A bit confused by page 4 of chapter 22 on interest rate risk. I do not see its relevance to the title of Risk Management. To me is seems a dump and misplaced. It is not clear how PV01 or DV01 are used or risk management. Anyone with ideas? Thanks
Thanks for the feedback. You are right - they do seem a little out of place in the Notes, this is a result of where they occur in the Core Reading. They also crop up in Chapter 19. PV01 and DV01 are simply measures (similar to a delta in derivatives, and are related to VaR). Hence they can be used in risk management to measure riskiness of a position or set a limit for traders. We will look at improving the position in the Notes. Hope this helps.
