Question

A share of IBM stock is purchased by an individual investor for $75 and later sold to another investor for $125. Who profits from this sale?

a. The second investor
b. The first investor
c. IBM
d. IBM and both investors

Answer 1

The correct answer is B

Step-by-step explanation:

As the share of IBM is bought by an individual investor at $75, later the investor sold it to another investor for $125. So, the first investor earns the profit of $50 from selling the share of IBM. Therefore, the first investor is the one who is getting profits or benefits from this sale of the share.

Working Note:

Profit = Selling Price - Purchase Price

= $125 - $75

= $50