1, with different definitions: duration is an indicator to measure the sensitivity of bond prices to interest rate changes, and its calculation method is the ratio of maturity time of bonds to percentage change of bond yields, while modified duration is an indicator to measure the sensitivity of bond prices to interest rate changes, considering the ratio of bond interest rate types to percentage change of interest rates.
2. Different application scenarios: duration is widely used in fixed income portfolio management and interest rate risk management, while modified duration is more used in risk measurement and management of floating interest rate bills.