Ceteris paribus and Percentage point: Difference between pages

Revision as of 16:17, 9 August 2016

A percentage point is 1%, or 100 basis points.

An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points.

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-A simplifying assumption in economic analysis that other variables remain unchanged, with the exception of a very small number of variables under review.
+A percentage point is 1%, or 100 basis points.
-For example, looking simplistically at the relationship between demand and price, we might assume for analysis purposes that all other variables are held constant.
+An increase of 3%, say from 2% to 5%, is an increase of three percentage points, or 300 basis points.
-Making the ''ceteris paribus'' assumption in error is one of the most common sources of errors in forecasting and financial models.
 == See also ==
-* [[Demand]]
+* [[Basis point]]
-* [[Financial model]]
-[[Category:The_business_context]]
-[[Category:Corporate_finance]]
-[[Category:Investment]]
-[[Category:Identify_and_assess_risks]]
-[[Category:Manage_risks]]
-[[Category:Risk_frameworks]]
-[[Category:Risk_reporting]]
-[[Category:Financial_products_and_markets]]