Definition of Unrealized

Unrealized is a paper profit or loss on a security which is still owned.

Applying "Unrealized" to Securities Exams:

During the time an investment is held, the price of that investment will fluctuate. As the price increases above the cost base, the investor will have an unrealized gain. If the price of the investment falls below the cost base, the investor will have an unrealized loss. These gains and losses are not realized until the investor sells the shares.

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