This captures the sensitivity of the price of a fixed income security to a change in interest rates, all in one number.

Two of the factors that influence bond prices are general interest rates and the time remaining until the security is redeemed, or bought back. A security with a high duration is usually more sensitive in price terms to changes in interest rates than one with a lower duration. As a rough rule of thumb the lower the coupon rate on the security and the longer it has to run until maturity, the higher the duration number will tend to be. Note that for a particular bond duration is not fixed and it decreases as the bond moves towards maturity.