Definition of basis point
: one hundredth of one percent (as in the yield of an investment)
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Recent Examples of basis point from the Web
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The yield on the 10-year Treasury sank more than 10 basis points in the past week, tumbling to its lowest level since early February.
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The Fed moved to raise rates by 25 basis points, as expected.
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Kroger's gross margin declined 31 basis points last quarter, which didn't exactly help alleviate those concerns.
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On Wednesday, the Fed moved to raise rates by 25 basis points, as expected.
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Meanwhile, Dick’s Sporting Goods likely gained more than 200 basis points, or 2 percent, from the shuttering of Sports Authority and other sporting-goods chains — or about 10 percent of those chains’ annual sales, according to the report.
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Gross margin, a key indicator of profitability, was up 220 basis points to 51.7 percent in the fourth quarter, mostly due to a better pricing.
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Britain’s 10-year yield fell three basis points to 1.527 percent, the biggest fall in almost five weeks.
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Britain’s 10-year yield fell four basis points to 1.514 percent, the biggest fall in almost five weeks.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'basis point.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of basis point
1962
Financial Definition of BASIS POINT
basis point
What It Is
A basis point is one hundredth of one percent.
How It Works
There are one hundred basis points in one percent.
Let's say Bank XYZ pays 2.54% interest on its savings accounts. A month later, it raises the rate to 2.75%. We would say that rate increased by 21 basis points.
Why It Matters
Basis points are in anything that is expressed as a percentage: interest rates, rates of return, bond coupons, rates of change and much more. Because tiny changes can have big effects, it is no surprise that the markets are concerned about hundredths of a percent.
Source: Investing Answers
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