Yield Spread
The difference between yields on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument. The spread can be measured between debt instruments of differing maturities, credit ratings and risk.
Investopedia Commentary
Looking at the yield spread, often with historical spreads, can give investors potential investment opportunities. For example, if the 5-year Treasury Bond is 5% and the 30-year Treasury Bond is at 6% the yield spread between the two debt instruments is 1% (6% - 5%). If the yield spread has historically been closer to 5%, the investor is much more likely to invest in the 5-year bond compared to the 30-year bond as it should be trading around 10% instead of 6% or the 5-year should be around 1%, making it very attractive at this yield.
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See also: Flat Yield Curve, Government Security, Inverted Yield Curve, Maturity, Normal Yield Curve, Treasury Bond, Yield
yield spread