Shares and dividends

Question

A man wishes to invest Rs.2400. He invests Rs.900 in 7/2% Rs.100 stock at 75, Rs.850 in 3% Rs.100 stock at 68 and the remainder in 6% Rs.100 stock. If the total; yield from his investment is 5%, at what price did he buy the 6% stock?

Answer 1

Income from 7/2% stock at 75 = Rs. 7/2*75 * 900 = Rs.42

Income from 3% stock at 68 = Rs. 3/68 * 850 = Rs. 37.50

Total income from these two stocks = Rs 79.50

But total income from the three stocks Rs. 5/100 * 2490 = Rs.124.50

Therefore Income from the third stock Rs. (124.50 - 79.50) = Rs.45

Investment in this case = Rs.2490 - (900+850) = Rs.740

If income is Rs.45, investment = Rs.740

If income is Rs.6, investment = Rs. 740/45 * 6 = 296/3

So he buys 6% stock at 296/3

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