When One Has Accumulated Shares of a Stock or a Mutual

question 38

Multiple Choice

When one has accumulated shares of a stock or a mutual fund over time at different prices, for minimizing taxes, which of the following shares should be sold?

• A) Those that cost the most
• B) Those that cost the least to provide a larger capital gain
• C) It does not matter since the company will automatically compute a weighted average of your various purchase prices
• D) It does not matter since the company will automatically sell the shares which cost the least
• E) None of the above

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Definitions:

Investment Account

An account held at a financial institution that contains securities, cash, and other investments owned by the account holder.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Dividends

Payments made by a corporation to its shareholders, typically from earnings, as a distribution of profits.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's earnings.