Yield To Worst Calculator

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 permium

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?

  1. First, determine the risk free rate.

    Calculate or measure the risk free rate of the bond.

  2. Next, determine the credit risk premium.

    Calculate or measure the credit risk premium associated with the bond.

  3. 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.

yield to worst calculator
yield to worst formula