Stocks and Shares – Quantity purchasable with brokerage How much 4.5% stock quoted at 95 can be purchased by investing Rs. 1950 if brokerage is 1/4% on the purchase?

Introduction / Context:We are given a fixed investment and asked what nominal (face value) stock can be purchased at a discount quote, after including a small percentage brokerage. This is a direct application of effective per-100 price arithmetic.

Given Data / Assumptions:

• Total money to invest = Rs. 1950
• Quote = 95 (i.e., Rs. 95 per Rs. 100 nominal)
• Brokerage = 1/4% (that is 0.25%) on the purchase
• Dividend rate (4.5%) is irrelevant for quantity; it affects income, not the amount purchasable.

Concept / Approach:Effective price per Rs. 100 nominal = quoted price + brokerage% of quoted price. The nominal purchasable equals (Investment / effective per-100 price)*100.

Step-by-Step Solution:Brokerage = 0.25% of 95 = 0.2375Effective per-100 price = 95 + 0.2375 = Rs. 95.2375Nominal purchasable = (1950 / 95.2375) * 100 ≈ Rs. 2047.51 nominalRounded to two decimals: ≈ Rs. 2047.50 nominal

Verification / Alternative check:Multiply back: (2047.5/100)*95.2375 ≈ Rs. 1950, confirming consistency.

Why Other Options Are Wrong:Rs. 2050 or Rs. 2000 nominal are rounded guesses that do not align exactly with the effective price; Rs. 2200 is too high for the given budget.

Common Pitfalls:Ignoring brokerage or treating 0.25% as Rs. 0.25 (a flat amount) rather than as a percentage of the quote.

Final Answer:Rs. 2047.50 nominal