Which term describes buying partial ownership in a company to earn dividends or capital gains?

Which term describes buying partial ownership in a company to earn dividends or capital gains?

• A. Property investment
• B. Shares/stocks investment
• C. Interest-earning investments
• D. Bad debt

Answer: (B)

Equity investment. When you buy shares, you acquire a partial ownership stake in a company. This ownership can yield returns in two main ways: dividends, which are a share of the company’s profits paid to shareholders, and capital gains, which occur if the stock price rises and you can sell your shares for more than you paid. This distinguishes it from property investment, which centers on real estate assets rather than ownership in a business; from interest-earning investments like bonds or savings accounts that pay interest rather than dividends or ownership-based gains; and from bad debt, which is about uncollectible loans rather than an equity investment.

Equity investment. When you buy shares, you acquire a partial ownership stake in a company. This ownership can yield returns in two main ways: dividends, which are a share of the company’s profits paid to shareholders, and capital gains, which occur if the stock price rises and you can sell your shares for more than you paid. This distinguishes it from property investment, which centers on real estate assets rather than ownership in a business; from interest-earning investments like bonds or savings accounts that pay interest rather than dividends or ownership-based gains; and from bad debt, which is about uncollectible loans rather than an equity investment.