Question

Aki Zhang owns and manages an investment portfolio of 36 stocks. The attached data gives the holding time (to the nearest whole year) between purchase and sale of each of the 36 stocks.

How many classes would you recommend?

Answer 1

Investors 1 and 2 together own 38,000 shares, which is less than 50,000 (50% of 100,000 shares). They cannot be certain of always getting their way in how the company will be run.

Step-by-step explanation:

The Darkroom Windowshade Company has a total of 100,000 shares of stock outstanding. To change the company's top management, a vote must be taken. In order to ensure a majority vote, more than 50% of the shares must be in favor of the change.

Investors 1 and 2 together own 20,000 + 18,000 = 38,000 shares. In order to have a majority vote, they would need to gather more than 50,000 shares (50% of 100,000). Since 38,000 is less than 50,000, they cannot be certain of always getting their way in how the company will be run.