Definition of Basis point:
One hundredth of one percent, used chiefly in expressing differences of interest rates.
Smallest measure of quoting the yield on a bond, note, or other debt instrument. One basis point is equal to one hundredth of one percent (0.01%): one percent of a yield equals 100 basis points. For example, an interest rate of 5 percent is 50 basis point higher than the interest rate of 4.5 percent. Similarly, a spread of 50 basis points (between the bid price and offer price of a bond) means the investor must pay 0.5 percent more to buy it than he or she could realize from selling it.
How to use Basis point in a sentence?
- The basis point s that Billy decided to settle on as a new investor were substantial as he was still learning about them.
- The Treasury will be paying an overall rate just 75–100 basis points above bill rates.
- I preferred to analyze the stocks performance using the basis point as I wanted to be as exact as possible in my attempts to explain and of course understand our position.
- Even if all you are gaining is a basis point or two that is better than your money sitting idly by gaining nothing.
Meaning of Basis point & Basis point Definition