What is a bond yield?

A bond yield refers to the return expected from a bond investment, which is a critical concept in fixed income securities. It typically expresses the income generated by the bond relative to its price or original investment. Yield can be calculated in several ways, including current yield, yield to maturity, and yield to call, and serves as an important indicator for investors assessing the profitability of a bond versus other investment opportunities.

Understanding bond yield is essential for evaluating the attractiveness of fixed income investments, as it reflects not just the income received but also accounts for the bond's price fluctuations in the market. The other options, while related to bonds, do not capture the concept of yield appropriately. For example, the price of a bond in the secondary market merely reflects its market valuation at a specific point in time, rather than the return expected from holding the bond. Similarly, the face value of a bond upon maturity indicates the amount to be received at the end of the bond's term, and trading volume provides insight into market activity but does not relate to the yield or return on the investment itself.