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Unformatted text preview: owever,
Facebook fails to live up to its hype and the share price declines. To limit your losses, you
decide to sell your shares at a price of $26. Assume that brokerage commissions are 2% for
both the purchase and sale of the shares.
a) What was the total cost of the 1,000 shares?
b) What was the total return from your broker when you sold the shares?
c) What is your capital loss and yield from the transaction? Problem 2
Recognizing the concerns over shrinking oil reserves, you decide to invest in the Canadian
company Innergex Renewable Energy. You purchase 500 shares at a price of $6 per share.
Later, the share price rises to $9 and you decide to purchase an additional 250 shares. The
next year, you sell the shares at $12 per share. Assume that brokerage commissions are 2%.
a) What was the total cost of the 750 shares?
b) What was the total return received from the broker?
c) Calculate the capital gain and yield on the investment. Raising Marks. Raising Money. Raising Roofs.
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This note was uploaded on 02/07/2014 for the course BU 111 taught by Professor Jessicastockie during the Fall '08 term at Wilfred Laurier University .
- Fall '08