A trader bought a stock for $20 then sold it for $30. He bought it back for $38 and then sold it again for $48. How much did he gain or lose on these transactions?
$10 gain?
First time was $10. Second time was $10. If you gain $10 two times, how much did you make?
To determine the gain or loss on these transactions, we need to calculate the total amount spent and the total amount received.
1. Transaction:
- Bought the stock for $20
2. Transaction:
- Sold the stock for $30
3. Transaction:
- Bought the stock again for $38
4. Transaction:
- Sold the stock for $48
To calculate the gain or loss, we need to calculate the net amount spent and the net amount received:
Net amount spent: $20 (initial purchase) + $38 (second purchase) = $58
Net amount received: $30 (first sale) + $48 (second sale) = $78
To calculate the gain or loss, you subtract the net amount spent from the net amount received:
Gain or loss = Net amount received - Net amount spent
= $78 - $58
= $20
Therefore, the trader gained $20 from these transactions.