Mgt411 Money and Banking solution
Monday, April 26, 2010 Posted In Bank , MGT Edit ThisQuestion 01
Part A
Calculate consumer price index and inflation rate by using following data. (Marks 4)
| Years | Cost of Basket | CPI Inflation | Rate |
| 2006 | 2000 | 100 | n.a |
| 2007 | 2300 | 115 | 15% |
| 2008 | 2850 | 142.5 | 23.91% |
| | | | |
Part B
Calculate GDP deflator and inflation rate by using following data. (Marks 4)
| Years | Nominal GDP | Real GDP | GDP deflator | Inflation Rate |
| 2006 | 78000 | 78000 | 100.0 | n.a |
| 2007 | 82000 | 80000 | 102.5 | 2.5% |
| 2008 | 89000 | 85000 | 104.7 | 2.146% |
Part C
Which of the following accounts will include in M1 & M2? Identify separately.(Marks 2)
• Euro dollars
• Current account balances in Pakistan
• ATM cards balances in Pakistan
• Banks Saving accounts in Pakistan
• Individual money market mutual fund
• Institutional money market mutual fund share
M1:
• Euro dollars
• Current account balances in Pakistan
• ATM cards balances in Pakistan
M2:
• Individual money market mutual fund
• Banks saving accounts in Pakistan
• Institutional money market mutual fund share
Question 02
Part A
An investor deposits Rs.100,000 today in a bank and bank offers 5% interest rate per annum compounded quarterly. What will be the amount after 10 years? (Marks 5)
Part B
A student needs Rs 200,000 after 5 year for his study. What amount he has to deposit in a bank today so that he will have Rs 200,000 after 5 years if bank offers yearly 6% interest rate compounded semi-annually. (Marks 5)
