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19 September, 05:48

2. Sandy made several investments. She bought 1000 shares of a company's stock for $8.60/share, she bought a bond with a face value of $2500 and a coupon rate of 7%, and she invested $5000 into a fund that is expected to grow by 3.5% per year.

(a) Sandy pays a broker a commission of $14 to buy and sell stock. After one year, Sandy sold all her shares, when they were worth $9.15/share. What was her net gain or loss? Show your work.

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  1. 19 September, 09:20
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    The stock price per share was $8.60

    Number of shares bought 1000

    Total price for the shares:

    (Cost per share) * (Number of shares)

    =8.60*1000

    =$8600

    The stock price after 1 year $9.15

    Total number of shares is 1000

    Current price = (current share price) * (number of shares)

    9.15*1000

    =$9150

    current value = (Current price) - (buying price)

    =9150-8600

    =$550

    Net Profit = (Current value) - (Expenses)

    =550-14

    =$536
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