Business Related queries

There are only six points on the graph (the six dots). The lines have just been drawn between the points to make it easier to see how the profit is changing.

So you get the average profit by adding up the six values and dividing by six.

Rajorshi Koyal

Yes but in one question we calculated (150-105)/8..Where we had the ambiguity if you remember..

Yes

The answer showed divided b 9...

by*

John Rennie

5:22 AM

I remember the question. Let me see if I can find it.

Rajorshi Koyal

So kind of you..

John Rennie

yesterday, by Rajorshi Koyal

Rajorshi Koyal

Yes correct

satan 29

happy holi everyone!!

John Rennie

@satan29 hi :-)

Srijan M.T

5:24 AM

Happy holi everyone

John Rennie

@RajorshiKoyal the graph shows 9 points, so if we were just calculating the average of those 9 points we would add them all together and divide by 9. OK so far?

Rajorshi Koyal

Yes

ok

John Rennie

But question 11 doesn't ask about the average of the values on the graph. It asks for the average change.

Rajorshi Koyal

What does the word AVERAGE mean in the context..

I always presume it to be mean

Why do I get it wrong?

John Rennie

When you see the word average you can normally assume it to be the arithmetic mean.

Rajorshi Koyal

5:28 AM

ok...but how did you rule out that option here...?

How are you so good at aptitude @JohnRennie

Where did you practice them?

John Rennie

@RajorshiKoyal Practice :-)

Rajorshi Koyal

Why did you have to practice these?

For jobs?

John Rennie

I've been doing this for the better part of fifty years!

Rajorshi Koyal

But why for job interviews?

Which books did you use?

For practice?

John Rennie

@RajorshiKoyal Data analysis is something every scientist learns as part of their job.

Rajorshi Koyal

5:29 AM

How are you in Number Theory?

John Rennie

My maths isn't that great.

Rajorshi Koyal

Can you help me out slightly with that?

John Rennie

I can try ...

Rajorshi Koyal

Not an issue..Please continue with this..

John Rennie

I've lost track of where we got to ...

Rajorshi Koyal

5:31 AM

Not an issue..Please continue with this..

Average

@JohnRennie The first question was what I wanted to ask..

John Rennie

What were you asking?

Rajorshi Koyal

Why did you rule out arithmetic mean as an option here?

John Rennie

13 hours ago, by Rajorshi Koyal

That question?

Rajorshi Koyal

No no

@JohnRennie This one..

John Rennie

OK. Let's have a look at exactly what Q11 is asking:

Note that the question is not asking for the average of the nine values on the graph.

It is asking for the change in the values i.e. the change from the first data point to the last data point.

A change is the difference between two points, so if there are nine data points then there are only eight changes. Yes?

These are the eight changes:

Rajorshi Koyal

6:38 AM

Everything seems fine..Infact I feel that I have got the answer...

But divided by 8 is something I do not understand yet..

John Rennie

@RajorshiKoyal let's take a simple example.

Suppose you have only two years data:
1990 105
1991 109

So the change from 1990 to 1991 is 109 - 105 = 4

OK so far?

Rajorshi Koyal

Yes ok

John Rennie

Now what is the average change? Well the average of one number is just that number, so the average change is 4.

i.e. it's 4/1

Because there is 1 year in between the two data points.

Does this make sense so far?

Rajorshi Koyal

ok..

John Rennie

6:53 AM

@RajorshiKoyal Suppose have a third year:

1990 105
1991 109
1992 118

Now we have two changes:

1991-1990 4
1992-1991 9

So the average change is (4 + 9)/2

And obviously we can go on adding extra years until we get the 9 years in the original question, but we are always dividing by one less than the number of years.

I need to drop out for half an hour or so to do some work.

Rajorshi Koyal

7:31 AM

@JohnRennie Sir somebody told me that while considering absolute values take them as discrete and while considering cahnge always take intervals..

Is it right..??

Btw can you describe profit,expenditure,income and profite percent in each others terms..

If yes it would be of great help..

John Rennie

@RajorshiKoyal hi :-)

Rajorshi Koyal

Yes

John Rennie

Let's define profit first. If your income is i and your expenditure is e then your profit is:

p = i - e

Yes?

Rajorshi Koyal

ok

fine now profit percentage?

John Rennie

The profit is often expressed as a percentage of the income i.e. you calculate p/i

Rajorshi Koyal

7:36 AM

ok but many places like in my book they took it as expenditure..

How do I justify that?

John Rennie

There is no definite rule. You can calculate the percentage profit based on income or expenditure.

In real life the way companies report profit can be complicated.

