Shortcut Techniques
Stocks & Shares · Study material
Shortcut Techniques – Stocks & Shares
Shortcut techniques in Stocks & Shares help candidates solve investment and dividend-based aptitude questions quickly and accurately in Banking, SSC, Railway, Insurance, MBA entrance, Defence, and various competitive examinations.
Most questions from this chapter are based on:
- Dividend calculations
- Face value and market value
- Premium and discount concepts
- Brokerage calculations
- Income and investment problems
- Rate of return calculations
- Comparison of investments
Learning shortcut methods reduces lengthy calculations and improves solving speed significantly.
Why Learn Shortcut Techniques?
- Improves calculation speed.
- Reduces formula confusion.
- Helps solve investment problems faster.
- Useful in banking aptitude examinations.
- Improves overall time management.
Shortcut #1: Always Remember the Golden Rule
Dividend is always calculated on Face Value.
This is the most important rule in Stocks & Shares.
Shortcut #2: Understand Stock Notation Quickly
Suppose:
₹100, 12% stock at ₹120
Directly understand:
- Face Value = ₹100
- Dividend = ₹12
- Market Value = ₹120
- Investment of ₹120 gives annual income ₹12
Shortcut #3: Premium Shortcut
If stock is at premium:
Market Value = Face Value + Premium
Example:
₹100 stock at premium ₹18
Market Value = ₹118
Shortcut #4: Discount Shortcut
If stock is at discount:
Market Value = Face Value − Discount
Example:
₹100 stock at discount ₹6
Market Value = ₹94
Shortcut #5: Income Formula Shortcut
Income = Investment × Dividend% / Market Value
This shortcut directly solves most aptitude questions.
Shortcut #6: Rate of Return Shortcut
Rate of Return = (Dividend / Market Value) × 100
Shortcut #7: Better Investment Trick
The stock giving higher return for same investment is always better.
Higher Dividend + Lower Market Value = Better Investment
Shortcut #8: Direct Comparison Method
Compare:
| Stock | Return Formula |
|---|---|
| 10% stock at ₹125 | 10/125 |
| 12% stock at ₹150 | 12/150 |
Simplify fractions quickly and compare returns.
Shortcut #9: Brokerage Shortcut
| Transaction | Brokerage Effect |
|---|---|
| Purchase | Add Brokerage |
| Sale | Subtract Brokerage |
✔ Remember this rule carefully because many exam questions are based on it.
Shortcut #10: Number of Shares Shortcut
Number of Shares = Investment / Market Value
Shortcut #11: Dividend per Share Shortcut
Dividend per Share = Dividend % of Face Value
Example:
₹100 share, 9% stock
Dividend = ₹9
Shortcut #12: Quick Investment Formula
If annual income is given:
Investment = (Required Income × Market Value) / Dividend
Shortcut #13: Face Value Shortcut
Most aptitude questions assume:
Face Value = ₹100
unless specified otherwise.
Shortcut #14: Percentage Simplification Trick
Instead of calculating full percentages:
- 10% = 1/10
- 12.5% = 1/8
- 20% = 1/5
- 25% = 1/4
- 50% = 1/2
This reduces lengthy calculations.
Shortcut #15: Income Comparison Shortcut
To compare two stocks:
Compare Dividend / Market Value
Higher ratio means better investment.
Shortcut #16: Investment Distribution Trick
If total investment is divided between two stocks:
- Assume first investment = x
- Second investment = Total − x
Then form equations using income formulas.
Shortcut #17: Market Value Change Trick
Remember:
| Concept | Behavior |
|---|---|
| Face Value | Usually Constant |
| Market Value | Changes Frequently |
Shortcut #18: Dividend Yield Shortcut
Yield = (Dividend ÷ Market Price) × 100
Shortcut #19: Quick Revision Table
| Concept | Shortcut Formula |
|---|---|
| Dividend | (Dividend% × Face Value)/100 |
| Income | Investment × Dividend% / Market Value |
| Investment | (Income × Market Value)/Dividend |
| Number of Shares | Investment / Market Value |
| Rate of Return | (Dividend / Market Value) × 100 |
Shortcut #20: Common Exam-Based Observations
- Higher dividend gives better return.
- Lower market value increases yield.
- Brokerage affects final investment.
- Dividend always depends on face value.
- Most problems use ₹100 face value.
Common Mistakes to Avoid
- Calculating dividend on market value.
- Ignoring brokerage charges.
- Confusing face value and market value.
- Using incorrect percentage calculations.
- Calculation mistakes in investment comparison.
Important Exam Tips
- Memorize all important formulas.
- Practice investment comparison problems.
- Learn premium and discount concepts clearly.
- Use fraction conversion shortcuts.
- Verify units and percentages carefully.
- Practice brokerage-related problems regularly.
- Improve calculation speed through mental math.
Shortcut techniques in Stocks & Shares help candidates improve solving speed, reduce lengthy calculations, and solve investment and dividend aptitude questions efficiently in competitive examinations.