Eddie purchased an autographed Kobe Bryant basketball when he was 17 years old for a total cost of $200 and then sold the basketball 4 years later for $700. Due to these transactions
A) Eddie earned a capital gain of $500.
B) Eddie earned a capital gain of $700.
C) Eddie earned a dividend of $500.
D) Eddie earned a dividend of $900.

Question

Quizplus · Accepted Answer

Eddie earned a capital gain of $500 because he sold the basketball for $700, which was $500 more than the original cost of $200. A dividend refers to a portion of a company's profits that are distributed to its shareholders, which is not relevant to this scenario.

Eddie Purchased an Autographed Kobe Bryant Basketball When He Was