Question

A share of stock in the Lofty Cheese Company is quoted at 25 1/4. Suppose you hold 30 shares of that stock, which you bought at 20 1/4. If you sell your stock at 25 1/4, which one of the following statements would be true?
A: you'll suffer a loss of $15
B: you'll make a profit of $15
C: you'll make a profit of $150
D: you'll suffer a lose if $150

Answer 1

Since each share was purchased when it was still quoted at 20 1/4, then when the stock value increases, it gains (25 1/4 - 20 1/4) = $5.00 for each stock. Since you're to sell 30 shares of your stock, that means you'll be making a profit of (30 x 5 ) = $150.00. Thus, the answer is C.