Bps and Conversion value: Difference between pages

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Basis points.
''Convertible bonds''.


Often written ''bps''.
The total current market value of the ordinary shares (or other securities) for which each convertible bond may be exchanged (at the bondholder's option).




1.
For example:


''Interest rates''.
each convertible bond may be exchanged for 40 ordinary shares,


One hundredth of 1%
and the ordinary shares are currently trading in the market at £2 each,


= 0.01%
then the conversion value


= 0.0001 as a decimal.
= 40 x £2


 
= £80.
For example, an increase of three basis points (0.03%) from a starting rate of 2%, would give an increased rate of 2.03%.
 
 
One hundred basis points are 1%.
 
An increase of 3%, say from 2% to 5%, would be an increase of 300 basis points.
 
 
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 ==
== See also ==
* [[Commercial paper]]
* [[Convertible bonds]]
* [[Constant net asset value]]
* [[G+]]
* [[Percentage point]]
* [[Pip]]
* [[Price value of a basis point]]

Revision as of 15:12, 20 September 2014

Convertible bonds.

The total current market value of the ordinary shares (or other securities) for which each convertible bond may be exchanged (at the bondholder's option).


For example:

each convertible bond may be exchanged for 40 ordinary shares,

and the ordinary shares are currently trading in the market at £2 each,

then the conversion value

= 40 x £2

= £80.


See also

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