Capital Gains MCQ Quiz - Objective Question with Answer for Capital Gains - Download Free PDF

The correct answer is An increase in the value of an asset.

Key Points Capital gains:

• A capital gain is an increase in an asset's or investment's value as a result of the asset's or investment's price appreciation.
• In other terms, a gain happens when an asset's current or selling price exceeds its original purchase price.
• All kinds of capital assets, including but not restricted to stocks, bonds, goodwill, and real estate, are attributed with capital gains.

Important Points Classifications of Capital Gain:

• Capital gain can be realized or unrealized.
• The realized gain is the gain from the final sale of an asset or investment.
• Conversely, an unrealized gain arises when the current price of an asset or investment exceeds its purchase price, but the asset or investment is still unsold. 
• Realized capital gains are usually classified as short-term gains or long-term gains.
• Short-term (capital) gains occur if an asset or investment was held for less than a year.
• Long-term (capital) gains are gains from an asset or investment that was held for more than one year.

The correct answer is Both (A) and (R) are true and (R) is the correct explanation of (A).

Key Points

• Free trade is a trade policy that does not restrict imports or exports. 
• In free trade, such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices.
• In such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices, called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).
• When two countries trade with each other their specialized goods, they gain from trade and that leads to more production and more consumption. Therefore, A is correct.
• When in trade, the gain from exchanging goods and services, is independent or does not depend on the change of price magnitude, that is the price will not affect the gains from trade, therefore, R is also correct.
• Hence, it can be concluded that both statements A and R are correct and R is the correct explanation of A.

The correct answer is An increase in the value of an asset.

Key Points Capital gains:

• A capital gain is an increase in an asset's or investment's value as a result of the asset's or investment's price appreciation.
• In other terms, a gain happens when an asset's current or selling price exceeds its original purchase price.
• All kinds of capital assets, including but not restricted to stocks, bonds, goodwill, and real estate, are attributed with capital gains.

Important Points Classifications of Capital Gain:

• Capital gain can be realized or unrealized.
• The realized gain is the gain from the final sale of an asset or investment.
• Conversely, an unrealized gain arises when the current price of an asset or investment exceeds its purchase price, but the asset or investment is still unsold. 
• Realized capital gains are usually classified as short-term gains or long-term gains.
• Short-term (capital) gains occur if an asset or investment was held for less than a year.
• Long-term (capital) gains are gains from an asset or investment that was held for more than one year.

The correct answer is An increase in the value of an asset.

Key Points Capital gains:

• A capital gain is an increase in an asset's or investment's value as a result of the asset's or investment's price appreciation.
• In other terms, a gain happens when an asset's current or selling price exceeds its original purchase price.
• All kinds of capital assets, including but not restricted to stocks, bonds, goodwill, and real estate, are attributed with capital gains.

Important Points Classifications of Capital Gain:

• Capital gain can be realized or unrealized.
• The realized gain is the gain from the final sale of an asset or investment.
• Conversely, an unrealized gain arises when the current price of an asset or investment exceeds its purchase price, but the asset or investment is still unsold. 
• Realized capital gains are usually classified as short-term gains or long-term gains.
• Short-term (capital) gains occur if an asset or investment was held for less than a year.
• Long-term (capital) gains are gains from an asset or investment that was held for more than one year.

The correct answer is An increase in the value of an asset.

Key Points Capital gains:

• A capital gain is an increase in an asset's or investment's value as a result of the asset's or investment's price appreciation.
• In other terms, a gain happens when an asset's current or selling price exceeds its original purchase price.
• All kinds of capital assets, including but not restricted to stocks, bonds, goodwill, and real estate, are attributed with capital gains.

Important Points Classifications of Capital Gain:

• Capital gain can be realized or unrealized.
• The realized gain is the gain from the final sale of an asset or investment.
• Conversely, an unrealized gain arises when the current price of an asset or investment exceeds its purchase price, but the asset or investment is still unsold. 
• Realized capital gains are usually classified as short-term gains or long-term gains.
• Short-term (capital) gains occur if an asset or investment was held for less than a year.
• Long-term (capital) gains are gains from an asset or investment that was held for more than one year.

The correct answer is An increase in the value of an asset.

Key Points Capital gains:

• A capital gain is an increase in an asset's or investment's value as a result of the asset's or investment's price appreciation.
• In other terms, a gain happens when an asset's current or selling price exceeds its original purchase price.
• All kinds of capital assets, including but not restricted to stocks, bonds, goodwill, and real estate, are attributed with capital gains.

Important Points Classifications of Capital Gain:

• Capital gain can be realized or unrealized.
• The realized gain is the gain from the final sale of an asset or investment.
• Conversely, an unrealized gain arises when the current price of an asset or investment exceeds its purchase price, but the asset or investment is still unsold. 
• Realized capital gains are usually classified as short-term gains or long-term gains.
• Short-term (capital) gains occur if an asset or investment was held for less than a year.
• Long-term (capital) gains are gains from an asset or investment that was held for more than one year.

The correct answer is Both (A) and (R) are true and (R) is the correct explanation of (A).

Key Points

• Free trade is a trade policy that does not restrict imports or exports. 
• In free trade, such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices.
• In such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices, called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).
• When two countries trade with each other their specialized goods, they gain from trade and that leads to more production and more consumption. Therefore, A is correct.
• When in trade, the gain from exchanging goods and services, is independent or does not depend on the change of price magnitude, that is the price will not affect the gains from trade, therefore, R is also correct.
• Hence, it can be concluded that both statements A and R are correct and R is the correct explanation of A.

The correct answer is Both (A) and (R) are true and (R) is the correct explanation of (A).

Key Points

• Free trade is a trade policy that does not restrict imports or exports. 
• In free trade, such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices.
• In such a situation, there is a tendency for the domestic factor and product prices to get equalized with international prices, called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).
• When two countries trade with each other their specialized goods, they gain from trade and that leads to more production and more consumption. Therefore, A is correct.
• When in trade, the gain from exchanging goods and services, is independent or does not depend on the change of price magnitude, that is the price will not affect the gains from trade, therefore, R is also correct.
• Hence, it can be concluded that both statements A and R are correct and R is the correct explanation of A.