Financial Quotient

What is yield?

The yield is the income portion of an investment's return, which includes the interest or dividends received from holding securities, such as bonds and stocks.

It is shown as a percentage of the annual income return over the investment's cost or current market value. The yield and the price of a security share an inverse relationship - the yield will drop when the price of a stock or bond increases.

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A version of this article appeared in the print edition of The Sunday Times on October 28, 2018, with the headline 'What is yield?'. Print Edition | Subscribe