BIT RATES AND BAUD RATES

Many people use the terms bit rate and baud rate interchangeably, even though as we see with the Manchester encoding, they are not the same thing. While the Manchester encoding is an example of a case in which a link's baud rate is greater than its bit rate, it is also possible to have a bit rate that is greater than the baud rate. This would imply that more than one bit is encoded on each pulse sent over the link

BIT RATES AND BAUD RATES

To see how this might happen, suppose you could transmit four distinguished signals over a link rather than just two. On an analog link, for example, these four signals might correspond to four different frequencies. Given four different signals, it is possible to encode two bits of information on each signal. That is, the first signal means 00, the second signal means 01 and so on. Now, a sender(receiver) that is able to transmit(detect) 1,000 pulses per second would be able to send (receive) 2,000 bits of information per second. That is, it would be a 1,000-baud/2,000-bps link