Question

Which is better investment? 20% stock at 140 (or) 10% stock at 70.

Answer 1

Let the investment in the case be ₹ 140 × 70

Income from 20% stock at ₹ 140 = `20/140 xx 140 xx 70`

= 20 × 70

= ₹ 1400

Income from 10% stock at 70 = `10/70 xx 140 xx 70`

= 10 × 140

= ₹ 1400

For the same investment, both stocks fetch the same income. Therefore they are equivalent shares.