STOCKS AND SHARES

Q.1

Find the cost of:

(i) Rs. 7200, 8% stock at 90;

(ii) Rs. 4500, 8.5% stock at 4 premium;

(iii) Rs. 6400, 10% stock at 15 discount.

Rs. 6480.,Rs. 4680,Rs. 5440

Rs. 6440.,Rs. 4660,Rs. 5440

Rs. 6560.,Rs. 4120,Rs. 5340

Rs. 6320.,Rs. 3680,Rs. 4440

Ans .

Rs. 6480.,Rs. 4680,Rs. 5440

Explanation :
(i) Cost of Rs. 100 stock = Rs. 90
Cost of Rs. 7200 stock = Rs. (90/100 * 7200 ) = Rs. 6480.
(ii) Cost of Rs. 100 stock = Rs. (100+4)
Cost of Rs. 4500 stock = Rs. (104/100 * 4500 ) = Rs. 4680
(iii) Cost of Rs. 100 stock = Rs. (100-15)
Cost of Rs. 6400 stock = Rs. (85/100 * 6400 ) = Rs. 5440.

Q.2

Find the cash required to purchase Rs. 3200, 7(1/2) % stock at 107

(brokerage (1/2) %)

Rs. (115/2),Rs. 1140

Rs. (215/2),Rs. 3440

Rs. (215/2),Rs. 1440

Rs. (315/2),Rs. 4440

Ans .

Rs. (215/2),Rs. 3440

Explanation :
Cash required to purchase Rs. 100 stock = Rs (107+(1/2)) = Rs. (215/2).
Cash required to purchase Rs. 100 stock = Rs [(215/2)*(1/100)*3200] = Rs. 3440

Q.3

Find the cash realised by selling Rs. 2440, 9.5% stock at 4 discount

(brokerage (1/4) %)

Rs. (324/4),Rs 2198

Rs. (383/4),Rs 2298

Rs. (313/4),Rs 1298

Rs. (333/7),Rs 2228

Ans .

Rs. (383/4),Rs 2298

Explanation :
By selling Rs. 100 stock , cash realised = Rs. [(100-4)-(1/4)] = Rs. (383/4).
By selling Rs. 2400 stock, cash realised = Rs. [(383/4)*(1/100)*2400] = Rs 2298.

Q.4

Find the annual income derived from Rs. 2500, 8% stock at 106.

Rs. 300

Rs. 200

Rs. 150

Rs. 250

Ans .

Rs. 200

Explanation :
Income from Rs. 100 stock = Rs. 8.
Income from Rs. 2500 = Rs. [(8/1000*2500) =Rs. 200.

Q.5

Find the annual income derived by investing Rs. 6800 in 10% stock at 136.

Rs. 300

Rs. 600

Rs. 400

Rs. 500

Ans .

Rs. 500

Explanation :
By investing Rs. 136, income obtained = Rs. 10.
By investing Rs. 6800, income obtained = Rs. [(10/136)*6800] = Rs. 500.

Q.6

Which is better investment? 7(1/2) % stock at 105 or 6(1/2) % at 94.

7(1/2) % stock at 105 is better

6(1/2) % at 94 is better

7(1/2) % stock at 105 and 6(1/2) % at 94 is better

none of them

Ans .

7(1/2) % stock at 105 is better

Explanation :
Let the investment in each case be Rs. (105*94).
Case I : 7(1/2) 5 stock at 105:
On investing Rs. 105, income = Rs. (15/2).
On investing Rs. (105*94), income = Rs. [(15/2)*(1/105)*105*94] = Rs 705.
Case II : 6(1/2) % stock at 94:
On investing Rs. 94, income = Rs. (13/2).
On investing Rs. (105*94), income = Rs. [(13/2)*(1/94)*105*94] = Rs. 682.5.
Clearly, the income from 7(1/2) % stock at 105 is more.
Hence, the investment in 7(1/2) % stock at 105 is better.

Q.7

Find the cost of 96 shares of Rs. 10 each at (3/4) discount, brokerage being

(1/4) per share.

Rs. 812

Rs. 912

Rs. 921

Rs. 902

cAns .

Rs. 912

Explanation :
Cost of 1 share = Rs. [(10-(3/4)) + (1/4)] = Rs. (19/2).
Cost of 96 shares = Rs. [(19/2)*96] = Rs. 912.

Q.8

Find the income derived from 88 shares of Rs. 25 each at 5 premium,

brokerage being (1/4) per share and the rate of dividend being 7(1/2) % per annum.

Also, find the rate of interest on the investment.

Rs. 165, 6.2 %

Rs. 155, 5.5 %

Rs. 175, 7.2%

Rs. 150, 5.6%

Ans .

Rs. 165, 6.2 %

Explanation :
Cost of 1 share = Rs. [25+5+1/4)] = Rs. (121/4).
Cost of 88 shares = Rs.[(121/4)*88] = Rs. 2662.
Investment made = Rs. 2662.
Face value of 88 shares = Rs. (88*25) = Rs. 2200.
Dividend on Rs. 100 = (15/2).
Dividend on Rs. 2200 = Rs. [(15/20*(1/100)*2200] = Rs. 165.
Income derived = Rs. 165.
Rate of interest on investment = [(165/2662)*100] = 6.2 %.

Q.9

A man buys Rs. 25 shares in company which pays 9 % dividend. The

money invested is such that it gives 10 % on investment. At what price did he buy

the shares?

Rs. 32.50

Rs. 25.50

Rs. 22.50

Rs. 35.50

Ans .

Rs. 22.50

Explanation :
Suppose he buys each share for Rs. x.
Then, [25*(9/100)] = [x*(10/100)] or x = Rs. 22.50.
Cost of each share = Rs. 22.50.

Q.10

A man sells Rs.5000, 12 % stock at 156 and uinvests the proceeds parity in

8 % stock at 90 and 9 % stock at 108. He hereby increases his income by Rs. 70.

How much of the proceeds were invested in each stock?

Rs. 4500.

Rs. 3500.

Rs. 3800.

Rs. 4200.

Ans .

Rs. 4200.

Explanation :
S.P of Rs. 5000 stock = Rs. [(156/100)*5000] = Rs. 7800.
Income from this stock = Rs. [(12/100)*5000] = Rs. 600.
Let investment in * % stock be x and that in 9 % stock = (7800-x).
[x*(8/90)] + (7800-x) * (9/108) = (600+7)
(4x/45) + [(7800-x)/12] = 670 -->16x + 117000-15x = (670*180) --> x = 3600.
Money invested in 8 % stock at 90 = Rs. 3600.
Money invested in 9 % at 108 = Rs. (7800-3600) = Rs. 4200.

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