You can produce ____________ by buying and selling stocks, bonds, mutual funds, and real estate.

• A. operating expenses
• B. investment income
• C. accounts payable
• D. depreciation

Answer: (B)

Verified step by step guidance

1. Understand the concept of investment income: Investment income refers to earnings generated from investments such as stocks, bonds, mutual funds, and real estate. It is distinct from income earned through regular business operations or employment.
2. Identify the types of assets mentioned in the problem: Stocks, bonds, mutual funds, and real estate are all examples of investment assets that can generate income through dividends, interest, capital gains, or rental income.
3. Differentiate investment income from other financial terms: Operating expenses refer to costs incurred in running a business, accounts payable are liabilities owed to creditors, and depreciation is the reduction in the value of an asset over time. None of these terms are related to income generated from investments.
4. Recognize the correct answer: The term 'investment income' accurately describes the earnings produced by buying and selling stocks, bonds, mutual funds, and real estate.
5. Apply this understanding to similar scenarios: Whenever you encounter questions about income generated from financial assets or property, consider whether the term 'investment income' is appropriate based on the context provided.