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Stocks and Shares Practice Test 1

Question : 9 of 40

Marks: +1, -0

Find the cost of Rs 5,000, 10% stock at 5 premium.

Solution: 👈: Video Solution

Concept:

When stock is bought at a premium, the market price is more than its face value.

Explanation:

Face value of the stock

= \mathrm{Rs}\ 5000

Premium

= 5\%

on face value.

So market price of

\mathrm{Rs}\ 100

stock

= 100 + 5 = \mathrm{Rs}\ 105

Cost of purchase

= 5000 \times \frac{105}{100}

Cost

= \mathrm{Rs}\ 5250

Answer:

The cost of

\mathrm{Rs}\ 5000

10\%

stock at

5

premium is

\mathrm{Rs}\ 5250

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