The income generated by an investment, expressed as a percentage of its cost.
Yield is the annual income generated by an investment (interest, dividends) expressed as a percentage of the investment's cost or current value. For bonds, yield is the annual coupon payment divided by the bond price; for stocks, dividend yield is annual dividends per share divided by share price. For example, a stock paying $2 annual dividends with a price of $100 has a 2% dividend yield. Bond yields rise when bond prices fall (inverse relationship); stock yields rise when stock prices fall or dividends increase. "High yield" can mean attractive returns but often comes with higher risk—junk bonds offer high yields because they're risky. Yield is important for income-focused investors; growth investors focus more on capital appreciation than yield.