Question

- What is Joe's capital gain from share redemption if he redeemed 300 mutual fund shares

for $55 a share and he originally paid $43 for the shares?

Answer 1

3,600

Explanation:

Joe's capital gain from share redemption can be calculated using the following formula:

Capital Gain = (Selling Price - Purchase Price) * Number of Shares

In this case, Joe redeemed 300 mutual fund shares for $55 per share, and he originally paid $43 per share.

So, the capital gain can be calculated as follows:

Capital Gain = ($55 - $43) * 300

Simplifying the equation:

Capital Gain = $12 * 300

Therefore, Joe's capital gain from share redemption is $3,600.