What is defined as the gain or loss made on an investment relative to the amount invested?

The term that describes the gain or loss made on an investment relative to the amount invested is known as investment return. This concept encompasses the overall financial performance of an investment, which includes not just any increase or decrease in value (capital gains or losses) but also any income generated from the investment, such as dividends or interest.

Investment return is typically expressed as a percentage of the original investment, making it easier to compare the performance of different investments or assess how well an investment has performed over time. This measure is crucial for investors, as it helps them evaluate the effectiveness of their investment strategies and make informed decisions moving forward.

While capital gain refers specifically to the increase in the value of an investment when it is sold for a price higher than the purchase price, it does not account for other forms of income associated with the investment. Market risk pertains to the potential for an investor to experience losses due to factors that affect the overall performance of the financial markets, but does not measure the gain or loss of a specific investment. Equity return is similarly focused on returns from equity investments, typically reflecting the performance of stocks specifically, but again does not encompass the broader concept of investment return.