BMSI

Q1: In 4:7 :: 16:28, 7 and 16 are called .

a) middle terms.

b) extreme

c) 7 middle and 16 extreme term.

d) 7 extreme and 16 middle term.

Q2: Two concepts, which are important in the theory of differential and integral calculus are limit of
function and .

a) vertical asymptote.

b) horizontal asymptote

c) interval.

d) continuity.

Q3: If Rs. 35,400 is deposited for a period of 7 years at a compound annual interest rate of 18%. What
total amount(round to the nearest hundred) would be received at the end of 7 years.

a) Rs. 115300.

b) Rs. 130800.

c) Rs. 135400.

d) Rs. 112800.

Compound interest = FV = PV (1+r/m)^nxm

FV = 35400 x (1.18)^7

FV = 112,800

Q4: A one year investment yields a return of 20%. The cash returned from the investment, including
principal and interest is Rs. 30,000. The interest is:

a) Rs. 5000.
b) Rs. 4000.

c) Rs. 3000.

d) Rs. 6000.

Simple interest = FV = PV (1 + Rn)

30000 = PV (1 + (0.20 x 1))

PV = Principal amount = 30000/1.20

PV = 25000

Since PV = 25000 and FV = 30000, hence the difference i-e: 30000 – 25000 = 5000 is interest.

We can also find it by simple interest formula = I = PRn= 25000 x 0.20 x1= 5000.

Q5: For an ogive constructed for a particular set of data:

a) The original data can never be approximated or reconstructed but valid conclusions regarding the
data can be drawn.

b) The original data can always be approximated.

c) The original data can always be reconstructed exactly.

d) none of these.

Q6: The median of a given frequency distribution is found graphically with the help of:

a) ogive.

b) frequency curve.

c) pie chart.

d) histogram.

Q7: What would be the variance of 11, 11, 11, 11, 11, 11, 11, 11, 11, 11?

a) 11

b) zero

c) 110

d) 10
Q8: The formula ∑pnqn/poqn x100 is used to calculate?

a) Laspeyers price index.

b) Paasche price index.

c) Paasche quantity index

d) Laspeyers quantity index.

Q9: Which of the following statements is not correct?

a) A weighted mean should be used when it is necessary to take the importance of each value into
account.

b) calculating of a mean is effected by extreme data values.

c) same data sets do not have means.

d) All these statements are correct.

Q10: A series of numerical figures which show the relative positions is called:

a) absolute number.

b) relative number.

c) index number.

d) none of these.

Q11: The probability of one event occurring, given that another event has occurred is

called probability.

a) conditional.

b) marginal.

c) joint.

d) simple.

Q12: If y=f(u) is a differentiable function and u=g(x) is a differentiable function, then according to
chain rule dy/dx = .

a) dy/dx . du/dx
b) dy/du . du/dx

c) dy/du . dx/du

d) du/dx . du/dy

Q13: In a normal curve, the ordinate is highest at:

a) mean.

b) variance.

c) standard deviation.

d) quartile 1.

Q14: To test hypothesis about the mean of a normal population with a known standard deviation, we
can compare:

a) The observed value of x̄ with the critical value of x.

b) The observed value of x̄ with the critical value of z.

c) The observed value of z with the critical value of z.

d) either i or iii

Q15: For a sampling distribution, the samples are drawn with replacement with standard error of
sample mean= 0.8 and population standard deviation 5. What would be the sample size.

a) 45.

b) 38.

c) 50.

d) 40.

σX̄ = σ/√n

n = (5/0.8)^2

n = 40

Q16: The trend is linear if:

a) growth is not constant.

b) the growth is constant.

c) rate of growth is positive.

d) none of the above.

Q17: Find the present value of Rs. 10,000 required after 5 years if the compound interest rate is 9%.

(given (1.09)5= 1.5386)

a) Rs. 6988.

b) Rs. 6599.

c) Rs. 6499.

d) Rs. 6788.

PV = FV/(1+r)^n

PV = 10000/1.5386

PV= 6499

Q18: Which one of the following best describes an annuity?

a) A series of receipts occurring over a specific number of periods.

b) A series of payments occurring over a specific number of periods.

c) A series of receipts or payments occurring over a specific number of periods.

d) none of these.

