What financial metric is expressed as "basis points" when discussing bond yields?

Basis points are a common unit of measurement used in finance to describe the percentage change in financial instruments, particularly in the context of interest rates and yields. One basis point is equal to 0.01%, which makes it a useful way to express small changes in these percentages without dealing with decimal places.

Yield to maturity (YTM) is particularly relevant here, as it represents the total return anticipated on a bond if it is held until it matures. When bond yields fluctuate, these changes are often reported in basis points to provide clarity on the magnitude of the change. For instance, if a bond's yield increases from 3.00% to 3.25%, it can be described as having risen by 25 basis points. This usage allows investors and analysts to easily communicate and understand shifts in bond yields within the fixed-income market.

While the coupon rate is the fixed interest rate that the bond pays, and price per point refers to how bond prices may be quantified, these do not typically involve basis points in their standard discussions. Market volatility, while an important concept in finance, is not expressed in basis points; it deals more with the degree of variation in trading prices over time. Thus, yield to maturity is the correct answer as