Dividing by 2 in PVBP

CFA Level I Fixed Income
#1

Hi,

Can anyone please explain why are we diving by 2 in PVBP =((P-) - (P+))/2?

isn’t the difference the actual difference in price due to 1 bps the actual money duration for 1 bps?

Thanks,

#2

P− is the price for a 1bp decrease in yield, and P+ is the price for a 1bp increase in yield. The yield difference between P− and P= is, therefore, 2bps.

#3

Thank you once again! Makes a lot of sense!

#4

My pleasure.