Stock And Shares Sample Questions And Answers

#### Stock And Shares Sample Questions And Answers

• Posted by  Raju
29 Jan, 2012

Ex. 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.

Sol. (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.

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

Sol. 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.

Ex. 3. Find the cash realised by selling Rs. 2440, 9.5% stock at 4 discount (brokerage (1/4) %)

Sol. 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.

Ex. 4. Find the annual income derived from Rs. 2500, 8% stock at 106.

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

Ex. 5. Find the annual income derived by investing Rs. 6800 in 10% stock at 136.

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

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

Sol. 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.

Ex. 7. Find the cost of 96 shares of Rs. 10 each at (3/4) discount, brokerage being (1/4) per share.

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

Ex. 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.

Sol. 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 %.

Ex. 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?

Sol. 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.

Ex. 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?

Sol. 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.