What Is the Basic Premium Factor? The basic premium factor is the acquisition expenses, underwriting expenses, profit, and loss conversion factor adjusted for the insurance charge for a policy. The basic premium factor is used in the calculation of retrospective premiums. It does not take into account taxes or claims adjustment expenses, which are instead
What Are Basic Reparations Benefits? In the insurance industry, basic reparations benefits are a type of automobile insurance that provides assistance with medical expenses, lost income, and essential services following a car accident. Importantly, basic reparations benefits are a type of “no-fault” insurance option, meaning that the benefits are paid regardless of whether the policyholder
What Is Basing? The term basing refers to the consolidation in the price of a security. This movement in price is commonly used by technical analysts and usually comes after a downtrend before it begins a bullish phase. The resulting price pattern looks flat or slightly rounded. As such, the price shows that supply and
What is a Basing Point? The basing point is the specific predetermined geographical location used in the basing point pricing system, in which the delivered price is the same for every destination, no matter where the product is produced or from what point it is shipped. Firms that use the system set the prices of
What is the Basis Grade The basis grade is the minimum accepted standard that a deliverable commodity must meet for use as the actual asset of a futures contract. This grading is also known as par grade or contract grade. Basis grade is vital for trading in futures and to maintain uniformity within the market. BREAKING
A basis point is a common unit of measure for interest rates and other percentages in finance. Basis points are typically expressed with the abbreviations bp, bps, or bips. One basis point is equal to 1/100th of 1%, or 0.01%. In decimal form, one basis point appears as 0.0001 (0.01/100). Basis points (BPS) are used
What Is a Basis Price? Basis price is a way of referring to the price of a fixed-income security that references its yield to maturity. It is commonly used to refer to bonds and it implies the yield to maturity at the moment when an investor makes a bond purchase. The basis price is useful
What Is a Basis Quote? A basis quote is a way of quoting the price of a futures contract by comparing it to the price of its underlying asset. However, it can have slightly different meanings depending on the context. When discussing most futures contracts, basis refers to the futures price of a contract minus
What Is a Basis Rate Swap? A basis rate swap (or basis swap) is a type of swap agreement in which two parties agree to swap variable interest rates based on different money market reference rates. The goal of a basis rate swap is for a company to limit the interest rate risk it faces
What is Basis Trading? In the context of futures trading, the term basis trading refers generally to those trading strategies built around the difference between the spot price of a commodity and the price of a futures contract for that same commodity. This difference, in futures trading, is referred to as the basis. If a
