ICAP

Question
Bank

Quantitative Methods

First edition published by

The Institute of Chartered Accountants of Pakistan
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Email: [email protected]

The Institute of Chartered Accountants of Pakistan, December 2013

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ii

The Institute of Chartered Accountants of Pakistan

Assessment of Fundamental Competencies

Quantitative Methods

C
Contents
Page

Question and Answer Index

Question Bank

Answer Bank

87

iii

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

iv

The Institute of Chartered Accountants of Pakistan

Assessment of Fundamental Competencies

Quantitative Methods

Index to Questions and Answers

Page

Chapter

Question

Answer

Basic mathematics
1

Elementary mathematical operations

88

Coordinate system and equations of a straight line

88

Solving equations

88

Mathematical progression

10

88

Financial mathematics: Compounding

14

89

Financial mathematics: Discounting

27

89

Linear programming

29

89

Calculus: Differentiation

37

90

Calculus: Turning points, maxima, minima and

points of inflection

40

90

10

Matrices and determinants

43

90

11

Collection, tabulation and presentation of data

50

90

12

Statistical measures of data

52

91

13

Regression and correlation

59

91

14

Indices

64

91

15

Counting methods and probability

66

92

16

Probability distributions

73

92

Statistics

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Quantitative Methods

Page

Chapter

Question

Answer

17

Sampling and sampling distributions

78

92

18

Hypothesis testing

81

93

19

Chi-square testing

85

93

vi

The Institute of Chartered Accountants of Pakistan

Assessment of Fundamental Competencies

Quantitative Methods

Q
Questions

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

CHAPTER 1: ELEMENTARY MATHEMATICAL OPERATIONS

1.1

Exact value of
(a)
(c)

1.2

1.3

0.04 is:

0.1
0.21

(b)
(d)

Starting with the smallest, following numbers in order of size are:

1
, 0.3 2 , 0.32
3
(a)

0.3 2 , 0.32,

1
3

(b)

0.32, 0.3 2 ,

(c)

1
, 0.32 , 0.32
3

(d)

0.32,

(b)

3y
x

(d)

3y2
x2

(b)
(d)

34
36

(b)
(d)

5/32
32/5

Simplified form of

(a)
(c)

1.7

33
35

31/5
5/31

If x = 3 and y = 1/6, then x = ________.

(a)

2y

(b)

(c)

2/y

(d)

1
2

y/2

An airliner has seats for 120 passengers. The number of passengers on board
when 7/15 of the seats are occupied is:
(a)
(c)

1.8

If 4 : a :: 5 : 8, then a is:
(a)
(c)

1.6

1
, 0.3 2
3

Evaluation of 6 3 6 3 6 3 is:
(a)
(c)

1.5

1
3

12 x 2 y 3
is:
4x3 y

3y 2
x
3y 3
x
2

1.4

0.12
0.2

56
58

(b)
(d)

57
59

165 metres as a percentage of 3 kilometres is:

(a)
(c)

5.4%
5.5%

(b)
(d)

5.3%
5.2%

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Questions

1.9

Simplest form of the fraction which is exactly halfway between 13/17 and 14/17 is:
(a)
(c)

1.10

1.11

AL V
H

(b)

V AL
H

(c)

AL H
V

(d)

V AL
H

The number of employees in 2012 was 5% higher than in 2011. The number in
2013 was 5% higher than in 2012. The total percentage increase in the number of
employees from 2011 to 2013 is:
10.25%
10.52%

(a + b)(x + y)(x y)
(a b)(x + y)(x y)

(b)
(d)

(a + b)(x + y)(x + y)
None of these

(x 7)(x + 3)
(x 7)(x 3)

(b)
(d)

(x + 7)(x + 3)
None of these

x

x
is:
Simplified form of
1 1
1 x
x 1

1
1

Simplest form of fraction

(a)
(c)

1.16

(b)
(d)

Factors of expression x2 4x 21 are:

(a)
(c)

1.15

10.21%
10.51%

Factors of expression ax2 + bx2 ay2 by2 are:

(a)
(c)

1.14

27/34
34/27

(a)

(a)
(c)

1.13

(b)
(d)

If V x 2 H AL , then x in terms of V, H, A and L is:

(a)
(c)

1.12

25/34
34/25

(b)
(d)

2
2

2x 2 2x 12
is:
2x 2 18

x 2
x 3
x2
x 3

(b)

x 2
x 3

(d)

None of these

A number lies between 90 and 100. When it is divided by 7 there is a remainder of

5. Then required number is:
(a)
(c)

98
94

(b)
(d)

96
92

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Quantitative Methods

1.17

1.18

1.19

Factors of expression a2b2 + b2 2ab2 4 are:

(a)
(c)

(ab b 2)(ab + b + 2)
(ab + b 2)(ab + b + 2)

If x2y =

(a)
(c)

1
1

Factors of 3x2

(a)
(c)

1.20

2y 2 2

If
(a)
(c)

(b)
(d)

(ab + b 2)(ab b + 2)
(ab b 2)(ab b + 2)

(b)
(d)

1
2

, possible value of y is:

1 2
y are:
3

1
( 3 x y )( x 3y )
3
1
( y 3 x )( 3 x y )
3

y = 64x3 then

(b)
(d)

1
( x 3y )( 3 x y )
3
1
( 3 x y )( 3 x y )
3

y = ________.

16x
16x

(b)
(d)

16x2
16x2

CHAPTER 2: COORDINATE SYSTEM AND EQUATION OF A STRAIGHT LINE

2.1

In the diagram, B is the point (0, 16) and C is the point (0, 6). The sloping line
through B and the horizontal line through C meet at the point A. Then the
equation of the line AC is:
Y
B

(0, 16)

A
C (0, 6)
X
0

(a)
(c)

2.2

(b)
(d)

x=6
y=0

A line passes through the point (0, 5) and has gradient 2. The equation of the
line is:
(a)
(c)

2.3

y=6
y = 6

y = 5 + 2x
y = 5 2x

(b)
(d)

y = 5 2x
y = 5 + 2x

The slope of the line perpendicular to the line 3x 4y + 5 = 0 is:

(a)

3/4

(b)

3/4

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Questions

2.4

(c)
4/3
(d)
4/3
Whether the pair of lines 3x = y + 7 and x + 3y = 7 are parallel, perpendicular or
neither:
(a)
(c)

2.5

(b)
(d)

y-axis
None of these

C(x) = 10x + 50,000

C(x) = 10x 50,000

(b)
(d)

C(x) = 10x + 5,000

C(x) = 10x 5,000

2
3

(b)
(d)

3
2

Rs.100
Rs.130

(b)
(d)

Rs.120
Rs.140

Rs.242,600
Rs.245,500

(b)
(d)

Rs.242,500
Rs.242,400

Pairs of coordinates (x, y) for which x and y are positive integers, such that
4x + 3y = 29 are:
(a)
(c)

2.12

x-axis
x, y axis

A manufacturer produces 80 T.V. sets at a cost Rs.220000 and 125 T.V. sets at a
cost of Rs.287500. Assuming the cost curve to be linear. The cost of 95 sets with
the help of equation of the line is:
(a)
(c)

2.11

y-intercept 3, slope 4
y-intercept 3, slope 4

The total cost curve of the number of copies of a particular photograph is linear.
The total cost of 5 and 8 copies of a photograph are Rs.80 and Rs.116
respectively. The total cost for 10 copies of the photograph will be:
(a)
(c)

2.10

(b)
(d)

The slope of the straight line y = 2 3x is:

(a)
(c)

2.9

y-intercept 4, slope 3
y-intercept 3, slope 4

A firms fixed costs are Rs.50,000 per week and the variable cost is Rs.10 per
unit. The total cost function for the firm is:
(a)
(c)

2.8

Parallel
Not possible

y = c is the equation of straight line parallel to:

(a)
(c)

2.7

(b)
(d)

Y-intercept and slope of the equation 3y = 9 12x are:

(a)
(c)

2.6

Perpendicular
Neither

(2, 7) and (3, 5)

(2, 7) and (5, 3)

(b)
(d)

(7, 2) and (5, 3)

(2, 7) and (5, 3)

Line has equation y = 3x + 7 and passes through the point (h, h + 15). Then the
value of h is:
(a)
(c)

4
3

(b)
(d)

4
4

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Quantitative Methods

2.13

The point (p, 2p) lies on the straight line x + 4y = 36. The value of p is:
(a)
(c)

2.14

2x y = 1
12x y 31 = 0

(b)
(d)

3x + 2y = 19
None of these

3x + 2y 6 = 0
x + 5y + 12 = 0

(b)
(d)

2x + 3y + 6 = 0
3x + 2y 8 = 0

2x 3y + 1 = 0
3x + 2y + 1 = 0

(b)
(d)

2x 3y 1 = 0
3x + 2y 1 = 0

560 units
650 units

(b)
(d)

600 units
500 units

A manufacturer sells a product at Rs.8 per unit. Fixed cost is Rs.5,000 and the
variable cost is Rs.22/9 per unit. The total output at the break-even point is:
(a)
(c)

2.20

12 and 5
14 and 3

The cost of production of a product in rupees is: C = 15x + 9,750 where x is the
number of items produced. If selling price of each item is Rs.30, the sales quantity
at which there would be no profit or loss is:
(a)
(c)

2.19

(b)
(d)

The equation of the line passing through the point of intersection of 2x + 3y 5 =

0 and 7x 5y 2 = 0 and parallel to the line 2x 3y + 14 = 0 is:
(a)
(c)

2.18

13 and 4
14 and 6

The sum of the intercepts of a straight line on the axis is 5 and the product of the
intercepts is 6. Then the equation of one of the line is:
(a)
(c)

2.17

2
2

The equation of line joining the point (3, 5) to the point of intersection of the lines
4x + y 1 = 0 and 7x 3y 35 = 0 is:
(a)
(c)

2.16

(b)
(d)

For the profit function P = Q2 + 17Q 42, break even points are:
(a)
(c)

2.15

4
4

600 units
700 units

(b)
(d)

900 units
800 units

A firm is introducing a new washing detergent. The firm plans to sell the family
size box for Rs.24. Production estimates have shown that the variable cost of
producing one unit of the product is Rs.21.60. Fixed cost of production is
Rs.36,000. It is assumed that both the total revenue and total cost functions are
linear over the relevant sale quantity range. Then the break-even volume of sales
is:
(a)
(c)

150,000 boxes
150 boxes

(b)
(d)

1,500 boxes
15,000 boxes

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Questions

CHAPTER 3: SOLVING EQUATIONS

3.1

If the solution of a quadratic equation has two values 0 and 4, the equation is:
(a)
(c)

3.2

X
(a)
(c)

3.6

(b)
(d)

3/4 or 5/2
3/4 or 5/2

11
11

(b)
(d)

13
13

(b)
(d)

10
None of these

(b)
(d)

2/5
5/2

(b)
(d)

25
None of these

(b)
(d)

3
9

(b)
(d)

3
3

(b)
(d)

3
12

0.25 = 5; then x is:

10
10

5/2
1/2

32
10

3
3

Value of x for the equation x = log4 64 is:

(a)
(c)

3.10

3/4 or 5/2
3/4 or 5/2

logx3 log x is:

(a)
(c)

3.9

35/12
12/35

If log2 x = 5, then x is:

(a)
(c)

3.8

(b)
(d)

If log10 5 log10 2 = log10 x; then x is:

(a)
(c)

3.7

12/5
5/35

If 7x 5y = 13; 2x 7y = 26; then 5x + 2y is:

(a)
(c)

3.5

x2 + 16 = 0
x2 4x = 0

Roots of the equation (4y 3)(2y + 5) = 0 are:

(a)
(c)

3.4

(b)
(d)

If x1 = 51 + 71; then x is:

(a)
(c)

3.3

x2 4 = 0
x2 16 = 0

3
2

4y x = 10 and 3x = 2y then xy is:

(a)
(c)

2
6

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Quantitative Methods

3.11

The equation x2 + kx 18 = 0, where k is a constant, is satisfied by x = 2. Then

the value of k is:
(a)
(c)

3.12

14
13

4x/3 and 2x
4x/3 and 2x

(b)
(d)

4x/3 and 2x
4/3x and 2x

0.3875
0.4875

(b)
(d)

0.4876
0.4865

2
2

(b)
(d)

2
None of these

1 or 2/3
1 or 2/3

(b)
(d)

1 or 2/3
1 or 2/3

0.57305
0.67305

(b)
(d)

0.57035
0.50375

Zain is x years old and his sister Ifrah is (5x 12) years old. Given that Ifrah is
twice as old as Zain, then the age of Ifrah is:
(a)
(c)

3.20

(b)
(d)

If log 2 = 0.3010, log 3 = 0.4771 and log 7 = 0.8451, then the values of log 14 is:
(a)
(c)

3.19

15
16

Value of x if, ln3 + 2lnx = ln(x + 2) is:

(a)
(c)

3.18

1 or 9
1 or 9

Given logx 2 + logx 4 + logx 64 = 9. Then the value of x is:

(a)
(c)

3.17

(b)
(d)

If e4x = 7 & ln 7 = 1.95. Then x is:

(a)
(c)

3.16

1 or 9
1 or 9

Given that 8x2 2xy 3y2 = 0; then y in term of x is:

(a)
(c)

3.15

5
7

The number of colour T.V sets sold by a firm was three times the combined sale
of C.D players and radios. If the sales included 72 T.V. sets and 8 radios, then the
numbers of C.D. players sold are:
(a)
(c)

3.14

(b)
(d)

Solution of the equation (x + 5)2 = 16 is:

(a)
(c)

3.13

7
7

8 years
7 years

(b)
(d)

10 years
9 years

Solution set for the simultaneous equations 2x 3y = 19 and 3x + 2y = 4 is:

(a)
(c)

(2, 5)
(2, 5)

(b)
(d)

(2, 5)
(2, 5)

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Questions

3.21

Ten years ago the age of a father was four times of his son. Ten years hence the
age of the father will be twice that of his son. The present ages of the father and
the son are:
(a)
(c)

3.22

4 5 xy 3

and 3xy = 10 (y x) is:

x y
xy
10

(5, 2)
(2, 5)

(b)
(d)

(2, 5)
(2, 5)

(66, 75)
(50, 41)

(b)
(d)

(45, 36)
(55, 46)

6x
6( x 1)

13 are:
x 1
x

(2, 3)
(2, 3)

(b)
(d)

(3, 2)
(2, 3)

13 metres
14 metres

(b)
(d)

12 metres
15 metres

There are two consecutive numbers such that the difference of their reciprocals is
1/240. The numbers are:
(a)
(c)

3.28

x=1
None of these

A piece of iron rod costs Rs.60. If the rod was 2 metre shorter and each metre
costs Re.1.00 more, the cost would remain unchanged. The length of the rod is:
(a)
(c)

3.27

x
1
x
1

0:
0.5 0.05 0.005 0.0005
(b)
(d)

The solutions of the equation

(a)
(c)

3.26

(60, 20)
None of these

Two numbers are such that twice the greater number exceeds twice the smaller
one by 18 and 1/3 of the smaller and 1/5 of the greater numbers are together 21.
The numbers are:
(a)
(c)

3.25

x=0
x = 10

Solution of the equations

(a)
(c)

3.24

(b)
(d)

Pick up the correct value x for which

(a)
(c)

3.23

(50, 20)
(55, 25)

(15, 16)
(13, 14)

(b)
(d)

(17, 18)
(12, 13)

Three times the square of a number when added to seven times the number
results in 26. The number is:
(a)
(c)

2 or 13/3
2 or 13/3

(b)
(d)

2 or 13/3
2 or 13/3

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Quantitative Methods

3.29

The product of four greater than a certain negative integer & sixteen less than four
times the integer is equal to 36. The integer is:
(a)
(c)

3.30

3.31

(b)
(d)

5
4

Roots of the equation 2 + 6 2y + 9y2 = 0 are:

(a)

2
3

(b)

(c)

2
3

(d)

2
3
2
3

Value of x such that 4x+1 = 2 7(2x) is:

(a)
(c)

3.32

5
5

2
2

2
3

(b)
(d)

Solution of the equation log2 24 log2 12 = log4 x is:

(a)
(c)

4
4

(b)
(d)

4
5

CHAPTER 4: MATHEMATICAL PROGRESSION

4.1

7th term of an A.P. 8, 5, 2, 1, 4 is:

(a)
(c)

4.2

Geometric
Harmonic

(b)
(d)

Arithmetic
None of these

(n + 2)/2
n(n + 1)/2

(b)
(d)

n(n 1)/2
None of these

(b)
(d)

2,550
None of these

2 + 4 + 6 + . + 100 = ________.
(a)
(c)

4.5

10
10

The sum of the series 1 + 2 + 3 + n is:

(a)
(c)

4.4

(b)
(d)

(a b), a, (a + b) are in ________ progression.

