Bond Yield
Bond yield is a measure of the return on an investment in a bond. It is calculated by dividing the annual interest payment by the current market price of the bond. Bond yields are used to compare the relative value of different bonds and to determine the attractiveness of a particular bond. Bond yields are also used to measure the risk associated with a particular bond. The higher the yield, the greater the risk.
History of Bond Yields
The concept of bond yields has been around since the 16th century, when the Dutch East India Company issued bonds to finance its voyages to the East Indies. Bond yields were used to determine the return on these investments. Since then, bond yields have been used to measure the return on investments in bonds issued by governments, corporations, and other entities.
Comparison of Bond Yields
| Type of Bond | Yield |
|---|---|
| Government Bond | 2.5% |
| Corporate Bond | 4.5% |
| Municipal Bond | 3.5% |
Summary
Bond yield is a measure of the return on an investment in a bond. It is calculated by dividing the annual interest payment by the current market price of the bond. Bond yields are used to compare the relative value of different bonds and to determine the attractiveness of a particular bond. Bond yields are also used to measure the risk associated with a particular bond. For more information on bond yields, visit websites such as Investopedia, Bloomberg, and The Wall Street Journal.
See Also
- Interest Rate
- Bond Maturity
- Bond Coupon
- Bond Price
- Yield to Maturity
- Yield Curve
- Duration
- Credit Spread
- Default Risk
- Inflation Risk
