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Glossary entry · Money in motion
Yield
Definition
The cash income an investment produces, expressed as an annual percentage of its current price. A 4% yield on a $1,000 bond means $40/year. Often confused with return, but yield is just the income part — not the price changes.
Example
A stock at $100 paying $3 in annual dividends has a 3% dividend yield.
Related
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
Read →Inflation
The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays — or costs — per year.
Read →Return
The gain (or loss) on an investment, usually expressed as a percentage per year.
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