JMET 2007 Paper with answers

Solution 10 . From 1 INR we can buy 1/42 $
From 100,000 INR we can buy 100,000/42 $
= 2400 $ (Given:1/42=0.024)
Similarly;
From 100,000 INR we can buy 100,000/79 £
= 1300£ (Given:1/79=0.013)
From 100,000 INR we can buy 100,000/62€
= 1600 € (Given:1/62=0.016)
The descending order of currency we will receive
=$ > € > £. Hence the correct answer option is (A).
Alternate solution:
Number of unit buy = 1/Buying price ;
Buying price of $ < € < £;
Ratio of number of unit from fixed amount of INR = $ > € > £ Hence the correct answer option
is (A).
Q.11 When you buy foreign currency from your local bank, it will levy a transaction fee
equivalent of INR 500 and an additional INR 500 to deliver the exchanged money to the branch
of your choice. This total amount of INR 1000 will be deducted from the foreign currency
payable to you. At the airport, the money changer is willing to offer $ 0.022 for INR I.
What is the range of values of INR that can be exchanged for buying the $ which will get you a
better deal at the airport than the bank?
(A) INR 0 to 1000 (B) INR 1000 to 23000
(C) INR 0 to 23000 (D) INR > 23000
Solution 11 . From x INR we can get (x-1000) * 1/42 $,
= [ (x-1000) 0.023 ] $,
= (0.023x-23) $ from the bank and 0.022x $ from airport.
For better deal;
=› 0.022x > 0.023x - 23;
=› 23 > 0.023x - 0.022x;
=› 23 > 0.001x;
=› 23000 > x.
Answer is option (c) INR 0 to 23000.
Q.12 The £ to € 'buy' rate is £ I = € 1.222. Using the INR as the reference currency, determine by
what percentage this 'buy' rate should change such that there is no arbitrage (or, differences
among the three pair-wise exchange rates) across the three currencies?
(A) approx. 5% (B) approx. 36%
(C) approx. 4.25% (D) approx. 35.75%
Solution 12. 1 INR = 1/79 £ = 1/62 €;