Definition of Yield

yield is the annual amount of income generated by a security relative to its price expressed as a percentage.

Applying "Yield" to Securities Exams:

Many investors seek current income as part of their investment objective. An investment’s yield measures the amount of income generated by a bond (in the form of an interest payment) or stock (in the form of a dividend payment) as a percentage of the price an investor must pay to purchase that bond or stock. The higher the yield the higher the amount of income the investor will receive each year.

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