Cash received from sale at a premium quotation How much money is obtained from selling Rs. 1700 nominal stock at 106 1/4% (i.e., 106.25%)?

Introduction / Context:This problem checks your ability to convert a quoted premium (above par) into actual cash received for a given nominal (face) amount of stock. The quotation 106 1/4% means Rs. 106.25 for each Rs. 100 nominal sold.

Given Data / Assumptions:

• Nominal (face value) sold = Rs. 1700.
• Quoted price = 106.25% of par.
• No brokerage or taxes are considered.

Concept / Approach:Cash realized = Nominal * (Quoted price / 100). A premium quotation (>100%) increases cash above nominal; a discount (<100%) would reduce it.

Step-by-Step Solution:Cash = 1700 * 106.25 / 100.Compute 106.25/100 = 1.0625.Cash = 1700 * 1.0625 = Rs. 1806.25.

Verification / Alternative check:Since 6.25% of 1700 is 106.25, add this to 1700: 1700 + 106.25 = 1806.25. Matches the direct multiplication result.

Why Other Options Are Wrong:Rs. 1808.75 and Rs. 1765.00 are off the exact 6.25% premium; Rs. 1608.25 and Rs. 1706.25 reflect misapplied percentages.

Common Pitfalls:Misreading the mixed fraction (106 1/4%) or applying the percentage to the wrong base. Always apply the quotation percentage to the nominal amount.

Final Answer:Rs. 1806.25