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Test: Stocks And Shares- 2


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Test: Stocks And Shares- 2 - Question 1

A 14% stock yielding 8% is quoted at:

Detailed Solution for Test: Stocks And Shares- 2 - Question 1

Assume that face value = Rs.100 as it is not given

To earn Rs.8, money invested = Rs.100

To earn Rs.14, money invested = 
100 ×14 / 8= Rs.175

ie, market value of the stock = Rs.175

Test: Stocks And Shares- 2 - Question 2

Which is better investment: 11% stock at 143 or 9(3/4%) stock at 120?

Detailed Solution for Test: Stocks And Shares- 2 - Question 2

 Let investment in each case be Rs. (143 x 117).
Income in 1st case = Rs.11/143 x 143 x 117 = Rs. 1287.
Income in 2nd case = Rs.39/(4×117) x 143 x 117= Rs. 1394.25
Clearly, 9 3/4% stock at 117 is better.

Test: Stocks And Shares- 2 - Question 3

Sakshi invests a part of Rs. 12,000 in 12% stock at Rs. 120 and the remainder in 15% stock at Rs. 125. If his total dividend per annum is Rs. 1360, how much does he invest in 12% stock at Rs. 120?

Detailed Solution for Test: Stocks And Shares- 2 - Question 3

Let investment in 12% stock be Rs.x
Then, investment in 15% stock=Rs.(12000−x)
∴ 12/120 × x + 15/125 *(12000−x) = 1360
⇒ x/10 + 3/25(12000−x) = 1360
⇒ 5x + 72000 − 6x = 1360 × 50
⇒ x = 4000

Test: Stocks And Shares- 2 - Question 4

Rs. 9800 are invested partly in 9% stock at 75 and 10% stock at 80 to have equal amount of incomes. The investment in 9% stock is:

Detailed Solution for Test: Stocks And Shares- 2 - Question 4

Let the investment in 9% stock be Rs.x        Then,investment in 10% stock    = Rs.(9800−x)        
9/75 × x = 10/80 × (9800−x)        
⇒ 3x/25 = (9800−x)/8
⇒24x = 9800 × 25 − 25x        
⇒ 49x = 9800×25        
⇒x = 5000

Test: Stocks And Shares- 2 - Question 5

A 6% stock yields 8%. The market value of the stock is:

Detailed Solution for Test: Stocks And Shares- 2 - Question 5

For an income of Rs. 8, investment = Rs. 100.
For an income of Rs. 6,
investment = Rs.(100/8 × 6)
= Rs.75

Test: Stocks And Shares- 2 - Question 6

12500 shares, of par value Rs. 20 each, are purchased from Ram by Mohan at a price of Rs. 25 each. Find the amount required to purchase the shares.

Detailed Solution for Test: Stocks And Shares- 2 - Question 6

Market value of a share = Rs. 25
Market value of 12500 shares = Rs. (25 x 12500) = Rs. 312500
Thus, the amount required to purchase 12500 shares = Rs. 312500

Test: Stocks And Shares- 2 - Question 7

12500 shares, of par value Rs. 20 each, are purchased from Ram by Mohan at a price of Rs. 25 each. If Mohan further sells the shares at a premium of Rs. 11 each, find his gain in the transaction.

Detailed Solution for Test: Stocks And Shares- 2 - Question 7

Face value of each share = Rs.20
Market value of each share = Rs.25
Number of shares = 12500
Amount required to purchase the shares = 12500 × 25 = 312500
Mohan further sells the shares at a premium of Rs. 11 each
ie, Mohan further sells the shares at Rs.(20+11) = Rs.31 per share
total amount he gets by selling all the shares = 12500 × 31 = 387500
His gain = 387500 - 312500
 = Rs.75000
 

Test: Stocks And Shares- 2 - Question 8

Find the annual dividend received by Nishita from 1200 preferred shares and 3000 common shares both of par value Rs. 50 each if the dividend paid on preferred shares is 10% and semi-annual dividend of 3½ % is declared on common shares.

Detailed Solution for Test: Stocks And Shares- 2 - Question 8

Total number of preferred shares = 1200
Face value = Rs.50
dividend paid on preferred shares is 10%
Dividend per share = 50 × 10/100 = Rs.5
Total Dividend = 1200 × 5 = 6000
Total number of common shares = 3000
Face value = Rs.50
Semi-annual dividend of 3½ % is declared on common shares.
semi-annual dividend per share = 
50 × 7/2 × 100 = Rs.7/4
Total semi-annual dividend = 7/4 × 3000 = Rs.5250
annual dividend = Rs.5250 × 2 = Rs.10500
Total dividend on all all shares(preferred and common) = 6000 + 10500 
= Rs.16500
 

Test: Stocks And Shares- 2 - Question 9

A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?

Detailed Solution for Test: Stocks And Shares- 2 - Question 9

Assuming that face value of the first stock = Rs.100 as it is not given in the question
Since it is a 5% stock, we can take the dividend per stock = Rs.5
Market Value of the first stock = Rs.104
Investment on the first stock = Rs.26000
Number of stocks purchases = 26000/104 = 250
His total income from all these stocks = Rs.250 × 5 = Rs.1250
He sells each of this stock at Rs.120
ie, amount he earns = Rs.120 × 250 = Rs.30000
He invest this Rs.30000 in 6% stock (here also face value is not given and hence take it as Rs.100)
His new income = Rs.(1250 + 2500) = Rs.3750
ie, By Rs.30000 of investment , he earns an income of Rs.3750
To get an income of Rs.6, investment needed = (30000 × 6)/3750 = Rs.48

Test: Stocks And Shares- 2 - Question 10

Anu invested Rs. 32400 in 8% stock at 90. She sold out Rs. 18000 stock when the price rose to Rs 95 and the remaining stock at Rs.98. She invested the total sale proceeds in 10% stock at 96½. Find the change in income of Anu.

Detailed Solution for Test: Stocks And Shares- 2 - Question 10

Since the face value of the stock is not given, we can take it as Rs.100
it is an 8% stock. ie, dividend per stock = Rs.8
Total investment = Rs.32400
Market Value = Rs.90
Amount of stock she purchased = (32400×100)/90 = Rs.36000
Number of shares she purchased = 32400/90 = 360
Total income = 360 × 8 = Rs.2880
She sold out Rs. 18000 stock when the price was Rs.95
Amount received by selling Rs.18000 stock at Rs.95 = (18000×95)/100 = Rs.17100
Amount received by selling remaining Rs.18000 stock at Rs.98 = (18000×98)/100 = Rs.17640
Total amount received = Rs. (17100 + 17640) = Rs. 34740
This Rs.34740 is invested in 10% stock at 96½
Number of shares = 34740*(193/2) = 360
Total income from these stocks = 360 × 10 = Rs.3600
Change in income = Rs.3600 - Rs.2880 = Rs.720
 

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