Stocks and Shares— Concepts, Formulas & Shortcuts
- Face value (par or nominal value) is fixed, usually ₹100 unless stated; market value is what the share trades at.
- "A 9% stock" pays ₹9 per year on every ₹100 of face value, whatever the market price.
- Number of shares = investment / market value per share.
- Annual income = number of shares × face value × rate.
- Return % = (dividend per share / market price) × 100 — use this to compare two stocks.
- "At par" means market value = face value; "at premium" means above par and "at discount" below par. Brokerage is added when buying and subtracted when selling.
Stocks and Shares Practice Questions with Answers
Attempt each question first, then open the explanation. All 18 questions below are free to read and require no signup.
Q1.The face value of a share is also known as its:
Easy- AMarket value
- BPar value
- CBook value
- DPremium
Stocks and Shares question 1 of 18+Show Answer & Explanation
Answer: B. Par value
Explanation: Face value, par value and nominal value all refer to the value printed on the share certificate.
Q2.The annual income from investing ₹90 in a 9% stock quoted at ₹90 is:
Moderate- A₹8.10
- B₹9
- C₹10
- D₹90
Stocks and Shares question 2 of 18+Show Answer & Explanation
Answer: B. ₹9
Explanation: ₹90 buys one ₹100 face-value share, and 9% of ₹100 is ₹9.
Q3.An investment of ₹1,620 in an 8% stock at ₹81 yields an annual income of:
Difficult- A₹129.60
- B₹150
- C₹160
- D₹180
Stocks and Shares question 3 of 18+Show Answer & Explanation
Answer: C. ₹160
Explanation: Number of shares = 1620/81 = 20; income = 20 × 100 × 8% = ₹160.
Q4.A stock quoted "at par" means its market value is:
Easy- AAbove the face value
- BBelow the face value
- CEqual to the face value
- DZero
Stocks and Shares question 4 of 18+Show Answer & Explanation
Answer: C. Equal to the face value
Explanation: At par means the share trades at exactly its face value.
Q5.Which is the better investment: a 9% stock at 108 or an 8% stock at 90?
Difficult- A9% stock at 108
- B8% stock at 90
- CBoth are equal
- DCannot be determined
Stocks and Shares question 5 of 18+Show Answer & Explanation
Answer: B. 8% stock at 90
Explanation: Returns are 9/108 = 8.33% and 8/90 = 8.89%, so the 8% stock at 90 is better.
Q6.When shares are purchased through a broker, the brokerage is:
Moderate- AAdded to the cost price
- BSubtracted from the cost price
- CIgnored
- DAdded to the dividend
Stocks and Shares question 6 of 18+Show Answer & Explanation
Answer: A. Added to the cost price
Explanation: Brokerage raises what you pay when buying and reduces what you receive when selling.
Q7.The income from a ₹100 face-value 12% stock is:
Easy- A₹10
- B₹12
- C₹100
- D₹112
Stocks and Shares question 7 of 18+Show Answer & Explanation
Answer: B. ₹12
Explanation: 12% of the ₹100 face value is ₹12 per year.
Q8.A 10% stock quoted at ₹120 gives a return of approximately:
Moderate- A6.3%
- B8.3%
- C10%
- D12%
Stocks and Shares question 8 of 18+Show Answer & Explanation
Answer: B. 8.3%
Explanation: Return = dividend/market price = 10/120 × 100 ≈ 8.33%.
Q9.How many ₹100 shares can be bought for ₹4,500 if the market price is ₹90?
Easy- A45
- B50
- C55
- D60
Stocks and Shares question 9 of 18+Show Answer & Explanation
Answer: B. 50
Explanation: 4500/90 = 50 shares.
Q10.A stock trading above its face value is said to be at a:
Easy- ADiscount
- BPar
- CPremium
- DLoss
Stocks and Shares question 10 of 18+Show Answer & Explanation
Answer: C. Premium
Explanation: Trading above face value is called a premium; below it is a discount.
Q11.The annual income from ₹6,000 invested in a 15% stock at ₹120 is:
Difficult- A₹600
- B₹750
- C₹800
- D₹900
Stocks and Shares question 11 of 18+Show Answer & Explanation
Answer: B. ₹750
Explanation: Shares = 6000/120 = 50 → income = 50 × 100 × 15% = ₹750.
Q12.To earn ₹1,500 per year from a 10% stock at ₹150, the investment required is:
Difficult- A₹15,000
- B₹18,000
- C₹20,000
- D₹22,500
Stocks and Shares question 12 of 18+Show Answer & Explanation
Answer: D. ₹22,500
Explanation: Each ₹150 invested earns ₹10, so ₹1,500 income needs 150 shares' worth: 1500/10 × 150 = ₹22,500.
Q13.The annual income from one ₹100 share of an 8% stock is:
Easy- A₹4
- B₹8
- C₹80
- D₹100
Stocks and Shares question 13 of 18+Show Answer & Explanation
Answer: B. ₹8
Explanation: 8% of the ₹100 face value is ₹8.
Q14.How many shares of face value ₹100 can be bought for ₹2,000 at a market price of ₹80?
Easy- A20
- B25
- C30
- D40
Stocks and Shares question 14 of 18+Show Answer & Explanation
Answer: B. 25
Explanation: 2000/80 = 25 shares.
Q15.A stock trading below its face value is said to be at a:
Easy- APremium
- BPar
- CDiscount
- DDividend
Stocks and Shares question 15 of 18+Show Answer & Explanation
Answer: C. Discount
Explanation: Below face value is a discount; above it is a premium.
Q16.The return on a 12% stock bought at ₹150 is:
Moderate- A6%
- B8%
- C10%
- D12%
Stocks and Shares question 16 of 18+Show Answer & Explanation
Answer: B. 8%
Explanation: Return = 12/150 × 100 = 8%.
Q17.The annual income from ₹8,000 invested in a 10% stock at ₹100 is:
Moderate- A₹640
- B₹700
- C₹800
- D₹1,000
Stocks and Shares question 17 of 18+Show Answer & Explanation
Answer: C. ₹800
Explanation: Shares = 8000/100 = 80 → income = 80 × 10 = ₹800.
Q18.Dividend on a share is always calculated on the:
Easy- AMarket value
- BFace value
- CPurchase price
- DBrokerage
Stocks and Shares question 18 of 18+Show Answer & Explanation
Answer: B. Face value
Explanation: The declared rate applies to the face value, whatever the market price.
Stocks and Shares — Frequently Asked Questions
Is dividend calculated on the face value or the market value?+
Always on the face value. A 9% stock pays ₹9 per ₹100 of face value even if you bought it at ₹108 or at ₹90 — which is why the market price determines your actual return.
How do I compare two stocks to see which is better?+
Compute the percentage return for each: dividend divided by market price. A 9% stock at 108 returns 8.33%, while an 8% stock at 90 returns 8.89%, so the second is the better investment.
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