Question

You purchase 20 shares of common stock at $15.20 per share. a few months later, you sell the shares for $10.12. no dividends were paid. your stockbroker charges 2.5% commission on transactions of less than 100 shares. determine the gain (or loss) of the stock transaction. round your answer to the nearest cent.

a. a gain of $114.26
c. a gain of $197.34
b. a loss of $114.26
d. a loss of $197.34

Answer 1

Purchased common stocks: 1.025 x 20 shares x $15.20 = $311.60
Sold common stocks: (1 - 0.025) x 20 shares x $10.12 = $197.34

To get the gain or loss of the stock transaction:
$197.34 - $311.60 = ($114.26)

Negative result signifies loss.

The answer is there is a loss of $114.26