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# Commerce UGC NTA NET JRF Solved Previous Year Paper December 2013 PAPER-III

1. 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

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
(a) Zero-base Budgeting 1. Internal Reconstruction
(b) Goodwill or Capital Reserve 2. Earnings Per Share
(c) Reduction of Capital 3. Control of Expenditure
(d) Basic & Diluted 4. Business Combination
Codes :
(a) (b) (c) (d)
A. 3 4 2 1
B. 4 3 1 2
C. 4 1 3 2
D. 3 4 1 2
Ans : D

13. Assertion (A) : Dividend paid out of preacquisition profit by the subsidiary company to the holding company is deducted from the cost of investment.
Reason (R) : Dividend paid out of preacquisition 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 the 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 1. MRPT = MC = MRPX = MRPPY
(b) Cost-plus pricing 2. MRT = MC = MR1 = MR2
(c) Multiple markets 3. MR = MCT = MCA = MCB
(d) Multiple products 4. P = (1 + m) ATC
Codes :
(a) (b) (c) (d)
A. 4 2 1 3
B. 1 3 4 2
C. 2 1 3 4
D. 3 4 2 1
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
(a) AIDA Model 1. Consumer behaviour
(b) Hierarchy of effects model 2. Marketing communication
(c) Howard and Sheth model 3. Consumer buying decision process
(d) Information search 4. Advertising effectiveness
Codes :
(a) (b) (c) (d)
A. 1 2 3 4
B. 2 3 4 1
C. 2 4 1 3
D. 4 1 3 2
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. Statement (I) : Job evaluation is a technique of assessing the worth of each job in comparison with others throughout an organization.
Statement (II) : Job evaluation and job rating are one and the same for employees’ appraisal purposes.
Codes :
A. Statement (I) is correct, but Statement (II) is incorrect.
B. Statement (II) is correct, but Statement (I) is incorrect.
C. Both the Statements (I) and (II) are correct.
D. Both the Statements (I) and (II) are incorrect.
Ans : A

52. Match the items of List–I with the items of List–II and select the correct answer :
List–I List–II
(a) Job Rotation 1. Involves conscious efforts, to organise tasks, duties and responsibilities into a unit of work to achieve certain objectives.
(b) Job Design 2. Involves movement of employees from job to job
(c) Job Evaluation 3. Seeks to improve both task efficiency and human satisfaction and more opportunity for individual growth
(d) Job Enrichment 4. The formal process by which the relative worth of various jobs in the organisation is determined for pay purpose.
Codes :
(a) (b) (c) (d)
A. 1 2 3 4
B. 4 3 2 1
C. 3 4 2 1
D. 2 1 4 3
Ans : D

53. Assertion (A) : Merit rating of an employee is the process of evaluating the employees performance on the job in terms of the requirements of the job.
Reason (R) : Employees’ merit rating is a technique for fair and systematic evaluation of an employee’s capacities and abilities and performance on the specific job.
Codes :
A. Both (A) and (R) are correct, and (R) is the right explanation of (A).
B. Both (A) and (R) are correct, but (R) is not the right explanation of (A).
C. Both (A) and (R) are incorrect.
D. (R) is correct, but (A) is incorrect.
Ans : B

54. The major provisions for employees’ health and safety are contained in
A. The Industrial Disputes Act, 1947
B. The Factories Act, 1948
C. The Industrial Employment (Standing Orders) Act, 1946
D. The Employees’ Compensation Act, 1923
Ans : B

55. Indicate your choice through the codes given below :
1. A club is an industry under the Industrial Disputes Act, 1947
2. Factory as defined under the Factories Act, 1948 includes a mine.
3. For purpose of the payment of bonus to employees, the gross profits earned by a bank is to be calculated in the manner specified in Schedule – I of the Payment of the Bonus Act, 1965.
4. Various labour laws do not apply to public sector undertakings.
Codes :
A. While 1 and 2 are correct, others are not.
B. All the statements are correct.
C. Only 1 is correct, others are incorrect.
D. Only 1 is incorrect, all others are correct.
Ans : A

56. Match the items of List–I with the items of List–II and select the correct answer :
List–I List–II
(a) Abraham Maslow 1. Achievement Motivation Theory
(b) Herzberg 2. ERG Theory
(c) Alderfer 3. Two Factor Theory
(d) McClelland 4. Need Hierarchy Theory
Codes :
(a) (b) (c) (d)
A. 1 2 3 4
B. 4 3 2 1
C. 3 2 1 4
D. 4 3 1 2
Ans : B

57. Assertion (A) : The Central Bank of the country is responsible to maintain stability of the monetary standard which involves currency circulation.
Reason (R) : The Central Bank is the only authorized entity to do so.
Codes :
A. (A) and (R) both are correct.
B. (A) and (R) both are incorrect.
C. (A) is correct, but (R) is incorrect.
D. (R) is correct, but (A) is incorrect.
Ans : C

58. Identify the quantitative credit control methods among the following :
(i) Bank Rate
(ii) Credit Rationing
(iii) Open Market Operations
(iv) Variable Reserve Ratio
(v) Selective Credit Control
(vi) Liquidity Ratio
Codes :
A. (i), (ii), (iii) and (iv)
B. (ii), (iii), (iv) and (v)
C. (i), (ii), (v) and (vi)
D. (i), (iii), (iv) and (vi)
Ans : D

59. The following activities are mainly related to which organization?
(i) Micro Finance
(ii) Rural Finance
(iii) Self Help Groups
(iv) Cooperative Banks Finance
A. Industrial Finance Corporation of India
B. Ministry of Finance
C. Reserve Bank of India
D. National Bank for Agriculture and Rural Development
Ans : D

60. PIN in banking transaction is known as
A. Postal Index Number
B. Permanent Identification Number
C. Personal Identification Number
D. Public Interlocking Numeric
Ans : C

