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1.	A man invested Rs.14,400 in Rs.100 shares of a company at 20% premium. If the company declares 5% dividend at the end of the year, then how much does he get?
	A.  Rs.500
	B.  Rs.600
	C.  Rs.650
	D.  Rs.720

Solution

Number of shares = (14400 / 120) =120. Face value =Rs.(100 ×120) =Rs. 12000. Annual Income = Rs.(5/100 ×12000) =Rs. 600.

2.	A invested some money in 10% stock at 96. If B wants to invest in an equality good 12% stock, he must purchase a stock worth of
	A.  Rs.50
	B.  Rs.60
	C.  Rs.115.20
	D.  Rs.125.40

Solution

For an income of Rs. 10, investments = Rs. 96. For an income of Rs. 12, investments = Rs. (96/10 x 12) = Rs. 115.20.

3.	A man buys Rs.50 shares in a company which pays 10% dividend. If the man gets 12.5% on his investments, at what price did he buy the shares?
	A.  Rs.37.50
	B.  Rs.40
	C.  Rs.48
	D.  Rs.52

Solution

Dividend on 1 share =Rs.(10/100 x 50) = Rs. 5 Rs.12.50 is an income on an investments of Rs.100. Rs.5 is an income on an investments of Rs.(100x2/25x5) = Rs. 40. Cost of 1 share = Rs.40.

4.	A 6% stock yields 8%. The market value of the stock is
	A.  Rs.48
	B.  Rs.75
	C.  Rs.96
	D.  Rs.133.33

Solution

For an income of Rs. 8, investments = Rs. 100. For an income of Rs. 6, investments = Rs.(100/8 x 6) Market value of Rs.100 stock = Rs. 75.

5.	A man invests some money partly in 9% stock at 96 and partly in 12% stock at 120. To obtain equal dividends from both he must invest the money in the ratio
	A.  3 : 4
	B.  3 : 5
	C.  4 : 5
	D.  16 : 25

Solution

For an income of Re. 1 in 9% stock at 96, investments = Rs. (96 / 9). = Rs.(32/3). For an income of Re.1 in 12% stock at 120, investments =Rs.(120/12 ) = Rs.10. Ratio of investments= 32/3 : 10 = 32 : 30 = 16 : 25.