Aptitude - Stocks and Shares - Discussion

Discussion :: Stocks and Shares - General Questions (Q.No.1)

1. 

In order to obtain an income of Rs. 650 from 10% stock at Rs. 96, one must make an investment of:

[A]. Rs. 3100
[B]. Rs. 6240
[C]. Rs. 6500
[D]. Rs. 9600

Answer: Option B

Explanation:

To obtain Rs. 10, investment = Rs. 96.

To obtain Rs. 650, investment = Rs. 96 x 650 = Rs. 6240.
10


Ross said: (Mar 16, 2011)  
Can somebody solve it with easy explanation please?

Shashikanth said: (Jul 25, 2011)  
Why Rs. 10 had taken?

Shinchan said: (Aug 19, 2011)  
From where Rs. 10 came?

Hari said: (Sep 9, 2011)  
Can somebody solve it with easy explanation please?

Dhananjay said: (Sep 12, 2011)  
Its rs 10 or 10%?

Ezhilarasi said: (Sep 25, 2011)  
Where Rs. 10 came?

Raghavendra said: (Oct 24, 2011)  
10% = 10/100 = Rs 10/-

Thirumoorthy S said: (Dec 29, 2011)  
(10/100) * 96 = 96/10 ; (9.6/96)* x = 650 ; x = 650 * 96/9.6

Venu said: (Mar 7, 2012)  
I didn't understood answer. Please explain it clearly, What is face value, dividend etc.

Lavanya said: (Jun 8, 2012)  
Stock is :96
Income is.: 650
The percentage is: 10%
:10/100
:10rs
The makeing investment is:(96/10)*650
:9.6*650
:6240

Jatingarg said: (Jun 18, 2012)  
Marketing value = 96.

Face value = 650.

Annual dividend = 10%of face value = 10\100*650 = 65.

An investment at Rs. 96 is = 65*96 = 6240.

Shivani said: (Aug 26, 2012)  
I think it should be like:

10% on 96= Rs.9.6
9.6--->96
for, 650---> 96*650/9.6=6500 not 6240

Hitesh Dhanwani said: (Sep 2, 2012)  
I agree with what shivani posted. Cause it was not mentioned that 650 was the face value.

Faiz Shaikh said: (Mar 17, 2013)  
Market value is Rs.96.

Dividend is 10%.

If we go through the formula.

Rate of interest p.a. = 10*100/96 would give us 10.42%.

So if we invest Rs.6240 we would get income of Rs.650.

Haritha said: (May 8, 2013)  
Why income is face value? will you explain me?

Vijay said: (Jun 18, 2013)  
10% of share value 96* profit = investment.

9.6*650 = 6240.

Hemant said: (Jul 24, 2013)  
What is the face value and market value?

Nilofar said: (Sep 8, 2013)  
Face value is 96.

96*10% = 9.6.

9.6*650 = 6240.

Ajay said: (Sep 29, 2013)  
When stocks are out we have a base value.

Here base value = 100 as per BSE Sensex.

So 10% stock means profit is 10% of base value.

Profit from investment in 1 share (Rs 96) is Rs 10.

So investment of Rs 1 yields Rs 10/96 profit.

So Rs x investment yields Rs (10/96) *x profit, which is Rs 650.

So investment x = Rs 6240.

Namit Jain said: (Oct 11, 2013)  
Guys.

Current Market Value = Rs. 96.
Required Income = Rs. 650.

Face Value is not given. We always assume face value as Rs. 100 when it's not mentioned in the question. and dividend is always given on face value!. So you earn Rs. 10 (i.e 10% of Face Value which is 100) even if you purchase the shares at Rs. 96 (which is the current market value).

So if you earn Rs. 10 on each share, you need 65 shares to earn Rs 650. at current market price Rs. 96, you need to invest 96*65 which is Rs. 6240.

Hope this helps.

U.K Paul said: (Mar 25, 2014)  
Face value = 100.
Dividend = 10.

So. To earn 650 we have to buy 650/10 = 65.
So, investment = 65*95 = 6240.

Sid said: (Oct 7, 2014)  
Income = rate of dividend * face value.
Thus, face value = 6500.

Investment, or market value would be 96% of face value.
The 'Rs' should not be there with 96 it should be just 96 meaning that market value is 96% of face value.

Income = rate of dividend * face value.

Thus, Rs 650 = 10% * face value.

Face value = 6500 Rs.

Market Value or Investment = 96% of face value = Rs 6240.

Dinesh Kumar said: (Nov 9, 2014)  
'10% stock at Rs.96'. What does stock means? Please clarify.

James said: (Feb 4, 2015)  
Can some one tell me what Rs stand for?

Archana Lp said: (Feb 5, 2015)  
Rs stands for Rupees.

