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defeated_soldier
04-21-2006, 04:53 PM
A man buys shares at a discount of Rs x. Later he sells all but 10 of the shares he purchased at a premium of Rs x. If his investment was Rs 4,500 and proceeds from the sale were Rs 6,250 , then howmany shares did he buy originally ?

[Assume the face value of shares as Rs 100].

Sir, i have couple of questions on this question....those are as follows....


.....Later he sells all but 10 of the shares he purchased at a premium of Rs x....

what ? what does it mean by the word "..he purchased at a premium of Rs x.."

how does it possible ?people never purchase share with a premium......they pay money and get the share......even if its feasible can you tell, how much premium and for how long one has to pay realistically ? can you provide me an xample whether this reaaly exists in the market......this is bit odd looking thing.

....proceeds from the sale were Rs 6,250....

Again confused with this statement.

can you please simplify the above problem so that i can understand whats happenin in this problem ?

thanks you

tkhunny
04-21-2006, 05:07 PM
what ? what does it mean by the word "..he purchased at a premium of Rs x.."They are already purchased at a discount. He is now selling at a premium. Just a sentence structure problem. I had to read it a couple of times, too.

A man buys shares at a discount of Rs x.
Later he sells all but 10 of the shares he purchased.
He sells them at a premium of Rs x.
If his investment was Rs 4,500...
Proceeds from the sale were Rs 6,250One piece at a time.

Name things clearly.

Y = Number of Shares Purchased Originally
X = Premium
100 = Par Value of Shares
100 - X = Price per Share Paid for Shares in Original Purchase
Y-10 = Number of Shares Sold
100 + X = Price per Share Collected for Shares in Eventual Sale

This gives:

Y*(100-X) = 4500
(Y-10)*(100+X) = 6250

See, it was not so bad.

tim-penny
07-04-2010, 04:13 AM
yes rather solution was quiet easy

Denis
07-04-2010, 09:00 AM
Hey D_S, where you been? We missed you :!: