Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The price value of a basis point (PVBP) measures the change in the price of a bond if the yield changes by one basis point
The "price value of a basis point" (PVBP) measures the change in the price of a bond if the yield changes by one basis point (one one-hundredth of a percent0.01%). PVBP is expressed as the absolute value of the change in price. Consider a coupon bond with a face value of $100, an annual coupon rate of 4%, and 19 years to maturity. What is PVBS if the yield rises from 4% to 4.01%?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
