Calculating the Price of Stocks and Portfolio Values
When investing in stocks, or any other type of investment, it is important to understand your cost and returns. This activity will help you understand how to identify your true value/costs.
Example:
You purchase 5 shares of NEW stock.
The current stock price for NEW stock is $12.
Your stock broker charges you a 2% commission for the transaction.
What is the value of your stock portfolio?
$60 (5 shares x $12)
How much commission did you pay to buy this stock?
$1.20 ($60 x 2%)
How much in total did it cost you to purchase 5 shares of NEW stock?
$61.20 ($60 for the stock + $1.20 for the commission)
When you calculate your Return on Investment (ROI), you must consider your TOTAL costs, not just the price of the stock, etc.
You are to use this guideline to answer the following questions:
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