Question

Which is better investment: 11% stock at 143 or $9.75\%$ stock at 117?

• A. 11% stock at 143
• B. 9.75 % stock at 117
• C. Both are equally good
• D. Cannot be compared, as the total amount of investment is not given.

Answer 1

The correct option is B

9.75 % stock at 117

Let investment in each case be: Rs. (143 $\times$ 117).

Income in $1^{st}$ case =$Rs.(\frac{11}{143}\times 143\times 117)=Rs.1287.$

Income in $2^{nd}$ case = $Rs.(\frac{39}{4\times 117}\times 143\times 117)=Rs.1394.25$

Clearly, $9.75\%$ stock at $117$ is better