Solved Examples

Stocks & Shares

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Stocks & Shares

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Solved Examples

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Solved Examples – Stocks & Shares

Solved examples help students understand the practical application of stocks, shares, dividend, brokerage, and investment concepts in competitive examinations. These examples are designed from basic to advanced level and cover important questions frequently asked in Banking, SSC, Railway, Insurance, MBA entrance, Defence, and various aptitude examinations.

Topics Covered in Solved Examples

  • Dividend Calculations
  • Face Value and Market Value
  • Premium and Discount Problems
  • Brokerage Questions
  • Income and Investment Problems
  • Rate of Return Calculations
  • Comparison of Investments
  • Advanced Stock Problems

Example 1: Basic Dividend Calculation

Question: Find the annual dividend on one ₹100 share at 8% dividend.

Solution:

Dividend:

= 8% of ₹100

= ₹8

Answer: ₹8

Example 2: Income from Shares

Question: A person owns 150 shares of ₹100 each paying 12% dividend. Find his annual income.

Solution:

Dividend per share:

= 12% of ₹100

= ₹12

Annual Income:

= 150 × 12

= ₹1800

Answer: ₹1800

Example 3: Market Value at Premium

Question: A ₹100 stock is quoted at premium of ₹18. Find its market value.

Solution:

Market Value:

= ₹100 + ₹18

= ₹118

Answer: ₹118

Example 4: Market Value at Discount

Question: A ₹100 stock is quoted at discount of ₹7. Find its market value.

Solution:

Market Value:

= ₹100 − ₹7

= ₹93

Answer: ₹93

Example 5: Number of Shares Purchased

Question: A person invests ₹23,600 in ₹100 shares available at ₹118 each. Find the number of shares purchased.

Solution:

Number of Shares:

= Investment / Market Value

= 23600 / 118

= 200 shares

Answer: 200 shares

Example 6: Annual Income from Investment

Question: A person buys 250 shares of ₹100 stock at ₹120 paying 10% dividend. Find his annual income.

Solution:

Dividend per share:

= 10% of ₹100

= ₹10

Annual Income:

= 250 × 10

= ₹2500

Answer: ₹2500

Example 7: Rate of Return

Question: Find the rate of return on ₹100 shares quoted at ₹125 paying 12% dividend.

Solution:

Dividend:

= ₹12

Rate of Return:

= (12 / 125) × 100

= 9.6%

Answer: 9.6%

Example 8: Better Investment Comparison

Question: Which is a better investment:

  • 10% stock at ₹120
  • 12% stock at ₹150

Solution:

First Stock Return:

= 10 / 120

= 1 / 12

Second Stock Return:

= 12 / 150

= 2 / 25

Since:

1/12 > 2/25

First stock gives better return.

Answer: 10% stock at ₹120 is better.

Example 9: Investment Required for Fixed Income

Question: How much money should be invested in 8% ₹100 stock at ₹125 to earn ₹960 annually?

Solution:

Dividend per share:

= ₹8

Investment Formula:

Investment:

= (Required Income × Market Value) / Dividend

= (960 × 125) / 8

= ₹15000

Answer: ₹15000

Example 10: Brokerage on Purchase

Question: A person buys ₹100 shares at ₹120 with 2% brokerage. Find the actual purchase price per share.

Solution:

Brokerage:

= 2% of ₹120

= ₹2.40

Actual Purchase Price:

= ₹120 + ₹2.40

= ₹122.40

Answer: ₹122.40

Example 11: Brokerage on Sale

Question: A person sells ₹100 shares at ₹135 with 1% brokerage. Find actual selling price per share.

Solution:

Brokerage:

= 1% of ₹135

= ₹1.35

Actual Selling Price:

= ₹135 − ₹1.35

= ₹133.65

Answer: ₹133.65

Example 12: Total Investment

Question: Find the total investment if 320 shares are purchased at ₹125 each.

Solution:

Investment:

= Shares × Market Value

= 320 × 125

= ₹40000

Answer: ₹40000

Example 13: Dividend Yield Problem

Question: Find the dividend yield on 15% ₹100 stock quoted at ₹125.

Solution:

Dividend:

= ₹15

Yield:

= (15 / 125) × 100

= 12%

Answer: 12%

Example 14: Shares Purchased with Brokerage

Question: How many shares can be purchased for ₹50,000 in ₹100 stock at ₹125 with 1% brokerage?

Solution:

Brokerage:

= 1% of ₹125

= ₹1.25

Actual Cost per Share:

= ₹125 + ₹1.25

= ₹126.25

Number of Shares:

= 50000 / 126.25

≈ 396 shares

Answer: 396 shares

Example 15: Mixed Investment Problem

Question: A person invests ₹20,000 partly in 10% stock at ₹100 and partly in 12% stock at ₹120. If his total annual income is ₹2120, find the amount invested in each stock.

Solution:

Let investment in first stock = ₹x

Then investment in second stock = ₹(20000 − x)

Income from first stock:

= 10% of x

= 0.1x

Income from second stock:

= (12 / 120) × (20000 − x)

= 0.1(20000 − x)

Total income:

0.1x + 0.1(20000 − x) = 2120

2000 = 2120

Since income exceeds possible value, data is inconsistent.

Answer: Given data is inconsistent.

Important Exam Tips

  • Dividend is always calculated on face value.
  • Brokerage increases purchase price.
  • Brokerage decreases selling price.
  • Practice rate of return calculations regularly.
  • Use shortcut formulas wherever possible.
  • Compare investments using dividend/market value ratio.
  • Verify calculations carefully.

Common Mistakes to Avoid

  • Calculating dividend on market value.
  • Ignoring brokerage.
  • Confusing premium and discount.
  • Using wrong percentage formulas.
  • Calculation mistakes in investment problems.

Practicing solved examples regularly improves conceptual clarity, logical thinking, and calculation speed in solving Stocks & Shares aptitude questions in competitive examinations.

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