Yield To Worst (YTW)
Yield To Worst (YTW) is the lowest yield an investor could receive on a fixed-income security across all potential redemption scenarios (such as calls or puts) and the stated maturity, assuming no default. It is used to measure the most unfavorable outcome under the security’s terms.
Example: An investor analyzes a callable corporate bond and notes that the bond’s YTW is 3.2%, reflecting the possibility of early redemption under certain rate scenarios.
💬 Comments