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 experience a capital loss after selling an investment, and the loss exceeds the $3,000 that you are allowed to take a tax deduction on, what happens to the excess amount?
Choose wisely. There is only one correct answer.
You can carry it over to the next year and deduct it. Losses over $3,000 can be carried over to future years.
2.
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.
3.
All investment earnings are taxed the same way.
Choose wisely. There is only one correct answer.
False. Long-term capital gains are usually taxed at a lower rate than other forms of income, and most municipal bonds' interest payments are tax-exempt (tax-free).
4.
Mutual fund dividends are passed to investors from ______.
Choose wisely. There is only one correct answer.
The earnings of the securities in a fund. The fund passes earnings from its portfolio in the form of dividends to its shareholders.
5.
What would be your return on investment if you bought a $1,000 bond that had an 8 percent annual coupon rate and you sold the bond one year later for $950?
Choose wisely. There is only one correct answer.
3 percent.