Yield
The basis on which a bond is priced and sold. It reflects the value of the bond giving consideration to the length of time to maturity, credit quality of the issuer/guarantor, and general market conditions. The rate of return on an investment over a given time, expressed as an annual percentage rate. Yield is affected by the price paid for the investment as well as the timing of principal repayments. The annual percentage rate of return earned on a security, as computed in accordance with standard industry practice. Yield is a function of a security's purchase price and coupon interest rate.
Yield-to-call (YTC)
A yield on a security calculated by assuming that interest payments will be paid until the call date, at which point the security will be redeemed. Yield to call is computed in the same manner as yield to maturity, except the maturity date is replaced by the call date and the redemption value at maturity is replaced by the call price.
Yield-to-maturity (YTM)
The rate of return an investor receives if a fixed-income security is held to maturity, and that all interest received can be reinvested at the yield to maturity. The internal rate of return of a series of cash flows from a given time until maturity.
Yield-to-par call
Yield-to-par call is computed in the same manner as yield to maturity, except that the maturity date is replaced by the par call date, and that the redemption value at maturity is replaced by the par call price.
Yield-to-worst
The lowest yield on a security as determined after calculating the yield-to-maturity and the yield-to-call on the first call date and on all subsequent call dates up to maturity.
Yield curve
The graphical relationship between individual yields and maturities for the same issuer's securities. The yield level is usually plotted on the vertical axis and the term to maturity of debt instruments of similar credit-worthiness is plotted on the horizontal axis. The yield curve is positive when long-term rates are higher than short-term rates. Yield curves can be negative or inverted. Yield curve usually refers to the yield curve for U.S. Treasury securities or USD swap curve.
Yield maintenance premium
A penalty paid by the borrower designed to make investors whole in the event of early redemption of principal.
Yield spread
The difference in yield between two bonds or bond indices.
YV01 (risk in yield value)
A measure of the risk in yield based on the 1/32 of price change.