× = % Example . A person sells a % stocks of face value ` , at a premium of %. With the money obtained he buys a % stock at a discount of %. What is the change in his income if the brokerage paid is %.
Step : For % stocks: F.V. = ` Income = ×10000 = ` , ... ( ) - - Financial Mathematics Investment = ` , Face value = ` Market value = ` + – = Number of shares = FV investments = Sales proceeds = × = , Step : For % stocks: M.V. = ` – + = Number of shares = FV investments 14000 = Income = × × = ` Step : Change of income: Change of income = ` – ` = ` Example .
Which is better investment: % ` shares at ` (or) % ` shares at ` . Let the investment in each case be ` ( × ) Step : Income on % shares: Income from % ` shares at ` = ×( × ) = ` Step : Income on % shares: Income from % ` Shares at ` = × ( × ) = ` Hence, the first investment is better. Exercise . .
Find the market value of shares available at ` having the par value of ` . . How much will be required to buy of ` shares at a discount of ` . .
If the dividend received from % of ` shares is ` , , then find the number of shares. . Mohan invested ` , in % of ` shares of a company quoted at a premium of %. Calculate (i) the number of shares bought by Mohan (ii) his annual income from shares (iii)