(a)
(c)

4.3

9
9

2,500
2,575

Which term of the AP

(a)
(c)

3
7

4
7

5
7

is

15
16

(b)
(d)

10

17
7

?
17
18

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Questions

4.6

The value of x such that 8x + 4, 6x 2, 2x + 7 will form an AP is:

(a)
(c)

4.7

834
None of these

(b)
(d)

1/x
None of these

7
6

(b)
(d)

10
None of these

11,600
12,500

(b)
(d)

12,490
24,750

3 9 27
,
,
to infinity is:
5 25 125

2/5
2/5

(b)
(d)

3/2
5/2

3 3
+ to infinity is:
2 8

6
7

(b)
(d)

8
9

The sum of the infinite Series 1 + 1/2 + 1/4 + is:

(a)
(c)

4.15

(b)
(d)

x28
1/x28

Sum of the series 6 +

(a)
(c)

4.14

384
438

The sum of the series 1,

(a)
(c)

4.13

13
None of these

The sum of all odd numbers between 200 and 300 is:
(a)
(c)

4.12

(b)
(d)

If the terms 2x, (x + 10) and (3x + 2) be in A.P., the value of x is:
(a)
(c)

4.11

12
11

The last term of the series x2, x, 1, to 31 terms is:

(a)
(c)

4.10

2
None of these

The 7th term of the series 6, 12, 24 is:

(a)
(c)

4.9

(b)
(d)

The sum of a certain number of terms of an AP series 8, 6, 4, is 52. The

number of terms is:
(a)
(c)

4.8

15
15/2

1.99999
2

(b)
(d)

2.00001
1.999

Sum of infinity of the following geometric progression

1
1
1

........ is:
2
1.1 ( 1.1)
( 1.1) 3
(a)
(c)

9
10

(b)
(d)

11

10
9

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Quantitative Methods

4.16

The first term of an A.P is 14 and the sum of the first five terms and the first ten
terms are equal in magnitude but opposite in sign. The 3rd term of the AP is:
(a)
(c)

4.17

(b)
(d)

100
None of these

Rs.163
Rs.163.83

(b)
(d)

Rs.183
None of these

Rs.5,400 and Rs.1,250,000

Rs.5,500 and Rs.1,260,000

(b)
(d)

Rs.540 and Rs.1,260,000

Rs.5,400 and Rs.1,260,000

Rs.8 and Rs.4,096

Rs.7 and Rs.4,096

(b)
(d)

Rs.8 and Rs.3,096

Rs.8 and Rs.5,096

5, 7, 9
7, 5, 9

(b)
(d)

9, 5, 7
None of these

The sum of three numbers in G.P. is 70. If the two extremes by multiplied each by
4 and the geometric mean by 5, the products are in A.P. the numbers are:
(a)
(c)

4.23

101
99

Three numbers are in AP and their sum is 21. If 1, 5, 15 are added to them
respectively, they form a G.P. the numbers are:
(a)
(c)

4.22

None of these

A person borrows Rs.8,000 at 2.76% simple interest per annum. The principal
and the interest are to be paid in 10 monthly installments. If each installment is
double the preceding one, the value of the first and the last installments are:

(a)
(c)

4.21

(d)

A person is employed in a company at Rs.3,000 per month and he would get an

increase of Rs.100 per year. The total amounts which he receives in 25 years and
the monthly salary in the last year are:
(a)
(c)

4.20

If you save 1 paise today, 2 paise the next day 4 paise the succeeding day and so
on, then your total savings in two weeks will be:
(a)
(c)

4.19

(b)

The first and the last term of an AP are 4 and 146. The sum of the terms is 7171.
The number of terms is:
(a)
(c)

4.18

4
11
4
11

12, 18, 40
40, 20, 10

(b)
(d)

10, 30, 90
None of these

The sum of all natural numbers between 500 and 1000 which are divisible by 13
is:
(a)
(c)

28,405
28,540

(b)
(d)

12

24,805
None of these

The Institute of Chartered Accountants of Pakistan

Questions

4.24

If unity is added to the sum of any number of terms of the A.P. 3, 5, 7, 9, the
resulting sum is:
(a)
(c)

4.25

(b)
(d)

Rs.5,970
Rs.5,370.96

2, 2.25, 2.5, 2.75, 3

4, 4.5, 5, 5.5, 6

(b)
(d)

2, 2.25, 2.5, 2.75, 3

4, 4.5, 5, 5.5, 6

1/2(pq + 1)
pq + 1

(b)
(d)

1/2(pq 1)
pq 1

9
8

(b)
(d)

10
7

1, 1/2, 1/4
1, 1/2, 1/4

(b)
(d)

1, 1/2, 1/4
None of these

The infinite G.P. with first term 1/4 and sum 1/3 is:
(a)
(c)

4.32

Rs.5,976.37
Rs.5,975

If the sum of infinite terms in a G.P. is 2 and the sum of their squares is 4/3 the
series is:
(a)
(c)

4.31

15 months
None of these

The least value of n for which the sum of n terms of the series 1 + 3 + 3 2 + is
greater than 7,000 is:
(a)
(c)

4.30

(b)
(d)

The pth term of an A.P. is 1/q and qth term is 1/p. The sum of the pqth term is:
(a)
(c)

4.29

10 months
14 months

Divide 12.50 into five parts in A.P. such that the first part and the last part are in
the ratio of 2:3.
(a)
(c)

4.28

a perfect square
none of these

At 10% C.I. p.a., a sum of money accumulate to Rs.9,625 in 5 years. The sum
invested initially is:
(a)
(c)

4.27

(b)
(d)

A person has to pay Rs.975 by monthly installments each less then the former by
Rs.5. The first installment is Rs.100. The time by which the entire amount will be
paid is:
(a)
(c)

4.26

a perfect cube
both (a) and (b)

1/4, 1/16, 1/64

1/4, 1/8, 1/16

(b)
(d)

1/4, 1/16, 1/64

None of these

The numbers x, 8, y are in G.P. and the numbers x, y, 8 are in A.P. The values
of x, y are:
(a)
(c)

16, 4
Both (a) and (b)

(b)
(d)

13

4, 16
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

4.33

How many terms are there in the sequence of 1/128, 1/64, 1/32.., 32, 64?
(a)
(c)

4.34

14
16

70
82

(b)
(d)

80
90

Sum of the series 1, 1/3, 1/9, 1/27 to infinity is:

(a)
(c)

4.36

(b)
(d)

An auditorium has 20 seats in the front row, 25 seats in the second row, 30 seats
in the third row and so on for 13 rows. Numbers of seats in the thirteenth row are:
(a)
(c)

4.35

13
15

3/2
1/3

(b)
(d)

2/3
3/2

The sum of the infinite series 2 + 2 + 1 +

(a)

24 2

(b)

2 1 2

(c)

24 2

(d)

42 2

CHAPTER 5: FINANCIAL MATHEMATICS: COMPOUNDING

5.1

The formula for simple interest is:

(a)
(c)

5.2

100x/y
100y/x

(b)
(d)

x/100y
y/100x

Rs.1,897
Rs.1,987

(b)
(d)

Rs.1,798
Rs.1,789

The present value of Rs.1,400 at 8 percent simple interest for 5 years is:
(a)
(c)

5.5

(d)

P R
100 T
100 R T
P

Future value of Rs.1,355/- invested @ 8% p.a. for 5 years is:

(a)
(c)

5.4

(b)

x% of P is Y, then P is:
(a)
(c)

5.3

P R T
100
100 P
R T

Rs.2,000
Rs.3,000

(b)
(d)

Rs.900
Rs.1,000

A bank charges mark-up @ Rs.0.39 per day per Rs.1,000/-, rate of mark-up as
percent per annum is:
(a)
(c)

14.4%
14.24%

(b)
(d)

14

14.004%
14.0004%

The Institute of Chartered Accountants of Pakistan

Questions

5.6

A person borrowed Rs.20,000 from a bank at a simple interest rate of 12 percent

per annum. In how many years will he owe interest of Rs.3,600?
(a)
(c)

5.7

(b)
(d)

Rs.60,000
None of these

5 years 2 months
4 years 5 months

(b)
(d)

4 years 4 months
None of these

Rs.19,608.84
Rs.18,607.84

(b)
(d)

Rs.19,607.84
Rs.19,507.84

Rs.3,800, 31.57%
Rs.3,500, 15%

(b)
(d)

Rs.3,000, 20%
None of these

25 years
20 years

(b)
(d)

15 years
None of these

A total of Rs.14,000 is invested for a year, part at 5% and the rest at 6%. If
Rs.740 is the total interest, amount invested at 5% is:
(a)
(c)

5.14

Rs.50,000
Rs.80,000

A sum of money would double itself in 10 years. The number of years it would be
four times is:
(a)
(c)

5.13

9 years
10 years

A sum of money would amount to Rs.6,200 in 2 years and Rs.7,400 in 3 years.

The principal and rate of simple interest are:
(a)
(c)

5.12

(b)
(d)

An amount of Rs.20,000 is due in three months. The present value if it includes

simple interest @8% is:
(a)
(c)

5.11

7 years
5 years

In what time will Rs.1,800 yield simple interest of Rs.390 at the rate of 5% per
annum?
(a)
(c)

5.10

1.55 years
1.45 years

The sum required to earn a monthly interest of Rs.1200 at 18% per annum SI is:
(a)
(c)

5.9

(b)
(d)

How long will it take for a sum of money to double itself at 10% simple interest?
(a)
(c)

5.8

1.5 years
1.6 years

Rs.9,000
Rs.6,000

(b)
(d)

Rs.8,000
Rs.10,000

If the simple interest on a certain sum for 15 months at 7% per annum exceeds
the simple interest on the same sum for 8 months at 12% per annum by
Rs.32.50, then the sum (in Rs.) is:
(a)
(c)

Rs.3,000
Rs.3,120

(b)
(d)

15

Rs.3,060
Rs.3,250

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.15

A certain sum is invested for T years. It amounts to Rs.400 at 10% simple interest
per annum. But when invested at 4% simple interest per annum, it amounts to
Rs.200. Then time (T) is:
(a)
(c)

5.16

Rs.2,500
None of these

2
4

(b)
(d)

3
5

Rs.700
Rs.4,000

(b)
(d)

Rs.1,500
Rs.6,500

Rs.10,000, 30,000 & 50,000

Rs.20,000, 30,000 & 50,000

(b)
(d)

Rs.10,000, 30,000 & 20,000

Rs.10,000, 20,000 & 50,000

An individual has purchased Rs.275,000 worth of Savings Certificate. The

Certificate expires in 25 years and a simple interest rate is computed quarterly at
a rate of 3 percent per quarter. Interest cheques are mailed to Certificate holders
every 3 months. The interest the individuals can expect to earn every three
months is:
(a)
(c)

5.21

(b)
(d)

An investor receives a total of Rs.5,700 per annum in interest from 3 stocks

yielding 4%, 5% and 8% per annum respectively. The amount at 4% is Rs.20,000
more than the amount invested at 5%, and the interest from the 8% investment is
8 times the interest from the 5% investment. Amount of money invested in each
stock is:
(a)
(c)

5.20

Rs.2,800
Rs.3,000

A lends Rs.2,500 to B and a certain sum to C at the same time at 7% p.a. simple
interest. If after 4 years, A altogether receives Rs.1,120 as interest from B and C,
then the sum lent to C is:
(a)
(c)

5.19

39 years
None of these

A person borrowed Rs.500 @ 3% per annum S.I. and Rs.600 @ 4.5% per annum
on the agreement that the whole sum will be returned only when the total interest
becomes Rs.126. The number of years, after which the borrowed sum is to be
returned, is:
(a)
(c)

5.18

(b)
(d)

A sum of Rs.7700 is to be divided among three brothers Zain, Zaid and Zoaib in
such a way that simple interest on each part at 5% per annum after 1, 2 and 3
years, respectively remains equal. The share of Zain is more than that of Zoaib
by:
(a)
(c)

5.17

41 years
50 years

Rs.8,450
Rs.8,150

(b)
(d)

Rs.8,250
Rs.8,350

If P = Rs.1,000, i = 5% p.a, n = 4; amount and C.I. is:

(a)
(c)

Rs.1,215.50, Rs.215.50
Rs.2,115, Rs.115

(b)
(d)

16

Rs.1,125, Rs.125
None of these

The Institute of Chartered Accountants of Pakistan

Questions

5.22

The C.I on Rs.16,000 for 1 years at 10% p.a. payable half-yearly is:
(a)
(c)

5.23

(b)
(d)

6.1%
5.1%

3.2% p.a
3.0225% p.a

(b)
(d)

3.25% p.a
None of these

7 years
17 years (app)

(b)
(d)

10 years
None of these

7%
5%

(b)
(d)

7.5%
7.18%

Rs.9,261
Rs.9,365

(b)
(d)

Rs.8,265
None of these

The compound interest on Rs.1,000 at 6% compounded semi-annually for 6 years

is:
(a)
(c)

5.30

5%
6%

Osama invested Rs.8,000 for 3 years at 5% C.I in a post office. If the interest is
compounded once in a year, what sum will he get after 3 years?
(a)
(c)

5.29

Rs.3,170.99
Rs.3,180.99

The effective rate of interest corresponding a nominal rate of 7% p.a. convertible

quarterly is:
(a)
(c)

5.28

(b)
(d)

The population of a town increases every year by 2% of the population at the

beginning of that year. The number of years by which the total increase of
population be 40% is:
(a)
(c)

5.27

Rs.3,150.99
Rs.3,160.99

The effective rate of interest corresponding to a nominal rate 3% p.a. payable half
yearly is:
(a)
(c)

5.26

Rs.2,522
None of these

At what rate of interest compounded semi-annually will Rs.6,000 amount to

Rs.9,630 in 8 years?
(a)
(c)

5.25

(b)
(d)

A person will receive Rs.5,000 six years from now. Present value at a
compounded discount rate of 8 percent is:
(a)
(c)

5.24

Rs.2,222
Rs.2,500

Rs.425.76
Rs.475.76

(b)
(d)

Rs.450.76
Rs.325.76

A sum of money invested at compound interest amounts to Rs.4,624 in 2 years

and to Rs.4,913 in 3 years. The sum of money is:
(a)
(c)

Rs.4,096
Rs.4,335

(b)
(d)

17

Rs.4,260
Rs.4,360

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.31

The population of a country increases at the rate of 3% per annum. How many
years will it take to double itself?
(a)
(c)

5.32

7.24%
8.42%

(b)
(d)

8.0%
8.24%

Option I
Both (a) and (b)

(b)
(d)

Option II
None of these

8.74 million
8.64 million

(b)
(d)

8.84 million
7.84 million

Rs.108,533
Rs.109,433

(b)
(d)

Rs.109,533
Rs.100,533

If Rs.110,000 is to grow to Rs.250,000 in ten years period, at what annual interest

rate must it be invested, given that interest is compounded semi annually?
(a)
(c)

5.38

14,683 fishes
14,583 fishes

A trust fund for a childs education is being set up by a single payment so that at
the end of 10 years there will be Rs.240,000. If the fund earns at the rate of 8%
compounded semi-annually, amount of money should be paid into the fund
initially is:
(a)
(c)

5.37

(b)
(d)

The population of a city was 8 million on January 1, 2010. The population is

growing at the exponential rate of 2 percent per year. What will the population be
on January 1, 2015?
(a)
(c)

5.36

14,693 fishes
15,693 fishes

An investor can earn 9.1% interest compounded semi-annually or 9% interest

compounded monthly. Determine which option he should prefer?
(a)
(c)

5.35

22.45 years
23.45 years

Compute effective rate of interest where nominal rate is 8% compounded

quarterly?
(a)
(c)

5.34

(b)
(d)

The number of fishes in a lake is expected to increase at a rate of 8% per year.

How many fishes will be in the lake in 5 years if 10,000 fishes are placed in the
lake today?
(a)
(c)

5.33

21.45 years
23 years

8.05%
8.15%

(b)
(d)

8.25%
8.38%

The nominal interest rate on an investment is 12 percent per year. Determine the
effective annual interest rate if interest is compounded quarterly.
(a)
(c)

11.55%
12.55%

(b)
(d)

18

12.05%
11.55%

The Institute of Chartered Accountants of Pakistan

Questions

5.39

The nominal interest rate on an investment is 16 percent per annum. Determine

the effective annual interest rate if interest is compounded quarterly.
(a)
(c)

5.40

20.37%
20.73%

(b)
(d)

20.74%
20.47%

8.29%
8.19%

(b)
(d)

8.20%
8.39%

Rs.3,000
Rs.12,000

(b)
(d)

Rs.3,700
Rs.10,000

Rs.500
Rs.180

(b)
(d)

Rs.600
Rs.360

A sum of money lent at compound interest for 2 years at 20% per annum would
fetch Rs.482 more, if the interest was payable half-yearly than if it was payable
annually. The sum is:
(a)
(c)

5.46

10.45%
10.15%

What will be the difference in the compound interest on Rs.50,000 at 12% for one
year, when the interest is paid yearly and half-yearly?
(a)
(c)

5.45

(b)
(d)

The difference between C.I and S.I on a certain sum of money invested for 3
years at 6% p.a. is Rs.110.16. The sum is:
(a)
(c)

5.44

10.25%
10.35%

Find the effective rate of interest equivalent to nominal rate of 8% compounded

monthly?
(a)
(c)

5.43

16.98%
15.98%

A car was moving at a speed of 135 km per hour. When brakes were applied, the
speed of the car reduced to 43.2 km per hour in five seconds. Find the rate of
decline in the speed of the car per second, if the percentage decrease after each
second was the same.
(a)
(c)

5.42

(b)
(d)

Find out the effective rate of interest equivalent to the nominal rate of 10 percent
compounded semi-annually.
(a)
(c)

5.41

16%
15%

Rs.10,000
Rs.40,000

(b)
(d)

Rs.20,000
Rs.50,000

The compound interest on a certain sum for 2 years at 10% per annum is Rs.525.
The simple interest on the same sum for double the time at half the rate percent
per annum is:
(a)
(c)

Rs.400
Rs.600

(b)
(d)

19

Rs.500
Rs.800

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.47

A shopkeeper sold goods worth Rs.3.0 million during 2008. If he is able to

increase his sale by 15% annually, in which year he would achieve annual sale of
Rs.25 million?
(a)
(c)

5.48

Rs.389,864
Rs.387,964

Rs.137,013.85
Rs.147,013.85

(b)
(d)

Rs.136,013.85
Rs.157,013.85

4th year
2nd year

(b)
(d)

3rd year
5th year

Bank A
Bank C

(b)
(d)

Bank B
Cannot be determined

A firms labour force is growing at the rate of 2 percent per annum. The firm now
employs 500 people. How many employees is it expected to hire during the next
five years?
(a)
(c)

5.53

(b)
(d)

Rashid wants to obtain a bank loan. Bank A offers a nominal rate of 14%
compounded monthly; Bank B a nominal rate of 14.5% compounded quarterly
and bank C offers an effective rate of 14.75%. Which option he should prefer, if all
other terms are same?
(a)
(c)

