Question

You own 600 shares of Newstar Financial stock, currently trading for 450 per share. You are offered a deal where you can exchange these stocks for 200 shares of Amback Financial Group stock, currently trading at $500 per share. What is the value of this trade, if you choose to make it? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer.

Answer 1

The value of the trade is $170,000.

Step-by-step explanation:

To calculate the value of the trade, we need to consider the value of the Newstar Financial stock and the value of the Amback Financial Group stock. The value of the Newstar Financial stock is calculated by multiplying the number of shares you own (600) by the current trading price ($450 per share). This gives a total value of $270,000. The value of the Amback Financial Group stock is calculated by multiplying the number of shares offered (200) by the current trading price ($500 per share). This gives a total value of $100,000. Therefore, the value of the trade is $270,000 - $100,000 = $170,000.