Ankit had the option of investing in company A, where 7% ₹ 100 shares are available at ₹ 120 or in company B, where 8%, ₹ 1000 shares are available at ₹ 1620.

Statement (1) : Investment in company B is better than company A.

Statement (2) : Yield % of company B is better than in company A.

1. Both the statements are true.

2. Both the statements are false.

3. Statement 1 is true, and statement 2 is false.

4. Statement 1 is false, and statement 2 is true.

For company A :

Dividend = 7%

N.V. = ₹ 100

M.V = ₹ 120

Dividend per share = 7% of N.V.

= $\dfrac{7}{100} \times 100$ = ₹ 7

⇒ Rate of return = $\dfrac{\text{Dividend earned on 1 share}}{\text{Market Value of one share}} \times 100$

= $\dfrac{7}{120} \times 100$ = 5.83%

For company B :

Dividend = 8%

N.V. = ₹ 1000

M.V = ₹ 1620

Dividend per share = 8% of N.V.

= $\dfrac{8}{100} \times 1000$ = ₹ 80

⇒ Rate of return = $\dfrac{\text{Dividend earned on 1 share}}{\text{Market Value of one share}} \times 100$

= $\dfrac{80}{1620} \times 100$ = 4.94%

Investment in company B is better than A. This is false, because A gives higher yield.

So, statement 1 is false.

Yield of company B is better than A.

Company A gives better return that is 5.83%.

So, statement 2 is false.

Hence, option 2 is correct.