invested = number of shares × market value of a share. (ii) Income: Annual income = number of shares × face value of a share × rate of dividend. (iii) Return percentage (or yield percentage): Percentage of return = Investment Income (iv) Number of shares: Number of shares purchased = market value of a share Investment Stock exchange: The place where the shares are traded is called the stock exchange (or) stock market. Brokerage: A broker who executes orders to buy and sell shares through a stock market is called Stock Broker.
A fee or commission for their service is called the brokerage. Brokerage is generally based on the face value and expressed as a percentage. NOTE (i) When the share is purchased, brokerage is added to its market price. (ii) When the share is sold, brokerage is subtracted from the market price.
Example . Find the market value of shares of face value ` at a premium of ` . Face value of a share = ` Premium per share = ` M.V. of a share = ` Market value of shares = number of shares × M.V of a share = × = ` , Therefore market value of shares is ` , .
Example . A man buys shares of face value ` at ` below par. How much money does he pay? Number of shares = Face value of a share = ` - - Financial Mathematics Discount = ` Market value of a share = – = ` [face value – discount] Market value of shares = Number of shares × market value of a share = × = , Market value of shares = ` , Example .
A person buys shares of par value of ` of a company which pays % dividend at such a price that he gets % on his money. Find the market value of a share. Face value of