By SIMON CONSTABLE
Investment professionals regularly refer to "basis points" when discussing things like bond yields and mutual funds.
In the bond market, if the yield of a Treasury note rises to 1.05% from 1% it is said to have moved by five basis points or, as some abbreviate it, five "bips."
Why does this seemingly tiny unit of measure—one basis point is equal to one one-hundredth of a percentage point—get so much attention? It's pretty simple: Basis points can add up to a lot of money for both individual investors and institutions. See original story here.
Photo by Annie Spratt on Unsplash
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