COMMERCE PAGE 7
Commerce Page 7- MCQs
1. Which of the following are methods of on-the-job training?
(i) Coaching
(ii) Vestibule training
(iii) Demonstration
(iv) Role-playing
(v) Apprenticeship training
Select the right answer from the following codes:
(A) (i), (ii), (iii), (iv)
(B) (i), (iii), (v)
(C) (ii), (iii), (iv)
(D) (i), (ii), (iii), (iv), (v)
Ans: B
2. Which of the following is not regulated by The Competition Act, 2002?
(A) Abuse of dominant position
(B) Anti-competitive agreements
(C) Medical negligence
(D) Predatory pricing
Ans: C
3. The freedom of private enterprise is the greatest in the free market economy. This is characterized by which of the following assumptions?
(i) The factors of production (labour, land, capital) are privately owned and production occurs at the initiative of the private enterprise.
(ii) Income is received in monetary form by the sale of services of the factors of production and from the profits of the private enterprise.
(iii) Members of the free market economy have freedom of choice in so far as consumption, occupation, savings and investments are concerned.
(iv) The free market economy is not planned, controlled or regulated by the government.
(v) The free market economy is prone to corrupt practices.
Codes:
(A) (i), (ii) and (iii)
(B) (i), (ii), (iii) and (iv)
(C) (i), (ii), (iii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Ans: B
4. The important responsibilities of a business to the customers are
(i) To ensure family welfare of the customers.
(ii) To understand customer needs and to take the necessary measures to satisfy these needs.
(iii) To ensure health condition of the customers.
(iv) To ensure that the product supplied has no adverse effect on the customer.
(v) To provide an opportunity for being heard and to redress genuine grievances.
Codes:
(A) (i), (ii), (iii), (iv) and (v)
(B) (i), (ii), (iii) and (iv)
(C) (ii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Ans: C
5. The rationale of expanding role of the public sector stems mainly from which of the following factors?
(i) The failure of the private sector in certain crucial areas
(ii) The exploitation of the society by the private sector
(iii) The revenue need of the Central Government
(iv) The demand of economic justice
(v) The need for accelerating the pace of economic growth
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (v)
(D) (i), (ii), (iv) and (v)
Ans: D
6. Which of the following factors may lead to a sick industrial unit?
(i) Shortage of funds and faulty financial management
(ii) Investment by the FIIs in Indian industries
(iii) Unauthorized FDI in Indian industries
(iv) Lack of experience on the part of promoters
(v) Technological factors including obsolete or improper technology
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iv) and (v)
(D) (i), (ii) and (iii)
Ans: C
7. Indicate what is not correct in respect of the Consumer Protection Act, 1986.
(A) No complaint can be entertained in respect of a product purchased more than 2 years back.
(B) A complaint against medical negligence can be filed by legal heir or representative of the deceased.
(C) A complaint involving a claim of Rs. 15 lakhs is to be filed before the State Commission.
(D) Both (A) and (C)
Ans: C
8. If bonus shares are issued out of pre-acquisition profit, it will have
(A) Direct effect on the Consolidated Balance Sheet
(B) No effect on the Consolidated Balance Sheet
(C) No effect on Net Profit
(D) None of the above
Ans: B
9. The present value of the future contributions of employees is one of the methods of
(A) HR Accounting
(B) Inflation Accounting
(C) Social Accounting
(D) Responsibility Accounting
Ans: A
10. A standard which can be attained under the most favourable working conditions is called
(A) Attainable Standard
(B) Basic Standard
(C) Current Standard
(D) Ideal Standard
Ans: D
11. Which of the following ratios are taken into consideration by a banker before sanctioning the loan?
(A) Proprietory Ratio
(B) Stock-Turnover Ratio
(C) Debt-Equity Ratio
(D) All of the above
Ans: C
12. Match the items of the following two lists:
List – I List – II
(i) Zero-base Budgeting (a) Internal Reconstruction
(ii) Goodwill or Capital Reserve (b) Earnings Per Share
(iii) Reduction of Capital (c) Control of Expenditure
(iv) Basic & Diluted (d) Business Combination
Codes:
(i) (ii) (iii) (iv)
(A) (c) (d) (b) (a)
(B) (d) (c) (a) (b)
(C) (d) (a) (c) (b)
(D) (c) (d) (a) (b)
Ans: D
13. Assertion (A): Dividend paid out of pre-acquisition profit by the subsidiary company to the holding company is deducted from the cost of investment.
Reason (R): Dividend paid out of pre-acquisition profit by the subsidiary company should be treated as a return of capital to the holding company.
Which one of the following is correct?
(A) Both (A) and (R) are correct.
(B) (A) is correct, but (R) is wrong.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: A
14. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): Increasing the value of closing inventory increases profit.
Reason (R): Increasing the value of closing inventory reduces cost of goods sold.
In the context of above two statements, which of the following is correct?
Codes:
(A) Both (A) and (R) are correct.
(B) Only (A) is correct.
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: A
15. Match the items of List – I with the items of List – II and select the correct code for the answer:
List – I List – II
(a) Multiple plants (i) MRPT = MC = MRPX = MRPPY
(b) Cost-plus pricing (ii) MRT = MC = MR1 = MR2
(c) Multiple markets (iii) MR = MCT = MCA = MCB
(d) Multiple products (iv) P = (1 + m) ATC
Codes:
(a) (b) (c) (d)
(A) (iv) (ii) (i) (iii)
(B) (i) (iii) (iv) (ii)
(C) (ii) (i) (iii) (iv)
(D) (iii) (iv) (ii) (i)
Ans: D
16. A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as
(A) Cross Elasticity of Demand
(B) Substitution Elasticity of Demand
(C) Complementary Elasticity of Demand
(D) Price Elasticity of Demand
Ans: A
17. If the total cost is Rs. 260 and the total variable cost is Rs. 60, what will be total fixed cost if output is (a) 100 units and (b) 200 units?
(A) Rs. 200 and Rs. 200
(B) Rs. 100 and Rs. 200
(C) Rs. 260 and Rs. 100
(D) Rs. 160 and Rs. 100
Ans: A
18. Optimal input combination to minimize the cost for a given output will be at the point where:
(A) Isocost is tangent to Isoquant
(B) MRTS between inputs is equal
(C) Any movement from optimum point will lead to low level of output
(D) All the above conditions are fulfilled.
Ans: D
19. What kinds of actions can be taken to put the rivals at a disadvantageous position under oligopoly market?
(A) Commitments
(B) Threats
(C) Promises
(D) All the above
Ans: D
20. There is no exceptions to the law of demand in the case of
(A) Giffen goods
(B) Normal goods
(C) Articles of conspicuous consumption
(D) Ignorance of the buyer
Ans: B
21. What is the degree of elasticity of demand in case the demand is represented by a straight line parallel to the x-axis?
(A) e > 1
(B) e = 0
(C) e = ∝
(D) e < 1
Ans: C
22. If a chi-square test is to be performed on a contingency table with 3 rows and 4 columns, how many degrees of freedom should be used?
(A) 6
(B) 12
(C) 8
(D) 9
Ans: A
23. Assertion (A): If regression coefficient of X on Y is greater than one, regression coefficient of Y on X must be less than one.
