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20 December, 05:33

Explain why a financial investor in stocks cannot earn high capital gains simply by buying companies with a demonstrated record of high profits.

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  1. 20 December, 05:36
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    Capital gains is the appreciation or growth in the value of shares. A financial investor cannot earn high capital gains simply by buying companies with a demonstrated record of high profit.

    Explanation:

    Capital gains however can be received, when an invested buys a share at a low price and sell to another investor at a high price. In this situation the difference between the buying price and selling price, becomes the capital gains.
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