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Basis Point (BPS), also known as 'Bips', is a unit of measurement used in finance, particularly in the field of interest rates and yields. One basis point is equal to 0.01% (one hundredth of one percent). It is widely used in the pricing of financial instruments, such as bonds and derivatives, to measure changes in yields or interest rates. Understanding basis points is crucial for analyzing the cost of borrowing or lending, as well as for evaluating investment performance.

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