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# If $4500 dollars was invested in a bond fund when the price  Question banks Downloads My Bookmarks Reviews Important topics Author Message TAGS: Manager Joined: 08 Sep 2006 Posts: 53 Followers: 0 Kudos [?]: 10 [0], given: 0 If$4500 dollars was invested in a bond fund when the price [#permalink]  23 Jul 2007, 17:40
If $4500 dollars was invested in a bond fund when the price per share was$9 and $3000 was invested when the price was$10, What is the average price per share?

a) 9.40
b) 9.375
c) 9.50
d) 9.75
e) 10.0

Please explain how you arrive at the answer.
Senior Manager
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[#permalink]  23 Jul 2007, 17:42
(4500 + 3000)/(500 + 300) = 75/8

9.375

500 is the number of shares bought when its $9 300 is the number of shares bought when its$10

total cost/total shares = avg. cost per share
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[#permalink]  23 Jul 2007, 17:44
# of shares issued with 4500 invested at pps of 9 = 4500/9 = 500
# of shares issued with 3000 invested at pps of 10 = 3000/10 = 300

TOtal number of shares = 800
Total amount invested = 7500

Average PPS = 7500/800 = 75/8 = 9.375
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[#permalink]  23 Jul 2007, 17:49
Thanks for the quick reply
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[#permalink]  23 Jul 2007, 19:11
B. $9.375 Total price of all shares bought ($7500)

Divided by number of shares purchased at each price ( 500+ 300 = 800)

$7500/800 =$9.375
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Re: Avg Price? [#permalink]  24 Jul 2007, 07:30
tinman1412 wrote:
If $4500 dollars was invested in a bond fund when the price per share was$9 and $3000 was invested when the price was$10, What is the average price per share?

a) 9.40
b) 9.375
c) 9.50
d) 9.75
e) 10.0

Please explain how you arrive at the answer.

I would add that with a simple glance you can get rid of 3 of the answers immediately.

Note that if the same number of shares were purchased at each price point, the average would be $9.5/share. Since more shares were purchased at$9 than $10 ($4500 vs $3000 ~ 500 to 300), we know the average is closer to 9 than 10. Therefore we can cross out c, d, and e. This is a good way to check your answer if you are prone (like me) to dumb errors. Re: Avg Price? [#permalink] 24 Jul 2007, 07:30 Similar topics Replies Last post Similar Topics: Sustainable/SRI Investment Funds 0 12 May 2012, 17:18 2 Samantha invests i1 dollars in bond X, which pays r1 19 02 Oct 2010, 10:56 Pat invested x dollars in a fund that paid 8 % annual 0 12 Jul 2008, 08:44 Pat invested x dollars in a fund that paid 8 percent annual 3 09 May 2006, 00:15 An investor purchased a bond for p dollars on Monday. For a 1 18 Dec 2005, 01:33 Display posts from previous: Sort by # If$4500 dollars was invested in a bond fund when the price

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