If a Stock Was Purchased in January 2014 for $1,000

question 49

Multiple Choice

If a stock was purchased in January 2014 for $1,000 and sold in December 2015 for $3,000, a ________ of $2,000 results.

• A) long-term capital gain
• B) short-term capital gain
• C) long-term capital loss
• D) short-term capital loss

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Definitions:

Open Market Operations

Central bank activities that involve the buying and selling of government securities in the market to influence liquidity and interest rates.

Reserve Requirement

Central bank regulations regarding the minimum amount of reserves that commercial banks must hold against deposits.

Margin Requirements

The minimum amount of equity that must be maintained in a margin account as mandated by brokers or exchanges.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.