BMS 1
Unit 2Shares and Mutual Funds Q1) How many shares of market price of Rs.130 each, can be purchased for Rs.50150 with brokerage being 0.5%?A1) It is given that- Market price for one share = Rs. 130Total amount invested = Rs.50,150And brokerage = 0.5Brokerage per share = 0.5% of market pricePurchased price for one share = Market price + Brokerage = 130+0.65 = 130.65 Q2) There are two investments given below, then find out which investment is better?7% of Rs. 100 shares at Rs. 120 or 8% of Rs. 10 shares at Rs. 13.50?A2) Suppose the investment amount is = Rs. XFirst situation-It is given that- rate of dividend = 7%F.V = 100, and Market value = Rs. 120Second situation-It is given that- rate of dividend = 8%F.V = 10, and Market value = Rs. 13.50Here we see that the dividend in second situation is more than the first situation.Hence we conclude that the second situation is more profitable for investment. Q3) Mrs. Kapoor invested to Rs. 80,000 to purchase equity shares of Reliance company at market value of Rs. 210 each through a broker, charging 1% brokerage. The face value of a share is Rs. 10. How many shares did saptak purchase?A3) It is given that-Total Investment = 80,000M.V. = Rs. 210, F.V. = Rs. 10, Brokerage = 1%Now, Brokerage per share = 1% of M.V.So that, Purchase price of 1 share = M.V. + Brokerage= 210 + 2.1 = 212.10 Q4) Amandeep purchased 150 shares of BOB at Rs. 210 on 3rd Jan 2019. On 13th Feb. 2019, the company decided to split all the shares of company so that the face value of the share become Rs. 10 from Rs. 20 per share. The market price as on 30th July, 2019 is Rs. 300. Find number of shares held by Amandeep as on 30th July 2019. Also Find gain as on 30th July 2019.A4) It is given that-Total number of shares = 150M.V. = Rs. 210, F.V. =Rs. 20.Total amount invested = Number of shares × M.V.= 150 × 210= 31,500 Number of shares held on 30th July 2019 Actual value of shares on 30th July 2014= 300 × 300= 90,000Profit = 90,000 – 31,500= 58,500 Q5 Amit invests Rs. 65,000 in ABC mutual fund where N.A.V. of Rs. 98. How many units he bought, if entry load is 2%.A5) Amount Invested = Rs. 65,000N.A.V. = Rs. 98, Entry Load = 2%Actual Purchase amount of 1 unit = NAV + Entry load Q6) If a ICICI M.F. had a N.A.V. of Rs. 60 at the beginning of the year and if percentage increase in NAV during the year was 15% Find absolute change in N.A.V.A6) NAV at the beginning of the year = Rs. 60Percent change in NAV = 15% Absolute change in NAV = (% change in NAV) × (NAV at beginning of year)NAV at the end of the year = (Absolute change in NAV) + (NAV at beginning of the year)= 9 + 60 = 69 Q7) Rakhi invested Rs. 25,000 in LPU M.F. with entry load 1%. Find the N.A.V. if the number of units purchased was 120.A7) Let N.A.V. of 1 unit = Rs. XPurchase price of 1 unit = NAV + Entry loadIt is given that-Amount investment = Rs. 25,000No. of unit purchase = 120.From equation (1) and (2), we get-1.01 X = 208.33 Q8) Mr. Sharma purchased 500 units of Bajaj M.F. at Rs. 8,000 and sold all the units after 2 months when NAV of Rs. 35. The short term gain tax was 10% of the profit. Find his net profit or loss.A8) It is given that-No. of unit purchased = 500Purchase Amount = Rs. 8,000Now selling Price of all the units= 35 × 500 = 17,500So thatProfit = SP – Purchasing Price = 17,500 – 8,000 = 9,500Short term gain tax = 10% of profitNet profit = 9,500 – 950 = Rs. 8,550 Q9) Nana invested 2,000 every month for 4 month in SBI Gold systematic Investment plan (SIP). The N.A.V.’s on these particular dates were 25, 28, 26.75 and 30 respectively. After 1 year, he sold all the units when N.A.V. was 29. Find average (mean) price of one unit and his net profit or loss.Note: there was no entry and exit loadA9) Amount Investment = 2,000 per month.No Entry load-------Given
Average (mean) price of 1 unit= Total no. of unit purchased/ Total Amount Invested= 8,000/292.861 = 27.3166Given: selling price of 1 unit = 29S.P. of all units = 29 × 292.861= 8,492.9806Net profit = S.P. – purchase price= 8,492.9806 – 8,000 = 492.9806 Q10) Ms. Lalita invested 5,000 every month for 5 months in BIRLA systematic investment plan (SIP) with N.A.V. of 35, 41, 40, 45 and 50 respectively the entry load was 2%. After 9 months she sold all the units when N.A.V. of 48.
