Question

Cynthia charges her commission of $38 for every $1000 Cisco stock bought or sold. Cynthia bought 2,000 shares of Our Medical Solutions at $35 each. When the price rose to $53.5, she sold a part of her holdings. When the price fell to $48.10, she sold 1,150 of her shares. When the price climbed to $53.4, she sold the remainder of her holdings. How much did Cynthia make in total?

a) $950.32
b) $2,205
c) $532.05
d) $1,150

Answer 1

Cynthia's total profit from stock transactions, after calculating revenue from her sales and subtracting the commissions and initial purchase cost, is $26,866.71. This is not one of the provided options, suggesting an error in the question or the answer options.

Step-by-step explanation:

To calculate Cynthia’s total earnings from her stock transactions, we need to consider the initial purchase, the sales at various stock prices, and the commission charges.

1. Initial Purchase: 2,000 shares at $35 each results in a total cost of 2,000 * $35 = $70,000.
2. Cynthia sold part of her holdings at $53.5, but we are not given the exact amount for this transaction. Therefore, we cannot calculate the profit for this partial sale.
3. Selling 1,150 shares at $48.10: The total revenue from this sale is 1,150 * $48.10 = $55,315. The commission for this sale is (1,150 * $48.10)/1000 * $38 = $2,117.43 (rounded to two decimal places).
4. Selling the remainder of her holdings (850 shares) at $53.4: The revenue is 850 * $53.4 = $45,390. The commission for this sale is (850 * $53.4)/1000 * $38 = $1,720.86 (rounded to two decimal places).
5. To calculate Cynthia’s total profit, we sum the revenue from both sales and then subtract the commissions and the initial purchase cost:
   $55,315 (from selling at $48.10) + $45,390 (from selling at $53.4) = $100,705 total revenue
   $100,705 total revenue - $2,117.43 commission (first sale) - $1,720.86 commission (second sale) - $70,000 initial cost = $26,866.71 total profit

Since the amount she made is not one of the provided options (a) $950.32, (b) $2,205, (c) $532.05, or (d) $1,150, it seems there may have been an error in the question or the answer options provided.