::: vuaskari.com ::: MGT411 (Money and Banking) Assignment No. 1 solution required

SEMESTER SPRING 2012
MGT411 (Money and Banking)
Assignment No. 1
Due Date: April 12, 2012 Marks: 20

Assignment:
Question No. 1 (Marks 10)

Suppose you were given a responsibility to measure the inflation rate prevailing in the country for the
last five years. You conducted a survey in the market over the years and selected a basket of goods
containing 10 mangoes, 08 apples, 03 onions and 6 eggs for measuring inflation.
Per unit prices are given in the following table:

Per Unit Prices in Rupees
Years Mango Apple Onion Egg
2007 15          4        2      2                    
2008 20          5        2      3       
2009 22          6        3      4
2010 30         10       3      5
2011 35         15      4       8

Requirement:
You are required to calculate the inflation rate based on the above market data?

Question No.2 (Marks 10)

The Central Bank (CB) is a supreme regulatory authority for the supervision of financial and banking
system in order to control the inflation and promoting economic growth in the country.
According to an annual report of the CB published at the end of the year 2011, the outstanding stock
of currency in the hands of the public was 866,700 million rupees; Traveler's checks were amounting
to 415.3 million rupees; the Outstanding Stock of Time Deposits of Scheduled Banks was 1,204,340
million rupees; the Demand Deposits with Scheduled Banks were 802,570 million rupees; Other
Deposits with the CB were 4,680 million rupees; Institutional money market mutual fund shares were
1,205.8 million rupees; Large-denomination time deposits were 937.5 million rupees; the Outstanding
Stock of Resident Foreign Currency Deposits (RFCDs) was 170,130 million rupees and Eurodollars
and repurchase agreements were 416.7 and 235.5 million rupees respectively.

Keeping in view the above information, you are required to calculate M1, M2 and M3.

Please share your solution ideas
thanks

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