Which best describes how an investor makes money from an equity investment?

An investor makes money from an equity investment primarily through two methods:

1. Capital Gains: This occurs when the investor sells the equity (such as stocks) for a higher price than the purchase price. The difference between the selling price and the purchase price is the capital gain.

2. Dividends: Companies may distribute a portion of their earnings to shareholders in the form of dividends. These are typically paid out on a regular basis (e.g., quarterly) and provide a source of income for the investor.

Both capital gains and dividends contribute to the overall return on an equity investment.