When an investor is calculating the return from holding common stock from the date of purchase to a given point in time and has sold the common stock, the return reflects an unrealized capital gain or unrealized capital loss.

Question

Quizplus · Accepted Answer

A realized capital gain or loss is only recognized when the stock is sold, whereas an unrealized gain or loss is based on the current market value of the stock and has not yet been realized through a sale. Therefore, if the investor has sold the common stock, the gain or loss would be realized, not unrealized.

When an Investor Is Calculating the Return from Holding Common