1. Determining Profit or Loss from an Investment. Three years ago, you purchased
ID: 2649038 • Letter: 1
Question
1. Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for $88 a share. Today, you sold your IBM stock for $103 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares.
a. What is the amount of profit you earned on each share of IBM stock?
b. What is the total amount of profit for your IBM investment?
Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for $88 a share. Today, you sold your IBM stock for $103 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares.
a. What is the amount of profit you earned on each share of IBM stock?
b. What is the total amount of profit for your IBM investment?
Explanation / Answer
Answer: a. Calculation of the amount of profit earned on each share of IBM stock:
=sale price per share - purchase price per share
=$103 - $88
=$15 per share
Answer: b. Calculation of the total amount of profit for IBM investment:
=(Profit per share * number of share)
=$15 *150
=$2250
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