Series 7 Exam Question 359: Answer and Explanation

Question: 359

An investor purchased 200 shares of AYLA Corp. common stock for a price of $5,000 on October 1st. The following October 1st, the investor sold the 200 shares of AYLA Corp. common stock for $6,000. The $1,000 capital gain will be

I. considered short-term

II. considered long-term

III. taxed at a maximum rate of 20 percent

IV. taxed at the investor's tax bracket

• A. I and III
• B. I and IV
• C. II and III
• D. II and IV

Correct Answer: B

Explanation:

B. Capital gains on securities held one year or less are considered short-term and taxed at the investor's tax bracket.