ABM- numerical with solutions by Neeraj agnihotri

1. Calculate broad money M3

Currency with public- Rs 100000
Demand deposit with banking sys-Rs 200000
Other deposit with RBI- Rs 200000
Savings deposit of post office savings banks-
Rs40000
Time deposits with banking sys-Rs 200000
All deposit with post office banking sys in
cluding Rs 40000 of NSC total-Rs 100000
a) Rs 500000
b) Rs 700000
c) Rs 800000
d) Rs 900000
Ans: b
Solution-M3 =m1+time deposit with banking
system
So M1=currency with public+ demand
deposit with the bankingsys+other deposits
with rbi


M1=100000+200000+200000
M1=500000
Than m3=500000+200000
Ans m3=700000
2. Qtn how much m4 will be from above qtn

a) Rs 700000
B) Rs 740000
c) Rs 760000
D) Rs 80000
Ans :c
M4=m3 + all deposit with post officesavings banks(
excluding National savings certificates)
m3 is rs 700000 from above qtn
since total deposit with po is Rs100000 out of it
Rs 40000 in NSC so Rs100000-40000= Rs 60000
M4=700000+60000
M4=760000



3. Calculate Inflation of Abc company as price
index in current year is RS 120lakh and price
index in base year is Rs 100 lakh.
a)20
b)1.2
c).2
d)200
e) non of these
ans : a ABM- 31
solutions : inflations
=( pirce index in current year-price index in base year)/
(price index in base year) * 100
= (12000000-10000000)/10000000*100
= 2000000/10000000 *100
= 02*100
= 20

4. data of country z co. is as follows all data are
in million in Indian rupees


a) consumptions : Rs 10000
b)gross investment : Rs 20000
c)govt spending : Rs 30000
d) Export : Rs 80000
e) Import : Rs 60000
f) taxes : Rs 2000
g) subsidies : RS 100
(on production and import)
h) Compensation of employee: Rs 200
i) Property Income : Rs 300
( net receivable from aboard)
j)total capital gains from from : Rs 1100
overseas investment
k) Income earned by foreign : Rs 500
national domestically



QTN i) calculate GDP
a) Rs 60000
b) Rs64000
c) Rs62000
e) Rs 61000
Ans: c
Solutions ABM-83page
GDP=C+I+G+(X-M)
=10000+20000+30000+(8000-6000)
=62000
4 .QTN ii) calculate GNP..from qtn no 4 i)
a) Rs 62000
B) Rs 60600
c)Rs 62200
d) Rs 62600
ans : d
GNP=GDP+ NR (total capital gains from
Overseas investment-income earn by foreign
national domestically)


= 62000+ (1100-500)
=62600
4. iii) Calculate GDP at cost factor
a) Rs 62000
b) Rs 62100
c) Rs 60100
d) Rs 62100
Ans : c
Solutions: GDP at factor rate
=GDP at market prices-(Indirect taxes-
subsidies)
=62000-(2000-100)
=60100
4) iv) calculate GNI.
a) Rs 62000
b) Rs 62400
c) Rs 64300
d) Rs 64400
Ans: D
Solutions : gross national income



=GDP at market prices+taxes less
subsidies on production and import( Net
receivable from abroad)+compensation of
employee(Net receivable from abroad)
property income ( Net receivable from
Abroad)
=62000+(2000-100)+200+300
=64400

5. Data of a A to Z co. is as follows all currency
million in Indian rupees.
Corporation tax : Rs 200
Income tax : Rs 300
Other taxes and duties :RS 100
Customs : RS 100
Union exercise tax : Rs 200
Service tax Rs 300
Tax of union territories : Rs 100
Interst receipt : Rs 300


Devident & profit : Rs 2000
External grant : Rs 100
Other non tax revenue : Rs 1000
Receipt of union territories : Rs 500
Trf to NCCD (National calamity : Rs 100
Contingency fund)
States Share : Rs 300
5 Qtn i) calculate Net Tax revenue of A to Z
co.
a) Rs 1300
b) Rs 900
c) Rs 1200
d) Rs 1000
Ans : b
Solutions: Net Tex Revenue
=Gross tax revenue- NCCD transferred to the National
Calamity Contingency fund- state share
Gross tax revenue = Corporation Tax+ Income tax+other
tax & duties+costoms+union excise duties+service Tax+
taxes on union territories
=200+300+100+100+200+300+100
Gross Tax Rrvenue=1300


