spread spread

Creator:	Suzan Hamer
Language pair:	English
Discipline:	-
Definition / notes:	The difference between the prices of two comparable or related securities. Spreads are measured in basis points. One basis point equals 1/100 of a percent. For example, corporate bonds of a comparable maturity and comparable coupon rates will have higher yields than Treasuries to reflect greater default risk, so their yields are often quoted as a spread above the Treasury rate. The more risky the bond issue, the larger is the spread. From: Investing in Hedge Funds, Joseph G. Nicholas.
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