Chapter 1- Ratio, Proportion , Indices and Logarithm

RATIOS

 If a and b are two quantities of the same kind (in same units), then the
fraction a/b is called the ratio of a to b. It is written as a : b.

 The quantities a and b are called the terms of the ratio, a is called the first
term or antecedent and b is called the second term or consequent.

 The ratio compounded of the two ratios a : b and c : d is ac : bd.

RATIOS
 A ratio compounded of itself is called its duplicate ratio. a2 : b2 is the
duplicate ratio of a b. Similarly, the triplicate ratio of a : b is a3 : b3.

 For any ratio a : b, the inverse ratio is b : a

RATIOS

 The sub-duplicate ratio of a : b is a1/2 : b1/2 and the sub-triplicate ratio of a : b

is a1/3: b1/3.

 Continued Ratio is the relation (or compassion) between the magnitudes of

three or more Quantities of the same kind. The continued ratio of three
similar quantities a, b, c is written as a : b : c.
PROPORTIONS

 The quantities a, b, c, d are called terms of the proportion; a, b, c and d are

called its first, second, third and fourth terms respectively and a : b = c : d

 First and fourth terms are called extremes (or extreme terms). Second and
third terms are called means (or middle terms).

 If a : b = c : d are in proportion then a/b = c/d i.e. ad = bc i.e. product of

extremes =product of means. This is called cross product rule.
PROPORTIONS

 Three quantities a, b, c of the same kind (in same units) are said to be in
continuous proportion, then the middle term b is called the mean
proportional between a and c, a is the first proportional and c is the third
proportional.

 if a : b = b : c i.e. a/b = b/c i.e. b2 = ac

 PROPORTIONS
 p : q = r : s ⇒ q : p = s : r (Invertendo)

 a : b = c : d ⇒ a : c = b : d (Alternendo)

 a : b = c : d ⇒a + b : b = c + d : d (Componendo)

 a : b = c : d ⇒ a – b : b = c – d : d (Dividendo)
PROPORTIONS
 a : b = c : d ⇒ a + b : a – b = c + d : c – d (Componendo & Dividendo)

 a : b = c : d = a + c : b + d (Addendo)

 a : b = c : d = a – c : b – d (Subtrahendo)(a/b = c/d = a – c/b – d)

 If a : b = c : d = e : f = . . . each of these ratios = (a – c – e – . . . . .) : (b–d–f–. . . .)

INDICES

 am × an = am + n (base must be same)

Ex. 23 × 22 =

 am / an = am–n

Ex. 25 / 23 =
INDICES

 (am)n = amn ,

Ex. (25) 2 =

 ao = 1 ,

Ex. 20 = , 30 =
INDICES

 a–m = 1/am and 1/a–m = am ,

Ex. 2–3 =

and 1/2–5 =

 If ax = ay, then x = y
INDICES

 If xa = ya , then x = y

 m√ a = a1/m ,

Ex. 3√8 =

 √x = x½ ,

Ex. √4 =
LOGARITHMS

 The two equations ax = n and x = logan are only transformations of each other and
should be remembered to change one form of the relation into the other.

 Since a1 = a, therefore logaa =

 NOTE

(A) If base is understood, base is taken as 10

(B) Thus log 10 = 1, log 1 = 0

(C) Logarithm using base 10 is called Common logarithm and logarithm using base e
is called Natural logarithm {e = 2.718 (approx.) called exponential number}.
 LOGARITHMS

 logamn = logam + logan ,

Ex. log (2 × 3) =

 loga(m/n) = logam – logan ,

Ex. log (3/2) =

 logamn = n logam

Ex. log 23 =
LOGARITHMS

 logaa = 1, a ≠ 1 ,

Ex.

 loga1 = 0 ,

Ex.

 logba × logab = 1 ,

Ex. log32 × log23 =

LOGARITHMS

 logba = log a/log b ,

Ex. log32 =

 logba × logcb = logca

Ex. log32 × log53 =

LOGARITHMS

 logba = 1/logab

 alogax = x (Inverse logarithm Property)

Chapter 2- Equations
 EQUATIONS

 A simple equation in one unknown x is in the form ax + b = 0. Where a, b are

known constants and a ≠0

 The general form of a linear equations in two unknowns x and y is

ax + by + c = 0 where a, b are non-zero coefficients and c is a constant.

 Two such equations a1x + b1y + c1 = 0 and a2 x + b2 y + c2 = 0 form a pair of

simultaneous equations in x and y.
EQUATIONS

 A value for each unknown which satisfies simultaneously both the

equations will give the roots of the equations.

 Elimination Method: In this method two given linear equations are

reduced to a linear equation in one unknown by eliminating one of the
unknowns and then solving for the other unknown.

 Cross Multiplication Method: Let two equations be:

a1x + b1y + c1 = 0
a2x + b2y + c2= 0

b1 c2 −b2 c1 c1 a2 −c2 a1
x= a1 b2 −a2 b1
y= a1 b2 −a2 b1
.
EQUATIONS

 An equation of the form ax2 + bx + c = 0 where x is a variable and a, b, c are

constants with a2 ≠ 0 is called a quadratic equation or equation of the
second degree.

 When b = 0 the equation is called a pure quadratic equation; when b ≠ 0

the equation is called an affected quadratic.

−𝑏± 𝑏 2 −4𝑎𝑐
 The roots of a quadratic equation: = 2𝑎
EQUATIONS

 The Sum and Product of the Roots of quadratic equation

𝑏 −𝑐𝑜𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑜𝑓 𝑥
Sum of roots =- = −
𝑎 coeffient of x2

𝑐 𝑐𝑜𝑛𝑠𝑡𝑎𝑛𝑡 𝑡𝑒𝑟𝑚
Product of the roots = 𝑎 = coeffient of x2

 To construct a quadratic equation for the equation ax2 + bx + c = 0 we have

x2+(Sum of the roots) x + Product of the roots = 0
EQUATIONS
−𝑏± 𝑏 2 −4𝑎𝑐
 Nature of the roots x = 2𝑎
i) If b2–4ac = 0 the roots are real and equal;

ii) If b2–4ac >0 then the roots are real and unequal (or distinct);

iii) If b2–4ac <0 then the roots are imaginary;

EQUATIONS
−𝑏± 𝑏 2 −4𝑎𝑐
 Nature of the roots x = 2𝑎
iv) If b2–4ac is a perfect square ( ≠0) the roots are real, rational and
unequal (distinct);

v) If b2–4ac >0 but not a perfect square the rots are real, irrational and
unequal.

