What type of financial return does yield usually signify?

Yield typically signifies the annual profit from an investment, often expressed as a percentage of the investment's cost or current market value. This measure helps investors understand how much income they can expect to earn relative to the amount they invested, making it a crucial indicator of an investment's performance.

In the context of investments, yield most commonly refers to the income generated from fixed-income securities, such as bonds or stocks that pay dividends. For example, if a bond has a yield of 5%, it indicates that the investor can expect to earn 5% of the bond's value in interest payments annually. This concept allows investors to assess whether an investment is generating an adequate return compared to its risks and other investment opportunities.

Understanding yield in this way provides a clearer picture of the income-generating capabilities of an investment, emphasizing its role in measuring profitability over a specific time period, typically one year.