Definition of Capital Gain or Loss
A capital gain or loss is the change in an asset's market value over an investment period, calculated as the difference between its selling and purchase prices. When calculated over a long-term period of several years, this is determined by the total change in the asset's real market price. For decomposing the total rate of return, the capital gain or loss is typically expressed as a percentage of the initial investment.
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- Asset B's return consisted of a 1% increase in its market price and a 6% income payment.
Based on this breakdown of their returns, what is the most accurate conclusion to draw about the two assets?
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Learn After
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