Middle School

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Zeke bought 10 shares of a company’s stock at a price of $21.20 per share. He now sees that the price per share of his investment is $32. His broker informs him that the price of the shares may see a decline in the future. Zeke should ideally sell the assets because he stands to earn a profit of $10.80 per share from the transaction.

Answer :

Final answer:

Zeke can make a profit of $10.80 per share if he sells his stocks now. His broker expects a decline in the future, so selling now would be a good decision.

Explanation:

Zeke's situation pertains to the world of finance and stock investment. He bought 10 shares of a company's stock at $21.20 per share and it's currently priced at $32 per share. By subtracting the buying price from the current price, we can calculate the profit per share which is $10.80.

So, if he sells the stocks now, he will make a profit of $10.80 per share. For 10 shares, that's a total profit of $108 (10 shares * $10.80 per share). If his broker expects a decline in the price, Zeke ideally should sell the shares now to profit before the prices go down.

Generally, the rate of return on a financial investment in a share of stock can be from dividends paid by the firm or as a capital gain achieved by selling the stock for more than you paid. In this case, Zeke's profit would be considered a capital gain.

Learn more about Stocks here:

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