Ami Purchased 100 Shares of Stock for $10,000

question 59

Multiple Choice

Ami purchased 100 shares of stock for $10,000.A year later the stock is valued at $18,000.Instead of selling the stock,Ami held onto it for another year.Which of the following is TRUE?

• A)The $8,000 increase in the value of the stock represents an unrealized capital gain.
• B)The $8,000 increase in the value of the stock represents a dividend.
• C)To determine the capital gain,it is first necessary to know the normal rate of return on capital.
• D)none of the above

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Definitions:

Units of X

A generic term for the measurable quantity of a particular thing or variable being studied or utilized.

Leftward Shift

This denotes a movement to the left on a graph, often used in economics to indicate a decrease in supply or demand, leading to changes in price and quantity in the marketplace.

Consumer's Budget Line

A graphical representation of all possible combinations of goods and services that a consumer can purchase with a given income.

Money Income

The total amount of monetary earnings from wages, investments, rentals, and other sources before any deductions like taxes or other expenses.