BrainLab wrote:

BrainLab wrote:

An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80

2. 45.95

3. 46.00

4. 46.05

5. 46.20

Is there some way to avoid intensive calculations ? I've solved it this way.... (at the time I was writing my solution, I saw a much better one

)

\(\frac{45,75*20+30(45,75+0,50)}{50}\) --> \(\frac{50*45,75}{50} + \frac{15}{50}= 45,75+0,3=46,05\)

Answer D

Hi

you dont require to do any intensive calculations if you do by weighted average..

the ratio of shares =2:3 and their price = 45.75:46.25..

the average ratio of total would depend on the ratio of number of shares..

difference in the price = 46.25-45.75=.50..

divide this .50 in the ratio 2:3=.2:.3...

since the number of shares of 46.25 is more, the average will be closer to it...

so average= 46.25- .2=46.05...

.2 has come from .2:.3...

D

hope it helps you in reducing your calculations further

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