UGC NET Exam July 2018 Commerce Solved Paper 2

UGC NET Exam July 2018 Commerce Solved Paper 2 

Subject: Commerce
Solved Paper: II
No.of Questions: 100

1. The central bank can significantly influence the savings, investments and consumer spending in the economy through which of the following policy ?
(1) Fiscal Policy 
(2) Monetary Policy
(3) Industrial Policy 
(4) Foreign Exchange Policy
Answer: 2

2. Which one of the following is not the characteristic of capitalism ?
(1) Individuals and associations behave with economic motive of maximising their profit with least sacrifice or cost.
(2) The country’s major means of production are either owned by the Government or their use is controlled by the Government.
(3) Producers, consumers and employees compete among themselves, as the resources and opportunities are limited.
(4) Price, the invisible hand, plays a predominant role in the flow of the factors of production and consumption.
Answer: 2

3. Which of the following is not the salient feature of the industrial policy developments since 1991 ?
(1) The scope of the private sector has been enormously expanded.
(2) Public sector has been withdrawing partially or fully from several of the enterprises by divestment.
(3) The Indian industry is increasingly exposed to foreign competition.
(4) Monopoly or dominant position for the public sector in most of the industries and control of the commanding heights of the economy by the public sector.
Answer: 4

4. Which of the following does not form the part of the important information to be incorporated in the Memorandum of Association as specified in the Companies Act, 2013 ?
(1) The name of the company and the state in which it is situated.
(2) The objects for which the company is proposed to be incorporated.
(3) The rules, regulations and bye-laws for the internal management of the company.
(4) The liability of the members of the company, whether limited or unlimited.
Answer: 3

5. Assertion (A) : The volume of imports tends to be very high when there is a conjecture of high rate of economic growth and a sharp fall in the relative price of imports and vice versa. 
Reason (R) : High rate of growth, ceteris paribus, is associated with rise in imports and increase in the imports, ceteris paribus, is associated with a fall in the relative price of imports.
Code :
(1) Both (A) and (R) are correct and (R) is the right explanation of (A).
(2) Both (A) and (R) are correct but (R) is not the right explanation of (A).
(3) (A) is correct but (R) is not correct.
(4) (R) is correct but (A) is not correct.
Answer: 1

6. Which of the following statements is not correct relating to consumerism ?
(1) Consumerism is a manifestation of the failure of the business to guarantee and ensure consumer legitimate rights.
(2) The government does not have any role in consumer protection as it is the part of business organisations alone.
(3) The consumers should accept consumerism as a means of asserting and enjoying their rights.
(4) Consumerism evolution is not a set-back for marketing but rather points to the next stage in the evolution of enlightened marketing.
Answer: 2

7. Which one of the following is not covered in the approach adopted by “Niti Aayog” ?
(1) Five year planning approach 
(2) Three year action agenda
(3) Seven year strategy 
(4) Fifteen year vision
Answer: 1

8. Assertion (A) : Personal transactions of the owners of the business are not recorded in the books.
Reasoning (R) : According to the business entity concept, each business enterprise is considered as an accounting unit separate from owners.
Code :
(1) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(2) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(3) (A) is correct but (R) is not correct.
(4) (A) is wrong but (R) is correct.
Answer: 1

9. Which one of the following is not an example of ‘financing activities’ with reference to cash flow statement ?
(1) Repayment of bank loan
(2) Interest on debentures/Dividend paid
(3) Cash proceeds from public deposits
(4) Sale of fixed assets
Answer: 4

10. Which one of the following statements is true about estimated costs and standard costs ?
(1) Standard costs are based on scientific analysis and engineering studies while estimated costs are based on historical basis.
(2) Standard cost emphasis is on “what cost will be” while estimated cost emphasis is on “what cost should be”.
(3) Standard costs are more frequently revised compared to estimated cost.
(4) Estimated costs are more stable than standard costs.
Answer: 1

11. Which one of the following statements is not true ?
(1) An expenditure intended to benefit current year is revenue expenditure.
(2) Amount paid for acquiring goodwill is capital expenditure.
(3) Wages paid for installation of a new machine is usually debited to wages account.
(4) Revenue expenditure is not intended to benefit future period.
Answer: 3

12. X Ltd. forfeited 20 shares of Rs.10 each, Rs. 8 called up, on which John had paid application and allotment money of Rs. 5 per share, of these, 15 shares were reissued to Parker as fully paid up for Rs. 6 per share. What is the balance in the share Forfeiture Account after the relevant amount has been transferred to Capital Reserve Account ?
(1) NIL 
(2) Rs. 5 
(3) Rs. 25 
(4) Rs.100
Answer: 3

