Find expert advice and community support for all your questions on IDNLearn.com. Find the information you need quickly and easily with our reliable and thorough Q&A platform.
Sagot :
The number of shares could he buy is 63.19 and 126.38. Then the profit gained by Bob is $764.68.
What is the profit gained by Bob?
Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications.
At the time of his investment, Verizon was selling for $47 a share.
If Bob paid a $30 commission, then the number of shares could he buy if he used only his own money and did not use margin.
[tex]\rightarrow \dfrac{3000- 30}{47}\\\\\rightarrow \dfrac{2970}{47}\\\\\rightarrow 63.19[/tex]
If Bob paid a $60 commission, then the number of shares could he buy if he used his $3,000 and borrowed $3,000 on margin to buy Verizon stock will be
[tex]\rightarrow \dfrac{6000 - 60 }{47}\\\\\rightarrow \dfrac{5940}{47}\\\\\rightarrow 126.38[/tex]
Assume Bob did use margin and paid a $60 total commission to buy his Verizon stock. Also, assume he paid another $60 to sell his stock and sold the stock for $54 a share. Then the profit will be
[tex]\rightarrow (126.38 \times 54 - 60) - (6000)\\\\\rightarrow (6824.68 - 60) - 6000\\\\\rightarrow 6764.68 - 6000\\\\\rightarrow \$764.68[/tex]
More about the profit link is given below.
https://brainly.com/question/15036999
#SPJ1
Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. For trustworthy and accurate answers, visit IDNLearn.com. Thanks for stopping by, and see you next time for more solutions.
