Ms Fresh Bought 1,000 Shares of Ibis Corporation Stock for $5,000

question 57

Multiple Choice

Ms. Fresh bought 1,000 shares of Ibis Corporation stock for $5,000 on January 15, 2016. On December 31, 2018 she sold all 1,000 shares of her Ibis stock for $4,500. Based on a hot tip from her friend, she bought 1,000 shares of Ibis stock on January 23, 2019 for $3,000. What is Ms. Fresh's recognized loss on her 2018 sale and what is her basis in her 1,000 shares purchased in 2019?

• A) $-0- LTCL and $3,500 basis.
• B) $200 LTCL and $3,300 basis.
• C) $300 LTCL and $3,200 basis.
• D) $400 LTCL and $3,100 basis.
• E) $500 LTCL and $3,000 basis.

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Definitions:

Opportunity Cost

Missing potential benefits that could have been gained from unchosen options when deciding on one.

Production Possibilities

A graphical representation that shows the maximum combination of goods or services that can be produced with a fixed amount of resources.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs representing resource allocation.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, representing the trade-offs of allocating resources between the production of those goods.