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Investing

Yield

What is Yield?

The income an investment produces, as a percentage of its price.

Understanding Yield

For bonds, current yield is the annual coupon divided by the market price. Yield to maturity also counts the gain or loss at maturity.

When a bond's price falls, its yield rises, and the other way around.

Formula

Current yield=Annual coupon paymentBond price\text{Current yield} = \frac{\text{Annual coupon payment}}{\text{Bond price}}
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