Nancy holds common stock in Suiznon Inc., an electrical goods manufacturing company. Although Nancy paid only $4,300 for the stock at the time of its purchase, the price of the stock goes up by $400 in the market after six months. In this case, Nancy will earn _____.
A) a dividend
B) interest income
C) a principal amount
D) a capital gain

Question

Quizplus · Accepted Answer

Nancy will earn a capital gain because the value of her stock has increased by $400 in the market, which is the difference between the purchase price and the current market price.

Nancy Holds Common Stock in Suiznon Inc