Since, b2 – 4ac discriminates the roots b2 – 4ac is called the discriminant in

the equation ax2 + bx + c = 0 as it actually discriminates between the
roots.
EQUATIONS

Cubic Equation :- An Equation of 3rd degree i.e. Cubic Equation will look like

ax3 + bx2 + cx + d = 0

Best Method to solve is by Sum of roots and Product of Root s

Chapter 3- Linear Inequalities
Linear Inequalties (Steps to Solve )
 Linear inequation in one variable:-
WHY TO
•STUDY?
As the heading says, when there is an inequality in one variable than
it will be called as linear inequation in one variable.

EXAMPLE

 Thing to remember that the sense of the inequality reverses if we

multiply or divide both sides by a negative number.
 Linear inequation on one variable:-
WHY TO
The range where the equation satisfies in called as solution space
STUDY?
If a < b, and a < x < b means that a < x and x < b. That is, x is between a and b.

Interval Inequality
(Solution
Space)??
[a, b]
[a, b)
(a, b]
(a, b)
 Linear inequation in two variable:-
WHY TO
STUDY?
As the heading says, when there is an inequality in two variables than it will be
called as linear inequation in two variables.
• For example: -
Chapter 4- Time Value of Money
Time Value of Money Summary

Time value of money:

 The sum of money received in future is less valuable than it is today.
 In other words the present worth of money received after some time will
be less than a money received today.
Interest:
 Interest is the price paid by a borrower for the use of a lender’s money.

 If you borrow (or lend) some money from (or to) a person for a particular
period you would pay (or receive) more money than your initial
borrowing (or lending).
Time Value of Money Summary

 Simple interest: is the interest computed on the principal for the entire
period of borrowing.
I = Pit
A=P+I
I=A–P
Here, A = Accumulated amount (final value of an investment)
P = Principal (initial value of an investment)
i = Annual interest rate in decimal.
I = Amount of Interest
t = Time in years
Time Value of Money Summary

 Compound interest: as the interest that accrues when earnings for each
specified period of time added to the principal thus increasing the principal
base on which subsequent interest is computed.

Formula for compound interest:

An = P ( 1 + i)n

C.I. = An – P = P ( 1 + i )n – P

where, P = Principal i = Annual rate of interest

n = Number of total conversion period i.e. t x no. of conversions per year
Time Value of Money Summary

 Effective Rate of Interest: The effective interest rate can be computed

directly by following formula:

E = (1 + i)n– 1

Where E is the effective interest rate

i = actual interest rate in decimal
n = number of conversion period

 Future value of a single cash flow can be computed by above formula.

Replace A by future value (F) and P by single cash flow (C.F.) therefore
F = C.F. (1 + i)n
Time Value of Money Summary

 Annuity can be defined as a sequence of periodic payments (or receipts)

regularly over a specified period of time.

Annuity may be of two types:

(i) Annuity regular: In annuity regular first payment/receipt takes place
at the end of first period.
(ii) Annuity Due or Annuity Immediate: When the first receipt or
payment is made today (at the beginning of the annuity) it is called
annuity due or annuity immediate
 Time Value of Money Summary

Future Value of Annuity Regular :- If A be the periodic payments, the future

value A(n, i) of the annuity is given by
1+i n −1
A n, i = A
i

Future value of an Annuity due/Annuity immediate = Future value of annuity

regular x (1+i) where i is the interest rate in decimal.
 Time Value of Money Summary
 Present value of annuity regular :- The present value P of the Annuity A due
at the end of n period at the rate of i per interest period may be obtained by
solving for
𝐴((1 + i)n−1)
PV( i , n ) =
1+i n 𝑖

• Present value of annuity due or annuity immediate: Calculating the present

value of annuity due involves two steps.
Step 1: Compute the present value of annuity as if it were a annuity
regular for one period short.
Step 2: Add initial cash payment/receipt to the step 1 value.
 Applications

 Sinking Fund: It is the fund credited for a specified purpose by way of

sequence of periodic payments over a time period at a specified interest
rate. Interest is compounded at the end of every period.

• Leasing: Leasing is a financial arrangement under which the owner of the

asset (lessor) allows the user of the asset (lessee) to use the asset for a
defined period of time (lease period) for a consideration (lease rental)
payable over a given period of time. This is a kind of taking an asset on
rent.
 Time Value of Money Summary

 Capital Expenditure (investment decision): Capital expenditure means

purchasing an asset (which results in outflows of money) today in
anticipation of benefits (cash inflow) which would flow across the life of
the investment.

 Valuation of Bond: A bond is a debt security in which the issuer owes the
holder a debt and is obliged to repay the principal and interest. Bonds are
generally issued for a fixed term longer than one year.
 Time Value of Money Summary

 Perpetuity

 Compound Annual Growth Return

 Logical Reasoning
Chapter – Number Series, Coding and Decoding , Odd Man Out
 Number Series

Number series, a series of numbers following a particular pattern will

be called as number series.

And question on it will be such that, one term is missing in given series
and you need to find that missing term.
For Examples :-

(a) 1, 2, 3, 4, …….. ,6, 7, 8

(b) 2, 4, 6, 8, 10, 12, ……..

(c) …… , 9, 16, 25, 36, 49

Alphabet Series

When series of few alphabets are taken together in such way they form a
particular pattern.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
ABCDEFG H I J K L M N O P Q R S T U V W X Y Z
CODING AND DECODING :-

When we talk about Coding and Decoding , there are 2 types :-

Letter coding

Number coding
Number Coding :-

There are two types in number coding

 When letter is given a particular number code
Number Coding :-

 When number is given a particular letter code

Odd Man Out

When there are few words,numbers or letters are given to you, such that all
have a relation except one and you need to find that particular word.
 Logical Reasoning
Chapter – Direction Tests
Direction Tests

 Generally, the questions are easy on it.

