Aptitude question and answer on Stock and shares

In this section we are going to discuss about stock and shares problems. Not just the overview of the topic, but also you are going to learn the important formulas on stock and shares along with explanation which is easy to understand.

1
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. 37.50
B.    Rs. 48
C.    Rs. 40
D.    Rs. 52

Answer : C.  Rs. 40

Explanation:
Dividend  on 1 share = Rs. \(({10 \over 100 } \times 50 )\)= Rs. 5

Rs. 12.50 is an income on an investment of  Rs.100.

Rs. 5 is an income on an investment of  Rs. \((100 \times {2 \over 25} \times 5)\)= Rs. 40

∴ Cost of 1 share = Rs. 40.

2
Santosh 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 ?
A.    Rs. 4000
B.    Rs. 5500
C.    Rs. 4500
D.    Rs. 6000

Answer : A.  Rs. 4000

Explanation:
Let investment in 12% stock  be Rs. x.

Then, investment in 15% stock =Rs. \((12000-x)\)

\({12 \over 120} \times x +{15 \over 125} \times (12000-x)=1360\)

=>\({x \over 10}+{3 \over 25}(12000-x)=1360.\)

=> \(5x+72000-6x=1360 \times 50\)

=>\(x=4000\)

=>
 

3
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 :
A.    Rs. 4600
B.    Rs. 4800
C.    Rs. 5000
D.    Rs. 5200

Answer : C.  Rs. 5000

Explanation:
Let the investment in 9% stock be Rs. x.

Then,investment in 10% stock = Rs. \((9800-x).\)

\({9\over75}\times x={10 \over 80} \times (9800-x)\)

=> \({3x \over 25}= {9800-x \over 8 }\)

=>\(24x=9800 \times 25 -25x \)

=>\(49x=9800 \times25\)

=>\(x=5000\)

4
A man buys Rs. 20 shares paying 9% dividend. The man wants to have an interest of 12% on his money. What is the market value of each share?
A.    18
B.    12
C.    15
D.    21

Answer : C.  15

Explanation:
Face value of each share = Rs.20

Dividend per share = 9% of 20 = \({{9 \times 20} \over 100}={9 \over 5}\)

He needs to have an interest of 12% on his money
ie, Money Paid for a share x \({12 \over 100}={9 \over 5 }\)
Money Paid for a share = \({9 \over 5} \times {100 \over 12 }=15\)

ie, Market Value of the share = Rs.15

5
A man invested Rs.1552 in a stock at 97 to obtain an income of Rs.128. What is the dividend from the stock?
A.    7.5%
B.    8%
C.    9.7%
D.    None of these

Answer : B.   8%

Explanation:
By investing Rs.1552, income = Rs.128
By investing Rs.97, income = \({{128 \times 97 } \over 1552 } =8\)
ie, dividend = 8%

6
The cost price of a Rs. 100 stock at 4 discount, when brokerage is \({1 \over 5}\%\) is
A.    96.2
B.    96.25
C.    97.25
D.    97.5

Answer : A.  96.2

Explanation:
Cost Price  \(=100 -4+{1 \over 5} = 96.2 \)



7
In order to obtain an income of Rs. 650 from 10% stock at Rs. 96, one must make an investment of
A.    3100
B.    6240
C.    6500
D.    9600

Answer : B.   6240

Explanation:
Market Value = Rs. 96.

Required Income = Rs. 650.

Here face value is not given. Take face value as Rs.100 if it is not given in the question

To obtain Rs.10 (ie,10% of the face value 100), investment = Rs.96

To obtain Rs.650, investment  = \({96 \over 10 } \times 650 = 6240\)

8
By investing in \(6{2\over 3}\%\) stock at 64, one earns Rs. 1500. The investment made is
A.    5640
B.    5760
C.    5760
D.    9600

Answer : C.  5760

Explanation:
Market Value = Rs.64

Face Value is not given and hence take it as Rs.100
\(16{2 \over3 }\%\) of the face value = \(50 \over 3\)
ie, to earn \(50 \over 3\) investment = Rs. 64 
Hence, to earn Rs.1500, investment needed = \({{64 \times 3 \times 1500 } \over 50 } = 5760\)