Aptitude - Stocks and Shares - Discussion

Discussion :: Stocks and Shares - General Questions (Q.No.3)

3. 

Which is better investment: 11% stock at 143  or  9% stock at 117?

[A]. 11% stock at 143
[B].
9 3 % stock at 117
4
[C]. Both are equally good
[D]. Cannot be compared, as the total amount of investment is not given.

Answer: Option B

Explanation:

Let investment in each case be Rs. (143 x 117).

Income in 1st case = Rs. 11 x 143 x 117 = Rs. 1287.
143

Income in 2nd case = Rs. 39 x 143 x 117 = Rs. 1394.25
4 x 117

Clearly, 9 3 % stock at 117 is better.
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Nagarajan. M said: (Nov 16, 2010)  
Completely i cant understand. Why 11% of stock is being multiplied with 117 why not with 143?

Anusha said: (Jan 1, 2011)  
Completely I can't understand the problem please explain briefly.

Gaurav said: (Jan 15, 2011)  
Alternate way in 1st case u get rs 11 on investing rs143.
so for getting 1 rs u have to invest 13 rs
similarly in 2nd case u have to invest 12 rs for getting 1.so second one is profitable.

Nagendramurthy said: (Jul 4, 2011)  
Alternate
1 case: if we invest rs 143 we get a profit of 11 rs therefore 100 rs how much
i.e 143 rs invest 11 rs profit
100 rs ?

(100*11)/143=7.69 rs profit

2 case: if we invest rs 117 we get 9.75 rs profit therefore for 100 rs how much?
i.e 117 rs invest 9.75 rs profit
100 rs ?

(100*9.75)/117=8.333 rs profit


From above we can clearly make out that 2 case is best...

I hope you understood the logic.

Wahid said: (Jul 29, 2012)  
@Nagendramurthy. Your explanation is the best.

Vikas said: (Aug 21, 2012)  
Its 11% at the stock...which means we get rs 11 if we invest rs 100 in it..as percentage is always considered in 100. plz clarify me

Viswanath said: (Feb 20, 2013)  
Income->investment

11----->143.
39/4--->117.

Solution: here we can compare only after equating 2 investments.

So,
11*117--->143*117==>here income is 1287.
39/4*143->117*143==>here income is 1394.25

Vamshi said: (Dec 26, 2013)  
@Mr. Vikas don't care about the problem in reality way try to understand the given problem.

Its clear that 11% stock is once with of 117 and once with 143 so its simply multiply by those two and compare that two answers ok na. Did you get it.

Ashwath said: (Sep 1, 2014)  
11% Means in the real world 11/100 not 11/143.
11% on 143 is 15.73.
9.75% or 9 3/4 % on 117 means 11.40.

If you invest 143 you get 15.73 143 ===> 15.73.
If you invest 117 you get 11.40 117 ===> 11.40.

Please clarify how could you determinate 11% = 11 for 143?

Pulkit said: (Oct 11, 2014)  
Without knowing face value, how can the comparisons be made?

Manan said: (Nov 13, 2014)  
This is how it is:

You need to find the value of profit for both the cases, therefore.

Make the values 100 to make it easier.

1. For 11% stock/share at 143,

143 Rs : 11 Rs : 100 Rs : x Rs.

143x = 1100.

So, x = 7.692 which is the profit on 1st case.

2. For 9.75% stock/share at 117,

117 Rs : 9.75 Rs :: 100 Rs : x Rs.

So, 117x = 975.

Therefore, x = 8.333 which is the profit in 2nd case.

8.333>7.692, therefore best investment would be 2nd.

Tapes Pal said: (Nov 27, 2014)  
I can't understand why two investment 117 and 143 are multiplied when the actual question is what is the best investment. No mention that investor have to invest these two both at a time on question.

Aashi said: (Dec 23, 2015)  
117 & 143 are multiplied only as an assumption.

Ebenezar said: (Jun 24, 2016)  
I can't understand completely, so please explain in a easy way.

Samuel said: (Jul 6, 2016)  
Answer.

143/11 = 13.
117/9 = 13.

Both are equal and good.

Vivek Ranjan said: (Jul 20, 2016)  
There is the only thing which is creating a problem, that is face value.

What is the Face value? If not given take it as 100 always.

Here or anywhere if it is written 11% stock at 143 it means 11 Rupee's you will gain by investing 143 Rupees.

For this question.

If we put 143 we get 11 rupees.
So if we put 1 rupee we get 11/143.

And, in another case.

If we put 117 Rs we get 39/4 rupees.
So for 1 rupee we get (39/4) * (1/117).
11/143 < (39/4) * (1/117).

For making calculation simple, instead of 1 rupee they compared it for 143 * 117 rupees, as it will cancel some value.

Kapil Kumar said: (Aug 20, 2016)  
Rate of return = (dividend/investment) * 100.

1st case:

11 = (d1/143) * 100,
d1 = Rs. 15.73.

2nd case:

(39/4) = (d2/117) * 100,
d2 = Rs. 11.4075.

Answer : option A. Because dividend (d1) > dividend (d2).

Vinay Shankar said: (Feb 15, 2017)  
@ALL.

I think the term percent is misleading here.

As percent simply means out of hundred. So in my view, 13% means 13 out of 100 and it is solved for 13 out of 143.

Anne said: (Apr 15, 2017)  
As 143 and 117 is not a facevalue, its only market vallue. And we have to calculate the rates on facevalue only, hence in both the cases we take the respective market value.

Santu said: (Apr 17, 2017)  
Let us assume face value of stock is Rs.100.

11% stock at 143 means:
11% = dividend rate which can be calculated on face value.i.e. dividend = 11% on 100 = Rs.11.
143 = market value of stock at which we can buy or sell the stock.

Here, we have to calculate the interest rate as we actually receive Rs.11 on investment of Rs.143 i.e. market value, the rate at which may be bought the stock.

Therefore, in 1st case interest rate = Rs.11/Rs.143 * 100=7.69%.
Similarly in 2nd case interest rate= Rs.9.75/Rs.117 * 100=8.33%.
As the interest is more in case 2.
The better investment is case 2.

Shipra said: (Oct 26, 2017)  
Why answer is 2nd type of stock?

According to me,
1st case. 143*11%=15.73,
15.73/143*117=12.87,
2ndcase. 117*9.75%= 11.40.
So rate of interest is more in case 1st.

Raj said: (Mar 11, 2018)  
11% stock at 143 yields 25.75 (less profit).

9% stock at 117 yields 30.12 (more profit) <= preferable.

Abhilas said: (Jun 7, 2018)  
There is another efficient way.

For 117 in the first case (11/143)*117=9,
For 117 in the second case 9+(given).
Clearly second wins.

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