Investing Bell Ringer 9

Which of the following is an example of insider trading?

• Buying shares of a company based on publicly available information

• Selling shares of a company after conducting thorough research on its financial performance

• Purchasing shares of a company based on non-public, confidential information obtained from a company executive

• Selling shares of a company after reading news articles about the industry

What is one difference between short and long-term capital gains tax?

• Short-term capital gains tax has a higher tax rate than long-term capital gains tax

• Long-term capital gains tax applies only to investments held for less than a year

• Short-term capital gains are not subject to any tax, while long-term capital gains are taxed at a fixed rate

• Long-term capital gains tax has a shorter holding period requirement compared to short-term capital gains tax

The real rate of return on an investment would allow an investor to…

• Determine the historical performance of an investment

• Calculate the total return on an investment before taxes

• Assess the inflation-adjusted return on an investment

• Predict the future performance of a stock

Which of the following is an example of insider trading?

• Purchasing stocks based on the general trend in the stock market

• Buying or selling stocks based on information that is not available to the public

• Investing in a diversified portfolio to spread out the risk of investment

• Selling stocks because of publicly released financial news and company earnings

Which of the following is TRUE about capital gains tax?

• Capital gains tax is only applied to the sale of personal items, such as cars and jewelry

• Capital gains tax is applied at a uniform rate across all types of investments, regardless of the holding period

• Capital gains tax is charged on the profit made from the sale of an investment or real estate

• Capital gains tax is something you can opt-out of if you do not want to pay it for a specific year