13. X and Y sharing profits in the ratio of 7 : 3, admit Z for 3/7 share in the new firm in which he takes 2/7 from X and 1/7 from Y. The new ratio of X, Y and Z will be :
(1) 7 : 3 : 3 
(2) 4 : 2 : 3 
(3) 14 : 6 : 15 
(4) 29 : 11 : 30
Answer: 4

14. Assertion (A) : A high operating ratio indicates a favourable position.
Reasoning (R) : A high operating ratio leaves a high margin to meet non operating expenses.
Code :
(1) (A) and (R) both are correct and (R) correctly explains (A).
(2) Both (A) and (R) are correct but (R) does not explain (A).
(3) Both (A) and (R) are incorrect.
(4) (A) is correct but (R) is incorrect
Answer: 3

15. The following are the two statements regarding concept of profit. Indicate the correct code of the statements being correct or incorrect.
Statement (I) : Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.
Statement (II) : Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while Statement (II) is incorrect.
(4) Statement (I) is incorrect while Statement (II) is correct.
Answer: 1

16. Which one of the following sets is incorrect to show the inter-relationships among price elasticity coefficient, change in price and change in total revenue ? 
Price elasticity       Change     Change in Total
 coefficient             in price        Revenue
(1) Zero                   ncrease       Increase
                               Decrease     Decrease
(2) Less than 1       Increase       Decrease
                               Decrease     Increase
(3) Equal to 1         Increase      No change
                              Decrease     No change
(4) More than 1     Increase      Decrease
                              Decrease     Increase
Answer: 2

17. Which one of the following is not the basic property of indifference curves ?
(1) Indifference curves have a negative slope.
(2) Indifference curves of imperfect substitutes are concave to the origin.
(3) Indifference curves do not intersect nor are they tangent to one another.
(4) Upper indifference curves indicate higher level of satisfaction.
Answer: 2

18. When labour is plotted on X-axis and capital is plotted on Y-axis and an iso-quant is prepared, then which of the following statements is/are false ?
(a) Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant.
(b) Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour.
(c) Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.
Code :
(1) (a) and (b) statements 
(2) Only (c) statement
(3) Only (a) statement 
(4) Only (b) statement
Answer: 2

19. Match the items of List - II with the items of List - I and indicate the code of correct matching.
The items relate to economies of scale/scope.
                    List - I                                            List - II
(a) Economies of scale (i) arise with lower average costs of manufacturing a product when two complementary products are produced by a single firm
(b) Internal economies (ii) Mean lowering of costs of production by producing in bulk
(c) External economies (iii) Arise when cost per unit depends on size of the firm
(d) Economies of scope (iv) Arise when cost per unit depends on the size of the industry, not the firm
Code :
     (a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (i) (ii) (iii) (iv)
(3) (ii) (iii) (iv) (i)
(4) (iv) (iii) (ii) (i)
Answer: 3

20. A firm that produces highly substitute goods can adopt which one of the following pricing strategies ?
(1) Transfer pricing 
(2) Going Rate pricing
(3) Product bundling 
(4) Full cost pricing
Answer: 2

21. In a perfectly competitive market, a firm in the long run operates at the level of output where :
(1) AC = MC when MC is lowest 
(2) MC = AR = MR when MC is lowest
(3) MR = MC 
(4) AR = MR =AC = MC
Answer: 4

22. Assignment of numerals to the objects to represent their attributes is known as :
(1) Nominal data 
(2) Ordinal data 
(3) Interval data 
(4) Ratio data
Answer: 1

23. A graph of a cumulative frequency distribution is called :
(1) Frequency polygon 
(2) Frequency curve
(3) Ogive 
(4) Pie diagram
Answer: 3

24. In the case of classification of data, the class having its upper limit is treated as the lower limit of its next class is called :
(1) Open ended class 
(2) Close ended class
(3) Exclusive class 
(4) Inclusive class
Answer: 3

25. For a standard normal probability distribution, the mean (µ) and the standard deviation (σ) are :
(1) µ=0, σ= 1 
(2) µ=16, σ=4
(3) µ=25, σ=5 
(4) µ=100, σ=10
Answer: 1

26. Match the items of List - II with the items of List - I and select the code of correct matching.
                   List - I                         List - II
(a) Standard error of mean      (i) Ha : µ1 ≠ µ2
(b) Base of point estimate of (ii) Values based on all the observations of the mean of the population the population
(c) Non-specific hypothesis    (iii) Mean of the sampling distribution of mean
(d) Parameter value of descriptive statistics (iv) Standard deviation of the sampling distribution of mean
Code :
      (a) (b) (c) (d)
(1) (iv) (iii) (i) (ii)
(2) (i) (ii) (iii) (iv)
(3) (iv) (iii) (ii) (i)
(4) (iii) (iv) (i) (ii)
Answer: 1

