which best describes how an investor makes money from an equity investment?\n\n- by earning interest\n- by…

which best describes how an investor makes money from an equity investment?\n\n- by earning interest\n- by selling the asset for a profit\n- by raising capital\n- by growing the asset

which best describes how an investor makes money from an equity investment?\n\n- by earning interest\n- by selling the asset for a profit\n- by raising capital\n- by growing the asset

Answer

Brief Explanations:

An equity investment represents an ownership interest in a company (such as stocks). Investors typically realize a financial gain through two primary methods: receiving dividends (a share of the company's earnings) or through capital appreciation. Capital appreciation occurs when the market value of the asset increases over time, allowing the investor to sell the asset for a price higher than the original purchase price, thereby generating a profit. While "growing the asset" refers to the increase in value, the actual act of "making money" or realizing that gain is achieved by selling the asset. Interest is associated with debt investments (like bonds), and raising capital is a function of the business issuing the equity, not the investor.

Answer:

by selling the asset for a profit