________ measures a bond's price sensitivity to changes in interest rates. It also measures the average number of years to a bond's discounted cash flows.

Question

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Duration measures a bond's price sensitivity to changes in interest rates by calculating the average number of years it takes for a bond's discounted cash flows (coupon payments and principal repayment) to be received. A bond with a longer duration will be more sensitive to changes in interest rates, while a bond with a shorter duration will be less sensitive.

________ Measures a Bond's Price Sensitivity to Changes in Interest