A measurement used to determine the average length of time it takes for the principal of a loan or security to be repaid.
Calculated by: weighing the time until each cash flow (usually principal payments) is received against the total cash flows.
A measurement used to determine the average length of time it takes for the principal of a loan or security to be repaid.
Calculated by: weighing the time until each cash flow (usually principal payments) is received against the total cash flows.