Whats the difference btw yield and return for a bond??

[SriHanuman]

Can somebody give an example to elaborate difference btw yield and return of a bond….
Thnx.

 

[cpk123]

I think yield is the return on the bond.
coupon yield, current yield, yield-to-maturity, yield-to-call and yield-to-worst. -> http://www.finra.org/investors/bond-yield-and-return
http://financialexamhelp123.com/comparing-yield-measures-quant/

 

[cnon]

Yield to maturity is the market interest rate
Coupon yield shows the return for the particular period of the bond.
Check the definition of spot rate,zero rate,par rate and forward rate also in order to have deep knowledge about interest rates.

 

[cnon]

By the way which level includes different type of interest rates?

 

[Onward]

A bond’s return and its yield are the same ONLY when ALL three of the following are true:

• The bond is held to maturity
• All payments (coupon and principal) are made on time and in full
• All coupons are reinvested at the original YTM

The second requirement implies that the bond is option-free and there is no default risk.
The last requirement is the least realistic assumption. Unless the yield curve is perfectly flat, the coupon payments will not be reinvested at the YTM and the return will differ from the yield.

 

[S2000magician]

Onward wrote:
A bond’s return and its yield yield to maturity are the same ONLY when ALL three of the following are true:

• The bond is held to maturity
• All payments (coupon and principal) are made on time and in full
• All coupons are reinvested at the original YTM

You’re talking specifically about yield to maturity.
In general, yield and return are used interchangeably. The holding period yield and the holding period return are the same thing. The terms EAY (effective annual yield) and EAR (effective annual return) mean the same thing.

 

[Onward]

Agreed S2000, thank you for the correction in my wording