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Friends, Updating here the recollected questions from Feb 2017 Exams. Wish you all the very best for your exam.
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Questions on GDP / GNP
Go through the following data and answer the questions (all in Indian Rupees in Crores)
1. Consumptions - Rs. 30000
2. Gross investment - Rs. 40000
3. Govt spending - Rs. 20000
4. Export - Rs. 70000
5. Import - Rs. 60000
6. Taxes - Rs. 5000
7. Subsidies(on production and import) - RS. 1000
8. Compensation of employee - Rs. 500
9. Property Income - Rs. 500
7,8,9 - Net receivable from aboard
10.Total capital gains from overseas investment - Rs. 1500
11.Income earned by foreign national domestically - Rs. 500
Calculate GNP
GDP = Consumption + Gross investment + Government spending + (Exports - Imports)
GDP = C+I+G+(X-M)
= 30000+40000+20000+(70000-60000)
= 100000
GNP=GDP+NR(total capital gains from Overseas investment-income earned by foreign national domestically)
= 100000 + (1500-500)
= 101000
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Questions on Business Mathematics
Find the present value of quarterly payment of Rs. 250 for 5 years @ 12% compounded quarterly.
Here,
P = Rs. 250
T = 5 years = 5 × 4 = 20 quarters
R = 12% = 12% ÷ 4 = 0.03% quarterly
PV = P / R * [(1+R)^T - 1]/(1+R)^T
PV = 250 × (1.0320 – 1) ÷ (0.03 × 1.0320)
= 3719
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Mr x is to receive Rs. 10000, as interest on bonds by end of each year for 5 years @ 5% roi. Calculate the present value of the amount he is to receive.
Here,
P = 10000
R = 5% p.a.
T = 5 Y
PV = P / R * [(1+R)^T - 1]/(1+R)^T
PV to be received, if the amount invested at end of each year:
So,
FV = (100000÷0.05) * {(1+0.05)^5 – 1} ÷ (1+0.05)^5
= 43295
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X opened a recurring account with a bank to deposit Rs. 16000 by the end of each year @ 10% roi. How much he would get at the end of 3rd year?
Here,
P = 16000
R = 10% p.a.
T = 3 yrs
FV = P / R * [(1+R)^T - 1]
FV = 16000 * (1.13 – 1) ÷ 0.1
= 52960
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Questions on Money Supply
Given,
Currency with public - Rs. 120000 Crores
Demand deposit with banking system - Rs. 200000 Crores
Time deposits with banking system - Rs. 250000 Crores
Other deposit with RBI - Rs. 300000 Crores
Savings deposit of post office savings banks - Rs. 100000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M2.
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 120000+200000+300000
M1 = 620000
M2 = M1+Savings deposit of post office savings banks
So,
M2 = 620000+100000
M2 = 720000 Crores
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Given,
Currency with public - Rs. 120000 Crores
Demand deposit with banking system - Rs. 200000 Crores
Time deposits with banking system - Rs. 250000 Crores
Other deposit with RBI - Rs. 300000 Crores
Savings deposit of post office savings banks - Rs. 100000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate broad money M3.
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 120000+200000+300000
M1 = 620000
M3 = M1+Time deposit with banking system
So,
M3 = 620000+250000
M3 = 870000 Crores
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Given,
Currency with public - Rs. 90000 Crores
Demand deposit with banking system - Rs. 180000 Crores
Time deposits with banking system - Rs. 220000 Crores
Other deposit with RBI - Rs. 260000 Crores
Savings deposit of post office savings banks - Rs. 60000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M4.
M4 = M3+All deposit with post office savings bank excluding NSCs
M3 = M1+Time deposit with banking system
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 90000+180000+260000
M1 = 530000
So,
M3 = M1+Time deposit with banking system
M3 = 530000+220000
M3 = 750000 Crores
So,
M4 = M3+All deposit with post office savings bank excluding NSCs
M4 = 750000+50000
M4 = 800000 Crores
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Questions on Bond/YTM
A bond has been issued with a face value of Rs. 1000 at 10% Coupon for 3 years. The required rate of return is 8%. What is the value of the bond if the Coupon amount is payable on half-yearly basis?
Here,
FV = 1000
CR = 10% half-yearly = 5% p.a.
Coupon = FV × CR = 50
R = 8% yearly = 4% p.a.
t = 3 years
Bond Price = (1/(1+R)^t)((coupon*((1+R)^t-1)/R)+Face Value)
= 1052
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A console bond of Rs. 10000 is issued at 6%. Coupon current interst rates and 9%. Find out the current value of the console bond.
Solution :
= 10000*0.06/0.09
= 6000/0.09
= 6670
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Suppose you purchased a bond Rs.1000 for Rs.920. The interest is 10 percent, and it will mature in 10 years. Calculate Yield to maturity
C=Coupon payment
F=Face value
P=Price
n=Years to maturity
Yield To Maturity=C+(F-P/n)/(F+P/2)
=100+(1000-920/10)/(1000+920/2)
=100+(80/10)/(1920/2)
=100+8/960
=108/960
=0.1125
=11.25%
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A bond has been issued with a face value of Rs. 20000 at 12% Coupon for 3 years. The required rate of return is 10%. What is the value of the bond?
Here,
FV = 20000
Coupon Rate (CR) = 0.12
t = 3 yr
R (YTM) = 0.10
Coupon = FV × CR = 2400
Bond Price = (1/(1+R)^t)((coupon*((1+R)^t-1)/R)+Face Value)
So, Value of bond = 20995
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Case Studies on HR
The top management of ABC. Bank was in a triumphant mood after engaging XYZ Ltd, one of the top IT Companies as a consultant for a massive technology upgradation in the Bank. Their enthusiasm was short lived, as the project did not progress well and the consultants were not able to deliver the desired results even after several months. In fact the Consultants were of the view that it may never be possible to implement the project with 100% success as they seemed to be facing resistance from the employees at multi-levels. The employees at all levels seemed reluctant to cooperate. Their fear of Role erosion seemed palpable.
What does “Role erosion” mean in this context?
a. The fear of the employee that he will be sent out
b. Fear that the responsibility and the power will reduce
c. Fear that he will no more be an indispensable
d. a & b
Ans - d
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The critical issue in this case is:
a. Attitudes of individuals
b. Training of people
c. Group behavior due to a sense of the unknown
d. All the above
Ans - c
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How could this situation have beenmanaged better?
a. By issuing project details and time frame mentioning punishments in case of delay
b. By roping in the HR professionals to act as coordinator
c. By recognizing that any change brings its own reactions and co-opting the managers even before Consultants moved in
d. b & c
Ans - d
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The Bank should deal with the employee resistance by:
a. Co-opting the employees
b. Communicating strategically about the potential benefits
c. Conducting simultaneous training to familiarize the staff with the new software
d. All of the above
Ans - d
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