Discussion
Which is the better investment: 12% stock at 120 or 8% stock at 90 ?
Answer: B
Correct answer: 12% stock at 120
Compare the return on each Rs. 100 actually invested.
\[\frac{12}{120} \times 100 = 10\%, \qquad \frac{8}{90} \times 100 = 8.89\%\]
The first yields more per rupee invested, so the 12% stock at 120 is the better buy despite its higher price.
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