Final answer:
The duration is the length of time it takes to recover a loss due to a change in the discount rate in finance and investment analysis.
Step-by-step explanation:
The statement is True. Duration refers to the length of time it takes to recover a loss due to a change in the discount rate. It is a measure used in finance and investment analysis to estimate the sensitivity of the value of a fixed-income security or an investment portfolio to changes in interest rates. The higher the duration, the longer it takes to recoup the loss caused by a change in the discount rate.
In the realm of finance and investment analysis, duration serves as a metric to estimate the sensitivity of the value of a fixed-income security or an investment portfolio to fluctuations in interest rates.
The concept reflects that a higher duration signifies a longer timeframe for recovering losses incurred due to alterations in the discount rate. Understanding duration is crucial for investors and financial professionals, providing insights into the potential impact of interest rate changes on the value and performance of fixed-income securities or investment portfolios.