basis point
Definition
Smallest measure of quoting the yield on a bond, note, or other debt instrument. One basis point is equal to one hundredth of one percent (0.01%): one percent of a yield equals 100 basis points. For example, an interest rate of 5 percent is 50 basis point higher than the interest rate of 4.5 percent. Similarly, a spread of 50 basis points (between the bid price and offer price of a bond) means the investor must pay 0.5 percent more to buy it than he or she could realize from selling it.
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basis point is in the Accounting & Auditing, Investing and Securities & Futures Trading subjects.
basis point appears in the definition of the following term: point
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