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Which id the better stock 5% at 143 or (...

Which id the better stock `5%` at 143 or `(3)1/2%` at 93.

A

`5%` at 143

B

`(3)1/2%` at 93

C

both are equally good

D

none of these

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The correct Answer is:
To determine which stock is better, we will compare the yields of both stocks. The yield is calculated by taking the annual income from the stock and dividing it by the price of the stock. ### Step-by-Step Solution: 1. **Identify the Stocks and Their Values:** - Stock A: 5% at 143 - Stock B: \(3\frac{1}{2}\%\) (which is 3.5%) at 93 2. **Calculate the Income from Stock A:** - The income from Stock A can be calculated as: \[ \text{Income from Stock A} = \frac{5}{100} \times 143 = \frac{5 \times 143}{100} = \frac{715}{100} = 7.15 \] 3. **Calculate the Income from Stock B:** - The income from Stock B can be calculated as: \[ \text{Income from Stock B} = \frac{3.5}{100} \times 93 = \frac{3.5 \times 93}{100} = \frac{325.5}{100} = 3.255 \] 4. **Calculate the Yield for Each Stock:** - Yield for Stock A: \[ \text{Yield A} = \frac{\text{Income from Stock A}}{\text{Price of Stock A}} = \frac{7.15}{143} \] - Yield for Stock B: \[ \text{Yield B} = \frac{\text{Income from Stock B}}{\text{Price of Stock B}} = \frac{3.255}{93} \] 5. **Convert the Yields to Percentage:** - Yield A: \[ \text{Yield A} = \left(\frac{7.15}{143}\right) \times 100 \approx 5.00\% \] - Yield B: \[ \text{Yield B} = \left(\frac{3.255}{93}\right) \times 100 \approx 3.50\% \] 6. **Compare the Yields:** - Yield A (5%) is greater than Yield B (3.5%). ### Conclusion: Stock A (5% at 143) is the better stock compared to Stock B (3.5% at 93).
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