Stocks and Shares Practice Questions

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

Question 11
Medium
A man bought 20 shares of Rs. 50 at 5 discount, the rate of dividend being 13 1/2%. The rate of interest obtained is:
A 12.5%
B 14%
C 15%
D 16%
Correct Answer: C

Explanation:

Face value of each share = Rs. 50. Market value of each share = 50 - 5 = Rs. 45. Annual dividend per share = 13.5% of Rs. 50 = (13.5 / 100) * 50 = Rs. 6.75. Rate of return on investment = (Dividend per share / Market Value per share) * 100 = (6.75 / 45) * 100 = 675 / 45 = 15%.
Question 12
Medium
Which is better investment 7.5% stock at 105 or 6.5% stock at 94?
A 7.5% stock at 105
B 6.5% stock at 94
C Both are equally good
D Cannot be determined
Correct Answer: A

Explanation:

Yield 1 = (7.5 / 105) * 100 = 750 / 105 = 50 / 7 = 7.143%. Yield 2 = (6.5 / 94) * 100 = 650 / 94 = 325 / 47 = 6.915%. Since 7.143% > 6.915%, 7.5% stock at 105 is the better investment.
Question 13
Easy
A 12% stock yields 16%. The market value of the stock of face value Rs. 100 is:
A Rs. 68
B Rs. 72
C Rs. 75
D Rs. 80
Correct Answer: C

Explanation:

16% of MV = 12% of 100 = 12 => MV = (12 / 16) * 100 = (3/4) * 100 = Rs. 75.
Question 14
Easy
How many shares of market value Rs. 25 can be purchased for Rs. 15,775?
A 625
B 631
C 635
D 640
Correct Answer: B

Explanation:

Total Investment = Rs. 15,775. Market Value per share = Rs. 25. Number of shares purchased = 15775 / 25 = 631 shares.
Question 15
Easy
A person buys 9 1/2% stock of Rs. 72000 at 144. Find his annual income.
A Rs. 4750
B Rs. 6840
C Rs. 7200
D Rs. 7600
Correct Answer: B

Explanation:

Stock of Rs. 72000 represents the total Face Value. Rate of dividend = 9.5%. Annual income = 9.5% of Rs. 72000 = 0.095 * 72000 = Rs. 6840.