Realized Yield

What is a 'Realized Yield'

A realized yield is the actual amount of return earned on a security investment over a period of time. This period of time is typically the holding period which may differ from the expected yield at maturity. The realized yield also includes the returns that have been earned from reinvested interest, dividends and other cash distributions.

BREAKING DOWN 'Realized Yield'

The realized yield tends to differ from the yield at maturity in scenarios where the holding period is less than that of the maturity date. In other words, the security is settled or sold prior to the maturity date given at the time of purchase.

For example, suppose an investor purchases a 10-year bond for $1,000 that issues a 5% annual coupon. Furthermore, if the investor sells the bond for $1,000 at the end of the first year (and after receiving the first coupon payment), her realized yield would only include the $50 coupon payment.

RELATED TERMS
  1. Effective Yield

    The yield of a bond, assuming that you reinvest the coupon (interest ...
  2. Running Yield

    The annual income on an investment divided by its current market ...
  3. Yield

    The income return on an investment. This refers to the interest ...
  4. Coupon Rate

    The yield paid by a fixed income security. A fixed income security's ...
  5. Coupon

    The annual interest rate paid on a bond, expressed as a percentage ...
  6. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
Related Articles
  1. Markets

    Comparing Yield To Maturity And The Coupon Rate

    Investors base investing decisions and strategies on yield to maturity more so than coupon rates.
  2. Markets

    How Do I Calculate Yield To Maturity Of A Zero Coupon Bond?

    Yield to maturity is a basic investing concept used by investors to compare bonds of different coupons and times until maturity.
  3. Markets

    Simple Math for Fixed-Coupon Corporate Bonds

    A guide to help to understand the simple math behind fixed-coupon corporate bonds.
  4. Markets

    Understanding the Different Types of Bond Yields

    Any investor, private or institutional, should be aware of the diverse types and calculations of bond yields before an actual investment.
  5. Markets

    Bond Yields: Current Yield And YTM

    A bond's current yield, also called "bond yield," is the interest it pays annually divided by the bond's price. A stock's current yield, also called "dividend yield," is the sum of its annual ...
  6. Managing Wealth

    4 Types Of Money Market Yields

    We give you four equations to help figure out the yields on your investments.
  7. Markets

    If I Buy A $1,000 10-Year Bond With A 10% Coupon, Will I Receive $100 Each Year?

    Investors can count on a fixed-income security paying them a certain amount of cash as long as the security is held until maturity and the issuer doesn’t default.
  8. Markets

    Calculating Yield to Worst

    Yield to worst is the lowest possible yield on a bond that may be called in the future.
  9. Investing

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  10. Managing Wealth

    How To Evaluate Bond Performance

    Learn about how investors should evaluate bond performance. See how the maturity of a bond can impact its exposure to interest rate risk.
RELATED FAQS
  1. How can I use the holding period return yield to determine whether or not I should ...

    Find out how to use the holding period return yield formula to determine whether it is a good time to sell your bond based ... Read Answer >>
  2. What is the difference between yield to maturity and the coupon rate?

    Read about some of the basic differences between a debt security's coupon rate and its yield to maturity, and learn which ... Read Answer >>
  3. What is the difference between yield to maturity and the yield to call?

    Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing ... Read Answer >>
  4. How do I calculate yield to maturity of a zero coupon bond?

    Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than ... Read Answer >>
  5. Can I use the current yield to compare a bond to an equity investment?

    Learn about the different types of yield measurements for stocks and bonds, and find out how to make careful comparisons ... Read Answer >>
  6. What is the difference between the yield of stock and the yield of a bond?

    Explore and understand the various meanings of the investment term "yield" as it is applied to equity investments and bond ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center