Q19: In constructing a frequency distribution for a sample, the number of classes depend upon:

a) the number of data points and the range of the data collected.

b) the range of data collected and the size of the population.

c) the number of data points and the size of population.

d) none of these.

Q20: Why is it necessary to square the difference from mean when computing the population
variance?
a) so that extreme values will not effect the calculation.

b) because it is possible that N could be very small.

c) some of the differences will be positive and some will be negative.

d) none of the above.

Q21: The price of a kilogram of raw material was Rs. 80 in year 1 and Rs. 120 in year 2. Using year 1 as
a base year, the price index number for year 2 is:

a) 150.

b) 67.

c) 167.

d) 140.

Index number = 120/80 x 100 = 150

Q22: There are 100 students in a college class of which 36 are boys studying statistics and 13 girls not
studying statistics. If there are 55 girls in all, probability that a boy picked up at random is not studying
statistics is .

a) 1/5

b) 2/5

c) 4/5

d) 3/5

Number of students =100

Number of girls =55
∴ Number of boys =100−55=45
Out of 45 boys 36 boys are studying Statistics. 
∴ Number of boys not studying Statistics =45−36=9
∴ Number that a boy picked up at random is not studying Statistics =9/45=1/5.

Q23: For a normal probability distribution to be a standard normal probability distribution, the value
of mean (μ) must be:

a) zero.

b) more than zero.

c) one.
d) less than zero.

Q24: Setting the p level at 0.01 increases the chances of making a:

a) Type II error.

b) Type I error.

c) Type III error.

d) All of these.

Q25: The standard error of a sample statistic is the standard deviation of its distribution.

a) frequency.

b) sampling.

c) probability.

d) discrete.

Q26: operations generated forecasts often having nothing to do with.

a) inventory requirements.

b) sales.

c) resource needs.

d) time requirements.

Q27: A forecast that projects company’s sales is the .

a) demand forecast.

b) economic forecasts.

c) technological forecast.

d) none of the above.

Q28: If the product of n positive numbers is 1, then their sum is .

a) a positive integer.

b) divisible by n.
c) equal n+1/n

d) never less than n^2.

Q29: How much should be invested now to receive Rs. 20,000 per annum in perpetuity. If the annual
rate of interest is 20%.

a) Rs. 100,000.

b) Rs. 93,500.

c) Rs. 45,000.

d) Rs. 24,000.

PV of perpetuity = A/r

= 20000/0.20

= 100000

Q30: In 2 years you are to receive Rs. 10,000. If the interest rate were to suddenly decrease, the
present value of that future amount to you would?

a) rise.

b) remain unchanged.

c) the correct answer cannot be determined without more information.

d) fall.

Q31: If r is the correlation coefficient then:

a) – 1 ≤ r ≤ 1

b) r ≤ 1

c) r ≥ 1

d) - ∞ < r < ∞

Q32: play a very important part in construction of index numbers.

a) classes.

b) weights.
c) estimations.

d) none of these.

Q33: Table is a matrix of data in and .

a) charts, graphs.

b) numbers, words.

c) rows, columns.

d) time, series.

Q34: Which of the following is the correct formula for calculating mode.

a) Median – Arithmetic mean = Mode.

b) Median + Arithmetic mean = 2 x Mode.

c) 3(Median) – 2(Arithmetic mean) = Mode.

d) 3(Arithmetic mean) – 2(Median) = Mode.

Q35: An index number is called a simple index when it is computed from .

a) bi-variable.

b) single variable.

c) multiple variables.

d) none of the above.

Q36: The use of significance testing is an example of .

a) an alternative hypothesis.

b) descriptive statistics.

c) statistical inference.

d) confidence intervals.

Q37: If the trend is absent, seasonal indices are known by .

a) ratio to moving average method.

b) semi-average method.

c) simple average method.

d) ratio to trend method.

Q38: Which of the following are the major components of a time series?

i) seasonal variation.

ii) cyclical variation.

iii) regular variation.

a) i, ii, iii

b) i and ii only.

c) ii and iii only.

d) i only.

