DEFINITION of 'Nominal Yield Spread'
The spread, expressed in percent or basis points, that when added to the yield at one point on the Treasury yield curve equals the discount factor that will make a security's cash flows equal to its current market price.
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BREAKING DOWN 'Nominal Yield Spread'
Nominal yield spreads are a convention frequently used in pricing certain types of mortgagebacked securities (MBS). These MBSs are priced at a spread over the interpolated Treasury curve at the point equal to their weighted average life.
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RELATED FAQS

What is the difference between the Daily Treasury LongTerm Rates and the Daily Treasury ...
Find out more about the daily Treasury longterm rates, daily Treasury yield curve rates and the difference between these ... Read Answer >> 
What are the most popular and useful measures of credit spread?
Learn about the different types of credit spread measures that measure risk, including the zerovolatility spread and the ... Read Answer >> 
Where on the Internet can I find yield curves over various periods?
Find out where to locate reliable yield curve information on the Internet, including the U.S. Department of the Treasury ... Read Answer >> 
How can the yield curve help me make investment decisions?
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What is the current yield curve and why is it important?
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What are the different formations of yield curves?
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