Discussion

The market value of a 10.5% stock, in which an income of Rs. 756 is derived by investing Rs. 9000, brokerage being \( \tfrac{1}{4}\% \), is

Answer: C

\[ \text{yield} = \frac{756}{9000} = 8.4\% \]

The price paid per Rs. 100 of stock, brokerage included, is

\[ \frac{10.5}{0.084} = \text{Rs. } 125 \]

Brokerage of \( \tfrac{1}{4}\% \) is part of that outlay, so the market value itself is

\[ 125 - 0.25 = \text{Rs. } 124.75 \]

Brokerage is added to the price when buying, so it must be stripped out to recover the quoted market value.

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