YIELD Definition

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YIELD is the annual return on an investment, expressed as a percentage. The yield to redemption or maturity (the same thing) combines the running yield with the "pull to redemption"; thus a bond which has a 10% coupon and exactly one year of remaining life will sell at $98.2% when interest rates are at 12.0%, that 12.0% being composed of 10.2% running yield and 1.8% pull to redemption ($100.0 - 98.2%).

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SECONDARY MARKET is buyers and sellers willing to trade securities after their initial issuance.

AGENCIES is securities issued by various agencies of the U.S. Government, such as the Federal National Mortgage Association.

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