Which of the following is an example of capital loss?(1 point)
Responses
An investor purchases a bond on the secondary market above its issue price.
An investor purchases a bond on the secondary market above its issue price.
An investor sells a bond on the secondary market below the price she paid for it.
An investor sells a bond on the secondary market below the price she paid for it.
An investor purchases a bond on the secondary market below its issue price.
An investor purchases a bond on the secondary market below its issue price.
An investor sells a bond on the secondary market above the price she paid for it.
An investor sells a bond on the secondary market below the price she paid for it.
The correct answer is:
An investor sells a bond on the secondary market below the price she paid for it.
The correct answer is:
An investor sells a bond on the secondary market below the price she paid for it.
To determine which option represents a capital loss, we need to understand what a capital loss is. In finance, a capital loss occurs when an investment or asset is sold for a lower price than the original purchase price.
Looking at the options provided, "An investor sells a bond on the secondary market below the price she paid for it" is the only option that describes a situation where an investor sells a bond for a lower price than what they initially paid. This would result in a capital loss. Therefore, the correct answer is the third option.