Because the earnings yield is a rate of return, it can be directly compared with other rates of return.

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After all, if they thought that whatever expansion they were considering would only yield an internal rate of return of 5%, they would conclude that they should not engage in the expansion since it would cause them to lock in a guaranteed loss of 1% per year.

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T-bills yield a negative real rate of return now and 10-year Treasuries yielding 4% don't light my fire.

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T-bills normally yield a 1% real rate of return.

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This eases the cash flow of a strapped business, and the time value of money makes such investment yield a higher (after-tax) rate of return.

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Typically mutual funds is where we are looking at quite substantially right now for really one reason, and those tend to trend better with a lot less risk, so you know you can have market-like rate of return on high-yield-bond mutual funds with historically a third of the downside risk of the markets.

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In fact, the rate of return you can earn today on high yield bonds (6.61%) is the lowest absolute yield on record.

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White Mountains has a negative rate of return of 1.97% and earnings yield of 11%.

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Shares of the aging discounter are essentially unchanged from where they were five years ago, meaning that an investor who bought the stock in July 2002 has made an approximate 1% return, the rate of Wal-Mart's dividend yield.

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By investing in a money market mutual fund, which may often yield just 2% or 3%, the investor may be missing out on an opportunity for a better rate of return.

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