What Does Capital Gain Mean?

1. An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than
the purchase price. The gain is not realized until the asset is sold. A capital gain may be short term (one
year or less) or long term (more than one year) and must be claimed on income taxes. A capital loss is
incurred when there is a decrease in the capital asset value compared to an asset's purchase price.

2. Profit that results when the price of a security held by a mutual fund rises above its purchase price and
the security is sold (realized gain). f the security continues to be held, the gain is unrealized. A capital
loss would occur when the opposite takes place.

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An ntaI pubI. offerng (IPO) or sto. maret Iaun.h, is the first sale of stock by a private company to
the public. t can be used by either small or large companies to raise expansion capital and become
publicly traded enterprises. Many companies that undertake an PO also request the assistance of an
nvestment Banking firm acting in the capacity of an underwriter to help them correctly assess the value
of their shares, that is, the share price
What Does Capital Markets Mean?
A market in which individuals and institutions trade financial securities. Organizations/institutions in the
public and private sectors also often sell securities on the capital markets in order to raise funds. Thus,
this type of market is composed of both the primary and secondary markets.

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