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.