This measure is the absolute value of the change in price of a bond for a one basis point change in yield. It is another way to measure interestrate risk. It does not matter if it is an increase or decrease in rates, because such a small move in rates will be about the same in either direction according to the second property of a bond's price . This is also know as Dollar Value of an 01 (DV01).
Formula 14.18
PVBP = initial price  price if yield is changed by 1 basis point 
Example: Price Value of a Basis Point
Assume that the initial price is 98 and the new price is 97.75. Because of a 1 bps increase in rates the PVBP would be .25 (98  97.75).
DV01 is related to duration. It is just a special case of dollar duration. Instead of using a 100 basis point change you are simply using a 1 basis point change.
An example using the Stone & Co. bonds with duration of 5.5
5.5 x 0.0001 x 100 = .055% change
If the price was 98 the dollar price change would be:
.055% x 98 = $ 0.53
Conclusion
Congratulations! You just finished a section on one of the more complicated topics on your upcoming exam. Ensure you practice all examples presented in this section. We also recommend attempting several different practice exams on Fixed Income with Investopedia's CFA Level 1 Quizzer.
Introduction

Trading
A Common Base for Understanding Changes in Value
A discussion of basis points as well as basis point calculations using Excel. 
Financial Advisor
Why Bondholders Should Manage Duration Risk
Bonds and bond funds are fixedincome investments, but their duration, combined with changes to interest rates, can lead to price fluctuations. 
Investing
Why You Should Avoid Fixating on Bond Duration
Financial advisors and their clients should then focus on a bond fundâ€™s portfolio rather than relying on any single metric like duration. 
Investing
Duration is On My Mind
In this explainer on duration, we talk about some of the risks and opportunities in a potentially rising interest rate environment. 
Investing
Immunization Inoculates Against Interest Rate Risk
Bigmoney investors can hedge against bond portfolio losses caused by rate fluctuations. 
Investing
Use Duration And Convexity To Measure Bond Risk
Find out how this measure can help fixedincome investors manage their portfolios. 
Investing
Watch Your Duration When Rates Rise
While recent market volatility is leading investors to look for the nearest exit, here are some suggestions for bond exposure in attractive sectors. 
Managing Wealth
Know Your Stock Cost Basis
Understanding equity cost basis is critical for tracking the gains or losses of an investment. 
Financial Advisor
The Effect of Fed Fund Rate Hikes on Your Bond Portfolio
Learn how an increase in the federal funds rate may impact a bond portfolio. Read about how investors can use the duration of their portfolio to reduce risk.