61. Reserve Bank of India was nationalized on
A. January 26, 1948
B. January 01, 1949
C. January 26, 1950
D. January 01, 1956
Ans : B

62. When a banking company is placed under moratorium under Section 45 of the Banking
(Regulation) Act, 1949, the RBI must prepare a scheme of
A. VRS for staff
B. Capital Buy-Back
C. Reconstruction of the company or amalgamation with any other bank
D. IPO of the bank
Ans : C

63. Match the following items of List–I with List– II :
List–I List–II
(a) SWIFT 1. 1996
(b) NEFT 2. 1988
(c) BASEL I Accord 3. 1973
(d) BASEL II Accord 4. 2004
Codes :
(a) (b) (c) (d)
A. 1 2 3 4
B. 2 3 1 4
C. 4 3 2 1
D. 3 1 4 2
Ans : B

64. The main features of TRIMS are :
(i) All restrictions on foreign capital are imposed.
(ii) No restriction is imposed on any area of investment.
(iii) Restrictions on repatriation of dividend is eliminated.
(iv) Imports of raw material is allowed freely.
(v) No limit on the extent of foreign investment.
Indicate the correct combination
A. (i), (ii), (iii) and (v)
B. (ii), (iii), (iv) and (v)
C. (iii), (iv) and (v)
D. (iv) and (v)
Ans : B

65. Assertion (A) : TRIPS requires an understanding about the scope of the new patent regime.
Reason (R) : Patent protection will be extended to micro-organisms, non-biological and microbiological processes and plant varieties.
Codes :
A. (A) and (R) are not related with each other.
B. (R) is related with (A).
C. (A) is independent of (R).
D. While (R) is related with TRIMS, (A) is related with TRIPS.
Ans : A

66. Possible impact of WTO on various aspects of the Indian economy :
(i) Quantitative restriction will be allowed.
(ii) Second hand cars will be imported.
(iii) There will be dumping of Chinese goods.
(iv) Increase in population.
(v) Child labour exploitation
(vi) Unemployment will increase Which combination is appropriate?
A. (i), (ii), (iii) B. (iii), (iv), (v)
C. (ii), (iii) & (vi) D. (iv), (v) & (vi)
Ans : C

67. Assertion (A) : Economic integration abolishes cross-national economic discrimination.
Reason (R) : Geographical proximity is an important reason for economic integration.
Codes :
A. (R) does explain (A).
B. Both (A) and (R) are correct.
C. Both (A) and (R) are not correct.
D. (A) is correct, but (R) is not correct.
Ans : B

68. Match the items of List–I and items of List– II and select the correct answer :
List–I List–II
(a) Free Trade Area 1. MERCOSUR
(b) Customs Union 2. European Union
(c) OEEC 3. EFTA
(d) Common Market 4. Marshall Plan
Codes :
(a) (b) (c) (d)
A. 1 2 3 4
B. 2 4 1 3
C. 3 1 4 2
D. 4 3 2 1
Ans : C

69. Assertion (A) : A futures contract specifies in advance the exchange rate to be used, but it is not as flexible as a forward contract.
Reason (R) : A futures contract is for specific currency amount and a specific maturity date.
Codes :
A. (R) is a correct explanation of (A).
B. (R) is not a correct explanation of (A).
C. (A) and (R) are not related with each other.
D. (R) is irrelevant for (A).
Ans : A

70. Out of the following, which are the important objectives of IMF?
(i) To promote exchange rate stability
(ii) To create standby reserves
(iii) To print International currency notes
(iv) To establish a multilateral system of payments.
(v) To maintain orderly exchange rate stability
(vi) To create employment
Codes :
A. (ii), (iv), (v), (vi) B. (iii), (v), (vi)
C. (i), (ii), (iv), (v) D. (i), (ii), (v), (vi)
Ans : C

71. Given that :
Fair rent of a let out house property is Rs. 75,000.
Its Municipal value is Rs. 60,000, standard rent is Rs. 72,000 and actual rent received is Rs. 63,000. What is the Gross Annual Value of this house property?
A. Rs. 60,000 B. Rs. 63,000
C. Rs. 72,000 D. Rs. 75,000
Ans : C

72. Match the items of List–I with the items of List–II.
List–I List–II
(a) Amount deposited in PPF 1. 80-IA
(b) Profits and gains from undertakings engaged in infrastructure development 2. 80-G
(c) Contribution to National 3. 80-IAB Defence Fund
(d) Profits and gains by an undertaking engaged in the development of Special Economic Zone 4. 80-C
Codes :
(a) (b) (c) (d)
A. 4 3 2 1
B. 4 1 2 3
C. 4 1 3 2
D. 2 1 3 4
Ans : B

73. Which of the following deductions will not come under Sec. 80 of the Income Tax Act?
A. Deduction in the case of a person with disability
B. Deduction for interest paid on loan taken for pursuing higher education
C. Deduction for interest on loan taken for the construction/purchase of house property
D. Deduction for repayment of any instalment of principal amount borrowed for the purchase/construction of house property
Ans : C

74. X purchased a land in the P.Y. 1997-98 for Rs. 50,000. This land was sold by him during the P.Y. 2009-10 for Rs. 8,00,000. The fair market value of this land on 1-4-81 was Rs. 1,20,000. If the Cost Inflation Index for the A.Y. 2010-11 is 632, his capital gain for the A.Y. 2010-11 will be
A. Rs. 4,84,000
B. Rs. 7,50,000
C. Rs. 6,80,000
D. Rs. 41,600
Ans : D

75. Any amount of money received in excess of Rs. 50,000 without consideration is fully taxable in the hands of
A. Individuals
B. Individuals and HUF
C. Individuals, HUF and Company
D. All assessees
Note :
This paper contains fifty (50) objective type questions, each question carrying two (2) marks.
All questions are compulsory.
Ans : B

