Annabelle Is a "Trader" in Securities

question 94

Essay

Annabelle is a "trader" in securities. She works for a national securities firm. She occasionally buys and sells securities for her personal account. On May 10, 2017, she purchased 100 shares of Acorn, Inc. common stock for a total of $40,000. She sold all of those shares for a total of $46,000 on July 11, 2018. What was the amount and nature of her gain or loss from this transaction? What could she have done to change this result?

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Definitions:

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and homogeneous products.

Units of Labor

A measurement in economics indicating the quantifiable effort or work provided by labor forces, often used to determine productivity or cost in production processes.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts and/or the physical factories, machinery and equipment used to produce goods.

Profit-Maximizing Amounts

The levels of output or operation at which a business achieves the highest possible profit, determined by analyzing costs and revenues.