For a given change in yield bond price, volatility is directly related to duration.

Question

Quizplus · Accepted Answer

The duration measures the sensitivity of a bond's price to changes in interest rates, and volatility refers to the magnitude and frequency of price movements. Since duration measures the price sensitivity, a longer duration bond is more volatile than a shorter duration bond when yields change by the same amount. Therefore, there is a direct relationship between duration and volatility.

For a Given Change in Yield Bond Price, Volatility Is