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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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Investopedia explains 'Nominal Yield Spread'
Nominal yield spreads are a convention frequently used in pricing certain types of mortgage-backed 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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Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
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Find out what happens when short-term interest rates exceed long-term rates.
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By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it.
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Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
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Investing in bonds - What are they, and do they belong in your portfolio?
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