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Hi
I am going through the P4 practice and revision kit, and I have come across a few questions that mention ‘Basis Point’.
I’m not sure if this was in F9 as I was exempt, but I have never come across this before. What lecture can I watch that would explain this to me, or is there an example of how this should be treated somewhere?It wasn’t (I don’t think) mentioned in F9, because it was not relevant.
A basis point is the smallest movement. So for foreign exchange the smallest movement is 0.0001 and, more relevant, for interest rates the smallest movement is 0.01. So for interest rates, 1 basis point in 0.01.
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