Ami Purchased 100 Shares of Stock for $10,000

question 21

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:

Exosystem

In Bronfenbrenner’s bioecological model, the level of the environment that children may not directly interact with but that influences them nonetheless.

Bronfenbrenner's Model

A theoretical model outlining the social and environmental layers that influence an individual's development, such as family, school, and society.

Affordable

Something that is priced within one's financial means, often implying reasonable or low cost.

Reflective Practice

A self-examination process where practitioners critically assess their own thoughts, decisions, and actions in professional situations to foster continuous learning.