Reason (R): The geometric mean between two regression coefficients is the co-efficient of correlation.
On the basis of the above, choose the appropriate answer:
(A) (A) and (R) are correct.
(B) (A) is correct, but (R) is not correct.
(C) (A) is not correct, but (R) is correct.
(D) Both (A) and (R) are not correct.
Ans: A
24. If the sum of squares of deviations within samples is 140 with 12 degrees of freedom and the sum of squares of deviations between samples is 190 with 2 degrees of freedom, the test statistic will be
(A) 81.4
(B) 12.28
(C) 8.14
(D) 1.22
Ans: C
25. The regression equation of profits (X) on sales (Y) of a firm is given as:
3Y – 5X + 110 = 0. If the sales of the firm is Rs. 44,000, the profit will be
(A) Rs. 23,370
(B) Rs. 26,422
(C) Rs. 24,422
(D) Rs. 21,370
Ans: B
26. Cricketer ‘A’ scores on an average 40 runs with a standard deviation of 5. Scores of players ‘B’ and ‘C’, on an average, are 75 and 90 with standard deviations 10 and 18 respectively. Arrange the players in the descending order of consistency:
(A) A, B and C
(B) C, B and A
(C) B, A and C
(D) C, A and B
Ans: A
27. Among the following, choose the most suitable ‘test’ that can be applied to examine the influence of one factor on different groups:
(A) ‘t’ test
(B) ‘F’ test
(C) ‘Chi-square’ test
(D) None of the above
Ans: B
28. A machine produced 20 defective articles in a batch of 400. After overhauling, it produced 10% defectives in a batch of 300. Which test of hypothesis can be applied to the above situation to examine whether the machine has improved?
(A) Test of significance of a sample proportion (two-tail test)
(B) Test of significance of a sample proportion (one-tail test)
(C) Test of significance of difference between two sample proportion (two-tail test)
(D) Test of significance of difference between two sample proportion (one-tail test)
Ans: D
29. Strategies and policies
(A) are not closely related
(B) give direction
(C) are the framework for performance appraisal
(D) both (A) and (B)
Ans: B
30. According to Vroom’s Expectancy Theory of Motivation,
(A) Force = valence divided by expectancy
(B) Force = valence × expectancy
(C) Force = strength of an individual preference for an outcome
(D) Valence = probability that a particular action shall lead to a desired outcome
Ans: B
31. In the managerial grid, the managers who have little or no concern for production but are concerned only for people are known as what type of managers?
(A) 1.1 Management
(B) 5.5 Management
(C) 9.1 Management
(D) 1.9 Management
Ans: D
32. According to the Boston Consulting group, a business, which has a strong market share in a low growth industry is referred to as a
(A) Dog
(B) Cash Cow
(C) Star
(D) Question mark
Ans: B
33. Which of the following are major principles of leading?
(i) Principle of motivation
(ii) Principle of continuous development
(iii) Principle of harmony of objectives
(iv) Principle of open competition
(v) Principle of communication clarity
Select the correct answer from the codes given below:
Codes:
(A) (i), (ii), (iii), (v)
(B) (i), (ii), (iii), (iv), (v)
(C) (i), (iii), (iv), (v)
(D) (i), (iii), (v)
Ans: D
34. The following are the steps of management control process:
(i) Taking corrective action from standards
(ii) Establishing standards
(iii) Measuring actual performance
(iv) Comparing performance against standard
Select the correct sequence of these steps from the codes given below:
Codes:
(A) (i), (ii), (iii), (iv)
(B) (ii), (iii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (ii), (iv), (i), (iii)
Ans: B
35. Consider the following:
(i) Planning is today’s action for tomorrow’s decision.
(ii) Planning is forward looking while controlling is looking back.
(iii) Motivation is about getting voluntary willingness of subordinates for action.
(iv) Line and staff organisation is the oldest form of organisation.
Select the correct statements from the codes given below:
Codes:
(A) (ii) and (iii) are correct.
(B) (i), (ii) and (iv) are correct.
(C) (i), (iii) and (iv) are correct
(D) All are correct.
Ans: A
36. Which is not one of the stages in the consumer buying-decision process?
(A) Purchase decision
(B) Post-purchase behaviour
(C) Problem recognition
(D) Cultural factors
Ans: D
37. At which stage of product-life-cycle are the pricing decisions most complex?
(A) Decline
(B) Growth
(C) Introduction
(D) Maturity
Ans: D
38. Which one is not an element of market logistics?
(A) Inventory
(B) Order-processing
(C) Warehousing
(D) Supply chain management
Ans: D
39. Under which legislation, the manufacturers and distributors are required to declare Maximum Retail Price (MRP) on packaged commodities?
(A) The Bureau of Indian Standards Act, 1986
(B) The Consumer Protection Act, 1986
(C) The Standards of Weights and Measures Act, 1976
(D) The Essential Commodities Act, 1955
Ans: C
40. In modern marketing, which of the following functions of a distribution middleman is gaining maximum importance?
(A) Making persuasive communication
(B) Price negotiation
(C) Keeping adequate inventory
(D) Gathering market information
Ans: D
41. Which method of setting the advertising budget of a company is considered to be the most scientific?
(A) All-you-can-afford method
(B) Percentage of sales method
(C) Competitive-parity method
(D) Objectives and tasks method
Ans: D
42. Match the items of List – I with those of List – II and indicate the correct combination from the codes given below:
List – I List – II
(i) AIDA Model (a) Consumer behaviour
(ii) Hierarchy of effects model (b) Marketing communication
(iii) Howard and Sheth model (c) Consumer buying-decision process
(iv) Information search (d) Advertising effectiveness
Codes:
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (b) (c) (d) (a)
(C) (b) (d) (a) (c)
(D) (d) (a) (c) (b)
Ans: C
43. Inability of the firm to meet its obligations results in financial distress which may lead to bankruptcy resulting into the following:
1. Distress sale of assets at lower price.
2. Legal and administrative costs for bankruptcy.
3. Dilution of stakeholders’ commitment to the firm.
4. Stretching of payments to suppliers and creditors.
The direct costs of such financial distress may be
(A) 1 and 4
(B) 2 and 3
(C) 1 and 2
(D) 3 and 4
Ans: C
44. Mutually exclusive projects can be more accurately ranked as per
(A) Internal rate of return method
(B) Net Present Value Method
(C) Modified Internal Rate of Returns Method
(D) Accounting or Average Rate of Return Method
Ans: B
45. Which one of the following does not constitute a Standalone Risk Analysis?
(A) Simulation Analysis
(B) Break-even Analysis
(C) Corporate Risk Analysis
(D) Scenario Analysis
Ans: C
46. Financial leverage in a firm is positively affected by
(A) Intensity of tangible assets
(B) Operating leverage
(C) Profitability
(D) Tax Rate
Ans: A
47. Which combination of the following two statements (A) and (R) is correct?
Assertion (A): The IRR of a project is the discount rate which reduces its NPV to zero.
Reason (R): A project is worth accepting if the IRR exceeds the cost of capital.
