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1) Sam invests a part of $15,000 in 12% stock at $120 and the remainder in 15% stock at $ 125. If his total dividend per annum is $1500, how much does he invest in 12% stock at $120?A) 9000 B) 15000 C) 12000 D) 10000
Answer & Explanation
Answer: 15000 (Let investment in 12% stock be $ x.
Then, investment in 15% stock = (15000 - x).
12x/120 + 15 (15000 - x)/125 = 1500
x/10 + 3 (15000 - x)/25 = 1500
5x + 90000 - 6x = 1500 x 50
x = 15000.
)
2) A man invested $2574 in a stock at 95 to obtain an income of $286. The dividend from the stock is:A) 10.56% B) 11% C) 10% D) 8%
Answer & Explanation
Answer: 10.56% (By investing $2574, income =$ 286
By investing 95, income =$ 286 x 95/2574 =10.56
Dividend = 10.56%)
3) The cost price of a $100 stock at 10 discount, when brokerage is 1/2 % is:A) 89 B) 90 C) 90.50 D) 88
4) By investing $1620 in 8% stock, Ken earns $135. The stock is then quoted at:A) 96 B) 95 C) 97 D) 98
Answer & Explanation
Answer: 96 (To earn $ 135, investment = $ 1620.
To earn $ 8, investment = $ 1620 x 8/135 = $ 96.
Market value of $100 stock = $ 96.)
5) A man buys $ 40 shares paying 9% dividend. The man wants to have an interest of 12% on his money. The market value of each share is:A) 40 B) 35 C) 30 D) 25
Answer & Explanation
Answer: 30 (Dividend on $ 40 = $ 9/100 x 40 = $18 /5.
$12 is an income on $100.
$ 18/5 is an income on $ 100 /12x 18/5 = $ 30.
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