Pam bought 500 shares of stock in the Lottadoe Corporation last year at a price of $24 per share. The market price has now risen to $35 per share. This result indicates that Pam could realize a capital gain if she sold her stock.

Question

Quizplus · Accepted Answer

A capital gain is the difference between the purchase price of an asset (in this case, the stock) and the selling price of the asset. Since the market price has risen from $24 per share to $35 per share, Pam could sell her stock for a higher price than what she paid for it, resulting in a capital gain.

Pam Bought 500 Shares of Stock in the Lottadoe Corporation