=1300-100-300
=900
Qtn5 ii) Calculate total Revenue Receipt of A
to Z country..
a) Rs 4000
b) Rs 4800
c) Rs 4500
d) Rs 4200
Ans:b Rs 4800
Total revnue receipt
=Net Tax revenue+total non tax revenue
Calculate first NTR=GTR-NCCD-State share
Already calcluted in previous qtn i.e Rs 900

Total Non tax revenue=interst
receipt+Dividend & profit+External
grants+other Non-Tax revenue+Receipt of
union territories=300+2000+100+1000+500
=3900
Hence Net tax revenue=900+3900
=4800


06. data of abc country.
Recoveries of loan & advance Rs 1000
recoveries of short term loans and advances Rs300
from states and loans to govt servents
Misc capital receipt Rs 200
Market loans Rs 300
Short term borrowings Rs 500
External assistance (Net) Rs 200
Securities issued against small savings Rs 200
State provident fund Rs 100
Other receipts (Net) Rs 400

Total non tax revenue Rs 3000
Net tax revenue Rs 1000
Draw down cash balance Rs 2000


@total revenue receipt=net tax revenue+Total non
tax revenue
6 a) calculate capital receipt
A) Rs 1200
B) Rs 900
C) Rs 2600
D) Rs 1700
Ans: c
Capital receipt =Non debit receipt+Debt receipt
First calculate NDR=Recoveries of loan&
advances(duduct recoveries of short term
loans & advance from state and loans to govt
sarvents)+MISC Capital receipts
=1000(-300)+200
NDR=900
Than Debt receipt= market loans+Short term
borrowings+External assistance(NET)+Securities
issued 3against Small savings+other
Receipts(Net)
=300+500+200+200+100+400


=1700
Capital receipt=900+1700
=2600
6 b). calculate total receipt..
a) Rs 4600
b) Rs 4900
c) Rs 8000
d) Rs 8600
Ans is :d Rs 8600
@total revenue receipt=net tax revenue+Total non
tax revenue

Total recepipt=Total Revenue receipt+capital
receipt+drawdown of cash bal
=(3000+1000)+2600+2000
=8600
6 c) calculate financing of fiscal deficit
a) Rs 2000
b) Rs 3700


c) Rs 2400
d) Rs 4600
Ans : b
solution
Financing of fisical deficit=Debt
receipt+Dwar-down of cash bal
Debt receipt= market loans+Short term
borrowings+External assistance(NET)+Securities
issued 3against Small savings+other
Receipts(Net)
=300+500+200+200+100+400=1700
Financing of fisical defict=1700+2000
=3700


MODULE-B


7. Mr ram wants to have Rs 20000 after a
year how much he should deposit in a bank to


get this amount if the prevailing rate of interest
is 9% p.a.
a) 17896
b)18104
c)18224
d)18348
ans : d 20000/1.09
8. Mr Amit purchased a property for Rs 8 lac .
he has been assured to get Rs 10 lac, after one
year at 9% interest rate. What is the net
present value of the poperty based on this
assured return.
a) Rs. 117400
b)Rs. 118300
c) Rs. 119200
d) Rs. 120100


Ans : a 1000000/1.09=917431-80000= 117400
9. Mr Raj decided to deposited Rs. 5000 ( at
end of the year) for 10 yr . how much amt he
will get if the interest rate of is 5% p.a.
a)62890
b)62980
c)68920
d)69820
all value in Rs.
Formula future value end of the period
annuties
Ans: a Fv=a/r (1+r)n-1 =5000/.05(1.05)10-
1=62890
10. . MR. ram sons is expected to join a
professionnal course in 03 yr from now and
he would be needing a sum of Rs 3lac at that


time as admission fee. Mr Ram wants to save
the amt in annual instalments and prevailing
interest rates are 5% How much amt he should
deposit per annum.
a)95163
b)95631
c)953631
d)96531
Ans: A
Thus annuity given the future value
=FV*r/(1+r)n-1 =300000*.05/(1.05)3-1=
95177 Appox
11. worked out the discount factor for Re 1
to be received at the end of two yr with
prevalent 8% .
a)0.890


b)0.873
c)0.857
D)0.842
Ans: c =1/(1+r)n= 1/(1.08)square2
12.An investment at 10% is compounded
monthly, what shall be the effect interst rate
for this.
A)10%
b)10.25%
c)10.47%
d)10.5156%
ans: c =(1+.10/12) sqare 12-1
semi annually devide by 2
monthly devide by 12
for daily by 365


continuous equare 10-1
13.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 .
a)7660
b)6760
c)6670
d)6706
And :c = 10000*.06=6000/.09=6670

