What is 20 basis points?

20 basis points are the same as 0.2 percentage points. If, for example, a bond yield dropped from 7.65% to 7.45%, you could say it fell 0.2 percentage points or 20 basis points. Basis points are a unit of measure used in finance to express percentage change.

How many basis points is a 10% increase?

The increase from 10% is either 50 basis points (which is 10.5%) or 500 basis points (which is 15%). Although basis points are used primarily when referring to yields and interest rates, they may likewise refer to the percentage change in the value of an asset such as a stock.

Why are basis points important?

To avoid this confusion, you can say it has increased by 1000 BPS. Then we know that you mean the second scenario, that is the increment by points, not by a percentage of a percentage. In this way, basis points help to eliminate ambiguity when talking about rate changes.