Abstract
Risk Management involves analyzing exposure to risk and determining how to best handle this exposure. The DV01 is a measure used to describe how a basis point change in yield can affects the price of a bond. It is also known as the "price value of a basis point"(PVBP). In fact, the DV01 calculation measures how much a bond's price can increase in case a bond's yield to maturity decreases by only one basis point. It tells you how much money you can gain or lose if the yield curve varies by 0.01% and therefore allows you to estimate the risks of your investment.
