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115.070.05.05 Fixed Income - Reading 46 - 5. Money Duration of a Bond and the Price Value of a Basis Point

# 5. Money Duration of a Bond and the Price Value of a Basis Point

## g. calculate and interpret the money duration of a bond and price value of a basis point (PVBP);

What is Modified duration versus Money duration? Modified duration measures the percentage price change of a bond to a change in its yield-to-maturity. Money duration measures the absolute price change.

In the U.S., what is “dollar duration”? In the U.S., money duration is called dollar duration. It is the approximate dollar change in a bond’s price for a 100 basis point change in yield.

What is the price value of a basis point (PVBP)? The price value of a basis point (PVBP) is the absolute change in the price of a bond for a one basis point change in yield.

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