Role of Price Volatility in Investment Risk

Risk of Negative Capital Gains from Short-Term Housing Investment

An investor purchases an asset for $200. Over the course of one year, the asset generates $10 in income for the investor. At the end of the year, the investor sells the asset for $216. What is the capital gain on this investment, expressed as a percentage of the initial purchase price?

Identifying Capital Gains in Asset Transactions

Distinguishing Capital Gains from Depreciation

An investor buys a stock for $100. During the year, the stock pays a dividend of $5. At the end of the year, the market price of the stock is $108. The capital gain for the year is $13.

Evaluating Investment Performance Based on Capital Gains

An investor made several transactions over a year. Match each transaction to the correct capital gain or loss.

Calculating and Explaining Capital Gain

Analyzing Investment Returns with Capital Loss

An individual purchases a piece of art for $5,000. Over the next two years, they spend $500 on a new frame and insurance. They also receive an offer of $5,800 for it after one year but decline. Finally, they sell the art for $6,200. What is the capital gain on this investment?

Analysis of Investment Return Components