DI: Investment Portfolios and Exchange Rates

XAT 2011 · QADI · Hard · Data Interpretation

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Passage / data set

Answer questions based on the following information:

In the beginning of the year 2010, Mr. Sanyal had the option to invest Rs. 800,000 in one or more of the following assets – gold, silver, US bonds, EU bonds, UK bonds and Japanese bonds.

Bullion Prices and Exchange Rates in 2010:

DateGold (Rs/10g)Silver (Rs/10g)US(Rs/US (Rs/US)€ (Rs/€)£ (Rs/£)¥ (Rs/¥)
1-Jan200003004060700.50
1-Feb201003024161.5710.51
1-Mar202503074162710.52
1-Apr203303104262710.52
1-May204003124262.5720.53
1-Jun205003184262.5720.54
1-Jul206503304463730.55
1-Aug207203354563730.55
1-Sep208503404764740.57
1-Oct209203424965740.58
1-Nov20950345506574.50.59
1-Dec210003505065750.60

Annual Interest rates: US bonds = 10%, EU bonds = 20%, UK bonds = 15%, Japanese bonds = 5%.

Question 1 of 4

Mr. Sanyal invested his entire fund in gold, US bonds and EU bonds in January 2010. He liquefied his assets on 31st August 2010 and gained 13% on his investments. If instead he had held his assets for an additional month he would have gained 16.25%. Which of the following options is correct?

  1. A.

    Mr. Sanyal invested less than 40% in gold and more than 40% in EU bonds.

  2. B.

    Mr. Sanyal invested less than 40% in each of gold and US bonds.

  3. C.

    Mr. Sanyal invested less than 40% in gold, and less than 25% in US bonds.

  4. D.

    Mr. Sanyal invested more than 40% in gold, less than 25% in EU bonds.

  5. E.

    Mr. Sanyal invested more than 40% in each of US bonds and EU bonds.

Question 2 of 4

At the beginning of every month, by sheer luck, Mr. Sanyal managed to correctly guess the asset that gave maximum return during that month and invested accordingly. If he liquefied his assets on 31st December 2010, how much was the percentage gain from his investments?

  1. A.

    34.64%

  2. B.

    46.71%

  3. C.

    47.5%

  4. D.

    49.15%

  5. E.

    49.96%

Question 3 of 4

Mr. Sanyal adopted the following investment strategy. On 1st January 2010 he invested half of his investible fund in gold and the other half he kept in fixed deposit of an Indian bank that offered 25% interest per annum. At the beginning of every quarter he liquefied his assets to create his investible fund for that quarter... On 31st December 2010 Mr. Sanyal liquefied his assets and realized that all of the following options are true except:

  1. A.

    By investing the entire amount in US bonds, he would have gained an additional Rs. 118395.

  2. B.

    By investing the entire amount in UK bonds, he would have gained an additional Rs. 65035.

  3. C.

    By investing the entire amount in EU bonds, he would have gained an additional Rs. 65035.

  4. D.

    By investing the entire amount in Japanese bonds, he would have gained an additional Rs. 38395.

  5. E.

    By investing the entire amount in fixed deposit of his Indian bank he would have gained an additional Rs.38395.

Question 4 of 4

Advisors were asked to prepare an investment strategy that involved US Bonds, EU Bonds and Japanese Bonds, keeping at least 20% of the initial fund in each of these assets for the entire year, and allowing exactly four additional transactions in the course of the year. Which of the recommendation out of the following was the best one?

  1. A.

    Two additional transactions each during the month of June and November.

  2. B.

    Two additional transactions each during the month of June and October.

  3. C.

    Two additional transactions each during the month of May and June.

  4. D.

    Two additional transactions each during the month of March and November.

  5. E.

    Two additional transactions each during the month of March and October.

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