Yield (economics)

The yield of a financial instrument, usually a debt instrument, is the rate of return the holder earns on that instrument.

Related Topics:
Financial instrument - Debt

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The absolute yield levels vary mainly with expectations of inflation. How yields compare between financial instruments tends to depend mainly on the credit worthiness of the lender, and the maturity of the instrument. The least risky instruments, such as government bonds, virtually always yield less than more risky corporate bonds. The relationship between yields and the maturity of instruments of similar credit worthiness, is described by the yield curve. Long dated instruments typically have a higher yield than short dated instruments.

Related Topics:
Inflation - Government bond - Corporate bond - Yield curve

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