Find the quoted price (market value): By investing ₹1100 in a 5.5% stock, an investor earns ₹77 per year. At what price (per ₹100 nominal) was the stock quoted?

Introduction / Context:Dividend is paid on nominal value, but you pay the quoted market price. Given actual income and total money invested, we can back-calculate the market price per ₹100 nominal. This is a classic inversion of the yield formula.

Given Data / Assumptions:

• Total investment (cash outlay) = ₹1100.
• Coupon rate = 5.5% ⇒ dividend ₹5.50 per ₹100 nominal.
• Actual annual income = ₹77.

Concept / Approach:If the market price is P per ₹100 nominal, then the number of ₹100-nominal units purchased is 1100 / P. Income = (1100 / P) * 5.5. Solve for P so that income equals ₹77.

Step-by-Step Solution:Income equation: (1100 / P) * 5.5 = 77.Rearrange: 1100 * 5.5 = 77 * P.Compute 1100 * 5.5 = 6050.Thus P = 6050 / 77 = 78 + 44/77 = 78 4/7.

Verification / Alternative check:At P = ₹78 4/7, number of shares = 1100 / (78 4/7) = 1100 / (550/7) = 14. Income = 14 * 5.5 = ₹77, confirming the result exactly.

Why Other Options Are Wrong:

• Rs. 93 and Rs. 107 do not satisfy the income equation.
• Rs. 97 3/4 corresponds to a much lower yield than observed.

Common Pitfalls:

• Treating ₹1100 as nominal instead of market investment, or mixing up yield with coupon rate.

Final Answer:Rs. 78 4/7