The difference between the return on government-issued securities and that on common stock.
- The increasing demand may be a sign that investors are expecting economic conditions to improve and the yield gap between low and middle-dated investment grade bonds and gilts to narrow.
- December 28 - Bloomberg: ‘The average yield gap between Peru's dollar-denominated foreign bonds and U.S. Treasuries fell to a record low today as the country's economic expansion lured investors to its securities.’
- The net result of this is that the yield gap has narrowed slightly between Great Britain and the North.
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