Yield

The annual rate of return on an investment expressed as a percentage. Bonds have three commonly used yield calculations: nominal, which is based on its par value, running / current, which is based on its market price, and redemption, which represents the total return if the bond was held to maturity. Stocks can have two dividend yields, the cost yield based on the price paid for the stock and the current yield based on its current price. This is calculated by dividing the dividend by either price. However, yields are not generally an accurate measure of total return as they ignore capital gains in the security.

This definition is for general information purposes only