Answer to Question #101204 in Financial Math for Ryan

Question

I am investing in stocks for a friend and myself. My friend bought 334 shares at $.17 a share. I later bought 2040 shares at $.30 a share. When the stock goes up, how do I fairly distribute the earnings between me and my friend?

Answer 1

We calculate the shares according to the purchased shares: 334/2374 = 14% and 2040/2374 = 86% and, accordingly, fairly distribute the profit between friend and the investor according to the purchased share of the share