You Bought Some Shares of Stock And, Over the Next

Multiple Choice

You bought some shares of stock and, over the next year, the price per share increased by 5 percent and the price level increased by 8 percent. Before taxes, you experienced

A) both a nominal gain and a real gain, and you paid taxes on the nominal gain.
B) both a nominal gain and a real gain, and you paid taxes only on the real gain.
C) a nominal gain and a real loss, and you paid taxes on the nominal gain.
D) a nominal gain and a real loss, and you paid no taxes on the transaction.