Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

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Duration Strategy for Bond Investment Based on an Empirical Study

Authors
Junming Nie1, *,a, †, Zhihao Wu2, *, b, †, Shiyao Wang3, *, c, †, Ye Chen4, *, d, †
1School of International Education, Wuhan University, Hubei, Wuhan, China
2Yangzhou New Oriental high school, Yangzhou, Jiangsu, China
3Beijing Renmin University Affiliated Middle School, Beijing, China
4Guangdong Country Garden school, Guangdong Foshan, China
†

These authors contributed equally.

*Corresponding author. Email:aguanghua.ren@gecacdemy.cn
Corresponding Authors
Junming Nie, Zhihao Wu, Shiyao Wang, Ye Chen
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.278How to use a DOI?
Keywords
duration; immunization strategy; bond
Abstract

The duration is also known as the Macaulay duration. It takes the cash flow occurring in the future time to fold the present value according to the current rate of return, and then multiplies each present value by the number of years from the time when the cash flow occurs, and then sums it up. The duration is calculated by dividing the sum by the discounted sum of the bond’s cash flows. In general, it is the weighted average of the time required for the bond’s cash flows to be paid. We calculated the sum of the duration of the bonds. For example, the first bond has a duration of four years and the second bond has a duration of 1.96 years. By calculating the duration, we can help investors better know when to receive the money receivable. And immunization is a strategy that helps to reduce the impact of interest rate fluctuation. In this paper, we have studied the methods of calculating duration and how to use the knowledge of duration and the immunization strategy to hedge the risk.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
978-94-6239-483-4
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.278How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

risenwbib
TY  - CONF
AU  - Junming Nie
AU  - Zhihao Wu
AU  - Shiyao Wang
AU  - Ye Chen
PY  - 2021
DA  - 2021/12/15
TI  - Duration Strategy for Bond Investment Based on an Empirical Study
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 1726
EP  - 1730
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.278
DO  - 10.2991/assehr.k.211209.278
ID  - Nie2021
ER  -