Gemeinsames Audio

Yield is the return based on the current price. A bond pays fifty dollars per year. If the price is one thousand, the yield is five percent. If the price drops to eight hundred, the yield becomes six point two five percent. When price falls, yield rises — this is key for trading. Bonds are stable with fixed income and lower risk, while stocks are volatile with variable returns and higher risk. Bondholders also have priority in payout compared to stockholders.