1. Direct supervision over depositories and mutual funds is undertaken by
A. NBFCs
B. RBI
C. SEBI
D. All of the above
Ans : C

2. In the call/notice money market, which of the following participants is allowed to trade?
A. All Banks, Primary Dealers and Mutual Funds
B. All Corporates
C. Only Commercial Banks
D. All of the above
Ans : C

3. Match the items of List-I with the items of List-II and select the correct answer :
List-I List-II
(i) Private ownership and Free Enterprise. (a) Secondary Market
(ii) Government ownership and Central Authority. (b) Capitalism
(iii) The market for the sale and purchase of previously issued securities. (c) Primary Market
(iv) The market for new long term capital. (d) Socialism
Codes :
(i) (ii) (iii) (iv)
A. (b) (d) (a) (c)
B. (a) (b) (c) (d)
C. (b) (d) (c) (a)
D. (a) (c) (b) (d)
Ans : A

4. The apex consumer court in India is referred to as
A. The Consumer Education and Research Centre.
B. The Consumer Unity and Trust Society.
C. National Consumer Disputes Redressal Commission.
D. None of the above
Ans : C

5. Who is Chairman of 13th Finance Commission?
A. Dr. C. Rangarajan
B. Mr. Vimal Jalan
C. Dr. Vijay C. Kelkar
D. None of the above
Ans : C

6. Insurance expenses paid to bring an equipment from the place of purchase to the place of installation is a type of
A. Revenue expenditure
B. Capital expenditure
C. Deferred revenue expenditure
D. Operating expense
Ans : B

7. ABC Ltd was incorporated with an authorised Share Capital of Rs. 1,00,000 equity shares of Rs. 10 each. The Board of Directors of the company decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd.?
A. Promoters’ Account
B. Services Account
C. Goodwill Account
D. Share Capital Account
Ans : C

8. In a reconstruction scheme, the reduction of capital may take the form of
A. Reducing the liability of the shareholders in respect of any unpaid amount on the shares held by them.
B. Paying-off any paid-up share capital which is in excess of its requirement.
C. Cancelling any paid-up share capital which is lost or unrepresented by available assets.
D. All of the above.
Ans : D

9. While determining the normal rate of return for the valuation of shares in Market Value Method, which of the following should be taken into consideration?
A. The degree of risk involved.
B. The current rate of interest on gilt-edged securities.
C. Weighted average cost of capital.
D. All of the above.
Ans : D

10. Master budget is a
A. Functional Budget
B. Operating Budget
C. Summary Budget
D. Financial Budget
Ans : C

11. Assertion (A) : Want-satisfying power of a commodity is called its utility.
Reason (R) : Utility may not have the characteristic of morality.
Codes :
A. Both (A) and (R) are correct.
B. (A) is correct, but (R) is not correct.
C. Both (A) and (R) are not correct.
D. (R) is correct, but (A) is not correct.
Ans : A

12. Match the items of List-I with those in List-II and select the correct code for the answer :
List-I List-II
(a) Contraction of Demand (i) Non-Price change effect
(b) Decrease in Demand (ii) Demand curve remains the same
(c) Increase in Demand (iii) Price change effect
(d) Expansion of (Demand iv) Shifts the Demand curve
Codes :
(a) (b) (c) (d)
A. (iii) (i) (iv) (ii)
B. (iv) (iii) (ii) (i)
C. (i) (ii) (iii) (iv)
D. (ii) (iv) (i) (iii)
Ans : A

13. Assertion (A) : As the proportion of one variable factor in a combination with fixed factor is increased, after a point the marginal product of the factor will diminish.
Reason (R) : Beyond the level of optimum combination of inputs leads to this.
Codes :
A. (R) is appropriate reason of (A).
B. (R) is not appropriate reason of (A).
C. (A) and (R) are not related with each other.
D. (A) is independent of (R).
Ans : A

14. Match the items of List-I with the items of List-II and select the correct answer.
List-I List-II
(a) Indifference Curve (i) Slopes downward to the right
(b) Demand Curve (ii) P = AR = MR = d
(c) Perfect Competition (iii) Oligopoly
(d) Price Leadership (iv) Convex to the origin
Codes :
(a) (b) (c) (d)
A. (ii) (iii) (iv) (i)
B. (iii) (iv) (i) (ii)
C. (iv) (i) (ii) (iii)
D. (i) (ii) (iii) (iv)
Ans : C

15. Price, Marginal Revenue and Elasticity are related to each other. When e = 1, then :
A. MR > 0 B. MR < 0
C. MR = 0 D. MR = 1
Ans : C

16. Consider the following statistical tests :
(i) ‘F’ test
(ii) ‘t’ test
(iii) ‘z’ test
(iv) ‘Chi-square’ test Which of these are parametric tests?
A. (i), (ii) and (iv) B. (i), (iii) and (iv)
C. (i), (ii) and (iii) D. (ii), (iii) and (iv)
Ans : C

17. The difference between sample statistic and its corresponding population parameter is
A. Sampling error
B. Measurement error
C. Coverage error
D. Non-response error
Ans : A

18. Match the items in List-I with items in List-II.
List-I List-II
(i) Level of significance (a) Sample mean is equal to population mean
(ii) Standard deviation of sampling distribution(b) Parameters
(iii) Numerical value that describes the characteristics of the population(c) Type-I error
(iv) Normally- distributed population(d) Standard error
Codes :
(i) (ii) (iii) (iv)
A. (d) (c) (a) (b)
B. (c) (d) (b) (a)
C. (c) (b) (d) (a)
D. (d) (b) (c) (a)
Ans : B

19. Kendall’s co-efficient of concordance is used to
A. Test the difference among two or more sets of data.
B. Test the relationship between variables.
C. Test the variations in the given data.
D. Test the randomness of samples.
Ans : B

