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The income return on an investment, expressed as a percentage of the investment's cost or current market value.
Yield takes different forms depending on the context. Current yield for bonds is the annual coupon divided by the current market price. Dividend yield for stocks is the annual dividend divided by the stock price. Yield to maturity (YTM) for bonds accounts for all coupon payments and the gain or loss from buying at a premium or discount to par. Yield and price move in opposite directions for bonds: when bond prices fall, yields rise, and vice versa. Comparing yields across asset classes helps investors assess relative value. For example, when dividend yields on stocks exceed bond yields, stocks may be more attractive from an income perspective.