A summary of two stocks is shown.
\begin{tabular}{|l|l|l|l|l|l|l|}
\hline 52W high & 52W low & Name of Stock & Symbol & High & Low & Close \\
\hline 37.18 & 29.39 & Zycodec & ZYO & 39.06 & 32.73 & 34.95 \\
\hline 11.76 & 7.89 & Unix Co & UNX & 16.12 & 12.11 & 15.78 \\
\hline
\end{tabular}

Last year, a stockholder purchased 25 shares of Zycodec at its lowest price of the year. What is the gain or loss if the stock is sold at the current closing price?

A. The gain is [tex]$\$[/tex]55.75[tex]$.
B. The loss is $[/tex]\[tex]$55.75$[/tex].
C. The gain is [tex]$\$[/tex]139.00[tex]$.
D. The loss is $[/tex]\[tex]$139.00$[/tex].



Answer :

To determine the gain or loss when selling the shares of Zycodec at the current closing price, we need to follow these detailed steps:

1. Determine the purchase price per share and the number of shares:
- The lowest price per share last year for Zycodec was \[tex]$29.39. - The stockholder purchased 25 shares at that price. 2. Calculate the total cost of purchasing the shares: \[ \text{Total cost} = \text{Lowest price per share} \times \text{Number of shares} \] Substituting the values, we get: \[ \text{Total cost} = 29.39 \times 25 = 734.75 \] 3. Determine the current closing price per share: - The closing price per share for Zycodec is \$[/tex]34.95.

4. Calculate the total value of the shares at the current closing price:
[tex]\[ \text{Total value} = \text{Closing price per share} \times \text{Number of shares} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Total value} = 34.95 \times 25 = 873.75 \][/tex]

5. Determine the gain or loss:
[tex]\[ \text{Gain or loss} = \text{Total value} - \text{Total cost} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Gain or loss} = 873.75 - 734.75 = 139.00 \][/tex]

Since the total value of the shares at the current closing price is higher than the total cost, the stockholder has realized a gain.

Therefore, the gain is \[tex]$139.00. The correct answer is: - The gain is \$[/tex]139.00