Price Value of a Basis Point - PVBP

What is 'Price Value of a Basis Point - PVBP'

Price value of a basis point (PVBP) is a measure used to describe how a basis point change in yield affects the price of a bond.

Also knows as the "value of a basis point" (VBP) or "basis point value" (BPV).

 

Price Value of a Basis Point (PVBP)

BREAKING DOWN 'Price Value of a Basis Point - PVBP'

There is an inverse relationship between bond price and yield. As bond prices decrease, their yields increase and vice versa. The degree of change in bond price for each basis point change in yield is determined by a number of other factors, such as the bond's coupon rate, time to maturity and credit rating.

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RELATED FAQS
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    Find out why financial analysts and publications track and quote bond yields in basis points, or bps, rather than simply ... Read Answer >>
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    A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial ... Read Answer >>
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