Discussion
The values of Stock A and Stock B on a particular day are Rs. 50 and Rs. 80, respectively. An investor invests Rs. 100 in Stock A and Rs. 80 in Stock B. He sells all the stocks the next day when the value of Stock A is Rs. 55 and Stock B is Rs. 70. The profit made by the investor is Rs. ________
Answer: A
The profit is Rs. 0.
Rs. 100 at Rs. 50 a share buys 2 shares of A, and Rs. 80 at Rs. 80 buys 1 share of B, a total outlay of Rs. 180. The next day:
\[ \begin{aligned} \text{Value} &= 2 \times 55 + 1 \times 70 \\ &= 110 + 70 = 180 \\ \text{Profit} &= 180 - 180 = 0 \end{aligned} \]
The Rs. 10 gain on Stock A is exactly cancelled by the Rs. 10 loss on Stock B. Rs. 10 is the gain on Stock A alone, ignoring the Rs. 10 fall in Stock B, and Rs. 5 is the rise on a single share of A.
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