Basis point

A basis point is 1/100th of 1 percent. Basis points are used as a convenient unit of measure when percentage differences of less than 1% are discussed. The most common example is interest rates, where differences in interest rates of less than 1%  per year are usually meaningful to talk about. For example, a difference of 0.10 percentage points is equivalent to a change of 10 basis points (a 4.67% rate increases by 10 basis points to 4.77%). An increase of 100 basis points means a rise of 1%.
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