Credit spread: Difference between revisions
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imported>Doug Williamson m (Add headers.) |
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1. | 1. ''Securities - issuer's credit quality.'' | ||
The difference in yield between a given security and a comparable benchmark government security. | The difference in yield between a given security and a comparable benchmark government security. | ||
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2. | 2. ''Securities - value differential.'' | ||
The difference in value of two securities with comparable maturity and yield but different credit jurisdiction. | The difference in value of two securities with comparable maturity and yield but different credit jurisdiction. | ||
3. | 3. ''Debt security.'' | ||
The extra yield on a debt security over the equivalent theoretical 'risk-free' security. | The extra yield on a debt security over the equivalent theoretical 'risk-free' security. | ||
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* [[G+]] | * [[G+]] | ||
* [[Risk-free rate of return]] | * [[Risk-free rate of return]] | ||
* [[Security]] | |||
* [[Yield]] | * [[Yield]] | ||
Revision as of 15:25, 25 March 2021
1. Securities - issuer's credit quality.
The difference in yield between a given security and a comparable benchmark government security.
It gives an indication of the issuer’s credit quality.
2. Securities - value differential.
The difference in value of two securities with comparable maturity and yield but different credit jurisdiction.
3. Debt security.
The extra yield on a debt security over the equivalent theoretical 'risk-free' security.
In other words the proportion of the total return that the issuer must pay due to credit risk.
