Income from stock bought at a premium What is the annual income by investing Rs. 3000 in 6% stock quoted at 120?

Introduction / Context:
When buying at a premium, a rupee of investment buys less nominal value; income must therefore be computed from the nominal acquired. This question reinforces converting rupees invested at a quoted price to nominal and then applying the dividend rate.

Given Data / Assumptions:

• Total investment = Rs. 3000.
• Quoted price = 120 ⇒ Rs. 120 per Rs. 100 nominal.
• Dividend rate = 6% on nominal.

Concept / Approach:
Nominal purchased = Investment / Price per 100 * 100. Annual income = Dividend% * Nominal. Premium reduces the nominal for a given cash outlay.

Step-by-Step Solution:
Nominal = 3000 / 120 * 100 = 25 * 100 = Rs. 2500.Income = 6% of 2500 = 0.06 * 2500 = Rs. 150.

Verification / Alternative check:
Per Rs. 120 spent, you buy Rs. 100 nominal. For Rs. 3000, that is 3000/120 = 25 blocks of Rs. 100 nominal ⇒ 25 * Rs. 6 dividend = Rs. 150.

Why Other Options Are Wrong:
Rs. 100 and Rs. 180 are inconsistent with 6% on the correct nominal; Rs. 200 and Rs. 250 overstate dividend or nominal.

Common Pitfalls:
Multiplying 6% by the invested amount directly is wrong unless the purchase is at par; always convert investment to nominal at the quoted price first.

Final Answer:
Rs. 150