What is Yield Spread?
Yield Spread The difference between the quoted rates of return of two different debt instruments, often used to compare risk and return profiles between bonds of varying credit quality or maturity.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Yield Spread” Used in Practice?
Widening yield spreads between corporate and government bonds may signal rising credit risk perceptions in the market.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Yield Spread?
The difference between the quoted rates of return of two different debt instruments, often used to compare risk and return profiles between bonds of varying credit quality or maturity.
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