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Solved Examples(Set 1) - Stocks and Shares

1. A man buys Rs. 20 shares paying 9% dividend. The man wants to have an interest of 12% on his money. What is the market value of each share?
A. Rs.18B. Rs.15
C. Rs.21D. Rs.12
Discuss
answer with explanation

Answer: Option B

Explanation:

Face value of each share = Rs.20

Dividend per share = 9% of 20 = $\dfrac{9× 20}{100} = \dfrac{9}{5}$

He needs to have an interest of 12% on his money

$\text{ie, Money Paid for a share} × \dfrac{12}{100}= \dfrac{9}{5}$

$\text{Money Paid for a share} = \dfrac{9}{5} × \dfrac{100}{12} = 15$

ie, Market Value of the share = Rs.15

2. A man invested Rs.1552 in a stock at 97 to obtain an income of Rs.128. What is the dividend from the stock?
A. 7.5%B. None of these
C. 9.7%D. 8%
Discuss
answer with explanation

Answer: Option D

Explanation:

By investing Rs.1552, income = Rs.128

$\text{By investing Rs.97, income = }\dfrac{128× 97}{1552} = 8$

ie, dividend = 8%

3. The cost price of a Rs. 100 stock at 4 discount, when brokerage is $\dfrac{1}{5}\%$ is
A. Rs. 97.5B. Rs. 96.2
C. Rs. 97.25D. Rs. 96.25
Discuss
answer with explanation

Answer: Option B

Explanation:

$\text{Cost Price = }100 - 4 + \dfrac{1}{5} = 96.2$

4. In order to obtain an income of Rs. 650 from 10% stock at Rs. 96, one must make an investment of
A. Rs. 9600B. Rs. 6500
C. Rs. 6240D. Rs. 3100
Discuss
answer with explanation

Answer: Option C

Explanation:

Market Value = Rs. 96.

Required Income = Rs. 650.

Here face value is not given. Take face value as Rs.100 if it is not given in the question

To obtain Rs.10 (ie,10% of the face value 100), investment = Rs.96

$\text{To obtain Rs.650, investment = }\dfrac{96}{10} × 650 = 6240$

5. By investing in $16\dfrac{2}{3}\%$ stock at 64, one earns Rs. 1500. The investment made is

A. Rs. 7500B. Rs. 9600
C. Rs. 5760D. Rs. 5640
Discuss
answer with explanation

Answer: Option C

Explanation:

Market Value = Rs.64

Face Value is not given and hence take it as Rs.100

$16\dfrac{2}{3}\% \text{ of the face value = }\dfrac{50}{3}$

$\text{ie, to earn }\dfrac{50}{3},\text{ investment = }Rs.64$

$\text{Hence, to earn Rs.1500, investment needed = }\dfrac{64 × 3 × 1500}{50} = 5760$

Comments(4)

profilevictor otieno
2014-11-13 15:56:40 
find the cost of RS 8750,8.5% stock at 92
like 0 dislike 0 reply
profilesrhri mhnndia
2014-10-08 06:21:16 
Answering and discussing  make the thing clear.
like 0 dislike 0 reply
profileaakash
2014-01-23 21:06:54 
Which is a better investment 14% stock at 95 or 15% stock at 105 
like 0 dislike 0 reply
profileJay
2014-01-25 13:04:02 
This is same as Q.12

Dividend per share in 1st case is Rs.14
Dividend per share in 2nd case is Rs.15

Number of shares one can purchase with Rs.(95*105)  in 1st case = (95*105) /95= 105
Number of shares one can purchase with Rs.(95*105)  in 2nd case = (95*105) /105 = 95

Income in 1st case = Rs.(14 × 105) = Rs.1470
Income in 2nd case = Rs.(15 × 95) = Rs.1425

So, 14% stock at 95 is better
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