Yield
Financial Dictionary — Finance & Capital Markets
Definition
is the annual return on an investment, expressed as a percentage. The yield to redemption or maturity (the same thing) combines the running yield with the "pull to redemption"; thus a bond which has a 10% coupon and exactly one year of remaining life will sell at $98.2% when interest rates are at 12.0%, that 12.0% being composed of 10.2% running yield and 1.8% pull to redemption ($100.0 - 98.2%).
Use cases, Example & Why it matters
Use cases
- Used in capital markets for disclosure, valuation, and investor communication.
- Used when interpreting securities, filings, and market indicators.
- Used when interpreting securities, filings, and market indicators.
Example
- Example: Investors reference **Yield** when assessing risk/return and interpreting public disclosures.
Why it matters
- Why it matters: Improves transparency for investors and supports pricing, funding, and governance decisions.