Comparison of FV and MV

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Notes

(1) If MV > FV then the share is at premium.
(2) If MV = FV then the share is at par.
(3) If MV < FV then the share is at discount.

For example : (1) suppose FV = Rs. 10, MV = Rs. 15 and 15 - 10 =Rs. 5
∴  The share is at premium of Rs. 5, as MV > FV
(2) suppose FV = Rs. 10, MV = Rs.10 and 10 - 10 = 0
∴The share is at par. As MV = FV
(3) suppose FV = Rs. 10, MV = Rs. 7 and 10 - 7 = 3
∴The share is at discount. As MV < FV.

Sum Invested : Total amount required to purchase the shares is sum invested.
Sum invested = Number of shares × MV
Ex. (1) If 50 shares of FV Rs. 100 each are purchased for MVRs. 120. Find the sum
invested.
Solution : Sum invested = number of shares× MV
= 50 × 120 = Rs. 6000


Ex. (2) If you want to purchase 50 shares of MV Rs. 50 each. What is the total
amount to be paid ?
Solution : Sum invested = Number of shares × MV = 50 × 50 =Rs. 2500

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