PVBP (Price Value of Basis Point)

PVBP, or Price Value of a Basis Point (also known as DV01—Dollar Value of 01), measures the absolute change in a bond's price for a one basis point (0.01%) change in its yield. It is calculated as: PVBP = Modified Duration × Bond Price × 0.0001. PVBP is a practical tool used by fixed-income traders and portfolio managers to quantify interest rate risk in rupee terms—rather than as a percentage—making it easier to size hedges and manage position risk precisely. A bond with a higher PVBP will gain or lose more in price for each basis point move in interest rates, reflecting greater interest rate sensitivity.