What is the cost of 100 shares of Jiffy, Inc. stock given that the bid-ask prices are $31.25 – $32.00 and a $15.00 commission per transaction exists?

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BlackTom AI · Accepted Answer

Question restatement: What is the cost of 100 shares of Jiffy, Inc. stock given that the bid-ask prices are $31.25 – $32.00 and a $15.00 commission per transaction exists?

Option A: $3125
- Analysis: This uses 100 shares × $31.25 per share, which is the bid price. However, when purchasing, you typically pay the ask price, not the bid price. Additionally, this figure omits the $15 commission, so it is incomplete as the total cost.

Option B: $3140
- Analysis: This seems to add the $15 commission to $3125 (the bid-based cost). But the calculation should be based on the ask price for a purchase, not the bid price, and the correct total should include the full commission after multiplying by the share price. Therefore this amount reflects an incorrect basis for the share price and miscounts the commission.

Option C: $3200
- Analysis: This equals 100 shares × $32.00 per share, which uses the ask price correctly, but it omits the $15 commission. Since a transaction fee applies per transaction, the total would be higher by $15 if a commission is charged.

Option D: $3215
- Analysis: This is 100 × $32.00 plus a $15 commission, which correctly uses the ask price for the purchase and accounts for the per-transaction commission. The calculation aligns with standard trading costs where you pay the market price to buy plus any fixed commission.

Summary: Each option reflects a different aspect of the cost calculation—whether the correct price basis (ask vs bid) is used and whether the commission is included. The only choice that simultaneously uses the proper purchase price and includes the commission corresponds to the total that matches 100 × 32.00 plus 15.

What is the cost of 100 shares of Jiffy, Inc. stock given that the bid-ask prices are $31.25 – $32.00 and a $15.00 commission per transaction exists?

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