Basis point

(bp).

1. Interest rates.

One hundredth of 1% = 0.01% = 0.0001 as a decimal.

2. While bond coupons may be expressed in fractions (for example, quarters, eighths or sixteenths), yields and prices of most money market instruments, such as commercial paper or treasury bills, are quoted in basis points.

3. Foreign exchange rates.

One hundredth of a cent, for example $0.0001, or its equivalent in other currencies.

Often, but not always, this represents a minimum price movement in the related foreign exchange rate quotation.

See also

• Commercial paper
• Constant net asset value
• Pip
• Price value of a basis point