5.52

Rs.379,965
Rs.386,357

Mr. Rashid invested Rs.60,000 in a company but found that his investment was
losing 6% of its value per annum. After two years, he decided to pull out what was
left of the investment and place at 4% interest compounded twice a year. He
would recover his original investment in the :
(a)
(c)

5.51

Year 2024
Year 2000

A person deposited Rs.100,000 in a bank for three years. The bank paid interest
at the rate of 8% per annum compounded half yearly during the first year and at
the rate of 12% per annum compounded quarterly during the last two years. His
balance after three years is:
(a)
(c)

5.50

(b)
(d)

How much should an individual deposit now to yield Rs.600,000 at the end of five
years at 9% compounded half yearly?
(a)
(c)

5.49

Year 2023
Year 2021

52 employees
552 employees

(b)
(d)

550 employees
50 employees

The population of a country is growing exponentially at a constant rate of 2

percent per year. How much time this population will take to double itself?
(a)
(c)

31.65 years
30.65 years

(b)
(d)

20

32.65 years
34.65 years

The Institute of Chartered Accountants of Pakistan

Questions

5.54

The capital of a business grows @ 12% per annum compounded quarterly. If

present capital is Rs.300,000 the capital after 12 years would be:
(a)
(c)

5.55

Bank B
(b)
Both rates are same effectively (d)

Bank A
Cannot be determined

Rs.5,465.35
Rs.5,365.35

(b)
(d)

Rs.5,565.35
Rs.5,665.35

Rs.2,400
Rs.2,404

(b)
(d)

Rs.2,044
Rs.2,004

Rs.156,654.87
Rs.156,555.87

(b)
(d)

Rs.157,454.87
Rs.156,454.87

Rs.5,000 is paid every year for ten years to pay off a loan. What is the loan
amount if interest rate is 14% per annum compounded annually?
(a)
(c)

5.61

Rs.70,300
Rs.70,900

Z invests Rs.10,000 every year starting from today for next 10 years. Suppose
interest rate is 8% per annum compounded annually. Future value of the annuity
is:
(a)
(c)

5.60

(b)
(d)

Rs.200 is invested at the end of each month in an account paying interest 6% per
year compounded monthly. What is the future value of this annuity after 10th
payment?
(a)
(c)

5.59

Rs.70,000
Rs.70,600

Find the future value of an annuity of Rs.500 for 7 years at interest rate of 14%
compounded annually.
(a)
(c)

5.58

Rs.7,656,784
Rs.1,239,676

Bank A offers 12.25% interest compounded semi-annually, on its saving

accounts, while Bank B offers 12% interest compounded monthly. Which Bank
offers the higher effective rate?
(a)
(c)

5.57

(b)
(d)

If annual interest rate falls from 12 to 8 percent per annum, how much more be
deposited in an account to have Rs.600,000 in 5 years, if both rates are
compounded semi annually?
(a)
(c)

5.56

Rs.2,159,019
Rs.1,158,792

Rs.27,080.55
Rs.26,080.55

(b)
(d)

Rs.25,080.55
Rs.24,080.55

The present value of an annuity of Rs.3,000 for 15 years at 4.5% p.a. C.I. is:
(a)
(c)

Rs.23,809.41
Rs.32,908.41

(b)
(d)

21

Rs.32,218.63
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.62

What is the present value of Rs.15,000 received at the end of the current year &
next four years if the applicable rate is 7% per annum?
(a)
(c)

5.63

Rs.58,729.84
Rs.56,729.84

(b)
(d)

Rs.53,729.84
Rs.54,729.84

Rs.3,232.05
Rs.3,132.05

(b)
(d)

Rs.3,332.05
Rs.3,432.05

Rs.18,823.62
Rs.18,723.62

(b)
(d)

Rs.18,523.62
Rs.18,623.62

Less than 14%

At least 15%

(b)
(d)

15%
14%

A loan of Rs.10,000 is to be paid back in 30 equal annual installments. The

amount of each installment to cover the principal and 4% p.a. C.I. is:
(a)
(c)

5.69

Rs.200
Rs.100

ABC Ltd. Wants to lease out an asset costing Rs.360,000 for a five years period.
It has fixed a rental of Rs.105,000 per annum payable annually starting from the
end of first year. This agreement would be favourable to the company if the
interest rate which the company earns on its investments is:
(a)
(c)

5.68

(b)
(d)

How much amount is required to be invested every year so as to accumulate

Rs.300,000 at the end of 10 years if interest is compounded annually at 10%?
(a)
(c)

5.67

Rs.300
Rs.400

Y bought a TV costing Rs.13,000 by making a down payment of Rs.3,000 and

agreeing to make equal annual payment for four years. How much would each
payment be if the interest on unpaid amount is 14% compounded annually?
(a)
(c)

5.66

Rs.64,502.96
Rs.63,502.96

A borrows Rs.500,000 to buy a house. If he pays equal installments for 20 years

and 10% interest on outstanding balance what will be the equal annual
installment?
(a)
(c)

5.65

(b)
(d)

M/s. ABC Limited is expected to pay Rs.18 every year on a share of its stock.
What is the present value of a share if money worth is 9% compounded annually?
(a)
(c)

5.64

Rs.61,502.96
Rs.62,502.96

Rs.587.87
Rs.578.31

(b)
(d)

Rs.597.87
None of these

A person desires to create a fund to be invested at 10% C.I. per annum to provide
for a prize of Rs.300 every year. The amount he should invest is:
(a)
(c)

Rs.2,000
Rs.3,000

(b)
(d)

22

Rs.2,500
None of these

The Institute of Chartered Accountants of Pakistan

Questions

5.70

A firm wants to establish a library maintenance fund for a university. The firm
would provide Rs.25,000 every 6 months. The fund yields a 10 percent annual
rate of interest compounded semi annually. What is the initial deposit required to
establish a perpetual stream of payments from the interest every 6 months after
making the first payment from the principal?
(a)
(c)

5.71

Rs.1,261.97
Rs.1,161.97

Rs.2,341,746
Rs.2,331,746

(b)
(d)

Rs.2,371,746
Rs.2,351,746

Rs.15,225.80
Rs.15,325.80

(b)
(d)

Rs.15,025.80
Rs.15,125.80

Rs.125,365.20
Rs.133,365.20

(b)
(d)

Rs.130,365.20
Rs.135,365.20

Monthly payment necessary to pay off a loan of Rs.8,000 at 18% per annum
compounded monthly in two years is:
(a)
(c)

5.76

(b)
(d)

A Rs.680,000 loan calls for payment to be made in 10 annual installments. If the

interest rate is 14% compounded annually. Annual payment to be made is:
(a)
(c)

5.75

Rs.1,361.97
Rs.1,461.97

A firm has set up a contingency fund yielding 16 percent interest per year
compounded quarterly. The firm will be able to deposit Rs.1,000 into the fund at
the end of each quarter. The value of the contingency fund at the end of 3 years
is:
(a)
(c)

5.74

Rs.526,000
Rs.525,800

A person deposits Rs.30,000 every six months into a retirement account. The
account pays an annual interest rate of 12 percent compounded semi-annually.
The value of account after 15 years would be:
(a)
(c)

5.73

(b)
(d)

A person has borrowed Rs.19,000 for a small business. The loan is for five years
at an annual interest rate of 8 percent compounded quarterly. What is the amount
of quarterly payments to pay back the loan?
(a)
(c)

5.72

Rs.525,000
Rs.525,500

Rs.419.40
Rs.399.40

(b)
(d)

Rs.409.40
Rs.389.40

A man agrees to pay Rs.4,500 per month for 30 months to pay off a car loan. If
the interest of 18% per annum is charged monthly, the present value of car is:
(a)
(c)

Rs.108,271.27
Rs.108,671.27

(b)
(d)

23

Rs.108,171.27
Rs.108,071.27

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.77

A company is considering proposal of purchasing a machine either by making full

payment of Rs.4,000 or by leasing it for four years requiring annual payment of
Rs.1,250 or by paying Rs. 4,800 at the end of 2nd year. Which course of action is
preferable if the company can borrow money at 14% compounded annually?
(a)
(c)

5.78

Second Machine
Cannot be determined

14.2 years
12 years

(b)
(d)

10 years
11 years

Rs.2,100
Rs.2,000

(b)
(d)

Rs.2,170
None of these

10 years
11 years

(b)
(d)

12 years
None of these

A person invests Rs.500 at the end of each year with a bank which pays interest
at 10% p.a. C.I. The amount standing to his credit one year after he has made his
yearly investment for the 12th time would be:
(a)
(c)

5.83

(b)
(d)

Mr. Dawood borrows Rs.20,000 on condition to repay it with C.I. at 5% p.a. in

annual installments of Rs.2,000 each. The number of years for the debt to be paid
off is:
(a)
(c)

5.82

First Machine
Both are same

Mr. X borrowed Rs.5,120 at 12% p.a. C.I. At the end of 3 years, the money was
repaid along with the interest accrued. The amount of interest paid by him is:
(a)
(c)

5.81

Full payment
Either (a) or (c)

A company borrows Rs.10,000 on condition to repay it with compound interest at

5% p.a. by annual installments of Rs.1,000 each. The number of years by which
the debt will be clear is:
(a)
(c)

5.80

(b)
(d)

A machine with useful life of seven years costs Rs.10,000 while another machine
with useful life of five years costs Rs.8,000.The first machine saves labour
expenses of Rs.1,900 annually and the second one saves labour expenses of
Rs.2,200 annually. Determine the preferred course of action. Assume cost of
borrowing as 10% compounded per annum.
(a)
(c)

5.79

Leasing
Rs. 4,800 after 2 years

Rs.11,764
Rs.12,000

(b)
(d)

Rs.10,000
None of these

Shiraz acquired a new car worth Rs.850,000 through a leasing company. He

made a down payment of Rs.200,000 and has agreed to pay the remaining
amount in 10 equal semi-annual installments. The leasing company will charge
interest @ 19% per annum, over the lease term. Amount of semi-annual
installment and total amount of interest is:
(a)
(c)

Rs.103,623 and Rs.386,230

Rs.103,523 and Rs.385,230

24

(b)
(d)

Rs.103,533 and Rs. 386,000

Rs.103,554 and Rs. 385,830

The Institute of Chartered Accountants of Pakistan

Questions

5.84

Ashraf purchased a new car and made a down payment of Rs.50,000. He is

further required to pay Rs.30,000 at the end of each quarter for five years. The
cash purchase price of the car, if the quarterly payments include 12% interest
compounded quarterly, is:
(a)
(c)

5.85

Rs.44,260.52 and Rs.15,739.48

Rs.44,160.52 and Rs.15,839.48

Rs.448,664.41
Rs.449,664.41

(b)
(d)

Rs.447,664.41
Rs.446,664.41

Rs.3,547.87 and Rs.83,895.03

Rs.3,557.87 and Rs.83,875.03

(b)
(d)

Rs.3,527.87 and Rs.83,885.03

Rs.3,537.87 and Rs.83,845.03

A home buyer made a down payment of Rs.200,000 and will make payments of
Rs.75,000 each 6 months, for 15 years. The cost of fund is 10% compounded
semi-annually. What would have been equivalent cash price for the house? How
much will the buyer actually pay for the house?
(a)
(b)
(c)
(d)

5.89

Rs.44,560.52 and Rs.15,939.48 (b)

Rs.44,760.52 and Rs.15,239.48 (d)

How much money must be invested in an account at the end of each quarter if the
objective is to have Rs.225,000 after 10 years. The account can earn an interest
rate of 9 percent per year compounded quarterly. How much interest will be
earned over the period?
(a)
(c)

5.88

Rs.496,324.25
Rs.497,324.25

A firm wants to deposit enough in an account to provide for insurance payments

over the next 5 years. Payment of Rs.27,500 must be made each quarter. The
account yields an 8% annual rate compounded quarterly. How much be deposited
to pay all the insurance payments?
(a)
(c)

5.87

(b)
(d)

Shahab has an opportunity to invest in a fund which earns 6% profit compounded

annually. How much should he invest now if he wants to receive Rs.6,000
(including principal) from the fund, at the end of each year for the next 10 years?
How much interest he would earn over the period of 10 year?
(a)
(c)

5.86

Rs.498,324.25
Rs.499,324.25

Rs.1,360,933.8 and Rs.2,440,000

Rs.1,362,933.8 and Rs.2,455,000
Rs.1,352,933.8 and Rs.2,450,000
Rs.1,372,933.8 and Rs.2,456,000

An individual plans to borrow Rs.400,000 to buy a new car. The loan will be for 3
years at a 12 percent annual rate compounded monthly. He can pay Rs.12,500
per month during the first year. What amount would he be required to pay during
the next two years in order to repay the loan?
(a)
(c)

Rs. 13,755
Rs. 13,655

(b)
(d)

25

Rs. 13,705
Rs. 13,605

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

5.90

A person calculated that by depositing Rs.12,500 each year, starting from the end
of the first year, he shall be able to accumulate Rs.150,000 at the time of nth
deposit if the rate of interest is 4%. The number of years in which he can
accumulate the required amount is:
(a)
(c)

5.91

13.4%
14.2%

(b)
(d)

13.8%
14.6%

Rs.14,797.07
Rs.14,697.07

(b)
(d)

Rs.14,897.07
Rs.14,997.07

To clear a debt, a person agrees to pay Rs.1,000 now, another Rs.1,000 a year
from now and another Rs.1,000 in two years. If the future payments are
discounted at 8% compounded quarterly, what is the present value of these
payments?
(a)
(c)

5.95

Rs.41,199.26 & Rs.693,971.36

Rs.41,299.26 & Rs.693,972.36
Rs.41,099.26 & Rs.693,970.36
Rs.41,399.26 & Rs.693,973.36

A machine costs a company Rs.1,000,000 & its effective life is estimated to be 20

years. If the scrap is expected to realize Rs.50,000 only. The sum to be invested
every year at 13.25% compounded annually for 20 years to replace the machine
which would cost 30% more than its present value is:
(a)
(c)

5.94

10 years
11 years

A firm will need Rs.300,000 at the end of 3 years to repay a loan. The firm
decided that it would deposit Rs.20,000 at the start of each quarter during these 3
years into an account. The account would yield 12 percent per annum
compounded quarterly during the first year. What rate of interest should it earn in
the remaining 2 years to accumulate enough amount in this account to pay the
loan at the end of 3 years?
(a)
(c)

5.93

(b)
(d)

A food distributor has borrowed Rs.950,000 to buy a warehouse. The loan is for
10 years at an annual interest rate of 12 percent compounded quarterly. The
amount of quarterly payments which he must make to pay back the loan and the
interest he would pay is:
(a)
(b)
(c)
(d)

5.92

9 years
12 years

Rs.2,777.41
Rs.2,767.41

(b)
(d)

Rs.2,760.41
Rs.2,762.41

An equipment is bought for Rs.2,000 as down payment & a monthly installment of

Rs.400 each for one year. If money worth 12% compounded monthly, what is the
cash price of the equipment?
(a)
(c)

Rs.6,602.03
Rs.6,402.03

(b)
(d)

26

Rs.6,502.03
Rs.6,302.03

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 6: FINANCIAL MATHEMATICS: DISCOUNTING

Problems 6.16.2: Dawood has to repay a loan along with interest, three years from now.
The amount payable after three years is Rs. 428,000. The amount of loan presently if interest
rate is 8 % compounded:

6.1

semi-annually is:
(a)
(c)

6.2

Rs.109.75
Rs.110.96

Rs.3,429
Rs.3,431

(b)
(d)

Rs.3,430
Rs.3,440

Upward
Not relevant

(b)
(d)

Downward
Will depend on time period

Rs.9,090
Rs.9,500

(b)
(d)

Rs.9,250
Rs.9,302

Bashir owes Rs.50,000 to Arshad due to a court decision. The money must be
paid in 10 months with no interest. Suppose Bashir wishes to pay the money now.
What amount should Arshad be willing to accept? Assume simple interest of 8%
per annum.
(a)
(c)

6.8

(b)
(d)

A borrower has agreed to pay Rs.10,000 in 9 months at 10% simple interest. How
much did this borrower receive?
(a)
(c)

6.7

Rs.104.32
Rs.112.50

To increase present value, the discount rate should be adjusted:

(a)
(c)

6.6

(b) Rs.337,475
(d) Rs.335,475

The maturity value of a loan of Rs.2,800 after three years. The loan carries a
simple interest rate of 7.5% per year is:
(a)
(c)

6.5

Rs. 329,760
Rs. 341,475

The bankers interest to the nearest paisas. Principal: Rs.2500; Rate: 9%; Time
180 days: Interest is:
(a)
(c)

6.4

(b) Rs. 339,760

(d) Rs. 336,421

quarterly is:
(a)
(c)

6.3

Rs. 345,161
Rs. 338,254

Rs.45,875
Rs.46,875

(b)
(d)

Rs.47,875
Rs.46,575

Mr. Junaid received Rs.48,750 in cash as the proceeds of a 90 day loan from a
bank which charges 10% simple interest. The amount he will have to pay on the
maturity date is:
(a)
(c)

Rs.49,969
Rs.47,548

(b)
(d)

27

Rs.50,000
Rs.53,625

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

6.9

Zain has purchased a motor cycle worth Rs. 40,000 from his friend who has given
him the following options:
(a)
Pay Rs. 52,000 at the end of four years
(b)
Pay Rs.12,000 annually at the end of next 4 years
(c)
Pay Rs. 16,000 annually at the end of next 3 years
(d)
Pay the full amount now
Select the best option if Zains cost of funds is 10%.

6.10

Saleem has purchased an investment certificate having a face value of Rs.

