Stocks and Shares MCQ & Objective Questions
Understanding "Stocks and Shares" is crucial for students preparing for exams, as it forms a significant part of the financial literacy curriculum. Practicing MCQs and objective questions on this topic not only enhances your knowledge but also boosts your confidence in tackling exam questions. Engaging with practice questions helps you identify important concepts and improves your chances of scoring better in your exams.
What You Will Practise Here
Definition and types of stocks and shares
Key concepts of equity and debt instruments
Understanding stock market indices and their significance
Basic formulas related to stock valuation and dividends
Analysis of stock market trends and patterns
Important regulations governing stock trading in India
Real-life applications of stocks and shares in financial planning
Exam Relevance
The topic of "Stocks and Shares" is frequently featured in various examinations, including CBSE, State Boards, NEET, and JEE. Students can expect questions that assess their understanding of basic definitions, calculations related to stock prices, and the implications of market trends. Common question patterns include multiple-choice questions that require students to apply theoretical knowledge to practical scenarios, making it essential to grasp the core concepts thoroughly.
Common Mistakes Students Make
Confusing stocks with bonds and other financial instruments
Misunderstanding the implications of stock market indices
Errors in calculating dividends and returns on investment
Overlooking the importance of market regulations and their impact
Failing to relate theoretical concepts to real-world applications
FAQs
Question: What are the different types of stocks?Answer: The main types of stocks include common stocks, preferred stocks, and growth stocks, each with unique characteristics and benefits.
Question: How can I calculate the dividend yield?Answer: The dividend yield can be calculated by dividing the annual dividend payment by the stock's current market price.
Start your journey towards mastering "Stocks and Shares" by solving practice MCQs today! Testing your understanding with objective questions will not only prepare you for exams but also give you a solid foundation in financial literacy.
Q. A company has a profit margin of 15%. If the total sales are $200,000, what is the profit?
A.
$25,000
B.
$30,000
C.
$20,000
D.
$15,000
Show solution
Solution
Profit = Profit Margin * Total Sales = 0.15 * 200000 = $30000.
Correct Answer:
B
— $30,000
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Q. A person invests $2000 in a stock that gives a simple interest of 6% per annum. What will be the total amount after 3 years?
A.
$2400
B.
$2200
C.
$2600
D.
$2300
Show solution
Solution
Total Amount = Principal + (Simple Interest) = 2000 + (2000 * 6/100 * 3) = 2000 + 360 = $2400.
Correct Answer:
A
— $2400
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Q. A person invests $5000 in a stock that gives a simple interest of 6% per annum. What will be the interest earned in 3 years?
A.
$900
B.
$800
C.
$600
D.
$700
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Solution
Simple Interest = Principal * Rate * Time / 100 = 5000 * 6 * 3 / 100 = $900
Correct Answer:
A
— $900
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Q. A stock is bought for $500 and sold for $450. What is the loss percentage?
A.
10%
B.
15%
C.
20%
D.
25%
Show solution
Solution
Loss = Cost Price - Selling Price = 500 - 450 = 50. Loss Percentage = (Loss / Cost Price) * 100 = (50 / 500) * 100 = 10%
Correct Answer:
C
— 20%
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Q. A stock is bought for $80 and sold for $100. What is the profit percentage?
A.
20%
B.
25%
C.
30%
D.
15%
Show solution
Solution
Profit Percentage = [(Selling Price - Cost Price) / Cost Price] * 100 = [(100 - 80) / 80] * 100 = 25%.
Correct Answer:
B
— 25%
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Q. A stock is sold at a loss of 10%. If the cost price is $300, what is the selling price?
A.
$270
B.
$300
C.
$330
D.
$150
Show solution
Solution
Selling Price = Cost Price - (Loss% of Cost Price) = 300 - (10/100 * 300) = 300 - 30 = $270
Correct Answer:
A
— $270
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Q. A stock is sold at a loss of 10%. If the cost price is $500, what is the selling price?