 Sometimes, it can be confusing. But if you can picture yourself taking

direction and the diagram which we saw above is clear in your head, then it
will be easy for you

 Always draw clear diagram

Introduction

In these questions, you have to arrange a group of persons fulfilling certain

conditions. Here we can classify these problems into 4 types:
1. Linear Arrangement

2. Two row sequence Arrangement

3. Circular Arrangement

4. Polygon Arrangement
Linear Arrangement :

Here the arrangement of the persons is linear.

There will be two types of question for linear arrangement.
(a) When you don’t know the direction of facing

(b) When you know the direction of facing, (for Example –Upward,
Downward, east, north, south, west etc…)
Now, the conclusion from the diagram are: -

Left Right

A B C D E

 ___________________are right of A but ________ is to the immediate right of A.

 __________ is in the middle of line.

 ____________are sitting at the extreme end of line.

When you know the direction of facing.

For example – upward, Downward, East, north, south, west etc…

If it Faced, south

A B C D E
Double row arrangement:

There will be two groups of persons. You have to arrange one group in one
row and the other group in other row. The persons in these rows normally
face each other.

A B C

P Q R
 Circular arrangement:

In the circular seating arrangement questions, you have to arrange the

person Around a circular table etc., fulfilling certain conditions.

What if people are sitting by facing outside?

 Logical Reasoning
Chapter – Blood Relation
To make the above questions simple: -

We use these notations to show the relation between different relations: -

Male

Female

One generation gap

Same generation

Husband/wife
To make the above questions simple: -
 Also keep in mind about different generation
Generation 1 Grandmother , grandfather ,maternal
grandfather , maternal grandmother

Mother ,father ,uncle , aunt,

Generation 2 maternal uncle , maternal aunt

Self ,sister , sister-in-law

Generation 3
,brother ,brother-in-law

Generation 4 Son ,daughter ,nephew ,niece

Some tips before we start

• Break the question into very small parts

 Do not assume the gender of any person in the question just based on the
names given in the question.

 Draw clear diagrams as you solve (USE FAMILY TREE)

Types of questions asked from blood relations:

1. Based on puzzles

2. Based on dialogue or conversation

3. Based on symbolically coded

Symbolically coded relation

 In symbolically coded relations questions, the relationships between certain

members of the family are indicated by symbols like@£, $, %, &, +, -, etc.
 Statistics
Chapter – Statistical Description of Data
Q01 Statistical Description of Data

• Statistics deals with the aggregates. An individual, to a statistician has no significance

except the fact that it is a part of the aggregate.

• Statistics is concerned with quantitative data. However, qualitative data also can be
converted to quantitative data by providing a numerical description to the corresponding
qualitative data.

• We can broadly classify data as

(a) Primary;
(b) Secondary.

• Mode of Presentation of Data

(a) Textual presentation;
(b) Tabular presentation or Tabulation;
(c) Diagrammatic representation.
Q01 Statistical Description of Data

• The types of diagrams:

(a) Line diagram or Historiagram;
(b) Bar diagram;
(c) Pie chart

• Frequency Distribution of a Variable

(a) Find the largest and smallest observations and obtain the difference between them,
known as Range, in case of a continuous variable.
(b) Form a number of classes depending on the number of isolated values assumed by a
discrete variable.
(c) In case of a continuous variable, find the number of class intervals using the relation,
No. of class Interval × class length = Range.
(d) Cumulative frequency – less than and more than types
Q01 Statistical Description of Data

• Graphical Representation of Data

(i) Histogram or Area diagram;
(ii) Frequency Polygon;
(iii) Ogives or cumulative Frequency graphs.

• Frequency Curve
(a) Bell-shaped curve; (b) U-shaped curve; (c) J-shaped curve; (d) Mixed curve.

• LCB = LCL – D/2 and UCB = UCL + D/2

• Mid–point = LCB+UCB/2 or LCL+UCL/2

• Frequency density of a class interval = frequency of that class interval/corresponding class length

• Relative frequency and percentage frequency of a class interval = Class frequency/total frequency
 Statistics
Chapter – Measure of Central Tendancy
 Measure of Central Tendancy
Q01
ARITHMETIC MEAN GEOMETRIC MEAN HARMONIC MODE
MEAN
𝑥1 + 𝑥2 + 𝑥3 + ⋯ + 𝑥𝑛 𝑛
Individual GM H.M.= 1 The value that occurs the
𝑥ҧ =
Observation 𝑛 =(𝑥1 × 𝑥2 × 𝑥3 … .× 𝑥𝑛 )1/𝑛 σ
𝑥𝑖 maximum number of
Logarithm of G for a set of times
σ𝑛𝑖=1 𝑥𝑖 observations is the AM of
𝑥ҧ =
𝑛 the logarithm of the
observations; i.e.
σ log 𝑥
log 𝐺𝑀 =
𝑛
σ log 𝑥
G.M. = Antilog
𝑛

Frequency 𝑥ҧ =
𝑥1 𝑓1 + 𝑥2 𝑓2 + 𝑥3 𝑓3 + ⋯ + 𝑥𝑛 𝑓𝑛 GM = 𝑁
H.M.= 𝑓𝑖 Mode =𝑡1 +
𝑓0 –𝑓1
×𝑐
𝑓1 + 𝑓2 + 𝑓3 + ⋯ + 𝑓𝑛 σ 2𝑓0 –𝑓1 –𝑓–1
Distribution (𝑥1 𝑓1 × 𝑥2 𝑓2 × 𝑥3 𝑓3 … × 𝑥𝑛 𝑓𝑛 𝑥𝑖
Where,
l1 = LCB of the modal class i.e.
the class containing mode.
f0 = frequency of the modal
class
f–1 = frequency of the pre-
modal
f1 = frequency of the post
modal class
C = class length of the modal
class
Q01 Measure of Central Tendancy
ARITHMETIC MEAN GEOMETRIC MEAN HARMONIC MODE
MEAN
Relationship variables 𝑦᪄ = 𝑎 + 𝑏𝑥᪄ if 𝑧 = 𝑥𝑦, then ymo = a + bxmomo
𝐺𝑀 of 𝑧 = (𝐺𝑀 of 𝑥) ×
(𝐺𝑀 of 𝑦)
if 𝑧 = 𝑥/𝑦 then
GM of 𝑧 = (𝐺𝑀 of 𝑥)/(𝐺𝑀
of 𝑦)
Weighted Mean Weighted A.M =
Σ𝑥𝑖 𝑤t Weighted G.M Weighted
Σ𝑤t σ 𝑤𝑖 log𝑥𝑖 σ𝑤
= Antilog 𝐻. 𝑀 = 𝑤𝑖𝑖
σ 𝑤𝑖 σ
𝑥𝑖

