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Three years ago, you purchased 220 shares of IBM stock for $92 a share. Today, you sold

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Three years ago, you purchased 220 shares of IBM stock for $92 a share. Today, you sold your IBM stock for $140 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares and dividends you might have received as a shareholder.

a. What is the amount of profit you earned on each share of IBM stock?

b. What is the total amount of profit for your IBM investment?

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a The profit for each share of IBM stock was 48 as i...View the full answer


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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.

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