Stocks & shares — compute yield (return on investment): A person buys a 4.5% stock at ₹96 (per ₹100 nominal). What percentage yield does the investor actually obtain on the investment?

Introduction / Context:In stock problems, the printed rate (e.g., 4.5%) is paid on the nominal value, typically ₹100. But investors pay the market price (here ₹96). The effective yield equals annual dividend divided by the investment, expressed as a percentage.

Given Data / Assumptions:

• Nominal (face) value considered per unit = ₹100.
• Coupon rate = 4.5% ⇒ annual dividend per ₹100 nominal = ₹4.50.
• Market price paid = ₹96 per ₹100 nominal.

Concept / Approach:Yield % = (Dividend received per unit / Price paid per unit) * 100.

Step-by-Step Solution:Dividend per ₹100 nominal = ₹4.50.Price per ₹100 nominal = ₹96.Yield % = (4.50 / 96) * 100 = 4.6875% ≈ 4.69%.

Verification / Alternative check:If you invest ₹96, you get ₹4.50 annually. Over ₹100 investment, that is 4.6875%. Rounding to two decimals yields 4.69%.

Why Other Options Are Wrong:

• 4% and 4.5% ignore the price difference between nominal and market values.
• 1/2% is unrelated to the given coupon and price.

Common Pitfalls:

• Using 4.5% directly as the yield instead of adjusting for the market price.

Final Answer:4.69%