Q39: √(176+√2401)

a) 15

b) 18

c) 14

d) 24

Q40: If f(x) = ln(x²+2). Then f′(x) is equal to:

a) 1/(x²+2)

b) 2x/(x²+2)

c) 2x.

d) 2lnx

Q41: The pictorial representation of probability concepts, using symbols to represent outcome

is a diagram.

a) bar.

b) histogram.
c) cumulative frequency.

d) venn.

Q42: Suppose we have 10 balls in a box, 8 are blue and 2 are green. If one ball is selected the odds in
favor of selecting a green ball are:

a) 1 : 4.

b) 1 : 5.

c) 4 : 1.

d) 5 : 1.

Q43: While using t-distribution in estimation, we must assume that the population

is approximately.

a) infinite.

b) finite.

c) uniform.

d) normal.

Q44: A firm which makes chairs, selects a sample for examination. The method used is that two
random numbers are chosen, 5 and 8. Starting at the 5th chair, every chair at an interval of 8 is then
chosen for examination. This type of sampling is known as:

a) Multistage.

b) stratified.

c) systematic.

d) random.

Q45: If the trend is absent, seasonal indices are known as .

a) ratio to moving average method.

b) semi-average method.

c) simple average method.

d) ratio to trend method.

Q46: Operations generated forecasts often have nothing to do with:

a) sales.

b) inventory requirements.

c) time requirements.

d) resource needs.

Q47: A survey is being carried out to find out the number of wickets taken by the ten most popular
cricket teams in UAE in their past two matches to see if there is much variation between the teams.
What sort of data is being collected in such a survey.

a) Quantitative – discrete.

b) Qualitative – discrete.

c) Qualitative – continuous.

d) Quantitative – continuous.

Q48: In a negatively skewed distribution:

a) The mean is larger than the median.

b) The mean is smaller than the median.

c) The mean is same as the median.

d) The mean is between the median and the mode.

Q49: Regression lines give best possible estimate when “r” is:

a) less than 1.

b) -1 or 1.

c) greater than -1.

d) -2 or 2

Q50: The Laspeyers price index regards as fixed.

a) base year prices.

b) current year price.

c) base year quantities.

d) current year quantities.

Q51: Addition law of probability for mutually exclusive events is .

a) P(AUB) = P(A) – P(B).

b) P(AUB) = P(A) / P(B).

c) P(AUB) = P(A) + P(B).

d) P(AUB) = P(A) x P(B).

Q52: The process by which statistical inference about population are made from information about a
sample is called:

a) mathematics.

b) accountancy.

c) history.

d) statistical inferential.

LONG QUESTIONS

Q1: Distinguish between odd number and even number.

Answer:

Any number completely divisible by 2 giving 0 remainder is an even number. Similarly any number not
divisible by 2 and giving 1 as remainder is an odd number similarly Odd numbers are those numbers that
cannot be divided into two equal parts, whereas even numbers are those numbers that can be divided
into two equal parts. Examples of odd numbers are 3, 5, 7, 9, 11, 13, 15,… Examples of even numbers
are 2, 4, 6, 8, 10, 12, 14.

Q2: Define the following:

 Subset.
 Union set.
 Intersection of sets.
With one example each.

Answer:

Subset:

A set A is a subset of another set B if all elements of the set A are elements of the set B. In other
words, the set A is contained inside the set B. The subset relationship is denoted as A⊂B. For example, if
A is the set {1,2,3} and B is the set {1,2,3,4}, then A⊂B but B⊄A.

Union set:

In set theory, the union of a collection of sets is the set of all elements in the collection. It is one of the
fundamental operations through which sets can be combined and related to each other. A nullary union
refers to a union of zero sets and it is by definition equal to the empty set.

The union of two sets is a set containing all elements that are in A or in B (possibly both). For example,
{1,2}∪{2,3}={1,2,3}.

Intersection of sets:

Intersection of two sets A and B is the set of all those elements which are common to both A and B. It is
the set containing all elements of A that also belong to B or equivalently, all elements of B that also
belong to A.

For example- A = {1, 2, 3, 4, 5, 6, 7, 8, 9, 10} , B = {2, 4, 7, 12, 14} , A ∩ B = {2, 4, 7}.

Q3: What are index numbers?

