Instructions

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.

Question 48

# 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.

Solution

Hence he cannot earn less than 33.75% average as we consider B(lowest) to give extraordinary results .

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