Yield: Difference between revisions
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1. | 1. | ||
The rate of return <i>on the current market value</i> of an asset or liability, usually expressed as a percentage per annum. | |||
For example, today’s yield to maturity of a bond measures the total return to an investor in the bond, reflecting both (i) the interest income over the remaining life of the bond and (ii) any capital gain (or loss) from today’s market value to the redemption amount payable at maturity. | |||
When the market yield to maturity is applied to discount the future cashflows of the asset or liability, the net present value of all of the cashflows - including the current market purchase price - is Nil. | |||
2. | 2. | ||
Dividend yield. | |||
3. | |||
More broadly, any measure of a rate of return. | |||
In this broader sense, yield may be calculated and expressed on a number of different bases. | |||
For this reason it is essential to identify clearly the basis on which a given yield is expressed, before using it for calculation or comparison. | |||
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* [[Discount rate]] | * [[Discount rate]] | ||
* [[Discount yield]] | * [[Discount yield]] | ||
* [[Dividend yield]] | |||
* [[Interest]] | * [[Interest]] | ||
* [[Interest rate]] | * [[Interest rate]] | ||
* [[Liquidity]] | |||
* [[Security]] | |||
* [[SLY]] | |||
* [[Sterling commercial paper]] | * [[Sterling commercial paper]] | ||
* [[Yield spread]] | * [[Yield spread]] | ||
Revision as of 12:17, 3 May 2015
1.
The rate of return on the current market value of an asset or liability, usually expressed as a percentage per annum.
For example, today’s yield to maturity of a bond measures the total return to an investor in the bond, reflecting both (i) the interest income over the remaining life of the bond and (ii) any capital gain (or loss) from today’s market value to the redemption amount payable at maturity.
When the market yield to maturity is applied to discount the future cashflows of the asset or liability, the net present value of all of the cashflows - including the current market purchase price - is Nil.
2.
Dividend yield.
3.
More broadly, any measure of a rate of return.
In this broader sense, yield may be calculated and expressed on a number of different bases.
For this reason it is essential to identify clearly the basis on which a given yield is expressed, before using it for calculation or comparison.
See also
- Credit spread
- Discount instruments
- Discount rate
- Discount yield
- Dividend yield
- Interest
- Interest rate
- Liquidity
- Security
- SLY
- Sterling commercial paper
- Yield spread
- Yield to maturity