20. Which of the following softwares are used for data processing?
(i) EXCEL
(ii) ACCESS
(iii) SPSS
(iv) STAR
(v) PASW
Codes :
A. (i), (ii), (iii) and (v)
B. (ii), (iii), (iv) and (v)
C. (iii) and (iv)
D. (i), (iii) and (iv)
Ans : A

21. Match the items of List-I with the items of List-II and select the correct answer.
List-I List-II
(i) Grapevine (a) Task group
(ii) Formal group (b) Field force theory
(iii) Informal group (c) Gossip
(iv) Kurt Lewin (d) National group
Codes :
(i) (ii) (iii) (iv)
A. (c) (a) (d) (b)
B. (d) (c) (b) (a)
C. (a) (b) (c) (d)
D. (b) (a) (d) (c)
Ans : A

22. Who has suggested that achievement motivation among individuals and nations can be developed through training courses?
A. MeClelland B. Alderfer
C. Maslow D. Herzberg
Ans : *

23. Assertion (A) : When span of control is wide co-ordination and control becomes difficult.
Reason (R) : In a narrow span, levels of authority reduces.
Codes :
A. Both (A) and (R) are true and (R) is the correct explanation of (A).
B. Both (A) and (R) are true, but (R) is not a correct explanation of (A).
C. (A) is true, but (R) is false.
D. (A) is false, but (R) is true.
Ans : C

24. The general pattern of behaviour, shared belief and values that members have in common is known as
A. Organisation climate
B. Organisation culture
C. Organisation effectiveness
D. Organisation matrix
Ans : B

25. Which of the following is not a principle of management according to Henry Fayol?
A. Subordination of individual interest over the organisational interest
B. Esprit de crops
C. Unity of Managers
D. Unity of Direction
Ans : C

26. 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

27. The concept of marketing-mix, consisting of the 4 P’s of marketing, was developed by
A. E. Jerome McCarthy
B. Peter F. Drucker
C. Philip Kotler
D. William J. Stonton
Ans : A

28. The selling concept is most likely to be used by firms which sell
A. Convenience goods
B. Shopping goods
C. Speciality goods
D. Unsought goods
Ans : D

29. Match the items of List-I with those of List-II and select the correct answer from the codes given below :
List-I List-II
(a) Everitt M. Rogers (i) Service Quality Model
(b) J.D. Power (ii) Three types of marketing for services
(c) Parasuraman, Zeithamal and Berry (iii) Quality rating of automobiles
(d) Gronroos (iv) Diffusion of innovation
Codes :
(a) (b) (c) (d)
A. (iii) (ii) (i) (iv)
B. (i) (ii) (iii) (iv)
C. (ii) (i) (iv) (iii)
D. (iv) (iii) (i) (ii)
Ans : D

30. 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

31. 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

32. 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

33. 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

34. The appropriate ratio for indicating liquidity crisis is
A. Operating ratio
B. Sales turnover ratio
C. Current ratio
D. Acid test ratio
Ans : D

35. 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

36. 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. Departmentation
Ans : D

37. It is generally easy to measure the performance of the
A. Industrial Relations Manager
B. Research and Development Manager
C. Sales person
D. All of the above
Ans : C

38. Which one of the following is not a monetory incentive to sales people?
A. Bonus
B. Staff meeting
C. Travelling allowance
D. Both (B) and (C)
Ans : D

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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

47. Concessions mainly multinational in character come under the principle of
A. Non-discrimination
B. Reciprocity
C. Market Access
D. Fair Competition
Ans : B

48. 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

49. If the spot price is higher than the strike price in a call option, it is referred to as
A. At-the-money B. In-the-money
C. Out-of-the-money D. Premium
Ans : B

50. Identity the item which does not include under Current Account transaction.
A. Services
B. Non-monetary movement of gold
C. Unilateral transfer
D. Investment income
Ans : B

1. Under the provisions of the Industries
(Development and Regulation) Act, 1951, a licence is necessary for
A. changing the location of an existing industrial undertaking.
B. producing or manufacturing a ‘new article’ in an existing industrial undertaking.
C. establishing a new undertaking.
D. All of the above.
Ans : D

2. Match the items of List-I with the items of List-II and select the correct answer.
List-I List-II
(i) Political and Legal Environment (a) Important for industries directly depending on imports or exports.
(ii) Demographic Environment (b) Close relationship with the economic system and economic policy.
(iii) Economic Environment (c) Related to natural resources.
(iv) Geographical and Ecological Environment (d) Occupational and spatial mobilities of population having implications for business.
Codes :
(i) (ii) (iii) (iv)
A. (b) (d) (c) (a)
B. (b) (d) (a) (c)
C. (a) (b) (c) (d)
D. (a) (b) (d) (c)
Ans : B

3. Match the items of List-I with the items of List-II and select the correct answer :
List-I List-II
(i) SLR (a) Working in the field of consumer protection.
(ii) SIDBI (b) Credit control.
(iii) CUTS (c) Industrial policy.
(iv) ILPIC (d) Facilitating Small Scale Industries.
Codes :
(i) (ii) (iii) (iv)
A. (a) (c) (d) (b)
B. (b) (d) (a) (c)
C. (a) (b) (c) (d)
D. (a) (c) (b) (d)
Ans : B

4. Match the following :
List-I List-II
(i) National Stock Exchange (a) Marks the beginning of the process of dematerialisation of shares of the participating companies.
(ii) National Securities Depository Limited (b) Facilitation of equal access to investors across the country.
(iii) Securities and Exchange Board of India (c) To foster the development of an active secondary market for Government Securities.
(iv) Securities Trading Corporation of India (d) Abolition of Capital issues control and retaining the sale authority for new capital issues.
Codes :
(i) (ii) (iii) (iv)
A. (b) (a) (d) (c)
B. (a) (b) (c) (d)
C. (a) (b) (d) (c)
D. (d) (c) (b) (a)
Ans : A

