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This article is from the Glossary of Financial Terms.

Glossary of Financial Terms: Y

• Yield
  The percentage rate of return paid on a stock in the form of dividends, or the rate of interest paid on a bond or note.
  
  
• Yield to call
  The percentage rate of a bond or note, if your were to buy and hold the security until the call date. This yield is valid only if the security is called prior to maturity. Generally bonds are callable over several years and normally are called at a slight premium. The calculation of yield to call is based on the coupon rate, length of time to the call and the market price.
  
  
• Yield to maturity
  The percentage rate of return paid on a bond, note or other fixed income security if you buy and hold it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.
  
  

 

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