basis point
Dimensionlessexact by definition
A basis point is one hundredth of a percent, exactly 1e-4. It is finance's unit for interest rates, yields and fees, where a quarter point rate move is 25 basis points, and it also turns up in engineering tolerance and drift specifications. The factor is exact by definition.
| 1 | 0.0001 |
Where the unit came from
The unit exists to remove an ambiguity rather than to shorten a number. A rate that moves from 4 percent to 5 percent has risen by one percentage point and by 25 percent of its former value; saying it rose 100 basis points can only mean the first.
One basis point in every dimensionless unit
| 100,000,000 | part per trillion (ppt) | |
| 100,000 | part per billion (ppb) | |
| 100 | part per million (ppm) | |
| 10 | per cent mille (pcm) | |
| 1 | basis point (bp)this unit | |
| 0.1 | per mille (per mille) | |
| 0.01 | percent (%) | |
| 0.0001 | ratio (—) |
Solvers that use dimensionless