How much does the investor pay for taking possession of the security of face value Rs. 10,000?
In the illustration of Question 14 above, where the auction was yield based, the cut off rate that emerged in the auction was 9.40 per cent; while the weighted average cut off rate was 9.36 per cent. At the weighted average rate of 9.36 per cent the price of the security works out to Rs.100.27. Therefore, under the Scheme, the investor will get the security at Rs.100.27. Hence, price payable for every Rs.100 (face value) is Rs. 100.27.
