how do investors utilize bond yields 
yields are used for more sophisticated analyses bonds of different maturities can be traded to take advantage of the yield curve which plots the interest rates of bonds having equal credit quality but differing maturity dates the slope of the yield curve gives an idea of future interest rate changes and economic activity they may also look at the difference in interest rates between different categories of bonds holding some characteristics constant a yield spread is a difference between yields on differing debt instruments of varying maturities credit ratings issuer or risk level calculated by deducting the yield of one instrument from the other such as the spread between aaa corporate bonds and u s treasuries this difference is most often expressed in basis points bps or percentage points the bottom linebond yield is the amount of return an investor will realize on a bond the coupon rate and current yield are basic yield concepts and calculations a bond rating is a grade given to a bond and indicates its credit quality and often the level of risk to the investor in purchasing the bond 