5. The United Nations Conference on Trade and Development (UNCTAD) was set up in
A. 1944 B. 1954
C. 1960 D. 1964
Ans : D

6. Indicate the ground on which a complaint under the Consumer Protection Act, 1986, shall be invalid.
A. A product having short weight.
B. A service provided free of cost.
C. A misleading advertisement given in newspaper.
D. None of the above.
Ans : B

7. Out of the following, which are the four components of food security?
(i) Food availability
(ii) Food market
(iii) Food accessibility
(iv) Food utilization
(v) Food credit
Codes :
A. (iii), (iv) and (v)
B. (i), (iii) and (iv)
C. (i), (ii) and (iii)
D. (i), (ii) and (iv)
Ans : B

8. Performance evaluation of a responsibility centre can be done by
A. ROI B. Return on sales
C. EVA D. All of the above
Ans : D

9. Social Balance Sheet shows
A. Social costs
B. Social revenues
C. Value of employees of the organization
D. All of the above
Ans : C

10. Which of the following comes under efficiency ratios?
A. Average collection period
B. Inventory turnover ratio
C. Fixed assets turnover ratio
D. All of the above
Ans : D

11. Match the items of the following two lists :
List-I List-II
(i) Statement of changes in Working Capital (a) Cash Flow Statement
(ii) Deferred Tax (b) Fixed Assets
(iii) Three activities (c) Funds Flow Statement
(iv) Impairment Loss (d) Balance Sheet
Codes :
(i) (ii) (iii) (iv)
A. (a) (b) (c) (d)
B. (c) (d) (b) (a)
C. (c) (d) (a) (b)
D. (d) (c) (a) (b)
Ans : C

12. Match the items of the following two lists and indicate the correct answer :
List-I List-II
(i) Earning ability of firm (a) Basis of Accounting
(ii) Conservatism (b) P/V ratio
(iii) Cash profit (c) Cash flow statement
(iv) Cash and Accrual (d) Prudence
Codes :
(i) (ii) (iii) (iv)
A. (b) (d) (c) (a)
B. (b) (a) (d) (c)
C. (c) (d) (a) (b)
D. (c) (d) (b) (a)
Ans : A

13. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A) : Only the relevant costs should be taken into consideration for decisionmaking.
Reason (R) : All variable costs are relevant costs and all fixed costs are irrelevant costs.
In the above two statements, which one alternative of the following is correct?
Codes :
A. Both (A) and (R) are correct.
B. Only (A) is correct, but (R) is wrong.
C. Only (R) is correct, but (A) is wrong.
D. Both (A) and (R) are wrong.
Ans : B

14. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) :
Assertion (A) : Variance analysis is undertaken for planning and control of costs.
Reason (R) : Future costs are taken into consideration in budgeting and standard costing.
In the above two statements, which one alternative of the following is correct?
Codes :
A. Both (A) and (R) are correct and (R) is the Reason for (A).
B. Both (A) and (R) are correct and (R) is not the Reason for (A).
C. (A) is correct, but (R) is wrong.
D. (A) is wrong, but (R) is correct.
Ans : B

15. Assertion (A) : Mark-up pricing is a method of determining price.
Reason (R) : P = ATC + (m × ATC) is the expression for that.
Codes :
A. (A) is correct but (R) is not correct.
B. Both (A) and (R) are correct.
C. Both (A) and (R) are not correct.
D. (R) is correct, but (A) is not correct.
Ans : B

16. Match the items of List-I with the items of List-II and select the correct answer.
List-I List-II
(a) Economic profit (i) Total Revenue Explicit cost
(b) Accounting profit (ii) Buyers and Sellers exchanging
(c) Collusion/Cartel (iii) Total Revenue – Total cost
(d) Market (iv) Oligopoly
Codes :
(a) (b) (c) (d)
A. (iii) (i) (iv) (ii)
B. (i) (ii) (iii) (iv)
C. (iv) (iii) (ii) (i)
D. (ii) (iv) (i) (iii)
Ans : A

17. Which one is not the item of economic cost to the business?
A. Owner supplied resources.
B. Market supplied resources.
C. Implicit costs.
D. Non-monetary opportunity costs of using owner supplied resources.
Ans : B

18. Demand must have the elements
A. Desire
B. Want
C. Quantity, Price and Time
D. All of the above
Ans : D

19. Match the items of List-I and items of List-II and select the correct code for the answer.
List-I List-II
(a) Utilitarian Approach (i) Marginal Rate of Substitution
(b) Ordinal Approach (ii) Budget line & Indifference Curve
(c) Price- Consumption Curve (iii) U = f (x, y)
(d) Consumer Equilibrium (iv) MRSxy = MRSyx
Codes :
(a) (b) (c) (d)
A. (i) (iv) (iii) (ii)
B. (ii) (iii) (iv) (i)
C. (iii) (i) (ii) (iv)
D. (iv) (ii) (i) (iii)
Ans : C

20. The Learner Index measures
A. Market power
B. Price
C. Price-Marginal cost
D. None of the above
Ans : A

21. Match the items of List-I and items of List-II and select the correct answer.
List-I List-II
(a) Perfect competition (i) Different prices for the same product
(b) Monopolistic competition (ii) Dominant strategy
(c) Oligopoly (iii) Product differentiation
(d) Discriminating Monopoly (iv) Identical product
Codes :
(a) (b) (c) (d)
A. (iv) (iii) (ii) (i)
B. (i) (ii) (iii) (iv)
C. (ii) (iv) (i) (iii)
D. (iii) (i) (iv) (ii)
Ans : A

