* Site-Outage Notice: Our engineering elves will be tweaking the Shmoop site from Monday, December 22 10:00 PM PST to Tuesday, December 23 5:00 AM PST. The site will be unavailable during this time.
© 2014 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Capital Gains


There are basically 2 forms of tax - ordinary income (think: high rates) and capital gains (think: less high rates). Generally, if you hold a stock a year or more and it appreciates, you have a capital gain. The idea is to reward people for investing money rather than spending it by giving them a lower tax rate.