The interest rate is known as coupon rate and interest is payable at specified dates before bond maturity.

If investors think a rate increase is on the horizon - and that is by no means certain - they can shorten bond maturities, and sell or avoid rate-sensitive stocks.

An unexpected wave of profit taking swept the Treasury securities market early yesterday, with prices falling most sharply among the highly volatile and speculative long bond maturities.

So he has taken a defensive posture in his portfolio, with a significant portion in cash and relatively short bond maturities.

In the market for United States Treasury securities, there are three categories of bond maturities:

You can match bond maturity to college years.

An investor convinced rates will rise may shorten bond maturities; one expecting a rate drop may buy a certificate of deposit.

Shorten bond maturities to preserve principal and to have a crack at higher yields if rates continue to rise.

The interest rate to be paid the Japanese will depend on the bond maturities chosen.

In terms of standard bonds (for which cash flows are fixed and positive), this means the Macaulay duration will equal the bond maturity only for a zero-coupon bond.