When Selling Stocks, Which Method of Calculating Basis Provides the Greatest

question 28

Multiple Choice

When selling stocks, which method of calculating basis provides the greatest opportunity for minimizing gains or increasing losses?

• A)LIFO.
• B)FIFO.
• C)Weighted average.
• D)Specific identification.
• E)None of the choices are correct.

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Definitions:

Market Price

The present market rate for trading an asset or service.

Subscription Price

The fixed price at which existing shareholders can purchase additional shares of stock before it is offered to the public.

Common Share

A type of equity ownership in a corporation, representing a claim on part of the company’s profits and assets.