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vredina [299]
3 years ago
6

Robert sold his Lebec Corporation stock to his sister Karen for $8,000. Robert's cost basis in the stock was $15,000. Karen late

r sold this stock to Dana, an unrelated party, for $15,500. What is Karen's realized gain?
Business
1 answer:
lara [203]3 years ago
7 0

Answer:

$7,500

Explanation:

A few points must be considered in order to calculate ther realized gain.

1. Although Robert's stock in Lebec Corporation was $15,000 at cost, it was sold to Karen (his sister and related party) for $8000. Since it is related party transaction, the loss of $7000 ($15,000-$8,000) cannot be reported as a loss.

2. Karen's basis for the stock is $8000 (the amount she bought it from her brother).

3. Karen sold the stock to Dana for $15,500. The realized gain since Dana is not related is $15,500-$8,000= $7,500. This becomes the realized gain since it is an unrelated party transaction.

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Answer:

hope this helps

Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 21.5% and a beta of 1.70. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock? Do not round your intermediate calculations.

Old portfolio return

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% of portfolio in new stock = $ in New / ($ in old + $ in new) = $10,000/$100,000=

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Explanation:

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