Index numbers:

Index number is a technique of measuring changes in a variable or group of variables with respect to
time, geographical location or other characteristics

There can be various types of index numbers, such price index numbers, which measures changes in the
general price level (or in the value of money) over a period of time and quantity index numbers which
measure change in quantity over time.

Index numbers are a special type of average. Whereas mean, median and mode measure the absolute
changes and are used to compare only those series which are expressed in the same units. The
technique of index numbers is used to measure the relative changes in the level of a phenomenon
where the measurement of absolute change is not possible and the series are expressed in different
types of items.

Q4: Difference between Arithmetic mean and Geometric mean.

 Arithmetic mean is defined as the average of a series of numbers whose sum is divided by the
total count of the numbers in the series. Geometric mean is defined as the compounding effect
 of the numbers in the series in which the numbers are multiplied by taking nth root of the
multiplication.
 Arithmetic mean is simple average while geometric mean is nth root product.
 The arithmetic mean is appropriate if the values have the same units, whereas the geometric
mean is appropriate if the values have differing units

Q5: Solve the following equation by quadratic formula:

2x²+5x+8=0

Answer:

x = (-b ± √(b2 − 4ac))/(2a)

here a = 2, b = 5 and c = 8

= (-5 ± √(52 – 4 x 2 x 8))/(2 x 2)

x = this equation has no real solution since b2 − 4ac < 0

Q6: A farmer borrowed Rs. 2400 at 12% interest per annum. At the end of 5/2 years, he cleared the
account paying Rs. 1200 and a cow. Find the cost of cow.

Answer:

FV = PV (1 + Rn)

FV = 2400 x (1 + 0.12 x 2.5)

FV = 3120

FV = 1200 + cow = 3120

Cow = 3120 – 1200

Cost of cow = Rs. 1920

Q7: There are 10 persons in a park. If each one shake hands with each other, how many hands are
shaken?

Answer:

This question can be done by two methods:

1st method:
If 10 people meet and shakes hand with each other. First person will shakes hand with other 9, second
person had already shakes hand with 1st person and shakes hand with other 8, third and so on hence

So, the total no. of hand shakes= 9+8+7+6+5+4+3+2+1=45 shakes

2nd method:

The other way to calculate this is by the formula n(n+1)/2

where n is the no. of shake hands by very first person and that is 9.

So, the total no. of hand shakes=9(9+1)/2

= 9(10)/2

=90/2

=45 shakes

Q8: Calculate the mean, absolute deviation from mean and from median of the following data:

X d x-u x-median

44 -6 6 8

38 -12 12 14

60 10 10 8

52 2 2 0

56 6 6 4

Sum 0 36 34

Answer:

Mean = (44 + 38 + 60 + 52 + 56)/5 = 50

Median = 38, 44, 52, 56, 60 = (n+1)/2 th term = 5 + 1 / 2 th term = 3 rd term = 52.

absolute deviation from mean = summation (x – u) /n = 36/5 = 7.2

absolute deviation from median = summation (x – median) /n = 34/5 = 6.8

Q9: What are inequalities? Describe its kind.

In mathematics, an inequality is a relation which makes a non-equal comparison between two
numbers or other mathematical expressions. It is used most often to compare two numbers on the
number line by their size.

The five inequality symbols in Maths are greater than symbol (>), less than symbol (<), greater than or
equal to symbol (≥), less than or equal to symbol (≤), and not equal to symbol (≠).

Q10: How does business mathematics help in the finance?

The use of mathematics is to express, reason, and prove the underlying principles of finance. From the
nature of financial mathematics, financial mathematics is an important branch of finance. Therefore,
financial mathematics is completely based on the background and foundation of financial theory.

It helps you know the financial formulas, fractions; measurements involved in interest calculation,
hire rates, salary calculation, tax calculation etc. which help complete business tasks efficiently.
Business mathematics also includes statistics and provides solution to business problems.

Q11: Find the median of the following data:

x 4 5 7 9 12 15

f 2 6 3 8 5 4

Answer:

First, we will arrange this data:

4, 5, 7, 9, 12, 15

Since there are even number of digits in the data set hence,

Median = (n/2th + (n+1)/2th)/2 th term

Hence, median = (7 + 9)/2 = 8.

