KPMG Exam Info 3

NUMERICAL
TEST 3
Answer Booklet
www.efinancialcareers.com/numericaltests
Please note the correct answers are shown in bold.
Example Questions
City Trading last 6 months (number of trades made, in 000s)

30
25
28
27
26
Phone
In 000s
20
23
22
21
20
19
Internet
15
10
10
12
11
13
0
September
October
November
December
January
February
Ex 1 Between which two months was there the greatest change in the
number of Internet trades made?
Solution
We calculate the change in the number of Internet trades between months (in 000s):
Change
=
Number trades Month (n) Number trades Month (n 1)
Between
Change
September and October
October and November
November and December
December and January
January and February
From this we can see the greatest change in the number of Internet trades occurred between December and January.
As the Question only referred to the change in the number of trades and not whether the change should be positive or
negative, the change in number between December and January is the correct answer.
Tip
We should do these calculations mentally without resorting to a calculator. Once we have to resort to a calculator or
pen and paper, we start losing time.
Answer
A
September
and October
October
and November
November
and December
December
and January
January
and February
Ex 2 In September, approximately what proportion of the total number of

trades was made up of Internet trades?
Solution
We consider September data.
We calculate what proportion of the total number of trades is made up of Internet trades (in 000s):
Proportion of trades
= Number of Internet Trades Total number of Trades
= 10 (10 + 22)
= 0.31 or 31%
Answer
A
25%
31%
34%
37%
43%
Test Questions
US Brewers Share Price in US $
300
285
280
250
231
200
198
187
US $
175
Stella
165
153
150
143
130
125
100
120
Arca
98
90
85
75
73
65
Henecan
50
0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
For how many years was the price of Arca shares closer to that for
Stella than for Henecan?
Solution
We calculate the differences in share prices:
Year
Difference between Arca share

price and Stella share price
Difference between Henecan share

price and Arca share price
$90 $65 = $25
$175 $90 = $85
$98 $73 = $25
$165 $98 = $67
$125 $85 = $40
$231 $125 = $106
$130 $75 = $55
$187 $130 = $57
$153 $120 = $33
$280 $153 = $127
$198 $143 = $55
$285 $198 = $87
From these calculations we can see that the difference in share price between Arca and Stella is smaller than the
difference in share price between Henecan and Arca for each of the 6 years. Thus the Arca share price is closer to the
Stella share price for all of the 6 years.
Tip
Visually inspecting the chart provided, we can see that Arca share price is closer to the Stella share price for all 6
years except, maybe, Year 4.
A quick calculation shows that the Arca share price is closer to the Stella share price even for Year 4.
Thus, the Arca share price was closer to the Stella share price for all 6 years.
Answer
A
If the percentage increase in the Arca share price between Years 5

and 6 is doubled for the period Year 6 to 7, what will the value of
the share price be in Year 7?
Solution
We consider the Arca share price.
We calculate the percentage increase
Percentage increase
=
=
=
=
in share price between Year 5 and Year 6:

(Year 6 share price Year 5 share price) 1
($198/$153) 1
1.2941 1
0.2941 or 29.41%
The question indicates that the expected increase from Year 6 to Year 7 is double that of the increase from Year 5 to
Year 6, an increase of (2
0.2941) = 0.58822.
The Year 7 share price is then:
Year 7 share price
= [$198
(1 + 0.58822)]
= $314.47
The closest answer provided is $314.
Answer
$297
$314
$321
$328
$335
Between which two years did the change in Stellas share price
most closely match the change in Henecans share price?
Solution
We compare the percentage change in share prices by considering the proportional change in share price between
consecutive years per company (this makes the calculations faster without any loss of accuracy):
Proportional change = (Share price Year n+1 Share price Year n)
Year
Stella proportional change
Henecan proportional change
Year 1 Year 2
$73/$65 = 1.1231
$165/$175 = 0.9429
Year 2 Year 3
$85/$73 = 1.1644
$231/$165 = 1.4
Year 3 Year 4
$75/$85 = 0.8824
$187/$231 = 0.7229
Year 4 Year 5
$120/$75 = 1.6
$280/$187 = 1.4973
Year 5 Year 6
$143/$120 = 1.1917
$285/$280 = 1.0179
Comparing these values we see that the difference in proportional change in share price between Year 4 and Year 5 is
the smallest and, thus, they are the closest match.
Tip
A visual scan of the chart provided shows that the likely years would be, Year 4 to Year 5 or Year 5 to Year 6.
We calculate the proportionate changes for these 2 time periods only, reducing the number of calculations
necessary.
Answer
A
Year 1 to
Year 2
Year 2 to
Year 3
Year 3 to
Year 4
Year 4 to
Year 5
Year 5 to
Year 6
If in the year prior to Year 1 the share prices of Henecan and Stella
were both 10% higher, what was the actual difference in these
share prices in that year?
Solution
We calculate the share price for each company for the year prior to Year 1. Taking each company in turn, we calculate
the 10% increase in share price as follows:
Prior share price
= 1.1
Company Year 1 share price
So,
Henecan:
Prior share price
= 1.1
$175
= $192.5
Stella:
Prior share price
= 1.1
$65
= $71.5
Now we calculate the difference in share price:
Difference in share price
=
=
$192.5 $71.5
$121
Tip
A faster way of calculating this value is to consider the increase in difference in share price.
We can do this as both share prices increase by the same amount, 10%.
Difference in share price
= ($175 $65)
1.1
= $121
Answer
A
$121
$125
$131
$137
$142
Value of Corporate Bonds Traded Last Year in Euros (millions)

