Discount Yield
Discount yield is a face-value-based quote for short-term bills, distinct from the investor's price-based return, investment yield, and effective yield.
Realized yield, discount yield, and yield on cost answer different questions about actual investment results, bill quotations, and dividend income.
Realized yield, discount yield, and yield on cost describe different aspects of an investment. Their percentages are not directly interchangeable: one measures an actual outcome, another expresses a bill-price quotation, and another relates annual income to historical cost.
Realized Yield explains completed investment returns, including coupon reinvestment, sale proceeds, and the distinction between holding-period and annualized results.
Discount Yield explains why a short-term bill’s face-value-based quote differs from the return on the price paid. Yield on Cost shows how dividend income compares with a holding’s historical cost, without measuring its current market yield or total return.
Before comparing rates, identify the denominator, income period, annualization method, and whether the inputs are actual or projected. These distinctions help explain a result; they do not establish dividend safety, future returns, or suitability for an individual investor.
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Discount yield is a face-value-based quote for short-term bills, distinct from the investor's price-based return, investment yield, and effective yield.
Realized yield measures an investment's actual return, with examples separating holding-period gains, coupon reinvestment, and annualized bond returns.
Yield on cost compares annual dividends with historical purchase cost, showing income growth but not current yield, total return, or dividend safety.