18
QuizMultiple Choice

Buying and Selling Stock

Question 18 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

Rachel bought 1,500 shares of Cawh Consolidated Bank at a price of $24.85 each. As the price climbed, she sold off parts of her holdings. She sold off 250 shares at $28.32 apiece, she sold 800 of her shares at $33.60 apiece, and she sold off the remainder of her shares at $39.94 apiece. If Rachel’s broker charges a commission of $65 per $1,000 of stock bought or sold, how much profit did Rachel make, to the nearest dollar?

Answer
A
$20,459
B
$51,933
C
$14,661
D
$8,859

Explanation

Rachel sold the 1,500 shares for a total of 250($28.32) + 800($33.60) + 450($39.94) = $51,933. The shares originally cost 1,500($24.85) = $37,275, so the profit before commissions was $14,658. The commission is 6.5% of each transaction: 6.5% of $51,933 plus 6.5% of $37,275 is $5,798.52. Subtracting commissions leaves $8,859.48, which rounds to $8,859, choice D.

AI-written and checked against the verified answer.

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