Question

Bob, a stock market investor, purchases 3,000 shares in a company at $1.25 per share. The company subsequently announced that it's closing a number of its retail stores, and the share price drops to $0.86 per share. Wishing to minimize his losses, Bob decides to sell his shares. How much of a loss does Bob make?

Answer 1

Bob experienced a loss of $1,170 from selling his shares at a lower price after the value dropped due to the company closing some retail stores.

Step-by-step explanation:

Bob purchased 3,000 shares of a company at $1.25 per share. After the company's announcement of closing some retail stores, the share price dropped to $0.86 per share. Bob decided to sell his shares to minimize loss. To calculate Bob's loss, we need to find the difference between the purchase price and the selling price per share, and then multiply that by the number of shares.

The total amount Bob paid for the stocks = 3,000 shares × $1.25 per share = $3,750.

The total amount Bob sold the stocks for = 3,000 shares × $0.86 per share = $2,580.

Bob's overall loss from selling his stocks = Total purchase amount - Total selling amount = $3,750 - $2,580 = $1,170.

Thus, Bob incurred a loss of $1,170 by selling his shares after the price drop.