Question

Gregory bought 500 shares of stock at a price of $60 per share. He later sold his stock at a price of $56.What was his total return on his investment?A. $2,000 lossB. $60 lossC. $4 gainD. $2,000 gainE. $26,500 gain

Answer 1

Answer:

The correct answer is A

Explanation:

The amount which is paid for borrowing the shares is computed as:

Amount = Shares × Price per share

= 500 × $60

= $30,000

On selling the amount which is received is computed as:

Amount = Shares × Pricer per share

= 500 × $56

= $28,000

So, the total return on the investment is computed as:

= $30,000 - $28,000

= $2,000 (Loss)

It result in loss of $2,000 to Gregory.