Which statement about calculating the total cost is correct?

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Multiple Choice

Which statement about calculating the total cost is correct?

Explanation:
Total cost includes both the money spent on the shares and the trading costs charged by the broker. You first calculate the cost of the shares by multiplying price per share by the number of shares, then add any trading fees or commissions. For example, at $50 per share for 100 shares, the share cost is $5,000. If there are $5 in fees, the total cost is $5,005. This approach correctly accounts for all cash outlays. Adding the price per share to the number of shares, omitting fees, or assuming fees don’t exist would misstate the true amount you pay.

Total cost includes both the money spent on the shares and the trading costs charged by the broker. You first calculate the cost of the shares by multiplying price per share by the number of shares, then add any trading fees or commissions. For example, at $50 per share for 100 shares, the share cost is $5,000. If there are $5 in fees, the total cost is $5,005. This approach correctly accounts for all cash outlays. Adding the price per share to the number of shares, omitting fees, or assuming fees don’t exist would misstate the true amount you pay.

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