Combined Mean Combined 𝐴 ⋅ 𝑀𝑥᪄12 = Combined

𝑛1 𝑥᪄1 +𝑛2 𝑥᪄2 𝑛 +𝑛
H.M = 𝑛11 𝑛22
𝑛1 +𝑛2 +
𝐻1 𝐻2
Q01 Measure of Central Tendancy

Important points:-
• Algebraic sum of deviations of a set of observations from their AM is zero σ 𝑥𝑖 − 𝑥᪄ = 0

• AM is affected due to a change of origin and/or scale which implies that if the original variable x
is changed to another variable y by effecting a change of origin,

Relation among Average

For Given two positive numbers (A.M) 𝐱(𝐇 ⋅ 𝐌) = (𝐆 ⋅ 𝐌)2
AM ≥ 𝐆𝐌 ≥ 𝐇𝐌 The equality sign occurs, as we have already seen, when all the observations are
equal.
Mode = 3 Median −2 Mean
 Measure of Central Tendancy
MEDIAN QUARTILES (Q1, Q2 & Q3) DECILES (D1, D2,D3….D9) PERCENTILES (P1, P2, P3,….,
P99)
Discrete 𝑁+1 𝑡ℎ 1
𝑄1 quartile is given by the 4 (𝑁 + The 𝐃1 Decile is given by the The 𝑃1 Percentile is given by
Median = Size of item
Series/Unclassifi 2
1) th value
1
(𝑁 + 1) th value
1
the 100 (𝑁 + 1) th value
10
ed Data the Q n quartile is given by the 𝑛
𝐃𝐧 Decile is given by the 10 (𝑁 + Pn Percentile is given by the
𝑛 𝑛
4
(𝑁 + 1) th value 1)𝑡ℎ value 100
(𝑁 + 1) th value

Group Frequency 𝑁
− 𝐶𝐹 𝑁 ⋅ 𝑝 − 𝐶𝐹𝑙 𝑁 ⋅ 𝑝 − 𝐶𝐹𝑙 𝑁 ⋅ 𝑝 − 𝐶𝐹𝑙
𝑄𝑛 = 𝑙1 + ×𝐶 𝐷𝑛 = 𝑙1 + ×𝐶 𝑃𝑛 = 𝑙1 + ×𝐶
Distribution Median = 𝑙1 + 2 X𝐶 𝑓 𝑓 𝑓
𝑓
𝑙1 = lower class boundaty of the 𝑙1 = lower class boundary of the 𝑙1 = lower class boundary of
𝑙1
Quartile class i.e. the class Decile class i.e. the class containing the Percentile class i.e. the
= lower class boundary of the
containing Quartile. N = total Decile. class containing Percentile.
median class i.e. the class 1 2 3
containing median. frequency. p = , , for N = total frequency. N = total frequency
4 4 4 1 2 3 9 1 2 3 99
Q1 , Q 2 , Q 3 respectively p= , , ,…., for D1 , D2 p = 100 , 100 , 100 , … , 100 for P1
N = total frequency. 10 10 10 10 P2 , P3 , … , P99 respectively
, 𝐷3 , … . , 𝐷9 respectively
𝐶𝐹 = less than cumulative
𝐶𝐹 = less than cumulative
CF = less than cumulative frequency corresponding to 𝑙1. 𝐶𝐹 = less than cumulative
frequency corresponding to 𝑙1 . (Pre
frequency corresponding to 𝑙1. (Pre (Pre Quartile class) frequency corresponding to 𝑙1 .
Decile class)
median class) (Pre Percentile class)
F = frequency of the Decile class.
f= frequency of the median class F = frequency of the Quartile class. F = frequency of the Decile
class.
C = 𝑙2 − 𝑙1 = length of the
C = 𝑙2 − 𝑙1 = length of the median C = 𝑙2 − 𝑙1 = length of the C = 𝑙2 − 𝑙1 = length of the
Decile class.
class. Quartile class. Percentile class.

yme = a + bxme

Note:-
1. yme = a + bxme
2. σ 𝑥𝑖 − 𝐴 is minimum if we choose A as the median.
 Statistics
Chapter – Measure of Dispersion
 DISPERSIONS

Absolute Relative If y = a + bx
RANGE (R) Range = Largest (L) – Smallest Co efficient of Range = Ry = |b| × Rx
(S) 𝐿 –𝑆
×100
𝐿+𝑆
MEAN DEVIATION 1
M. 𝐷A = σ|𝑥 − 𝐴| Co efficient of M.D from A = M.D 𝐷𝑦 = |𝑏| × M.D 𝐷𝑥
𝑛
(M.D) about A 𝑀.𝐷 𝑎𝑏𝑜𝑢𝑡 𝐴
× 100
𝐴
MEAN DEVIATION 1
M.D about Mean = σ 𝑥𝑖 − 𝑋᪄ Co efficient of M.D from A.M = M. Dy = |𝑏| × M ⋅ Dx
(M.D) about A.M 𝑛 M.D about 𝑥᪄
× 100
(𝑥)ҧ ᪄ 𝑥

