Question

Question

An investor purchased 50 shares of stock in a company in 2015. At the time the investor purchased the stock, the value of the stock was priced at $5 per share. The investor sold all 50 shares of stock in 2019. The value of the stock at the time of sale was $6.50 per share. What is the capital gain the investor earned on this investment?(1 point)
Responses

$250
$250

$75
$75

$325
$325

$50

Answer 1

To calculate the capital gain, we first determine the total purchase price and the total selling price of the stock.

1. Purchase Price:

   • Number of shares purchased = 50
   • Price per share at purchase = $5
   • Total purchase price = 50 shares × $5/share = $250

2. Selling Price:

   • Price per share at sale = $6.50
   • Total selling price = 50 shares × $6.50/share = $325

3. Capital Gain:

   • Capital Gain = Total Selling Price - Total Purchase Price
   • Capital Gain = $325 - $250 = $75

Thus, the capital gain the investor earned on this investment is $75.