Rajorshi Koyal

ok..but how do I predict which is correct..???

John Rennie

@RajorshiKoyal The question should make it clear.

Rajorshi Koyal

ok..

@JohnRennie Check the last question

John Rennie

You mean Q49?

Rajorshi Koyal

7:40 AM

Yes

John Rennie

The graph shows you the profit for six years, and the question asks you for the percent increase in profit from 2003 to 2004. Yes?

Rajorshi Koyal

Yes correct..

John Rennie

When you are calculating a percentage change you always divide it by the original value i.e. the equation is:

(new - original)/original

Rajorshi Koyal

That is very correct

Then..

John Rennie

The profit in 2003 was 50%, and the profit in 2004 was 70%, so the change was 70 - 50 = 20. Yes?

Rajorshi Koyal

7:44 AM

So you are saying I need to take into account income of 2003?

Yes

So what is the denominator like 50%?

John Rennie

So the percentage change is (70 - 50)/50 = 20/50 = 40%

Rajorshi Koyal

So infact I do not even need to bring investment into picture..

I that correct..?

John Rennie

Correct. The question is simpler than you thought :-)

Rajorshi Koyal

:P

What about Q45 then?

@JohnRennie Sir

Sir can you explain what this word means,"settled its dispute with market regulator by agreeing to pay settlement charges.."

John Rennie

Ah, I just realised that the chart shows absolute profit not percent profit, but may answer to Q49 is still correct.

Rajorshi Koyal

7:48 AM

What is market regulator?

Yes either way you gave percentage profit..

So no issues...

John Rennie

We need to concentrate on one question at a time. Do you want to discuss Q45, or do you want to discuss market regulation?

Rajorshi Koyal

tell market regulation once maybe we can think about Q45 then..

John Rennie

In most countries companies have to operate by a set of rules. The rules are basically designed to make the companies play fair.

Rajorshi Koyal

ok then..

John Rennie

And there is an official called the market regulator who checks that the companies are following the rules and takes them to court if they break the rules.

When the market regulator finds that a company is not following the rules there are usually two ways this can turn out:
1. the regulator takes the company to court
2. the company admits it is guilty and agrees to pay a fine

Rajorshi Koyal

7:52 AM

Ok so please explain me this,The IndiGo Airlines promoter which has settled its dispute with market regulator SEBI by agrring to pay settlement changres of xyz rupees.:"

Ans is zzzz Aviation say for example..

John Rennie

Option 1 is long and expensive because when lawyers get involved everthing gets expensive. Option 2 doesn't involve the court - the company and the regulator agree between them what fine the comapny will pay and that usually ends up cheaper for the company.

Rajorshi Koyal

What is being promoter here?

I am actually quoting from an incident that has taken place..

John Rennie

IndiGo Airlines is a travel company. This is their website

Rajorshi Koyal

ok so who is the promoter and what is their involvement?

John Rennie

And there was a complaint made against it that it had broken the rules that companies have to obey.

In this case the organisation that enforces the rules is the Securities and Exchange Board of India, which is shortened to SEBI.

SEBI threatened to take IndiGo to court, and IndiGo agreed to pay a fine to avoid having to go to court.

Rajorshi Koyal

7:57 AM

And who is the promoter here?

Can you help me with finance slightly?

Provided I post you the queries timely?

John Rennie

@RajorshiKoyal I don't know why the word promoter was used. I'd have to see the original article to figure out what it means.

Rajorshi Koyal

can you cehck it out once?

or else leave it proceed with Q45..

John Rennie

I need to go and make the bed (Monday morning chores). I'll be back in 15 minutes.

Rajorshi Koyal

sure..

livemint.com/companies/news/…

Check this out if you are free in 15 mins @Jo

@JohnRennie

Bhavay

@RajorshiKoyal If you don't mind , can you tell which exam are you preparing for?

Rajorshi Koyal

8:08 AM

IBPS SBI PO

It is similar to CAT

Bhavay

@RajorshiKoyal Oh. Good luck!

Rajorshi Koyal

Tq

If you wish to help you may

John Rennie

@RajorshiKoyal This is what a promoter is in an Indian company.

As far as I know the term is not used in the UK.

Rajorshi Koyal

9:08 AM

Thanks for the concern.

Rajorshi Koyal

9:33 AM

@JohnRennie Sir tell me something..Is it a part of the company in the sense that the financial transactions are borne out by the company itself?

John Rennie

I'm not sure what you are asking. Is what a part of the company?

Rajorshi Koyal

Promoter

John Rennie

I don't know. The term doesn't exist in the UK.

Rajorshi Koyal

ok never mind ..thanks for the concern....

