# Stocks and Shares Quiz Set 010

### Question 1

What is the market value of a 12% stock that yields 7%?

A

Rs. \$171{3/7}\$.

B

Rs. \$85{5/7}\$.

C

Rs. \$51{3/7}\$.

D

Rs. \$137{1/7}\$.

Soln.
Ans: a

For an income of Rs. 7, the investment is Rs. 100. So, for an income of Rs. 12 the investment would be Rs. \$100/7\$ × 12 = Rs. \$171{3/7}\$.

### Question 2

Mr. M buys Rs. 60(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

120.

B

130.

C

135.

D

140.

Soln.
Ans: a

Dividend on share of Rs. 60 is \$4/100\$ × 60.
Rs. 2 is earned on an investment of Rs. 100.
So the dividend \$4/100\$ × 60 is earned on \$100/2\$ × \$4/100\$ × 60 = Rs. 120.

### Question 3

Mrs. K invests a part of Rs. 54000 in 4% stock at Rs. 150, and the remainder in 2% stock at Rs. 120. If her dividend per annum is Rs. 1260, how much did she invest in 2% stock?

A

Rs. 18000.

B

Rs. 18100.

C

Rs. 17900.

D

Rs. 18200.

Soln.
Ans: a

If she invests x in 2% stock at Rs. 120, then her income from this investment is Rs. \$(x × 2)/120\$. Her income from the 4% stock at Rs. 150 would be \${(54000- x) × 4}/150\$. The sum is Rs. 1260. So \$(x × 2)/120\$ + \${(54000- x) × 4}/150\$ = 1260. Solving for x we get x = Rs. 18000. Please note that if the calculation seems tough in the exam, you can try direct substitution of options one by one.

### Question 4

Which stock investment option is better: 3% at Rs. 124 or 7% at Rs. 121?

A

7% is better.

B

3% is better.

C

Both are same.

D

Can't be decided.

Soln.
Ans: a

Let the amount invested be Rs. 124 × 121. Return on the first investment is \$3/124\$ × 124 × 121 = Rs. 363. Return on the second investment is \$7/121\$ × 124 × 121 = Rs. 868. So 7% is better.

### Question 5

Rs. R1 are invested in 3% stock at Rs. 90, and R2 is invested in 6% stock at Rs. 75. If the dividends are equal then the ratio of R1 and R2 is?

A

12:5.

B

13:5.

C

12:6.

D

15:10.

Soln.
Ans: a

Return from investing R1 is \$3/90\$ × R1. If it equals return from R2, \$3/90\$ × R1 = \$6/75\$ × R2. So, R1/R2 = \$6/75\$ × \$90/3\$ = 12:5. 