Annuity yield

The annuity yield represents the overall financial success of a bond (also called annuity or fixed-income security).

The annuity return is made up of various elements:

• Interest payments , here called pension
• Price gains and losses
• Differences between the issue price and the face value

The modalities of the interest payments (time and amount) are agreed in advance. The adjustment to the market situation, the design of the Agios or discounts on the output rate, so that the effective yield to the market interest rate corresponds.

The price fluctuations are a consequence of the changing market situation and risk positions. The market value is set among the market participants in such a way that an effective interest rate is achieved at a fixed nominal interest rate that corresponds to the risk on the capital market .

The main influencing factors on the bond yield are the expectations of market participants in the bond market with regard to future interest and inflation developments.