Basics Beginner: Investment Earnings

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1.
Mutual fund dividends are passed to investors from ______.
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The earnings of the securities in a fund. The fund passes earnings from its portfolio in the form of dividends to its shareholders.
2.
Well-established, low-growth companies generally produce high capital gains.
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False. High-growth companies generally produce high capital gains.
3.
Which of the following choices is not a way that earnings are paid to bondholders?
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Dividends. Dividends are paid to stockholders but not to bondholders.
4.
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 _______.
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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.
5.
What is your one-year return on investment if you buy a stock for $50, receive a dividend of $3, and sell it for $55?
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16 percent.