The formula to calculate the percentage change in the price of the bond is the change in yield multiplied by the negative value of the modified duration multiplied by 100%.
The term "yield" describes the profits produced and realised on an investment over a specific time frame. It is shown as a percentage based on the amount invested, the security's current market value, or its face value. The interest or dividends a shareholder receives from holding a certain security are included in yield. Yields can be categorised as known or anticipated depending on the security's valuation (fixed vs. variable). The cash flow an investor receives in relation to the amount invested in an asset is measured by yield. Although there are additional variations, such as quarterly and monthly yields, it is often calculated on an annual basis.
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