Question

Cynthia’s broker charges her a commission of $88 for every $1000 of stock bought or sold. Cynthia bought 2,000 shares of Ombor Medical Supplies at $35.49 apiece. As the price rose and fell, she sold off part of her holdings. When the price rose to $48.57, she sold 600 shares. The price fell somewhat to $46.10, so she sold 1,150 of her shares. When the price climbed to $53.46, she sold off the remainder of her holdings. How much profit did Cynthia make in total?
a.
$9,889.82
b.
$24,542.00
c.
$16,312.06
d.
$74,799.58

Answer 1

Commission = $88 per $1000 = 0.088 of transaction value.

Purchase:
- 2,000 × $35.49 = $70,980
- Commission = 0.088 × 70,980 = $6,246.24
- Total cost = $70,980 + $6,246.24 = $77,226.24

Sales:
1) 600 × $48.57 = $29,142
- Commission = 0.088 × 29,142 = $2,564.50 (rounded)
- Net = $29,142 − $2,564.50 = $26,577.50

2) 1,150 × $46.10 = $53,015
- Commission = 0.088 × 53,015 = $4,665.32
- Net = $53,015 − $4,665.32 = $48,349.68

3) 250 × $53.46 = $13,365
- Commission = 0.088 × 13,365 = $1,176.12
- Net = $13,365 − $1,176.12 = $12,188.88

Total proceeds = $26,577.50 + $48,349.68 + $12,188.88 = $87,116.06
Profit = $87,116.06 − $77,226.24 = $9,889.82

Answer: a. $9,889.82