Rita placed an order for 300 shares of each of four separate IPOs (Orders A, B, C, and D) with an offer price of $16 each. She received 100 shares of Order B, 200 shares of Order D, and 300 shares of the other orders. At the end of the first day, Order A was overpriced by $2 a share, Order B was underpriced by $4 a share, Order C was correctly priced, and Order D was overpriced by $1 a share. What was combined total profit or loss for the first day on these four orders

Complete question:

Rita placed an order for 300 shares of each of four separate IPOs (Orders A, B, C, and D) with an offer price of $16 each. She received 100 shares of Order B, 200 shares of Order D, and 300 shares of the other orders. At the end of the first day, Order A was overpriced by $2 a share, Order B was underpriced by $4 a share, Order C was correctly priced, and Order D was overpriced by $1 a share. What was combined total profit or loss for the first day on these four orders

Multiple Choice

 -$400  $400  $100  -$100  -$300

Answer:

$400 was combined total profit or loss for the first day on these four orders

Solution:

Given,

Rita placed an order for 300 shares of each of four separate

Offer price of $16 each

She received 100 shares of Order B, 200 shares of Order D, and 300 shares of the other orders.

Now,

Order No. of shares Profit / (loss) per share Net profit / (loss)

A 300 $ (2) $ (600)

B 100 $ 4 $ 400

C 300 $ - $ -

D 200 $ (1) $ (200)

Net profit / (loss) $ (400)

Net loss for first day is $400.