Answer:
$1000, $613,500
Explanation:
Given: Bid Rate : $102.25
Ask Rate : $102.5
Order executed: $4000
Ask price $ 102.5 for 4000 shares = 4000 × 102.5 = $410,000
Bid price $102.25 for 4000 shares = 4000 × 102.25= $409,000
Profit = Sales - Cost price = $410,000 - $409,000 = $1,000
Thus, earnings on 4000 shares bought and sold = $1,000
Value of investment = Value of remaining purchased shares which were not sold
= 6000 shares × 102.25= $613,500
The above valuation of investment is based upon bid price i.e cost price
Bid price refers to the buying rate and ask price refers to the selling rate. Profit is the difference between bid rate and the ask rate.
