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When evaluating an investment scenario involving multiple purchases, the first step is to determine your total outlay and the total number of shares acquired. In this case, combining the individual purchases reveals a complete picture: 100 shares at $30 adds $3,000 to your cost, 200 shares at $20 adds another $4,000, and 300 shares at $10 contributes $3,000. Summing these amounts gives a grand total investment of $10,000 for 600 shares.
With all 600 shares subsequently sold for $15 each, the total revenue generated is $9,000. Comparing this to the initial investment of $10,000, there's a clear shortfall, leading to a $1,000 loss. To express this as a percentage, we divide the loss by the original total investment: $1,000 divided by $10,000 equals 0.10, or a 10% loss. This situation highlights how the overall outcome is determined by comparing total cost versus total revenue, not just individual share price movements.
This scenario underscores a fundamental principle in investing: it's not just about the final selling price, but how that price compares to your average purchase price across all transactions. Investors often use strategies like dollar-cost averaging, where they buy fixed dollar amounts of an investment at regular intervals, regardless of
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