What defines a capital gain?

A capital gain is defined as the profit realized from the sale of an asset when the selling price exceeds the purchase price. This profit represents an increase in the value of the asset that has been held over time. For instance, if you bought shares of a stock for $1,000 and later sold them for $1,500, the capital gain would be $500. This concept is crucial in the field of finance and investment since capital gains are often subject to taxation, and understanding them helps investors optimize their portfolios and strategize their investment decisions.

The other options refer to different financial concepts: a loss from an investment is simply the opposite situation of a capital gain; interest earned on a savings account is related to income from savings rather than profit from the sale of assets; and the amount invested without returns does not accurately capture any profit or gain scenarios.