Which investment gives a better return, assuming the face value of shares to be Rs. 10?
A. 5% stock at 75, subject to 30% income tax
B. 4% stock at 90, tax free

A says that, for an investment of Rs. 75, the return will be 5% on Rs. 10, with a 30% tax. 

So, Total return= $$\ \frac{\ 5}{100\ }\cdot10$$.

After tax deduction, Final Return= $$\ \frac{\ 5}{100\ }\cdot10\cdot\ \frac{\ 70}{100}$$ = 0.35

Percentage return= $$\ \frac{\ 0.35}{75}\cdot100$$= $$\ \frac{\ 35}{75}$$= 0.467%

B says that, for an investment of Rs. 90, the return will be 4% on Rs. 10, tax free.

So, Total return= $$\ \frac{\ 4}{100}\cdot10$$ =0.4

Percentage return for B= $$\ \frac{\ 0.4}{90}\cdot100$$= $$\ \frac{\ 40}{90}$$= 0.444%

Since, Percentage return in case A is greater than that in case B. Therefore, Option B is correct.