Basis: Difference between revisions
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{{a|plainenglish|}} | {{a|plainenglish|}}All-purpose financial services jargon which, if uttered in relation to a [[basis point|point]], means one-hundredth of a percentage point, and when comparing two things, means the unhedged difference between them. Hence “[[basis risk]]”. | ||
All-purpose financial services jargon which, if uttered in relation to a [[basis point|point]], means one-hundredth of a percentage point, and when comparing two things, means the unhedged difference between them. Hence “[[basis risk]]”. | ===Basis point=== | ||
One hundredth of one percent ''of a given notional or principal amount''. More accurate than “per cent” which suffers from a kind of relativistic ambiguity (do you mean a percentage of notional, or of ''a change'' in notional etc). | |||
Latest revision as of 14:16, 20 June 2022
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Towards more picturesque speech™
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All-purpose financial services jargon which, if uttered in relation to a point, means one-hundredth of a percentage point, and when comparing two things, means the unhedged difference between them. Hence “basis risk”.
Basis point
One hundredth of one percent of a given notional or principal amount. More accurate than “per cent” which suffers from a kind of relativistic ambiguity (do you mean a percentage of notional, or of a change in notional etc).