Yield

In economics, the yield is how much money somebody is paid each year for leaving money invested somewhere.  Unlike a corporate dividend, a yield is fairly certain, unless there is a bankruptcy. This means that people usually know how much money they are going to make from their yield ahead of time.

Yields can be different because of inflation but there is usually a relationship between risk and returns. The safest  instruments, such as government bonds, yield the least whereas higher risk securities, such as corporate bonds, should pay more - this compensates investors for risks like bankrupcy and inflation. Stocks and junk bonds are the riskiest investments and should promise the highest yield. Finance is studied at universities and these relationships between risk and returns are supported by academic research.

Related pages
Returns (economics)

Category:Finance