8
QuizMultiple Choice

3.5 Principles of Investment

Question 8 • TX-Personal Financial Literacy and Economics

Taxes are often owed on

Answer
A
initial investments.
B
the current value of investments.
C
the real value of investments.
D
investment returns.

Explanation

Taxes are generally owed on the income or gains an investment earns, such as interest, dividends, or realized capital gains. The investment’s initial amount and its current or inflation-adjusted value are not usually taxed just for being held. Therefore, the correct choice is investment returns.

AI-written and checked against the verified answer.

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