22. If there are 8 possible classes under consideration for a goodness of-fit, the number of degrees of freedom will be
A. 8
B. 7
C. 6
D. Cannot be determined from the given information.
Ans : D

23. Identify from the following, the test statistic for which the value of numerator should always be greater than that of denominator.
A. ‘Chi-square’ B. ‘F’ value
C. ‘Z’ value D. ‘t’ value
Ans : B

24. Which of the following tests can be applied to ordinal scale data?
(i) Chi-square test
(ii) ‘Z’ test
(iii) Kruskal-Wallis test
(iv) Wilcoxon Mann-Whitney test
Codes :
A. (i), (ii) and (iii) B. (ii), (iv) and (iii)
C. (i), (iii) and (iv) D. (i), (ii) and (iv)
Ans : C

25. Which of the following tests can be based on the normal distribution?
A. Difference between independent means
B. Difference between dependant means
C. Difference between proportions
D. All of the above
Ans : D

26. From the following, identify one situation where ‘F’ test cannot be used?
A. To compare more than two population means.
B. To test the hypothesis about a single population variance.
C. To test the hypothesis about twopopulation variance.
D. To study about randomized block design.
Ans : B

27. Which statistical test should be applied to test the effectiveness of ‘special coaching’ on the marks scored by the students?
A. Paired ‘t’ test B. ‘Chi-square’ test
C. ‘Z’ test D. ‘F’ test
Ans : A

28. In a linear equation, y = a + bx, ‘a’ refers to
A. Slope
B. Y-intercept
C. Dependant variable
D. Independent variable
Ans : B

29. Which among the following is the most popular approach for accomplishing the results?
A. Management by exception
B. Reward system
C. Management by objectives
D. Mentor system
Ans : C

30. The managerial function of organizing involves
A. Reviewing and adjusting plan in the light of changing conditions.
B. Establishing programme for the accomplishment of objectives.
C. Creating structure of functions and duties to be performed.
D. Getting things done through others.
Ans : C

31. A leader who identifies what subordinates need to do to achieve objectives, clarify organizational roles and tasks, set up an organization structure, reward performance and provide for the social needs of their followers, is
A. a transformational leader
B. a participative leader
C. a transactional leader
D. an autocratic leader
Ans : C

32. Which of the following is not an assumption of theory X?
A. An average human being has an inherent dislike of work and will avoid it if he can.
B. An average human being prefers to be directed, seeks to avoid responsibility, has relatively little ambition, and want security above all.
C. An average human being learns under proper conditions, not only to accept responsibility but also to seek it.
D. Most people must be coerced, controlled, directed and threatened with punishment to get them put forth adequate effort.
Ans : C

33. If a network of interpersonal relationship that arise when people associate with each other is an informal organization, then find out which of the following is not an informal organization?
A. The “machine shop” group
B. Customers’ group
C. The “sixth floor” group
D. The “Friday evening bowling” gang
Ans : B

34. Which of the following are sources of ethics?
(i) Religion
(ii) Legal system
(iii) Economic system
(iv) Culture
(v) Family system Select the correct answer from the codes given below :
A. (i), (ii), (iii), (v)
B. (i), (ii), (iv)
C. (i), (iv), (v)
D. (i), (ii), (iii), (iv), (v)
Ans : C

35. Which of the following has refined Maslow’s theory of motivation by proposing a hierarchy of three needs?
A. MeClelland B. Aldorfer
C. Herzburg D. Vroom
Ans : B

36. 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

37. The description of a product’s quality, features, style, brand name and packaging identifiers the
A. Actual product
B. Augmented product
C. Core product
D. Tangible product
Ans : A

38. Consider the following statements and find out the correct alternative from the codes given below :
(i) A firm’s marketing information system is a component of its marketing research system.
(ii) The most common forms of marketing researches conducted in most of the firms are the measurement of market potential and the analysis of market share.
(iii) Survey research is seldom used for studying consumer perception and attitudes.
(iv) The concept of cognitive dissonance is relevant to study consumer’s post-purchase behaviour.
Codes :
A. All the statements are true.
B. All the statements are false.
C. (i) is false and the rest are true.
D. (ii) and (iv) are true and the rest are false.
Ans : D

39. In India, which pricing practice is not permissible?
A. Penetrating pricing
B. Skimming pricing
C. Predatory pricing
D. None of the above
Ans : C

40. Consider the following statements and find out the correct alternative from the codes given below :
(i) A good salesman is one who can sell refrigerator to an Eskimo.
(ii) Salesmen are born, not made.
(iii) Physical distribution is an area where high cost-savings is possible.
Codes :
A. (i) and (iii) are correct.
B. (i) and (ii) are correct.
C. (ii) and (iii) are correct.
D. All are correct.
Ans : A

41. Which form of retail outlet has the highest operating costs?
A. Super market
B. Consumer co-operative store
C. Department store
D. Retail chain store
Ans : C

42. Consider the following statements and indicate the correct alternative from the codes given below :
(i) The product management system often turns out to be costly.
(ii) When customers belong to different user groups with distinct buying preferences and practices, a market management organization is not suitable.
(iii) Advertising department has the closest interface with the finance department of the company.
Codes :
A. (i) and (ii) are correct.
B. (ii) and (iii) are correct.
C. Only (i) is correct.
D. All are correct.
Ans : C

43. Match the statements in List-I with dividend models in List-II as follows :
List-I List-II
(a) Dividend Capitalisation Approach (i) Traditional Model.
(b) Dividend Policy has a bearing on the share valuation. (ii) Gardon Model
(c) Stock Market places more weight on dividends than on retain earnings. (iii) Walter Model
(d) Dividend payout is irrelevant to the value of the firm. (iv) Modigliani and Miller Model
Codes :
(a) (b) (c) (d)
A. (ii) (iii) (i) (iv)
B. (i) (ii) (iv) (iii)
C. (iv) (i) (iii) (ii)
D. (iii) (iv) (ii) (i)
Ans : A

