A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer's markup is:
A)10 5/8
B)19 7/8
C)23 1/2
D)5% above cost

Question

Quizplus · Accepted Answer

19 7/8. The markup is always based on the current market price, not upon cost. Therefore, the markup is based on the offering side of the current quotation.

A Dealer Buys 100 Shares of XYZ Common, Which Is