1: if Tim does not buy DEF, how many can he spend on ABC? 2: how many shares of ABC can he buy if he does not buy DEF?

3: if the selling price is $1,750, how much will Tim have earned by investing?

4: what is the total return divided by the total cost In this example?

1. $1400

2 329.4 shares

3. $350

4. 1.25

Step-by-step explanation:

1. if Tim does not buy DEF, how many can he spend on ABC?

From the attached image

100 shares for ABC = $425

100 shares for DEF $600 + $375 commission

Therefore, the amount he can spend on ABC without buying DEF = $600 + $375 + $425 = $1400

2: how many shares of ABC can he buy if he does not buy DEF?

$425 = 100 shares

$1400 =

Cross Multiply

= $1400 × 100 shares/ $425

= 329.41176471 shares

= 329.4 shares

3: if the selling price is $1,750, how much will Tim have earned by investing?

The cost of buying ABC = $1400

The Amount earned from investing = $1750 - $1400

= $350

4: what is the total return divided by the total cost In this example?

Total return = $1750

Total cost = $1400

= $1750/$1400

= 1.25