Assume You Buy Stock and Its Price Rises Just as Much

Multiple Choice

Assume you buy stock and its price rises just as much as the price level. Before taxes, which of the following have you made?

A) a nominal and real gain, and you pay taxes on the nominal gain
B) a nominal and real gain, but you pay taxes only on the real gain
C) a nominal gain, but no real gain, yet you pay taxes on the nominal gain
D) a nominal gain, but no real gain, so you pay no taxes on the nominal gain