What is the 'ZeroVolatility Spread  Zspread'
The Zerovolatility spread (Zspread) is the constant spread that will make the price of a security equal to the present value of its cash flows when added to the yield at each point on the spot rate Treasury curve where a cash flow is received . In other words, each cash flow is discounted at the appropriate Treasury spot rate plus the Zspread.
The Zspread is also known as a "static spread".
Next Up
BREAKING DOWN 'ZeroVolatility Spread  Zspread'
A Zspread calculation is different than a nominal spread calculation. A nominal spread calculation uses one point on the Treasury yield curve (not the spot rate Treasury yield curve) to determine the spread at a single point that will equal the present value of the security's cash flows to its price.
RELATED TERMS

Static Spread
The constant yield spread which when added to the point on the ... 
Spread
1. The difference between the bid and the ask price of a security ... 
Spread Indicator
An indicator that shows the difference between the bid and ask ... 
Yield Spread
The difference between yields on differing debt instruments, ... 
Present Value  PV
The current worth of a future sum of money or stream of cash ... 
Credit Spread Option
A financial derivative contract that transfers credit risk from ...
Related Articles

Investing Basics
Interest Rates And Your Bond Investments
By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it. 
Personal Finance
Evaluating A Statement Of Cash Flows
The metrics for the Statement of Cash Flows is best viewed over time. 
Options & Futures
Option Spreads: Tips And Things To Consider
By John Summa, CTA, PhD, Founder of OptionsNerd.comNow that you have obtained a solid foundation for underlying option spreads, here are some tips on how to use them. In this section, we'll ... 
Options & Futures
Trading Calendar Spreads In Grain Markets
Futures investors flock to spreads because they hold true to fundamental market factors. 
Investing Basics
Free Cash Flow Yield: A Fundamental Indicator
Free cash flow can measure a businessâ€™s performance as if youâ€™re looking at its net income line. 
Forex
Understanding Cash Flow
Learn about the different types of cash flows and the importance for businesses to properly manage their cash flows. 
Investing
Trade Bond ETFs Using Yield Curves
Different types of yield curves provide important insights for trading bondbased securities. 
Retirement
The Essentials Of Corporate Cash Flow
Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself. 
Investing Basics
What is Spread?
Spread has several slightly different meanings depending on the context. Generally, spread refers to the difference between two comparable measures. 
Investing
Fundamental Case Study: Is Amazon's Cash Flow Actually Solid? (AMZN)
Review Amazon's cash flow situation, including its free cash flow yield, operating cash flow from organic growth and cash flow from debt financing.
RELATED FAQS

What is Zspread and option adjusted credit spread?
Read about the uses of and connection between the zerovolatility spread (Zspread) and the optionadjusted credit spread ... 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 >> 
What is the difference between an optionadjusted spread and a Zspread in reference ...
Learn about the difference between the Zspread and optionadjusted spread valuations of future cash flows for bonds, and ... Read Answer >> 
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 >> 
How do I calculate free, discounted and operational cash flow in Excel?
Take a quick look at how you can calculate a company's operating cash flow, free cash flow and discounted cash flows using ... Read Answer >> 
What's the difference between free cash flow and operating cash flow?
Learn the difference between free cash flow and operating cash flow. Explore how analysts use earnings and cash flow when ... Read Answer >>