To match each investment term to how it provides income to investors, we can break it down as follows:
1. **Capital Gains:**
- Capital gains refer to the increase in the value of an asset over time. Investors make money through capital gains by selling an investment (such as stocks or real estate) for a higher price than they originally paid. This profit is the result of the asset appreciating in value.
2. **Dividend:**
- Dividends are payments made by a corporation to its shareholders from its profits. Companies distribute dividends as a way to share their financial success with investors. Shareholders receive these regular payments as a reward for holding onto the company's stock.
3. **Bonds:**
- When investors purchase bonds, they are essentially lending money to the issuer (such as a government or corporation) in exchange for regular interest payments. Bonds provide income to investors through these interest payments, which are usually paid semi-annually or annually based on the bond's coupon rate.
4. **Real Estate:**
- Real estate investments generate income for investors in various ways. For example, owning rental properties can provide rental income when tenants pay rent. Additionally, real estate investments can appreciate over time, allowing investors to sell the property for a higher price than they bought it, resulting in capital gains.
By understanding how each investment term generates income for investors, individuals can make informed decisions about their investment strategies based on their financial goals and risk tolerance.
