Question
Download Solution PDFWhat will be the investment in order to obtain an income of 550 from 10% stock at Rs. 96?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Income = Rs. 550
Rate of Stock = 10%
Market Price of Stock = Rs. 96
Concept:
To find the investment required for a given income from a stock, we use the concept of dividend yield and market price.
Formula Used:
Dividend = (Rate of Stock × Nominal Value) / 100
Investment = (Income × Market Price) / Dividend
Calculation:
We have,
⇒ Dividend = (10 × 100) / 100
⇒ Dividend = Rs. 10
Now,
⇒ Investment = (550 × 96) / 10
⇒ Investment = 5280
∴ The correct answer is option 1, Rs. 5280.
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