What is capital gains yield?
Understand the Problem
The question is asking for an explanation of the capital gains yield, which is a financial term related to the return on an investment due to price increases.
Answer
A capital gains yield is the rise in the price of an investment calculated as the rise in the security's price divided by its original price.
The final answer is: A capital gains yield is the rise in the price of an investment such as a stock or bond, calculated as the rise in the security's price divided by the original price of the security.
Answer for screen readers
The final answer is: A capital gains yield is the rise in the price of an investment such as a stock or bond, calculated as the rise in the security's price divided by the original price of the security.
More Information
Capital gains yield (CGY) helps investors understand the price appreciation of their investment over time, which is crucial for assessing investment performance.
Tips
A common mistake is to confuse capital gains yield with dividend yield. Capital gains yield focuses only on the price appreciation, not on dividends received.
Sources
- Capital Gains Yield - Overview, Formula - Corporate Finance Institute - corporatefinanceinstitute.com
- Capital Gains Yield (CGY) | Formula + Calculator - Wall Street Prep - wallstreetprep.com
- What Is Capital Gains Yield? - SmartAsset - smartasset.com