27. There is a very high inverse relationship between measures of ‘Overweight’ and ‘life expectancy’. Which one of the following value of the coefficient of correlation is consistent with the statement ?
(1) 0.80 
(2) 0.20 
(3) −0.20 
(4) −0.80
Answer: 4

28. Match the items of List - II with the items of List - I and select the code of correct matching.
            List - I                         List - II
(a) Chi-square Test           (i) Testing the significance of the differences of the meanvalues among more than two sample groups.
(b) ANOVA (F-test)           (ii) Testing the goodness of fit of a distribution
(c) Z - test                        (iii) Testing the significance of the difference of the mean values between two large sized samples
(d) t - test                        (iv) Testing the significance of the difference of the mean values between two small sized samples when population standard deviation is not available
Code :
     (a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iv) (iii) (ii) (i)
(3) (i) (ii) (iv) (iii)
(4) (ii) (i) (iii) (iv)
Answer: 4

29. Match the items of List - II with List - I and choose the correct code :
                List - I                 List - II
(a) Sales Executive      (i) Top- middle Management
(b) Branch Manager    (ii) Middle Management
(c) Foreman                 (iii) Lower Management
(d) Production Manager (iv) Operating Force
Code :
      (a) (b) (c) (d)
(1) (iv) (ii) (iii) (i)
(2) (ii) (iii) (iv) (i)
(3) (iii) (iv) (ii) (i)
(4) (i) (ii) (iii) (iv)
Answer: 1

30. Select the correct code of the statements being correct or incorrect.
Statement (I) : It is a significant feature of human that he plans.
Statement (II) : A plan is a trap to capture the future.
Code :
(1) Statement (I) is correct but (II) is incorrect.
(2) Statement (II) is correct but (I) is incorrect.
(3) Both the statements (I) and (II) are correct.
(4) Both the statements (I) and (II) are incorrect
Answer: 3

31. Assertion (A) : Management is a set of principles relating to its functions.
Reasoning (R) : Management is essential to run all types of organizations.
Code :
(1) (A) and (R) both are correct ; and (R) is the right explanation of (A).
(2) (A) and (R) both are correct ; but (R) is not the right explanation (A).
(3) Both (A) and (R) are incorrect.
(4) (A) is correct ; but (R) is incorrect.
Answer: 2

32. Match the items of List - II with List - I ; and choose the correct code :
                   List - I                         List - II
(Critical Control Standards)          (Critical Points)
(a) Physical standards              (i) Material cost per unit
(b) Cost standards                    (ii) Labour hours per unit of output
(c) Revenue standards            (iii) Timing of production
(d) Program standards             (iv) Average sales per customer
Code :
    (a) (b) (c) (d)
(1) (ii) (i) (iv) (iii)
(2) (ii) (i) (iii) (iv)
(3) (i) (ii) (iv) (iii)
(4) (iv) (i) (iii) (ii)
Answer: 1

33. Which among the following is not a correct statement with regard to Corporate Governance in India ?
(1) Every company must appoint an individual or firm as auditor.
(2) The independent directors must attend at least three meetings a year.
(3) One or more women directors are recommended for certain classes of companies.
(4) The maximum number of permissible directors cannot exceed 15 in a public limited company.
Answer: 2

34. The popular statement, - “if all you have is a hammer, everything looks like a nail”, is given by :
(1) A.H. Maslow (Hierarchy of Needs)
(2) Henry Fayol (Industrial and General Administration)
(3) F.W. Taylor (Scientific Management)
(4) Fredrick Herzberg (Hygiene Theory)
Answer: 1

35. Functional Leadership Theory is associated with :
(1) Hackman and Walton and McGrath
(2) Bernard and Ordway Tead
(3) Koontz and O’Donnell
(4) Alford and Beatty
Answer: 1

36. When two separate companies or two divisions within the same company agree to place both of their respective brands on a particular product or enterprise, this arrangement is termed as :
(1) Differential Branding 
(2) Cobranding
(3) Dual Branding 
(4) Both Cobranding and Dual Branding
Answer: 4

37. The tangible goods for which a consumer wants to compare quality, price and perhaps style in several stores before making a purchase are called :
(1) Convenience Goods 
(2) Shopping Goods
(3) Speciality Goods 
(4) Unsought Goods
Answer: 2

38. When a company treats each single customer as a separate segment, this is called :
(1) Niche Marketing 
(2) Nano Marketing
(3) Single Marketing 
(4) Micro Marketing
Answer: 4

39. Under which of the following conditions, the level of consumer’s involvement will not be high ?
(1) The consumer considers the amount of money involved to be large.
(2) The product is seen as having low potential for providing significant benefits.
(3) The consumer lacks information about alternatives for satisfying the need.
(4) The product has considerable social importance.
Answer: 2