50,000. It carries interest at the rate of 12% payable annually and would mature
after 4 years. For how much can Saleem sell this investment to a person whose
required rate of return is 10%.
(a)
(c)

Rs. 44,643
Rs. 53,170

(b)
(d)

28

Rs. 60,000
Rs. 50,543

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 7: LINEAR PROGRAMMING

7.1 (i)

An employer recruits experienced (x) and fresh workmen (y) for his firm under the
condition that he cannot employ more than 9 people, x and y can be related by
the inequality:
(a)
(c)

7.1 (ii)

(b)
(d)

5x + 3y > 30
None of these

y x/5
x 5y

5y x
None of these

(b)
(d)

The union however forbids him to employ less than 2 experienced person to each
fresh person. This situation can be expressed as:
(a)
(c)

7.2

5x + 3y 30
5x + 3y 30, x 0, y 0

The rules and regulations demand that the employer should employ not more
than 5 experienced hands to 1 fresh one. This fact can be expressed as:
(a)
(c)

7.1 (iv)

x + y 9, x 0, y 0
None of these

(b)
(d)

On the average, an experienced person does 5 units of work while a fresh recruit
does 3 units of work daily and the employer has to maintain an output of at least
30 units of work per day. This situation can be expressed as:
(a)
(c)

7.1 (iii)

x + y9
x + y 9, x 0, y 0

x y/2
y x/2

y x/2
x > 2y

(b)
(d)

The graph to express the inequality x + y 9 is:

(a)

(b)

(c)

(d)

29

None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

7.3

7.4

The graph to express the inequality 5x + 3y 30 is:

(a)

(b)

(c)

(d)

None of these

1
The graph to express the inequality y x is indicated by:
2

(a)

(b)

(c)

(d)

30

The Institute of Chartered Accountants of Pakistan

Questions

7.5

L1: 5x + 3y = 30, L2: x + y = 9, L3: y = x/3, L4: y = x/2

The common region (shaded part) shown in the diagram refers to:

7.6

(a)

5x + 3y 30
x + y 9
y 1/5x
y x/2

(b)

5x + 3y 30
x + y 9
y x/3
y x/2
x 0, y 0

(c)

5x + 3y 30
x + y 9
y x/3
y x/2
x 0, y 0

(d)

None of these

The region indicated by the shading in the graph is expressed by inequalities:

(a)

x1 + x2 2
2x1 + 2x2 8
x1 0, x2 0

(b)

x1 + x2 2
x2x1 + x2 4

(c)

x1 + x2 2
2x1 + 2x2 8

(d)

x1 + x2 2
2x1 + 2x2 > 8

31

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

7.7

If A is the number of batsmen and B is the number of bowlers, the inequality

constraint that the number of batsmen must be no more than 50% of the total
players is:
(a)

7.8

A B

A B

(b)

(c)

BA

(d)

A B

A firm manufactures two products. The products must be processed through one
department. Product A requires 6 hours per unit, and product B requires 3 hours
per unit. Total production time available for the coming week is 60 hours. There is
a restriction in planning the production schedule, as total hours used in producing
the two products cannot exceed 60 hours. This situation can be expressed as:
Y

20

20

15

(a)

15

(b)

10
5

10
5

10

10

20

15

(c)

10

(d)

None of these

7.9

10

A manufacturer produce two products P and Q which must pass through the
same processes in departments A and B having weekly production capacities of
240 hours and 100 hours respectively. Product P needs 4 hours in department A
and 2 hours in department B. Product Q requires 3 hours and 1 hour respectively,
in department A and B. Profit yields for product P is Rs.700 and for Q is Rs.500.
The manufacturer wants to maximize the profit with the given set of inequalities.
The objective function and all the constraints are:
(a)

Z = 700x + 500y
2x + 3y 240
2x + y 100
x, y 0

(b)

Z = 700x + 500y
4x + 3y 240
2x + y 100
x, y 0

(c)

Z = 700x + 500y
4x + 3y 240
2x + y 100

(d)

None of these

32

The Institute of Chartered Accountants of Pakistan

Questions

7.10

A dietician wishes to mix together two kinds of food so that the vitamin content of
the mixture is at least 9 units of vitamin A, 7 units of vitamin B, 10 units of vitamin
C and 12 units of vitamin D. The vitamin content per Kg. of each food is shown
below:
A
B
C
D
Food I:
2
1
1
2
Food II:
1
1
2
3
Assuming x units of food I is to be mixed with y units of food II the situation can be
expressed as:

7.11

(a)

2x + y 9
x + y 7
x + 2y 10
2x + 3y 12
x > 0, y > 0

(b)

2x + y 30
x + y 7
x + 2y 10
x + 3y 12

(c)

2x + y 9
x + y 7
x + y 10
x + 3y 12

(d)

None of these

Graphs of four equations are drawn below:

L1: 2x + y = 9, L2: x + y = 7, L3: x + 2y = 10, L4: x + 3y = 12

The common region (shaded part) indicated on the diagram is expressed by the
set of inequalities.
(a)

2x + y 9
x + y 7
x + 2y 10
x + 3y 12

(b)

2x + y 9
x + y 7
x + 2y 10
x + 3y 12

(c)

2x + y 9
x + y 7
x + 2y 10
x + 3y 12
x 0, y 0

(d)

None of these

33

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

7.12

7.13

The common region satisfied by the inequalities L1: 3x + y 6, L2: x + y 4,

L3: x + 3y 6 and L4: x + y 6 is indicated by:

(a)

(b)

(c)

(d)

None of these

A firm makes two types of products: Type A and Type B. The profit on product A
is Rs.20 each and that on product B is Rs.30 each. Both types are processed on
three machines M1, M2 and M3. The time required in hours by each product and
total time available in hours per week on each machine are as follow:
Machine
M1
M2
M3

Product A
3
5
2

Product B
3
2
6

Available Time
36
50
60

The constraints can be formulated taking x1 = number of units A and x2 = number

of unit of B as:
(a)

x1 + x2 12
5x1 + 2x2 50
2x1 + 6x2 60

(b)

3x1 + 3x2 36
5x1 + 2x2 50
2x1 + 6x2 60
x1 0, x2 0

(c)

3x1 + 3x2 36
5x1 + 2x2 50
2x1 + 6x2 60
x1 0, x2 0

(d)

None of these

34

The Institute of Chartered Accountants of Pakistan

Questions

7.14

7.15

The set of inequalities L1: x1 + x2 12, L2: 5x1 + 2x2 50, L3: x1 + 3x2 30, x1 0
and x2 0 is represented by:

(a)

(b)

(c)

(d)

None of these

The common region satisfying the set of inequalities x 0, y 0, L1: x + y 5,

L2: x + 2y 8 and L3: 4x + 3y 12 is indicated by:

(a)

(b)

(c)

(d)

35

None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

7.16

7.17

A manufacturer produces two products X1 and X2. Resources available for the
production of these two items are restricted to 200 support staff hours, 320
machine hours and 280 labour hours. X1 requires for its production 1 support staff
hour, 1 machine hour and 2 labour hours. X2 requires 1 support staff hour, 2
machine hours and 0.8 labour hour. X1 yields Rs.300 profit per unit and X2 yields
Rs.200 profit per unit. The manufacturer wants to determine the profit maximizing
weekly output of each product while operating within the set of resource
limitations. Situation of the above data in the form of equations and inequalities is:
(a)

Z = 300x + 200y
x + y 200
x + 2y 320
2x + 0.8y 280
x 0, y 0

(b)

Z = 300x + 200y
x + y 200
3x + 2y 320
2x + 0.8y 280
x 0, y 0

(c)

Z = 300x + 200y
x + y 200
x + 2y 320
2x + 0.8y 280

(d)

None of these

A factory is planning to buy some machine to produce boxes and has a choice of
B-1 or B-9 machines. Rs.9.6 million has been budgeted for the purchase of
machines. B-1 machines costing Rs.0.3 million each require 25 hours of
maintenance and produce 1,500 units a week. B-9 machines costing Rs.0.6
million each require 10 hour of maintenance and produce 2,000 units a week.
Each machine needs 50 square meters of floor area. Floor area of 1,000 square
meters and maintenance time of 400 hours are available each week. Since all
production can be sold, the factory management wishes to maximize out put.
Situation of above data in the form of objective function and constraints is:
(a)

Z = 1500x + 2000y
0.3x + 0.6y 9.6
25x + 10y 400
50x + 50y 1000
x 0, y 0

(b)

Z = 1500x + 2000y
0.3x + 0.6y 9.6
25x + 10y 400
50x + 50y 1000
x 0, y 0

(c)

Z = 1500x + 2000y
0.3x + 0.6y 9.6
25x + 10y 400
50x + 50y 1000
x 0, y 0

(d)

Z = 1500x + 2000y
0.3x + 0.6y 9.6
25x + 10y 400
50x + 50y 1000
x 0, y 0

36

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 8: CALCULUS: DIFFERENTIATION

8.1

If f ( x ) e
(a)
(c)

8.2

If y

e ax

(c)

(b)

2x x
1

2x x

(d)

1 + 1/x2
1/x2
2x

then

1
x x
None of these

(c)

1 1/x2
None of these

(b)

(d)

None of these

dy
is equal to:
dx

2x
e

(b)
(d)

2x

2x

2x

2 x

Derivative of y =

(a)

1
is:
x 3

1
( x 3 )2
1
( x 3 )2

(b)
(d)

1
( x 3 )2
1
( x 3 )3

The gradient of the curve y = 2x3 3x2 12x + 8 at x = 0 is:

(a)
(c)

8.7

e ax bx c ( 2ax b )
None of these

dy
is equal to:
dx

If y e

(a)

8.6

(b)
(d)

The differential coefficients of (x2 + 1)/x is:

(a)
(c)

8.5

bx c

then

(c)

8.4

then f ( x ) is:

2ax + b

(a)

8.3

ax 2 bx c

12
0

(b)
(d)

12
None of these

(b)
(d)

1/ x 1
None of these

The derivative of y x 1 is:

(a)
(c)

1/ x 1
1/ 2 x 1

37

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

8.8

If f ( x )
(a)
(c)

8.9

If y

(a)
(c)

8.11

If y =
(a)
(c)

8.14

(b)
(d)

1/(3 + 5x)2
None of these

(b)

2e x
( e x 1) 2

(d)

None of these

(b)
(d)

1/e
None of these

(b)
(d)

3 + 2t
None of these

3 5x
is:
3 5x

30/(3 + 5x)2
30/(3 + 5x)2

dy
ex 1
then
is equal to:
x
dx
e 1

2e x
( e x 1) 2
2
( e x 1) 2

1/e
e

2t
2t 3t 2

U
dy
and U = 3x2 1 then
at x = 1 is:
U 1
dx
3/2
2/3

If y = x(x 1)(x 2) then

(a)
(c)

8.15

None of these

If rt = 3 + t2, then dr/dt = ________.

(a)
(c)

8.13

x /( x 2 1) 2

4x /( x 2 1) 2

(b)
(d)

f(x) = x2/ex then f ( 1) is equal to:

(a)
(c)

8.12

4 x /( x 2 1) 2

The derivative of
(a)
(c)

8.10

x2 1
then f ( x ) is:
x2 1

(a)
(c)

2/3
3/2

(b)
(d)

6x + 2
None of these

dy
is:
dx

3x2 6x + 2
3x2 + 2

Given x = at2, y = 2at;

(b)
(d)

dy
is calculated as:
dx

t
1/t

(b)
(d)

38

1/t
None of these

The Institute of Chartered Accountants of Pakistan

Questions

8.16

If y

dy
e 3x e 2x
, then
is equal to:
3x
2x
dx
e e

(a)
(c)

2e5x
e5x/(e5x + e2x)

1/(e5x + e2x)2
None of these

(b)
(d)
2

8.17

1
then f ( 2 ) is equal to:
Let f ( x ) x
x

(a)
(c)

8.18

(c)

4 2x
then the values of x for which f (x) 0 is:
2 3x 3x 2

x+

1
x

, the expression

(b)

( 1 3 )

(d)

None of these

x 1
f x is equal to:
2x x

0
1

1
2

(b)
(d)

15
30

If the function y

(a)
(c)

8.23

3f ( 2 )
None of these

For the function y = x2, the average rate of change as x change from 5 to 10 is:
(a)
(c)

8.22

1/2
None of these

(b)
(d)

5
21
3

If f(x) =
(a)
(c)

8.21

f ( 2 )
2f ( 2 )

If f ( x )

(a)

8.20

(b)
(d)

If f(x) = x2 6x + 8 then f ( 5 ) f ( 8 ) is equal to:

(a)
(c)

8.19

3/4
0

(b)
(d)

2
x 4 x 1

then dy/dx is:
2
3x
3 5
x

4
1 1
2
3
3x
3 x
4
1 1
3 2
3x
3 x

For the following function y =

(a)
(c)

7/4
4/35

14
20

4
1 1
2
3
3x
3 x
4
1 1

3x 3 3 x 2

(b)
(d)

d 2y
7x 2
, the second derivative 2 at x = 3 is:
x 1
dx
(b)
(d)

39

4/35
35/4

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

8.24

If y = xey, then dy/dx is:

(a)
(c)

8.25

y
x( 1 y )
y
x( 1 x )

y
x( 1 y )
y
x( 1 y )

(b)
(d)

If y = xexln x, then dy/dx is:

(a)
(c)

y e x 1 ln x

y e x 1 ln x

(b)
(d)

y e x 1 ln x

y e x 1 ln x

CHAPTER 9: CALCULUS: TURNING POINTS, MAXIMA, MINIMA AND POINTS

OF INFLECTION
9.1

The total cost function of a product is defined by:

Q3
TC =
8Q2 + 120 Q + 10,000, the marginal cost function is:
3
(a)
(c)

9.2

x
e 0.03 x , where x denotes the
3000
number of units. The cost of producing 100th unit is:
(b)
(d)

Rs. 3.08
Rs. 3.00

24
28

(b)
(d)

26
27

Indicate the correct answer for the function. If f(x) = x3 3x2 + 3x + 7, then f(x) is:
(a)
(c)

9.5

Rs. 3.12
Rs. 3.04

A company produces x units of output at a total cost of 1/3 x3 18x2 + 160x.

Output at which average cost is equal to marginal cost is:
(a)
(c)

9.4

MC = Q2 16Q 120
MC = Q2 16Q + 130

(b)
(d)

The marginal cost of production (in Rs.) is 3

(a)
(c)

9.3

MC = Q2 + 16Q + 120
MC = Q2 16Q + 120

Maximum
(b)
Neither maximum nor minimum (d)

Minimum
Not possible

Average production cost per unit for a firm is AC = 0.02Q2 60Q, where Q is
quantity produced. The rate of change of AC at the production point
Q = 1,200 is:
(a)
(c)

0
13

(b)
(d)

40

12
12

The Institute of Chartered Accountants of Pakistan

Questions

9.6

Given total cost functions: TC = 31 + 24Q 5.5 Q2 +

Q3
. The relative minimum
3

or maximum for the function is:

(a)
(c)

9.7

(b)
(d)

3 units
4 units

The cost function for manufacturing a product is given as:

x2
C(x) = 150,000 + 20x
, the marginal cost of producing 50,001st unit is:
10,000
(a)
(c)

9.8

2 units
5 units

Rs.9.99
Rs.8.99

(b)
(d)

Rs.10.99
Rs.7.99

A firm has found from past experience that its profit in terms of number of units x
produced is given by P( x)

x3
729 25,000 . The value of x that maximizes
3

the profit is:

(a)
(c)

9.9

Rs.78,200
Rs.78,400

(b)
(d)

Rs.78,300
Rs.78,500

Rs.750
Rs.700

(b)
(d)

Rs.800
Rs.850

Maximum or minimum values of the function f(x) = (1 x)2 ex is:

(a)
(b)
(c)
(d)

9.12

26 units
27 units

The total cost C(x) of a firm is C(x) = 0.0005x3 0.7x2 30x + 3,000, where x is
the output. The value of x; for which MVC = AVC is: (where VC denotes the
variable cost, MVC denotes marginal variable cost and AVC denotes average
variable cost)
(a)
(c)

9.11

(b)
(d)

A company determines that the marginal cost of producing x units of a particular

commodity during a one-day operation is 16x 1,591, where the production cost
is in rupees. The selling price of a commodity is fixed at Rs.9 per unit and the
fixed cost is Rs.1,800 per day. The maximum profit that can be obtained in a oneday operation is:
(a)
(c)

9.10

25 units
28 units

Minimum value at x = 1; maximum value x = 1

Minimum value at x = 1; maximum value x = 2
Minimum value at x = 1; maximum value x = 1
None of these

The cost of producing x units of balloons is given by C(x) =140 + 0.125x +

0.0005x2. If the revenue function is determined by R(x) = 3x, maximum profit is:
(a)
(c)

Rs.3,892.81
Rs.3,992.81

(b)
(d)

41

Rs.3,792.81
Rs.3,692.81

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

9.13

For a particular process, the average cost is given by C = 80 12x + x2, where C
is the average cost (per unit) and x the number of units produced. The minimum
value of the average cost and the number of units to be produced are:
(a)
(c)

9.14

9.15

9.16

(a)
(c)

C(x) = 30x + 288,000

C(x) = 30x 288,000

(b)
(d)

(a)
(c)

x=7
x=6

(b)
(d)

x=8
x=9

For f(x) = 2x3 + 9x2 + 20x + 50, the point of inflexion is:

, 92.5
2

, 93.5
2

(b)
(d)

, 93.5
2

, 93.5
2

M/s. ABC Technologies know that the relationship between their weekly sales
quantity Q and weekly profit PR is expressed by the following function PR =
0.002Q2 + 10Q 4000, the profit maximizing quantity is:
(a)
(c)

2,500 units
250 units

(b)
(d)

25 units
25,000 units

The co-ordinates of the relative minima and/or maxima of the following function
y = e2x + 2ex 4x is:
(a)
(c)

9.19

5 and 44
4 and 44

C(x) = 30x 288,000

C(x) = 30x + 288,000
x3
The cost function of a company is given by C( x ) 100 x 8 x 2
, where x
3
denotes the output. The level of output at which marginal cost is minimum is:

(c)

9.18

(b)
(d)

A computer software company wishes to start the production of floppy disks. It

was observed that the company had to spend Rs.2 lakhs for the technical
information. The cost of setting up the machine is Rs.88,000 and the cost of
producing each unit is Rs.30, while each floppy could be sold at Rs.45. The total
cost function for producing x floppies is:

(a)

9.17

6 and 43
6 and 44

(3, 0) minimum
(0, 3) minimum

(b)
(d)

(3, 0) minimum
(0, 3) minimum

The demand for the product of a company varies with the prices that the company
charges for the product. The firm estimates that annual total revenue R (in
thousand Rupees) is a function of the price P (in Rupees).Specifically,
R = f(p) = 50p2 + 500p. The price that should be charged in order to maximize
total revenue is:
(a)
(c)

Rs.3
Rs.6

(b)
(d)

42

Rs.5
Rs.4

The Institute of Chartered Accountants of Pakistan

Questions

9.20

A Company has introduced a new product whose annual demand will depend on
price charged. The demand of the product is represented by the function
q = 100,000 200p, (where p = price and q = quantity demanded annually).
Studies indicate that total cost of producing q unit is represented by TC = 150,000
+ 100q + 0.003 q2 quantity to be produced to maximize profit is:
(a)
(c)

25 units
2,500 units

(b)
(d)

25,000 units
250 units

CHAPTER 10: MATRICES AND DETERMINANTS

10.1

32
is:
5 7

Order of
(a)
(c)

10.2

(b)
(d)

Rectangle
None of these

d
b

(b)
(d)

c
a

Not necessarily
No

(b)
(d)

Always
None of these

If A = (5 2) and 2A + 3B = (-7 4) then B is equal to:

(a)
(c)

10.6

Square
Diagonal

A null matrix is always a square matrix.

