Question

Kim placed an order with her broker for 800 shares of each of three IPOs being offered this week. Each of the IPOs has an offer price of $30. The number of shares allocated to Kim along with the closing prices on the first trading day are:Stock Shares Allocated Price A 700 $ 29.15 B 430 33.86 C 340 36.43 What is Kim's total profit on these three stocks at the end of the first day of trading? Multiple Choice a. $4,929.50 b. $3,251.00 c. $3,715.40 d. $1,591.20 e. $6,608.00

Answer 1

Answer:

B. $3,251

Explanation:

Stock shares × Allocated price = Shares closing price

A 700 ×$ 29.15 =$20,405

B 430 ×33.86=$14,560

C 340× 36.43 =$12,386

Total $47,351

Stock shares × IPO price= Shares IPO price

A 700 ×$30=$21,000

B 430×$30= $12,900

C 340×$30=$10,200

Total $44,100

Total Profits $47,351-$44,100

=$3,251

Therefore Kim's total profit on these three stocks at the end of the first day of trading will be $3,251