A basis point, or bp, denotes a change in hundredths of a percent.
- 1 basis point = 0.01%
- 100 basis points = 1%
Basis points are commonly used in banking and credit situations. For example, when the Federal Reserve cuts rates from 2.25% to 2.00%, it's referred to as 25 basis point cut. Or when a company's gross margin goes from 40.02% to 40.08%, it's referred to as a 6 basis point increase.
Related Fool Articles
Recent Mentions on Fool.com
- Why Under Armour Inc Crushed Expectations, Raised Guidance... and Fell Anyway
- Core Laboratories NV: This 9% Decline Is an Opportunity
- Why Ingram Micro Inc. Shares Tumbled Today
- Here's Why Apple Inc. Is a Great Value Play
- Amazon Prime vs. Netflix: Which Service Offers a Better Deal?
- Long-Term Mortgage Rates Rise; ARM Prices Hold Steady