Q12: There are 5 men and 4 ladies. In how many ways a delegation of 6 can be constituted including at
least 3 ladies.

= (5C3 X 4C3) + (5C2 X 4C4)

= 10 x 4 + 10 x 1

= 50

Q13: Distinguish between correlation coefficient and coefficient of determination.

Answer:
  The Pearson correlation coefficient (r) is used to identify patterns in things whereas the
coefficient of determination (R²) is used to identify the strength of a model.
 R is the correlation between the predicted values and the observed values of Y. R square is the
square of this coefficient and indicates the percentage of variation explained by your regression
line out of the total variation. This value tends to increase as you include additional predictors in
the model
 correlation explains the strength of the relationship between an independent and dependent
variable, R-squared explains to what extent the variance of one variable explains the variance of
the second variable.

Q14: A person deposited Rs. 520 in a bank. The bank pays interest 8% per annum. Find the interest
and amount to be received by him after two years.

Answer:

FV of simple interest = PV (1 + Rn)

FV = 520 (1 + 0.08 x 2)

FV = amount to be received after two years = Rs. 603.20

Interest = PRn = 520 x 0.08 x 2 = Rs. 83.20

Q15: Find out the compound amount and the compound interest at the end of 3 years on a sum of Rs.
20,000 borrowed at 6% compounded annually.

FV of compound interest = PV (1+r)^n

= 20,000 x (1.06)^3

= 20,000 x 1.19

= Rs. 23,820

Future value = compound amount = Rs. 23,820.

Compound interest = 23,820 – 20,000 = Rs. 3820.

Q16: From the following data, calculate Laspeyers and Paasche’s index numbers of base year and
current year:

Commodities poqo p1qo p2q1 poq1 poq2 p1q1 p2q2

Sum 35310 41140 39644 40048 47376 46707 51724

Answer:

Laspeyers index = p1qo / poq0 x 100

Laspeyers index = 41140 / 35310 x 100

= 116.51

Paashe’s index = p1q1 / poq1 x 100

Paashe’s index = 46707 / 40048 x 100

Paashe’s index = 116.62

Q17: What is geometric progression?

In mathematics, a geometric progression, also known as a geometric sequence, is a sequence of non-

zero numbers where each term after the first is found by multiplying the previous one by a fixed, non-
zero number called the common ratio.

It is a progression of numbers with a constant ratio between each number and the one before. This
common ratio which is denoted by r. For example, the sequence 1, 2, 4, 8, 16, 32… is a geometric
sequence with a common ratio of r = 2. Similarly 1, 3, 9, 27, 81 is a geometric progression in which each
number is multiplied by 3 to get the next number of this geometric progression.

Q18: Differentiate between qualitative and quantitative data:

Answer:

i. Quantitative data is numbers-based, countable, or measurable. Qualitative data is

interpretation-based, descriptive, and relating to language.
ii. Quantitative data tells us how many, how much, or how often in calculations. Qualitative data
can help us to understand why, how, or what happened behind certain behaviors.
iii. Quantitative data can be counted, measured, and expressed using numbers. Qualitative data is
descriptive and conceptual.
iv. In qualitative data, there is an unstructured gathering of data. As against this, data collection is
structured in quantitative data.
v. In qualitative data the sample size is small and that too is drawn from non-representative
samples. Conversely, the sample size is large in quantitative data drawn from the representative
sample.
vi. The approach to inquiry in the case of qualitative data is subjective and holistic whereas
quantitative data has an objective and focused approach.

Q19: Find out compound amount and compound interest at the end of 3 years on a sum of Rs. 20,000
borrowed at 6% compounded annually.
Answer:

FV of compound interest = PV (1+r)^n

= 20,000 x (1.06)^3

= 20,000 x 1.19

= Rs. 23,820

Future value = compound amount = Rs. 23,820.

Compound interest = 23,820 – 20,000 = Rs. 3820.

Q20: Define the following:

 Net present value

 Internal rate of return.
 Annuity.

Answer:

Net present value:

“Net present value is the present value of the cash flows at the required rate of return of a project
compared to initial investment,”. In practical terms, it is a method of calculating your return on
investment, or ROI, for a project or expenditure.

