Encyclopedia of Investment Terminology

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A yield is the cash amount that a person who owns a type of security will get. When the yield on an investment is high then it will be easier to get one’s initial investment returnedat a faster rate. This makes the investment a low-risk one. If a stock that trades at $20 pays 25 cents per quarter in dividends (or $1 per year), then the yield is the dividend divided by the stock price, or 5%.

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