ABSTRACT
The "yield" of an investment is a particularly important concept as it indicates to an investor the level of earnings of that investment, or the speed at which it will earn money. All other things being equal, the higher the yield the more attractive an investment will be. A 20% yielding investment will pay £20 pa for every £100 invested, whereas with a 5% investment the return will only be £5 for every £100 invested. Thus, all other things being equal, the former would be the more attractive investment, but the concept of yields is a little more complicated, for a yield also gives an indication of the degree of risk attached to an investment.
