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Sagot :
The number of shares could he buy is 63.19 and 126.38. Then the profit gained by Bob is $764.68.
What is the profit gained by Bob?
Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications.
At the time of his investment, Verizon was selling for $47 a share.
If Bob paid a $30 commission, then the number of shares could he buy if he used only his own money and did not use margin.
[tex]\rightarrow \dfrac{3000- 30}{47}\\\\\rightarrow \dfrac{2970}{47}\\\\\rightarrow 63.19[/tex]
If Bob paid a $60 commission, then the number of shares could he buy if he used his $3,000 and borrowed $3,000 on margin to buy Verizon stock will be
[tex]\rightarrow \dfrac{6000 - 60 }{47}\\\\\rightarrow \dfrac{5940}{47}\\\\\rightarrow 126.38[/tex]
Assume Bob did use margin and paid a $60 total commission to buy his Verizon stock. Also, assume he paid another $60 to sell his stock and sold the stock for $54 a share. Then the profit will be
[tex]\rightarrow (126.38 \times 54 - 60) - (6000)\\\\\rightarrow (6824.68 - 60) - 6000\\\\\rightarrow 6764.68 - 6000\\\\\rightarrow \$764.68[/tex]
More about the profit link is given below.
https://brainly.com/question/15036999
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