Can you help me out with the other questions..

John Rennie

I think a promoter would usually own part of the company. They can also be employed by the company as well, but they don't have to be.

Rajorshi Koyal

9:37 AM

ok got you..

John Rennie

We should probably create a separate room for the business related questions as this room is for physics questions. Shall I create a room or do you wantto do it?

Rajorshi Koyal

Sure sure why not..

Please tell me the technique I would like to learn

John Rennie

I can't remember how to create a room as I don't do it very often. Give me a moment and I'll see if I can work out how to do it.

If you go here: chat.stackexchange.com

Then at the bottom of the page there is a button to create a new room.

You just have to choose a name for your room and optionally a description.

Rajorshi Koyal

created..

John Rennie

Can you you post the link to it so I can find it.

@RajorshiKoyal hi :-)

Rajorshi Koyal

9:51 AM

Hello

You continue the discussion here if required.

John Rennie

What I can do is move all the previous posts here ...

← 185 messages moved from Problem Solving Strategies

Someone else has asked a question that I should answer given we've already spent a long time chatting today. I'll answer them and ping you when I'm free.

Rajorshi Koyal

What is meant by Inked an agreement?

@JohnRennie Sir please explain me the meaning of this,"The bank which constituted an eight member expert committee on Urban Coopeartive Banks(UCBs) that is tasked with examining existing issues and provide road map for strnegthening sector."

I really do not understadnw hat the bank has done.

John Rennie

10:10 AM

@RajorshiKoyal The term inked means signed in ink i.e. it refers to the process of signing a contract using an ink pen.

@RajorshiKoyal I don't understand that either. I would have to read the original article.

Rajorshi Koyal

Ok sending you the article

currentaffairs.adda247.com/…

@JohnRennie Here it is

John Rennie

Give me a moment to read it ...

Ah OK.

The phrase means that a committee was set up to investigate how Urban Cooperative Banks (UCBs) work in India. The committee has to find any problems with the way the UCBs work, and suggest ways of addressing those problems. OK so far?

Rajorshi Koyal

ok

John Rennie

The committee was set up by the Reserve Bank of India (RBI), and it is part of that bank.

Rajorshi Koyal

ok

John Rennie

10:22 AM

So the first part of the sentence: The bank which constituted an eight member expert committee ...

Rajorshi Koyal

ok got the point totally..

John Rennie

means: the RBI set up an eight member committee

Rajorshi Koyal

Yes I got you..Thanks a lot

Can you help me out with this

"HDFC Bank has said that the Reserve Bank of India has appointed an external IT firm for carrying out a special audit of its IT infrastructure in the aftermath of reputed service outrages at the country's largest private sector lender over the past two years."

John Rennie

Here the verb constituted means set up or created.

Rajorshi Koyal

Yes I understood it completely..

John Rennie

10:24 AM

@RajorshiKoyal that means: the Reserve Bank of India has appointed an external IT firm for carrying out a special audit of its IT infrastructure

The reason for carrying out the special audit is: reputed service outrages at the country's largest private sector lender over the past two years

Rajorshi Koyal

What is meant by "special audit of IT infrastructure."

John Rennie

The IT infrastructure just means the computers that run te bank.

And a special audit will be a check that the computers are running the bank properly.

So it just means the computers running the bank will be checked to make sure they are all working properly.

Rajorshi Koyal

Ok thanks a lot but please explain this line "reputed service outrages at the country's largest private sector lender over the past two years."

John Rennie

It means the computers crashed several times in the last two years, and the crashes caused the bank to have to stop working while the probklem was fixed.

Rajorshi Koyal

So RBI is a private sector lender?

John Rennie

10:34 AM

Reserve Bank of India

The Reserve Bank of India (RBI) is India's central bank and regulatory body under the jurisdiction of Ministry of Finance , Government of India. It is responsible for the issue and supply of the Indian rupee and the regulation of the Indian banking system. It also manages the country's main payment systems and works to promote its economic development. Its top official is designated as Governor who is a civil servant of the IAS or IES or ISS cadre. Until the Monetary Policy Committee was established in 2016, it also had full control monetary policy in India. It commenced its operations on 1 April...

Ah, wait, sorry I got that wrong.

Rajorshi Koyal

largest private sector lender: this means private only na...

John Rennie

It's the HDFC Bank that had the problems with the computers, and the RBI has appointed an IT firm to check the computers at HDFC Bank.

So the HDFC Bank is the private sector lender

Rajorshi Koyal

ohh I thought the reverse

John Rennie

@RajorshiKoyal yes, I made that mistake as well :-)

The sentence is a bit ambiguous.