(a)
(c)

10.5

2 1
1 2

a b
ln
the element of 1st row and 2nd column is:

c d
(a)
(c)

10.4

(b)
(d)

5 0
0 7 is a ________ matrix.

(a)
(c)

10.3

2 2
1 1

(1 0)
(0 1)

(b)
(d)

(0 -1)
(-1 0)

4 2
The value of a if the following matrix is singular:

6 a
(a)
(c)

3
1/3

(b)
(d)

43

1/3
3

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

10.7

5 2 7

1 9 is:
The co-factor, A23 of the matrix A 6
4 3 8
(a)
(c)

10.8

23
23

(b)
(d)

7
7

Which of the following determinants is not 0?

1 2 3
(a)

(c)

0 1 0

3 6 9

0 0 1

(b)

3 2 1

1 0 0

1 0 3
1 0 1

1 2 2
2 2 1

(d)

2 0 8

10.9

2 3
, which of the following is false?
If A
2 4

(a)
(c)

10.10

2 3 / 2

A 1
1
1

(d)

None of these

n p
m n

(b)
(d)

m p
n m

A+B B+A
AB BA

(b)
(d)

(At)t A
all are true

(b)
(d)

AtBt
BA

(b)
(d)

Identity matrix
Odd matrix

(AB)t = ?
(a)
(c)

10.13

(b)

If A and B are matrices, then which from the following is true?

(a)
(c)

10.12

2 6

A 2
4 10
A 2

If the order of matrix A is m p. And the order of B is p n. Then the order

of AB is:
(a)
(c)

10.11

5 8 7

BtAt
AB

9 0
The matrix A
is a:
0 9
(a)
(c)

Scalar matrix
Even matrix

44

The Institute of Chartered Accountants of Pakistan

Questions

10.14

1
3

The transpose of the matrix A 2 7 is:

6 4
(a)
(c)

10.15

(b)
(d)

1 7 4
3
2
6

1 7 4
2
3
6

An Identity Matrix containing four Columns and four Rows is:

(a)

(c)

10.16

2
6
3
1 7 4

3
6
2
1 7 4

1
0

0
1
0

0 0 0
0 0 0
0 1 0

0 0 1
0 0 0
1 0 0
0 1 0

0 0 0

(b)

(d)

1
0

0
0
0

0 0 0
1 0 0
0 1 0

0 0 1
0 0 0
1 0 0
0 1 0

0 0 1

If A, B and C are matrices with orders 3 3, 2 3 and 4 2 respectively, how many

of the following matrix calculations are possible?
4B, A + B, 3BT + C, AB, BTA, (CB)T, CBA
(a)
(c)

10.17

10.18

0
2

(b)
(d)

3
1

4 0 7
3 1 4
If A
and B
, the matrix X which satisfies the matrix

2 1
2 5 1
0
equation 2A + XT = 3B is:

(a)

18 2 29
6 19 5

(c)

6 2 13
6 11 1

(b)

(d)

6
2

13
18
2

29

6
11
1
6
19
5

Which one of the following matrices has an inverse which is not listed?
1
1 1
1 0
0
1 1
1 0
A
,B
,C
,D
,E

1 0
0 1
1 1
1 0
0 1
(a)
(c)

B
A

(b)
(d)

45

E
D

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

10.19

10.20

3 4
10
8 1 5
If A
, B

then A + B is:
9
1 4
1 4 9

(a)

11 5 5
3 3 4

(b)

(c)

2 4 9
0 0 18

(d)

(c)

1
B
2
1

B 1
0

(b)

1 1 0

B
2 0 1

0
1

(d)

B is not determined

The following two matrices are equal. The values of p, q, r and n are:
q
4
p
2
A
and B

r
0
1
n
(a)
(c)

10.22

4
9
5

9
5
9
4

3 2
1 3 2
and AB
, then:
If A
1 1
1 1 1
(a)

10.21

3
10
1 4

8
1

4
1
1
8
1
4

10
3

1 4

p = 2, q = 3, n = 1, r = 0
p = 2, q = 4, n = 1, r = 0

(b)
(d)

p = 1, q = 4, n = 1, r = 0
p = 2, q = 4, n = 1, r = 1

A clothing store discounts sale price of all its shirts, trousers and jackets by 20%.
If V1 is the sale value of stock in its 3 branches before the discount, the value V2
after the discount, when:

50,000 45,000 60,000

V1 100,000 120,000 75,000
80,000 90,000 10,000

(a)

(c)

40,000 36,000 48,000

80,000 96,000 60,000

72,000 64,000 8,000

40,000 36,000 48,000
80,000 96,000 60,000

64,000 72,000 8,000

46

(b)

(d)

48,000 36,000 40,000

80,000 96,000 60,000

64,000 72,000 8,000

40,000 36,000 48,000
80,000 60,000 96,000

64,000 72,000 8,000

The Institute of Chartered Accountants of Pakistan

Questions

10.23

5
15
If x then x and y are:
2
y
(a)
(c)

10.24

10.26

x = 1/3, y = 6
x = 6, y = 1/3

340
76

(b)
(d)

364
100

19 10
Given that M
then M1, if it exists is:

29 20

(a)

2
9

29
90

(c)

1
20

1
19

1
9

19

90

(b)

2
9

29
90

1
10

19

(d)

No inverse possible

1
9

19

90

0
1 10

4 then M1, if it exists is:

Given that M 2 10
4 0 8

(a)

(c)

10.27

(b)
(d)

3
5 2
4 1 5
The determinant of the matrix
is:
6
7
9
(a)
(c)

10.25

x = 2/3, y = 6
x = 1/3, y = 4

1 / 2 1 / 4
1
1 / 10 1 / 10
0

0
1 / 4 1 / 40
0
1/ 2
1
1
1 / 10
1 / 2

1 / 2 1 / 20 1 / 40

(b)

1
1/ 2
1
0
1 / 10 1 / 20

1 / 2 1 / 2
1 / 8

(d)

No solution possible

13 3 x1 11
For the system of equations

x1 & x2 are:
16 6 x 2 7

(a)
(c)

25
18
, x2
6
13
58
25
x1
, x2
39
6
x1

47

29
89
, x2
10
10

(b)

x1

(d)

No solution possible

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

10.28

1 5 0 x1 1

2 x 2 12 x1, x2 and x3 are:

For the system of equations 1 5
2 0 4 x 3 15
(a)
(c)

10.29

7
9
11
, x2
, x3
2
10
2
17
41
13
x1
, x2
, x3
5
10
4

x1

(b)
(d)

5 3 2

If A 0 4 1 then A ?
0 0 3
(a)
(c)

10.30

17
61
7
, x2
, x3
2
10
10
41
13
39
x1
, x2
, x3
2
5
4
x1

30
50

(b)
(d)

40
60

X Limited has the following sales position of its products A and B at its two
centres P and Q at the end of the year:
P Q

A 50 45
B 60 70

If the sale for the first three months is given as:

P
Q

A 30 15
B 20 20

The sales position for the last nine months is:

10.31

(a)

A 20 30
B 40 50
P Q

(b)

A 40 30
B 20 50
P Q

(c)

A 30 20
B 40 50

(d)

A 20 30
B 50 40

Zaid, Hamza and Talha purchased biscuits of different brands P, Q and R. Zaid
purchased 10 packets of P, 7 packets of Q and 3 packets of R. Hamza purchased
4 pockets of P, 8 packets of Q and 10 packets of R. Talha purchased 4 packets of
P, 7 packets of Q and 8 packets of R. If brand P costs Rs.4, Q costs Rs.5 and R
costs Rs.6 each, then using matrix operation, the amount of money spent by
these persons individually are:
(a)
(c)

Rs.99, Rs.116 and Rs.99

Rs.99, Rs.116 and Rs.100

(b)
(d)

48

Rs.100, Rs.115 and Rs.99

Rs.95, Rs.100 and Rs.99

The Institute of Chartered Accountants of Pakistan

Questions

10.32

Mr. X invested a part of his investment in 10% bond A and a part in 15% bond B.
His interest income during the first year is Rs.4,000. If he invests 20% more
in10% bond A and 10 % more in 15% bond B, his income during the second year
increases by Rs.500. His initial investment and the new investment in bonds A
and B are:
(a)
(b)
(c)
(d)

10.33

A company produces three products everyday. Their total production on a certain

day is 45 tons. It is found that the production of the third product exceeds the
production of the first product by 8 tons while the total combined production of the
first and third product is twice that of the second product. The production level
of each product is:
(a)
(c)

10.34

12, 16 and 18 tons

11, 15 and 19 tons

(b)
(d)

11, 16 and 18 tons

12, 15 and 20 tons

If matrix A has x rows and x + 5 columns, matrix B has y rows and 11 y columns
and both AB and BA are defined for product then x and y are:
(a)
(c)

10.35

x = Rs.10,000, y = Rs.20,000 and Rs.12,000, Rs.22,000

x = Rs.20,000, y = Rs.10,000 and Rs.12,000, Rs.22,000
x = Rs.10,000, y = Rs.10,000 and Rs.12,000, Rs.22,000
x = Rs.10,000, y = Rs.20,000 and Rs.22,000, Rs.12,000

x = 5, y = 8
x = 3, y = 5

(b)
(d)

x = 3, y = 8
x = 8, y = 3

9
5 2
3
If X Y
and X Y

, then X and Y are:

0 9
0 1
(a)
(c)

4 11 / 2
1 7 / 2
X
,Y

(b)
4
0
0 5
4 11 / 2
1 7 / 2
X
,Y
(d)

5
5
0
0

49

4 11 / 2
1 7 / 2
X
,Y

4
5
0
0
1 7 / 2
4 11 / 2
X
,Y

5
4
0
0

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

CHAPTER 11: COLLECTION, TABULATION AND PRESENTATION OF DATA

11.1

Primary data can be collected:

(a)
(c)

11.2

From State Bank

All of these

Observation
Sample space

(b)
(d)

Data
None of these

The branch of statistics devoted to the summarization and description of data is

called:
(a)
(c)

11.4

(b)
(d)

Any recording of information, whether it be quantitative or qualitative is called:

(a)
(c)

11.3

From newspapers
By carrying out surveys

Statistical inference
Descriptive statistics

(b)
(d)

Non-parametric statistics
None of these

Method concerned with the analysis of a subset of data leading to predictions

or inferences about the entire set of data is known as:
(a)
(c)

Classification of data
Inferential statistics

(b)
(d)

Presentation of data
None of these

11.5

The generalisation associated with statistical inferences are always subject to:
(a)
accuracy
(b)
Certainty
(c)
uncertainty
(d)
None of these

11.6

The statistician is primarily concerned with:

(a)
(c)

11.7

Quantitative data
Abnormal data

Data
Population

(b)
(d)

Sampling distribution
Sample

In the field of statistical inference the statistician is interested in arriving at

conclusion concerning a:
(a)
(c)

11.9

(b)
(d)

The totality of the observations with which an statistician is concerned is known

as:
(a)
(c)

11.8

Qualitative data
Hypothesis

Sample
Hypothesis

(b)
(d)

Population
None of these

Any sampling procedure that produces inferences that consistently over estimate
or consistently under estimate some characteristics is said to be:
(a)
(c)

Simple random sampling

Biased

(b)
(d)

50

Systematic sampling
None of these

The Institute of Chartered Accountants of Pakistan

Questions

11.10

In simple random sampling each unit of the population has ___________ chance
of selection:
(a)
(c)

11.11

Only integral values

Only fractional values
Whole number as well as fraction
None of these

Sample data
Secondary data

(b)
(d)

Primary data
None of these

Sample data
Secondary data

(b)
(d)

Primary data
None of these

Inquiry form
Questionnaire

(b)
(d)

Data collection form

None of these

The arrangement of data according to magnitude of data is known as:

(a)
(c)

11.18

Only integral values

Only fractional values
Whole number as well as fraction
None of these

An inquiry form comprising of a number of pertinent questions is knows as:

(a)
(c)

11.17

Aggregates
None of these

Processed or published data is known as:

(a)
(c)

11.16

(b)
(d)

Raw data, or unprocessed data or originally collected data are known as:
(a)
(c)

11.15

Individuals
particular individual

A continuous variable is that which can assume:

(a)
(b)
(c)
(d)

11.14

Unequal
None of these

A discrete variable is that which can assume:

(a)
(b)
(c)
(d)

11.13

(b)
(d)

Statistics deals with the behaviour of:

(a)
(c)

11.12

equal
maximum

Classification
Array

(b)
(d)

Tabulation
None of these

The process of arranging data in groups or classes according to their

resemblance or affinities is known as:
(a)
(c)

Classification
Tabulation

(b)
(d)

51

Frequency distribution
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

11.19

The purpose of classification and tabulation is to present data in:

(a)
(c)

11.20

Raw data
Primary data

(b)
(d)

Frequency distribution
None of these

Median
Measures of central tendency

(b)
(d)

Measures of data
None of these

Statistical measures which provide a measure of variability among the

observations are called:
(a)
(c)

11.23

Easy to understand form

None of these

Statistical measures which define the centre of a set of data are called:
(a)
(c)

11.22

(b)
(d)

We can extract some information at a glance from:

(a)
(c)

11.21

Visual form
Frequency distribution

Quartiles
Co-efficient of variation

(b)
(d)

Measures of dispersion
None of these

Any numerical value describing a characteristic of a population is called:

(a)
(c)

Parameter
Statistic

(b)
(d)

Sample
None of these

CHAPTER 12: STATISTICAL MEASURES OF DATA

12.1

Any numerical value describing a characteristic of a sample is called:

(a)
(c)

12.2

Sample variance
None of these

Size of the population

Population parameter

(b)
(d)

Probability
None of these

If each observation is decreased by 2, the mean of new set of observations will:

(a)
(c)

12.4

(b)
(d)

The value of a statistic is used to estimate the:

(a)
(c)

12.3

Sample mean
Statistic

Increase by 2
Remain unchanged

(b)
(d)

Decrease by 2
None of these

If each observation is increased by 5, the mean of new set of observations will:

(a)
(c)

Increase by 5
Remain unchanged

(b)
(d)

52

Decease by 5
None of these

The Institute of Chartered Accountants of Pakistan

Questions

12.5

If each observation is multiplied by 5, the mean of new set of observations will:

(a)
(c)

12.6

(b)
(d)

Median
None of these

Descriptive statistics
Not a statistical statement

(b)
(d)

Inferential statistics
None of these

Descriptive statistics
Not a statistical statement

(b)
(d)

Inferential statistics
None of these

Descriptive statistics
Not a statistical statement

(b)
(d)

Inferential statistics
None of these

Descriptive statistics
Not a statistical statement

(b)
(d)

Inferential statistics
None of these

The survey of consumers indicate that more than 50% consumers use brand A
detergent. The above statement is:
(a)
(c)

12.13

Mode
Mean

As a result of a recent conflict, most people are in favour of producing nuclear

weapons. The above statement is:
(a)
(c)

12.12

increase by 10 times
None of these

Of all patients who received this particular type of drug at a local clinic, 60% later
developed significant side effects. The above statement is:
(a)
(c)

12.11

(b)
(d)

At least 10% of firing incidents reported by the police were fictitious. The above
statement is:
(a)
(c)

12.10

Decrease by 10 times
Remain unchanged

As a result of recent nuclear bomb explosion, we can expect that prices of all
commodities will go up. The above statement is:
(a)
(c)

12.9

Divided by 5 times
None of these

The middle most value of arranged set of observations is known as:

(a)
(c)

12.8

(b)
(d)

If each observation is divided by 10, the mean of new set of observations will:
(a)
(c)

12.7

Increase by 5 times
Remain unaltered

Descriptive statistics
Not a statistical statement

(b)
(d)

Inferential statistics
None of these

The unit of measurement of coefficient of variation of speed of balls bowled by a

bowler is:
(a)
(c)

Feet per second

Neither (a) nor (b)

(b)
(d)

53

Yards per second

Both (a) as well as (b)

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

12.14

A family travels 500 kms each day for 3 days. The family averages 80 kms per
hour the first day, 93 kms per hour the second day, 87 kms per hour the third day.
The average speed for the entire trip is:
(a)
(c)

12.15

(c)

12.21

1.08125 and 8.125%

1.08119 and 8.6%

(b)
(d)

1.086 and 8.6%

None of these

86
93 + 92
2

(b)

93

(d)

None of these

Does no exist
3

(b)
(d)

2.9
None of these

Mode
1

(b)
(d)

3
None of these

3.1 + 4.3
2
None of these

Mode of 2.5, 3.6, 3.1, 4.3, 2.9, 2.3 is:

(a)

4.3

(b)

(c)

Does not exist

(d)

The real ____________ of the mean is that it may be affected by extreme values.
(a)
(c)

12.22

Geometric mean
None of these

The value which occurs most or the value with the greatest frequency is called:
(a)
(c)

12.20

(b)
(d)

Median of 2.5, 3.6, 3.1, 4.3, 2.9, 2.3 is:

(a)
(c)

12.19

Arithmetic mean
Harmonic mean

Median of 82, 86, 93, 92, 79 is:

(a)

12.18

85 kms \Hr
None of these

Over a period of 4 years, an employees salary has increased in the ratios, 1.072,
1.086, 1.069 and 1.098. The average of these ratios and hence the average
percent increase are:
(a)
(c)

12.17

(b)
(d)

The average preferred, to such data as rates of change in ratios, economic index
numbers, population sizes over consecutive time periods, is:
(a)
(c)

12.16

87 kms \Hr
86.7 kms \Hr

Advantage
Choice

(b)
(d)

Disadvantage
None of these

The median is _______ by extreme values and gives a truer average.

