What is the profit from selling an asset for more than its purchase price called?

Prepare for the NGPF Personal Finance – Investing Test with multiple choice questions, hints, and explanations. Boost your financial literacy and investment skills. Get exam-ready!

Multiple Choice

What is the profit from selling an asset for more than its purchase price called?

Explanation:
Profit from selling an asset for more than its purchase price is capital gains. This is the positive difference between what you sold it for and what you paid. Dividends are cash payments you receive while you own the asset, not the profit from selling it. A stock or an index fund is a type of investment, not the term for the gain itself. Capital gains can be short-term or long-term based on how long you held the asset, but the core idea is the positive difference between selling price and purchase price.

Profit from selling an asset for more than its purchase price is capital gains. This is the positive difference between what you sold it for and what you paid. Dividends are cash payments you receive while you own the asset, not the profit from selling it. A stock or an index fund is a type of investment, not the term for the gain itself. Capital gains can be short-term or long-term based on how long you held the asset, but the core idea is the positive difference between selling price and purchase price.

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