Back	Home > Data Dictionary > E > Effective Duration

Effective Duration

Effective duration is a measure of the duration for bonds with embedded options (e.g., callable bonds). Unlike the modified duration and Macaulay duration, effective duration considers fluctuations in the bond’s price movements relative to the changes in the bond’s yield to maturity (YTM). In other words, the measure takes into account possible fluctuations in the expected cash flows of a bond.

In Tamarac, Effective Duration is a Securities setting. You can manually enter effective duration on the General tab for an individual security, or add effective duration values for multiple securities at once using a Security Information upload with the Effective Duration column added.

You'll see effective duration in Bond Analysis and Holdings dynamic, PDF reports, PDF dashboard reports, and client view reports.

For more information on editing securities, see Maintain Securities.