spot curve

The spot rate yield curve (spot curve) for U.S. Treasury bonds is also referred to as the zero curve (for zero-coupon) or strip curve (because zero-coupon U.S. Treasury bonds are also called stripped Treasuries). Recall that spot rates are the appropriate yields, and therefore appropriate discount rates, for single payments to be made in the future. Yields on zero-coupon government bonds are spot rates. Earlier in this reading, we calculated the value of a bond by discounting each separate payment by the spot rate corresponding to the time until the payment will be received. Spot rates are usually quoted on a semiannual bond basis, so they are directly comparable to YTMs quoted for coupon government bonds