Question

Dwight believes that a new phone to be sold by Ear Candy Corporation will become the most widely bought and used phone in the global market. Dwight enters into a contract to buy 500 shares of Ear Candy stock, anticipating an increase in its value. If the price of the stock does not rise, Dwight can recover:______________.1. the amount of the purchase price2. the amount of the purchase price plus the expected increase3. nothing4. the amount of the purchase price plus the unexpected decrease

Answer 1

If the price of stocks does not rise, Dwight can recover;

3. Nothing.

Step-by-step explanation:

It is explained in the given question that Dwight has belief that Ear candy foundation a company has brought up a new phone to be sol and that phone will be the most widely used and bought phone globally all over the market.

So, Dwight bought shares at a count of 500 of the Ear candy stock by anticipating that its value will certainly get increased.

But now after investing in the share if stock does not get rised up, then Dwight can recover:

3. Nothing

How do stock prices increase:

The share prices depends on two major factors i.e.

• Supply
• Demand

So, when a share gets bought up by a person and then it gets sold the value of that stock gets increased. Similarly, in a converse way when he people do not want to buy a share instead they want to sell it the stock value gets slow down.