Definitions Starting with "Y"

Y

Y is a ticker-symbol extension that signifies that a stock is an American Depository Receipt. Issued by U. Read more

Y Shares

Also called institutional shares, Y shares are mutual fund shares that are available for sale only to institutions.   For example, let's say that the XYZ Mutual Fund invests in a variety of defensive stocks. Read more

Y-Share

A Y-share is a class of mutual funds with high minimum investments. For example, if Mutual Fund XYZ has a $750,000 minimum investment, it is a Y-share fund. Read more

Y2K

Y2K is short for the term "year 2000. " In the business world, Y2K (also called the millennium bug) was a problem that plagued computer systems around the world. Read more

Yankee Bonds

Yankee bonds are bonds issued in the U. S. Read more

Yankee CD

A Yankee CD is a certificate of deposit issued by a foreign bank in the United States and denominated in U. S. Read more

Yankee Market

Yankee Market is slang for the U. S. Read more

Yard

In the finance world, yard is slang for one billion. The term comes from the French word milliard, which means one billion. Read more

Year

In the business world, a year is a 12-month period, four-quarter period, or 13-period stretch of time. It is not always 365 days long, though it is usually very close to that. Read more

Year Over Year (YoY)

Year over year, often referred to using the acronym "YoY," refers to the mathematical process of comparing one year of data to the previous year of data. In business, note that a fiscal year does not always go from January 1 to December 31; many companies have fiscal years beginning at other times. Read more

Year to Date (YTD)

Year to date (YTD) refers to the period extending from the beginning of the year to the present. In business, note that the beginning of the year is not always January 1; many companies have fiscal years beginning at other times. Read more

Year's Maximum Pensionable Earnings

A year's maximum pensionable earnings is what the Canadian government uses to determine the maximum amount a person can get from the Canada Pension Plan. The Canada Pension Plan is similar to the Social Security program in the United States. Read more

Year-End Bonus

A year-end bonus is extra money given to an employee, typically as a reward for helping the company achieve financial goals. Let's say Company XYZ's goal this year was to earn 5 cents per share. Read more

Yellow Knight

A yellow knight is a company that backs out of an attempt to take over another company. Let's assume Company XYZ wants to acquire Company ABC. Read more

Yellow Sheets

Similar to the Pink Sheets, the Yellow Sheets are information about the prices of corporate bonds traded on the over-the-counter market (that is, bonds not listed on the mainstream exchanges). The Yellow Sheets disseminate information to market data vendor terminals and websites to subscribing customers. Read more

Yield

Yield refers to the cash return to the owner of a security or investment.   In general, yield is calculated as follows: Periodic Cash Distributions / Total Cost of Investment = Yield The term yield may refer to slightly different aspects of a return for variable types of investments. Read more

Yield Advantage

Yield advantage is the difference between yields on two different securities issued by the same company. It is the additional amount an investor can expect to earn if he or she chooses one security over another. Read more

Yield Basis

Yield basis refers to the act of quoting bond prices in terms of yield percentages rather than in dollars. Let's assume Company XYZ has $20,000,000 in bonds outstanding that pay 5% interest per year (or $50 per $1,000 bond). Read more

Yield Burning

Yield burning is the illegal practice of excessively marking up municipal and/or Treasury bonds in order to complete a bond offering. Let's assume interest rates have come down and City XYZ wants to refinance some outstanding municipal bonds. Read more

Yield Curve

The yield curve, also known as the "term structure of interest rates," is a graph that plots the yields of similar-quality bonds against their maturities, ranging from shortest to longest. (Note that the chart does not plot coupon rates against a range of maturities -- that's called a spot curve. Read more

Yield Curve Risk

Yield curve risk refers to the probability that the yield curve will shift in a manner that affects the values of securities tied to interest rates -- particularly, bonds. Also known as the term structure of interest rates, the yield curve is a graph that plots the yields of similar-quality bonds against their maturities, ranging from shortest to longest. Read more

Yield Elbow

A yield elbow is the highest point on the yield curve. Also known as the term structure of interest rates, the yield curve is a graph that plots the yields of similar-quality bonds against their maturities, ranging from shortest to longest. Read more

