You purchase 50 shares of Chips Unlimited Inc. for $87.35 per share. Three months later your shares are now worth $84.56 per share. How much has your investment value decreased?

To determine how much the investment value has decreased, you first need to find the initial value of the shares purchased and the current value after three months.

Initially, you purchased 50 shares at $87.35 per share. Therefore, the total initial investment value can be calculated as follows:

Initial Investment = Number of Shares × Price per Share

Initial Investment = 50 × $87.35 = $4,367.50.

Next, you calculate the current value of the shares, which are now worth $84.56 per share:

Current Value = Number of Shares × Current Price per Share

Current Value = 50 × $84.56 = $4,228.00.

Now, to find out how much your investment has decreased in value, subtract the current value from the initial investment value:

Decrease in Investment Value = Initial Investment - Current Value

Decrease in Investment Value = $4,367.50 - $4,228.00 = $139.50.

Thus, the answer reflects the total decrease in the investment’s value, which is $139.50, clearly establishing that this choice represents the correct calculation of the loss in investment value over the period.