Codes:
(A) (A) is right, but (R) is wrong.
(B) Both (A) and (R) are correct.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: B
48. Assertion (A): A company should pay minimum dividend to its shareholders.
Reason (R): Dividends are heavily taxed than capital gains.
Codes:
(A) Both (A) and (R) are correct.
(B) Both (A) and (R) are incorrect.
(C) (A) is not correct, but (R) is correct.
(D) (A) is correct, but (R) is wrong.
Ans: A
49. Dividend irrelevance hypothesis is implied in the
(A) Traditional Model
(B) Walter Model
(C) Gordon Model
(D) M.M. Model
Ans: D
50. Which one of the following does not serve the main objective of performance appraisal?
(A) Developmental uses
(B) Administrative uses
(C) Ethical and moral values
(D) Organisational objectives
Ans: C
(i) Coaching
(ii) Vestibule training
(iii) Demonstration
(iv) Role-playing
(v) Apprenticeship training
Select the right answer from the following codes:
(A) (i), (ii), (iii), (iv)
(B) (i), (iii), (v)
(C) (ii), (iii), (iv)
(D) (i), (ii), (iii), (iv), (v)
Ans: B
2. Which of the following is not regulated by The Competition Act, 2002?
(A) Abuse of dominant position
(B) Anti-competitive agreements
(C) Medical negligence
(D) Predatory pricing
Ans: C
3. The freedom of private enterprise is the greatest in the free market economy. This is characterized by which of the following assumptions?
(i) The factors of production (labour, land, capital) are privately owned and production occurs at the initiative of the private enterprise.
(ii) Income is received in monetary form by the sale of services of the factors of production and from the profits of the private enterprise.
(iii) Members of the free market economy have freedom of choice in so far as consumption, occupation, savings and investments are concerned.
(iv) The free market economy is not planned, controlled or regulated by the government.
(v) The free market economy is prone to corrupt practices.
Codes:
(A) (i), (ii) and (iii)
(B) (i), (ii), (iii) and (iv)
(C) (i), (ii), (iii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Ans: B
4. The important responsibilities of a business to the customers are
(i) To ensure family welfare of the customers.
(ii) To understand customer needs and to take the necessary measures to satisfy these needs.
(iii) To ensure health condition of the customers.
(iv) To ensure that the product supplied has no adverse effect on the customer.
(v) To provide an opportunity for being heard and to redress genuine grievances.
Codes:
(A) (i), (ii), (iii), (iv) and (v)
(B) (i), (ii), (iii) and (iv)
(C) (ii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Ans: C
5. The rationale of expanding role of the public sector stems mainly from which of the following factors?
(i) The failure of the private sector in certain crucial areas
(ii) The exploitation of the society by the private sector
(iii) The revenue need of the Central Government
(iv) The demand of economic justice
(v) The need for accelerating the pace of economic growth
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (v)
(D) (i), (ii), (iv) and (v)
Ans: D
6. Which of the following factors may lead to a sick industrial unit?
(i) Shortage of funds and faulty financial management
(ii) Investment by the FIIs in Indian industries
(iii) Unauthorized FDI in Indian industries
(iv) Lack of experience on the part of promoters
(v) Technological factors including obsolete or improper technology
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iv) and (v)
(D) (i), (ii) and (iii)
Ans: C
7. Indicate what is not correct in respect of the Consumer Protection Act, 1986.
(A) No complaint can be entertained in respect of a product purchased more than 2 years back.
(B) A complaint against medical negligence can be filed by legal heir or representative of the deceased.
(C) A complaint involving a claim of Rs. 15 lakhs is to be filed before the State Commission.
(D) Both (A) and (C)
Ans: C
8. If bonus shares are issued out of pre-acquisition profit, it will have
(A) Direct effect on the Consolidated Balance Sheet
(B) No effect on the Consolidated Balance Sheet
(C) No effect on Net Profit
(D) None of the above
Ans: B
9. The present value of the future contributions of employees is one of the methods of
(A) HR Accounting
(B) Inflation Accounting
(C) Social Accounting
(D) Responsibility Accounting
Ans: A
10. A standard which can be attained under the most favourable working conditions is called
(A) Attainable Standard
(B) Basic Standard
(C) Current Standard
(D) Ideal Standard
Ans: D
11. Which of the following ratios are taken into consideration by a banker before sanctioning the loan?
(A) Proprietory Ratio
(B) Stock-Turnover Ratio
(C) Debt-Equity Ratio
(D) All of the above
Ans: C
12. Match the items of the following two lists:
List – I List – II
(i) Zero-base Budgeting (a) Internal Reconstruction
(ii) Goodwill or Capital Reserve (b) Earnings Per Share
(iii) Reduction of Capital (c) Control of Expenditure
(iv) Basic & Diluted (d) Business Combination
Codes:
(i) (ii) (iii) (iv)
(A) (c) (d) (b) (a)
(B) (d) (c) (a) (b)
(C) (d) (a) (c) (b)
(D) (c) (d) (a) (b)
Ans: D
13. Assertion (A): Dividend paid out of pre-acquisition profit by the subsidiary company to the holding company is deducted from the cost of investment.
Reason (R): Dividend paid out of pre-acquisition profit by the subsidiary company should be treated as a return of capital to the holding company.
Which one of the following is correct?
(A) Both (A) and (R) are correct.
(B) (A) is correct, but (R) is wrong.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: A
14. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): Increasing the value of closing inventory increases profit.
Reason (R): Increasing the value of closing inventory reduces cost of goods sold.
In the context of above two statements, which of the following is correct?
Codes:
(A) Both (A) and (R) are correct.
(B) Only (A) is correct.
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: A
15. Match the items of List – I with the items of List – II and select the correct code for the answer:
List – I List – II
(a) Multiple plants (i) MRPT = MC = MRPX = MRPPY
(b) Cost-plus pricing (ii) MRT = MC = MR1 = MR2
(c) Multiple markets (iii) MR = MCT = MCA = MCB
(d) Multiple products (iv) P = (1 + m) ATC
Codes:
(a) (b) (c) (d)
(A) (iv) (ii) (i) (iii)
(B) (i) (iii) (iv) (ii)
(C) (ii) (i) (iii) (iv)
(D) (iii) (iv) (ii) (i)
Ans: D
16. A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as
(A) Cross Elasticity of Demand
(B) Substitution Elasticity of Demand
(C) Complementary Elasticity of Demand
(D) Price Elasticity of Demand
Ans: A
17. If the total cost is Rs. 260 and the total variable cost is Rs. 60, what will be total fixed cost if output is (a) 100 units and (b) 200 units?
(A) Rs. 200 and Rs. 200
(B) Rs. 100 and Rs. 200
(C) Rs. 260 and Rs. 100
(D) Rs. 160 and Rs. 100
Ans: A
18. Optimal input combination to minimize the cost for a given output will be at the point where:
(A) Isocost is tangent to Isoquant
(B) MRTS between inputs is equal
(C) Any movement from optimum point will lead to low level of output
(D) All the above conditions are fulfilled.
