1on 16,87. A person applies for 200 equity shares of Rs.10 each to be issued at a premium of Rs.6 per share, Rs.8 being payable along with the application and the balance at the time of the allotment. The company may issue 100 shares or 50 shares to those who apply for 200 shares, the probability of issuing 100 shares being 0.6 and that of issuing 50 shares 0.4. In either case, the probability of an applicant being selected for the allotment of any shares is 0.2. The allotment usually takes three months and the market price per share is expected to be Rs.25 at the time of allotment. Find the expected rate of return of the investor.
1on 16,87. A person applies for 200 equity shares of Rs.10 each to be issued at a premium of Rs.6 per share, Rs.8 being payable along with the application and the balance at the time of the allotment. The company may issue 100 shares or 50 shares to those who apply for 200 shares, the probability of issuing 100 shares being 0.6 and that of issuing 50 shares 0.4. In either case, the probability of an applicant being selected for the allotment of any shares is 0.2. The allotment usually takes three months and the market price per share is expected to be Rs.25 at the time of allotment. Find the expected rate of return of the investor.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Transcribed Image Text:Illustration 16.87. A person applies for 200 equity shares of Rs.10
each to be issued at a premium of Rs.6 per share, Rs.8 being payable
along with the application and the balance at the time of the allotment.
The company may issue 100 shares or 50 shares to those who apply for
200 shares, the probability of issuing 100 shares being 0.6 and that of
issuing 50 shares 0.4. In either case, the probability of an applicant
being selected for the allotment of any shares is 0.2. The allotment
usually takes three months and the market price per share is expected
to be Rs.25 at the time of allotment.
Find the expected rate of return of the investor.
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