The quotient of two bond yields, i.e., the ratio of the yield on some bond to the yield on a reference bond, both having similar maturities. Suppose there are two bonds: bond X and bond Y, yield spread is computed as follows:

yield ratio = yield on bond X ÷ yield on bond Y

Typically, the reference bond is an on-the-run Treasury issue. For example, on some date, the yield on the 10-year on-the-run Treasury issue was 4.70% and the yield on a single A rated 10-year industrial bond was 6.50%. The yield ratio (where the Treasury issue is the reference bond) would be:

yield ratio = 6.50% ÷ 4.70% = 1.3829

This implies that the yield on the industrial bond is 1.3829 times the Treasury yield.