Ans: D
19. What kinds of actions can be taken to put the rivals at a disadvantageous position under oligopoly market?
(A) Commitments
(B) Threats
(C) Promises
(D) All the above
Ans: D
20. There is no exceptions to the law of demand in the case of
(A) Giffen goods
(B) Normal goods
(C) Articles of conspicuous consumption
(D) Ignorance of the buyer
Ans: B
21. What is the degree of elasticity of demand in case the demand is represented by a straight line parallel to the x-axis?
(A) e > 1
(B) e = 0
(C) e = ∝
(D) e < 1
Ans: C
22. If a chi-square test is to be performed on a contingency table with 3 rows and 4 columns, how many degrees of freedom should be used?
(A) 6
(B) 12
(C) 8
(D) 9
Ans: A
23. Assertion (A): If regression coefficient of X on Y is greater than one, regression coefficient of Y on X must be less than one.
Reason (R): The geometric mean between two regression coefficients is the co-efficient of correlation.
On the basis of the above, choose the appropriate answer:
(A) (A) and (R) are correct.
(B) (A) is correct, but (R) is not correct.
(C) (A) is not correct, but (R) is correct.
(D) Both (A) and (R) are not correct.
Ans: A
24. If the sum of squares of deviations within samples is 140 with 12 degrees of freedom and the sum of squares of deviations between samples is 190 with 2 degrees of freedom, the test statistic will be
(A) 81.4
(B) 12.28
(C) 8.14
(D) 1.22
Ans: C
25. The regression equation of profits (X) on sales (Y) of a firm is given as:
3Y – 5X + 110 = 0. If the sales of the firm is Rs. 44,000, the profit will be
(A) Rs. 23,370
(B) Rs. 26,422
(C) Rs. 24,422
(D) Rs. 21,370
Ans: B
26. Cricketer ‘A’ scores on an average 40 runs with a standard deviation of 5. Scores of players ‘B’ and ‘C’, on an average, are 75 and 90 with standard deviations 10 and 18 respectively. Arrange the players in the descending order of consistency:
(A) A, B and C
(B) C, B and A
(C) B, A and C
(D) C, A and B
Ans: A
27. Among the following, choose the most suitable ‘test’ that can be applied to examine the influence of one factor on different groups:
(A) ‘t’ test
(B) ‘F’ test
(C) ‘Chi-square’ test
(D) None of the above
Ans: B
28. A machine produced 20 defective articles in a batch of 400. After overhauling, it produced 10% defectives in a batch of 300. Which test of hypothesis can be applied to the above situation to examine whether the machine has improved?
(A) Test of significance of a sample proportion (two-tail test)
(B) Test of significance of a sample proportion (one-tail test)
(C) Test of significance of difference between two sample proportion (two-tail test)
(D) Test of significance of difference between two sample proportion (one-tail test)
Ans: D
29. Strategies and policies
(A) are not closely related
(B) give direction
(C) are the framework for performance appraisal
(D) both (A) and (B)
Ans: B
30. According to Vroom’s Expectancy Theory of Motivation,
(A) Force = valence divided by expectancy
(B) Force = valence × expectancy
(C) Force = strength of an individual preference for an outcome
(D) Valence = probability that a particular action shall lead to a desired outcome
Ans: B
31. In the managerial grid, the managers who have little or no concern for production but are concerned only for people are known as what type of managers?
(A) 1.1 Management
(B) 5.5 Management
(C) 9.1 Management
(D) 1.9 Management
Ans: D
32. According to the Boston Consulting group, a business, which has a strong market share in a low growth industry is referred to as a
(A) Dog
(B) Cash Cow
(C) Star
(D) Question mark
Ans: B
33. Which of the following are major principles of leading?
(i) Principle of motivation
(ii) Principle of continuous development
(iii) Principle of harmony of objectives
(iv) Principle of open competition
(v) Principle of communication clarity
Select the correct answer from the codes given below:
Codes:
(A) (i), (ii), (iii), (v)
(B) (i), (ii), (iii), (iv), (v)
(C) (i), (iii), (iv), (v)
(D) (i), (iii), (v)
Ans: D
34. The following are the steps of management control process:
(i) Taking corrective action from standards
(ii) Establishing standards
(iii) Measuring actual performance
(iv) Comparing performance against standard
Select the correct sequence of these steps from the codes given below:
Codes:
(A) (i), (ii), (iii), (iv)
(B) (ii), (iii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (ii), (iv), (i), (iii)
Ans: B
35. Consider the following:
(i) Planning is today’s action for tomorrow’s decision.
(ii) Planning is forward looking while controlling is looking back.
(iii) Motivation is about getting voluntary willingness of subordinates for action.
(iv) Line and staff organisation is the oldest form of organisation.
Select the correct statements from the codes given below:
Codes:
(A) (ii) and (iii) are correct.
(B) (i), (ii) and (iv) are correct.
(C) (i), (iii) and (iv) are correct
(D) All are correct.
Ans: A
36. Which is not one of the stages in the consumer buying-decision process?
(A) Purchase decision
(B) Post-purchase behaviour
(C) Problem recognition
(D) Cultural factors
Ans: D
37. At which stage of product-life-cycle are the pricing decisions most complex?
(A) Decline
(B) Growth
(C) Introduction
(D) Maturity
Ans: D
38. Which one is not an element of market logistics?
(A) Inventory
(B) Order-processing
(C) Warehousing
(D) Supply chain management
Ans: D
39. Under which legislation, the manufacturers and distributors are required to declare Maximum Retail Price (MRP) on packaged commodities?
(A) The Bureau of Indian Standards Act, 1986
(B) The Consumer Protection Act, 1986
(C) The Standards of Weights and Measures Act, 1976
(D) The Essential Commodities Act, 1955
Ans: C
40. In modern marketing, which of the following functions of a distribution middleman is gaining maximum importance?
(A) Making persuasive communication
(B) Price negotiation
(C) Keeping adequate inventory
(D) Gathering market information
Ans: D
41. Which method of setting the advertising budget of a company is considered to be the most scientific?
(A) All-you-can-afford method
(B) Percentage of sales method
(C) Competitive-parity method
(D) Objectives and tasks method
Ans: D
42. Match the items of List – I with those of List – II and indicate the correct combination from the codes given below:
List – I List – II
(i) AIDA Model (a) Consumer behaviour
(ii) Hierarchy of effects model (b) Marketing communication
(iii) Howard and Sheth model (c) Consumer buying-decision process
(iv) Information search (d) Advertising effectiveness
Codes:
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (b) (c) (d) (a)
(C) (b) (d) (a) (c)
(D) (d) (a) (c) (b)
Ans: C
43. Inability of the firm to meet its obligations results in financial distress which may lead to bankruptcy resulting into the following:
1. Distress sale of assets at lower price.
2. Legal and administrative costs for bankruptcy.
3. Dilution of stakeholders’ commitment to the firm.
4. Stretching of payments to suppliers and creditors.
The direct costs of such financial distress may be
(A) 1 and 4
(B) 2 and 3
(C) 1 and 2
(D) 3 and 4
Ans: C
44. Mutually exclusive projects can be more accurately ranked as per
(A) Internal rate of return method
(B) Net Present Value Method
(C) Modified Internal Rate of Returns Method
(D) Accounting or Average Rate of Return Method
Ans: B
45. Which one of the following does not constitute a Standalone Risk Analysis?
(A) Simulation Analysis
(B) Break-even Analysis
(C) Corporate Risk Analysis
(D) Scenario Analysis
Ans: C
46. Financial leverage in a firm is positively affected by
(A) Intensity of tangible assets
(B) Operating leverage
(C) Profitability
(D) Tax Rate
Ans: A
47. Which combination of the following two statements (A) and (R) is correct?
Assertion (A): The IRR of a project is the discount rate which reduces its NPV to zero.
