Stocks and Shares Practice Questions

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

Question 16
Easy
What investment will be required to purchase Rs. 90000 of 8% stock at 110?
A Rs. 81000
B Rs. 90000
C Rs. 99000
D Rs. 108000
Correct Answer: C

Explanation:

To purchase Rs. 100 stock, investment required = Rs. 110. To purchase Rs. 90,000 stock, investment required = (110 / 100) * 90000 = 110 * 900 = Rs. 99,000.
Question 17
Medium
A man invested Rs. 3880 in a stock at 97 to obtain an income of Rs. 220. The dividend from the stock is:
A 5%
B 5.5%
C 6%
D 6.5%
Correct Answer: B

Explanation:

Number of stock units = 3880 / 97 = 40 units. Total face value = 40 * 100 = Rs. 4000. Rate of dividend = (Total Income / Total Face Value) * 100 = (220 / 4000) * 100 = 22 / 4 = 5.5%.
Question 18
Easy
Find out the income percent on 10% debentures of par value Rs. 120 available in the market for Rs. 150.
A 7.5%
B 8%
C 8.5%
D 9%
Correct Answer: B

Explanation:

Face Value = Rs. 120. Annual interest per debenture = 10% of Rs. 120 = Rs. 12. Market Value = Rs. 150. Income percent (yield) = (12 / 150) * 100 = 8%.
Question 19
Medium
A man sells 5000 common shares of a Company x (each of par value Rs. 10), which pays a dividend of 20% at Rs. 30 per share. He invests the sale proceeds in ordinary shares of Company Y (each of par value Rs. 25) that pays a dividend of 15%. If the market value of Company Y is Rs. 40, find the number of shares of Company Y purchased by the man
A 3500
B 3750
C 4000
D 4250
Correct Answer: B

Explanation:

Number of shares of Company X sold = 5000 at Rs. 30 each. Total sale proceeds = 5000 * 30 = Rs. 1,50,000. Market price of each share of Company Y = Rs. 40. Number of shares of Company Y purchased = Sale Proceeds / MV of Company Y = 1,50,000 / 40 = 3750 shares.
Question 20
Medium
Sneha had 50 preferred shares and 400 common shares of par value of Rs. 100 each. If the dividend declared on preferred shares is 10% per annum and a semiannual dividend of 7.5% is on common shares, find the annual dividend received by her.
A Rs. 5500
B Rs. 6000
C Rs. 6500
D Rs. 7000
Correct Answer: C

Explanation:

Preferred shares face value = 50 * 100 = Rs. 5000. Annual dividend on preferred shares = 10% of 5000 = Rs. 500. Common shares face value = 400 * 100 = Rs. 40,000. Semiannual dividend on common shares = 7.5% => Annual dividend = 7.5% * 2 = 15%. Annual dividend on common shares = 15% of 40,000 = Rs. 6000. Total annual dividend = 500 + 6000 = Rs. 6500.