ILISelected Stocks from the Dow Jones Industrial Average for a Dayin 2015NameAppleBosingInternationa1 BusinessMachingsJohnsonGeneralElectricProcter &GambleSymbol Open High Low Close Not % VohmechgChgAFFLBA113.8 115.0 113.6 115.0 1.73 1514111146.453IBM 140.4 143.72N14105140.30145.4 5.09 3.51142.7 3.14 225LiJNI 97.13 99.08 96.42 98.80 189 1.912GE 28.74 29.52 28.70 29.36 0.72558.320052988790high134.5441654100697630 158.83 115.020176.3105.49814764 31.4952PG 73.22 74.96 72.97 74.20 1.25 1.68 140809 86.78low92.Div65.021.084265.2081.79 3.00PE YID%chg214 10.0 8.4853.63 15.8 0.564.17 916 3.5918.8 -197183.16 16.9 -6.1717.1-6.09% 13. Stock Sale Suppose that you owned 1000 shares of stock in Procter & Gamble (PG). Youpurchased the shares at a price of $48.96 per share and sold them at the closing price of the stockgiven in the table.a. Ignoring dividends, what was your profit or loss on the sale of the stock?Answerb. If your broker charges 1.9% of the total sale price, what was the broker's commission?Answer

Profit or loss on the stock sale Profit or loss on the stock sale is calculated as shown below. Profit/ loss on the stock sale=Selling price-Purchased price% Profit/ loss on the stock sale=Selling price-Purchased pricePurchased price×100a. Following points should be noted. 1,000 shares of PG was purchased for $48.96 per share. Total purchased price or cash outflow is $48,960 (=$48.96*1,000). The closing price is $74.20, as shown in the above table, at which the 1,000 shares are sold. Total selling price or cash inflow is $74,200 (=$74.20*1,000). Dividends are ignored, as suggested in question. Based on this, profit or loss on the stock sale is calculated as shown below. Profit/ loss on the stock sale=Cash inflows-Cash outflowsCash outflows×100=$74,200-$48,960$48,960×100=$25,240$48,960×100=51.55% Since, the calculated amount is positive, so it is a profit. Profit on the stock sale is $25,240 or 51.55%. b. The broker's commission is 1.9% of total sale amount. Total sale amount is $74,200. Then, the broker's commission is calculated as shown below. Broker's commission=Total sale amount×Commission percentage=$74,200×0.019=$1,409.80 The broker's commission is $1,409.80. Answer: a. Profit on the stock sale is $25,240 or 51.55%. b. $1,409.80

Business

Finance

Selected Stocks from the Dow Jones Industrial Average for a Day in 2015 me 8 DRES OGS Symbol Open High Low Close Net % chg Chg F APPL AHMON INI 113.8 115.0 113.6 115.0 1.73 1.51 416541 134.54 1 1 1 00 697630 158.83 4 BA 141.1 146.4 141.0 145.4 5.09 1 3 ationa IBM 140.4 143.7 140.3 142.7 3.14 2.2 5 7532- 2 1590 3.5 Vohme 15 ONO 0 558320 52- week 0 176.3 52- week low 92. 2.08 Div Yield PE YTD %chg 115.02 4.36 118. 5.20 2.14 3.63 10.0 8.48 S 15.8 0.56 4.17 9.16 3.59

Selected Stocks from the Dow Jones Industrial Average for a Day in 2015 me 8 DRES OGS Symbol Open High Low Close Net % chg Chg F APPL AHMON INI 113.8 115.0 113.6 115.0 1.73 1.51 416541 134.54 1 1 1 00 697630 158.83 4 BA 141.1 146.4 141.0 145.4 5.09 1 3 ationa IBM 140.4 143.7 140.3 142.7 3.14 2.2 5 7532- 2 1590 3.5 Vohme 15 ONO 0 558320 52- week 0 176.3 52- week low 92. 2.08 Div Yield PE YTD %chg 115.02 4.36 118. 5.20 2.14 3.63 10.0 8.48 S 15.8 0.56 4.17 9.16 3.59

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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