44. Venture capital financing at starting stage is generally not done through
A. Debt instruments
B. Deep discount bonds
C. Equity shares
D. Conditional loans
Ans : B

45. Match the statements in List-I with the types of lease in the List-II as follows :
List-I List-II
(a) Lessor transfers all risks and rewards of an asset to the lessee. (i) Indirect lease
(b) Lessor transfers the assets to the lessee but bears the cost of maintenance(ii) Operating lease
(c) The owner of the asset sells it to the lessor who in turn leases it back to the owner (now lessee) (iii) Finance lease
(d) Lessor owns/acquires the assets that are leased to a given lessee. (iv) Direct lease
Codes :
(a) (b) (c) (d)
A. (ii) (iii) (iv) (i)
B. (i) (iv) (ii) (iii)
C. (iii) (ii) (i) (iv)
D. (iv) (i) (iii) (ii)
Ans : C

46. Full details for the issue of ADRs by a company must be furnished within 30 days from the date of its closure to
A. Securities and Exchange Commission
(SEC)
B. Reserve Bank of India (RBI)
C. Securities and Exchange Board of India
(SEBI)
D. Company Law Board (CLB)
Ans : B

47. The degree to which the returns of the two securities change together, is reflected by
A. Correlation B. Leverage
C. Covariance D. Beta
Ans : C

48. The transfer by a company of one or more of its business divisions to another newly set up company is called
A. Demerger
B. Merger
C. Equity Carve-out
D. Disinvestment
Ans : A

49. What combination of the following factors influences the working capital requirement?
(i) Market Conditions
(ii) Production Policy
(iii) Firm’s goodwill
(iv) Supply conditions
Codes :
A. (i), (ii) and (iii)
B. (ii), (iii) and (iv)
C. (i), (iii) and (iv)
D. (i), (ii) and (iv)
Ans : D

50. Which of the followings are the modern method of performance appraisal?
(i) 360 degree performance appraisal.
(ii) Graphic rating scale.
(iii) Management By Objectives (MBO).
(iv) Forced distribution method.
(v) Behaviourally Anchored Rating Scales
(BARS).
Select the correct answer from the codes given below :
A. (i), (ii), (iii) B. (ii), (iv), (v)
C. (i), (iii), (v) D. (iv), (ii), (i)
Ans : C

51. Which of the following principle serves as a warning to organizations not to take the selection and promotion process lightly?
A. Promotion Principle
B. Drucker Principle
C. Validity Principle
D. Peter Principle
Ans : D

52. According to D. Katz morale has four dimensions :
(i) Jobs satisfaction
(ii) Satisfaction with wages and promotional opportunities.
(iii) Identification with company.
(iv) Pride in the work group.
(v) Top Management Support.
Select the correct combination.
A. (i), (ii), (iii) and (iv)
B. (i), (ii), (iii) and (v)
C. (i), (ii), (iv), and (v)
D. (i), (iii), (iv) and (v)
Ans : A

53. HRM is viewed as a management process, consisting of four functional activities :
(i) Acquisition
(ii) Motivation
(iii) Development
(iv) Resolution of industrial disputes
(v) Maintenance Select the correct combination.
A. (i), (ii), (iii) and (iv)
B. (i), (ii), (iii) and (v)
C. (i), (ii), (iv) and (v)
D. (i), (iii), (iv) and (v)
Ans : B

54. O C TA PA C stands for
A. Order, Co-ordination, Trust, Authority, Personality and Cooperation.
B. Openness, Confrontation, Trust, Authenticity, Pro-action and Collaboration.
C. Organization, Conflict, Team, Authority, People and Collaboration.
D. Oneness, Compromise, Tress pass, Authority, Protection and Combination.
Ans : B

55. Technique of ‘Transaction Analysis’ was developed by
A. Elton Mayo
B. Peter Drucker
C. Eric Berne
D. Adam Smith
Ans : C

56. Which one of the following methods is not a demand forecasting method of Human Resource Planning?
A. Managerial judgement
B. Managerial grid
C. Work study techniques
D. Statistical techniques
Ans : B

57. Transaction of Internet Banking excludes
A. Withdrawal of cash anywhere in India.
B. Statement of account for a specific period.
C. Transfer of funds from one account to another account.
D. Balance enquiry.
Ans : A

58. Which among the following is not a category of Non-Performing Assets?
A. Substandard Assets
B. Doubtful Debts
C. Loss Assets
D. Devaluated Assets
Ans : D

59. When a loan will be NPA?
A. Interest and/or loan instalments overdue for more than 90 days.
B. Account is out of order for more than 90 days in case of overdraft/cash credit.
C. Bill remains overdue for more than 90 days.
D. All of the above.
Ans : D

60. Assertion (A) : “The problem of rural credit is not primarily one of rural credit, it may be said to be one of rural minded credit.” Reason (R) : The Indian economy has yet to come out of rural mentality.
Codes :
A. Both (A) and (R) are correct.
B. Both (A) and (R) are incorrect.
C. (A) is correct, but (R) is incorrect.
D. (R) is correct, but (A) is incorrect.
Ans : C

61. Match the items of List-I with the items of List-II and select the correct answer :
List-I List-II
(i) Debit card (a) Several storage
(ii) Credit card (b) Online recovery of amount
(iii) Electronic purse (c) Image processing use
(iv) Cheque function (d) Revolving credit
Codes :
(i) (ii) (iii) (iv)
A. (c) (a) (d) (b)
B. (a) (b) (d) (c)
C. (d) (c) (a) (b)
D. (d) (c) (b) (a)
Ans : B

