One basis point equals 0.01 percentage points.

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Multiple Choice

One basis point equals 0.01 percentage points.

This question tests how basis points relate to percentage points. A basis point is defined as one hundredth of a percentage point, so 1 basis point equals 0.01 percentage points. That means 100 basis points make up 1 percentage point. In decimal terms, 0.01 percentage points is 0.01%, which is 0.0001 in decimal form. For example, if an interest rate moves from 2.500% to 2.510%, that’s a 10 basis point move, or 0.10 percentage points. Looking at the statement, 0.01 percentage points exactly matches one basis point, so it’s the correct equivalence.

This question tests how basis points relate to percentage points. A basis point is defined as one hundredth of a percentage point, so 1 basis point equals 0.01 percentage points. That means 100 basis points make up 1 percentage point. In decimal terms, 0.01 percentage points is 0.01%, which is 0.0001 in decimal form.

For example, if an interest rate moves from 2.500% to 2.510%, that’s a 10 basis point move, or 0.10 percentage points. Looking at the statement, 0.01 percentage points exactly matches one basis point, so it’s the correct equivalence.

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