Q. Which is better investment, 4% stock at par with an income tax at the rate of 5 paise per rupee or 4 stock at 110 free from income tax?

1. 4% at par with income tax
2. 4 % at 110 free from income tax
3. both are equally good
4. an invested Rs. 388 in a stock at 97 to obtain an income of Rs. 22