62. Assertion (A) : The Indian economy could survive in the recent global recession due to its strong banking system.
Reason (R) : The Indian economy contains a large amount of black money.
Codes :
A. Both (A) and (R) are correct and (R) is the explanation of (A).
B. Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
C. (R) is correct, but (A) is not the appropriate assertion of (R).
D. Both (A) and (R) are incorrect.
Ans : B

63. Assertion (A) : Most of the development bank in India have setup private commercial banks after the introduction of capital adequacy norms.
Reason (R) : Development banks in India have not adhered to their basic objectives.
Codes :
A. (A) and (R) both are correct, and (R) is correct explanation of (A).
B. (A) and (R) both are correct, but (R) is not a correct explanation of (A).
C. (A) is correct, but (R) is incorrect.
D. (R) is correct, but (A) is incorrect.
Ans : C

64. Match the following items of List-I with List-II :
List-I List-II
(a) Brettonwoods conference (i) 1947
(b) General Agreement on Trade and Tariffs(ii) 1964
(c) ACCRA conference (iii) 1944
(d) United Nations Conference on Trade and Development(iv) 2008
Codes :
(i) (ii) (iii) (iv)
A. (b) (d) (a) (c)
B. (b) (d) (c) (a)
C. (b) (c) (d) (a)
D. (c) (a) (b) (d)
Ans : A

65. The forces that lend momentum to the process of globalization have been identified by Michael Porter include the following :
(i) Fluid global capital market.
(ii) Technological restructuring.
(iii) Decreasing religious command.
(iv) Ethnic decontrol.
(v) New-global competitors.
(vi) End of the ‘cold war’ in 1990s.
Codes :
A. (vi), (v), (iv) and (iii)
B. (vi), (iii), (ii) and (i)
C. (vi), (v), (ii) and (i)
D. (iv), (iii), (ii) and (i)
Ans : C

66. Statement (I) : Green Box subsidies include amount spent on Government services such as research, disease control, infrastructure and food security.
Statement (II) : Blue Box subsidies are certain direct payments made to farmers, to limit production, and are certain government assistance programmes to encourage agriculture and rural development.
Codes :
A. Statement (I) is correct, but (II) is not correct.
B. Statement (II) is correct, but (I) is not correct.
C. Both statement (I) and (II) are correct.
D. Both statement (I) and (II) are incorrect.
Ans : C

67. Assertion (A) : The major economic powers have succeeded in creating a new international regime where the profits and the dominance of their transnational corporations will be the decisive consideration.
Reason (R) : This regime will legitimise the process of progressive erosion of the sovereign economic space of the third-world countries.
A. Both (A) and (R) are correct, and (R) is the right explanation of (A).
B. Both (A) and (R) are correct, but (R) is not the right explanation of (A).
C. Both (A) and (R) are incorrect.
D. (R) is correct, but (A) is not correct.
Ans : B

68. Assertion (A) : The ‘Balance of Payments’ presents a classified record of all receipts on account of goods exported, services rendered and capital received by ‘residents’ and payments made by them on account of goods imported and services received from capital transferred to ‘non-residents’ or ‘foreigners”.
Reason (R) : The ‘Balance of Payments’ of a country is a systematic record of all economic transactions between the ‘residents’ of a country and the rest of the world.
A. Both (A) and (R) are correct and (R) is the right explanation of (A).
B. Both (A) and (R) are correct, but (R) is not the right explanation of (A).
C. (R) is correct, but (A) is not correct.
D. Both (A) and (R) are incorrect.
Ans : A

69. Which among the following is not rightly explained?
(i) M1 = Currency with the public + demand deposits of the public.
(ii) M2 = M1 + Post Office Savings Deposits.
(iii) M3 = M1 + Time Deposits of the public with Banks.
(iv) M4 = M3 + Total Post Office Deposits.
(v) M1 = Narrow money
(vi) M3 = Broad money
A. Only (v) and (vi)
B. Only (i) and (iii)
C. Only (vi)
D. None of the above
Ans : D

70. Which of the followings are not effect of dumping on importing country?
(i) Domestic industry might be affected adversely by a decline in sales and profits.
(ii) If dumping is continued for a longer period, survival of the domestic industry may be threatened.
(iii) Dumping may create BOP problems for the country.
(iv) It finds market for its surplus production.
Codes :
A. (i), (ii), (iii) and (iv)
B. (ii), (iii) and (iv)
C. (iii) and (iv)
D. Only (iv)
Ans : D

71. Donation to National Children’s Fund will come in which of the following deduction under Sec. 80G of Income Tax Act, 1961.
A. 100 per cent deduction without any qualifying limit.
B. 50 per cent deduction without any qualifying limit.
C. 100 per cent deduction subject to qualifying limit.
D. 50 per cent deduction subject to qualifying limit.
Ans : B

72. If the taxable income of a domestic company for the Assessment Year 2011-12 is Rs. 9,00,000, its tax liability will be
A. Rs. 2,76,800 B. Rs. 2,78,100
C. Rs. 3,70,800 D. Rs. 3,70,880
Ans : B

73. Unabsorbed depreciation which could not be setoff in the same assessment year, can be carried forward upto
A. 4 years B. 8 years
C. 10 years D. Indefinite period
Ans : D

74. If the book profits of a partnership firm is Rs. 1,10,000, the remuneration admissible to working partners under Sec. 40(b) of the Income Tax Act, 1961 is
A. Rs. 1,10,000 B. Rs. 1,50,000
C. Rs. 99,000 D. None of the above
Ans : B

75. Which of the following expenses is inadmissible while computing income from other sources?
A. Interest paid on amounts borrowed to meet tax liabilities.
B. Collection charges paid to the banker or any other person to collect interest/ dividend.
C. Interest on loan taken to invest in securities.
D. Depreciation on let-out machinery and plant.
Note : This paper contains fifty (50) objective type questions, each question carrying two (2) marks.
Attempt all the questions.
Ans : A

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