## Realized Yield

### Realized Yield

### What is a 'Realized Yield'

Realized yield is the actual return earned during the holding period for an investment, and may include dividends, interest payments and other cash distributions. The term may be applied to a bond sold prior to its maturity date or a dividend-paying security. Generally speaking, the realized yield on bonds includes the coupon payments received during the holding period, plus or minus the change in the value of the original investment, calculated on an annual basis. Next Up Bond Yield Yield Term To Maturity Running Yield

### Explaining 'Realized Yield'

The realized yield on investments with maturity dates is likely to differ from the stated yield to maturity under most circumstances. One exception occurs when a bond is purchased and sold at face value, which is also the redemption price of the bond at maturity. For example, a bond with a coupon of 5% that is purchased and sold at face value delivers a realized yield of 5% for the holding period. The same bond redeemed at face value when it matures delivers a yield to maturity of 5%. In all other circumstances, realized yields are calculated based on payments received and the change in value of principal relative to the amount invested.### Realized Yields With Bonds

Realized yield is the total return when a bond is sold prior to maturity. For example, a bond maturing in three years with a 3% coupon purchased at face value of $1,000 has a yield to maturity of 3%. If the bond is sold exactly one year after purchase at $960, the loss of principal is 4%. The coupon payment of 3% brings the realized yield to negative 1%. If the same bond is sold one year later at $1,020 for a 2% gain in principal, the realized yield is increased to 5% due to the 3% coupon payment.

### Early CD Withdrawal

Certificate of deposit investors who cash out prior to the maturity date are often charged a penalty. On a two-year CD, the typical penalty for early withdrawal is six months of interest. For example, say an investor who cashes out a two-year CD paying 1% after one year accrues $1,000 of interest. The penalty of six months equates to $500. After paying the penalty, the investor nets $500 over one year for a realized yield of 0.5%.

### Fixed-Income Funds

The calculation for realized yield also applies to exchange-traded funds (ETF) and other investment vehicles without maturity dates. For example, an investor who holds an ETF paying 4% interest for exactly two years and sells for a 2% gain has earned 4% per year. The gain in principal is amortized over the two-year holding period for a 1% gain per year, bringing the realized yield to 5% per year.

### Realized Yield FAQ

#### How do you calculate realized yield?

#### What's the difference between bond's promised yield and its realized yield?

#### What is the difference between ROI and yield?

#### What is realized compound yield?

#### What is realized yield?

#### What is yield to maturity mean?

### Further Reading

**The volatility of realized volatility**

www.tandfonline.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**The economic value of volatility timing using “realized” volatility**

www.sciencedirect.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**Realized returns and the default and prepayment experience of financial leasing contracts**

www.jstor.org [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**The Realized Yield Behavior of Junk Bonds**

search.proquest.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**Modelling the convenience yield in carbon prices using daily and realized measures**

www.ceeol.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**Is economic policy uncertainty important to forecast the realized volatility of crude oil futures?**

www.tandfonline.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**The association between investment opportunity set proxies and realized growth**

onlinelibrary.wiley.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …

**Realized jumps on financial markets and predicting credit spreads**

www.sciencedirect.com [PDF]

… The predictive performance of the different models, however, is assessed in terms of realized volatility, which is more relevant from the viewpoint of financial economics … They also consider the HAR model for the logarithm of realized variance, yielding similar results …