Basis Point (bps)

Measurement & Analysis

A unit of measurement equal to one-hundredth of a percent (0.01%). Basis points are commonly used for interest rates, yields, and spreads. For example, a 0.50% change is 50 basis points. A 100 basis points equals 1%. Basis points provide precision in discussions of small percentage changes—saying a fund has 50 bps of alpha is clearer than saying 0.5%.

Mentioned in this definition

Alpha

More in Measurement & Analysis

Information RatioR-SquaredTracking ErrorTreynor Ratio

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Basis Point (bps) | Blackworks Capital