Legal Definitions - net yield

Definition: Net yield is the profit or loss on an investment after deducting all appropriate costs and loss reserves. It is expressed as a percentage of the investment.

• Coupon yield: The annual interest paid on a bond divided by the bond's par value.
• Current yield: The annual interest paid on a bond divided by the bond's current market price.
• Discount yield: The yield on a security sold at a discount.
• Earnings yield: The earnings per share of a security divided by its market price.

For example, if you invest $100 in a bond with a coupon yield of 5%, you will receive $5 in interest each year. If the bond's current market price is $90, the current yield would be 5.56% ($5/$90). However, if you deduct any costs or loss reserves from your profit, such as fees or potential losses, the resulting percentage would be the net yield.