Basis points, percentages, decimal points

[BaseballRedhawks]

ok… so this is a bit embarassing, but can be confusing at some points.
1.0% = 100 basis points = 0.01
5 basis points = 0.05% = 0.0005
Anyone have easy ways to understand this and not screw up?

 

[S2000magician]

One basis point is 1/100 of 1%.
I’m not sure it gets any easier than that.
(Full disclosure: I worked at PIMCO for 6 years, so basis points are now firmly entrenched in my DNA.)

 

[myriam2222]

First, no question is embarassing. Actually nothing in the cfa curriculum is obvious. What may seem obvious to one person is not to another, all depending on your background
I did not use to need this one at work so i just had to learn it by heart.
Good luck!!

 

[CFA300]

Another way that i find it easier:
1. to convert 1bps to percentage just type 1 on your TI BA II and press the “%” key once (your screen should show 0.01).
2. to convert 1bps to decimals just type 1 on your TI BA II and press the “%” key twice (your screen should show 0.0001).

 

[aloha312]

A pretty fail-safe method:
1) Write out the word BASIS
2) Put a decimal after the B (i.e. B.ASIS)
3) Insert the number of basis points at the end
1bp –> BASIS –> B.ASIS –> 0.0001
100bp –> BASIS –> B.ASIS –> 0.0100