Yield
Definition
The income return on an investment, expressed as a percentage. For bonds, yield is the annual interest relative to price. For stocks, it refers to the dividend yield. Yield and price move inversely for bonds.
Related Terms
Bond
A fixed-income debt instrument where an investor loans money to an entity (government or corporation) for a defined period at a fixed or variable interest rate. Bonds pay regular interest (coupon) and return principal at maturity.
Dividend Yield
The annual dividend payment divided by the stock price, expressed as a percentage. A stock trading at $100 with a $3 annual dividend has a 3% dividend yield. Higher yields can indicate value or risk.
Yield Curve
A graph showing bond yields across different maturities (3-month to 30-year). A normal yield curve slopes upward (longer = higher yield). An inverted yield curve (shorter > longer) has historically predicted recessions.
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