A.
$450
B.
$500
C.
$550
D.
$600
Show solution
Solution
Selling Price = Cost Price - (Loss% of Cost Price) = 500 - (10/100 * 500) = 500 - 50 = $450
Correct Answer:
A
— $450
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Q. A stock is sold at a loss of 10%. If the selling price is $90, what was the cost price?
A.
$100
B.
$110
C.
$80
D.
$90
Show solution
Solution
Let Cost Price = x. Selling Price = x - 10% of x = 0.9x. Therefore, 0.9x = 90, x = 90 / 0.9 = $100
Correct Answer:
A
— $100
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Q. A stock worth $150 is sold at a loss of 10%. What is the selling price?
A.
$135
B.
$140
C.
$145
D.
$150
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Solution
Selling Price = Cost Price - (Loss% of Cost Price) = 150 - (10/100 * 150) = 150 - 15 = $135
Correct Answer:
A
— $135
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Q. A stock's price decreased from $120 to $90. What is the percentage decrease?
A.
25%
B.
30%
C.
20%
D.
15%
Show solution
Solution
Percentage Decrease = ((Old Price - New Price) / Old Price) * 100 = ((120 - 90) / 120) * 100 = 25%
Correct Answer:
B
— 30%
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Q. A stock's price decreased from $200 to $150. What is the percentage decrease?
A.
20%
B.
25%
C.
30%
D.
15%
Show solution
Solution
Percentage Decrease = [(Old Price - New Price) / Old Price] * 100 = [(200 - 150) / 200] * 100 = 25%.
Correct Answer:
B
— 25%
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Q. A stock's price decreased from $80 to $64. What is the percentage decrease?
A.
15%
B.
20%
C.
25%
D.
30%
Show solution
Solution
Percentage Decrease = [(Old Price - New Price) / Old Price] * 100 = [(80 - 64) / 80] * 100 = 20%.
Correct Answer:
C
— 25%
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Q. A stock's price increased from $150 to $180. What is the percentage increase?
A.
15%
B.
20%
C.
25%
D.
30%
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Solution
Percentage Increase = ((New Price - Old Price) / Old Price) * 100 = ((180 - 150) / 150) * 100 = 20%
Correct Answer:
C
— 25%
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Q. A stock's price increased from $50 to $75. What is the percentage increase?
A.
40%
B.
50%
C.
60%
D.
70%
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Solution
Percentage Increase = [(New Price - Old Price) / Old Price] * 100 = [(75 - 50) / 50] * 100 = 50%
Correct Answer:
B
— 50%
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Q. A stock's price is $120 and it increases by 15%. What will be the new price?
A.
$138
B.
$140
C.
$135
D.
$145
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Solution
New Price = Old Price + (15% of Old Price) = 120 + (0.15 * 120) = 120 + 18 = $138.
Correct Answer:
A
— $138
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Q. A stock's price is $150. If it increases by 10%, what will be the new price?
A.
$160
B.
$165
C.
$170
D.
$175
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Solution
New Price = Old Price + (10% of Old Price) = 150 + (0.10 * 150) = 150 + 15 = $165
Correct Answer:
B
— $165
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Q. A trader bought 100 shares at $20 each and sold them at $25 each. What is the average profit per share?
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Solution
Profit per share = Selling Price - Cost Price = 25 - 20 = $5. Average profit per share = $5.
Correct Answer:
B
— $5
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Q. A trader bought 100 shares at $50 each and sold them at $60 each. What is the total profit?
A.
$1000
B.
$500
C.
$600
D.
$700
Show solution
Solution
Total Profit = (Selling Price - Cost Price) * Number of Shares = (60 - 50) * 100 = $1000
Correct Answer:
A
— $1000
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Q. A trader bought a stock for $500 and sold it for $600. What is the profit percentage?
A.
20%
B.
25%
C.
30%
D.
