Enter the risk-free rate and the credit risk premium into the calculator to determine the yield to worst of a bond.

## Yield to Worst Formula

The following equation can be used to calculate the yield to worst.

YTW = RFR + CRP

- Where YTW is the yield to worst
- RFR is the risk-free rate
- CRP is the credit risk premium

## Yield to Worst Definition

A yield to worst is defined as the sum of the risk-free rate and the credit risk premium of a bond. It’s equal to the lower of the yield-to-call and yield-to-maturity.

## Yield to Worst Example

How to calculate yield to worst?

**First, determine the risk free rate.**Calculate or measure the risk free rate of the bond.

**Next, determine the credit risk premium.**Calculate or measure the credit risk premium associated with the bond.

**Finally, calculate the yield to worst.**Calculate the yield to worst using the equation above.

## FAQ

**What is YTW?**

YTW stands for yield to worst and is a measure of the lower of the either YTM or YTC of a bond.