What term describes an investment that has not been sold yet but could yield profit if sold?

Study for the Florida Real Estate License Renewal Test. Prepare with detailed scenarios and multiple choice questions offering explanations. Boost your confidence and ace the exam!

The correct term for an investment that has not been sold yet but could yield profit if sold is known as an unrealized capital gain. This refers to the potential increase in value of an asset that you hold but have not yet sold. Until the asset is sold, this gain is considered "unrealized" because it represents a paper profit rather than an actual transaction. The concept highlights that the value of the investment may rise, resulting in a profit when the asset is eventually sold, but until that point, it remains a potential profit rather than one that has been actualized through a transaction.

In contrast, realized gains occur when an asset is sold for more than its purchase price; this is the moment when the profit is confirmed. Investment yield typically refers to the income generated from an investment, such as dividends or interest, rather than a change in price. Deferred profit implies a delay in recognizing profit but does not specifically address the aspect of an unsold investment reflecting potential future gains. Thus, unrealized capital gain is the most accurate description of an investment that could yield profit upon sale without having been sold yet.

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