QUICK DEFINITION
Yield is a measure of the return implied by a bond's price and cash flows, expressed as an annualized rate under a specified convention.
WHY IT MATTERS
Why Yield matters in bond markets
Yield is the common language through which bond prices, expected returns and financing costs are compared.
MARKET CONTEXT
How to think about it
Bond investors use yield as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Yield important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Yield is the common language through which bond prices, expected returns and financing costs are compared.