What term describes the profit made from an investment compared to the purchase price?

The term that describes the profit made from an investment compared to the purchase price is "Capital Gain." This refers specifically to the increase in the value of an asset or investment from the time it is purchased until it is sold. If the selling price exceeds the purchase price, the difference is considered a capital gain.

Understanding capital gains is crucial for investors, as they directly impact the overall profitability of an investment strategy. When an asset appreciates in value, the investor can realize a profit by selling it at a higher price than what was paid initially. This fundamental concept plays a key role in building wealth through investments, making it essential for individuals to grasp.

While terms like "Investment Return" and "Net Profit" are related to overall financial performance, they encompass a broader scope that includes various types of income or profits, not solely the increase in value of an asset. Dividends refer specifically to distributions of a portion of a company's earnings to shareholders and do not relate to gains from asset value increases.