CAT 2005 | Question: 76

Question

Answer the following question based on the information given below:

Venkat, a stockbroker, invested a part of his money in the stock market of four companies – A, B, C and D. Each of these companies belonged to different industries, viz., Cement, Information Technolog (IT), Auto, and Steel in no particular order. At the time of investment, the price of each stock was Rs. $100.$ Venkat purchased only 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 arc defined as change in the value of the stock after one year, expressed as a percentage of 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 belonged to the either the Steel or the Auto industry. As a result, the returns on the stock of thse 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 results. For the company belonging to the Steel or Auto industry, the returns on announcement of extraordinarily good results were only one and half times of that of the initially expected returns. For remaining two companies, which did not announce extraordinarily good results, the returns realized during the year were the same as initially expected.

If Venkat earned a $35\%$ return on average during the year, then which of these statements would necessarily be true?

1. Company A belonged to either Auto or to Steel industry
2. Company B did not announce extraordinarily good results.
3. Company A announced extraordinarily good results.
4. Company D did not announce extraordinarily good results.
   • A. I and II only
   • B. II and III only
   • C. I and IV only
   • D. II and IV only