Which term describes anything you own and use for personal or investment purposes?

• A. Capital Asset
• B. Capital Gain and Loss
• C. Dividends
• D. Yield

Answer: (A)

A capital asset is anything you own to use for personal enjoyment or investment, held over time rather than bought to sell quickly as part of a business operation. This includes items like a home, car, stocks, bonds, or artwork—assets you hold to derive value from use or potential appreciation. The key point is that the asset itself is about ownership for personal use or investment, not about rapid resale.

When you later sell a capital asset, the profit or loss you realize is called a capital gain or capital loss. Dividends are payments you receive from owning certain investments like stocks, and yield is the return rate you earn on an investment. These relate to income or return, not to the asset category itself.