PI preparation: Academics: Commerce/Economics

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Hey puys, this thread is dedicated for people who have interest in commerce or economics. Share the core questions that you would have faced or came across while preparing or appearing for B-School interviews. Let us make our preparations fruitful...
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@Brooklyn said:
People in gonna start a blog for eco and finc ur take on it?? What topics to take up ??? from basic to start with
Macro ke topics uthao..coz they are directly linked with economy and Interview mein they are the asked the most.
@wheresthebell said:
guysfor economics..are we supposed to know and revise equations and graphs also ?? anyone from eco background here? ??
umm..I am from commerce..Ideally the check the application via asking you from economy related problems..but expect the unexpected :mg:
2013: CAT - 96.2 | Converts: IIM(S), NMIMS
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guys

for economics..
are we supposed to know and revise equations and graphs also ??

anyone from eco background here? ??
B.E.L.I.E.V.E
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Why do we fall??? So that we can learn to pick ourselves up again.
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any queries on accounts welcome.. a chartered accountant inter grad here... but in return teach me some quants questions that come in p.i..

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People in gonna start a blog for eco and finc 😃 ur take on it?? What topics to take up ??? from basic to start with

Why do we fall??? So that we can learn to pick ourselves up again.
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@VijayRawat thanks boss..How is the currency valued?? What methods are used??
2013: CAT - 96.2 | Converts: IIM(S), NMIMS
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@abhibansal123 said:
Hey, could you please explain me the reason why our rupee depreciated in 2012? Technical suggestions are welcome.
Dekh bhai, kuch to obvious reasons hai, like, Euro zone crisis...anyway for you and other, let me jot down the reasons neatly-

1. Global Uncertainty- Like I said earlier, due to Euro zone crisis and global uncertainty, investors prefer to stay away from risky investments, credit rating agencies have also downgraded India's rating to BBB, and any outward flow of investment from the country always hampers exchange rates.

2. Current Account Deficit- This is like ages old problem for India and I assume that it will be there for many decades as well. Europe is India's big trading partner, and in 2011 and 2012 due to economic crisis, India's exports to Europe hampered like anything, but the imports remained the same or increased and this contributed to increased deficit, depleting the forex reserves and consequently, depreciating rupee in International market.

3. Persistent inflation: India has experienced high inflation, above 8%, for almost two years. If inflation becomes a prolonged one, it leads to overall worsening of economic prospects and capital outflows and eventual depreciation of the currency.

4. Interest Rate Difference: Higher real interest rates generally attract foreign investment but due to slowdown in growth there is increasing pressure on RBI to decrease the policy rates. Under such conditions foreign investors tend to stay away from investing. This further affects the capital account flows of India and puts a depreciating pressure on the currency.

Due to all this, and many more, reasons, rupee depreciated in the International Market and don't expect it to bounce back until and unless there is stability in the Europe and the Middle East. RBI's measures will only help Rupee from suddenly falling into a deep well but cannot stop Rupee from depreciating slowly and progressively.
PG ain't the same. Should I come back or not is the question.
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@VijayRawat said:
You are perfectly correct in your assumption. RBI or for that matter, any central bank, in normal circumstances, sells its forex reserves when local currency is going down.
Reason- By selling the foreign reserves in exchange of local currency, it is creating "demand" for its currency and in this way the country's central bank tries to uplift the position of their currency.
Although, using this method too frequently is not an ideal way as this might lead to the deterioration of country's goodwill in the eyes of FIIs.
Hey, could you please explain me the reason why our rupee depreciated in 2012? Technical suggestions are welcome.
2013: CAT - 96.2 | Converts: IIM(S), NMIMS
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@wheresthebell said:
@VijayRawat One thing i find difficulty understanding even thought m a student of economics is why the RBI sells forex if rupee prices are going down.. If i am wrong in this assumption itself..do correct me and pls explain the reason
You are perfectly correct in your assumption. RBI or for that matter, any central bank, in normal circumstances, sells its forex reserves when local currency is going down.
Reason- By selling the foreign reserves in exchange of local currency, it is creating "demand" for its currency and in this way the country's central bank tries to uplift the position of their currency.
Although, using this method too frequently is not an ideal way as this might lead to the deterioration of country's goodwill in the eyes of FIIs.
PG ain't the same. Should I come back or not is the question.
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@VijayRawat One thing i find difficulty understanding even thought m a student of economics is why the RBI sells forex if rupee prices are going down.. If i am wrong in this assumption itself..do correct me and pls explain the reason
B.E.L.I.E.V.E
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