180
160
140
Euros (millions)
120
Long term
100
Medium term
80
Short term
60
40
20
0
London
Frankfurt
Zurich
Paris
Milan
What was the difference in the value of Medium Term Bonds trades
in Frankfurt compared to Paris?
Solution
We calculate the difference
Difference
=
=
=
in value of Medium Term Bonds trades (in Euro millions):

Value of trades in Frankfurt Value of trades in Paris
50 20
30
Answer
30 million euros
40 million euros
50 million euros
60 million euros
70 million euros
By how much did the total value of all Short Term Bonds traded
exceed that of all Long Term Bonds traded?
Solution
We calculate the difference
Difference
=
=
=
in value of all Short Term Bonds traded and all Long Term Bonds traded (in Euro millions):
total value Short Term Bonds total value Long Term Bonds
(90 + 50 + 40 + 60 + 20) (20 + 30 + 30 + 20 + 10)
150
Answer
A
120 million euros
130 million euros
140 million euros
150 million euros
160 million euros
As a proportion, which location traded the fewest

Medium Term Bonds?
Solution
We calculate the value Medium Term Bonds traded as a proportion of the total Bonds Traded per Location. The
Location with the smallest proportion is what we are looking for:
Proportion = Medium Terms Bonds traded Total Bonds traded
Location
Proportion
London
0.267
Frankfurt
0.385
Zurich
0.300
Paris
0.200
Milan
0.250
From this we can see that Paris, as a proportion, traded the fewest Medium Term Bonds.
Tip
To find the correct answer we have to look for a location where a small amount of Medium Bonds are traded and a
large overall amount of Bonds.
This will provide a small proportion which is what we are looking for.
Looking at the chart provided, there are two likely locations: London and Paris.
Looking at the Paris trades and comparing to Paris we can see London should have at least a total value of trade
over 200 million Euros to have a smaller proportion than Paris.
This makes Paris the answer.
Answer
London
Frankfurt
Zurich
Paris
Milan
Across these 5 locations, by what proportion would the volume of

trading in Long Term Bonds have to increase in order to match the
current volume of trading in Medium Term Bonds?
Solution
We calculate the total volume of trading in both Long Term and Medium Term Bonds. We then calculate the
percentage increase in trading of Long Term Bonds in order to match the current volume of trading in Medium Term
Bonds.
Total Volume traded (working in millions of Euros):
Long Term
= 110
Medium Term
= 150
Percentage difference
= (150/110)
100%
= 36.4%
Answer
A
31.6%
33.5%
36.4%
38.1%
39.4%
Direct Wine Company: Annual Sales and Profit figures (in $000s)
Total Sales
Total Profits
= (Total Sales
- Total Costs)
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
5,020
4,400
4,850
5,150
5,220
5,820
600
270
-230
-380
310
580
In which year did Total Costs equal approximately

90% of Total Sales?
Solution
We calculate the Total Costs and then the percentage this value is for each of the years (in $ 000s):
Total Costs = Total Sales Total Profits
Year
Total Costs
As Percentage of Total Sales
Year 1
4420
88.0%
Year 2
4130
93.9%
Year 3
5080
104.7%
Year 4
5530
107.4%
Year 5
4910
94.1%
Year 6
5240
90.0%
From this we can see Year 6 is the correct answer.

