Determine the cash required to acquire Rs. 3200 of a 7(1/2)% stock at 107 with a (1/2)% brokerage fee.
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Answer: A. 3440
Explanation
The purchase price percentage and brokerage fee are combined to find the effective cost multiplier. Multiplying the stock nominal value by the total cost factor yields the exact required cash amount. Accurate computation results in thirty four hundred forty currency units needed for the acquisition. Stock purchase costs depend on both the market quotation percentage and any applicable brokerage fees. Brokerage fees are added to the purchase price when calculating the total cash outlay for investors. Nominal stock values represent the face value upon which percentage dividends and premiums are calculated.
Investors must calculate total cash requirements carefully before purchasing securities on financial exchanges. Stock market transactions involve commission fees that impact the overall yield and initial investment cost. Financial literacy includes understanding how stock quotations and transaction fees translate into real currency. Option b overestimates the cash requirement by adding an incorrect flat amount for brokerage fees. Option c significantly exceeds the correct total due to an improper multiplication of the stock value. Option d is incorrect because it fails to match the precise arithmetic result of the transaction.
- Subject
- Mathematics
- Category
- Mathematics
- Topic
- —
- Difficulty
- medium
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