Question:

Joseph purchased following shares, Find his total investment.

Company A: 200 shares, FV = Rs. 2 Premium = Rs. 18.
Company B: 45 shares, MV = Rs. 500
Company C: 1 share, MV = Rs. 10,540.

Answer:

Company A:
Premium = Rs. 18
We know that if MV > FV, then the share is at premium.
∴ MV = FV + Premium
⇒ MV = 2 + 18 = Rs.20
We know that investment = number of shares × MV
∴ Investment in company A = 200 × 20
= Rs. 4000

Company B:
∴ Investment in company B = 45 × 500
= Rs. 22, 500

Company C:
∴ Investment in company C = 1 × 10, 540
= Rs. 10, 540

Joseph has invested 4000 + 22, 500 + 10, 540 = Rs. 37, 040

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