A10) Amount invested every month = 5,000.Entry Load = 2%. Exit Load = Nil.Selling price of 1 unit = 48
Average price of 1 unit = Total Amount Invested/Total no. of unit purchased= 25,000/589.136= 42.435Average (mean) price of 1 unit = Total amount/5=215.22/5= 43.044Total S.P. = 48 × 589.136= 28,278.528Gain = S.P. – Purchase price= 28,278.528 – 25,000 = 3,278.528
Q11) An investor joined the S.I.P scheme, for a mutual fund, under which he would invest Rs. 750 for 4 months. If the N.A.Vs for each month are Rs.75,Rs.60,Rs.25 and Rs.50, find the average unit cost using Rupee Cost Averaging method and compare it with Arithmetic Mean of prices if the entry load was 2% throughout, correct to 4 decimal places.A11)
Rupee cost average = total amount invested/total number of units=3000/66.1765 = 45.3333A.M. of prices =sum of all shares/number of months =214.2/4 = 53.55Thus the average price using Rupee cost method is less than A.M of prices. Q12) Mr. Patil invested in a SIP of a M.F. , a fixed sum of Rs. 10,000/- on 5th of every month , for 4 months . The NAV on these dates were Rs. 34.26 , 46.12 , 39.34 and 41.85 . The entry load was 2.25 % throughout the period . Find the average price , including the entry load , using the Rupee cost-Averaging method .How does it compare with the Arithmetic mean of the prices ? (Calculations are correct to 4 digits decimal)A12)
By using Rupee-cost-Averaging method :- Avg Price = Total amount/ Total No. of units = 40,000/979.8083 = 40 .8243A.M. of price = Total price/ 4= 165.2053/ 4= 41.3013∴ Avg. price using Rupee-cost- Averaging method is less than A.M. of prices .
Month | Amount invested | NAV | No. of unit purchased |
1 | 2000 | 25 | 2000/25 = 80 |
2 | 2000 | 28 | 71.42 |
3 | 2000 | 26.75 | 74.76 |
4 | 2000 | 30 | 66.66 |
| 8000 |
| 292.661 |
A10) Amount invested every month = 5,000.Entry Load = 2%. Exit Load = Nil.Selling price of 1 unit = 48
Month | NAV | Entry load | purchased price of 1 unit | No. of unit purchased |
1 | 35 | 0.70 | 35.7 | 5000/35.70 = 140.056 |
2 | 41 | 0.82 | 41.82 | 119.56 |
3 | 40 | 0.80 | 40.8 | 122.549 |
4 | 45 | 0.90 | 45.9 | 108.932 |
5 | 50 | 1.00 | 51 | 98.039 |
|
|
| 215.22 | 589.136 |
Q11) An investor joined the S.I.P scheme, for a mutual fund, under which he would invest Rs. 750 for 4 months. If the N.A.Vs for each month are Rs.75,Rs.60,Rs.25 and Rs.50, find the average unit cost using Rupee Cost Averaging method and compare it with Arithmetic Mean of prices if the entry load was 2% throughout, correct to 4 decimal places.A11)
Month | sum insured | NAV | Entry load | purchased price of 1 unit | No. of unit |
1 | 750 | 75 | 1.50 | 76.5 | 9.8039 |
2 | 750 | 60 | 1.20 | 61.2 | 12.2549 |
3 | 750 | 25 | 0.50 | 25.5 | 29.4118 |
4 | 750 | 50 | 1.00 | 51 | 14.7059 |
| 3000 |
|
| 214.2 | 66.1765 |
Month | NAV | Entry load = 2.25% | Total price | No. of unit= 1000/total price |
1 | 34.2600 | 0.7708 | 35.0308 | 285.4627 |
2 | 46.1200 | 1.0377 | 47.1577 | 212.0544 |
3 | 39.3400 | 0.8851 | 40.2252 | 248.6006 |
4 | 41.8500 | 0.9141 | 42.7916 | 233.6906 |
|
|
| 165.205 | 979.8083 |
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