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Answer :
A. By earning interest
B. By selling the asset for a profit
C. By raising capital
D. By growing the asset
Investors profit from equity investments mainly through selling stocks for a profit and receiving dividends. They earn capital gains when they sell their stocks for more than their purchase price, and dividends provide additional income from company profits. Therefore, the best description of how an investor makes money from equity investments is by selling the asset for a profit.
Explanation:
Understanding Equity Investments
Investors make money from equity investments primarily through two methods: capital gains and dividends.
1. Capital Gains
Capital gains occur when an investor sells a stock for more than they paid for it. For example, if you buy a stock for $100 and later sell it for $120, you earn a capital gain of $20.
2. Dividends
Some companies distribute a portion of their profits to shareholders in the form of dividends. For instance, if you own shares in a company that pays $5 in dividends per share, you receive this payment in addition to any profits you make from selling the stock.
Thus, the correct answer to how an investor makes money from an equity investment is by selling the asset for a profit. Ownership of stock can benefit you either through selling it at a higher price or earning dividends, making it a dynamic and potentially profitable investment option.