Question

An investor buys 400 shares of stock in a fund when the net asset value is $23.79 and the offer price is $23.89. The investor sells these shares when the net asset value is $50.34 and the offer price is $50.46. Determine the amount of profit the investor earns.

Answer 1

Given :

An investor purchased 400 shares.

net asset value = $23.79

offer price = 23.89

He sells these shares when

the net asset value = $50.34

offer price = $50.46

Solution :

Total number of purchased shares = 400

Total purchase value = 400 × 23.89

                                   = $9,556

Total selling price = 400 × 50.34

                              = $20,136

Profit = selling price - purchase value

profit = 20,136 - 9,556

         = $10,580

The investor earned $10,580.