MEAN DEVIATION 1
M.D about Median = σ ∣ 𝑥𝑖 − Co efficient of M.D from M.D Dy = |𝑏| × M ⋅ Dx
𝑛
(M.D) about Median ∣ Median
Median M.D about 𝐴
= × 100
𝐴
 DISPERSIONS
Absolute Relative If y = a + bx
𝜎
Standard Co efficient of Variation = × 𝜎y = |𝑏| × 𝜎x
σ 𝑥𝑖 − 𝑋᪄ 2 𝑥
Deviation () 𝜎= 100
𝑛

σ𝑥𝑖2
𝜎= − 𝑋᪄ 2
𝑛
Standard Deviati𝑜𝑛 𝑓𝑜𝑟 𝑇𝑤𝑜 𝑛𝑢𝑚𝑏𝑒𝑟𝑠 𝑛1 𝜎12 +𝑛2 𝜎22 +𝑛1 𝑑12 +𝑛2 𝑑22
=2 Combined Standard Deviation, 𝜎12 =
𝑛1 +𝑛2
Standard Deviations for first n Where d1 = 𝑥᪄1 − 𝑥᪄12 , d2 = 𝑥᪄2 − 𝑥᪄12
𝑛2 −1
Natural numbers, 𝜎 =
12

Quartile Deviation 𝑄3 − 𝑄1 Co-efficient of Q.D =

𝑄3 −𝑄1
× 100
Qd = 𝑄3 +𝑄1
(Qd) 2
Or
𝑄.𝐷
Co-efficient of Q.D = × 100
Median
Variance (2) Variance means Square of
standard Deviation
 Business Mathematics
Chapter 5- Permutation and Combination
 Fundamental principles of counting

(a) Multiplication Rule: If certain thing may be done in ‘m’ different ways and
when it has been done, a second thing can be done in ‘n‘ different ways then
total number of ways of doing both things simultaneously = m × n.

(b) Addition Rule : It there are two alternative jobs which can be done in ‘m’ ways
and in ‘n’ ways respectively then either of two jobs can be done in (m + n) ways.
Factorial

• The factorial n, written as n! or ⌊n, represents the product of all integers from 1
to n both inclusive.

• To make the notation meaningful, when n = 0 , we define 0! or ⌊0 = 1.

• Also, n! = n (n – 1) (n – 2) ….. …3.2.1

 Permutation

Permutations :- The ways of arranging or selecting smaller or equal number of

persons or objects from a group of persons or collection of objects with due regard
being paid to the order of arrangement or selection, are called permutations.

The number of permutations of n things chosen r at a time is given by

nP =
r
Circular Permutations

(a) Arranging n things in circular arrangement is given by :-nPn / n ways in

which all the n things can be arranged in a circle.
Which equals to (n-1)!

(b) The number of necklaces formed with n beads of different colours =

1/2 (n-1)!
Circular Permutations

(a) Number of permutations of n distinct objects taken r at a time when a

particular object is not taken in any arrangement is n–1pr.

(b) Number of permutations of r objects out of n distinct objects when a

particular object is always included in any arrangement is r. n-1Pr-1.
Combinations
The number of ways in which smaller or equal number of things are
arranged or selected from a collection of things where the order of selection
or arrangement is not important, are called combinations.
nC =
r

nC = nCn–r
r
nC = n!/{0! (n–0)!} = n! / n! =1.
o
nC = n!/{n! (n–n)!} = n! / n! . 0! = 1.
n
Combinations
The number of ways in which smaller or equal number of things are
arranged or selected from a collection of things where the order of selection
or arrangement is not important, are called combinations.

• nC =
r

• nC = nCn–r
r

• nC = 1 and nCn = 1.
0
Permutation and Combination

• nC has a meaning only when r and n are integers 0 ≤ r ≥ n and nCn–r has a
r
meaning only when 0 ≤ n – r ≥ n.

• n+1C = nCr + nCr–1

r

• nP = n–1P + rn–1 P
r r r–1
Permutation and Combination
• Permutations when some of the things are alike, taken all at a time
P = n!/ n1! n2! n3!

• Permutations of r things out of n when each thing may be repeated once,

twice,…upto r times in any arrangement = nr

• The total number of ways in which it is possible to form groups by taking

some or all of n things (2n–1).
Permutation and Combination

• The total, number of ways in which it is possible to make groups by taking

some or all out of n (=n1 + n2 + n3 +…) things, where n1 things are alike of
one kind and so on, is given by
{(n1 + 1) (n2 + 1) (n3 + 1)…} –1

• The combinations of selecting r1 things from a set having n1 objects and r2

things from a set having n2 objects where combination of r1 things, r2
things are independent is given by
n1C x n2Cr2
r1
 Business Mathematics
Chapter - Sequence and Series
Sequence and Series

• An ordered collection of numbers a1, a2, a3, a4, …………….., an, ……………..
is a sequence if there is some pattern and then an is called the term of
the sequence, corresponding to any value of the natural number n.

• An expression of the form a1+ a2+ a3 + ….. + an + ……………………….

which is the sum of the elements of the sequence is called a series.

• If the series contains a finite number of elements, it is called a finite

series, otherwise called an infinite series.
Arithmetic Progression

• A sequence a1, a2 ,a3, ……, an is called an Arithmetic Progression (A.P.)

when a2 – a1 = a3 – a2 = ….. = an – an–1= d

• This constant ‘d’ is called the common difference of the A.P. If 3

numbers a, b, c are in A.P.,

• If b – a = c – b or a + c = 2b; b is called the arithmetic mean between a

and c.
• nth term ( tn ) = a + ( n – 1 ) d,
Where a = First Term, d = Common difference= tn– tn-1

n
• Sum of n terms of AP:- Sn = 2 [2a + (n − 1)d]
Sum of the first n terms

• Sum of 1st n natural or counting numbers: S = n( n + 1 )/2

• Sum of 1st n odd number : S = n2

• Sum of 1st n even number : S = n(n+1)

n(n+1)(2n+1)
• Sum of the Squares of the first, n natural numbers:
6

n(n+1 2
• Sum of the squares of the first, n natural numbers is 2
Geometric Progression (G.P).
• If in a sequence of terms each term is constant multiple of the proceeding
term, then the sequence is called a Geometric Progression (G.P).
•
• nth term of a GP= arn–1

• The constant multiplier is called the common ratio

𝐴𝑛𝑦 𝑡𝑒𝑟𝑚 𝑡𝑛
= 𝑃𝑟𝑒𝑐𝑒𝑑𝑖𝑛𝑔 = . = arn–1/arn–2 = r
𝑡𝑒𝑟𝑚 𝑡𝑛−1
Geometric Progression (G.P).

