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Basis point |
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Basis pointIn the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 50 basis points higher than an interest rate of 4.5%. Sometimes referred to as BPS, BIPS, and pronounced "Bips"Basis pointA basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points.Basis pointUsually one hundredth of a percentage point used in quoting movements in interest rates of yields on securities.Similar MatchesAccrual basisAccrual basisIn the context of accounting, practice in which expenses and income are accounted for as if they are earned or incurred, whether or not they have been received or paid. Antithesis of cash basis accounting. Bank discount basisBank discount basisA convention used for quoting bids and offers for Treasury bills in terms of annualized yield, based on a 360-day year. BasisBasisThe difference between the price of a futures contract and the spot or cash price. The item being traded may be a commodity or a financial instrument. Cash basisCash basisRefers to the accounting method that recognizes revenues and expenses when cash is actually received or paid out. Booking the basisBooking the basisA forward pricing sales arrangement in which the cash price is determined, either by the buyer or seller, within a specified time at a previously agreed-upon basis applied to the then-current futures price. Further SuggestionsAgency basisDiscounted basis Fixed price basis cost basis Cost basis Flow through basis Price value of a basis point (PVBP) Basis price Adjusted basis sort the basis Formula basis Annual basis Bond equivalent basis After tax basis pay as you go basis |
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