👉 The bracket IOR, or Bracket Inverted Interoperable Ratio, is a financial metric used to evaluate the relative performance of two different types of bonds, particularly those with varying maturities and coupon rates. It compares the yield-to-maturity (YTM) of one bond to the YTM of another, but in a way that accounts for the differences in their structures. Specifically, the bracket IOR is calculated by inverting the interest rate on a shorter-term bond relative to a longer-term bond, then comparing the resulting ratio to that of a third, often benchmark, bond. This allows investors to assess how much more or less yield they can expect from one bond compared to another, providing a standardized way to evaluate credit risk and potential returns across different bond profiles.
