Question

Kim placed an order with her broker for 750 shares of each of three IPOs being offered this week. Each of the IPOs has an offer price of $24. The number of shares allocated to Kim along with the closing prices on the first trading day are: Stock Shares Allocated Price A 750 $ 23.15 B 370 27.43 C 260 29.87.What is Kim's total profit on these three stocks at the end of the first day of trading?

Answer 1

Answer:

Kim's total profits on the three stocks at the end of the first day of trading is $2157.80

Explanation:

The closing day valuation of stocks needs to be compared with the prices at the IPOs opened that same day to ascertain whether or not a profit has  been made.

The purchase price of IPOs =(750+370+260)*$24

                                                   =$33,120.00

Closing day valuation=($23.15*750+$27.43*370+$29.87*260)

                                    =$35,277.8 0

The total profit on the day's transactions=$35,277.8 0-$33,120.00

                                                                     =$2157.8

The total profits on the three stocks on first day is $2157.8 0