Sarasota County Investment Policy 2018

Sarasota County Investment Policy 27 133. YIELD-TO-WORST: The lowest potential yield that can be received on a bond without the issuer actually defaulting. The YTW is calculated by making worst-case scenario assumptions on the issue by calculating the return that would be received if the issuer uses provisions, including prepayments, calls or sinking funds. This metric is used to evaluate the worst-case scenario for yield to help investors manage risks and ensure that specific income requirements will still be met even in the worst scenarios. Yield-To- Worst is the industry standard utilized in conjunction with a bond’s price, coupon, maturity and possible redemption date(s).