ECONOMICS (CBSE/UGC NET)

ECONOMICS

SAVING AND INVESTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Results from an asset increasing in value between purchase and sale
A
dividend
B
index
C
capital gains
D
liquidity
Explanation: 

Detailed explanation-1: -It results in capital gain when the selling price of an asset exceeds its purchase price. It is the difference between the selling price (higher) and cost price (lower) of the asset. Capital loss arises when the cost price is higher than the selling price.

Detailed explanation-2: -A capital gain is the increase in a capital asset’s value and is realized when the asset is sold. Capital gains apply to any type of asset, including investments and those purchased for personal use. The gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.

Detailed explanation-3: -You have a capital gain if you sell the asset for more than your adjusted basis. You have a capital loss if you sell the asset for less than your adjusted basis. Losses from the sale of personal-use property, such as your home or car, aren’t tax deductible.

Detailed explanation-4: -A capital gain is an increase in the value of an asset or investment resulting from the price appreciation of the asset or investment. In other words, the gain occurs when the current or sale price of an asset or investment exceeds its purchase price.

Detailed explanation-5: -If you sell an asset for more than you paid for it, your profit (minus your cost basis) is called a capital gain. Short-term capital gains are profits from selling assets you own for a year or less.

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