Investment yield is defined as what?

Investment yield is defined as what?

• A. The initial investment
• B. The risk exposure
• C. The return received on the investment
• D. The duration of the investment

Answer: (C)

The main idea here is that investment yield measures the return you actually earn from an investment, usually shown as a percentage of what you put in. It captures the income generated (like interest or dividends) and, in some definitions, any capital gains, relative to the amount invested and over a specified period. For example, if you invest $1,000 and receive $50 in interest in a year, the yield is 5%. This is why the correct choice is the return received on the investment—yield is all about the earned return. The initial amount invested is just the base, not the yield; risk exposure describes potential loss, not the income earned; and duration is the time you hold the investment, not the return it generates.

The main idea here is that investment yield measures the return you actually earn from an investment, usually shown as a percentage of what you put in. It captures the income generated (like interest or dividends) and, in some definitions, any capital gains, relative to the amount invested and over a specified period. For example, if you invest $1,000 and receive $50 in interest in a year, the yield is 5%. This is why the correct choice is the return received on the investment—yield is all about the earned return. The initial amount invested is just the base, not the yield; risk exposure describes potential loss, not the income earned; and duration is the time you hold the investment, not the return it generates.