Marty purchased 290 shares of stock at $11.55 per share. The commission is 4% for round lots and an additional 5% for odd lots. What is the total cost of the transaction?

Question

Quizplus · Accepted Answer

The total cost of the shares before commission is:
$11.55/share x 290 shares = $3,349.50

Since the number of shares (290) is not a multiple of 100 (a round lot), it is considered an odd lot.

The commission on the stock purchase is calculated in two parts:

1) Commission for round lot: 4% of $3,349.50 = $133.98

2) Commission for odd lot: 5% of ($11.55 * 290) = $166.13

Total commission = $133.98 + $166.13 = $300.11

Total cost of transaction = cost of shares + commission = $3,349.50 + $300.11 = $3,649.61

Rounding to the nearest cent, the total cost of the transaction is $3,493.65. Therefore, the best choice is D.

Marty Purchased 290 Shares of Stock at $11