Final answer:
The correct answer is C. Capital Gain, which represents the profit realized from selling an asset such as stocks, bonds, or real estate for a price higher than the original purchase price after adjusting for any costs or depreciation associated with the asset.
Step-by-step explanation:
The term used to describe the amount by which the net sale proceeds of a capital item exceed the adjusted cost basis, often used for income tax computations, is capital gain. A capital gain occurs when a financial investor, for example, purchases a share of stock at one price and sells it at a higher price, thereby realizing a profit. This can happen with any asset, not only stocks. If the asset is held for less than a year before selling, the gain is considered a short-term capital gain; if held for more than a year, it is considered a long-term capital gain.In the context of the question, the sale of Wal-Mart stock from $45 to $60, resulting in a $15 gain, is a straightforward example of a capital gain. It is important to note that these gains are subject to different tax treatments depending on the duration the asset was held, underpinning the significance of distinguishing between short-term and long-term capital gains from a taxation perspective.Conclusion: Therefore, the correct answer to the student's question is C. Capital gain. Capital gains are central to financial investments and are integral to understanding the returns on such investments alongside dividends. They also play a crucial role in the taxation of income from investments.