Which term describes profit or loss from the sale of an asset?

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

Answer: (B)

When you sell an asset, the result in money you make or lose is called a capital gain or capital loss. This reflects the difference between your sale price and your cost basis (what you originally paid). It’s a realized result—it becomes actual only when the sale happens. If the sale price is higher than the cost, you have a capital gain; if it’s lower, you have a capital loss. This concept is distinct from the asset itself (a capital asset), from dividends (cash or stock payments received from holding investments), or from yield (the return rate, often expressed as a percentage). So the term that describes profit or loss from the sale of an asset is capital gain and loss.