Question

Suppose you purchased 100 shares of stock in 2010 for $20 a share, and the price now is $30 a share. If you sell the stock, then your capital gain is:__________.A. $3,000.B. $1,500.C. $1,000.D. indeterminate without knowing the inflation rate.

Answer 1

Option D is correct

Step-by-step explanation:

The cost of purchasing the 100 shares was $20 per share, in other words, the total amount paid for the stock acquisition is $2,000($20*100).

However, the later shares were sold for $3,000($30*100), which means that capital gain is the difference between the sales value and the acquisition value.

Capital gain=$3,000-$2,000=$1000

The correct option is D