Introduction

1 A decrease in the interest rate from 6,5% to 6,25% is a decrease of how many basis points?

It is indeed 25 basis points,

The calculation is as follows:

6,5% - 6,25% = 0,25%.

Since 1% = 100 basis points if follows that 0,25% = 0,25 x 100 = 25 basis points

Do the calculation again.

It is 25 basis points.

The calculation is as follows:

6,5% - 6,25% = 0,25%.

Since 1% = 100 basis points if follows that 0,25% = 0,25 x 100 = 25 basis points

2 It the South African Reserve Bank changes the repo rate from 4,5% to 5% by how many basis points did the interest rate increased.

It is indeed 50 basis points.

The calculation is as follows:

5% - 4,5% = 0,5%.

Since 1% = 100 basis points if follows that 0,5% = 0,5 x 100 = 50 basis points.

Do the calculation again.

The calculation is as follows:

5% - 4,5% = 0,5%.

Since 1% = 100 basis points if follows that 0,5% = 0,5 x 100 = 50 basis points.

3 If the return on a treasury bill increases from 6,2% to 7,5% the change in basis points is

It is indeed 130 basis points.

The calculation is as follows:

7,5% - 6,2% = 1,3%.

Since 1% = 100 basis points it follows that 1,3% = 1,3 x 100 = 130 basis points.

Do the calculation again.

It is 130 basis points.

The calculation is as follows:

7,5% - 6,2% = 1,3%.

Since 1% = 100 basis points it follows that 1,3% = 1,3 x 100 = 130 basis points.

4 If the return on a treasury bill is 7,5% and the return on a municipal bill is 7,4% what is the difference in basis points.

It is indeed 10 basis point.

It is calculated as follows:

7,5% - 7,4% = 0,1%

Since 1% = 100 basis points it follows that 0,1% = 0,1 x 100 = 10 basis points.

Do the calculation again.

It is 10 basis points.

It is calculated as follows:

7,5% - 7,4% = 0,1%

Since 1% = 100 basis points it follows that 0,1% = 0,1 x 100 = 10 basis points.