Reason (R): A project is worth accepting if the IRR exceeds the cost of capital.
Codes:
(A) (A) is right, but (R) is wrong.
(B) Both (A) and (R) are correct.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Ans: B
48. Assertion (A): A company should pay minimum dividend to its shareholders.
Reason (R): Dividends are heavily taxed than capital gains.
Codes:
(A) Both (A) and (R) are correct.
(B) Both (A) and (R) are incorrect.
(C) (A) is not correct, but (R) is correct.
(D) (A) is correct, but (R) is wrong.
Ans: A
49. Dividend irrelevance hypothesis is implied in the
(A) Traditional Model
(B) Walter Model
(C) Gordon Model
(D) M.M. Model
Ans: D
50. Which one of the following does not serve the main objective of performance appraisal?
(A) Developmental uses
(B) Administrative uses
(C) Ethical and moral values
(D) Organisational objectives
Ans: C
51. Positive NPV in project appraised by a firm may not occur an account of
(A) Economics of scale
(B) Market reach
(C) Product differentiation
(D) Intangible benefits
Ans: D
52. In case the projects are divisible under capital rationing an appropriate project appraisal method is
(A) Net Present Value Method
(B) Profitability Index Method
(C) Internal Rate of Return Method
(D) Payback Period Method
Ans: B
53. Permanent working capital is generally financed through
(A) Long term Capital Funds
(B) Government Assistance
(C) Internal Financing
(D) Short term loans from Banks
Ans: A
54. The appropriate ratio for indicating liquidity crisis is
(A) Operating ratio
(B) Sales turnover ratio
(C) Current ratio
(D) Acid test ratio
Ans: D
55. Who proposed a model to apply economic order quantity concept of inventory management to determine the optimum cash holding in a firm?
(A) Keith V. Smith
(B) Miller and Orr
(C) William J. Baumol
(D) J.M. Keynes
Ans: C
56. Which of the following is not included in the model of the systems approach to Human Resource Management?
(A) Human Resource Planning
(B) Recruitment and Selection
(C) Performance appraisal
(D) Depart mentation
Ans: D
57. It is generally easy to measure the performance of the
(A) Industrial Relations Manger
(B) Research and Development Manager
(C) Sales person
(D) All of the above
Ans: C
58. Which one of the following is not a monetary incentive to sales people?
(A) Bonus
(B) Staff meeting
(C) Travelling allowance
(D) Both (B) and (C)
Ans: D
59. Statement (i): Sound industrial relations are essential to achieve individual, team goals and organizational goals.
Statement (ii): Congenial labour management relations create an atmosphere of harmony and low rate of absenteeism.
(A) Statement (i) is true, but (ii) is false.
(B) Statement (ii) is true, but (i) is false.
(C) Both statements are true.
(D) Both statements are false.
Ans: C
60. Out of the following, which are the schemes of Social Security?
(i) Provident Fund Scheme
(ii) Health Insurance Scheme
(iii) Job Guarantee Scheme
(iv) Maternity Benefit Scheme
(v) Merit Promotion Scheme
(vi) Compulsory and Voluntary Social Insurance Scheme
(vii) Child Insurance Scheme
Codes:
(A) (i), (ii), (iv) and (vi)
(B) (ii), (i), (v) and (vii)
(C) (iii), (v), (iv) and (vi)
(D) (iv), (vii), (iii) and (ii)
Ans: A
61. RBI ensures that banks operate within the set norms by conducting ______ inspections and _______ monitoring.
(A) On site, off site
(B) Off site, on site
(C) On site, field
(D) Field, on site
Ans: A
62. Under Section 37 of the Banking (Regulation) Act, a moratorium order can be issued by the High Court for a maximum total period of
(A) One month
(B) Six months
(C) One year
(D) One and a half year
Ans: B
63. Bonds or debentures issued by Securitization company should bear interest not less than
(A) Bank Rate
(B) Prime Lending Rate
(C) 1.5% over the Bank Rate
(D) 1.5% over the Saving Rate
Ans: C
64. Section 131 of the Negotiable Instruments Act extends protection to the _______
(A) Collecting Banker
(B) Paying Banker
(C) Advising Banker
(D) Confirming Banker
Ans: A
65. When a customer, by a letter has advised the bank not to honour/pay a particular cheque, such letter is called ______
(A) Cancellation letter
(B) Garnishee letter
(C) Mandate
(D) None of the above
Ans: D
66. Flow of foreign loans and investments affect
(A) Trade balance
(B) Current Account balance
(C) Capital Account balance
(D) None of the above
Ans: C
67. Concessions mainly multinational in character come under the principle of
(A) Non-discrimination
(B) Reciprocity
(C) Market Access
(D) Fair Competition
Ans: B
68. From the following identify the one which is not a commercial counter trade?
(A) Classical barter
(B) Counter purchase
(C) Pre-compensation
(D) Buy-back agreement
Ans: D
69. Which segmentation approach is the most compatible with the spirit of the marketing concept?
(A) Benefit sought
(B) Income
(C) Social class
(D) Family size
Ans: A
70. Which of the stages of new product development process can be skipped?
(A) Business analysis
(B) Idea screening
(C) Product testing
(D) Test marketing
Ans: D
71. The price-setting method which most closely corresponds to the concept of product positioning is
(A) Cost-plus pricing
(B) Going-rate pricing
(C) Perceived value pricing
(D) Psychological pricing
Ans: C
72. The most important retail marketing decision a retailer has to make is to
(A) Select the product assortment.
(B) Identify its target market.
(C) Choose the desired service level.
(D) Develop an effective store atmosphere.
Ans: B
73. Which element of the promotion mix do wholesalers primarily use?
(A) Advertising
(B) Personal selling
(C) Public relations
(D) Trade show
Ans: B
74. Out of the following alternative methods of project evaluation and selection used in capital budgeting, which one of the combinations in the code corresponds to discounted cash flow methods?
(i) Internal Rate of Return
(ii) Pay Back Period
(iii) Profitability Index
(iv) Net Present Value
Codes:
(A) (i), (ii), (iii)
(B) (i), (iii), (iv)
(C) (ii), (iii), (iv)
(D) (i), (ii), (iii), (iv)
Ans: B
75. When the expected level of EBIT exceeds the indifferent point for two alternative financial plans, (Equity financing and Debt-financing), then
(A) The use of debt financing would be advantageous to increase EPS.
(B) The use of equity financing would be advantageous to maximize EPS.
(C) The use of debt-financing would reduce EPS.
(D) The use of equity financing would keep the EPS constant.