• Sum of first n terms of a G P

Sn = a ( 1 – rn) / ( 1 – r ) when r < 1

Sn = a ( rn – 1 ) / ( r – 1 ) when r > 1

• Sum of infinite geometric series

𝑎
𝑆∞ = 1−𝑟 , 𝑟 < 1
Arithmetic Mean

• A.M. of a & b is = ( a + b ) /2

• If a, b, c are in G.P we get b/a = c/b => b2= ac, b is called the
geometric mean between a and c
 Business Mathematics
Chapter – Sets, Relations and Functions
 Sets

• A set is defined to be a collection of well-defined distinct objects. This

collection may be listed or described.

• Each object is called an element of the set.

• We usually denote sets by capital letters and their elements by small letters.

Representation of Sets

• Roster form

• Set Builder Form

 Sets

• Subset :-

• No. of sets for n number of elements :-2n subsets.

• Power Set :- The collection of all possible subsets of a given set A is called the
power set of A, to be denoted by P(A).

• Proper Subset and Super Set :-

• A set containing n elements has 2n-1 proper subsets

• Equivalent Set: Two finite sets A & B are said to be equivalent if n (A) = n(B).
 Sets

• Null Set:- A set containing zero element is called Singleton

• Singleton Set:- A set containing one element is called Singleton.

• Equal Set:- Two sets A & B are said to be equal, written as A = B if

every element of A is in B and every element of B is in A.

• Universal Set:- The set which contains all the elements under
consideration in a particular problem is called the universal set
denoted by S. Suppose that P is a subset of S.

• Venn Diagram :-
 Sets

• If A and B are two sets then

n(AUB) = n(A) + n(B) – n(A ∩ B)

• If A and B are disjoint sets, then n(AUB) = n(A) + n(B) as n (A ∩ B) = 0

• For three sets P, Q and R

n(PUQUR) = n(P) + n(Q) + n(R) – n(P∩Q) – n(Q R) – n(P∩R) + n(P∩Q∩R)

• When P, Q and R are disjoint sets

n(PUQUR) = n(P) + n(Q) + n(R)
 Relations

• Ordered Pair: Two elements a and b, listed in a specific order, form an

ordered pair, denoted by (a, b).

• Cartesian Product of sets: If A and B are two non-empty sets, then the set
of all ordered pairs (a, b) such that a belongs to A and b belongs to B, is
called the Cartesian product of A and B, to be denoted by A × B.

• If A = Φ or B = Φ , we define A × B = Φ
 Relations

• Relation :-

• Domain & Range of a relation: If R is a relation from A to B, then the set of

all first coordinates of elements of R is called the domain of R, while the set
of all second co-ordinates of elements of R is called the range of R.
So, Dom (R) = {a : (a, b) ∈ R} & Range (R) = {b : (a, b) ∈ R}
 Function

• Any relation from X to Y in which no two different ordered pairs have the
same first element is called a function.

• Let A and B be two non-empty sets. Then, a rule or a correspondence f

which associates to each element x of A, a unique element, denoted by f(x)
of B, is called a function or mapping from A to B and we write f : A→B
 Function

• The element f(x) of B is called the image of x, while x is called the pre-
image of f (x).

• Let f : A→B, then A is called the domain of f, while B is called the co-
domain of f.

• The set f(A) = {f (x) : x ∈ A } is called the range of f.

Relation and Function

• One-one Function: Let f : A→B. If different elements in A have different images

in B, then f is said to be a one-one or an injective function or mapping.

• Onto or Surjective Functions: Let f : A→B. If every element in B has at least one
preimage in A, then f is said to be an onto function. If f is onto,if and only if
Range of f = B
Relation and Function

• Bijection Function: A one-one and onto function is said to be bijective.

A bijective function is also known as a one-to-one correspondence.

• Inverse Function:- A function is invertible if and only if f is one-one onto

Let f be a one-one onto function from A to B.
Then there exists an element x in A such that f (x) = y then f-1(y) = x
 Different Function :-
• Identity Function:-

• Constant Function:-

• Equal Functions:- Two functions f and g are said to be equal, written as f = g if

they have the same domain and they satisfy the condition:- f(x) = g(x), for all x

• Composite function:-
Different types of relations

• Let S = {a, b, c, ….} be any set then the relation R is a subset of the
product set S×S
(i) If R contains all ordered pairs of the form (a, a) in S×S, then R is called
reflexive. In a reflexive relation ‘a’ is related to itself.

(ii) If (a, b) ∈ R ⇒ (b, a) ∈ R for every a, b ∈ S then R is called symmetric

Relation :-

(iii) If (a, b) ∈ R and (b, c) ∈ R ⇒ (a, c) ⇒ R for every a, b, c, ∈ S then R is

called transistive.

(iv) A relation which is reflexive, symmetric and transitive is called an

equivalence relation or simply an equivalence. ‘

Some Equivalance Relation :- “is equal to’ , “is parallel to”

 Statistics
Chapter – Probability
Probability

 Experiment: An experiment may be described as a performance that

produces certain results.

 Random Experiment: An experiment is defined to be random if the

results of the experiment depend on chance only.

 Events: The results or outcomes of a random experiment are known as

events. Sometimes events may be combination of outcomes. The events are
of two types:
(i) Simple or Elementary,
(ii) Composite or Compound.
Probability

 Mutually Exclusive Events or Incompatible Events: A set of events

A1 , A2 , A3 , … … is known to be mutually exclusive if not more than one of
them can occur simultaneously

 Exhaustive Events: The events A1 , A2 , A3 , … … … … are known to form an

exhaustive set if one of these events must necessarily occur.

