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# Macaulay Duration as the Balancing Point of a Seesaw

Macaulay's duration is a weighted average of the time until the cash flows are received, where the weights are the present value of the cash flows as a percentage of the security's price. This visualization helps students to understand why increasing the yield and/or coupon rate decreases the duration, while increasing the term to maturity increases the duration (and vice-versa). Imagine a seesaw with several (one for each cash flow) buckets that are the height of the nominal cash flows. The buckets are filled with water to a level that represents the present value of the cash flows. Duration is the location of the fulcrum that results in a balanced seesaw.

### DETAILS

The author has found this visualization technique to be useful in teaching the concept of duration. It was inspired by [1].
Reference
[1] R.W. Kopprasch, "Understanding Duration and Volatility," The Handbook of Fixed Income Securities (F. J. Fabozzi and I. M. Pollack, eds.), Homewood, IL: Dow Jones–Irwin, 1987 pp. 86–120.

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