Ans: A
76. Which one of the following is not the assumption of the Modigliani-Miller Irrelevance Theory of Dividend Policy?
(A) No personal or corporate income taxes.
(B) Dividend policy has its effect on firm’s cost of equity.
(C) Capital investment policy is independent of its dividend policy.
(D) Stock floatation or transaction cost does not exist.
Ans: B
77. Match the items of List-I with the items of List-II.
List – I List – II
(i) Financial Breakeven- point (a) Rate of discount at which NPV is zero.
(ii) Cost-Volume-Profit Analysis (b) Cost of capital remains the same for different degrees of financial leverage.
(iii) Internal Rate of Return (c) Analysis to study relationship among fixed costs, variable costs, sales volume and profits.
(iv) Net Operating Income Approach (d) The minimum level of EBIT needed to satisfy all fixed financial charges.
Codes:
(a) (b) (c) (d)
(A) (iii) (iv) (ii) (i)
(B) (i) (ii) (iii) (iv)
(C) (iv) (iii) (i) (ii)
(D) (i) (ii) (iv) (iii)
Ans: A
78. Assertion (A): The focus of working capital management revolves around managing the operating cycle of the working capital.
Reason (R): It is because the concept is useful to ascertain the requirements of cash to meet the operating expenses of a going concern.
Codes:
(A) Both (A) and (R) are true, but (R) is not the explanation of working capital management.
(B) Both (A) and (R) are false.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: A
79. Which of the following terms includes the task, duties and responsibilities of a particular job?
(A) Job Evaluation
(B) Job Enrichment
(C) Job Analysis
(D) Job Enlargement
Ans: C
80. Match the following lists and indicate the correct pairing:
List – I List – II
1. Simple Ranking a Evaluation by Superiors, Peers and Subordinates.
2. Paired Comparison b Order of rating from best to worst.
3. 360-Degree Appraisal c Standardised quantitative rating.
4. Graphic Rating d Comparing ratings to one another.
The correct pairing is
1 2 3 4
(A) b d a c
(B) a b c d
(C) c d a b
(D) d a b c
Ans: A
81. In which method of performance appraisal, the evaluator keeps a written record of significant events and how difficult employees behaved during such events?
(A) Field Review Method
(B) BARS Method
(C) Critical Incidents Method
(D) Assessment Centre Method
Ans: C
82. In connection with HRD, what is incorrect?
(A) It is a reactive function.
(B) It develops total organisation.
(C) It focuses on autonomous work groups.
(D) It is an integrated system.
Ans: D
83. In which method of training, job conditions are duplicated with equipments and machines which are identical with those used at the work place?
(A) On the job training
(B) Apprenticeship training
(C) Vestibule training
(D) Internship training
Ans: C
84. Reserve Bank of India controls the activities of some of the following banks in India:
(i) Commercial Banks
(ii) Cooperative Banks
(iii) Foreign Banks
(iv) Rural Banks
Codes:
(A) (i), (ii) and (iii)
(B) (i), (iii) and (iv)
(C) (ii), (iii) and (iv)
(D) (i), (ii), (iii) and (iv)
Ans: D
85. Match the following List – I with List – II and select the correct answer:
List – I List – II
(a) Comparative Cost Theory of International Trade (i) Gottfried Haberler
(b) International Trade Theory of Opportunity Cost (ii) J.S. Mill
(c) Factor Endowment Theory of International Trade (iii) David Ricardo
(d) Doctrine of Reciprocal Demand (iv) Hecksher-Ohlin
Codes:
(a) (b) (c) (d)
(A) (iii) (ii) (iv) (i)
(B) (i) (iii) (ii) (iv)
(C) (iii) (i) (iv) (ii)
(D) (ii) (i) (iv) (iii)
Ans: C
86. Identify the one, from the following, which is not a type of disequilibrium in the balance of payments of a country:
(A) Cyclical disequilibrium
(B) Secular disequilibrium
(C) Structural disequilibrium
(D) Sectoral disequilibrium
Ans: D
87. The participants who take advantage of different exchange rates in different markets are
(A) Speculators
(B) Arbitrageurs
(C) Hedgers
(D) Investors
Ans: B
88. Assertion (A): The liability of the option buyer is limited in the currency options market.
Reason (R): Option buyer need not exercise the option if the exchange rate is not favourable for him.
Codes:
(A) (R) is correct and (A) is wrong.
(B) (A) is correct and (R) is wrong.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are wrong.
Ans: C
89. An MNC that maintains a balance between the home market and host market oriented policies is
(A) Ethnocentric firm
(B) Polycentric firm
(C) Geocentric firm
(D) None of the above
Ans: C
90. The present regime of subsidies can be improved by focussing on
(i) Reducing the overall scale of subsidies.
(ii) Making subsidies as transparent as possible.
(iii) Giving a specific amount to the Member of Parliament for subsidies.
(iv) Setting clear limits on duration of any new subsidy scheme.
(v) Eliminating system of periodic review of subsidies
(vi) Using subsidies for well-defined economic objectives.
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (vi)
(D) (i), (ii), (iv) and (vi)
Ans: D
91. Which of the following concepts is based on development, design and implementation of marketing programmes, processes and activities that recognise their breadth and interdependence?
(A) Product concept
(B) Sales concept
(C) Societal marketing concept
(D) Holistic marketing concept
Ans: D
92. Consumer attitudes and beliefs about diet, health and nutrition are influenced by
(A) Economic environment
(B) Cultural environment
(C) Social environment
(D) Natural environment
Ans: B
93. Which one of the following techniques is used by the Commercial Banks in India to measure the risk arising from trading activity?
(A) Network Analysis
(B) Sensitivity Analysis
(C) Value at risk methodology
(D) E.V.A.
Ans: C
94. Which of the following schemes introduced by NABARD is intended to provide credit to farmers?
(A) Rural Infrastructure
Development Fund
(B) Kisan Credit Card
(C) Micro-Finance
(D) Co-Operative Development Fund
Ans: B
95. Which one of the following is a recent E-Banking initiative in Commercial Banks in India?
(A) RTGS
(B) NEFT
(C) NECS
(D) NET Banking
Ans: C
96. Which of the following fee-based services are provided by IDBI?
(i) Credit syndication
(ii) Corporate trustee services
(iii) Custodial services
(iv) Foreign services
Identify the correct code:
Codes:
(A) (i), (ii) and (iv)
(B) (i) and (ii)
(C) (ii), (iii) and (iv)
(D) (iii) and (iv)
Ans: A
97. SIDBI provides financial assistance in the following forms:
(i) Bills financing
(ii) Project financing
(iii) Re-finance assistance
(iv) Resource support to institutions
Which of the following sequence is correct?
(A) (i), (iii), (iv) and (ii)
(B) (ii), (iv), (i) and (iii)
(C) (iii), (i), (iv) and (ii)
(D) (iv), (i), (iii) and (ii)
Ans: C
98. BOP problems in India cannot be attributed only to
(A) Large trade deficit
(B) Increase in invisible surplus
(C) Sensitive behaviour of foreign creditors, including NRI foreign-currency depositors.
(D) The declining role of concessional external finance.
