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1. Basic interview question

What Does Pip Stand For And What Does It Mean?

Standing for percentage in point, pip is the smallest increment or price change that can occur in exchange. In this market, prices are typically cited to this fourth decimal place (1/100th of 1%) and the pip is equal to exactly that. To give an example, a bottle of shampoo at a drugstore would be priced at $3.50 and in the FX market, it would be priced at $3.5000.

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