Assertion (A): Investing in 12% of the ₹ 100 shares at ₹ 150 means, an investment of ₹ 100 gives an annual income of ₹ 12.
Reason (R): Annual income of an investor depends upon the face value of the share.
Both A and R are true, and R is the correct explanation of A.
Both A and R are true, but R is not the correct explanation of A.
A is true, but R is false.
A is false, but R is true.

Question

Assertion (A): Investing in 12% of the ₹ 100 shares at ₹ 150 means, an investment of ₹ 100 gives an annual income of ₹ 12.

Reason (R): Annual income of an investor depends upon the face value of the share.

Both A and R are true, and R is the correct explanation of A.
Both A and R are true, but R is not the correct explanation of A.
A is true, but R is false.
A is false, but R is true.

KnowledgeBoat · Accepted Answer

Given, Face value = ₹ 100 Market value = ₹ 150 Dividend rate = 12% By formula, Annual income = No. of shares × Rate of div. × N.V. of 1 share However, the investment was ₹ 150 (the market price), not ₹ 100. So, an investment of ₹100 does not give ₹ 12 in income — ₹ 12 is earned on ₹ 150. ∴ Assertion (A) is false. By formula, Annual income = No. of shares × Rate of div. × N.V. of 1 share This means the income does depend on the face value, not the market value. ∴ Reason (R) is true. Hence, Option 2 is the correct option.

Mathematics

Shares & Dividends

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