Ans: B
99. Arrange the stages in anti-dumping investigation process in right sequence.
(i) Initiation
(ii) Preliminary screening
(iii) Rejection of unsubstantiated information
(iv) Provisional findings
(v) Final findings and measures
(vi) Permitting the exporting country to modify the practices
Codes:
(A) (i), (ii), (iii), (iv), (vi), (v)
(B) (i), (ii), (iv), (iii), (vi), (v)
(C) (ii), (iv), (iii), (i), (vi), (v)
(D) (ii), (iii), (i), (vi), (iv), (v)
Ans: D
100. A situation where any advantage given by one member of the WTO to another member is extended to all WTO members is referred to as
(A) Trade Diversion
(B) Inter Regional Principle
(C) Most Favoured Nation
(D) Least Traded Nation
Ans: C
(A) Economics of scale
(B) Market reach
(C) Product differentiation
(D) Intangible benefits
Ans: D
52. In case the projects are divisible under capital rationing an appropriate project appraisal method is
(A) Net Present Value Method
(B) Profitability Index Method
(C) Internal Rate of Return Method
(D) Payback Period Method
Ans: B
53. Permanent working capital is generally financed through
(A) Long term Capital Funds
(B) Government Assistance
(C) Internal Financing
(D) Short term loans from Banks
Ans: A
54. The appropriate ratio for indicating liquidity crisis is
(A) Operating ratio
(B) Sales turnover ratio
(C) Current ratio
(D) Acid test ratio
Ans: D
55. Who proposed a model to apply economic order quantity concept of inventory management to determine the optimum cash holding in a firm?
(A) Keith V. Smith
(B) Miller and Orr
(C) William J. Baumol
(D) J.M. Keynes
Ans: C
56. Which of the following is not included in the model of the systems approach to Human Resource Management?
(A) Human Resource Planning
(B) Recruitment and Selection
(C) Performance appraisal
(D) Depart mentation
Ans: D
57. It is generally easy to measure the performance of the
(A) Industrial Relations Manger
(B) Research and Development Manager
(C) Sales person
(D) All of the above
Ans: C
58. Which one of the following is not a monetary incentive to sales people?
(A) Bonus
(B) Staff meeting
(C) Travelling allowance
(D) Both (B) and (C)
Ans: D
59. Statement (i): Sound industrial relations are essential to achieve individual, team goals and organizational goals.
Statement (ii): Congenial labour management relations create an atmosphere of harmony and low rate of absenteeism.
(A) Statement (i) is true, but (ii) is false.
(B) Statement (ii) is true, but (i) is false.
(C) Both statements are true.
(D) Both statements are false.
Ans: C
60. Out of the following, which are the schemes of Social Security?
(i) Provident Fund Scheme
(ii) Health Insurance Scheme
(iii) Job Guarantee Scheme
(iv) Maternity Benefit Scheme
(v) Merit Promotion Scheme
(vi) Compulsory and Voluntary Social Insurance Scheme
(vii) Child Insurance Scheme
Codes:
(A) (i), (ii), (iv) and (vi)
(B) (ii), (i), (v) and (vii)
(C) (iii), (v), (iv) and (vi)
(D) (iv), (vii), (iii) and (ii)
Ans: A
61. RBI ensures that banks operate within the set norms by conducting ______ inspections and _______ monitoring.
(A) On site, off site
(B) Off site, on site
(C) On site, field
(D) Field, on site
Ans: A
62. Under Section 37 of the Banking (Regulation) Act, a moratorium order can be issued by the High Court for a maximum total period of
(A) One month
(B) Six months
(C) One year
(D) One and a half year
Ans: B
63. Bonds or debentures issued by Securitization company should bear interest not less than
(A) Bank Rate
(B) Prime Lending Rate
(C) 1.5% over the Bank Rate
(D) 1.5% over the Saving Rate
Ans: C
64. Section 131 of the Negotiable Instruments Act extends protection to the _______
(A) Collecting Banker
(B) Paying Banker
(C) Advising Banker
(D) Confirming Banker
Ans: A
65. When a customer, by a letter has advised the bank not to honour/pay a particular cheque, such letter is called ______
(A) Cancellation letter
(B) Garnishee letter
(C) Mandate
(D) None of the above
Ans: D
66. Flow of foreign loans and investments affect
(A) Trade balance
(B) Current Account balance
(C) Capital Account balance
(D) None of the above
Ans: C
67. Concessions mainly multinational in character come under the principle of
(A) Non-discrimination
(B) Reciprocity
(C) Market Access
(D) Fair Competition
Ans: B
68. From the following identify the one which is not a commercial counter trade?
(A) Classical barter
(B) Counter purchase
(C) Pre-compensation
(D) Buy-back agreement
Ans: D
69. Which segmentation approach is the most compatible with the spirit of the marketing concept?
(A) Benefit sought
(B) Income
(C) Social class
(D) Family size
Ans: A
70. Which of the stages of new product development process can be skipped?
(A) Business analysis
(B) Idea screening
(C) Product testing
(D) Test marketing
Ans: D
71. The price-setting method which most closely corresponds to the concept of product positioning is
(A) Cost-plus pricing
(B) Going-rate pricing
(C) Perceived value pricing
(D) Psychological pricing
Ans: C
72. The most important retail marketing decision a retailer has to make is to
(A) Select the product assortment.
(B) Identify its target market.
(C) Choose the desired service level.
(D) Develop an effective store atmosphere.
Ans: B
73. Which element of the promotion mix do wholesalers primarily use?
(A) Advertising
(B) Personal selling
(C) Public relations
(D) Trade show
Ans: B
74. Out of the following alternative methods of project evaluation and selection used in capital budgeting, which one of the combinations in the code corresponds to discounted cash flow methods?
(i) Internal Rate of Return
(ii) Pay Back Period
(iii) Profitability Index
(iv) Net Present Value
Codes:
(A) (i), (ii), (iii)
(B) (i), (iii), (iv)
(C) (ii), (iii), (iv)
(D) (i), (ii), (iii), (iv)
Ans: B
75. When the expected level of EBIT exceeds the indifferent point for two alternative financial plans, (Equity financing and Debt-financing), then
(A) The use of debt financing would be advantageous to increase EPS.
(B) The use of equity financing would be advantageous to maximize EPS.
(C) The use of debt-financing would reduce EPS.
(D) The use of equity financing would keep the EPS constant.
Ans: A
76. Which one of the following is not the assumption of the Modigliani-Miller Irrelevance Theory of Dividend Policy?
(A) No personal or corporate income taxes.
(B) Dividend policy has its effect on firm’s cost of equity.
(C) Capital investment policy is independent of its dividend policy.
(D) Stock floatation or transaction cost does not exist.
Ans: B
77. Match the items of List-I with the items of List-II.
List – I List – II
(i) Financial Breakeven- point (a) Rate of discount at which NPV is zero.
(ii) Cost-Volume-Profit Analysis (b) Cost of capital remains the same for different degrees of financial leverage.
(iii) Internal Rate of Return (c) Analysis to study relationship among fixed costs, variable costs, sales volume and profits.
(iv) Net Operating Income Approach (d) The minimum level of EBIT needed to satisfy all fixed financial charges.
