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Yield
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Yield

Yield is a measure of the amount of how much income an investment generates over time (related to return on investment). For example, farmers talk of the yield per acre of land. In finance, the yield is expressed as a percentage of the price of the investment. In the simple case of a consol, a bond's yield is its annual coupon payment (predetermined interest payments) divided by its current market price. Because the numerator is determined ahead of time, when the price of a bond rises, its yield drops -- and vice versa. The yield on bonds is often called its interest rate.

All else equal, a bond with higher credit and interest rate risk pays a higher yield.


Yield is a condition in steel and other metals under tensile stress where it becomes plastic and will ultimately break. See tensile strength.

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