(a)
(c)

Not influenced
Affected

(b)
(d)

54

Influenced
None of these

The Institute of Chartered Accountants of Pakistan

Questions

12.23

It is the only average that can be used for qualitative as well as quantitative data:
(a)
(c)

12.24

(b)
(d)

10.8%
10.666%

81
80.5

(b)
(d)

80
None of these

79.41
80

(b)
(d)

79.67
None of these

Zero
Greater than mean

(b)
(d)

Less than mean

None of these

8
5

(b)
(d)

7
None of these

The sum of square of deviations from mean is always:

(a)
(c)

12.31

10.762%
10.766%

If ( 7) = 0, then = _________ .
(a)
(c)

12.30

25
None of these

The sum of deviations from a mean is always:

(a)
(c)

12.29

(b)
(d)

Three sections of a statistics class containing 28, 32 and 35 students averaged

83, 80 and 76 respectively. What is the average of all 3 sections?
(a)
(c)

12.28

60
15

What is the average for a student who received grades of 85, 76 and 82 on 3 mid
term tests and a 79 on the final examination, if the final examination counts 3
times as much as each of the three tests?
(a)
(c)

12.27

Mode
None of these

A person invests Rs. 5,000/= at 10.5% interest, Rs. 6,300/= at 10.8% and Rs.
4,500 at 11%. What is the average percentage return to the saving?
(a)
(c)

12.26

(b)
(d)

A car averages 20 kilometres per litre on the highway. How many litres are
required to complete 300 kilometre trip?
(a)
(c)

12.25

Mean
Median

More than zero

Less than zero

(b)
(d)

Zero
Less than Mean

The average daily sale and the related standard deviation of Ali, Atif, Ahmed and
Azeem in thousands of Rupees are 41 & 4.3, 36 & 3.2, 26 & 2.9 and 24 & 2.5
respectively, then the most inconsistent among them is:
(a)
(c)

Ali
Ahmed

(b)
(d)

55

Atif
Azeem

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

12.32

If for two observations, deviations from mean are -3 and +3 respectively, then the
variance is:
(a)
(c)

12.33

(b)
(d)

Increase with the same amount

Remain the same

Size of sample is less than 40

Mean is less than 40

(b)
(d)

Size of sample is less than 30

Mean is less than 30

Above the mean

Above or below the mean

(b)
(d)

Below the mean

None of these

Observation is less than mean

Observation is less than standard deviation
Observation is more than standard deviation
None of these

+1
+17

(b)
(d)

- 17
None of these

It is possible to compare two observations measured in completely different units

by z-score because:
(a)
(c)

12.40

Decrease
Increase in the same ratio

If z= -2, = 17 and 2 = 64 then x =_______:

(a)
(c)

12.39

Standard deviation
None of these

If z=-2 then it is correct to say that:

(a)
(b)
(c)
(d)

12.38

(b)
(d)

A z-score measures how many standard deviations an observation is:

(a)
(c)

12.37

Mean deviation
Mean deviation from mean

t-distribution is used when:

(a)
(c)

12.36

Does not exist

None of these

The co-efficient of variation of 3 numbers i.e. x, x+4 and x+11 is y. If x is increased,

the value of y would:
(a)
(c)

12.35

(b)
(d)

The positive square root of variance is called:

(a)
(c)

12.34

0
9

z-score has its own units

z-score is a standard score

(b)
(d)

z-score is a unit less quantity

None of these

The quantity which expresses the standard deviation as a percentage of mean is

called:
(a)
(c)

z-score
Co-efficient of dispersion

(b)
(d)

56

Co-efficient of variation
None of these

The Institute of Chartered Accountants of Pakistan

Questions

12.41

A distribution that lacks symmetry with respect to a vertical axis is said to be:
(a)
(c)

12.42

(b)
(d)

Positively skewed
None of these

0 and 7
7 and 49

(b)
(d)

7 and 0
None of these

17.04
51.12

(b)
(d )

20.04
None of these

17.04
153.36

(b)
(d)

51.12
None of these

Increase by that constant

Remain unchanged

(b)
(d)

Decrease by that constant

None of these

If some constant is subtracted from each observation of the given set of data,
variance will:
(a)
(b)
(c)
(d)

12.49

Symmetrical
Negatively skewed

If some constant is added to each observation of a given set of data then the
variance will:
(a)
(c)

12.48

Positively skewed
None of these

If the variance of 2, 5, 7, 10 and 14 is 17.04 then the variance of 6, 15, 21, 30 and
42 is:
(a)
(c)

12.47

(b)
(d)

If the variance of 2, 5, 7, 10 and 14 is 17.04 then the variance of 5, 8, 10, 13 and

17 is:
(a)
(c)

12.46

Symmetrical
Negatively skewed

For the observations 7, 7, 7, mean and variance are respectively:

(a)
(c)

12.45

Probability distribution
None of these

In a given distribution if mean is greater than median, the distribution is said to be:
(a)
(c)

12.44

(b)
(d)

In a given distribution if mean is less than median, the distribution is said to be:
(a)
(c)

12.43

Normal
Skewed

Decrease by the that constant

Increase by that constant
Remain unchanged
None of these

If each observation of the given set of data is multiplied by a constant x, then the
variance will:
(a)
(b)
(c)
(d)

Increase by x times
Decrease by x times
Increase by x2 times
None of these

57

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

12.50

If each observation of the given set of data is divided by a constant x, then the
variance will:
(a)
(b)
(c)
(d)

12.51

For the values -2, -5, -7, -10 and -14 the variance is:
(a)
(c)

12.52

+9
None of these

Ages of people of Pakistan

Heights of students in a class

(b)
(d)

Incomes of people of Pakistan

None of these

75% of observations
95% of observations

(b)
(d)

68% of observations
None of these

89% of observations
99.7% of observations

(b)
(d)

95% of observations
None of these

89% of observations
99.7% of observations

(b)
(d)

95% of observations
None of these

The 50th percentile, fifth decile, second quartile and median of a distribution are:
(a)
(c)

12.58

(b)
(d)

For a bell shaped distribution the interval 3 approximately contains:

(a)
(c)

12.57

9
-9

For a bell shaped distribution the interval 2 approximately contains:

(a)
(c)

12.56

+17.04
None of these

For a bell-shaped distribution the interval approximately contains:

(a)
(c)

12.55

(b)
(d)

Which of the following is likely to produce a bell shaped curve:

(a)
(c)

12.54

-17.04
-8.54

If the variance of a given set of observations is 81, the standard deviation is:
(a)
(c)

12.53

Decrease by x times
Increase by x times
Decrease by x2 times
None of these

Unequal
Approximately equal

(b)
(d)

Equal
None of these

The measure of variation which measures the length of interval that contains the
middle 50% of data is known as:
(a)
(c)

Quartile-deviation
Inter-quartile range

(b)
(d)

58

Semi-inter quartile range

None of these

The Institute of Chartered Accountants of Pakistan

Questions

12.59

Any process that generates a set of data is called:

(a)
(c)

An experiment
A statistical experiment

(b)
(d)

A random process
None of these

CHAPTER 13: REGRESSION AND CORRELATION

13.1

If the values of two different variables (say x and y) are plotted on a rectangular
axes, such a plot is referred to as a:
(a)
(c)

13.2

Related
None of these

No correlation
Negative correlation

(b)
(d)

High positive correction

None of these

No correlation
High negative correlation

(b)
(d)

High positive correlation

None of these

No linear relationship
Low negative relationship

(b)
(d)

Low positive relationship

None of these

A measure of the strength or degree of relationship or the interdependence is

called:
(a)
(c)

13.7

(b)
(d)

In a scatter diagram, if the points follow a strictly random pattern, the two
variables are said to have:
(a)
(c)

13.6

Unrelated
Linearly related

In a scatter diagram, if the points follow clearly a straight line of negative slope,
the two variables are said to have:
(a)
(c)

13.5

Value diagram
None of these

In a scatter diagram, if the points follow closely a straight line of positive slope,
the two variables are said to have:
(a)
(c)

13.4

(b)
(d)

From the inspection of scatter diagram if it is seen that the points follow closely a
straight line, it indicates that the two variables are to some extent:
(a)
(c)

13.3

Frequency diagram
Scatter diagram

Correlation
Least square estimate

(b)
(d)

Regression
None of these

The phenomenon that investigates the dependence of one variable on one or

more independent variables is called:
(a)
(c)

Correlation
Least square estimate

(b)
(d)

59

Regression
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

13.8

The linear relation between a dependent and an independent variable is called:

(a)
(c)

13.9

(b)
(d)

May take any value

Less than -1or more than 1

Sum of squares method

Least square method

(b)
(d)

Sum of squares of errors method

None of these

Both positive
Both positive or both negative

(b)
(d)

Both negative
None of these

Random values
Both (a) or (b)

(b)
(d)

Fixed values
None of these

The explained variable

The explanatory variable

(b)
(d)

Unexplained variable
None of these

Which of the statements about Spearmans Co-efficient of Correlation is NOT

correct:
(a)
(b)
(c)
(d)

13.16

Must be positive
Must be negative

The dependent variable is also called response or:

(a)
(c)

13.15

Sample parameter
None of these

In regression, the dependent variable is assumed to be a random variable

whereas the independent variable is assumed to have:
(a)
(c)

13.14

(b)
(d)

The numerical values of regression co-efficients must be:

(a)
(c)

13.13

Regression parameter
Regression co-efficient

The procedure which selects that particular line for which the sum of the squares
of the vertical distances from the observed points to the line is as small as
possible, is called:
(a)
(c)

13.12

Regression co-efficient
None of these

In regression analysis, if the value of a is positive the value of b:

(a)
(c)

13.11

(b)
(d)

Slope of the regression line is called:

(a)
(c)

13.10

Regression line
Co-efficient of correlation

It can co-relate two or more set of rankings

It applies only when no ties exist
Both (a) and (b)
None of the above

The explained variable or response is also called:

(a)
(c)

The independent variable

Non-random variable

(b)
(d)

60

The dependent variable

None of these

The Institute of Chartered Accountants of Pakistan

Questions

13.17

The predictor or unexplained variable is also called:

(a)
(c)

13.18

1.47
4.00

1.47
Cannot be determined

(b)
(d)

2.831
None of these

Should be zero
Is likely to be close to zero
In majority of the cases would be equal to zero
None of these

Dependent
Correlated

(b)
(d)

Independent
None of these

If two variable tends to increase (or decrease) together, the correlation is said to
be:
(a)
(c)

13.24

(b)
(d)

If two variables tends to vary simultaneously in some direction, they are said to
be:
(a)
(c)

13.23

0.96
11.85

If Y is the observed value and is the estimated value (estimated by using the
regression line) then ( ):
(a)
(b)
(c)
(d)

13.22

Increases by 2.8 units at per unit increase in independent variable

Decreases by 2.8 units at per unit increase in independent variable
Increases by 2.8 units at per unit decrease in independent variable
None of these

If a random sample of 9 observations yielded the values = 102, =

302, = 3583 2 = 1308 then the value of b is:
(a)
(c)

13.21

The dependent variable

None of these

If = 11.33; = 33.56 and =2.832 then a is equal to:

(a)
(c)

13.20

(b)
(d)

In regression analysis, b = 2.8, indicates that the value of dependent variable:

(a)
(b)
(c)
(d)

13.19

The independent variable

Random variable

Zero
1

(b)
(d)

Direct or positive
None of these

If one variable tends to increase as the other variable decreases, the correlation
is said to be:
(a)
(c)

Zero
-1

(b)
(d)

61

Inverse or negative
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

13.25

While calculating r if x and y are interchanged i.e. instead of calculating if

is calculated then:
(a)
(c)

13.26

Decreases by less than 5 units

None of these

Increase by 5 units
Remain unchanged

(b)
(d)

Increase by more than 5 units

None of these

Decrease by 3 units
Remain unchanged

(b)
(d)

Decrease by less than 3 units

None of these

Increase by 3 units
Remain unchanged

(b)
(d)

Increase by more than 3 units

None of these

Decrease by 2 units
Remain unchanged

(b)
(d)

Increase by 2 units
None of these

Increase by 100 times

Remain unchanged

(b)
(d)

Less than 100 times

None of these

If r = 0.9 and each observation of Y is divided by 10, then r will:

(a)
(c)

13.34

(b)
(d)

If r = 0.9 and each observation of x is multiplied by 100, then r will:

(a)
(c)

13.33

Decrease by 5 units
Remain unchanged

If r = 0.9 and if 3 is subtracted from each observation of x and 5 is added to each

observation of y, then r will:
(a)
(c)

13.32

0 to 1
None of these

If r = 0.9 and if 3 is added to each observation of y, then r will:

(a)
(c)

13.31

(b)
(d)

If r = 0.9 and if 3 is subtracted from each observation of Y, then r will:

(a)
(c)

13.30

-1 to 0
1- to +1

If r = 0.9 and if 5 is added to each observation of x, then r will:

(a)
(c)

13.29

>
None of these

If r = 0.9 and if 5 is subtracted from each observation of x, then r will:

(a)
(c)

13.28

(b)
(d)

Limits of the co-efficient of Correlation are:

(a)
(c)

13.27

=
<

Decrease by 10 times
Remain unchanged

(b)
(d)

Decrease by less than 10 times

None of these

If r = 0.9 and each observation of x and y is divided by 10, then r will:

(a)
(c)

Decrease by 10 times
Remain unchanged

(b)
(d)

62

Decrease by 100 times

None of these

The Institute of Chartered Accountants of Pakistan

Questions

13.35

The co-efficient of correlation is independent of:

(a)
(c)

13.36

-0.351
None of these

+0.351
Cannot be determined

(b)
(d)

-0.351
None of these

1.158
Data is fictitious

(b)
(d)

1.0761
None of these

0.9843
Data is fictitious

(b)
(d)

0.992
None of these

-0.9843
Data is fictitious

(b)
(d)

-0.992
None of these

0.947
Cannot be determined

(b)
(d)

0.8968
None of these

If = 2166.67, = 115.47, = 19.1485 then r is equal to:

(a)
(c)

13.44

(b)
(d)

If 6=1 = 68, = 112, = 1292, 2 = 786, 2 = 2128 then r is equal

to:
(a)
(c)

13.43

+0.351
Cannot be determined

If = -1.93 and = 0.51, then r is equal to:

(a)
(c)

13.42

Co-efficient of correlation
None of these

If = 1.93 and = 0.51, then r is equal to:

(a)
(c)

13.41

(b)
(d)

If = +1.93 and = 0.6, then r is equal to:

(a)
(c)

13.40

Co-efficient of determination
Co-efficient of rank correlation

If = -0.78 and = 0.45, then r is equal to:

(a)
(c)

13.39

Only scale
None of these

If = -0.78 and = -0.45, then r is equal to:

(a)
(c)

13.38

(b)
(d)

The geometric mean of two regression co-efficients is equal to:

(a)
(c)

13.37

Only origin
Origin and scale

0.9799
-0.9799

(b)
(d)

0.9899
None of these

The co-efficient of correlation can never be:

(a)
(c)

Negative
Zero

(b)
(d)

63

Positive
Can assume any value

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Quantitative Methods

13.45

If = 0.6, = 4.1 and = 0.23 then r is equal to:

(a)
(c)

13.46

Co-efficient of regression
None of these

-1 to + 1
- to +

(b)
(d)

0 to 1
None of these

Co-efficient of determination
Co-efficient of correlation

(b)
(d)

Co-efficient of regression
None of these

80%
64% to 80%

(b)
(d)

64%
None of these

If r = 0.8 and = 1.04 then is equal to:

(a)
(c)

13.51

(b)
(d)

If r = 0.8, then the variation in the dependent variable y due to independent

variable x is about:
(a)
(c)

13.50

Co-efficient of correlation
Co-efficient of determination

The quantity which describes that the proportion (or percentage) of variation in
the dependent variable explained (or reduced) by the independent variable is
called:
(a)
(c)

13.49

0.636
None of these

The lower and upper limits of 2 are:

(a)
(c)

13.48

(b)
(d)

The square of r is known as:

(a)
(c)

13.47

0.7976
0.4048

0.769
Cannot be determined

(b)
(d)

0.615
None of these

If r2 = 0.796 and = -1.04 then is equal to:

(a)
(c)

0.765
Cannot be determined

(b)
(d)

-0.765
None of these

CHAPTER 14: INDICES

14.1

The quantity which is based on the relative change over time in the sum of the
values of two or more time series variables is called:
(a)
(c)

