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=170
0
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