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

Question 8 options:

A)

Par equality

B)

On par

C)

Above par

D)

Below par

Answer 1

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.