What does a positive capital gain signify for an investor?

What does a positive capital gain signify for an investor?

• A. The asset has appreciated in value
• B. The investor has high maintenance costs
• C. The property is rented out successfully
• D. There is a tax refund on the property

Answer: (A)

A positive capital gain signifies that the asset has appreciated in value. This occurs when the selling price of an asset exceeds its purchase price, indicating that the investment has increased in worth over time. For investors, this appreciation can reflect successful investment strategies or market conditions that favor the asset’s value. The other choices do not accurately represent what a positive capital gain signifies. High maintenance costs relate more to ongoing expenditures for property upkeep and do not inherently indicate value appreciation. Renting out property successfully pertains to income generation rather than appreciation of the asset itself. Similarly, a tax refund would not be a direct consequence of having a positive capital gain, as it relates more to tax overpayments rather than the performance of the investment.

A positive capital gain signifies that the asset has appreciated in value. This occurs when the selling price of an asset exceeds its purchase price, indicating that the investment has increased in worth over time. For investors, this appreciation can reflect successful investment strategies or market conditions that favor the asset’s value.

The other choices do not accurately represent what a positive capital gain signifies. High maintenance costs relate more to ongoing expenditures for property upkeep and do not inherently indicate value appreciation. Renting out property successfully pertains to income generation rather than appreciation of the asset itself. Similarly, a tax refund would not be a direct consequence of having a positive capital gain, as it relates more to tax overpayments rather than the performance of the investment.