effective yield

Effective yield

Yield or return on a short-term investment after adjustment for the change in exchange rates over the period of concern.

Annual Percentage Yield

The yield on an investment in one year, taking into account the effects of compounding. For example, if one has a fixed-income investment such as certificate of deposit that pays 3% in interest each month, the annual percentage yield is more than 3% because compounding the interest results in a (slightly) higher return each month. In this example, the annual effective yield is calculated thus:

Annual percentage yield = (1.03)^12 - 1 = .43 = 43%, where 1.03 is 1 plus the monthly interest and 12 is the number of times in a year interest is compounded. It is also known as the annual effective yield.

effective yield

A calculation of the return on an investment that considers the price paid,the time held,and the interest received.

References in periodicals archive ?
The Company believes the presentation of effective interest income, effective yield, effective interest expense, effective cost of funds, effective net interest income and effective interest rate margin measures, when considered together with U.
For an individual in the 30% tax bracket, the effective yield from EPF (calculated at 8.
Management said the money is held in bank deposits yielding 9% annually, but the effective yield is about 6% because some of the funds are used for corporate purposes over the year.
OOur overall strategy is closely tied to effective yield management,O he said in a speech to FedEx investors.
The bonds, which have six-year and 10-year maturity, offer an effective yield of 11.
By buying up quantities of government bonds the Bank has pushed down the effective yield on them, in turn weighing on swap rates in money markets.
Growth in international express package shipments and effective yield management on the domestic air transportation front played key roles in FedEx Corp.
Most lines are in production on cheddar and similar varieties and have proved their worth not only in the production data of low giveaway and effective yield but also in the reliability of the machines which regularly give service for 24/7 operations.
Timely information from all possible sources of yield loss in the semiconductor manufacturing process is essential for effective yield management.
In effect, the income tax consequences are determined with reference to the security's effective yield, rather than its cashflow.
There are two reasons for this: No ineffective piece is reported in earnings and the effective yield need not be recalculated until termination of the hedge.

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