[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 Curve – a chart showing the yield on the y-axis and the maturity on the x-axis. Each line on the chart depicts a specific type of issue (most frequently U.S. Treasury securities) as of a specific date. The shape of the yield curve can be a predictor of future economic conditions. Normally the yield curve is upward sloping, meaning that as the maturity increases, the yield also increases. When monetary conditions are tightening (as at the end of a business cycle, when the Fed is raising short-term interest rates in order to restrain inflation), the yield curve can become negatively sloped or “inverted”, meaning that the yield on near-term securities is higher than the yield on long-term securities. When short term and long-term yields are about the same, the yield curve is said to be “flat”.
Yield To Call – the percentage rate of a bond or note, if you 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 yield to maturity 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.