Bond yields represent what aspect of a bond investment?

Bond yields represent the return an investor earns on a bond. When an investor purchases a bond, they are essentially lending money to the issuer in exchange for periodic interest payments, known as coupon payments, along with the return of the bond's face value at maturity. The yield indicates how much return the investor can expect relative to the price paid for the bond, factoring in both the interest payments and any potential gains or losses based on the bond's resale value.

This concept is crucial for investors to assess the profitability of their bond investments, as it helps to compare different bonds and evaluate the risk associated with each. Understanding bond yields enables investors to make informed decisions, maximizing their returns based on current market conditions and interest rates.

The other choices focus on different aspects of bond investments, such as the total purchase cost, initial value at issue, or the government-set interest rate, which do not accurately represent what yields convey about an investment's return.