A Realized Capital Gain Is

question 94

Multiple Choice

A realized capital gain is

• A)the difference between the price of a share of stock and what the investor paid for it (i.e., the broker's fee)
• B)the difference between the original value of a piece of equipment and its depreciated value
• C)an increase in the net worth of a sole proprietorship or partnership
• D)an increase in the market value of a share of stock held by an individual
• E)the difference between the selling price and the purchase price of a share of stock

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Definitions:

Clear

in an economic or financial context often means to settle a transaction or complete a trade or payment process.

Federal Reserve's Assets

These are financial assets held by the Federal Reserve Bank, including government securities, mortgage-backed securities, and loans to banks.

Excess Reserves

The capital reserves held by a bank or financial institution in excess of what is required by regulators, creditors, or internal controls.

Required Reserve Ratio

The fraction of deposits that a bank is required by regulation to hold in reserve, not loaning them out, ensuring banks can meet their depositor's demands.