Groundlearn / Glossary / DV01
DV01 (PV01)
Also called PV01, basis point value, BPV. A CFA and FRM term, defined in plain English with the distinction examiners test.
What it means
The change in a position’s value for a one basis point change in yield, expressed in currency.
The exam angle
The practitioner’s hedging unit: hedge ratios are DV01 of the exposure divided by DV01 of the hedge. FRM uses it far more than duration.
Where it appears in the syllabus
- Valuation & Risk ModelsFRM Part I · exam weight 30% · VaR and ES, option valuation, bond risk, stress testing, credit and op risk.
- Market Risk Measurement & ManagementFRM Part II · exam weight 20% · VaR and ES estimation, backtesting, EVT, GARCH, copulas, FRTB.
- Fixed IncomeCFA Level II · exam weight 10–15% · Term structure dynamics, arbitrage-free valuation, embedded options, CDS.
Related terms
- ConvexityThe curvature of the price–yield relationship — how duration itself changes as yields move.
- DurationThe sensitivity of a bond’s price to a change in yield, and equivalently the weighted average time to receiving its…
- Bootstrapping (yield curve)Deriving spot rates sequentially from the prices of coupon bonds, using each solved rate to strip the next.
- DeltaThe change in an option’s value for a small change in the underlying price.
- Forward rateThe interest rate agreed today for borrowing or lending over a future period, implied by today’s spot curve.
- GammaThe rate at which delta changes as the underlying moves.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
Practise it in Cornerstone
Snapshot cards and five-question sessions for CFA® and FRM® candidates, free on Android and offline. The full glossary is in the app too, with search.
About CornerstoneOr get a free practice question every day on the Cornerstone WhatsApp channel.