a share of stock in the lofty cheese company

The phrase "a share of stock in the Lofty Cheese Company" appears in many pedagogical finance problems; this article explains that canonical exercise, how to compute profit and loss from fractional quoted prices, and the learning objectives for beginners.

Overview

This short entry treats "a share of stock in the Lofty Cheese Company" as a textbook multiple‑choice exercise used to teach basic arithmetic in equity trading scenarios. The problem demonstrates interpreting fractional quotes (for example, 25 1/4), calculating per‑share gains or losses, and converting those into total realized profit or loss.

Problem statement

Canonical text of the exercise: "A share of stock in the Lofty Cheese Company is quoted at 25 1/4. You bought the stock at 20 1/4 and sold 30 shares. Which statement is correct?" The facts readers need are the quoted selling price (25 1/4), the purchase price (20 1/4), and the number of shares (30).

Solution

Per‑share calculation

Convert fractional quotes to decimals: 25 1/4 = 25.25 dollars, 20 1/4 = 20.25 dollars. Compute per‑share profit: 25.25 − 20.25 = 5.00 dollars per share. This answers the per‑share component of the exercise about "a share of stock in the Lofty Cheese Company".

Aggregate calculation

Multiply per‑share profit by shares held: 5.00 × 30 = 150. The total realized profit from selling 30 shares is 150 dollars. Thus the correct multiple‑choice option states you made a profit of $150 on the position described as "a share of stock in the Lofty Cheese Company".

Key concepts illustrated

Fractional price notation

Notations like 25 1/4 mean 25 and one quarter (25.25). Historically common in U.S. markets, fractions are now largely replaced by decimals but remain useful pedagogically when teaching conversions.

Realized vs. unrealized gain

Because the shares were sold, the example calculates a realized gain. If the shares were still held, the same per‑share difference would be an unrealized gain.

Per‑share vs. total profit

Common student errors include forgetting to multiply the per‑share result by the number of shares; the Lofty Cheese problem reinforces that step with the 30‑share example.

Transaction costs and taxes

Real trading would reduce the $150 by commissions, fees, or taxes; the textbook problem omits these to focus on core arithmetic.

Worked example

Step 1: 25 1/4 → 25.25. Step 2: 20 1/4 → 20.25. Step 3: Difference = 5.00 per share. Step 4: 5.00 × 30 = 150 total. This completes the solution to the exercise framed around "a share of stock in the Lofty Cheese Company".

Variants and exercises

To extend practice, change the share count, reverse the prices to produce a loss, include a commission per trade, or use fractional denominators like eighths to reinforce conversion skills. Each variant helps students apply the same logic used for the Lofty Cheese example.

Educational context and usage

Problems featuring "a share of stock in the Lofty Cheese Company" are common in introductory finance, business math classes, and standardized test prep because they teach numeracy and price notation conversion in a concise format.

Historical note on fractional quoting

Fractional quoting was standard in U.S. equity markets until decimalization. Educators still use fractions for simple conversion practice; the Lofty Cheese problem is an example of that pedagogical choice.

Related topics

See entries on calculating stock profit and loss, bid‑ask spread, realized gain, and price notation (fractions vs decimals) for more practice beyond the Lofty Cheese exercise.

References

As of 2025-12-30, according to GreatAssignmentHelp and GauthMath, the canonical worked solutions for the exercise titled "a share of stock in the Lofty Cheese Company" show the same $150 total profit result. Sources consulted are educational solution pages and worked examples from tutoring sites (titles: GreatAssignmentHelp solution; GauthMath solution pages).

Notes and editorial guidance

This article treats "a share of stock in the Lofty Cheese Company" strictly as an instructional example and does not assert the existence of a public company by that name. For hands‑on practice with markets or simulated trading, consider exploring Bitget’s learning and demo tools to practice order entry, fractional conversions, and trade accounting in a controlled environment.

Further exploration: try converting other fractional quotes and recomputing totals, or add realistic fees to see how transaction costs alter the outcome for the Lofty Cheese scenario.