A »Duration in bond investment measures a bond's price sensitivity to interest rate changes, expressed in years. It's crucial because it helps investors understand risk; the longer the duration, the higher the price volatility. For example, a bond with a 5-year duration might decrease in value by 5% if interest rates rise by 1%. Thus, duration aids in managing interest rate risk in a bond portfolio.

A »Duration measures a bond's sensitivity to interest rate changes, indicating the time it takes to recoup investment. It's crucial as it helps investors assess risk and potential returns. A longer duration means higher volatility, while a shorter duration indicates lower risk. Understanding duration enables informed investment decisions and effective portfolio management.