Limitations of Duration:

Linear Relationship Assumption: Duration assumes a linear relationship between bond prices and interest rate changes. However, this may not hold true in practice, especially for bonds with embedded options or non-linear cash flows. Duration may not accurately capture the price changes in such bonds.
Sensitivity to Yield Changes: Duration is more accurate for small changes in interest rates, but its effectiveness decreases as interest rate changes become more significant. It may underestimate or overestimate price changes in the presence of large interest rate movements.
Limited Scope: Duration focuses primarily on interest rate risk and does not consider other types of risks, such as credit risk, liquidity risk, or market risk. It should be used in conjunction with other risk management tools to get a comprehensive view of the risks associated with a bond or portfolio.