Yield Spread

Last updated on
February 17, 2022

Yield spread is the difference in yields between debt instruments with different maturities, credit ratings, issuers, or risk levels, calculated by subtracting the yield of one instrument from the yield of the other. The spread is simple to calculate because you subtract the yield of one from the yield of the other in percentage or basis points.

Bond investors use yield spread as a key metric in estimating the level of expense for a bond or group of bonds.

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