Question
Three weeks ago John bought stock at 491/4; today the stock is valued at 497/8. We could say the stock is performing at which of the following?
Question 8 options:
A)
Par equality
B)
On par
C)
Above par
D)
Below par
Question 8 options:
A)
Par equality
B)
On par
C)
Above par
D)
Below par
Answers
GPT-4o mini
To determine how the stock is performing, we need to compare its current price to its purchase price.
1. John bought the stock at 49 1/4, which can be converted to a decimal as follows:
\[
49 \frac{1}{4} = 49 + 0.25 = 49.25
\]
2. The current value of the stock is 49 7/8, which can also be converted to a decimal:
\[
49 \frac{7}{8} = 49 + 0.875 = 49.875
\]
3. Now we can compare the two values:
- Purchase price: 49.25
- Current price: 49.875
Since 49.875 (current price) is greater than 49.25 (purchase price), the stock is performing positively.
In finance, "par" typically refers to the face value of a stock or bond. If a stock is performing "above par," it means it has appreciated in value above its initial or face value.
Based on this, we can say that the stock is performing:
**C) Above par.**
1. John bought the stock at 49 1/4, which can be converted to a decimal as follows:
\[
49 \frac{1}{4} = 49 + 0.25 = 49.25
\]
2. The current value of the stock is 49 7/8, which can also be converted to a decimal:
\[
49 \frac{7}{8} = 49 + 0.875 = 49.875
\]
3. Now we can compare the two values:
- Purchase price: 49.25
- Current price: 49.875
Since 49.875 (current price) is greater than 49.25 (purchase price), the stock is performing positively.
In finance, "par" typically refers to the face value of a stock or bond. If a stock is performing "above par," it means it has appreciated in value above its initial or face value.
Based on this, we can say that the stock is performing:
**C) Above par.**