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".
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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 ... 
Nominal Yield Spread
The spread, expressed in percent or basis points, that when added ... 
Spot Rate Treasury Curve
A yield curve constructed using Treasury spot rates rather than ... 
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 ...
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