NPV can be very useful for analyzing an investment in a company or a new project within a company.
NPV considers all projected cash inflows and outflows and employs a concept known as the time value
of money to determine whether a particular investment is likely to generate gains or losses.

Formula of NPV = Sum of present value of all cash flows – initial investment.

Internal rate of return:

The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of
potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows
equal to zero in a discounted cash flow analysis.

The term internal refers to the fact that the calculation excludes external factors, such as the risk-free
rate, inflation, the cost of capital, or financial risk. The method may be applied either ex-post or ex-ante

Annuity:

An annuity is a continuous stream of equal periodic payments from one party to another for a
specified period of time to fulfill a financial obligation. Examples of annuities are regular deposits to a
savings account, monthly home mortgage payments, monthly insurance payments and pension
payments.
Q21: Define the following with examples:

 Mean.
 Median.
 Mode.

Answer:

Mean:

The mean (average) of a data set is found by adding all numbers in the data set and then dividing by
the number of values in the set. Hence mean is a middle point or simply an average.

Example:

If we have a data set = 1, 2, 3, 4, 5.

Mean = 1+2+3+4+5/ 5 = 3

Median:

Median is a statistical measure that determines the middle value of a dataset listed in ascending order
(i.e., from smallest to largest value). The measure divides the lower half from the higher half of the
dataset. Along with mean and mode, median is a measure of central tendency.

Example:

If we have a data set = 10, 11, 12, 13, 14

Median = n + 1 / 2 th term = 5 + 1 / 2 = 3 rd term = 12.

Mode:

The mode is the number that occurs most often in a data set. It is the most repeated value in a data.

Example:

If we have a data set = 1, 2 , 2, 3, 4, 5.

Mode = 2.

Q22: Define the following with their formulas:

 Standard deviation.
 Variance.
 Coefficient of variance.

Answer:

Standard deviation:
A standard deviation (or σ) is a measure of how dispersed the data is in relation to the mean. Low
standard deviation means data are clustered around the mean, and high standard deviation indicates
data are more spread out.

Formula =

Variance:

The variance is a measure of variability. It is calculated by taking the average of squared deviations from
the mean. Variance tells you the degree of spread in your data set. The more spread the data, the larger
the variance is in relation to the mean.

Formula =

Coefficient of variance:

The coefficient of variation (CV) is the ratio of the standard deviation to the mean and shows the
extent of variability in relation to the mean of the population. The higher the CV, the greater the
dispersion.

Formula:

Q23: After a markup of 30% on sales a watch sells for Rs. 225.

i) what is its cost price?

ii) what is the %age markup on sales if the cost price of the watch would have been Rs. 153?

Answer:
Part i) cost = sales price – markup on sales

Cost = 225 – (0.30 x 225)

Cost = Rs. 157.5

Part ii) %age markup on sales if cost = 153

153 = 225 – (%age markup x 225)

%age markup = (225 – 153)/225

%age markup = 32%

Q24: From the following frequency distribution, find the standard deviation using the formula for
grouped data:

Class interval Frequency

10 – 20 9

20 – 30 18

30 – 40 31

40 – 50 17

50 – 60 16

60 – 70 9

Total 100

Answer:

X f X – X bar (X – X bar)^2 fX f((X – X bar)^2

15 9 -24 576 135 5184

25 18 -14 196 450 3528

35 31 -4 16 1085 496

45 17 6 36 765 612

55 16 16 256 880 4096

65 9 26 676 585 6084

100 3900 20000

X bar = mean = summation fX / summation f = 3900/100 = 39.

Summation f(X – X bar)^2 / Summation f = 20,000/100 = 200

Standard Deviation (SD) = sqt. (200)

Standard Deviation = 14.142

Q25: Find the variance and standard deviation of the data 32, 25, 30, 28, 22 and 18 representing the
output in tons of a worker in six days of a week.

Answer:

X X bar X – X bar (X – X bar)^2

32 9 6 36

25 18 -1 1

30 31 4 16

28 17 2 4

22 16 -4 16

18 9 -8 64

(Summation X)/n = 155/6 = 26 (approx..)

(X – X bar)^2 / n = 137/6 = 22.83

SD = sqt. (22.83)

SD = 4.77 = 5 (approx..)

Variance = SD^2 = 22.83