Yield Equivalence

The yield equivalence is the yield a taxable investment would have to offer to equal the tax-free yield on a municipal bond. The formula to calculate yield equivalence for a taxable security is: Yield equivalence = Taxable Yield x (1 - Tax Rate) The formula to calculate yield equivalence for a tax-exempt security is: Yield Equivalence = Tax-Exempt Yield / (1 - Tax Rate) Let's assume an investor is trying to decide whether to invest in the bonds of Company XYZ or in municipal bonds issued by City ABC. Read more

Yield Maintenance

Yield maintenance is a kind of prepayment fee that borrowers pay to banks to reimburse them for the loss of interest resulting from the prepayment of a loan.  The formula for the yield maintenance premium is:Yield Maintenance = Present Value of Remaining Payments on the Mortgage x (Interest Rate - Treasury Rate)note that the Treasury rate should be for bonds of the same duration as the mortgage in question. Read more

Yield on Cost (YOC)

Yield on cost (YOC) is an investment's annual dividend divided by the original purchase price of the investment. To calculate yield on cost, divide the annual dividend by the per-share price you initially paid. Read more

Yield Pickup

Yield pickup is the increase in yield an investor gets by selling one bond and buying another one with a higher yield. Let's assume Jane owns a bond issued by Company XYZ with a 5% yield. Read more

Yield Spread

Yield spread is the difference in yield between two securities or, more commonly, two classes of securities. Let's assume that Bond X is yielding 5% and Bond Y is yielding 7%. Read more

Yield Tilt Index Fund

A yield tilt index fund is a mutual fund that mirrors a specific stock index but gives extra weight to stocks within the index that offer high dividend yields. Let's assume the XYZ mutual fund is a yield tilt index fund. Read more

Yield to Average Life

The yield to average life is the yield on a security based on the security's average maturity rather than the maturity date of the issue. The concept is usually applied to bonds with sinking funds, which are often retired early and thus have shorter lives than their maturity dates suggest. Read more

Yield to Call (YTC)

Yield to call is a measure of the yield of a bond if you were to hold it until the call date. To understand yield to call, one must first understand that the price of a bond is equal to the present value of its future cash flows, as calculated by the following formula:where:P = price of the bond n = number of periods C = coupon payment r = required rate of return on this investment F = principal at maturity t = time period when payment is to be received   To calculate the yield to call, the investor then uses a financial calculator or software to find out what percentage rate (r) will make the present value of the bond's cash flows equal to today's selling price. Read more

Yield to Maturity (YTM)

Yield to maturity (YTM) measures the annual return an investor would receive if he or she held a particular bond until maturity. To understand YTM, one must first understand that the price of a bond is equal to the present value of its future cash flows, as shown in the following formula: Where: P = price of the bond n = number of periods C = coupon payment r = required rate of return on this investment F = maturity value t = time period when payment is to be received To calculate the lien, the investor then uses a financial calculator or software to find out what percentage rate (r) will make the present value of the bond's cash flows equal to today's selling price. Read more

Yield to Worst (YTW)

Yield to worst (YTW) is the lowest yield an investor can expect when investing in a callable bond. The concept is best illustrated with an example. Read more

Yield-Based Option

A yield-based option is a financial instrument that gives the owner the right but not the obligation to purchase a debt security. The value of the yield-based option depends on the difference between the strike price, expressed as a percentage, and the yield on the debt security. Read more

Yield-Spread Premium

Also known as negative points, yield-spread premiums are rebates lenders pay to mortgage brokers or borrowers. Yield-spread premiums are a percentage of the principal. Read more

Yo-Yo

Yo-yo is slang describing volatility in the market. In a mathematical sense, standard deviation is a measure of how much an investment's returns can vary from its average return. Read more

Young and Wealthy but Normal (YAWN)

The Young and Wealthy but Normal (YAWN) demographic is a group of people who typically have generated their own wealth but live modest lifestyles. Let's say John and Jane Doe each has a job that pays $175,000 per year. Read more

Yupcap

Yupcap stands for Young Urban Professionals Who Can't Afford Property. Let's say Jane Doe has a master's degree and is an editorial assistant in San Francisco. Read more

Yuppie

Yuppie is short for young urban professional. Yuppies are usually in their twenties or thirties, just out of college or graduate school, and have high-paying jobs in the city. Read more