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Question 26 of 30

Q.Which is better investment? 20% stock at ₹ 140\text{\text{₹}}\,140 (or) 10% stock at ₹ 70\text{\text{₹}}\,70.

Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2024Subjective· 2mImportance★★★★★
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Both stocks return the same 1007%≈14.29%\tfrac{100}{7}\%\approx14.29\% per rupee invested, so neither is the better buy.

Method — compare percentage yield (income per ₹100 invested). For a c%c\% stock bought at market price MM, income on ₹100 face value is ₹cc for a cost of ₹MM, so

yield=cM×100.\text{yield}=\frac{c}{M}\times100.

20%20\% stock at ₹140:  20140×100=1007=14.29%.\ \dfrac{20}{140}\times100=\dfrac{100}{7}=14.29\%.

10%10\% stock at ₹70:  1070×100=1007=14.29%.\ \dfrac{10}{70}\times100=\dfrac{100}{7}=14.29\%.

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