Economics Bonds Questions
The yield of a bond refers to the annual interest or coupon payment received by the bondholder, expressed as a percentage of the bond's current market price. It represents the income generated by the bond.
On the other hand, the total return of a bond includes both the yield and any capital gains or losses that occur when the bond is sold or matures. It takes into account any changes in the bond's price over time.
In summary, the main difference between a bond's yield and its total return is that the yield only considers the income generated by the bond, while the total return includes both income and capital gains or losses.