Basis Points

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A basis point is a unit equal to one part per ten thousand or one hundredth of a percentage point. The basis

point is symbolically represented similar to the percentage sign (%) just with two extra zero's in the

denominator. One basis point or 1 bps is equal to 0.01%. Basis points are very useful while dealing with

calculations regarding finances and it easily converts the given percentage value to a standard basis point

value.


Example 1: Find the basis points for 0.05 percentage points.
 
Given are percentage points equal to 0.05%
 
According to the definition, 1 basis point = 1/100 percentage point.
 
So, for the conversion of percentage points to basis points the percentage points are multiplied by 100.
 
1 percentage point = 100 * basis points 
 
Hence 0.05 percentage points = 0.05 * 100 basis points = 5 basis points.
 
Therefore the answer is 0.05 percentage points equals 5 basis points.
 
 
Example 2: Find the basis points for 0.3 percentage points.
 
Given are percentage points equal to 0.3%
 
According to the definition, 1 basis point = 1/100 percentage points.
 
So, for the conversion of percentage points to basis points the percentage points are multiplied by 100.
 
1 percentage point = 100 * basis points 
 
Hence 0.003 percentage points = 0.3 * 100 basis points = 30 basis points.
 
Therefore the answer is 0.3 percentage points equals 30 basis points.
 

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