What is the difference between average life and duration?
The total term of a loan is the number of years from the loan draw down date to the last debt service. The average life of a loan is the number of years that pass from the loan draw down until half the time- weighted principal is repaid.
What is meant by weighted average life?
The weighted average life (WAL) is the average length of time that each dollar of unpaid principal on a loan, a mortgage, or an amortizing bond remains outstanding.
Is weighted average life the same as weighted average maturity?
Weighted Average Life (WAL): WAL, as it applies to money market funds, is calculated in the same manner as the Weighted Average Maturity (WAM), but is based solely on the periods of time remaining until the securities held in the fund’s portfolio (a) are scheduled to be repaid or (b) would be repaid upon a demand by …
Is weighted average maturity the same as duration?
Effective duration and average maturity apply if you have a portfolio consisting of several bonds. While maturity refers to when a bond expires, or matures, duration is a measure of the bond’s price sensitivity to changes in interest rates.
What is weighted average mark WAM?
A Weighted Average Mark (WAM) is calculated based on results for all completed subjects within a diploma or degree, where results are out of 100. This includes subjects for which you gained a failing score or grade. Ignore any subjects for which there are no scores, or where only a non-scoring pass or fail is possible.
What is weighted average duration of defined benefit obligation?
weighted average duration of the benefit obligation. This is broadly defined as ‘the weighted average time until. payment of all expected future discounted cashflows, determined based on membership and the financial and demographic assumptions at a particular time’.
What is the meaning of Macaulay duration?
The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. Macaulay duration is frequently used by portfolio managers who use an immunization strategy.
What is the difference between duration and modified duration?
Duration or Macaulay Duration refers to measurement of weighted average time before having the cash flow, while Modified Duration is more on the percentage change in price in terms of yields.