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25 June, 04:21

A share of IBM stock is purchased by an individual investor for $75 and later sold to another investor for $125. Who profits from this sale?

a. The second investor

b. The first investor

c. IBM

d. IBM and both investors

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Answers (1)
  1. 25 June, 06:02
    0
    The correct answer is B

    Explanation:

    As the share of IBM is bought by an individual investor at $75, later the investor sold it to another investor for $125. So, the first investor earns the profit of $50 from selling the share of IBM. Therefore, the first investor is the one who is getting profits or benefits from this sale of the share.

    Working Note:

    Profit = Selling Price - Purchase Price

    = $125 - $75

    = $50
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