Stocks and Shares Practice Questions

5 questions per page • Detailed step-by-step solutions

Question 1
Medium
Mr. Shankar spends 25% of his monthly salary on household expenditure, 20% of the remaining on children's education, and the remaining is equally invested in three different schemes. If the amount invested in each scheme is Rs. 5600, what is the monthly salary of Shankar?
A Rs. 24000
B Rs. 28000
C Rs. 32000
D Rs. 35000
Correct Answer: B

Explanation:

Let monthly salary be S. Household expense = 25% of S => Remaining = 75% of S. Education expense = 20% of 75% = 15% of S. Remaining after education = 75% - 15% = 60% of S. This remaining amount is split equally into 3 schemes: Each scheme receives (60% / 3) = 20% of S. Given: 20% of S = 5600 => (20/100) * S = 5600 => S = 5600 * 5 = Rs. 28,000.
Question 2
Medium
A invested some money in 10% stock at 96. If B wants to invest in an equally good 12% stock, he must purchase a stock worth of:
A Rs. 112.50
B Rs. 115.20
C Rs. 118.00
D Rs. 120.00
Correct Answer: B

Explanation:

Yield on 10% stock at 96 = (10 / 96) * 100 = 500 / 48%. For the 12% stock to be equally good, its yield must be the same: (12 / MV) * 100 = (10 / 96) * 100 => 12 / MV = 10 / 96 => MV = (12 * 96) / 10 = 1152 / 10 = Rs. 115.20.
Question 3
Easy
A company issued 50000 shares of par value Rs. 10 each. If the total dividend declared by the company is Rs. 62500, then find out the rate of dividend paid by the company.
A 10%
B 12.5%
C 15%
D 16%
Correct Answer: B

Explanation:

Total par value of capital = 50000 * 10 = Rs. 500,000. Rate of dividend = (Total Dividend / Total Capital) * 100 = (62500 / 500000) * 100 = 62.5 / 5 = 12.5%.
Question 4
Medium
A man invests some money partly in 3% stock at 96 and partly in 4% stock at 120. To get equal dividends from both, he must invest the money in the ratio:
A 15 : 16
B 16 : 15
C 4 : 5
D 5 : 4
Correct Answer: B

Explanation:

Income per rupee from first stock = 3 / 96 = 1 / 32. Income per rupee from second stock = 4 / 120 = 1 / 30. For equal incomes: I1 * (1/32) = I2 * (1/30) => I1 / I2 = (1/30) / (1/32) = 32 / 30 = 16 : 15.
Question 5
Easy
Money is worth 4%. At what price should the stock which pays 5 percent be quoted?
A Rs. 120
B Rs. 125
C Rs. 130
D Rs. 135
Correct Answer: B

Explanation:

'Money is worth 4%' means the market interest rate / yield expected is 4%. Stock pays a dividend of 5% on Rs. 100 face value = Rs. 5. Let quoted market value be MV. Then: 4% of MV = 5 => (4/100) * MV = 5 => MV = (5 * 100) / 4 = Rs. 125.