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a. 20 years 8% bond b. 5 years 8% bond

c. 10 years 8% bond d. not enough information

Ans - a

2. A sum of Rs. 25, 000 is borrowed over 8 years. What will be the monthly repayments @ 18% compounded monthly?

a. 439 b. 493 c. 394 d. 349

Ans - b

Explanation :

Here, PV = Rs. 25000

T = 8 years = 8 × 12 = 96 months

R = 18% = 18% ÷ 12 = 0.015% monthly

PV = P / R * [(1+R)^T - 1]/(1+R)^T 25000

= P × (1.01596 – 1) ÷ (0.015 × 1.01596) 25000

= P × 50.7017 P = 25000 / 50.7017

3. XYZ Ltd has just issued a 10 year 7 % coupon bond. The face value of the bond is Rs 1000 and the bond makes annual coupon payments. If the required return on the bond is 10%, what is the bond's price?

a. Rs 815.66 b. Rs 923.67 c. Rs 1000.00 d. Rs 1256.35

Ans – a

4. ABC Ltd just issued a 10 year 7% coupon bond. The face value of the bond is Rs 1000 and the bond makes semiannual coupon payments. If the required return on the bond is 10% , what is the price of bond?

a. Rs 815.66 b. Rs 1000.00 c. Rs 813.07 d. Rs 1035.27

Ans – c

5. An urn contains 10 black balls and 5 white balls. 2 balls are drawn from the urn one after other without replacement. What is the probability that both drawn are black ?

a. 2/7 b. 3/7 c. 4/7 d. 6/7

Ans – b

6. If A invests Rupees 100 at 7% interest rate for 3 years, what will be the value at the end of 3 years?

a. 125.20 b. 122.50 c. 152.50 d. 120.50

Ans – b

7. A 5-year Govt. bond with a coupon rate of 8% has a face value of 1000. What is the annual interest payment?

A. 80 B. 40 C. 100 D. None of the above

Ans – a

8. You are receiving Rs. 10000 every year for the next 5 years (at the end of the period) and you invest each payment @ 5%. How much you would have at the end of the 5-year period?

a. 55526 b. 55652 c. 55265 d. 55256

Ans - d

R = 5% p.a. T = 5 yrs

If invested at the end,

FV = P / R * [(1+R)^T - 1]

FV = 10000 × (1.05^5 – 1) ÷ 0.05

9. The central limit theorem assures us that the sampling distribution of the mean

a. Is always normal

b. Is always normal for large sample sizes

c. Approaches normality as sample size increases

d. Appears normal only when N is greater than 1,000

Ans – b

10. A quarterly repayments of a loan carry an interest rate of 8 % per annum.

What is the effective annual interest rate?

a. 8.4 % b. 8.2 % c. 8.3 % d. 8.5 %

Ans - b

= (1+8/4)^4-1)

11. Seasonal variation is...

a. Repetitive b. Predictable

c. Both a and b d. None of the above

Ans - c

12. The probability that we associate with an interval estimate is called ...

a. Estimate level b. Confidence Level

c. Probability Level d. None of the above

Ans – b

13. In Random Sampling, we pick up one, we note it down, put it back with the remaining and pick the next one. This is called...

a. Sampling with replacement b. Simple random sampling c. Sampling without replacement d. None of the above

Ans – a

14. Population of a town is 100000. The rate of change is 4% p.a. what it will be after 5 years?

a. 112665 b. 116265 c. 126615 d. 121665

Ans - d

Explanation :

Here, P = 100000 R = 4% T = 5 yrs

FV = P*(1+R)^T

FV = 10000*(1+0.04)^5

15. Calculate the present value of 6 year bond with 9 per cent coupon rate with FV Rs. 1000/-. Current interest rate is 12 per cent.

a. Rs.843.83 b. Rs.1025.57 c. Rs.876.66 d. Rs.768.68

Ans - c

= 1000 Coupon Rate (CR)

= 0.9% t = 6 year R (YTM)

= 0.12 Annual interest rate payable=1000*9%=90

Principal repayment at the end of 6 year = Rs. 1000

=90 (PVIFA, 12%,6 years)+1000(PVIF,12%, 6 Years)

=90(1.12^6-1/0.12*(1.12)^6+1000(1/1.12^6)

=90*1.97382-1/0.12*1.1.97382+1000(1/1.97382)

=90*0.97382/0.12*1.97382+1000*0.0.50663 =90*0.97382/0.23685+506.63

=90*4.11154+506.63

=370.03+506.63

16. The most widely used method of measuring seasonal variations Is ......

a. ratio to moving averages method

b. ratio to trend method

c. link relative method

d. method of simple averages

Ans - a

17. Irregular variations are caused by ......

(i) floods, (ii) strikes, (iii) wars

a. Only (i) and (ii) b. Only (i) and (iii)

c. Only (ii) and (iii) d. (i), (ii) and (iii)

Ans - d

18. An increase in the price of a commodity, other things remaining same, results in ......

a. Increase in price

b. Increases in quantity supplied

c. Increase in demand

d. Taxes

Ans - b

19. Supply remaining constant, if demand increases, price will ......

a. Rise b. Remains constant c. Fluctuate d. Fall

Ans - a

20. "Free Trade Area" denotes ......

a. Free Exports

b. A group of countries which have decided to impose no duties of any kind on imports from other members of the group

c. Free Exports & Imports

d. All the above

Ans - b

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