Realized Yield

Realized yield is the actual return on an investment over a certain period of time. It is calculated by taking the difference between the sale price and purchase price of an investment, and dividing that amount by the purchase price.

For example, if you buy a stock for $100 and sell it for $110, your realized yield would be 10%.

Realized yield is different from expected yield, which is the anticipated return on an investment based on its current price and other factors. Expected yield is often used to compare different investments and make investment decisions.

Realized yield is important because it provides a more accurate picture of the actual return on an investment. Expected yield can be misleading, as it does not take into account the possibility of an investment losing value.

There are a few things to keep in mind when calculating realized yield. First, you need to make sure that you are using the correct purchase price and sale price. The purchase price is the price you paid for the investment, and the sale price is the price you received when you sold it.

Second, you need to make sure that you are using the correct time period. The realized yield is calculated over a specific period of time, such as one year or five years.

Finally, you need to make sure that you are using the correct method of calculation. There are a few different ways to calculate realized yield, but the most common method is to use the following formula:

Realized yield = (Sale price - Purchase price) / Purchase price

By using this formula, you can easily calculate the realized yield on any investment.

Realized yield is a valuable tool for investors, as it provides a more accurate picture of the actual return on an investment. By understanding realized yield, investors can make more informed investment decisions.