How does duration change when the characteristics of a security change?

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Duration is the average capital commitment period of a financial investment and represents the weighted average of the maturities of the future cash flows assigned to a security or portfolio. But how does it change when the conditions of some relevant variables change?

  • With the same residual term and yield-to-maturity, duration is shortened with higher coupons.
  • With the same coupon interest rate and yield-to-maturity, the duration of a security is shortened if the coupons are separated more frequently.
  • With the same coupon and yield-to-maturity, the duration of a security increases when the maturity is extended.
  • With the same other characteristics, the duration of a security decreases if the discount rate increases.

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