Question

The values of Stock A and Stock B on a particular day are Rs. 50 and Rs. 80, respectively. An investor invests Rs. 100 in Stock A and Rs. 80 in Stock B. He sells all the stocks the next day when the value of Stock A is Rs. 55 and Stock B is Rs. 70. The profit made by the investor is Rs. __________

• A. 0
• B. 5
• C. 10
• D. 20

Hint:

Find shares bought as investment divided by price, then compare total sale value to total investment for both stocks combined.

Answer 1

The Correct Option is A

Step 1: Setting Up Total Cost and Total Sale Value:
Rather than finding the profit or loss of each stock separately, we can directly compute the total amount invested and the total amount received when everything is sold, and then subtract one from the other at the end.

Step 2: Computing Total Investment:
The total amount the investor puts in on day one is the sum of the amount in Stock A and the amount in Stock B, which is $100 + 80 = 180$ rupees.

Step 3: Detailed Explanation:
The number of shares of Stock A bought is $\frac{100}{50} = 2$ shares, and the number of shares of Stock B bought is $\frac{80}{80} = 1$ share.

On the next day, the sale value of the 2 shares of Stock A at the new price of Rs. 55 is $2 \times 55 = 110$ rupees, and the sale value of the 1 share of Stock B at the new price of Rs. 70 is $1 \times 70 = 70$ rupees.

Adding these two sale amounts together gives the total amount received from selling everything, which is $110 + 70 = 180$ rupees.

The overall profit is then the total sale value minus the total original investment, which is $180 - 180 = 0$ rupees, showing that the gain from Stock A was fully cancelled by the loss from Stock B, exactly as found through the stock by stock method.

Final Answer:
Since the combined total received on selling equals the combined total invested, the net profit made by the investor is zero.
$\boxed{0}$