Which term matches the definition: The money you earn from an investment, usually shown as a percent?

• A. Risk-Reward Tradeoff
• B. Saving
• C. Yield
• D. Time Horizon

Answer: (C)

Yield is the money you earn from an investment expressed as a percentage. It captures income like interest or dividends relative to what you invested. For example, if you own an investment that pays $3 in dividends over a year and the price you paid is $100, the yield is 3%. If a bond pays $40 a year on a $1,000 bond, the yield is 4%. This metric lets you compare how much income different investments generate relative to their cost. Saving is simply setting money aside and doesn’t reflect investment income. Time horizon is about how long you plan to hold the investment, and the risk–reward tradeoff describes balancing potential gains against potential losses.