Each of the 20 students contributed Rs. 10,000, so the total fund is:
\[ 20 \times 10,000 = Rs. 200,000 \]
Half of this fund is invested in riskless government securities and the other half in equities:
\[ \text{Investment in government securities} = \frac{200,000}{2} = Rs. 100,000 \]
\[ \text{Investment in equities} = \frac{200,000}{2} = Rs. 100,000 \]
The return on equities is zero, but the return on government securities is 7.8%:
\[ \text{Return on government securities} = 100,000 \times 0.078 = Rs. 7,800 \]
This gain is divided equally among the 20 students:
\[ \text{Gain per student} = \frac{7,800}{20} = Rs. 390 \]
The gain per student as a percentage of their initial contribution:
\[ \frac{390}{10,000} \times 100 = 3.9\% \]
Thus, the gain per student is 3.9%, which does not match any of the given options. Therefore,
Answer: D (None of the options is correct)