[Verse 1] When bond prices swing like a pendulum's arc Duration reveals what moves in the dark It measures the years till cash flows return But weighted by present value we earn A modified twist shows price sensitivity One percent yield change, what's the liability? [Chorus] Duration's the heartbeat of portfolio risk Macaulay measures time, but modified's brisk Higher duration means wilder the ride When interest rates shift, there's nowhere to hide D-U-R-A-T-I-O-N Price sensitivity's best friend [Verse 2] A five-year duration on your corporate bond Means five percent drop when rates move beyond One percentage point in the upward direction Duration predicts this price deflection Managers ladder and barbell their trades Immunizing portfolios as yield curve fades [Chorus] Duration's the heartbeat of portfolio risk Macaulay measures time, but modified's brisk Higher duration means wilder the ride When interest rates shift, there's nowhere to hide D-U-R-A-T-I-O-N Price sensitivity's best friend [Bridge] Match your duration to liability streams Convexity curves beyond linear dreams When parallel shifts rock the yield terrain Duration hedging keeps losses restrained [Verse 3] Portfolio duration's a weighted sum game Each bond contributes to the risk frame Rebalance the mix when targets drift wide Keep duration aligned with your risk appetite guide [Chorus] Duration's the heartbeat of portfolio risk Macaulay measures time, but modified's brisk Higher duration means wilder the ride When interest rates shift, there's nowhere to hide D-U-R-A-T-I-O-N Price sensitivity's best friend [Outro] From pension funds vast to retail accounts small Duration management governs them all
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