The expected rate of return of an investment. For bonds, the yield considers the current bond price and coupon payments until maturity. See also “seven day effective yield.”
A graph displaying the relationship between bonds whose yields are of the same quality but mature at different times. A yield curve normally slopes upward to show that short-term investments usually have a lower yield than their longer-term counterparts. When short-term funds become more expensive, the yield curve is said to invert.
The return of a bond over its life, assuming periodic coupon payments are reinvested until the bond matures. This accounts for the par value, coupon rate, time to maturity and market price.
When one person’s gain is equivalent to another’s loss. In financial markets, “zero-sum game” applies to derivative securities (e.g., options), unlike other types of investments (e.g., stocks).
