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Question no. 56207

What investment is required in a 10% stock at Rs. 96 to secure an annual return of Rs. 650___________?

Select your answer for: What investment is required in a 10% stock at Rs. 96 to secure an annual return of Rs. 650___________?
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Answer: A. Rs. 6240

Explanation

Securing an annual return of six hundred fifty from a ten percent stock requires calculating the total nominal value. The stock is quoted at ninety six currency units, meaning ninety six is paid for every one hundred nominal value. Multiplying the required nominal value by the market price ratio yields the investment total of sixty two forty. Stock market mathematics relates dividend income, nominal stock value, and market purchase price. Investing in premium or discounted stocks requires adjusting capital outlays based on current market price quotes. Calculating required investment capital involves scaling the nominal dividend yield by the market purchase rate.

Option B underestimates the required capital investment by miscalculating the stock market price ratio. Option C represents the target annual return rather than the capital investment needed to secure it. Option D overestimates the required investment by using an unadjusted nominal stock face value.

Subject
Mathematics
Category
Mathematics
Topic
—
Difficulty
medium

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