Glossary of Financial Terms: Y
Description
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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