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Why is this?

(i) We always know the chance that any population element will be included in the sample,

(ii) Every sample always has an equal chance of being selected,

(iii) All the samples are exactly the same size and can be counted

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

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

Ans - a

2. An investment at 12% interest rate compounded monthly is equal to an annual rate of ......

A. 12.68% B. 12.36% C. 12% D. None of the above

Ans - a

3. What is a scatter diagram ?

a. diagram which scatters all elements of the variable.

b. A graphic representation of the relationship of the variables

c. Helps plot observed values

d. b & c

Ans - d

4. What variation does moving average method eliminate?

a. Seasonal b. Cyclical c. Irregular d. Secular trend

Ans - a

5. What are sampling groups which are very similar within but dissimilar without are called?

a. Cluster

Ans - b

6. Which is an example of sinking fund?

a. Perpetuity b. Annuity

c. Gratuity d. None of the above

Ans - b

7. What is the rule of 72 ?

a. 12 times table

b. rule for calculating future cash flows

c. rule for compounding present cash flows

d. rule for knowing how quickly money doubles

Ans - d

8. Which method helps us draw a line between the set of scattered points?

a. Regression method b.Correlation method

c. Least square method d. Least fit method

Ans - c

9. A loan of Rs. 1 lac is paid back in 5 equal annual installments. The ROI charged is 20% annually. Find the amount of each loan?

a. 34338 b. 33348 c. 33438

Ans - c

FV = Rs. 100000 T = 5 years

R = 20% p.a. = 0.2%

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

= 100000 × 0.2 × 1.25 ÷ (1.25– 1)

10. In systematic sampling, each ...... has an equal chance of being selected.

a. sample b. element

c. both of these d. none of these

Ans - b

11. What is repayment of entire loan principal at the end of the loan period called ?

a. Balloon payment b. Compounded payment

c. Annuity d. Term payment

Ans - a

12. 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

13. If a standard error of a statistic is less than that of another then the former is said to be ......

a. efficient b. unbiased c. consistent d. sufficient

Ans - a

14. If the maturity of a bond is long into the future the interest rate is higher.

Why?

a. longer term maturity is more sensitive to price fluctuation than shorter term

b. the attractiveness of longer term is related to interestonly

c. longer term bonds are generally issued by institutions of lesser rating

d. longer term maturity is less sensitive to fluctuation than shorter term

Ans - a

15. If prices double, what happens to real value of rupee?

a. remains same b. doubles

c. halves d. changes in unlike proportions

Ans - c

16. A fund which is created by companies to make payment of balloon repayment loans by regular annual contributions to have adequate funds at the end of the period, when repayment fails due is called...

a. Reserve fund b. Balloon fund

c. Sinking fund d. Repayment fund

Ans - c

17. Which of the following is not a method of selecting samples from a population?

a. Judgement sampling b. Random sampling

c. Probability sampling d. Cluster Sampling

Ans - c

18. Present value is Rs.20000. Interest rate is 12 % per annum. Interest is compounded on quarterly basis. What will be the cash flow at the end of first year?

a. 25210 b. 22150 c. 22510 d. 21520

Ans - c

So, C4 = PV(1+i/100)^4

= 10000(1.03)^4

= 10000*1.125509

19. If payments are made/received at the beginning of the period, this Annuity is called as ...

a. Perpetual Annuity b. Annuity Ordinary

c. Annuity Due d. Advance Annuity

Ans - c

20. In case of compound Interest, if compounding is done half yearly, then t is multiplied by ...

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

Ans - a

21. If you want to get Rs. 50000 after 1 year, how much you should invest at the interest rate of 10% ?

a. 45545 b. 45454 c. 44554 d. 44454

Ans – b

= PV (1+10/100)^1 50000

= PV (1+0.1) 50000

= PV (1.1)

PV = 50000/1.1

22. A bond that has no maturity and pays a fixed coupon (or rate of interest) is called ...

a. Long term bond b. Perpetual bonds

c. Console bonds d. Non-repayable bonds

Ans – c

23. If you wish an annuity to grow to Rs. 17000 over 5 years so that you can replace your car, what monthly deposit would be required if you could invest @ 12% compounded monthly?

a. 208 b. 280 c. 204 d. 240

Ans - a

R = 12% yearly = 0.01% monthly

P =?

FV = P / R * [(1+R)^T - 1] 17000

= P × (1.01^60 – 1) ÷ 0.01 17000

= P × 81.6697

So, P = 17000 / 81.6697

=

24. Bonds may be ......

(i) Secured by Fixed charges on assets,

(ii) Floating charge on assets,

(iii) Unsecured debentures can also be issued

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

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

Ans - d

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