ECONOMICS
RISK AND RETURN
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Capital Loss = Purchase Price – Sale Price If the sale price is higher than the purchase price, it is referred to as a capital gain.
Detailed explanation-2: -Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.
Detailed explanation-3: -Capital loss is the reverse of capital gain, i.e. it results in a loss when the investment is sold. In simple terms, the difference between the selling price and cost/purchase price of an investment can be described as capital gain/loss.
Detailed explanation-4: -The difference between the buying price and the selling price is your capital gain or loss. The formula is Sale Price-Cost Basis = Capital Gain.