Alexa purchased 700 shares of Campagna Corp stock for x dollars per share in 2005. She sold them in 2010 for y dollars per share, where y < x.a. Did Alexa have a gross capital gain or a gross capital loss? Explain. b. Alexa used the formula 700y 700x / 700x to compute the percent of the loss. Her

Chapter 8, Application 8.6 #12

Alexa purchased 700 shares of Campagna Corp stock for x dollars per share in 2005. She sold them in 2010 for y dollars per share, where y < x.
a. Did Alexa have a gross capital gain or a gross capital loss? Explain.

b. Alexa used the formula 700y – 700x / 700x to compute the percent of the loss. Her husband Tom used the formula y – x / x  to compute the percent of the loss. She told him he was incorrect because he didn’t take into account that she bought 700 shares. He says that his formula is correct, and so is hers. Who is correct, Alexa or Tom? Explain.

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Related Book For answer-question

Financial Algebra Advanced Algebra With Financial Applications

2nd Edition

Authors: Robert Gerver, Richard J. Sgroi

ISBN: 9781337271790