What Is Yield? Meaning & Example
Definition
Yield is the income an investment produces, usually shown as an annual percentage of its price. For bonds, yield moves opposite to price.
Related terms
A bond is a loan you make to a government or company in exchange for regular interest payments and the return of principal at maturity. Bond prices tend to fall when interest rates rise.
Dividend YieldDividend yield is the annual dividend per share divided by the share price, expressed as a percentage. It shows the income return from dividends alone.
Yield CurveThe yield curve plots interest rates on bonds of the same credit quality across different maturities. Its shape offers clues about growth and rate expectations.
What is Yield?
Yield is the income an investment produces, usually shown as an annual percentage of its price. For bonds, yield moves opposite to price.
Can you give an example of Yield?
A bond priced at $950 paying $40 a year has a current yield of about 4.2%.