14 please explain this as it was asked in last time caiib exams
Q A bag contains 7 yellow balls and 5 red balls. One ball is taken from the bag at random and is not
replaced. A second ball is taken from the bag. Determine the probability that

Q-1 What is Probability of both balls are red....
1) 42/132 2) 20/132 3) 21/132 4) 35/132

Q-2 What is Probability of both balls are the same colour.
1) 42/132 2) 20/132 3) 62/132 4) 70/132

Q-3 What is Probability of both the balls are different colours.
1) 42/132 2) 20/132 3) 21/132 4) 70/132

Q-4 What is Probability of at least one ball is yellow.
Solutions:-1) 120/132 2) 112/132 3) 70/132 4) 35/132.Chat Conversation En
o


Hitesh Kothari q-1 20/132 , Q2 62/132, q3 70/132, q4 112/132
Q 15 If debt equity ratio of a unit is 2:1, current Liabilities are Rs. 8 Lakh, equity Rs. 4 Lakh, the total
assets of the firm will be...?
As equity z givn debt vl b 8 lacs so total assets= debt +equity +c.liab i.e 8+4+8
Q 16 Total asstes of a company are Rs. 200 lakh. Debt Equity Ratio is 2:1 and current liabilities are Rs. 56
Lakh. Equity of the company will be....?
ans Total long term liab z 144 so equity z 1/3
rd

q 17 If current Ratio of a unitis 1.25:1, current assets are 5 Lakh, quick ratio is 1:1 Presuming there are
noprepaid exp, inventry will be...?
Ans 500000/1.25 (quick ratio=ca-inv/cl
Ans :10000
Q 18 Current Ratio is 2:5:1 and current assets are Rs. 30 Lakh. NWC will be.....? calculate howTop of
Form
Ans;18 lacs. 24 lacs c.a. & 6 lacs cl 24_6=18 lacs nwc

19 Qtn 91 days treasury bills maturing on 06.04.2013 purchased on 18-02-2013 rate quoted is Rs 99.1489
per Rs 100 this yield of ths T bill is
a)6.8%
b)4.90%
c)5.70%
d) none of the above

please also explain your ans
100-99.14/99.14*365/remain days(47 or 48)
ans is 6.98 APROX
20. How many years it will take under rule 72 for an investment to become quadruple
In value , if th ROI is 12%.
a) 6 year
b) 12 year
c) 16 year


d) 20 year
ans: 12
21. What is the easiestway to calculate value of any investment will become half, if
inflation rate is 7% the value will become half in how many year.(under rule 70)
a) 6 year
b) 10 year
c) 12 year
d) 16 year
ans: b under rule 70
22. 6% coupon rate of bond of rs 1000 what will be the amount we will get after 03
year if compounded return is 5.6%.
a) 1010.77
b) 1010.91
c) 1177.58
d) 1237.58
e) Non of these
ans : a
23. 6% coupon rate of bond of rs 1000 what will be the amount we will get after 03
year if the coupon payment become half yearly than, compounded return is 5.6% only
a) 1010.77
b) 1010.91
c) 1177.58
d) 1237.58
e) Non of these
ans: b


24. Mr. X is expecting a cash flow of Rs 10 lac at the end of 01 year for his investment
of Rs 8 lac in a housing property , at 08% discount rate what is the Net present value.
a) 92592
b) 125926
c) 740740
d) 125926
e) None of these
ans: d ( present value 100000/108= 925926 than NPV= PV- investment =925926-800000=
125926 ans
25. bonds and debentures are an example of
a) term loan
b) lump-sum payment loan
c) balloon repayment laon
d) interest demand laon
e) non of these
ans:c
26. A constant flow paid or recived at aregular intervals for ever is known as.
a) annuity
b) peretuity
c) growing annuity
d) growing perpetuity
ans: b
27. what is present value of Rs 180000 which is paid every year over a period assuming the
rate of interest at 12%
a) 64860


b)646880
c) 648860
d) 684860
e) non of these
ans: c 9 pv=A((1+r)power n -1))/r(1+r)power n= 180000(1+.12)power 5- 1/.12(1+.12)power 5=
137221/.2114=648860
28. On 8%, 5 year bond of Rs 10000, the investors gets annually as..
A) 80 int
b) 80 coupon
c) 800 discount
d) 800 coupon
ans: d
29. regular repayment in the from of interst on a bond is called
a) discount
b) interst
c) coupon
d) dividend
e) installment
f) EMI
ans: c
30. depending upon the current interest rates ,the face value of which of the following types of
bonds changes .
a).floating rate bonds
b) negotiable bonds
c) Zero coupon bonds


d) convertible bonds
ans: b