What is a unit equal to 1/100th of 1% called?

Prepare for the CSI Investment Funds in Canada exam with flashcards and multiple choice questions. Gain insights through hints and explanations for a successful exam experience!

Multiple Choice

What is a unit equal to 1/100th of 1% called?

Explanation:
A basis point is the unit used for tiny changes in rates and percentages. It equals one hundredth of a percentage point. So 1 basis point is 0.01 percentage point. Since 1% is 100 basis points, 1/100 of 1% is 0.01 percentage point, which is exactly 1 basis point. This distinguishes a small fractional change in percent from the full percent difference. A percentage point is the difference between two whole percentages (for example, moving from 5% to 6% is a 1 percentage point change), which is not the same as a fraction of a percent. The other terms aren’t standard for this tiny unit.

A basis point is the unit used for tiny changes in rates and percentages. It equals one hundredth of a percentage point. So 1 basis point is 0.01 percentage point. Since 1% is 100 basis points, 1/100 of 1% is 0.01 percentage point, which is exactly 1 basis point. This distinguishes a small fractional change in percent from the full percent difference. A percentage point is the difference between two whole percentages (for example, moving from 5% to 6% is a 1 percentage point change), which is not the same as a fraction of a percent. The other terms aren’t standard for this tiny unit.

More practice questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy