# Problems on Shares and Stocks

Q1. Find the cost of Rs. 10,000, 5% stock at 85

(a) Rs. 8350

(b) Rs. 8500

(c) Rs. 8700

(d) Rs. 8800

**Answer:** (b) Rs. 8500

Cost of Rs. 100 = Rs. 85

∴ Cost of Rs. 10,000 = Rs. (85/100) X 10000 = Rs. 8500

Q2. A man invests some money partly in 4% stock at 96 and partly in 6% stock at 120. To get equal dividends from both, he must invest the money in the ratio

(a) 2 : 3

(b) 5 : 3

(c) 6 : 5

(d) 7 : 9

**Answer:** (c) 6 : 5

Let, the required ratio be x : 1

A/Q | 4 | X x = | 6 | X 1 |

96 | 120 |

⇒ x = | 6 | X | 96 | = | 6 |

120 | 4 | 5 |

∴ Required ratio be 6/5 : 1 = 6 : 5

Q3. A man invests in a 5½ % stock at 95. The interest obtained by him is

(a) 5.78 %

(b) 6.12 %

(c) 6.65 %

(d) 7.05 %

**Answer:** (a) 5.78 %

Interest on Rs. 95 = Rs. 5½ = Rs. 11/2

Interest on Rs. 100 = Rs. | 11/2 | X 100 |

95 |

= Rs. | 11 | X 100 |

2 X 95 |

= Rs. | 110 |

19 |

= Rs. 5.78 = 5.78 %

Q4. A man buys Rs. 50 shares in a company which pays 10% dividend. If the man gets 12.5% on his investment at what price did he buy the shares ?

(a) Rs. 22

(b) Rs. 28

(c) Rs. 33

(d) Rs. 40

**Answer:** (d) Rs. 40

Dividend on 1 share = Rs. (^{10}/_{100} X 50) = Rs. 5

If income is Rs. 25/2, investment = Rs. 100

If income is Rs. 5, investment = Rs. (100 X ^{2}/_{25} X 5) = Rs. 40

∴ He buys the shares at Rs. 40 per share

Q5. A man bought 20 shares of Rs. 50 each at 5 discount, the rate of dividend being 12½ %. The rate of interest obtained is

(a) 12 ^{6}/_{7} %

(b) 13 ^{8}/_{9} %

(c) 15 ^{4}/_{5} %

(d) 16 ^{4}/_{5} %

**Answer:** (b) 13 ^{8}/_{9} %

C.P of one share = Rs. (50 - 5) = Rs. 45

C.P of 20 share = Rs. 45 X 20 = Rs. 900

Face value of 20 shares = Rs. (50 X 20) = Rs. 1000

∴ | 25 | X | 1 | X 1000 = | x | X 900 |

2 | 100 | 100 |

⇒ 125 = 9x

⇒ x = ^{125}/_{9} = 13 ^{8}/_{9} %

**1**

## Practice Test Exam