Question

Which formula gives the brokerage when the rate of brokerage and Market Value are known?

Options

• \[ \text{Brokerage} = \frac{18}{100} \times \text{Market Value} \]

• \[ \text{Brokerage} = \frac{\text{Rate of brokerage}}{100} \times \text{Face Value} \]

• \[ \text{Brokerage} = \text{Market Value} - \text{Face Value} \]

• \[ \text{Brokerage} = \frac{\text{Rate of brokerage}}{100} \times \text{Market Value} \]

Answer 1

Brokerage is computed as \[ \text{Brokerage} = \frac{\text{Rate of brokerage}}{100} \times \text{Market Value} \] since brokerage is always calculated on the Market Value (MV) of shares.