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IPMAT Indore 2020 PYQsMultiple Choice (Quants). Free, no login required.

The table below presents the quoted buy and sell prices of five stocks during the five trading days of a given week. The quoted sell price is the price at which an investor can sell a stock in the market. The quoted buy price is the price at which an investor can buy a stock from the market. All the quoted numbers are in Indian Rupees.

DayMondayTuesdayWednesdayThursdayFriday
QuoteSellBuySellBuySellBuySellBuySellBuy
Dabur460462455458432433444447461462
Marico345346335336365368372375372374
HUL1931193319521955197919812044204819661969
ITC237238238239246251221225253256
Britannia3044304631003101311031153025302731403144

If an investor planned to invest Rs 36,00,000 in purchasing the stocks of HUL on Monday, sell them off on Wednesday and use the entire proceeds to purchase the stocks of Britannia on the same day and sell them off again on Friday, then the total investment return during the week would be

Solution

Correct Option: 3

For first investment in HUL:

Initial amount = 36000003600000

Buy price Monday = 19331933

Number of shares = 36000001933=1862\lfloor\frac{3600000}{1933}\rfloor = 1862 shares

Sell price Wednesday = 19791979

Proceeds = 1862×1979=36848981862 \times 1979 = 3684898

For second investment in Britannia:

Amount available = 36848983684898

Buy price Wednesday = 31153115

Number of shares = 36848983115=1183\lfloor\frac{3684898}{3115}\rfloor = 1183 shares

Sell price Friday = 31403140

Final value = 1183×3140=37146201183 \times 3140 = 3714620

For total return calculation:

Initial investment = 36000003600000

Final value = 37146203714620

Return = 371462036000003600000×100\frac{3714620 - 3600000}{3600000} \times 100

=1146203600000×100= \frac{114620}{3600000} \times 100

=3.184%=approximately 3.2%= 3.184\%=\text{approximately }3.2\%

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