40%
Show solution
Solution
Profit = Selling Price - Cost Price = 600 - 500 = 100. Profit Percentage = (100 / 500) * 100 = 20%
Correct Answer:
D
— 40%
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Q. An investor bought 200 shares at $50 each and sold them at $60 each. What is the total profit?
A.
$2000
B.
$1000
C.
$1500
D.
$2500
Show solution
Solution
Total Cost Price = 200 * 50 = $10000. Total Selling Price = 200 * 60 = $12000. Profit = Selling Price - Cost Price = 12000 - 10000 = $2000.
Correct Answer:
B
— $1000
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Q. An investor bought shares for $600 and sold them for $720. What is the average profit per share if 12 shares were bought?
A.
$10
B.
$15
C.
$20
D.
$25
Show solution
Solution
Total Profit = Selling Price - Cost Price = 720 - 600 = $120. Average Profit per Share = Total Profit / Number of Shares = 120 / 12 = $10
Correct Answer:
B
— $15
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Q. An investor earns $300 from a stock investment of $3000. What is the return on investment (ROI) percentage?
A.
5%
B.
10%
C.
15%
D.
20%
Show solution
Solution
ROI = (Profit / Investment) * 100 = (300 / 3000) * 100 = 10%.
Correct Answer:
B
— 10%
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Q. An investor invests $1000 in a stock with a compound interest rate of 5% per annum. What will be the amount after 2 years?
A.
$1100.25
B.
$1102.50
C.
$1105.00
D.
$1107.50
Show solution
Solution
Amount = Principal * (1 + Rate)^Time = 1000 * (1 + 0.05)^2 = 1000 * 1.1025 = $1102.50
Correct Answer:
B
— $1102.50
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Q. If a person invests $1000 in shares at a compound interest rate of 5% per annum, what will be the amount after 2 years?
A.
$1102.50
B.
$1050.00
C.
$1200.00
D.
$1150.00
Show solution
Solution
Amount = Principal * (1 + Rate/100)^Time = 1000 * (1 + 5/100)^2 = 1000 * 1.1025 = $1102.50
Correct Answer:
A
— $1102.50
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Q. If a stock is bought at $80 and sold at $100, what is the profit in dollars?
A.
$15
B.
$20
C.
$25
D.
$30
Show solution
Solution
Profit = Selling Price - Cost Price = 100 - 80 = $20
Correct Answer:
B
— $20
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Q. If a stock is bought for $200 and sold for $250, what is the percentage profit?
A.
20%
B.
25%
C.
30%
D.
40%
Show solution
Solution
Percentage Profit = [(Selling Price - Cost Price) / Cost Price] * 100 = [(250 - 200) / 200] * 100 = 25%
Correct Answer:
B
— 25%
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Q. If a stock's price decreases from $120 to $90, what is the percentage loss?
A.
25%
B.
30%
C.
20%
D.
15%
Show solution
Solution
Percentage Loss = [(Old Price - New Price) / Old Price] * 100 = [(120 - 90) / 120] * 100 = 25%.
Correct Answer:
B
— 30%
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Q. If a stock's price drops from $120 to $90, what is the percentage loss?
A.
25%
B.
30%
C.
20%
D.
15%
Show solution
Solution
Percentage Loss = [(Old Price - New Price) / Old Price] * 100 = [(120 - 90) / 120] * 100 = 25%.
Correct Answer:
B
— 30%
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Q. If a stock's price is $120 and it pays a dividend of $6, what is the dividend yield?
Show solution
Solution
Dividend Yield = (Dividend / Price) * 100 = (6 / 120) * 100 = 5%.
Correct Answer:
B
— 5%
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Q. If a stock's price is $200 and it increases by 15% in one year, what will be its price after one year?
A.
$220
B.
$230
C.
$240
D.
$250
Show solution
Solution
New Price = Old Price + (Percentage Increase of Old Price) = 200 + (15/100 * 200) = 200 + 30 = $230
Correct Answer:
A
— $220
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