A basis point is a unit of measurement used to express the change in
value of a financial instrument, such as a bond or a loan. One basis
point is equal to 0.01%, or one one-hundredth of a percentage point. For
example, if the interest rate on a bond increases from 5% to 5.25%,
that is an increase of 25 basis points. It is often used in the context
of interest rates, yield, and credit spreads. The short-hand for a basis point is bps and on a trading floor you will hear them referred to as 'bips' or 'beeps'
A basis point is a unit of measurement used to express the change in
value of a financial instrument, such as a bond or a loan. One basis
point is equal to 0.01%, or one one-hundredth of a percentage point. For
example, if the interest rate on a bond increases from 5% to 5.25%,
that is an increase of 25 basis points. It is often used in the context
of interest rates, yield, and credit spreads. The short-hand for a basis point is bps and on a trading floor you will hear them referred to as 'bips' or 'beeps'
A basis point is a unit of measurement used to express the change in
value of a financial instrument, such as a bond or a loan. One basis
point is equal to 0.01%, or one one-hundredth of a percentage point. For
example, if the interest rate on a bond increases from 5% to 5.25%,
that is an increase of 25 basis points. It is often used in the context
of interest rates, yield, and credit spreads. The short-hand for a basis point is bps and on a trading floor you will hear them referred to as 'bips' or 'beeps'
