Question

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.

Answer 1

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