[Verse 1]
Duration tells us how much prices change
When interest rates go up or down their range
But percentages don't show the dollar cost
We need to know exactly what we've lost
Modified duration gives us the percent
But money duration shows where dollars went
Take your portfolio value times duration
That's your money duration calculation
[Chorus]
Money duration, dollar sensation
Shows the real impact on your situation
PVBP, one basis point's fee
Price value tells you what the change will be
Money times duration equals dollar risk
PVBP makes it quick and crisp
[Verse 2]
A basis point is just one hundredth percent
Point zero one when rates are being bent
PVBP shows the dollar change you'll see
When rates move up by that small degree
Take a bond worth one million today
Duration is five, what does that say?
Money duration is five million flat
That's your dollar risk, imagine that
[Chorus]
Money duration, dollar sensation
Shows the real impact on your situation
PVBP, one basis point's fee
Price value tells you what the change will be
Money times duration equals dollar risk
PVBP makes it quick and crisp
[Bridge]
When rates rise one percent, you'll lose five million
When they fall the same, you gain that vision
But PVBP breaks it smaller still
One basis point change shows your bill
Fifty thousand lost per basis point
That's PVBP, right on the joint
Divide money duration by one hundred
Now rate changes can be easily numbered
[Verse 3]
Portfolio managers use these tools each day
To measure interest rate risk in every way
Money duration for the bigger swings
PVBP for the smaller things
Both convert duration to dollar terms
So you can see how your portfolio squirms
When interest rates decide to move around
These metrics keep you safe and sound
[Chorus]
Money duration, dollar sensation
Shows the real impact on your situation
PVBP, one basis point's fee
Price value tells you what the change will be
Money times duration equals dollar risk
PVBP makes it quick and crisp
[Outro]
From percentages to dollars clear
Money duration makes risk appear
PVBP for precision fine
Now you've got these tools in line