Final answer:
The question revolves around the business concepts of buying and selling stock on margin. The student must calculate the profit by multiplying the number of shares sold by the selling price, then subtracting their initial investment and any transaction costs.
Step-by-step explanation:
When buying and selling stocks on margin, it is important to consider the initial purchase and the subsequent sale of the stock. In this case, you purchased 550 shares of 2nd Chance Co. stock at a price of $55 per share, requiring a deposit of $15,500 from your broker. If you sell the stock at a price of $62 per share, you would calculate your profit by subtracting the initial purchase cost from the sale proceeds. The profit per share would be $62 - $55 = $7.00, and the total profit would be 550 shares x $7.00 = $3,850.
The problem in question involves buying on margin and selling stock, which falls into the field of Business, specifically investments and finance. In this scenario, the student stated that they purchase 550 shares of 2nd Chance Co. stock at $55 per share, depositing $15,500 with their broker. They then sell the stock at a higher price of $62, leading to calculations to determine profit or loss from the transaction. To calculate the profit, we multiply the number of shares by the selling price, then subtract the total initial investment and any associated costs.
For example, if you were to follow a similar calculation as shown in the previous samples, you would find your profit by taking the total selling price (550 shares × $62) and subtracting the initial investment ($15,500) along with any brokerage fees if they apply.