A Capital Gain Is the Result Of

question 27

Multiple Choice

A capital gain is the result of:

• A)selling an asset for less than its purchase price.
• B)holding an asset that has depreciated.
• C)selling an asset at its purchase price.
• D)selling an asset for more than its purchase price.
• E)buying a new asset at a rate lower than the market rate of the asset.

---

Definitions:

Compounded Annually

The process wherein the interest earned on an investment is added to the principal at the end of each year, with future interest calculated on the new total.

Treasury Bonds

Long-term government debt securities with a fixed interest rate, considered low-risk investments.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Compounded Annually

Interest calculation method where the interest is added to the principal sum at the end of each year, affecting the total interest earned or paid.