Which of the following best defines the term 'capital gain'?

The term 'capital gain' is best defined as the increase in an asset's value over time, realized upon sale. This means that when an investor sells an asset for more than they paid for it, the difference between the selling price and the purchase price is classified as a capital gain. This concept is essential in investment accounting and tax calculations, as capital gains can be taxable events when the profit is realized.

Understanding what constitutes a capital gain helps investors make informed decisions about when to sell their investments to maximize their returns. It also highlights the importance of asset appreciation in the overall investment strategy. In contrast, the other choices refer to different aspects of investment income but do not accurately capture the definition of a capital gain.