Business Mathematics and Statistics(EMS) : Financial Mathematics

**Endowment
or Scholarship fund**

If the scholarship is awarded
endlessly, then P =a/*i*

If the scholarship is awarded for
a fixed period, say, n years, then

**Face
Value: **The original Value of the share is called its nominal values or face
value or printed value.

**Market
Value: **The price at which the share is sold (or) purchased in the capital
market through stock exchanges is called the market value.

A Share is called at par if the
market value of the share is equal to its face (or) nominal value.

A share is said to be above par
(or) at premium, if the market value of the share is more than its nominal
value.

A share is said to be below par
(or) at discount, if the market value of the share is less than its nominal
value.

The part of the annual profit,
which a share holder gets for his investment from the company is called
dividend.

Dividend is always declared on
the face value of the share and the rate of dividend is expressed as a
percentage of the nominal value of a share per annum.

Annual income of a shareholders =
n×r×F.V / 100

Where *n* = number of shares with the shareholders

*r* = rate
of dividend,

Annual Return = *Annual income / investment
in shares ×100%*

Number of Shares held = *investment
/ M.V (or) F.V. of one share (as the
type of investment)*

(or)

= *Annual income / income from one
share *

(or) = *Total F.V / F.V. of one
share*

Which is better investment for
two stocks

Let the investment each case be =
(M.V of First stock × M.V. of Second Stock)

**Case (i) **

Income form r_{1} % = [ r_{1}
/ (*investment in each stock*) ] × Total investment

**Case (ii)
**

Income form r2 % = [ r_{2}
/ (*investment in each stock*) ] ×Total investment

Tags : Financial Mathematics , 11th Business Mathematics and Statistics(EMS) : Chapter 7 : Financial Mathematics

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11th Business Mathematics and Statistics(EMS) : Chapter 7 : Financial Mathematics : Summary of Financial Mathematics | Financial Mathematics

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