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Question
Which is better investment? 20% stock at 140 (or) 10% stock at 70.
Solution
Let the investment in the case be ₹ 140 × 70
Income from 20% stock at ₹ 140 = `20/140 xx 140 xx 70`
= 20 × 70
= ₹ 1400
Income from 10% stock at 70 = `10/70 xx 140 xx 70`
= 10 × 140
= ₹ 1400
For the same investment, both stocks fetch the same income. Therefore they are equivalent shares.
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