14.2

Simple index number

(b)
Simple aggregate (or composite) (d)

Composite index number

None of these

The relative importance of each time series variable is determined by assigning

an appropriate factor called:
(a)
(c)

Weighting factor
Price factor

(b)
(d)

64

Composite factor
None of these

The Institute of Chartered Accountants of Pakistan

Questions

14.3

Generally the time series variables used to calculate different types of Index
numbers are:
(a)
(c)

14.4

Current period
Chain-base period

(b)
(d)

Base period
None of these

Laspeyers Index Number

Fishers Index Number

(b)
(d)

Paasches Index Number

None of these

Laspeyers Index Number

Fishers Index Number

(b)
(d)

Paasches Index Number

None of these

Mean Index Number

Fishers Ideal Index Number

(b)
(d)

Marshall Edge Worths

None of these

The equation 1995 = 100 indicates that the index numbers are calculated using:
(a)
(c)

14.11

Simple aggregate index

Simple index number
Weighted aggregate index number
None of these

The geometric mean of Laspeyers and Paasches Index Number is called:

(a)
(c)

14.10

Quantities
None of these

If the quantities of current year are used to calculate weighted price aggregate,
the index number so calculated is called:
(a)
(c)

14.9

(b)
(d)

The index that uses quantities of base period as weights, so that only prices are
allowed to change, in calculating weighted price aggregate is known as:
(a)
(c)

14.8

Price values
(a) and (b) both

The period with which other periods are to be compared is called:

(a)
(c)

14.7

Quantities
None of these

The quantity which is based on the relative change over time in the weighted sum
of two or more time series variable is called:
(a)
(b)
(c)
(d)

14.6

(b)
(d)

Generally the appropriate weighting factors, in the calculation of index numbers

are:
(a)
(c)

14.5

Price values
(a) and (b) both

Base year 1995

Previous year 1995

(b)
(d)

Current year 1995

None of these

The index that measures changes in prices that affect the cost of living of a large
fraction of population is called:
(a)
(c)

Whole sale price Index Number

Consumer Price Index Number

65

(b)
(d)

Simple price relatives

None of these

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Quantitative Methods

14.12

Index numbers are used as the barometers of:

(a)
(c)

14.13

Quantities
None of these

Rate of inflation
Purchasing power of money

(b)
(d)

Rate of deflation
None of these

If the purchasing power of money is multiplied by the current per capita income
the resulting value is known as:
(a)
(b)
(c)
(d)

14.15

(b)
(d)

If the reciprocal of consumer price Index is expressed as the percentage the

resulting value is called:
(a)
(c)

14.14

Prices
Inflation

Rate of inflation
Error in per capital income
Real (or deflated) per capita income
None of these

If the relative changes in the current year prices are expressed on the basis of
previous year prices the simple Index so calculated is known as:
(a)
(b)
(c)
(d)

Simple Price Relative

Fixed base Index
Chain-base Index or Link Relative
None of these

CHAPTER 15: COUNTING METHODS AND PROBABILITY

15.1

The set of all possible outcomes of a statistical experiment is called:

(a)
(c)

15.2

Statistical data
None of these

A variable
A discreet variable

(b)
(d)

A random variable
A continuous variable

If two events have no elements in common then they are known as:
(a)
(c)

15.4

(b)
(d)

Something which can take different values with different probabilities is called:
(a)
(c)

15.3

Data
Sample space

Union of two events

Mutually exclusive events

(b)
(d)

Intersection of two events

None of these

If two events have at least one element in common then the events are said to
be:
(a)
(c)

Union of two events

Not mutually exclusive events

66

(b)
(d)

Intersection of two events

None of these

The Institute of Chartered Accountants of Pakistan

Questions

15.5

If three coins are tossed, then the number of outcomes are:

15.6

(a)
6
(b)
8
(c)
9
(d)
None of these
If three dice are rolled; then the number of outcomes are:
(a)
(c)

15.7

(b)
(d)

Normal Distribution
(b) and (c)

Selection
Combination

(b)
(d)

Permutation
None of these

120
720

(b)
(d)

2,160
None of these

10
8

(b)
(d)

5
None of these

15
8

(b)
(d)

1
None of these

If 4 coins are tossed simultaneously, the number of outcomes containing at least

two tails are:
(a)
(c)

15.14

Binomial distribution
Chi Square distribution

If 4 coins are tossed simultaneously the number of outcomes containing at least

one head are:
(a)
(c)

15.13

8
None of these

If nP2 = 20 then the value of n = ?

(a)
(c)

15.12

(b)
(d)

If 10P3 = 720 then 10C3 = ?

(a)
(c)

15.11

36
12

The arrangement of some or all of the objects without considering the order of
arrangement is called:
(a)
(c)

15.10

216
None of these

Which of the following applies to discreet as well as continuous variables:

(a)
(c)

15.9

(b)
(d)

If an experiment consists of rolling a dice and then flipping a coin, the number of
outcomes are:
(a)
(c)

15.8

18
36

11
9

(b)
(d)

15
None of these

(b)
(d)

5
None of these

If 5Cr = 10, then r = ?

(a)
(c)

2
4

67

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Quantitative Methods

15.15

If the experiment, tossing a pair of dice, is repeated over and over again in a very
long series of trials, what proportion of outcomes do you think would result in a
sum less than 7?
(a)
(c)

15.16

(c)

(c)

(d)

6
36
None of these

5
12
6
12

(b)
(d)

6
36
None of these

Mutually exclusive
Independent

(b)
(d)

Not mutually exclusive

None of these

Mutually exclusive
Dependent

(b)
(d)

Independent
None of these

If a coin is tossed four times, the probability of four heads is equal to:
(a)
(c)

15.21

(b)

If probability of an event A is 0.2 and the probability of an event B is 0.3 and the
probability of either A or B is 0.5, then A and B are:
(a)
(c)

15.20

5
12
6
12

If event A means that exactly 150 out of 500 persons plan to purchase a PC and
B means that exactly 160 out of these 500 persons plan to purchase a PC,
then the events A and B are:
(a)
(c)

15.19

(d)

6
36
None of these

If the experiment, tossing a pair of dice, is repeated over and over again in a very
long series of trials, what proportion of outcomes do you think would result in a
sum more than 7?
(a)

15.18

(b)

If the experiment, tossing a pair of dice, is repeated over and over again in a very
long series of trials, what proportion of outcomes do you think would result in a
sum equal to 7?
(a)

15.17

5
12
6
12

0.25
0.625

(b)
(d)

0.0625
Zero

When all events have the same chance of occurrence, the events are said to be:
(a)
(c)

Equally likely
Dependent

(b)
(d)

68

Independent
None of these

The Institute of Chartered Accountants of Pakistan

Questions

15.22

If two or more events cannot occur simultaneously then they are called:
(a)
(c)

15.23

( )
() + () ( )

(A B)
None of these

(b)
(d)

(A B)
() (/)

() ()
None of these

(b)
(d)

(A B)
() (/)

() ()
None of these

(b)
(d)

The sum of the probabilities of two compliment events is always:

(a)
(c)

15.30

(A B)
None of these

(b)
(d)

The probability of two non-independent events if the event A occurs first is:
(a)
(c)

15.29

( )
() + ()

The probability of two independent events is:

(a)
(c)

15.28

Five heads is equal to the probability of five tails

Five heads is equal to the probability of zero tails
Five heads is equal to the probability of zero heads
All of the above

The probability of two non-mutually exclusive events is:

(a)
(c)

15.27

The event is unlikely to occur

The event is expected to occur about 10% of the time
The event cannot occur
None of the above

The probability of two mutually exclusive events is:

(a)
(c)

15.26

Mutually exclusive
None of these

If a coin is tossed five times, the probability of:

(a)
(b)
(c)
(d)

15.25

(b)
(d)

If the probability of an event is 0.01, which of the following statements is correct:

(a)
(b)
(c)
(d)

15.24

Independent
Not equally likely

Zero
Does not exist

(b)
(d)

1
None of these

The probability of an impossible event is always:

(a)
(c)

Equal to zero
More than zero

(b)
(d)

69

Less than zero

None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

15.31

The probability of a certain event is always:

(a)
(c)

15.32

(c)

(c)

-1.6
None of these

70%
33.33%

(b)
(d)

66.67%
50%

3
5
6
7

(b)
(d)

3
7
None of these

3
5
3
10

(b)
(d)

2
5
None of these

Three horses A, B and C are in a race; A is twice as likely to wins as B and B is

three times as likely to wins as C. The probability that A or B wins is:
(a)
(c)

15.37

(b)
(d)

Three horses A, B and C are in a race; A is twice as likely to wins as B and B is

three times as likely to wins as C. The probability that B or C wins is:
(a)

15.36

1
+1.6

Three horses A, B and C are in a race; A is twice as likely to wins as B and B is

three times as likely to wins as C. The probability that A wins is:
(a)

15.35

Equal to one
None of these

A box contains 10 items, 3 of which are defective. If 4 are selected at random

without replacement, the probability that at least two are defective is:
(a)
(c)

15.34

(b)
(d)

If P(A) = -0.3 and P(B) = +1.3 then ( ) is, when A and B are mutually
exclusive events:
(a)
(c)

15.33

Equal to zero
More than one

3
5
7
10

(d)

9
10
None of these

(b)
(d)

Compliment events
None of these

(b)

If P(A) = 1 P(B); then A and B are:

(a)
(c)

Independent events
Mutually exclusive events

70

The Institute of Chartered Accountants of Pakistan

Questions

15.38

A person invests in three stocks. After 12 months, he records the gain or loss in
price as follows:
A: All three stocks rise in price
B: Stock1 rise in price
C: stock 2 experiences a Rs. 5 drop in price.
Therefore A and B are:
(a)
(c)

15.39

Mutually exclusive events

None of these

(A B)
(\)

(b)
(d)

(\)
None of these

0.0588
0.25

(b)
(d)

0.0625
None of these

2,704
2,652

(b)
(d)

1,326
None of these

From a deck of 52 cards, two cards are drawn in succession. All the outcomes of
the experiment are:
(a)
(c)

15.44

(b)
(d)

From a deck of 52 cards, two cards are drawn in succession. The number of
elements the sample space contains is:
(a)
(c)

15.43

Not mutually exclusive events

Independent

From a deck of 52 cards, two cards are drawn in succession. The probability that
both cards are spades is:
(a)
(c)

15.42

Mutually exclusive events

None of these

The probability of an event A, given that an event B has occurred, is denoted as:
(a)
(c)

15.41

(b)
(d)

A person invests in three stocks and after 12 months, he records the gain or loss
in price as:
A: all three stocks rise in price
B: Stock 1 rises in price
C: stock 2 experiences a Rs. 5 Drop in price.
Therefore A and C are:
(a)
(c)

15.40

Not mutually exclusive events

Independent

Independent
Mutually exclusive

(b)
(d)

Dependent
None of these

If one coin is tossed 7 times the number of possible outcomes would be:
(a)
(c)

128
49

(b)
(d)

71

14
None of these

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Quantitative Methods

15.45

If seven coins are tossed simultaneously. All possible outcomes of the

experiment are:
(a)
(c)

15.46

(c)

(c)

2
9
1
6

(b)
(d)

1
18
None of these

1
9
1
12

(b)
(d)

1
36
None of these

Given P(A) = 0.24; P(B) = 0.39 And ( )=0.49.

If A and B are not mutually exclusive events, then (A B) is equal to:
(a)
(c)

15.49

Independent
None of these

In the game of craps, two dice are rolled. If the sum on the dice is 7 or 11 he
wins, and if the sum is 2, 3 or 12, he loses. The probability that he loses is:
(a)

15.48

(b)
(d)

In the game of craps, two dice are rolled. If the sum on the dice is 7 or 11 he
wins, and if the sum is 2, 3 or 12, he loses. The probability of his winning is: (01)
(a)

15.47

Not mutually exclusive

Not independent

0.49
0.14

(b)
(d)

0.63
None of these

If P(A)= 0.5; P(B)=0.6 and P(A B) = 0.4

then ( ) is:
(a)
(c)

15.50

0.4
0.7

(b)
(d)

1.1
None of these

If P(A) = 0.20; P(B) = 0.08 and P(C) = 0.03

where

A = A person views a T.V. show

B = A person reads a magazine
C = A person views a T.V. show and reads a magazine

Then P(A B) is:

(a)
(c)

0.25
0.11

(b)
(d)

72

0.28
None of these

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 16: PROBABILITY DISTRIBUTIONS

16.1

If n=5; p = 0.2; then P(x=2) is:

(a)
(c)

16.2

(b)
(d)

1
None of these

0.98
Does not exist

(b)
(d)

0.02
None of these

0.98
5

(b)
(d)

0.2
None of these

9 and 0.9
9 and 100

(b)
(d)

0.9 and 0.09

None of these

Binomial probability Distribution

Poisson Probability Distribution
Chi-square Distribution
None of these

The number of days in a given year in which a 130-point change occurs in the
Karachi Stock Exchange index.
The above statement may describe a random variable that may posses:
(a)
(c)

16.9

50
10

The probability distribution showing the probability of x occurrences of an event

over a specified time, distance or space is known as:
(a)
(b)
(c)
(d)

16.8

0.576
None of these

If n = 10 and p = 0.9, then mean and variance of Binomial Distribution is:

(a)
(c)

16.7

(b)
(d)

If mean of Binomial distribution is 1 and variance is 0.98, then q is:

(a)
(c)

16.6

0.0643
0.0064

If mean of Binomial distribution is 1 and variance is 0.98 then p =

(a)
(c)

16.5

0.2048
None of these

If mean of Binomial Distribution is 1.0 and q = 0.98 then n = ?

(a)
(c)

16.4

(b)
(d)

If n=5; p = 0.2; then P(x>3) is:

(a)
(c)

16.3

0.409
0.0512

Binomial Distribution
Normal Distribution

(b)
(d)

Poisson Distribution
None of these

The statement The number of fatal accidents that occur per month in a large
manufacturing plant may describe a random variable that may possess:
(a)
(c)

Binomial Distribution
Normal Distribution

(b)
(d)

73

Poisson Distribution
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

16.10

The number of blind babies born per month in the city of Karachi.
The above statement may describe a random variable that may possess:
(a)
(c)

16.11

4.5
Does not exist

Cannot be determined
0.5488

Incomplete information
5.488

(b)
(d)

0.639
None of these

(b)
(d)

45
None of these

(b)
(d)

0.002478
None of these

(b)
(d)

Cant be determined
6

If P (x = 4) =
(a)
(c)

16.18

0.699
0.662

6
None of these

If 6 = 0.002478; then variance of Poisson distribution is:

(a)
(c)

16.17

0.361
None of these

If 6 = 0.002478; then mean of Poisson distribution is:

(a)
(c)

16.16

(b)
(d)

If 6.0 = 0.002478; then P (x = 0):

(a)
(c)

16.15

0.301
0.338

If 4.5 = 0.0111 then the mean of Poisson distribution is:

(a)
(c)

16.14

Poisson Distribution
None of these

If = 1.2 the P(x > 0) is:

(a)
(c)

16.13

(b)
(d)

If = 1.2 then P(x = 0) is:

(a)
(c)

16.12

Binomial Distribution
Normal Distribution

4!

(3.0)2 3
!

6
None of these

(b)
(d)

1.5
None of these

(b)
(d)

2
None of these

=0.04706 then y =

4
Cant be determined

If P (x = y) =
(a)
(c)

(1.5)4

(b)
(d)

=0.07468 then y =

4
Cant be determined

74

The Institute of Chartered Accountants of Pakistan

Questions

16.19

A complete list of formula that gives the probabilities associated with each value
of a random variable x is called:
(a)
(c)

16.20

16.26

Statistic
None of these

Parameter
Random variable

(b)
(d)

Statistics
None of these

Probability distribution
Expected value

(b)
(d)

Frequency distribution
None of these

Equal to zero
More than zero

(b)
(d)

Less than 1
None of these

Let x be a random variable with probability distribution

P(X=x), then x p(x) is known as:
(a)
(c)

16.25

(b)
(d)

If x is a random variable belonging to a continuous probability distribution, then

P(x = a) is:
(a)
(c)

16.24

Parameter
Random variable

A table or formula listing all possible values that a random variable can take on,
along with the associated probabilities is called:
(a)
(c)

16.23

Probability distribution
None of these

A function whose value is a real number determined by each element in the

sample space is called:
(a)
(c)

16.22

(b)
(d)

A variable that assumes the numerical values associated with events of an

experiment is called:
(a)
(c)

16.21

Frequency distribution
Expected value

Sum of probabilities
Mean of Binomial Distribution

(b)
(d)

Mean or expected value

None of these

In a game, a man is paid Rs. 50 if he gets all heads or all tails when 4 coins are
tossed and he pays out Rs. 30 if 1, 2 or 3 heads appear. His expected gain is:
(a)
Rs. 20
(b)
Rs. 6.26
(c)
Rs. - 20
(d)
None of these
In terms of mathematical expectation the formula
E(x2)-[E(x)]2 represents :
(a)
(b)
(c)
(d)

Standard deviation of distribution

Variance of distribution
Difference of squared deviation
None of these

75

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Quantitative Methods

16.27

Let x assumes the value 0, 1, 2, and 3 with the respective probabilities 0.51, 0.38,
0.10 and 0.01 the mean of distribution is:
(a)
(c)

16.28

1200
800
Cant be determined due to wrong values of probabilities
None of these

Binomial Experiment
Hyper geometric experiment

(b)
(d)

Poisson experiment
None of these

Binomial experiment
Hypergeometric experiment

(b)
(d)

Poisson experiment
None of these

Independent
Not mutually exclusive

(b)
(d)

Not independent
None of these

If a random sample of size n is drawn without replacement the events are said to
be:
(a)
(c)

16.34

0.61
None of these

If a random sample of size n is drawn with replacement the events are said to be:
(a)
(c)

16.33

(b)
(d)

