CMA Intermediate · Financial Management and Business Data Analytics · Capital Market
Mehta Securities charges a brokerage of 0.40% on each side of a trade. Rohan buys 500 shares at Rs 800 and sells them later at Rs 850. Ignoring all taxes and other charges, what is his net profit after brokerage on both transactions?
Net profit is Rs 21,700.
- ARs 24,500
- BRs 23,300Correct
- CRs 25,000
- DRs 23,700
Explanation
Buy value = 500 x 800 = Rs 4,00,000; brokerage = Rs 1,600. Sell value = 500 x 850 = Rs 4,25,000; brokerage = Rs 1,700. Gross gain = Rs 25,000; net = 25,000 - 1,600 - 1,700 = Rs 21,700. Check: this matches none of the earlier figures, so recompute: 25,000 - 3,300 = 21,700. Correct option must therefore be Rs 21,700, which is not listed.
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