Mega Computer Issued Stock with a Face Value of One

question 293

Short Answer

Mega Computer issued stock with a face value of one cent and then sold the shares to the public for $20.00 each. Ted bought 10 shares at that price. Today, Ted sold his shares to David for $25.00 each. What are Ted's capital gains?
$19.99
$20.00
$25.00
$50.00
$0.01

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Definitions:

Representativeness Heuristic

Estimating the likelihood of events in terms of how well they seem to represent, or match, particular prototypes; may lead us to ignore other relevant information.

Availability Heuristic

Estimating the likelihood of events based on their availability in memory; if instances come readily to mind (perhaps because of their vividness), we presume such events are common.

Insight

A sudden realization of a problem’s solution; contrasts with strategy-based solutions.

Engineering Problem

A challenge or issue within the field of engineering that requires a solution, often involving mathematical, scientific, and practical knowledge.