It is, it supports GI, dispersion, caustics, ansiotropic shader models (although only via .xml editing), etc…most of the stuff you need for true realism (on the other hand, you could fake most of that but that won’t make it very accurate).
HOWEVER, it is NOT a receipt to simply “bake” realistic images. If you’re looking for that, I’d also advise to check out Indigo which makes things even easier than Yafray, I’m often surprised how simple the corresponding lighting setup is when you look at images made with the new render engine.
But there is no way to get around some work. To achieve realism you need to work on your skills in texturing, lighting, modelling (and traditional techniques of art, as composition, wouldn’t hurt either ). Without that, you’ll be most likely lost even with the powerful yet simple methods of Indigo and Yafray.