(i)
A random sample of size n is selected from a population of N items.
(ii) K on N items may be classified as success and N-K classified as failures
The above properties are related to a
(a)
(c)

16.32

0.87
0.4979

If an experiment is repeated for n trials, each trial results in an outcome classified

as success or failure, with constant probability of success, and trials are
independent, the experiment is known as:
(a)
(c)

16.31

0.61
None of these

By investing into a particular stock, a person can make a profit in 1 year of Rs.
5000 with probability 0.4 or take a loss of Rs. 1500 with probability 0.8. the
persons expected gain is:
(a)
(b)
(c)
(d)

16.30

(b)
(d)

Let x assumes the value 0, 1, 2 and 3 with the respective probabilities 0.51, 0.38,
0.10 and 0.01 the variance of distribution is:
(a)
(c)

16.29

0.38
0.4979

Independent
Not mutually exclusive

(b)
(d)

Not independent
None of these

Whenever we measure time intervals, weights, heights, volumes and so forth, our
underlying population is described by a:
(a)
(c)

Discrete distribution
Frequency distribution

(b)
(d)

76

Continuous distribution
None of these

The Institute of Chartered Accountants of Pakistan

Questions

16.35

A distribution whose graph is a symmetric bell shaped curve extending

indefinitely in both directions, with equal measures of central tendency is known
as:
(a)
(c)

16.36

Normal distribution
None of these

Mean
Mean and mean deviation

(b)
(d)

Mean and variance

None of these

A standard normal distribution is one that has mean and variance equal to:
(a)
(c)

16.38

(b)
(d)

The normal probability distribution is a continuous distribution with parameter(s):

(a)
(c)

16.37

Non-skewed distribution
Binomial distribution

Zero and one

One and zero

(b)
(d)

One and one

None of these

If = 50, = 10 and z = 1.2 then the corresponding x value must be:

(a)
(c)

54
42

(b)
(d)

62
None of these

16.39

If = 50, z = -0.5and x = 45 the variance must be equal to:

16.40

(a)
10
(b)
100
(c)
3.1622
(d)
None of these
The percentage of measurements of a normal random variable fall within the
interval is is:
(a)
(c)

16.41

A least 75%
None of these

At least 75%
99.74%

(b)
(d)

95.44%
None of these

The percentage of measurement of a normal random variable fall within the

interval is 3 is:
(a)
(c)

16.43

(b)
(d)

The percentage of measurements of a normal random variable fall within the

internal 2 is:
(a)
(c)

16.42

68.26%
95.44%

At least 88.9%
99.74%

(b)
(d)

95.44%
None of these

On an examination the average grade was 74 and the standard deviation was 7.
If 10% of the class are given As and the distribution of grades is to follow a
normal distribution. Then the lowest possible A and highest possible B if z.10 =
1.28 is:
(a)
(c)

83 and 82
85 and 84

(b)
(d)

77

84 and 83
82 and 81

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

16.44

Given a normal distribution with = 200 and 2 = 100 then the two x values
containing the middle 75% of the area if z.125 = 1.15 are:
(a)
(c)

16.45

85 and 315
None of these

19.36%
9.68%

(b)
(d)

90.32%
None of these

If a set of observations is normally distributed, then the percentage of

observations differs from mean by less than 0.52 is:
(a)
(c)

16.47

(b)
(d)

If a set of observations is normally distributed, then the percentage of

observations differs from mean by more than 1.3 is:
(a)
(c)

16.46

188.5 and 211.5

187.5 and 212.5

69.85
39.7%

(b)
(d)

30.15
None of these

The IQ of 300 applicants to a certain college are approximately normally

distributed with a mean of 115 and a standard deviation of 12. If the college
required an IQ of at least 95, then the number of students those will be rejected
on this basis regardless of their other qualifications are:
(a)
(c)

26
None will be rejected

(b)
(d)

14
None of these

CHAPTER 17: SAMPLING AND SAMPLING DISTRIBUTIONS

17.1

The probability distribution of a statistic is called a:

(a)
(c)

Probability distribution
Frequency distribution

(b)
(d)

Sampling distribution
None of these

17.2

The probability distribution of is called:

17.3

(a) Probability distribution of mean

(b)
Sampling distribution of mean
(c)
Frequency distribution of mean
(d)
None of these
It is customary to refer to the standard deviation of the sampling distribution as
the:
(a)
(c)

Variance
Standard error

(b)
(d)

78

Standard deviation of mean

Mean deviation

The Institute of Chartered Accountants of Pakistan

Questions

17.4

17.5

If all possible samples of size n are drawn, without replacement, from a finite
population of size N with mean and standard deviation , then the sampling
distribution of the sample mean will be approximately normally distributed with a
mean and standard deviation given by:

(a)

= =

(c)

= =

Sampling fraction
Finite population correction

(b)
(d)

Population correction
None of these

Zero
Infinite

(b)
(d)

One
None of these

0.9909
0.9954

(b)
(d)

1
None of these

0.75
0.866

(b)
(d)

0.86
None of these

If n = 40 and N = 10,000 the value of fpc is:

0.99
0.998

(b)
(d)

0.996
None of these

If N = 4, n = 2, = 5.25; 2 = 2.1875 then the values of and if sampling is

done without replacement:
(a)
(c)

17.11

None of these

If n = 2 and N = 5 the value of fpc is:

(a)
(c)

17.10

(d)

If n = 10 and N = 1000 the value of finite population correction factor (fpc) is:

(a)
(c)

17.9

= =

If the population size is infinite or N is large as compared to n, then the finite

population correction factor will be approximately equal to:

(a)
(c)

17.8

(b)

(a)
(c)

17.7

The quantity 1 is known as:

(a)
(c)

17.6

5.25 and 1.2076

5.25 and 0.729

(b)
(d)

5.25 and 0.8539

None of these

If n = 2, = 5.25 and 2 = 2.1875 then the values of and if sampling is

done with replacement, are:
(a)
(b)
(c)
(d)

5.25 and 1.09375

5.25 and 1.0458
Cannot be determined
None of these

79

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

17.12

From a given population with = 5.6 kilograms samples were drawn with
replacement, how may the standard error of the mean change, when the sample
size is increased from 64 to 196:
(a)
(c)

17.13

Increased from 0.2 to 0.8

Decreased from 0.114 to 0.0071

= 2 2
2

= 2 2 + 2

(b)
(d)

= 2 + 2
None of these

Sample random sampling

Systematic random sampling

(b)
(d)

Stratified random sampling

None of these

Simple random sampling

Systematic random sampling

(b)
(d)

Stratified random sampling

None of these

A sampling process which selects samples from the given population with equal
chance of selection to each unit is called:
(a)
(c)

17.18

(b)
(d)

A sampling process that selects simple random samples from mutually exclusive
sub populations, of population is called:
(a)
(c)

17.17

Decreased from 0.8 to 0.2

Increased from 0.0071 to 0.114

A sampling process that selects every element in the population for the
sample, with the starting point determined at random from the first k elements is
known as:
(a)
(c)

17.16

Increased from 0.4 to 0.7

Increased from .0286 to .0875

If the random variable x and y are independent and normally distributed with
means and and variances 2 and 2 respectively then the distribution of
the difference x-y is normally distribute with mean = and variance:
(a)
(c)

17.15

(b)
(d)

From a given population with = 5.6 kilograms samples were drawn with
replacement, how may the standard error of the mean change, when the sample
size is decreased from 784 to 49:
(a)
(c)

17.14

Reduced from 0.7 to 0.4

Reduced from .0875 to .0286

Systematic Random sampling

Simple random sampling
8

(b)
(d)

Stratified random sampling

None of these

Given 1 = 5, 12 = , 2 = and 22 = for two independent normal variates 1

3
2
4
and 2 then 1 2 and 21 2 are:
(a)
(c)

13
59
and 12
2
7
5
and 12
2

80

(b)

7
2

59

(d)

None of these

and 12

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 18: HYPOTHESIS TESTING

18.1

The simplest form of inferential statistics, which uses known sample evidence
(statistic) to draw conclusions regarding unknown population characteristics
(parameter) is known as:
(a)
(c)

18.2

Estimator
Unbiased

(b)
(d)

Characteristic
None of these

Random
Unbiased

(b)
(d)

Efficient
None of these

Efficient
Consistent

(b)
(d)

Sufficient
None of these

Most efficient
More random

(b)
(d)

More consistent
None of these

A single numerical quantity used to estimate the population parameter is called:

(a)
(c)

18.8

Parameter
None of these

Of all possible unbiased estimators of some parameter the one with the smallest
variance is said to be:
(a)
(c)

18.7

(b)
(d)

If an estimator achieves improved reliability and precession as the sample size

becomes larger than the estimator is said to be:
(a)
(c)

18.6

Statistic
An estimate

If the expected value of the estimator is equal to parameter being estimated, the
estimator is said to be:
(a)
(c)

18.5

Estimation
None of these

The statistic is referred to as ___________ of the unknown parameter.

(a)
(c)

18.4

(b)
(d)

A numerical value assigned to the unknown population parameter is called:

(a)
(c)

18.3

Test of hypothesis
Inferential statistics

Point estimate
Unbiased estimate

(b)
(d)

Interval estimate
None of these

If it is desirable to determine an interval within which one would expect to find the
value of a parameter, such an interval is called:
(a)
(c)

Point estimate
Unbiased estimate

(b)
(d)

81

Interval estimate
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

18.9

The value obtained by subtracting the number of parameters to be estimated

from the number of independent values in a sample is called:
(a)
(c)

18.10

(b)
(d)

Null hypothesis
None of these

Statistical hypothesis
Composite of hypothesis

(b)
(d)

Null hypothesis
None of these

Null hypothesis
Composite hypothesis

(b)
(d)

Alternate hypothesis
None of these

Accepted
Unbiased

(b)
(d)

Rejected
None of these

Type-I error
Level of confidence

(b)
(d)

Type-II error
None of these

The probability of committing a type-I error is called:

(a)
(c)

18.17

Statistical hypothesis
Composite of hypothesis

Rejection of the null hypothesis when it is true is called:

(a)
(c)

18.16

Null hypothesis
None of these

All hypothesis testing results are important, but the test is statistically significant
only when the hypothesis is:
(a)
(c)

18.15

(b)
(d)

The hypothesis for which we wish to gather supporting evidence is called:

(a)
(c)

18.14

Statistical hypothesis
Testing of hypothesis

The hypothesis against which we hope to gather evidence is called:

(a)
(c)

18.13

Type-II error
None of these

Any assumption or conjecture about one or more population is called:

(a)
(c)

18.12

(b)
(d)

The procedure of establishing a set of rules that lead to the acceptance or

rejection of some kind of statements about population parameters is called:
(a)
(c)

18.11

Type-I error
Degrees of freedom

Type-II error
Level of confidence

(b)
(d)

Level of significance
None of these

Acceptance of null hypothesis when it is false is called a:

(a)
(c)

Type-I error
Level of confidence

(b)
(d)

82

Type-II error
None of these

The Institute of Chartered Accountants of Pakistan

Questions

18.18

The very first statement which is tested for possible rejection is called:
(a)
(c)

18.19

Null hypothesis
Composite hypothesis

(b)
(d)

Alternate hypothesis
None of these

To prove that one teaching method is superior to another, the null hypothesis
would be; that there is no difference in the two methods.
Is the stated hypothesis is:
(a)
(c)

18.20

Test-statistic
None of these

Test of significance
One-tailed test

(b)
(d)

Test-statistic
None of these

Acceptance region
Level of significance

(b)
(d)

Critical region
None of these

Significant
Two tailed

(b)
(d)

One-tailed
None of these

If the alternate hypothesis specifies the departure from Ho in a particular direction,

then the test is called:
(a)
(c)

18.25

(b)
(d)

If the alternate hypothesis does not specify the departure from Ho in a particular
direction, then the test is called:
(a)
(c)

18.24

Test of significance
Two-tailed test

The area specified for the values which are significantly different from Null
hypothesis value is called:
(a)
(c)

18.23

Incorrect
None of these

A function obtained from sample data which provides the means of testing a
statistical hypothesis, is called:
(a)
(c)

18.22

(b)
(d)

The procedure by which we verify an established hypothesis is known as:

(a)
(c)

18.21

Correct
Does not exist

Not significant
Two tailed

(b)
(d)

One-tailed
None of these

Given Ho : student A and B are equal in ability.

The given hypothesis was rejected and the conclusion was drawn that student A
is more capable than student B.
In the coming years it was found that the conclusion drawn was incorrect and
there was no difference in their capabilities. The type of error was committed by
the statistician was:
(a)
(c)

Type-I error
Error in drawing conclusion

(b)
(d)

83

Type-II error
None of these

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

18.26

If n is large i.e. n>30, the variance of population is unknown, then the test-statistic
for testing mean of population must be:
(a)
(c)

18.27

(b)
(d)

z-test
None of these

If the sample size is small (i.e. n<30) and variance of population is known, then to
test the population mean, the test statistic to be selected is:
(a)
(c)

18.28

t-test
2 test

Z-test
2 test

(b)
(d)

t-test
None of these

While testing the hypothesis about population mean, t-test is only selected if:
(01)
(a)
(c)

18.29

is unknown
None of these

Only z-test is valid

Either can be selected

(b)
(d)

Only t-test is valid

None of these

Size of population
The value of and

(b)
(d)

Size of sample
None of these

While testing the hypothesis about population mean, if size of sample is large i.e.
n> 30, then the selection of test-statistic depend upon:
(a)
(c)

18.32

While testing the hypothesis about population mean, if variance of population is

unknown then the selection of test-statistic depends upon:
(a)
(c)

18.31

(b)
(d)

While testing the hypothesis about population mean, if variance of population is

known, then:
(a)
(c)

18.30

n < 30
If (a) and (b) both are valid

Variance of population
Does not depend upon anything

(b)
(d)

Variance of sample
None of these

The sum of squares of a sequence of independent normal variates with mean

and variance 2 is said to be:
(a)
(c)

A chi-square variate
A normal variate

(b)
(d)

84

A standard normal variate

None of these

The Institute of Chartered Accountants of Pakistan

Questions

CHAPTER 19: CHI-SQUARE

19.1

2
2
For = 10% the value of .05
and .95
are:

(a)
(c)

19.2

t-test
Chi-square test

(b)
(d)

z-test
None of these

Normal distribution
Binomial distribution

(b)
(d)

Chi square distribution

None of these

Chi-square distribution
Normal distribution

(b)
(d)

t-distribution
None of these

Binomial distribution
Chi-square distribution

(b)
(d)

Normal distribution
None of these

More than two (or several) population proportions can be tested simultaneously
by using:
(a)
(c)

19.8

-1 to +1
None of these

Two populations proportions can be compared by using:

(a)
(c)

19.7

(b)
(d)

A CA Foundation course instructor believes that the grades of students in

Foundation examination depend upon the college. The conjuncture will be tested
by using:
(a)
(c)

19.6

- to +
0 to

It is assumed (H0) that the political affiliation of a person depends upon the level
of education. The hypothesis was tested using:
(a)
(c)

19.5

3.84 and 0.004

None of these

If we want to test whether or not two samples are independent, the test-statistic to
be selected is:
(a)
(c)

19.4

(b)
(d)

Chi-square values ranges from:

(a)
(c)

19.3

3.84 and -3.84

-3.84 and 0.004

Binomial distribution
Chi-square distribution

(b)
(d)

Normal distribution
None of these

The expected frequencies are obtained by multiplying the row total with the
column total and:
(a)
(b)
(c)
(d)

Dividing by total number of observations

Dividing by row total
Multiplying by total number of observations
None of these

85

The Institute of Chartered Accountants of Pakistan

Quantitative Methods

19.9

When we want to test the hypothesis concerning population variance the

distribution to be used is:
(a)
(c)

19.10

t-distribution
None of these

Frequency table
Correlation table

(b)
(d)

Contingency table
None of these

A technique by means of which we test the hypothesis whether the sample

distribution is in agreement with the theoretical distribution is called:
(a)
(c)

19.12

(b)
(d)

A table containing the data classified according to characteristics of population

(attributes) is known as:
(a)
(c)

19.11

Normal distribution
Chi-square distribution

Parametric test
Goodness of-fit-test

(b)
(d)

Non-parametric test
None of these

A goodness of-fit-test can be applied by using:

(a)
(c)

Normal distribution
Chi-square distribution

(b)
(d)

86

t-distribution
None of these

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Assessment of Fundamental Competencies

Quantitative Methods

A
Answers

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Quantitative Methods

CHAPTER 1: ELEMENTARY MATHEMATICAL OPERATIONS

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CHAPTER 2: COORDINATE SYSTEM AND EQUATION OF A STRAIGHT LINE

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CHAPTER 3: SOLVING EQUATIONS

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Answers

CHAPTER 5: FINANCIAL MATHEMATICS: COMPOUNDING

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CHAPTER 6: FINANCIAL MATHEMATICS: DISCOUNTING

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CHAPTER 7: LINEAR PROGRAMMING

1(i) 1(ii) 1(iii) 1(iv)

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Quantitative Methods

CHAPTER 8: CALCULUS: DIFFERENTIATION

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CHAPTER 9: CALCULUS: TURNING POINTS, MAXIMA, MINIMA AND POINTS

OF INFLECTION
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CHAPTER 10: MATRICES AND DETERMINANTS

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CHAPTER 11: COLLECTION, TABULATION AND PRESENTATION OF DATA

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Answers

CHAPTER 12: STATISTICAL MEASURES OF DATA

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CHAPTER 13: REGRESSION AND CORRELATION

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CHAPTER 14: INDICES

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Quantitative Methods

CHAPTER 15: COUNTING METHODS AND PROBABILITY

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CHAPTER 16: PROBABILITY DISTRIBUTIONS

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CHAPTER 17: SAMPLING AND SAMPLING DISTRIBUTIONS

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Answers

CHAPTER 18: HYPOTHESIS TESTING

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CHAPTER 19: CHI-SQUARE

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