Seems it’s a new concept in level 1…
Modified duration measures the percentage price change of a bond to a change in its yield-to-maturity. Money duration measures the absolute price change
Money Duration = Dirty Price x Modified Duration
But i’m not fully understand it either…
Modified (or effective) duration measures the percentage price change for a 1% change in the yield to maturity (YTM)
Dollar (or money) duration measures the dollar (or other currency) price change for a 1% change in YTM
So, if you have a $1,000,000 portfolio with a modified duration of 4 years and its YTM increases 0.1%, then its dollar duration (money duration) is $1,000,000 × 4 years = 4,000,000 (dollar-years), its (approximate) percentage price change is -4 × 0.1% = -0.4%, and its (approximate) dollar change is -$4,000,000 × 0.1% = -$4,000.
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