Basis Point (BPS)

What is the definition of a Basis Point (BPS) in finance? DefinitionA basis point is a unit of measurement equals to .01 or 1/100th of 1% (1 percent). According to its calculation 1 BPS equals 0.01%, 10 BPS equals 0.1%, 50 BPS equals 0.5%, 100 BPS equals 1%, 1000 BPS equals 10%, and 10000 equals 100%. The BPS is used in the measurement of fixed-income yields, interest rates, and other financial rates. It is the most used metric for bonds and loans to indicate yield spreads or percentage changes in different financial instruments. Why Basis Points (BPS)?The use of BPS…
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