 Equally Likely Events or Mutually Symmetric Events or Equi-Probable

Events: The events of a random experiment are known to be equally likely
when all necessary evidence are taken into account, no event is expected to
occur more frequently as compared to the other events of the set of events.
Probability

 The probability of occurrence of the event A is defined as the ratio of the

number of events favourable to A to the total number of events. Denoting this
by P(A), we have
𝑛A No. of eqally likely events favourable to A
P(A) = =
𝑛 Total no. of equally likely events

• The probability of an event lies between 0 and 1, both inclusive.

i.e. 0 ≤ P(A) ≤ 1

• When P(A) = 0, A is known to be an impossible event and when P(A) = 1, A

is known to be a sure event.
Probability

• Non-occurrence of event A is denoted by A′ or Ac or A ഥ and it is known as

complimentary event of A. The event A along with its complimentary A′
forms a set of mutually exclusive and exhaustive events.
i.e. P(A) + P A′ = 1
⇒ P A′ = 1 − P(A)

• The ratio of no. of favourable events to the no. of unfavourable events is

known as odds in favour of the event A and its inverse ratio is known as
odds against the event A.
i.e. odds in favour of A = mA : m − mA
and odds against A = m − mA : mA
Probability

• For any two mutually exclusive events A and B, the probability that
either A or B occurs is given by the sum of individual probabilities of A
and B.
i.e. P A ∪ B or P(A + B) = P(A) + P(B)

• For any K( ≥ 2) mutually exclusive events A1 , A2′ , A3 … , AK the probability

that at least one of them occurs is given by the sum of the individual
probabilities of the K events.
i.e. P A1 ∪ A2 ∪ ⋯ ∪ AK = P A1 + P A2 + ⋯ . P AK
Probability

• For any two events A and B, the probability that either A or B occurs is
given by the sum of individual probabilities of A and B less the probability
of simultaneous occurrence of the events A and B.
i.e. P(A ∪ B) = P(A) + P(B) − P(A ∩ B)

• For any three events A, B and C, the probability that at least one of the
events occurs is given by
P (A  B  C) = P(A) + P(B) + P(C) – P(A  B) – P(A  C) – P(B  C) + P(A
 B  C)
Probability

• For any two events A and B, the probability that A and B occur
simultaneously is given by the product of the unconditional probability of
A and the conditional probability of B given that A has already occurred
i.e. P(A ∩ B) = P(A) × P(B/A) Provided P(A) > 0

• Compound Probability or Joint Probability

P(B ∩ A) P(A ∩ B)
P(B/A) = =
P(A) P(A)

• For any three events A, B and C, the probability that they occur jointly is
given by P(A  B  C) = P(A) × P(B/A) × P(C/(A  B)) Provided P(A  B)>0
Probability

 A random variable or stochastic variable is a function defined on a sample

space associated with a random experiment assuming any value from R and
assigning a real number to each and every sample point of the random
experiment.

 Expected value or Mathematical Expectation or Expectation of a random

variable may be defined as the sum of products of the different values taken
by the random variable and the corresponding probabilities.
Probability

 When 𝒙 is a discrete random variable with probability mass function

𝒇(𝒙), then its expected value is given by

𝜇 = ෍ xf(x)
x

and its variance is

𝜎 2 = E x2 − 𝜇2

Where E x 2 = σx x 2 f(x)
Probability

Properties of Expected Values

(i) Expectation of a constant k is k

i.e. E(k) = k for any constant k.
(ii) Expectation of sum of two random variables is the sum of their
expectations.
i.e. E(x + y) = E(x) + E(y) for any two random variables x and 𝑦.
(iii)Expectation of the product of a constant and a random variable is the
product of the constant and the expectation of the random variable.
i.e. E(kx) = k ⋅ E(x) for any constant k
(iv) Expectation of the product of two random variables is the product of the
expectation of the two random variables, provided the two variables are
independent.
i.e. E(xy) = E(x) × E(y)
Whenever x and y are independent.
 Statistics
Chapter – Theoretical Distribution
 Probability Distribution
Name Condition Probability Mass Notation Mean Varinace Remarks
Function
Binomial Trials are P(X = x) = xCx px qn–x X ~ B(n, p)  = np 2 = npq p+q=1
Distribution independent and
each trail has only
two outcomes
Success & failure.
Poisson Trials are 𝑒 −𝑚 ⋅ 𝑚 𝑥 X ~ P(m) =m 2 = m e = 2.71828
𝐏(𝐗 = 𝐱) =
Distribution independent and 𝑥!
probability of For x = 0,1,2, . . , n
occurrence is very
small in give time.
Normal or When distribution is 𝑃(𝑋 = 𝑥) X ∼ N 𝜇, 𝜎 2 Mean = 2 Mean Deviation =
Gaussian symmetric 1 2 /2𝜎2
𝑥−𝜇 Median = 0.8𝜎
= ᪄
𝑒 −(𝑥−𝜇) 𝑍=
Distribution 𝜎 2𝜋 𝜎 Mode =  First Quartile = 𝜇 −
For −∞ < 𝑥 < +∞ 0.675𝜎
Third Quartile =
𝜇 + 0.675𝜎
Quartile
Deviation = 0.675𝜎
Point of Inflexion
x = 𝜇 − 𝜎 and x =
𝜇+𝜎

Relationship for Normal Distribution:- 4SD = 5MD = 6QD

 Statistics
Chapter – Correlation and Regression
Correlation

There are four ways to find Correlation :-

Scatter Diagram
A scatter diagram is a graphical presentation of bivariate data {(Xi, Yi): i = 1, 2,
… n} on two quantitative variables X and Y that allows us to show two variables
together.
 Perfect correlation
 Positive Correlation

 Perfect Negative Correlation  Negative Correlation

 No Correlation  Curvilinear correlation

 Correlation

 The following table shows degrees of correlation according to various values of r.

