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.
Next Up
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.
RELATED TERMS

ZeroVolatility Spread  Zspread
The constant spread that will make the price of a security equal ... 
Yield Curve
A line that plots the interest rates, at a set point in time, ... 
Static Spread
The constant yield spread which when added to the point on the ... 
Yield Spread
The difference between yields on differing debt instruments, ... 
Normal Yield Curve
A yield curve in which shortterm debt instruments have a lower ... 
Inverted Yield Curve
An interest rate environment in which longterm debt instruments ...
Related Articles

Bonds & Fixed Income
How Bond Market Pricing Works
Learn the basic rules that govern how bond prices are determined. 
Professionals
Yield Curves
FINRA/NASAA Series 65: Section 8 Yield Curves. In this section normal, inverted and flat yield curves and yield spreads. 
Term
Understanding Yield Spread
Yield spread is the difference in yields between debt instruments. 
Professionals
Types of Yield Measures
CFA Level 1  Types of Yield Measures. Learn the different methods of calculating yield spreads and the formulas behind them. Discusses the benefits of using relative yield spreads. 
Professionals
Yield Curve
Yield Curve 
Professionals
Yield Curve Risk
CFA Level 1  Yield Curve Risk. Learn how yield curve risk can affect your bond portfolio and how the various shifts in the yield curve relate to interestrate risk. 
Professionals
Intermarket vs. Intramarket Sector Spreads
CFA Level 1  Intermarket vs. Intramarket Sector Spreads. Learn the various sectors that make up the bond market and how they relate to yield spreads. Also relates credit spreads to economic ... 
Bonds & Fixed Income
How Bond Market Pricing Works
Yield is the commonest measure used to determine a bondâ€™s expected return. Yieldtomaturity and spot rates are the two primary yield measures. 
Professionals
Spreading
Spreading 
Professionals
Yield Curves
CFA Level 1  Yield Curves. Learn how governments can influence short and longterm interest rates. Discusses the various shapes of yield curves and how they are formed.
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?
Learn about the yield curve, and discover why this chart is an important economic indicator. How do Treasury bond yields ... Read Answer >> 
What is the current yield curve and why is it important?
Understand what the current yield curve represents, and learn how market analysts commonly interpret various changes in the ... Read Answer >> 
What are the different formations of yield curves?
Find out more about the yield curve and yield curve formations, what yield curves measure and the three main types of yield ... Read Answer >>