An asset's return on investment has two components, one of which is ____________, which reﬂects the cash you receive directly while you own the investment.
A) the capital gain
B) the income component
C) your reward for bearing risk
D) your total dollar return
E) your gross return on that investment

Question

Quizplus · Accepted Answer

The income component represents the cash you receive while owning the investment, such as dividends or interest payments. The other component is the capital gain, which reflects the change in value of the asset. Your reward for bearing risk is a concept related to both components, as investors take on risk in hopes of receiving higher returns. Your total dollar return is the combined result of both components, while gross return typically refers to the return before deducting expenses or fees.

An Asset's Return on Investment Has Two Components, One of Which