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learn what is a basis point in 2 minutes

WHAT IS A BASIS POINT?

Welcome to professrsavings.com, we teach finance basics. Today we will teach you about basis point. 

Hi I’m Rayfil Wong.  We hope these investment concepts will help you be a better investor.

The basis point,  aka BP in the finance street cred world is simply common unit of measure for interest rates.

A basis point is equal to 1/100 of 1% or 0.01%.

Keeping it simple 100 basis points equal 1%. 

Bonds and loans often are quoted in basis point terms. 

For example, the interest rate on a 6% bond is 50 basis points higher than the interest rate on a 5.5% bond. 

Traders use basis points to more accurately describe the movement of a bond in percentage more accurately.

More simple that you think. Remember to go through all the lessons so that you can piece together all the concepts of finance basics.

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