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Financial Literacy

Financial Literacy

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Duration

Duration refers to the length of time from which a loan is made to when it is paid off. Loans which have a very long expiration (Disney has issued 100 year bonds) will reflect prices that are much more volatile than bonds that come do in a few years. Over 100 year period, one would imagine that bond prices would be affected greatly by inflation, credit risk worries and individual corporate issues, all of which make prices in bond swings volatile for high duration bonds.

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