Certified Government Financial Manager (CGFM) Practice Exam

In investment terminology, 'yield' is defined as the income received from an investment, typically expressed as a percentage of the investment's cost or market value. This income can come in various forms, such as interest payments for bonds, dividends for stocks, or any other earnings generated by the investment over a specific period.

When investors assess potential investments, they often focus on yield to evaluate the potential return relative to the investment amount. Understanding yield is crucial for making informed decisions, as it helps compare different investment options, taking into account the income each will generate.

Other concepts mentioned, such as the initial investment, the risk associated with the investment, and the market price of the security, do not represent yield directly. Instead, they provide context for assessing an investment's overall attractiveness but do not encapsulate the income aspect that yield specifically represents.