Tip
Considering the table of data provided, we look for the year for which the Total Profits is 10% of the Total Sales.
We can ignore Year 3 and Year 4 as these do not have any profits and thus will have greater Costs than Sales.
We can see that Year 6 has a Total Profits that is 10% of Total Sales, which is what we are looking for.
Answer
10
Year 2
Year 3
Year 4
Year 5
Year 6
In which one of the following years were

Total Costs the highest?
Solution
We calculate the Total Costs for each of the years and from this establish the year with the highest Total Costs
(in $ 000s):
Year
Total Costs
Year 1
4,420
Year 2
4,130
Year 3
5,080
Year 4
5,530
Year 5
4,910
Year 6
5,240
From this we can see Year 4 is the year with the highest Total Costs.
Tip
Looking at the data provided, we can see that Year 4 or Year 6 would have the highest Total Costs as these years
have the highest Total Sales values.
For Year 4 we add $380,000 to the Total Sales to establish Total Costs.
Comparing this value of Total Costs to Year 6 Total Costs (Total Sales minus Total Profits) we see Year 4 is the
correct answer.
Answer
11
Year 2
Year 3
Year 4
Year 5
Year 6
What was the average annual profit over the 6-year period?
Solution
We calculate the average profit over the 6-year period (in $ 000s):
Average Profit = Total Profits 6
= (600 + 270 + (-230) + (-380) + 310 + 580) 6
=
191.666
Answer
12
$187,666
$191,666
$212,333
$223,133
$266,633
In Year 1, compared with the previous year, both Total Sales and
Total Profits rose by 10% each. What approximately were the Total
Costs in the year prior to Year 1?
Solution
As we are asked for an approximate value for Total Costs, we can calculate the value using mental arithmetic. Working
in $ 000s:
Both Total Sales and Total Profits are 10% less in the year prior to Year 1. From this we know that the Total Costs will
also be 10% less than the Total Costs in Year 1. Total Costs in Year 1 is a bit less than 4,500. 10% of this value is a bit
less than 4,050.
The answer is thus 4,018 or A.
Answer
A
$4,018,182
$4,096,000
$4,128,573
$4,282,000
$4,376,925
10
Value of financial products sold in $000s

15000
14000
Bonds
only
13000
Value in $000s
12000
11000
All
products
(Bonds
and
equities)
10000
9000
8000
7000
6000
5000
Year 1
13
Year 2
Year 3
Year 4
Year 5
Year 6
What was the average value of Bonds sold per annum

over the 6-year period?
Solution
We calculate the average value of the Bonds Sold per annum over the 6-year period. (Considering the chart we have
to remember that the Value in $000s does not start at 0 but 5000.) Working in $ 000s:
Average Value = (6000 + 8000 + 7000 + 9000 + 9000 + 10000) 6
= 8166
The answer closest to this value is C: $8.17 million.
Answer
A
$7.33 million
$7.83 million
$8.17 million
$8.53 million
$8.83 million
11
14
The biggest proportional increase in the sales of Equity products

took place between which two years?
Solution
We calculate the proportional change in the sales of Equities (in $ 000s):
Value of Equities sold
= All Products Bonds only
Proportional Change
= (Value Year n Value Year n1) Value Year n1
Year
Proportional change
Year 1 Year 2
-0.25
Year 2 Year 3
0.67
Year 3 Year 4
-0.20
Year 4 Year 5
-0.50
Year 5 Year 6
1.00
From this we can see the biggest proportional increase in the sales of Equity products is Year 5 Year 6.
Tip
Visually inspecting the chart, we can see the only increases in the sales of Equity products were for Year 2 to Year 3
and Year 5 to Year 6.
Year 2 to Year 3 has a change from 3 to 5 units.
Year 5 to Year 6 has a change from 2 to 4 units. This is the time period with the greatest proportional increase.
Answer
A
Year 1 and
Year 2
Year 2 and
Year 3
Year 3
Year 4
Year 4 and
Year 5
Year 5 and
Year 6
12
15
In which year did Bonds represent the largest proportion of total

financial products sold?
Solution
We calculate the proportion that Bonds represent of total financial products sold, for each year:
Proportion = Value Bonds total financial products sold
Year
Proportion
Year 1
0.600
Year 2
0.727
Year 3
0.583
Year 4
0.692
Year 5
0.818
Year 6
0.714
From this we can see that for Year 5 Bonds represented the largest proportion of total financial products sold.
Tip
Visually inspecting the chart provided, we look for the year with smallest difference between all products and Bonds,
and large values for both.
Year 5 fits these criteria the best.
Answer
16
Year 2
Year 3
Year 4
Year 5
Year 6
If in Year 7 the value of Bond products increases by 10%

and the value of Equity products increase by 15%,
what will the total value of sales be?
Solution
We calculate the increases in value for Bond products and Equity products and then add these together to calculate
the total value of sales (in $ 000s):
Year 7:
Value of Bond products
= 10,000
110
= 11,000
Value of Equity products
= (14,000 10,000)
115%
= 4,600
Total value of sales
= 11,000 + 4,600
= 15,600
Answer
A
$14.85 million
$15.60 million
$15.75 million
$17.25 million
$18.35 million
13
Sales and enquiries generated per 10,000 direct mailshots by age

