Basics Beginner: Investment Earnings

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
If you have a capital gain (that is, earn a profit) on an investment that you held for three years, it will be considered a _______.
Choose wisely. There is only one correct answer.
Long-term capital gain. Investments that are held for longer than a year and then sold for a profit will earn long-term capital gains.
2.
What are a security's increases in value called after they are sold?
Choose wisely. There is only one correct answer.
Capital gains. They are capital gains after they are sold, but paper profit while they are still held.
3.
Which of the following choices is not a way that earnings are paid to bondholders?
Choose wisely. There is only one correct answer.
Dividends. Dividends are paid to stockholders but not to bondholders.
4.
Well-established, low-growth companies generally produce high capital gains.
Choose wisely. There is only one correct answer.
False. High-growth companies generally produce high capital gains.
5.
Imagine that a share of your Fund X rises from 20 dollars per share to 30 dollars per share. How much of a capital gain have you made on it?
Choose wisely. There is only one correct answer.
10 dollars, but only if you have sold it. Until they have been sold, shares that rise in price will only be profits on paper.