DV01 for all securities

All securities are the present value of future cash flows, discounted for time and non-diversifiable variance. I don’t think the variance of the cost of time is discussed much, but it should be, especially in a time with low rates and seemingly compressed beta premiums.

I worked on a desk on Wall Street in 2016 where we helped clients managed the variance of interest rates. For example, Coca Cola might borrow money with floating interest rates, and want fixed rates, or perhaps they want to issue new debt in 6 months and are worried about rising rates. We noted the cost of a change of one basis point in…