Practice Quiz

GMAT Math Practice Test #1

Category - Math

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If “basis points” are defined so that 1 percent is equal to 100 basis points, then 44.5 percent is how many basis points greater than 34.5 percent?

  1. 0.1
  2. 10
  3. 100
  4. 1000
Explanation

Answer: D - 1000

1 percent is equal to 100 basis points. 44.5 percent = 4450 basis points and 34.5 percent = 3450 basis points. Hence the difference = 1000 basis points.

Key takeaway: Percent literally means “per 100” or “out of 100”. 1 percent is equal to 100 basis points. This term is frequently used in banking to indicate changes in interest rates. 50 basis points means 1/ 2

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