Why is the nominal spread one of the most commonly used yield spread measures is the nominal spread and what are its limitations?

An upward sloping yield curve-the nominal spread is easy to calculate it is simply the yield to maturity on a bond minus the yield to maturity on a treasury security of a similar maturity. because the nominal yield is based on the yield to maturity, it suffers the same shortcomings as yield to maturity. the yield measures assume that all cash flows can be discounted at the same rate (i.e., assumes a flat yield curve). they also assume that all coupon payments will be received in a prompt and timely fashion, and reinvested to maturity, at a rate of return that is equal to the appropriate solving rate (i.e., the bonds ytm or its bey).