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What's the meaning of Yield Spread?

帮考网校2020-10-12 15:40:43
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Yield spread refers to the difference between the yield on two different types of investments, typically bonds. It is calculated by subtracting the yield on a lower-risk investment, such as a government bond, from the yield on a higher-risk investment, such as a corporate bond. The yield spread is used to measure the risk associated with a particular investment and to compare the relative attractiveness of different investment options. A wider yield spread indicates higher risk and potentially higher returns, while a narrower yield spread indicates lower risk and potentially lower returns.
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