Salazar made an investment in 140 shares of stock in a no-load fund for $2,993.20. After one year the stock had a net asset value of $24.53 per share. If Salazar redeems all 140 shares, which of the following is a correct statement?
Answer
A
Salazar will have a loss of $441.
B
Salazar will have a profit of $441.
C
Salazar will have a profit of $3,434.20.
D
There is not enough information to calculate profit or loss.
Explanation
The redemption value is 140 × $24.53 = $3,434.20. Subtract the original investment of $2,993.20: $3,434.20 − $2,993.20 = $441.00. Salazar therefore has a profit of $441, matching choice b.
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