What is the 'Yield To Worst  YTW'
The yield to worst (YTW) is the lowest potential yield that can be received on a bond without the issuer actually defaulting. The yield to worst is calculated by making worstcase scenario assumptions on the issue by calculating the returns that would be received if provisions, including prepayment, call or sinking fund, are used by the issuer. This metric is used to evaluate the worstcase scenario for yield to help investors manage risks and ensure that specific income requirements will still be met even in the worst scenarios.
BREAKING DOWN 'Yield To Worst  YTW'
Yield to worst is calculated on all possible call dates. It is assumed that prepayment occurs if the bond has call or put provisions and the issuer can offer a lower coupon rate based on current market rates. If market rates are higher than the current yield of a bond, the yield to worst calculation will assume no prepayments are made, and yield to worst will equal the yield to maturity. The assumption is made that prevailing rates are static when making the calculation. The yield to worst will be the lowest of yield to maturity or yield to call (if the bond has prepayment provisions); yield to worst may be the same as yield to maturity but never higher.

Bond Yield
The amount of return an investor will realize on a bond. Several ... 
Running Yield
The annual income on an investment divided by its current market ... 
Call Provision
A provision on a bond or other fixedincome instrument that allows ... 
Required Yield
The return a bond must offer in order to be a worthwhile investment. ... 
Sinking Fund Call
A provision allowing a bond issuer the opportunity to buy outstanding ... 
Realized Yield
The actual amount of return earned on a security investment over ...

Bonds & Fixed Income
Calculating Yield to Worst
Yield to worst is the lowest possible yield on a bond that may be called in the future. 
Investing
Understanding the Different Types of Bond Yields
Any investor, private or institutional, should be aware of the diverse types and calculations of bond yields before an actual investment. 
Bonds & Fixed Income
Advanced Bond Concepts: Yield and Bond Price
In the last section of this tutorial, we touched on the concept of required yield. In this section we'll explain what this means and take a closer look into how various yields are calculated. ... 
Retirement
Bond Basics: Yield, Price And Other Confusion
Investopedia Explains: Bond yield, Bond price, yield to maturity, the link between price and yield and bond price in the market. 
Bonds & Fixed Income
The Risks Of MortgageBacked Securities
Find out how weighted average life guards against prepayment risk. 
Bonds & Fixed Income
Bond Yields: Current Yield And YTM
A bond's current yield, also called "bond yield," is the interest it pays annually divided by the bond's price. A stock's current yield, also called "dividend yield," is the sum of its annual ... 
Bonds & Fixed Income
Calculating Bond Equivalent Yield
The bond equivalent yield calculates the semiannual, quarterly or monthly yield on a discount bond or note. 
Mutual Funds & ETFs
What You Need To Know About Bond ETF Yields
When it comes to fixed income investing, yield is an important component of a bond investmentâ€™s total return to accurately assess if it's the right move. 
Active Trading
Finding The Best Yields
Using yields to supplement earnings can mean big bucks, with the right strategy. 
Term
Understanding Interest Rates Inflation And The Bond Market
Interest rates, bond yields and inflation expectations are all correlated.

What is the difference between yield to maturity and the yield to call?
Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing ... Read Answer >> 
What is the difference between yield and rate of return?
Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept ... Read Answer >> 
Can I use the current yield to compare a bond to an equity investment?
Learn about the different types of yield measurements for stocks and bonds, and find out how to make careful comparisons ... Read Answer >> 
In what ways can a sinking fund affect bond returns?
Find out how a bond sinking fund provision impacts the likely returns on a corporate bond, and learn why investors should ... Read Answer >> 
How do I calculate yield to maturity of a zero coupon bond?
Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than ... Read Answer >> 
How do I use the holding period return yield to evaluate my bond portfolio?
Find out how to use the holding period return yield formula to evaluate the performance of bonds in your portfolio, and view ... Read Answer >>