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A summary of two stocks is shown.

\begin{tabular}{|l|l|l|l|l|}
\hline Name of Stock & Symbol & Closing Price Day 1 & Closing Price Day 2 & Closing Price Day 3 \\
\hline Metropolis, Ltd & MTP & 17.95 & 18.28 & 18.25 \\
\hline Suburbia, Inc & SBR & 5.63 & 5.88 & 4.98 \\
\hline
\end{tabular}

Suppose you purchase 30 shares of Metropolis stock and 55 shares of Suburbia stock on Day 1 at the closing price. Which day, during the following two days, would be the best to sell both stocks?

A. Day 2 is the best by \[tex]$26.75.
B. Day 3 is the best by \$[/tex]26.75.
C. Day 2 is the best by \[tex]$23.65.
D. Day 3 is the best by \$[/tex]23.65.



Answer :

GinnyAnswer
Let's analyze the information step-by-step to determine the best day to sell the stocks.

1. Initial Purchase Details:
- Metropolis (MTP): 30 shares at [tex]$17.95 per share - Suburbia (SBR): 55 shares at $[/tex]5.63 per share

2. Closing Prices:
- Metropolis (MTP):
- Day 1: [tex]$17.95 - Day 2: $[/tex]18.28
- Day 3: [tex]$18.25 - Suburbia (SBR): - Day 1: $[/tex]5.63
- Day 2: [tex]$5.88 - Day 3: $[/tex]4.98

3. Total Value on Day 1:
- Metropolis: [tex]\(30 \text{ shares} \times \$17.95 = \$538.50\)[/tex]
- Suburbia: [tex]\(55 \text{ shares} \times \$5.63 = \$309.65\)[/tex]
- Total Value Day 1: [tex]\(\$538.50 + \$309.65 = \$848.15\)[/tex]

4. Total Value on Day 2:
- Metropolis: [tex]\(30 \text{ shares} \times \$18.28 = \$548.40\)[/tex]
- Suburbia: [tex]\(55 \text{ shares} \times \$5.88 = \$323.40\)[/tex]
- Total Value Day 2: [tex]\(\$548.40 + \$323.40 = \$871.80\)[/tex]

5. Total Value on Day 3:
- Metropolis: [tex]\(30 \text{ shares} \times \$18.25 = \$547.50\)[/tex]
- Suburbia: [tex]\(55 \text{ shares} \times \$4.98 = \$273.90\)[/tex]
- Total Value Day 3: [tex]\(\$547.50 + \$273.90 = \$821.40\)[/tex]

6. Profit Calculation:
- Profit on Day 2: [tex]\(\$871.80 - \$848.15 = \$23.65\)[/tex]
- Profit on Day 3: [tex]\(\$821.40 - \$848.15 = -\$26.75\)[/tex] which is a loss.

Conclusion:

Comparing the values, we see:
- The value on Day 2 is higher than on Day 3.
- The profit on Day 2 is positive and greater.

Therefore, the best day to sell both stocks is:

Day 2 is the best by $23.65.

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