Investments and the Yield

The yield - on any investment this will be a crucial piece of information and knowledge to collect, so just what does it refer to?

Well, this is a measure of the RETURN ON INVESTMENT effectively, an absolutely key measure on each investment and whether you should take it out or not.

The simplest of all is called the FLAT YIELD - and here you get a flat return as anticipated from the name, e.g. a flat rate of interest or running yield.

However the flat yield is of marginal use as it fully ignores timing of cash flows, the time value of money and any sort of variations that really would be expected to come into account.

In other words whilst perhaps the simplest to understand and calculate, in real terms the flat yield is not of much practical use!

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