The Economics and Financial Education Program

  Duration risk is a crucial concept in finance and investment. Let’s delve into its significance: 1.      Definition of Duration Risk: o     Duration risk refers to the potential loss that an investor faces due to changes in interest rates. o     It measures the sensitivity of a bond’s price to fluctuations in interest rates. o     Understanding duration risk is essential for investors seeking to maximize returns while managing risk. 2.      Why Duration Risk Matters: o     Risk and Potential Loss : Duration risk provides a measure of risk and potential loss. Investors can identify downside risks associated with specific investments. o     Asset Allocation and Decision-Making : By assessing duration risk, investors can make informed decisions about asset allocation, risk management, and investment strategies. o     Evaluating Performance : Duration ris...