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Tim purchases 3,000 shares in company X at $2.49 per share. The company subsequently announces a profit warning, and the share price drops to $2.24 per share. Wishing to minimise his losses, Tim decides to sell his shares. How much of a loss does Tim make? Give your answer in dollars to the nearest dollar. Do not include commas or the dollar sign in your answer.

A. $450
B. $750
C. $900
D. $300

1 Answer

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Final answer:

To find the loss, we subtract the selling cost from the purchase cost: $7,470 - $6,720 = $750.

Step-by-step explanation:

To find the amount of loss Tim makes, we need to calculate the difference between the purchase price and the selling price of the shares.

The purchase price of 1 share is $2.49 and Tim purchased 3,000 shares, so the total purchase cost is 2.49 * 3000 = $7,470.

The selling price of 1 share is $2.24, so the total selling cost is 2.24 * 3000 = $6,720.

To find the loss, we subtract the selling cost from the purchase cost: $7,470 - $6,720 = $750.

Therefore, Tim makes a loss of $750.

Tim purchased 3,000 shares in company X at $2.49 per share. After a profit warning, the share price dropped to $2.24 per share. To calculate the loss Tim makes upon selling his shares, we need to find the difference in purchase and selling prices and then multiply by the number of shares. The initial cost for the shares was 3000 shares × $2.49/share = $7,470. The amount received from the sale was 3000 shares × $2.24/share = $6,720. The loss is then $7,470 - $6,720 = $750.

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