Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question

Capital gain yield (CGY) can be either positive or negative.

 

Select one:
True
False
Expert Solution
Check Mark
Conceptual Introduction:

Capital gains yield is the percentage increase in the value of an investment. It's calculated by dividing an investment's price increase by the cost of acquisition. For instance, if you purchase a security for $100 and later sell it for $125, your capital gains yield is 25%. If the price of an investment falls below its acquisition price, there is no capital gains yield.

This concept disregards any dividends received and is solely dependent on the change of an investment's price. To calculate the entire return on a share, an investor must add the capital gains yield and the dividend yield.

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