But the RBI is not a private sector lender, so it must mean it's the HDFC Bank that had the computer problems.

Rajorshi Koyal

Got you...

"The finance minister Nirmala Sitharamanwhile presenting Budget 2021-22 announced privatisation of PSBs as part of disinvestment drive to garner-17.5 lakh crore

What is meant by "disinvestment drive to garner"

John Rennie

10:40 AM

I'll be a few minutes while I answer another question.

Disinvestment means selling things.

So the sentence means the government is selling stuff to get cash i.e. 17.5 lakh crore

Rajorshi Koyal

10:52 AM

@JohnRennie Sir how do you know so much about business also?

John Rennie

@RajorshiKoyal you just pick this stuff up over the years. I've never made an effort to study it.

Rajorshi Koyal

Great so you read newspapers daily?

John Rennie

I read the newspapers once a week to catch up on all the week's news. I read a paper called The Guardian.

Rajorshi Koyal

"In a first three way merger Bank of Baroda merged with Vijaya Bank and Dena Bank itself in 2019.

What is the meaning of the word three way merger.

Please explain this to me in slight detail.

John Rennie

A three way merger is when three companies merge into one single company three times as big.

Rajorshi Koyal

11:05 AM

ok got you..You know a lot of things..:P

John Rennie

@RajorshiKoyal it's just experience :-)

I knew nothing about how businesses worked when I was your age, and to be honest I didn't care about it.

Rajorshi Koyal

Do you know fiscal deficit?

@JohnRennie You are two years elder to my dad :P

Anyways..

John Rennie

I think fiscal deficit normally means the difference between how much the government spends and how much it gets in tax.

Rajorshi Koyal

ok may be we can discuss at that point..

John Rennie

i.e. if it is spending more than it is getting in tax then it is going into debt, and the amount that debt increases in a year is called the fiscal deficit for that year.

You can Google for it to check.

Rajorshi Koyal

11:11 AM

Ok maybe we will discuss it when I study that particular topic.

Rajorshi Koyal

11:36 AM

"RBI said that it would allow retail investors to buy government bonds directly from it."

Please explain me this.

John Rennie

The way governments borrow money is that they sell bonds.

Rajorshi Koyal

Who are retail investors?

John Rennie

For example the UK government might sell a million bound bond with the promise that in five years it will buy back the bond for £1100000.

So if you give the government your million pounds in five years you get your money back plus an extra £100000.

Now these bonds are normally only sold to big financial companies.

The reason for this is that governments don't want to bother with selling bonds for £1000 as it's too small an amount.

So unless you have millions of pounds to spend the government doesn't want to sell to you.

@RajorshiKoyal OK so far?

Rajorshi Koyal

ok

Yes absolutely..

John Rennie

So it's normally only big financial companies that buy government bonds, and they spend hundred of millions or even billions of pounds on them.

You and I can't buy government bonds because we don't have that sort of money.

These financial companies are generally known as corporate investors.

The phrase retail investor applies to everyone else i.e. everyone who isn't a big financial company.

So for example you and I are retail investors, and in the UK at least the government won't sell us government bonds because don't have enough money to make it worth while.

> RBI said that it would allow retail investors to buy government bonds directly from it.

But this means the RBI is going to sell bonds to ordinary people like you and me.

I need to go now. I'll will be around later today (around 9 p.m. your time) or I'll be here tomorrow morning as usual.

Rajorshi Koyal

11:48 AM

Sure..

Rajorshi Koyal

12:09 PM

Currently retail stock investors can only buy gilt or government issued bonds through platform on the National Stock Exchange..

A detailed explanation to this is most welcome..

National Stock Exchange says that currently retail investors can only buy gilt or government issued bonds through a platform on National Stock Exchange....

According to the RBI governor Shaktikanta Das India is the first country to sell G-secs through the central banks in Asia..

Again this is something I do not understnad.

BP Kanungo said,"We had a committe that is still on the drawing board.In fact,an internal committe is taking a close look to decide on the model of the central bank digital currency and you will hear from the Reserve Bank very soon in the matter."

Rajorshi Koyal

1:17 PM

What is meant by higher provisions for bad loans?

Rajorshi Koyal

2:25 PM

what is meant by committee is still on the drawing board..can you help me out..

John Rennie

3:11 PM

← 1 message moved from Problem Solving Strategies

@RajorshiKoyal "on the drawing board" means it is still at the planning stage.

So I guess this means a committee is going to be set up but it still being planned how the committee will work.

Rajorshi Koyal

It would be great if you answer the preceeding statements that I wrote.

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Business Related queries