Which of the following defines the capital gains yield?

The capital gains yield is defined as the rate at which the value of an investment grows, specifically measured by the price appreciation of an asset over time. This yield reflects the change in the price of a stock (or any investment) and is expressed as a percentage of the initial price.

When investors consider an investment's potential returns, they often focus not only on the dividends or interest received but also on how much the investment's price may increase. Capital gains yield captures this component, providing a clear picture of how the value of the investment is expected to change, thus playing a crucial role in evaluating an asset's overall performance.

In contrast, other choices don't align with the definition of capital gains yield. For instance, while the rate of return from selling a stock refers to the total gains realized upon sale, it is broader than just the capital gains yield, which focuses specifically on the change in market prices rather than the selling transaction itself. The percentage increase in a company's dividend payments pertains to the income yield rather than capital gains. Similarly, the rate of interest on a bond is a fixed return that is unrelated to capital gains since bonds do not typically reflect price appreciation in the same context as stocks do.