50
40
Value in $000s
39
36
Sales
32
30
20
23
21
Enquiries
10
15
14
12
15
10
0
Year 1
17
Year 2
Year 3
Year 4
Year 5
Year 6
Which age range shows the smallest number of

sales per enquiry?
Solution
We calculate the number of sales per enquiry for each age range. From this we establish the age range with the
smallest number of sales per enquiry:
Sales per enquiry = Sales Enquiries
Age Range
Sales per Enquiry
16-24 years old
0.333
25-34 years old
0.359
35-44 years old
0.476
45-54 years old
0.348
55-64 years old
0.469
65 years and over
0.600
From this we can see that the age range 16-24 years old has the smallest number of sales per enquiry.
Tip
Visually inspecting the chart provided we look for age ranges where the number of enquiries is large and the number
of sales small.
Age ranges 16-24 years old and 25-34 years old seem like the most likely candidates.
We can see the number of sales per enquiry for 16-24 years old is 1/3. For the age range 25-34 years old to
have a smaller sale per enquiry ratio, the number of sales would have to be less than 13.
The sales for this age range are 14.
Thus the age range 16-24 years old is the correct answer.
Answer
A
16-24 years
25-34 years
35-44 years
45-54 years
55-64 years
14
18
Assuming 400,000 mail shots were sent out to 25-34 year olds, how
many more enquiries would be generated compared to actual
sales?
Solution
We calculate the number of enquiries and actual sales generated by 400,000 mail shots. The chart provided indicates
the data represented is for 10,000 mail shots, so we calculate the actual sales and enquiries generated using:
Actual Sales
= (400,000 10,000)
14
= 560
Enquiries
= (400,000 10,000)
39
= 1,560
Thus a 1000 more enquiries are generated than actual sales.
Tip
As the ratio of (400,000 10,000) is the same for both equations we need only multiply the difference between
actual sales and enquiries by this ratio:
Difference between enquiries and sales = (400,000 10,000)
(39 14) = 1,000
Answer
19
800
900
1,000
1,100
1,200
Last year there were 630 sales recorded for the 45-54 year old
group. How many mail shots would have been sent out to reach
this figure?
Solution
We calculate the number of mail shots by calculating how many batches of 10,000 would have had to be sent out to
achieve 630 sales:
Number of batches
= 630 8
= 78.75
Number of mail shots
= 78.75
10,000
= 787,500
Answer
A
630,500
625,000
685,500
760,000
787,500
15
20
In one year, there were 1.9 million mail shots sent out to people
aged 65 and over compared to 1.1 million mail shots sent out to
people aged 16-24 years old. How many more sales were likely to
have been made to people aged 65 and over?
Solution
We calculate the number of sales generated for each of the age ranges 65 years and older and 16-24 years old by
the respective mail shots:
Sales for 65 years and over
= (1.9 million 10,000)
9
= 1,710
Sales for 16-24 years old
= (1.1 million 10,000)
12
= 1,320
Difference in sales generated
= 1,710 -1,320
= 390
Answer
A
270
336
390
484
533
Average Value of Euro (Eur)

Currency
21
Year 1
Year 2
US Dollar ($)
1.28
1.05
Pound Sterling ()
0.87
0.74
Japanese Yen (Y)
184
156
Swiss Franc (CHF)
1.98
1.80
Hong Kong Dollar (HK$)
12.70
10.20
How many more Swiss Francs could have been purchased with
3000 Euros in Year 1 compared to Year 2?
Solution
We calculate the number of Swiss Francs purchased with 3000 Euro for Year 1 and Year 2, and take the difference:
Swiss Francs bought Year 1
= 3,000
1.98
= 5,940
Swiss Francs bought Year 2
= 3,000
1.80
= 5,400
Difference
= 5,940 5,400
= 540
Tip
A faster way of calculating this value is to multiply the difference in exchange rates by 3,000:
Difference
= 3,000
(1.98 1.8)
= 540
Answer
A
435 Swiss Francs
450 Swiss Francs
485 Swiss Francs
540 Swiss Francs
570 Swiss Francs
16
22
In Year 1, 200 Euros was used to purchase a holding of Japanese

