Glossary

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Yankee Bond Market
A dollar-denominated bond issued in the U.S. by foreign banks and corporations. Bonds are issued in the U.S. when market conditions there are more favorable than on the Eurobond market or in domestic markets overseas.

Yates's Correction
When a small amount of data is available for testing, the chi-square formula is adjusted to account for the small sample base.

Year-to-Date (YTD)
Refers to the period from the beginning of the calendar year, or fiscal year, to the reporting date. For instance, the third quarterly results of a corporation would be reported for the quarter and for the year-to-date which would be a total of nine months.

Yellow Sheets
The daily publication of the National Quotation Bureau in the U.S. that details the bid and asked prices and firms that make a market in corporate bonds traded in the over the counter market. The sheets are named for their color. Over the counter equity issues are listed separately on pink sheets and regional over the counter issues of both classes are listed on white sheets.

Yen Bonds
Any bond issue dominated by the Japanese yen. International bankers using this term are usually referring to yen-dominated bonds issued or held outside Japan.

Yield
The rate of return on an investment, usually expressed as an annual percentage rate.

Yield (Bonds)
The coupon rate of interest divided by the purchase price is the current yield. Also, the rate of return on a bond after taking into account the total annual interest payments, purchase price, redemption value and the amount of time remaining to maturity.

Yield (Stocks)
The rate of return paid in dividends on a common or preferred stock, expressed as a percentage.

Yield Curve
A curve on a graph that plots the interest rate (yield) of a bond on the vertical axis and the length of time until maturity on the horizontal axis. Their relationship is frequently referred to as the yield curve. Three basic types of curves exist. A normal curve is when interest yields are higher for longer-term bonds and lower for shorter-term bonds. A flat curve is when yields are about the same for longer term and shorter-term bonds. Finally, an inverted curve is when the short-term yields are higher than the yields on longer-term bonds. A yield curve shows the yields of bonds of the same quality but with different maturities to illustrate the relationship between bond yields and maturity lengths.

Yield to Average Life
Refers to a yield calculation where bonds are retired systematically during the life of the issues as in the case of a sinking fund with contractual requirements. An issuer will buy their own bonds on an open market to satisfy their sinking fund requirements if the bonds are trading below par. To this extent, there is an automatic price support for such bonds.

Yield to Call
Refers to the yield on a bond based on the assumption that the bond will be redeemed by the issuer at the first call date specified in the indenture agreement. The same calculations used to determine yield to maturity are used to calculate yield to call, except that the principal value at maturity is replaced by the first call price and the maturity date is replaced by the first call date. On the assumption that the issuer will put the interest of the corporation before the interest of the investor and will therefore call the bonds if it is favorable to do so, the lower of the yield to call and the yield to maturity date can be viewed as the more realistic rate of return to the investor. The percentage rate of a bond or note, if your were to buy and hold the security until the call date. This yield is valid only if the security is called prior to maturity. Generally bonds are callable over several years and normally are called at a slight premium. The calculation of yield to call is based on the coupon rate, length of time to the call and the market price.

Yield to Maturity (YTM)
The percentage rate of return paid on a bond, note or other fixed income security if you buy and hold it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate. The annual rate of return an investor receives assuming a bond is held to maturity, taking into account the purchase price, capital gain or loss, coupon rate, maturity and reinvestment rate.

Yo-Yo Stock
Refers top stock that fluctuates in a volatile way, similar to the quick rise and fall of a yo-yo

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