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Yield – Bond & Stock
Return on an investment. A stock yield is calculated by expressing the annual dividend as a percentage of the stock's current market price. A bond yield is more complicated, involving annual interest payments plus amortizing the difference between its current market price and par value over the bond's life. See also Current Yield.

Yield Curve
A graph showing the relationship between yields of bonds of the same quality but different maturities. A normal yield curve is upward sloping depicting the fact that short-term money usually has a lower yield than longer-term funds. When short-term funds are more expensive than longer term funds the yield curve is said to be inverted.

Yield to Maturity
The rate of return investors would receive if they purchased a bond today and held it to maturity. Yield to maturity is considered a long term bond yield expressed as an annual rate.

Yield Spread
The difference between the yields on two debt securities, normally expressed in basis points. In general, the greater the difference in the risk of the two securities, the larger the spread.

Zero Coupon Bonds
See Strip Bonds.