Balaji said: (Mar 17, 2015)  
I really happy more and more solution come for here. So I clear quickly. Thanks to all.

Shahbaz said: (Jul 12, 2015)  
If you invest Rs. 96 in a 10% stock, then the profit is 96*(10/100) = 9.6.

To get Rs. 650, you have to multiply it with the profit factor i.e., 9.6.

Investment = 650*9.6 = Rs. 6240.

Ram said: (Aug 13, 2015)  
Its good to understood.

Janardhanarao.Kadali said: (Sep 5, 2015)  
10 = 650.
96 = ?
96/10*65 = 6240.

Padma said: (Sep 29, 2015)  
But we have a formula.

Annual income obtained = Total amount of stock * % rate of stock.

According to this if we do it:

650 = Total amount of stock*(10/100).

By solving this we will get total amount of stock = 6500.

Then what it means. I am unable to understand this stocks topic clearly can any one help.

Its Rk said: (Oct 27, 2015)  
Here in this, face value of stock not mentioned, and in solving problem we must need face value because income asked in rupees not in percentage.

So they assumed face value as 100.

For example if you assume F.V = 200 answer will be different.

So data is not sufficient in the question.

Anil Kumar Yadav said: (May 8, 2016)  
Good explanation @Namit Jain.

Srinu said: (May 20, 2016)  
10/100 * x = 650.

Ans = 6500
Why Rs = 10 value is used?

Shubham said: (Jul 3, 2016)  
That's the correct solution. @Namit Jain.

Bunny said: (Nov 12, 2016)  
Here, 10/100 = 0.1.

Harshit said: (Nov 22, 2016)  
Very clear explanation, thanks @Namit.

Charishma said: (Jan 4, 2017)  
Nice explanation. Thank you all.

Deepika Nithya Kavitha said: (Jan 28, 2017)  
Thank you all for explaining the solution.

Nawal Kumar said: (Feb 19, 2017)  
What is stock value?

Saurav Chakravarty said: (Mar 7, 2017)  
I guess the answer should be Rs 6500. Because if 10% is the profit per share then 10% of 6500/- makes 650/-. But 10% of 6240 makes 624/- which is not the desired profit 650.

Khurshed said: (Apr 9, 2017)  
@Namit Jain.

Thanks for your explanation. I think it is a good explanation.

Bivhu said: (Aug 24, 2017)  
Current Market Value = Rs. 96.
Required Income = Rs. 650.

Face Value is not given. We always assume face value as Rs. 100 when it's not mentioned in the question. and the dividend is always given on face value!. So you earn Rs. 10 (i.e 10% of Face Value which is 100) even if you purchase the shares at Rs. 96 (which is the current market value).

So if you earn Rs. 10 on each share, you need 65 shares to earn Rs 650. at current market price Rs. 96, you need to invest 96*65 which are Rs. 6240.

Govinda said: (Sep 17, 2017)  
A man purchased shares worth rs 18900 when the market price was rs 94. 50. Out of those shares, he sold shares of face value rs 12600 when the market price was rs 104, and sold the remaining shares at rs 98. He had to pay 1.5% brokerage each time. What was his gain or loss on the whole?

Can anyone solve this?

Naveen said: (Apr 8, 2018)  
Dividend rate= 10,
Market price = Rs.96,
Income = Rs.650,
Investment = (income * market price )/dividend rate,
Investment = (650*96)/10,
= 6240.

Nihad said: (Apr 13, 2018)  
Dividend rate -10%.
Market price - 96.
Expected income - 650.
Income from one share = 96*10% =9.6.
So, investment require for getting 650 return = (650/9.6)*96.
= 6500.

The answer is not 6240.
The rate of return is 10%.
Return=6240*10%=624 not 650.

Nikhitha said: (Sep 8, 2018)  
Thank you @Namit Jain.

Shanas said: (Nov 1, 2018)  
No.of share = 650 (total income)/income per share.
i.e.10 = 65.
So,
Investment per share= 96.
Investment for 65 shares= 96*65= 6240.

Ankit said: (Dec 18, 2018)  
Thanks for the answer @Namit Jain.

Gaurav said: (Nov 24, 2019)  
Which formula applies here exactly?

Rahul Gupta said: (Aug 12, 2020)  
Here,

Market Price=96 Rs.

Dividend=10% of face value(since, here face value is not given so we take it as 100 Rs).
= profit per share =(10/100)*100=10 Rs.

This means,
On buying a share at the market price of 96 Rs earning is 10 Rs.
Therefore,
In order to earn 1 Rs as a profit, we have to invest = (96/10) = 9.6 Rs.

So,
To earn 650 Rs.
We have to invest = 650 * 9.6 = 6240 Rs.
Therefore, the answer will be option B.

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