Question

Which is better investment: 11% stock at 143 or 9$\frac{3}{4}$% stock at 117?

• A. 11% stock at 143
• B. 9$\frac{3}{4}$% stock at 117
• C. Both are equally good
• D. Cannot be compared, as the total amount of investment is not given.

Answer 1

Answer: (B)

9$\frac{3}{4}$% stock at 117

Let investment in each case be $Rs(143\times 117)$
Income in 1st case $=Rs.(\frac{11}{143}\times 143\times 117)=Rs.1287$
Income in 2nd case $=Rs.(\frac{39}{4\times 117}\times 143\times 117)=Rs.1394.25$
Clearly, 9$\frac{3}{4}$% stock at 117 is better.