Basis Point

Smallest measure used in quoting yields on bonds and notes. One basis point is 0.01% of yield. For example, a bond?s yield that changed from 6.52% to 7.19% would be said to have moved 67 basis points.

REMARKS: A bond is a debt security, in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. A bond is simply a loan in the form of a security with different terminology: The issuer is equivalent to the borrower, the bond holder to the lender, and the coupon to the interest. Bonds enable the issuer to finance long-term investments with external funds.