Definitions for **"Macaulay Duration"**

In 1938, Frederick R. Macaulay defined Duration as the total weighted average...

The weighted - average term to maturity of a bond's cash flows. The weighting is based on the present value of each cash flow divided by the price. This is one of two ways to calculate duration, the other being modified duration.

Is the present value of all cash flows, both principal and interest, weighted by time. It is a measurement expressed in years which is generally less than the stated maturity. An exception occurs for zero coupon bonds.