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Credit Spread Calculator

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Risk Management

✖Corporate Bond Yield refers to the rate of return or interest rate that investors earn from investing in a corporate bond.ⓘ Corporate Bond Yield [CBY]			+10% -10%
✖Treasury Bond Yield refers to the rate of return or interest rate that investors earn from investing in a government-issued treasury bond.ⓘ Treasury Bond Yield [TBY]			+10% -10%

✖Credit Spread refers to the difference in yield or interest rate between two debt securities with similar maturities but differing credit qualities.ⓘ Credit Spread [CS_P]

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Credit Spread Solution

STEP 0: Pre-Calculation Summary

Formula Used

Credit Spread = Corporate Bond Yield-Treasury Bond Yield
CS_P = CBY-TBY
This formula uses 3 Variables

Variables Used

Credit Spread - Credit Spread refers to the difference in yield or interest rate between two debt securities with similar maturities but differing credit qualities.
Corporate Bond Yield - Corporate Bond Yield refers to the rate of return or interest rate that investors earn from investing in a corporate bond.
Treasury Bond Yield - Treasury Bond Yield refers to the rate of return or interest rate that investors earn from investing in a government-issued treasury bond.

STEP 1: Convert Input(s) to Base Unit

Corporate Bond Yield: 2.5 --> No Conversion Required
Treasury Bond Yield: 1.96 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

CS_P = CBY-TBY --> 2.5-1.96

Evaluating ... ...

CS_P = 0.54

STEP 3: Convert Result to Output's Unit

0.54 --> No Conversion Required

FINAL ANSWER

0.54 <-- Credit Spread

(Calculation completed in 00.004 seconds)

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Credit Spread Formula

LaTeX Go

Credit Spread = Corporate Bond Yield-Treasury Bond Yield
CS_P = CBY-TBY

What is Credit Spread?

Credit spread refers to the disparity in yield, or return, between two debt instruments of the same maturity but possessing different credit ratings. It represents the difference in returns resulting from varying credit qualities. In simpler terms, credit spread measures the additional compensation investors demand for assuming higher credit risk.

How to Calculate Credit Spread?

Credit Spread calculator uses Credit Spread = Corporate Bond Yield-Treasury Bond Yield to calculate the Credit Spread, Credit Spread refers to the disparity in yield, or return, between two debt instruments of the same maturity but possessing different credit ratings. Credit Spread is denoted by CS_P symbol.

How to calculate Credit Spread using this online calculator? To use this online calculator for Credit Spread, enter Corporate Bond Yield (CBY) & Treasury Bond Yield (TBY) and hit the calculate button. Here is how the Credit Spread calculation can be explained with given input values -> 0.54 = 2.5-1.96.

FAQ

What is Credit Spread?

Credit Spread refers to the disparity in yield, or return, between two debt instruments of the same maturity but possessing different credit ratings and is represented as CS_P = CBY-TBY or Credit Spread = Corporate Bond Yield-Treasury Bond Yield. Corporate Bond Yield refers to the rate of return or interest rate that investors earn from investing in a corporate bond & Treasury Bond Yield refers to the rate of return or interest rate that investors earn from investing in a government-issued treasury bond.

How to calculate Credit Spread?

Credit Spread refers to the disparity in yield, or return, between two debt instruments of the same maturity but possessing different credit ratings is calculated using Credit Spread = Corporate Bond Yield-Treasury Bond Yield. To calculate Credit Spread, you need Corporate Bond Yield (CBY) & Treasury Bond Yield (TBY). With our tool, you need to enter the respective value for Corporate Bond Yield & Treasury Bond Yield and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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