The option-adjusted spread (OAS) has developed into a popular and powerful tool for portfolio management. The OAS allows the investor to adjust ex ante yields to a consistent basis for comparison. Valuable as it may be, however, this adjustment has some fundamental flaws.
![Bridge over ocean](/-/media/images/hero/rpc-theme-heros/bridge-default.jpg?w=2560&hash=C67CE44B69F875C23628FEF2E3F26808)