ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Dividends from bonds also are investment income. Investment income is taxed at a different rate than earned income. The profits from the sale of gold coins or fine wine could be considered investment income. If you have a savings account, the interest you earn on it is considered investment income.

Detailed explanation-2: -Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage.

Detailed explanation-3: -In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. Net investment income generally does not include wages, unemployment compensation, Social Security Benefits, alimony, and most self-employment income.

Detailed explanation-4: -Return on investment (ROI) or return on costs (ROC) is a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment’s gains compare favourably to its cost.