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Yankee bonds are bonds issued in dollars in the United States by overseas companies and governments.
The purpose is to raise more money than the issuers may be able to borrow in their home markets, either because there is more money available for investment in the United States, or because the interest rate the issuers must pay to attract investors is lower.
US investors buy these bonds as a way to diversify into overseas markets without the potential drawbacks of currency fluctuation, foreign tax, or different standards of disclosure that may be characteristic of other markets.
- Browse Related Terms: Brady bond, Central bank, Depository Trust and Clearing Corporation (DTCC), Devaluation, Euro, Eurobond, Eurocurrency, Exchange Rate, Floating rate, Global depositary receipt (GDR), International Monetary Fund (IMF), Monetary policy, Monetary reserve, Open market, World Bank, Yankee bond
Yield is most commonly associated with a money market fund's return. "Current Yield" is based on daily return, "Effective Yield" on the annual compounded return. Yield to Maturity: The annual rate of return an investor would receive if a bond were held until maturity.
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The return on an investor’s capital investment.
The return on an investor's capital investment.
- Browse Related Terms: Asset, Asset Backed Securities, CMOs (Collateralized Mortgage Obligations), Collateralized Mortgage Obligation (CMO), Modified Duration, Mortgage backed security, Par Value, trust, Yield
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Yield is the rate of return on an investment expressed as a percent.
Yield is usually calculated by dividing the amount you receive annually in dividends or interest by the amount you spent to buy the investment.
In the case of stocks, yield is the dividend you receive per share divided by the stock's price per share. With bonds, it is the interest divided by the price you paid. Current yield, in contrast, is the interest or dividends divided by the current market price.
In the case of bonds, the yield on your investment and the interest rate your investment pays are sometimes, but by no means always, the same. If the price you pay for a bond is higher or lower than par, the yield will be different from the interest rate.
For example, if you pay $950 for a bond with a par value of $1,000 that pays 6% interest, or $60 a year, your yield is 6.3% ($60 ÷ $950 = 0.0631). But if you paid $1,100 for the same bond, your yield would be only 5.5% ($60 ÷ $1,100 = 0.0545).
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Percentage of return on an investment.
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A graph showing the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from the shortest to the longest possible. The Y-axis represents the interest rate and the X-axis represents time with a normal curve being convex in shape.
A graph showing the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from the shortest to the longest possible. The Y-axis represents the interest rate and the X-axis represents time with a normal curve being convex in shape.
- Browse Related Terms: Basis Point (bp), Benchmark, bp (Basis Point), Capital Gain, Endowment Funds, Loss (Realized Gain), Loss (Unrealized Gain), Non-endowment Funds, Operating Monies, Realized Gain (Loss), Reverse Repurchase Agreement, Unrealized Gain (Loss), Yield Curve, Yield to Maturity
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A yield curve shows the relationship between the yields on short-term and long-term bonds of the same investment quality.
Since long-term rates are characteristically higher than short-term rates, a yield curve that confirms that expectation is described as positive. In contrast, a negative yield curve occurs when short-term rates are higher.
A flat or level yield curve occurs when the rates are substantially the same.
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A measure of the average rate of return that will be earned on a bond if held to maturity.
A measure of the average rate of return that will be earned on a bond if held to maturity.
- Browse Related Terms: Basis Point (bp), Benchmark, bp (Basis Point), Capital Gain, Endowment Funds, Loss (Realized Gain), Loss (Unrealized Gain), Non-endowment Funds, Operating Monies, Realized Gain (Loss), Reverse Repurchase Agreement, Unrealized Gain (Loss), Yield Curve, Yield to Maturity
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Yield to maturity is the most precise measure of a bond's anticipated return and determines its current market price.
YTM takes into account the coupon rate and the current interest rate in relation to the price, the purchase or discount price in relation to the par value, and the years remaining until the bond matures.
Although YTM figures are complex to calculate, brokers will supply this information if you ask, or you can use a calculator programmed to provide YTM figures.
- Browse Related Terms: Average annual yield, Basis point, Current return, current yield, Equivalent taxable yield, Nominal yield, Rate of return, Spread, Yield, Yield to maturity (YTM)
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Most insurance companies charge higher rates for young drivers between the ages of 16 and 25.
- Browse Related Terms: Benchmark rate(s), Credit score, Non-Bound Application, Proof of loss, Quotation or Quote, Quote, Underwriter, Underwriting, Youthful Driver