Inverted Spread

Inverted Spread
A situation in which the yield difference between a longer term financial instrument and a shorter term instrument is negative. This is calculated by subtracting the longer term by the shorter term. In effect, the shorter term instrument is yielding a higher rate of return than the longer term instrument. This is in contrast to what is considered a normal market, where longer term instruments should yield higher returns to compensate for time.

For example, in the bond market, if you had a three-year government bond yielding 5% and a 30-year government bond yielding 3%, the spread between the two yields would be inverted by 2% (3% - 5% = -2%). The reasons behind this situation can vary and can include such things as changes in demand and supply of each instrument and the general economic conditions at the time.


Investment dictionary. . 2012.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Inverted pyramid — For the structure in the Louvre in Paris, France, see La Pyramide Inversée. The Inverted pyramid The inverted pyramid is a metaphor used by journalists and other writers to illustrate the placing of the most important information first within a… …   Wikipedia

  • Point spread function — The point spread function (PSF) describes the response of an imaging system to a point source or point object. A related but more general term for the PSF is a system s impulse response. The PSF in many contexts can be thought of as the extended… …   Wikipedia

  • Yield curve — This article is about yield curves as used in finance. For the term s use in physics, see Yield curve (physics). Not to be confused with Yield curve spread – see Z spread. The US dollar yield curve as of February 9, 2005. The curve has a typical… …   Wikipedia

  • MythBusters (2010 season) — Country of origin Australia United States No. of episodes 25 (includes 4 specials) Broadcast Original channel …   Wikipedia

  • List of Chinese inventions — A bronze Chinese crossbow mechanism with a buttplate (the wooden components have …   Wikipedia

  • ALPHABET, HEBREW — The origin of alphabetic script has always been a subject of human curiosity. According to Greek mythology, script was brought to Greece from Phoenicia. This tradition was accepted by the Greek and Roman writers, some of whom developed it even… …   Encyclopedia of Judaism

  • Database — A database is an organized collection of data for one or more purposes, usually in digital form. The data are typically organized to model relevant aspects of reality (for example, the availability of rooms in hotels), in a way that supports… …   Wikipedia

  • Attitude (heraldry) — Rampant redirects here. For the Nazareth album, see Rampant (album). For the 2009 fantasy novel, see Diana Peterfreund. The lion passant guardant, a frequent figure in heraldry, is sometimes called a leopard . Here shown or, armed argent, langued …   Wikipedia

  • New World Order (conspiracy theory) — This article is about the use of the term New World Order in conspiracy theory. For other uses, see New World Order. The reverse side of the Grea …   Wikipedia

  • Islamic arts — Visual, literary, and performing arts of the populations that adopted Islam from the 7th century. Islamic visual arts are decorative, colourful, and, in religious art, nonrepresentational; the characteristic Islamic decoration is the arabesque.… …   Universalium

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”