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29 May, 15:06

If you bought 600 shares of stock for $41 per share, paid 1% commission, and then sold them 6 months later for $41.75 per share, with a $30 flat fee, are your net proceeds positive or negative? Explain.

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  1. 29 May, 15:40
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    Total value of stocks purchased = 600*41 = $24,600

    The commission paid = 1% = 0.01 * 24,600 = $246

    Total purchase cost = $24,600 + $246 = $24,846

    Sale price = $41.75

    Total sale proceeds = 41.75*600 = $25,050

    There is a flat commission of $30 on the sale

    Total sale proceeds after commission = $25,050 - $30 = $25,020

    Net proceeds = Total sales vale - total purchase cost

    Net proceeds = 25,020 - 24,846 = $204 (profit)

    Since we have a profit, the answer is sale proceeds are positive
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