The difference between the yields of any two bonds is called a yield spread as given below for bonds A and B:yield spread = yield on bond A – yield on bond BThe normal way that yield spreads are quoted is in terms of basis points.The yield spread reflects the difference in the risks associated with the two bonds.When bond B is a benchmark bond and bond A is a non-benchmark bond, the yield spread is referred to as a benchmark spread; that is,benchmark spread = yield on non-benchmark bond – yield on benchmark bondThe benchmark spread reflects the compensation that the market is offering for bearing the risks associated with the non-benchmark bond that do not exist for the benchmark bond. Thus, the benchmark spread can be thought of as a risk premium.