# Stocks and Shares Quiz Set 004

### Question 1

An amount of Rs. 2704 is invested in a stock with market value of Rs. 312. The investor earns Rs. 104. What is the dividend(%) of the stock?

A

12%.

B

14%.

C

15%.

D

17%.

Soln.
Ans: a

If investment is Rs. 2704 the earning is Rs. 104. So, if the investment is Rs. 312 the earning should be $104/2704$ × 312 = 12%.

### Question 2

Mr. M buys Rs. 70(face value) shares paying 4% dividend. If his investment is getting him an interest of Rs. 2%, what is the market value of the share?

A

140.

B

150.

C

155.

D

160.

Soln.
Ans: a

Dividend on share of Rs. 70 is $4/100$ × 70.
Rs. 2 is earned on an investment of Rs. 100.
So the dividend $4/100$ × 70 is earned on $100/2$ × $4/100$ × 70 = Rs. 140.

### Question 3

Which stock investment option is better: 4% at Rs. 114 or 7% at Rs. 113?

A

7% is better.

B

4% is better.

C

Both are same.

D

Can't be decided.

Soln.
Ans: a

Let the amount invested be Rs. 114 × 113. Return on the first investment is $4/114$ × 114 × 113 = Rs. 452. Return on the second investment is $7/113$ × 114 × 113 = Rs. 798. So 7% is better.

### Question 4

How much cash is realized by selling Rs. 1600 of 13% stock at a discount of 3%? Take the brokerage to be 2%.

A

Rs. 1520.

B

Rs. 1620.

C

Rs. 1420.

D

Rs. 1720.

Soln.
Ans: a

If Rs. 100 stock is sold, the amount realized is $(100 - \text"discount" - \text"brokerage")$ = $(100 - 3 - 2)$. So cash realized by selling Rs. 1600 stock is $(100 - 3 - 2)/100$ × 1600 = Rs. 1520.

### Question 5

An investor buys Rs. 50 shares in a company that pays 16% dividend. If his investment is such that it is getting him an interest of Rs. 8%, for how much did he buy each share?

A

Rs. 100.

B

Rs. 110.

C

Rs. 115.

D

Rs. 120.

Soln.
Ans: a

If he bought each share at Rs. x, then his income is $8/100$ × x = 50 × $16/100$, solving, we get x = Rs. 100. 