Capital Gain Distributions Result When You Decide to Sell Shares

question 139

True/False

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

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Definitions:

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, over a given period.

Discount Rate

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis.

Net Present Value

A financial metric that calculates the present value of expected future cash flows relative to the initial investment, used to assess the profitability of an investment.

Investment Project

An undertaking requiring capital investments with the aim of generating future returns.