Statistical Representation of DataMCQPYQ June 22Question 2771 of 295
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The profitability of a blue chip company is shown by ______.

Options

ABell Shape curve
BU Shape curve
CJ Shape curve
DMixed curve
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Correct Answer

Option aBell Shape curve

All Options:

  • ABell Shape curve
  • BU Shape curve
  • CJ Shape curve
  • DMixed curve

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Detailed Solution & Explanation

The profitability (annual rate of profit or return on investment) of a mature, well-established blue-chip company over a long series of years follows a stable distribution:\n- In most typical years, the profitability remains around a central average or target rate of return, representing the highest frequency peak.\n- In a few highly favorable economic years, the company reports exceptionally high profitability, forming a tail that tapers down to the right.\n- In a few unfavorable years (such as during market recessions), the profitability falls below average, forming a tail that tapers down to the left.\n\nGraphically, when the frequency of yearly profitability is plotted against the profit rates, the resulting distribution follows a symmetric, single-peaked **Bell Shape curve**.\n- A **U-shaped curve** is incorrect because a blue-chip company does not swing exclusively between huge profits and huge losses with zero average years.\n- A **J-shaped curve** is incorrect as profit rates cannot grow infinitely in a real economy.\n\nHence, **Option A** is the correct answer.

About This Chapter: Statistical Representation of Data

Paper

Paper 3: Quantitative Aptitude

Weightage

2-4 Marks

Key Topics

Data, Frequency Distribution, Graphical Representation

This chapter covers Data, Frequency Distribution, Graphical Representation and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 2-4 Marks weightage. Focus on understanding core concepts rather than memorizing.

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