Venkat, the stockbroker
(CAT
2005)
Venkat, a stockbroker, invested a
part of his money in the stock of four companies — A, B, C and D. Each of these
companies belonged to different industries, viz., Cement, Information
Technology (IT), Auto, and Steel, in no particular order. At the time of
investment, the price of each stock was Rs. 100. Venkat purchased only one
stock of each of these companies. He was expecting returns of 20%, 10%, 30% and
40% from the stock of companies A, B, C and D, respectively. Returns are
defined as the change in the value of the stock after one year, expressed as a
percentage of the initial value. During the year, two of these companies
announced extraordinarily good results. One of these two companies belonged to
the Cement or the IT industry, while the other one belonged to either the Steel
or the Auto industry. As a result, the returns on the stocks of these two
companies were higher than the initially expected returns. For the company
belonging to the Cement or the IT industry with extraordinarily good results,
the returns were twice that of the initially expected returns. For the company
belonging to the Steel or the Auto industry, the returns on announcement of
extraordinarily good results were only one and a half times that of the
initially expected returns. For the remaining two companies which did not
announce extraordinarily good results, the returns realized during the year
were the same as initially expected.
1. What is the minimum average
return Venkat would have earned during the year?
a. 30%
b. 31.25 %
c. 32.5%
d. Cannot be determined
2. If Venkat earned a 35% return
on average during the year, then which of these statements would necessarily be
true?
I. Company A belonged either to
Auto or to Steel Industry.
II. Company B did not announce
extraordinarily good results.
III. Company A announced
extraordinarily good results.
IV. Company D did not announce
extraordinarily good results.
a. I and II only
b. II and III only
c. III and IV only
d. II and IV only
3. If Venkat earned a 38.75%
return on average during the year, then which of these statement(s) would
necessarily be true?
I. Company C belonged either to
Auto or to Steel Industry.
II. Company D belonged either to
Auto or to Steel Industry.
III. Company A announced
extraordinarily good results.
IV. Company B did not announce
extraordinarily good results.
a. I and II only
b. II and III only
c. I and IV only
d. II and IV only
4. If Company C belonged to the
Cement or the IT industry and did announce extraordinarily good results, then
which of these statement(s) would necessarily be true?
I. Venkat earned not more than
36.25% return on average.
II. Venkat earned not less than
33.75% return on average.
III. If Venkat earned 33.75%
return on average, Company A announced extraordinarily good results.
IV. If Venkat earned 33.75%
return on average, Company B belonged either to Auto or to Steel Industry.
a. I and II only
b. II and IV only
c. II and III only
d. III and IV only
For answers click here.
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