See more synonyms on Thesaurus.com. noun. 1. a written promise to pay a specified sum of money to a designated person or to his or her order, or to the bearer of the note, at a fixed time or on demand. 2. a written promise to do or provide something, usually presented as a gift and claimable when or however the recipient chooses.
DEFINITION of 'Duration'. A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.
What does this mean? Duration is a measure of the length of time it will take the bond's cash flows to repay the investor the price he or she paid for the bond. The smaller the duration of a bond, the faster an investor will get back his or her investment through coupon payments and the final par-value payment.hat does this mean? Duration is a measure of the length of time it will take the bond's cash flows to repay the investor the price he or she paid for the bond. The smaller the duration of a bond, the faster an investor will get back his or her investment through coupon payments and the final par-value payment.