Degree of Correlation Positive Negative

Perfect correlation +1 -1
Very high degree of correlation + 0.9 to + 1 - 0.9 to – 1
Fairly high degree of correlation + 0.75 to + 0.9 - 0.75 to - 0.9
Moderate degree of correlation + 0.50 to + 0.75 - 0.50 to - 0.75
Low degree of correlation + 0.25 to + 0.50 - 0.25 to - 0.5
Very low degree of correlation 0 to + 0.25 - 0.25 to 0
No correlation 0 0
 CORRELATION

KARL PEARSON’S PRODUCT MOMENT SPEARMAN’S RANK COEFFICIENT OF CONCURRENT

CORRELATION COEFFICIENT CORRELATION DEVIATIONS
COEFFICIENT
Cov (𝑥 , 𝑦) 6 σ 𝑑𝑖2
𝑟 = 𝑟𝑥𝑦 = 𝑟𝑅 = 1 − (2𝑐 − 𝑚)
𝜎𝑥 × 𝜎𝑦 𝑛 𝑛2 − 1 𝑟𝐶 = ± ±
𝑚
Where,
σ 𝑥𝑖 − 𝑥᪄ 𝑦𝑖 − 𝑦᪄ Where c is concurrent deviation, m
Cov (𝑥 , 𝑦) = is one less than number of pairs of
𝑛 For tied ranking,
σ 𝑥𝑖 𝑦𝑖 𝑟𝑅 observations
or = − 𝑥᪄ 𝑦᪄ 𝑡3 − 𝑡
𝑛 6 σ +σ𝑑𝑖2
12
σ xi − xത 2 σ yi − yത 2 =1−
𝜎𝑥 = 𝜎𝑦 = 𝑛 𝑛2 − 1
n n

𝑛 σ 𝑥𝑖 𝑦𝑖 − σ 𝑥𝑖 × σ 𝑦𝑖
𝑟=
𝑛 σ 𝑥𝑖2 − σ 𝑥𝑖 2 × 𝑛 σ 𝑦𝑖2 − σ 𝑦𝑖 2

𝑏𝑑 𝑥−𝑎 𝑦−𝑐
𝑟𝑥𝑦 = 𝑟𝑢𝑣 where 𝑢 = and 𝑣 =
|𝑏||𝑑| 𝑏 𝑑
 REGRESSION ANALYSIS

Y depends on X X depends on Y
Simple Regression y = a + byx x x = a + bxy y
Equation
Normal Equations σ𝑦𝑖 = 𝑛𝑎 + byx σxi σ𝑥𝑖 = 𝑛𝑎 + bxyσyi
σ𝑥𝑖 𝑦𝑖 = 𝑎σxi + byx σxi2 σ𝑥𝑖 𝑦𝑖 = 𝑎σyi + bxy σyi2

Regression Co efficient Cov(𝑥, 𝑦) Cov(𝑥, 𝑦)

byx = bxy =
𝜎𝑥2 𝜎𝑦2
𝑟𝜎𝑦 𝑟𝜎𝑥
byx = bxy =
𝜎𝑥 𝜎𝑦

𝑛σ𝑥𝑖 𝑦𝑖 − σ𝑥𝑖 × σ𝑦𝑖 𝑛σ𝑥𝑖 𝑦𝑖 − σ𝑥𝑖 × σ𝑦𝑖

byx = bxy =
𝑛σ𝑥𝑖2 − σ𝑥𝑖 2 𝑛σ𝑦𝑖2 − σ𝑦𝑖 2

Some Important Relation :- Intersection point of these two lines is 𝑥,ҧ 𝑦ത

 REGRESSION ANALYSIS
Some Important Points :-
• 𝑟 = ± byx × bxy

𝑞 𝑥−𝑎 𝑦−𝑐
• 𝑏𝑦𝑥 = × 𝑏𝑣𝑢 where 𝑢 = and 𝑣 =
𝑝 𝑝 𝑞

• Coefficient of Determination = 𝑟 2

• Coefficient of Non − Determination = 1 − 𝑟 2

1−𝑟 2
• P.E=0.674 ( )
𝑛

1−𝑟 2
• S.E. =
𝑛
 Statistics
Chapter – Index Number
Index Number
 An index number is a ratio or an average of ratios expressed as a percentage,
Two or more time periods are involved, one of which is the base time period.

 Issues Involved in index numbers

(a) Selection of Data
(b) Base period
(c) Selection of Weights:
(d) Use of Averages:
(e) Choice of Variables
Index Number

Method Price Index Quantity Index

1. Simple Aggregate σ 𝑃𝑛 σ 𝑄𝑛
σ 𝑃0 σ 𝑄0
2. Simple Average σ 𝑃𝑛 σ 𝑄𝑛
σ 𝑃0 σ 𝑄0
𝒏 𝒏
3. Weighted Aggregate
(a) With base year weight (Laspeyre's σ 𝑃𝑛 𝑄0 σ 𝑄𝑛 𝑃0
index) σ 𝑃0 𝑄0 σ 𝑄0 𝑃0
(b) With current year weight (Paasche's σ 𝑃𝑛 𝑄𝑛 σ 𝑄𝑛 𝑃𝑛
index) σ 𝑃0 𝑄𝑛 σ 𝑄0 𝑃𝑛
(c) Fisher's Ideal [Geometric mean of
σ 𝑃𝑛 𝑄0 σ 𝑃𝑛 𝑄𝑛 σ 𝑄𝑛 𝑃0 σ 𝑄𝑛 𝑃𝑛
Laspeyere's and Paasche's] × ×
σ 𝑃0 𝑄0 σ 𝑃0 𝑄𝑛 σ 𝑄0 𝑃0 σ 𝑄0 𝑃𝑛

4. Weighted Average 𝑃𝑛 𝑄𝑛
σ 𝑊 σ 𝑊
𝑃0 𝑄0
W = Weights = Base Year or Current Year
σ𝑊 σ𝑊
Price Weights
Index Number

Link relative of current year × Chain Index of the previous year

• Chain Index = 100

Vn σ Pn Qn
• Value Indices :- = σ Po Qo
Vo

Current Value
• Deflated Value =
Price Index of the current year

Base Price P0
or Current Value × Base Price P0
Current Price Pn
Quantity Index Numbers

Original Price Index

• Shifted Price Index = × 100
Price Index of the year on which it has to be shifted

• Splicing of Index Number

• Test of Adequacy
(1) Unit test

(2) Time reversal Test

(3) Factor reversal test

(4) Circular Test