If $P$ is price, $D$ modified duration and $y$ yield then we have the relationship,
$$dP=-D \cdot P \cdot dy$$
Why is there a minus sign and what does correspond to?
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It only takes a minute to sign up.Sign up to join this community
The price-yield relationship is negatively correlated; when prices go down, the implied yield goes up. The minus sign allows the modified duration to be positive for a normal bond.