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Basic Question 1 of 5
Miyoung Chen has a 5.00%, 19-year bond that is selling for a price of 34.9412 and is currently yielding 16.00%. The bond has a modified duration of 7.1481. Given this information, what is the Price Value of a Basis Point (PVBP)?
B. $0.0165
C. $0.0325
A. $0.0250
B. $0.0165
C. $0.0325
User Contributed Comments 5
| User | Comment |
|---|---|
| stefdunk | how about we just do price times duration times 0.0001? |
| derektl2 | that the way i prefer to look at it too... since duration is the price percentage change due to 100 basis points change in yield |
| Richie188 | 1% of the duration x price / 100 |
| johntan1979 | Not that it matters but you should be getting a non-rounded answer of $0.024976 |
| tomalot | Yeah it doesn't matter dude |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
define, calculate, and interpret modified duration, money duration, and the price value of a basis point (PVBP)
CFA® 2024 Level I Curriculum, Volume 4, Module 11.