# The Wall Street Investor

An investor trading through a discount stock broker that charges \$10.00 Dollars per transaction bought 200 shares of Vola Tile Corporation at \$50.00 Dollars per share. The stock quickly increased in value by 50%, but then lost 40% of its value. The investor sold the stock. How much money did the investor gain or lose?

pnikam Expert Asked on 18th August 2015 in

The cost of 200 shares at \$50.00 Dollars each is \$10,000.00 Dollars.
The 50% gain on \$10,000 is \$5,000, making the new total \$15,000.00 Dollars.
The 40% loss on \$15,000 is \$6,000, reducing the total amount to \$9,000.00 Dollars.
This is a \$1000.00 Dollar loss, plus \$10 Dollars for the Buy transaction, and \$10 Dollars for the Sell transaction.

The investor lost a total of \$1020.00 Dollars.

It seems counterintuitive that the investor should lose money when the percentage of the loss is less than the percentage of the gain. However, the percentage of the loss is calculated on a bigger amount than the percentage of the gain.

anikam Expert Answered on 18th August 2015.

Im sorry but your answer is incorrect. Here is the real solution:

Cost of Shares = \$10,000
Transaction amt = \$10
Investment = \$10,010

When calculating real-time dollars, you must include the \$10 in your % of increase/decrease.

Hence =

\$10,010  +  50% = \$15,015

\$15,015 – 40% = \$9,009

To sell the shares, you need to subract an additional \$10 for transaction fees.

= \$9.009 – \$10 = \$8,999

Actual Loss = \$10,010 – \$8,999 = \$1,011

Dat investor got played homeboi. Rasdawg out \m/

AkshatRas Starter Answered on 23rd March 2017.

loss of \$5000

Vishal_KIET Starter Answered on 30th June 2016.

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