CFA Level 1 | Fixed Income: 4 Ways to Calculate Macaulay Duration of a Bond

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CFA Level 1
Topic: Fixed Income
Reading: Understanding Fixed Income Risk and Return
If you are worried about having to memorize the closed-form formula for Macaulay duration, fear not, there is an easier way to calculate it. In this video, I show four ways to calculate Macaulay duration
Method 1: General Formula
Method 2: Closed-Form Formula
Method 3: Approximation using Modified Duration
Method 4: BOND function (Texas BA II Professional Only)
#NoesisExed #CFA #CFALevel1 #FixedIncome #MacaulayDuration #ModifiedDuration

[@jesseosborne9674]

This has saved me many hours of study time! I'm so glad there is a way to calculate using the bond worksheet!

[@moran8448]

thank you so much for method 3

[@Ashleycashmoney]

Method 3 is goated. Thanks for the easy explanation.

[@Ashleycashmoney]

Thanks for also showing me STO and 246 keys to easily remember moddur formula.

[@noelminano3733]

Thanks for this upload, good timing on uploads. Useful after just gotten off work and have a mini review on such topics

[@shubhammundra9475]

Thanx Fabian do fabulous job....I am waiting for many more to watching

[@adityarajchauhan7949]

Thanks for constant uploads

[@smithmendonsa922]

Thanks for this Quick hack 👍

[@tedgrove9412]

Duration can be quite challenging for us candidates at times. Thank you for breaking everything down bro!

[@lazarus_8589]

Thank you

[@noelminano3733]

Do you have videos regarding Fixed Income Attribution? and practices on residual effects being overriden or allocated to other effects

[@aslivinschi]

Fabian, what about calculating the duration between period, more realistic rather than selecting periods as 1,2,3,4,5 and etc?

[@debmaren3814]

Thank you!!!

[@FabianMoa]

You're welcome!

[@baxoutthebox5682]

Why do you say this is not possible on the plus? I am able to calculate it using bond function. Only difference is using 5 (annual pmt) in the bond function. Is this a problem under different scenarios?

[@TheRealOnlineAcc]

he said it is possible on the professional version of the BA 2 Plus

[@maximilliangarcia3201]

To annualize the MacDur in Method 3, do you have to divide it by 2 since it is a semi-annual payment or is that technically already baked in?

[@FabianMoa]

It's already in annualized terms

[@wallstreetzoomer]

method 3 if bond is 12 days into the first coupon in a 30/360?

[@Ashleycashmoney]

Say its semi annual, 12/180 = 0.067 which is how much time has passed. 1-0.067= 0.933, which is the time remaining of the period. Say there's 5 years left and you're 12 days into the first period, then N= 4.933.

[@user-px2wd5ix8v]

@@Ashleycashmoney Thank you so so much!