Mr. Lewis bought 650 shares of stocks in Garrett Corp. the previous year at a price of $19 per share. The market price has now risen to $25 per share. This result indicates that Mr. Lewis could receive a capital gain if he sells his stock.

A. True

B. False

A. True

Explanation:

Capital Gain / loss is the difference between the selling and purchasing prices. Capital gain arises when sales price of an asset is more than purchase price. Capital loss arises when sales price of an asset is less than purchase price.

In this Question if Mr. Lewis sells the stock at a price of $25, he will have a capital gain of $3,900 (650 shares ($25 - $19)).