Codes:
(a) (b) (c) (d)
(A) (iii) (iv) (ii) (i)
(B) (i) (ii) (iii) (iv)
(C) (iv) (iii) (i) (ii)
(D) (i) (ii) (iv) (iii)
Ans: A
78. Assertion (A): The focus of working capital management revolves around managing the operating cycle of the working capital.
Reason (R): It is because the concept is useful to ascertain the requirements of cash to meet the operating expenses of a going concern.
Codes:
(A) Both (A) and (R) are true, but (R) is not the explanation of working capital management.
(B) Both (A) and (R) are false.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: A
79. Which of the following terms includes the task, duties and responsibilities of a particular job?
(A) Job Evaluation
(B) Job Enrichment
(C) Job Analysis
(D) Job Enlargement
Ans: C
80. Match the following lists and indicate the correct pairing:
List – I List – II
1. Simple Ranking a Evaluation by Superiors, Peers and Subordinates.
2. Paired Comparison b Order of rating from best to worst.
3. 360-Degree Appraisal c Standardised quantitative rating.
4. Graphic Rating d Comparing ratings to one another.
The correct pairing is
1 2 3 4
(A) b d a c
(B) a b c d
(C) c d a b
(D) d a b c
Ans: A
81. In which method of performance appraisal, the evaluator keeps a written record of significant events and how difficult employees behaved during such events?
(A) Field Review Method
(B) BARS Method
(C) Critical Incidents Method
(D) Assessment Centre Method
Ans: C
82. In connection with HRD, what is incorrect?
(A) It is a reactive function.
(B) It develops total organisation.
(C) It focuses on autonomous work groups.
(D) It is an integrated system.
Ans: D
83. In which method of training, job conditions are duplicated with equipments and machines which are identical with those used at the work place?
(A) On the job training
(B) Apprenticeship training
(C) Vestibule training
(D) Internship training
Ans: C
84. Reserve Bank of India controls the activities of some of the following banks in India:
(i) Commercial Banks
(ii) Cooperative Banks
(iii) Foreign Banks
(iv) Rural Banks
Codes:
(A) (i), (ii) and (iii)
(B) (i), (iii) and (iv)
(C) (ii), (iii) and (iv)
(D) (i), (ii), (iii) and (iv)
Ans: D
85. Match the following List – I with List – II and select the correct answer:
List – I List – II
(a) Comparative Cost Theory of International Trade (i) Gottfried Haberler
(b) International Trade Theory of Opportunity Cost (ii) J.S. Mill
(c) Factor Endowment Theory of International Trade (iii) David Ricardo
(d) Doctrine of Reciprocal Demand (iv) Hecksher-Ohlin
Codes:
(a) (b) (c) (d)
(A) (iii) (ii) (iv) (i)
(B) (i) (iii) (ii) (iv)
(C) (iii) (i) (iv) (ii)
(D) (ii) (i) (iv) (iii)
Ans: C
86. Identify the one, from the following, which is not a type of disequilibrium in the balance of payments of a country:
(A) Cyclical disequilibrium
(B) Secular disequilibrium
(C) Structural disequilibrium
(D) Sectoral disequilibrium
Ans: D
87. The participants who take advantage of different exchange rates in different markets are
(A) Speculators
(B) Arbitrageurs
(C) Hedgers
(D) Investors
Ans: B
88. Assertion (A): The liability of the option buyer is limited in the currency options market.
Reason (R): Option buyer need not exercise the option if the exchange rate is not favourable for him.
Codes:
(A) (R) is correct and (A) is wrong.
(B) (A) is correct and (R) is wrong.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are wrong.
Ans: C
89. An MNC that maintains a balance between the home market and host market oriented policies is
(A) Ethnocentric firm
(B) Polycentric firm
(C) Geocentric firm
(D) None of the above
Ans: C
90. The present regime of subsidies can be improved by focussing on
(i) Reducing the overall scale of subsidies.
(ii) Making subsidies as transparent as possible.
(iii) Giving a specific amount to the Member of Parliament for subsidies.
(iv) Setting clear limits on duration of any new subsidy scheme.
(v) Eliminating system of periodic review of subsidies
(vi) Using subsidies for well-defined economic objectives.
Codes:
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (vi)
(D) (i), (ii), (iv) and (vi)
Ans: D
91. Which of the following concepts is based on development, design and implementation of marketing programmes, processes and activities that recognise their breadth and interdependence?
(A) Product concept
(B) Sales concept
(C) Societal marketing concept
(D) Holistic marketing concept
Ans: D
92. Consumer attitudes and beliefs about diet, health and nutrition are influenced by
(A) Economic environment
(B) Cultural environment
(C) Social environment
(D) Natural environment
Ans: B
93. Which one of the following techniques is used by the Commercial Banks in India to measure the risk arising from trading activity?
(A) Network Analysis
(B) Sensitivity Analysis
(C) Value at risk methodology
(D) E.V.A.
Ans: C
94. Which of the following schemes introduced by NABARD is intended to provide credit to farmers?
(A) Rural Infrastructure
Development Fund
(B) Kisan Credit Card
(C) Micro-Finance
(D) Co-Operative Development Fund
Ans: B
95. Which one of the following is a recent E-Banking initiative in Commercial Banks in India?
(A) RTGS
(B) NEFT
(C) NECS
(D) NET Banking
Ans: C
96. Which of the following fee-based services are provided by IDBI?
(i) Credit syndication
(ii) Corporate trustee services
(iii) Custodial services
(iv) Foreign services
Identify the correct code:
Codes:
(A) (i), (ii) and (iv)
(B) (i) and (ii)
(C) (ii), (iii) and (iv)
(D) (iii) and (iv)
Ans: A
97. SIDBI provides financial assistance in the following forms:
(i) Bills financing
(ii) Project financing
(iii) Re-finance assistance
(iv) Resource support to institutions
Which of the following sequence is correct?
(A) (i), (iii), (iv) and (ii)
(B) (ii), (iv), (i) and (iii)
(C) (iii), (i), (iv) and (ii)
(D) (iv), (i), (iii) and (ii)
Ans: C
98. BOP problems in India cannot be attributed only to
(A) Large trade deficit
(B) Increase in invisible surplus
(C) Sensitive behaviour of foreign creditors, including NRI foreign-currency depositors.
(D) The declining role of concessional external finance.
Ans: B
99. Arrange the stages in anti-dumping investigation process in right sequence.
(i) Initiation
(ii) Preliminary screening
(iii) Rejection of unsubstantiated information
(iv) Provisional findings
(v) Final findings and measures
(vi) Permitting the exporting country to modify the practices
Codes:
(A) (i), (ii), (iii), (iv), (vi), (v)
(B) (i), (ii), (iv), (iii), (vi), (v)
(C) (ii), (iv), (iii), (i), (vi), (v)
(D) (ii), (iii), (i), (vi), (iv), (v)
Ans: D
100. A situation where any advantage given by one member of the WTO to another member is extended to all WTO members is referred to as
(A) Trade Diversion
(B) Inter Regional Principle
(C) Most Favoured Nation
(D) Least Traded Nation
Ans: C