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Yield

Also known as return. It is the amount of interest paid on a bond or dividend paid on the current market price of the security, expressed as a percentage.

Yield-Curve

A curve formed when plotting yield against maturity over a given period.

  1. Negative Yield Curve: Shorter-term interest rates are higher than longer-term interest rates. It occurs in periods of a "tight" credit environment. Also called inverted yield curve. 
  2. Normal Yield Curve: Shorter-term interest rates are lower than longer-term interest rates. It occurs in periods of a "loose" credit environment. Also called positive yield curve.
Yield-to-Maturity

The yield an investor of a bond or debenture would earn if the security were held to maturity. It factors in the price paid for the security (price discount or price premium), the coupon rate, the period remaining to maturity and the face value.

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