Basis Point

A basis point is one-hundredth of a percentage point, or 1/100 (0.01%). This term has its origins in the practice of trading the ‘basis’, or the percentage difference between spreads. It is commonly used in describing the rate of change of interest rates. So if a central bank increases interest rate from 4.5% to 5%, this is an increase in 0.5% or 50 basis points.

By |2018-09-04T14:12:14+00:00September 4th, 2018|0 Comments

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