I. B. Michaels has a chance to participate in a new publicoffering by Hi-Tech Micro Computers. His broker informs him thatdemand for the 530,000 shares to be issued is very strong. Hisbroker’s firm is assigned 28,000 shares in the distribution andwill allow Michaels, a relatively good customer, 1.80 percent ofits 28,000 share allocation. The initial offering price is $20 pershare. There is a strong after market, and the stock goes to $21.50one week after issue. The first full month after issue, Mr.Michaels is pleased to observe his shares are selling for $22.50.He is content to place his shares in a lock box and eventually usetheir anticipated increased value to help send his son to collegemany years in the future. However, one year after the distribution,he looks up the shares in The Wall Street Journal and finds theyare trading at $19.50.

a. Compute the total dollar profit or loss on Mr. Michaels’shares one week, one month, and one year after the purchase. Ineach case, compute the profit or loss against the initial purchaseprice. (Do not round intermediate calculations and round youranswers to 2 decimal places. Enter all amounts as a positivevalue.)

b. Also compute the percentage gain or loss from the initial $30price. (Do not round intermediate calculations. Enter your answersas a percent rounded to 2 decimal places. Enter all amounts as apositive value.)