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Definition of YieldYieldThe percentage rate of return paid on a stock in the form of dividends, or the effective rate of interest yieldthe quantity of output that results from a specified input Yield a. Measure of return on an investment, stated as a percentage of price. YieldThe interest rate that makes the present value of a stream of future payments associated with an asset equal to the current price of that asset. Also called yield to maturity. See also current yield.
Related Terms:Annual percentage yield (APY)The effective, or true, annual rate of return. The APY is the rate actually Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent YieldBond yield calculated on an annual percentage rate method Capital gains yieldThe price change portion of a stock's return. Convenience yieldThe extra advantage that firms derive from holding the commodity rather than the future. Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Current yieldFor bonds or notes, the coupon rate divided by the market price of the bond. current yieldAnnual coupon payments divided by bond price. Current YieldThe percentage return on a financial asset based on the current price of the asset, without reference to any expected change in the price of the asset. This contrasts with yield-to-maturity, for which the calculation includes expected price changes. See also yield. Dividend yield (Funds)Indicated yield represents return on a share of a mutual fund held over the past 12 dividend yield ratioCash dividends paid by a business over the most Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. Earnings yieldThe ratio of earnings per share after allowing for tax and interest payments on fixed interest Effective annual yieldAnnualized interest rate on a security computed using compound interest techniques. Effective Annual YieldAnnualized rate of return on a security computed using compound Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax Flattening of the yield curveA change in the yield curve where the spread between the yield on a long-term High-yield bondSee:junk bond. Indicated yieldThe yield, based on the most recent quarterly rate times four. To determine the yield, divide labor yield variance(standard mix X actual hours X standard rate) - (standard mix X standard hours X standard rate); Liquid yield option note (LYON)Zero-coupon, callable, putable, convertible bond invented by Merrill Liquid yield option note (LYON)Zero-coupon, callable, putable, convertible bond invented by Merrill Lynch & Co. material yield variance(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price); Non-parallel shift in the yield curveA shift in the yield curve in which yields do not change by the same Par yield curveThe yield curve of bonds selling at par, or face, value. Parallel shift in the yield curveA shift in the yield curve in which the change in the yield on all maturities is process quality yieldthe proportion of good units that resulted from the activities expended Production yield varianceThe difference between the actual and budgeted proportions Pure yield pickup swapMoving to higher yield bonds. Realized compound yieldyield assuming that coupon payments are invested at the going market interest Relative yield spreadThe ratio of the yield spread to the yield level. Reoffering yieldIn a purchase and sale, the yield to maturity at which the underwriter offers to sell the bonds Required yieldGenerally referring to bonds, the yield required by the marketplace to match available returns Riding the yield curveBuying long-term bonds in anticipation of capital gains as yields fall with the Spot curve, spot yield curveSee Zero curve. Steepening of the yield curveA change in the yield curve where the spread between the yield on a long-term Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. Yield curveThe graphical depiction of the relationship between the yield on bonds of the same credit quality Yield CurveA graphical representation of the level of interest rates for Yield curveGraph of yields (vertical axis) of a particular type of security yield curveGraph of the relationship between time to maturity and yield to maturity. Yield curveA graph showing how the yield on bonds varies with time to maturity. Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the Yield curve strategiesPositioning a portfolio to capitalize on expected changes in the shape of the Treasury yield curve. Yield ratioThe quotient of two bond yields. yield ratiothe expected or actual relationship between input and output Yield spread strategiesStrategies that involve positioning a portfolio to capitalize on expected changes in Yield to callThe percentage rate of a bond or note, if you were to buy and hold the security until the call date. Yield to maturityThe percentage rate of return paid on a bond, note or other fixed income security if you Yield to MaturityThe measure of the average rate of return that will be earned on a Yield to maturityA measure of the average rate of return that will be earned yield to maturityInterest rate for which the present value of the bond’s payments equals the price. Yield to worstThe bond yield computed by using the lower of either the yield to maturity or the yield to call Zero curve, zero-coupon yield curveA yield curve for zero-coupon bonds; Arbitrage-free option-pricing modelsyield curve option-pricing models. AssetA resource, recorded through a transaction, that is expected to yield a benefit to a Attribute biasThe tendency of stocks preferred by the dividend discount model to share certain equity Average inventoryThe beginning inventory for a period, plus the amount at the end of Back-up1) When bond yields and prices fall, the market is said to back-up. Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized Basis pointIn the bond market, the smallest measure used for quoting yields is a basis point. Each percentage Basis PointOne one-hundredth of a percentage point, used to express variations in yields. For example, the difference between 5.36 percent and 5.38 percent is 2 basis points. Basis pricePrice expressed in terms of yield to maturity or annual rate of return. Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will Bond-equivalent basisThe method used for computing the bond-equivalent yield. Book ReturnsBook yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets. BootstrappingA process of creating a theoretical spot rate curve , using one yield projection as the basis for Bootstrapping, bootstrap methodAn arithmetic method for backing an Bullet strategyA strategy in which a portfolio is constructed so that the maturities of its securities are highly Butterfly shiftA non-parallel shift in the yield curve involving the height of the curve. Contract monthThe month in which futures contracts may be satisfied by making or accepting a delivery. ConvexBowed, as in the shape of a curve. Usually referring to the price/required yield relationship for ConvexityA measure of the rate of change in duration; measured in time. Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Default premiumA differential in promised yield that compensates the investor for the risk inherent in default premiumDifference in promised yields between a default-free bond and a riskier bond. DividendA dividend is a portion of a company's profit paid to common and preferred shareholders. A stock DurationThe expected life of a fixed-income security considering its coupon Effective convexityThe convexity of a bond calculated with cash flows that change with yields. efficiencya measure of the degree to which tasks were performed Figuring the tailCalculating the yield at which a future money market (one available some period hence) is Floating-rate contractA guaranteed investment contract where the credit rating is tied to some variable Forward rateA projection of future interest rates calculated from either the spot rates or the yield curve. Forward rateThe future interest rate of a bond inferred from the term Give upThe loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon Income stockCommon stock with a high dividend yield and few profitable investment opportunities. Internal rate of return a. The average annual yield earned by an investment during the period held. Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Junk bondA bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high Leveraged buyout (LBO)A transaction used for taking a public corporation private financed through the use Long rateThe yield on a zero-coupon Treasury bond. Macaulay durationA widely used measure of price sensitivity to yield Market segmentation theory or preferred habitat theoryA biased expectations theory that asserts that the
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