Yen. What would the value of this holding be if exchanged for HK$
in Year 2?
Solution
We calculate the value of the holding in HK$ by calculating the value of the following exchanges:
200 EURO Year 1 -> Japanese Yen Year 1 -> Euro Year 2 -> Hong Kong Dollar Year 2.
Value of holding
= 200
184
(1 156)
10.20
= HK$ 2,406
Answer
23
HK$ 2,313
HK$ 2,406
HK$ 2,511
HK$ 2,612
HK$ 2,709
Which currency strengthened the least against the Euro

between Year 1 and Year 2?
Solution
We calculate the proportional change for each currency and from this establish the currency that strengthened
the least:
Proportional change = (Value Year 2 Value Year 1) 1
Currency
Proportional change
US Dollar
0.18
Pound Sterling
0.15
Japanese Yen
0.15
Swiss Franc
0.09
Hong Kong Dollar
0.20
All of the currencies have appreciated against the Euro but the Swiss Franc has appreciated the least.
Answer
A
US Dollar
Sterling
Yen
Swiss Franc
Hong Kong Dollar
17
24
Between Year 1 and Year 2, the value of Sterling in relation to the

Euro, moved:
Solution
We calculate the change in value of
using:
Percentage change =
=
=
the Pound Sterling in relation to the Euro from Year 1 to Year 2. We calculate this
{[(1/Year 2 Value) (1/Year 1 Value)] (1/Year 1 Value)}
{[(1/0.74) (1/0.87)] (1/0.87)}
100%
17.6%
100%
Tip
A way to understand this calculation is to consider the following, simplified scenario:
In Year 1 a shirt costs $1.
In Year 2 the same shirt costs $2.
Looking at this we can see that the value of the shirt has increased 100% in relation to the Dollar:
Change of value of the shirt
= [($2 $1) $1]
100%
= 100%
Conversely, the value of the Dollar has decreased 50% in relation to the shirt:
Change of value of Pound Sterling
= {[(1/$2) (1/$1)] (1/$1)}
100%
= -50%
We apply the same principle to calculate the change in value of the Pound Sterling in relation to the Euro by
replacing the shirt with Euro and the Dollar with Pound Sterling.
Answer
A
Down 9.1%
Down 8.5%
Up 11.7%
Up 14.3%
Up 17.6%
Numerical Test Answer Booklet 3 is created by eFinancialCareers.com. eFinancialCareers.com 2007.

No part of this booklet may be reproduced or transmitted in anyway without the written consent of eFinancialCareers.com
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NUMERICAL

Please note the correct answers are shown in bold.

City Trading last 6 months (number of trades made, in 000s)

September and October

October and November

November and December

December and January

January and February

Ex 2 In September, approximately what proportion of the total number of

Difference between Arca share

Difference between Henecan share

$90 $65 = $25

$175 $90 = $85

$98 $73 = $25

$165 $98 = $67

$125 $85 = $40

$231 $125 = $106

$130 $75 = $55

$187 $130 = $57

$153 $120 = $33

$280 $153 = $127

$198 $143 = $55

$285 $198 = $87

If the percentage increase in the Arca share price between Years 5

in share price between Year 5 and Year 6:

Stella proportional change

Henecan proportional change

Value of Corporate Bonds Traded Last Year in Euros (millions)

in value of Medium Term Bonds trades (in Euro millions):

120 million euros

130 million euros

140 million euros

150 million euros

160 million euros

As a proportion, which location traded the fewest

Across these 5 locations, by what proportion would the volume of

In which year did Total Costs equal approximately

As Percentage of Total Sales

From this we can see Year 6 is the correct answer.

In which one of the following years were

Value of financial products sold in $000s

What was the average value of Bonds sold per annum

The biggest proportional increase in the sales of Equity products

In which year did Bonds represent the largest proportion of total

If in Year 7 the value of Bond products increases by 10%

Sales and enquiries generated per 10,000 direct mailshots by age

Which age range shows the smallest number of

Sales per Enquiry

16-24 years old

25-34 years old

35-44 years old

45-54 years old

55-64 years old

65 years and over

Average Value of Euro (Eur)

Japanese Yen (Y)

Swiss Franc (CHF)

Hong Kong Dollar (HK$)

435 Swiss Francs

450 Swiss Francs

485 Swiss Francs

540 Swiss Francs

570 Swiss Francs

In Year 1, 200 Euros was used to purchase a holding of Japanese