A share of stock in the Lofty Cheese Company is quoted at 251/4. Suppose you hold 30 shares of that stock, which you bought at 201/4. If you sell your stock at 251/4, which one of the following statements would be true?
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A share of stock in the Lofty Cheese Company is quoted at 251/4. Suppose you hold 30 shares of that stock, which you bought at 201/4. If you sell your stock at 251/4, which one of the following statements would be true?
To determine which statement is true when selling your 30 shares of Lofty Cheese Company stock that were bought at 20 1/4 (or 20.25) and sold at 25 1/4 (or 25.25), we need to calculate the profit from the transaction. The profit can be calculated by subtracting the total purchase cost from the total selling price.
Let’s calculate the profit:
Total purchase cost = Purchase price per share × Number of shares
Total selling price = Selling price per share × Number of shares
Profit = Total selling price – Total purchase cost
Now, let’s do the math with the provided numbers.
The total purchase cost of the 30 shares was $607.50, and the total selling price was $757.50, resulting in a profit of $150.00 from the transaction.
Therefore, the true statement when selling your 30 shares of Lofty Cheese Company stock that were bought at 20 1/4 and sold at 25 1/4 is that you would make a profit of $150.00.