Zero-volatility spread. A tool used in the analysis of an asset swap that uses the zero-coupon yield curve to calculate the spread. The Z-spread is the number of basis points that would have to be added to the spot yield curve so that the bond's discounted cash flows equal the bond's present value. Each cash flow is discounted using its maturity and the spot rate for that maturity term, so each cash flow has its own zero-coupon rate. Analysts will typically look at both the Z-spread and the asset-swap spread to see if there are discrepancies in a bond's price. For short-term debt and high-rated debt there tends to be little difference between the two spreads. If there is a large difference between the two spreads then the market is not pricing the bonds accurately. also called static spread.

Related information about Z-spread:

Related information about Z-spread:

**Z-spread - Wikipedia, the free encyclopedia**

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**Zero-Volatility Spread (Z-spread) Definition | Investopedia**

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 ...

**CFA Level 1 Study Guide - Fixed Income Investments - Investopedia**

Investopedia's Free CFA Level 1 Exam Online Study Guide. Learn the differences between the z-spread and an option-adjusted spread. Shows how both ...

**Understanding the Z-Spread - YieldCurve.com**

A key measure of relative value of a corporate bond is its swap spread. This is the basis point spread over the interest-rate swap curve, and is a measure of the ...

**Z-spread**

The z-spread is conceptually closely related to YTM. It is a more accurate definition of spread than the simple difference between two numbers, for the same ...

**Z-spread (versus bond's nominal credit spread) - YouTube**

Jul 26, 2010 ... Please note: spreadsheet is available on the website). A nominal credit spread is the difference in yields (YTM), which are single factors; ...

**What is Z-spread? definition and meaning**

The Z-spread is the number of basis points that would have to be added to the ... Analysts will typically look at both the Z-spread and the asset-swap spread to ...

**fixed income - What is the difference between Option Adjusted ...**

Apr 22, 2012 ... So to me, Z spread should be less than the OAS. ... That is, if the present value of the risky bond is $v_b$, then the Z-spread $z$ is the value ...