Graph presenting the term structure of
interest rates by plotting the yields of all bonds of the same quality with
maturities ranging from shortest to the longest available. The resulting
curve shows if short-term interest rates are higher or lower than long-term
rates.
Yield
Return on an investor's capital investment. The
dividends or interest paid by a company expressed as a percentage of the
current price. A stock with a current market value of $80 a share paying
dividends at the rate of $6.40 has a return of 8% ($6.40÷$80.00). Figured
the same way for bonds.
Yield To Maturity
Concept used to determine the rate of return
an investor will receive if a long-term, interest bearing investment is
held to its maturity date. It takes into account purchase price, redemption
value, time to maturity, coupon yield, and the time between interest
payments.