Subject: General Aptitude · Chapter: Stocks and Shares · Exam: · Marks: · Difficulty:
Which is better investment? $7\frac{1}{2}\%$ stock at 105 or $6\frac{1}{2}\%$ stock at 94.
Answer
Answer (as printed):
Explanation
Let the investment in each case be ₹(105 × 94). Case I: $7\frac{1}{2}\%$ stock at 105: On investing ₹105, income $=₹\frac{15}{2}$. On investing $₹(105 \times 94)$, income $=₹\left(\frac{15}{2} \times \frac{1}{105} \times 105 \times 94\right)=₹705$. Case II: $6\frac{1}{2}\%$ stock at 94: On investing ₹94, income $=₹\frac{13}{2}$. On investing $₹(105 \times 94)$, income $=₹\left(\frac{13}{2} \times \frac{1}{94} \times 105 \times 94\right)=₹682.50$. Clearly, the income from $7\frac{1}{2}\%$ stock at 105 is more. Hence, the investment in $7\frac{1}{2}\%$ stock at 105 is better.
Explanation as extracted from the printed page; notation may be imperfect.