Stocks and Shares


  1. Which is better investment, 4% stock at per with an income tax at the rate of 5 paise per rupee or 41/2% stock at 110 free from income tax ?









  1. View Hint View Answer Discuss in Forum

    Let investment in each case be Rs. (100 x 110)
    Gross income from 4% stock = Rs. (4/100) x (100 x 110) = Rs. 440
    Net income from the stock = Rs. (440 - 22) = Rs. 418
    Net income from 41/2% stock = Rs. (9 x 100 x 110) / (2 x 110) = Rs. 450

    Correct Option: B

    Let investment in each case be Rs. (100 x 110)
    Gross income from 4% stock = Rs. (4/100) x (100 x 110) = Rs. 440
    Net income from the stock = Rs. (440 - 22) = Rs. 418
    Net income from 41/2% stock = Rs. (9 x 100 x 110) / (2 x 110) = Rs. 450
    ∴ Better stock is 41/2% at 110.


  1. A man invested Rs. 388 in a stock at 97 to obtain and income of Rs. 22. The dividend from the stock is ?









  1. View Hint View Answer Discuss in Forum

    When investment is Rs. 388, income = Rs. 22
    When investment is Rs. 97, income = Rs. (22 / 388) x 97 = Rs. 5.50

    Correct Option: C

    When investment is Rs. 388, income = Rs. 22
    When investment is Rs. 97, income = Rs. (22 / 388) x 97 = Rs. 5.50
    ∴ Dividend on Rs. 100 stock = 51/2%



  1. A man buys Rs. 20 shares paying 9% dividend. The man want to have an interest of 12% on his money. The market value of each share must be ?









  1. View Hint View Answer Discuss in Forum

    Dividend on Rs. 20 = Rs. 9 / (100 x 20) = Rs. 9/5
    Rs. 12 is an income on Rs. 100
    ∴ Rs. 9/5 is an income on Rs. (100/12) x (9/5)

    Correct Option: B

    Dividend on Rs. 20 = Rs. 9 / (100 x 20) = Rs. 9/5
    Rs. 12 is an income on Rs. 100
    ∴ Rs. 9/5 is an income on Rs. (100/12) x (9/5) = Rs. 15


  1. A man bought 20 shares of Rs. 50 at 5 discount the rate of dividend being 43/4% The rate of interest obtained is ?









  1. View Hint View Answer Discuss in Forum

    Face value = Rs. (50 x 20) = Rs. 1000
    Dividend = Rs. (1000 x 19) / (4 x 100) = Rs. 95/2
    Investment = Rs. (45 x 20) = Rs. 900

    Correct Option: C

    Face value = Rs. (50 x 20) = Rs. 1000
    Dividend = Rs. (1000 x 19) / (4 x 100) = Rs. 95/2
    Investment = Rs. (45 x 20) = Rs. 900
    Rate = Rs. (95 x 100) / (2 x 900) = 5.28%



  1. A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 6% his annual income is ?









  1. View Hint View Answer Discuss in Forum

    Number of shares = 4455 / 8.25 = 540
    Face value = Rs. (540 x 10) = Rs. 5400
    Income = Rs. (6/100) x 5400

    Correct Option: C

    Number of shares = 4455 / 8.25 = 540
    Face value = Rs. (540 x 10) = Rs. 5400
    Income = Rs. (6/100) x 5400 = Rs. 324