40. Statement (I) : The mindset which is commonly associated with a long - ago era when the demand for goods generally exceeded the supply, and the primary focus in business was to effectively produce medium quantities of products ; finding the customers was viewed as a relatively major function.
Statement (II) : The firms with product orientation typically focus on the quality and quantity of offerings while assuming that customers will seek out and buy reasonably priced, well made products.
From the above statements indicate the correct code of being statements correct or incorrect The statements relate to concepts of marketing.
(1) Both the statements (I) and (II) are not correct.
(2) Both the statements (I) and (II) are correct.
(3) Statement (I) is correct but statement (II) is not correct.
(4) Statement (I) is not correct but statement (II) is correct.
Answer: 4

41. Match the items of List - II with List - I to identify the correct code which are related to legal forces affecting international marketers.
               List - I                           List - II
(a) Tariff                             (i) A regulation specifying the proportion of a finished product’s components and labour that must be provided by importing country.
(b) Import Quota               (ii) Tax imposed on product entering a country and used to protect domestic producers and/or raise revenue.
(c) Local-content Law       (iii) A requirement that a product contain or exclude certain ingredients or that it be tested and certified as meeting certain restrictive standards.
(d) Local-operating Law   (iv) Limiting amount of a particular product that can be brought into a country, to protect domestic industry or broadening access to its markets.
(e) Standards and             (v) A refusal to buy products from a particular company or Certification country.
(f) Boycott                        (vi) A constraint on how, when or where retailing can be conducted.
Code :
       (a) (b) (c) (d) (e) (f)
(1) (iii) (iv) (ii) (i) (vi) (v)
(2) (vi) (ii) (i) (iv) (iii) (v)
(3) (ii) (iv) (i) (vi) (iii) (v)
(4) (iv) (vi) (i) (ii) (iii) (v)
Answer: 3

42. Match the items of List - II with List - I which are related to personal selling process and identify the correct code :
         List - I                  List - II
(a) Prospecting (i) Attention, Interest, Desire, Action
(b) Preapproach (ii) Identifying Profiles, leads, Records and Qualifying capability and willingness
(c) Presentation (iii) Reduce Dissonance, Build goodwill
(d) Post sales services (iv) Information, habits, preferences
Code :
     (a) (b) (c) (d)
(1) (i) (iii) (iv) (ii)
(2) (iii) (iv) (ii) (i)
(3) (ii) (iv) (i) (iii)
(4) (iv) (iii) (ii) (i)
Answer: 3

43. Which of the following is not an approach to the Capital Structure ?
(1) Gross Profit Approach 
(2) Net Operating Income Approach
(3) Net Income Approach 
(4) Modigliani and Miller Approach  
Answer: 1

44. Which one of the following methods of Capital Budgeting assumes that cash-inflows are reinvested at the project’s rate of return ?
(1) Net Present Value 
(2) Accounting Rate of Return
(3) Internal Rate of Return 
(4) Discounted Pay Back Period
Answer: 3

45. Cost of Equity Share Capital is more than cost of Debt because :
(1) Equity shares are not easily saleable.
(2) Equity shares do not provide the fixed dividend rate.
(3) Generally the face value of equity shares is less than the face value of debentures.
(4) Equity shares have high risk than debts.
Answer: 4

46. Negative Net Working Capital implies that :
(1) Long-term funds have been used for fixed assets.
(2) Short-term funds have been used for fixed assets.
(3) Long-term funds have been used for current assets.
(4) Short-term funds have been used for current assets.
Answer: 2

47. Which of the following is an implicit cost of increasing proportion of debt of a company ?
(1) P.E. Ratio of the company would increase.
(2) Rate of return of the company would decrease.
(3) Tax-shield would not be available on new debts.
(4) Equity shareholders would demand higher return.
Answer: 4

48. Profitability Index of a Project is the ratio of present value of cash inflows to :
(1) Total cash inflows 
(2) Total cash outflows
(3) Present value of cash outflows 
(4) Initial cost minus Depreciation
Answer: 3

49. Which one of the following statements is false ?
(1) Effective dividend policy is an important tool to achieve the goal of wealth maximisation.
(2) According to Walter, the optimal payout ratio for a growth firm is 100%.
(3) MM model asserts that the value of the firm is not affected whether the firm pays dividend or not.
(4) ‘Bird-in-the-hand theory’ in reference to dividend decision has been developed by Myron Gordon
Answer: 2

50. Which one of the following statements defines the correct meaning of the term “boundary spanning” ?
(1) It refers to an obligation of an individual, firm or institution to account for its activities and accept responsibility for them.
(2) It refers to the process that helps the organization and its employees to link with their external environment through specific activities/functions.
(3) It refers to the science of morals, principles and rules of conduct. 
(4) It refers to multiculturism management.
Answer: 2

51. The VRIO framework, used in HR function in today’s era, refers to four criteria. Identify the correct code which stands as correct explanation to VRIO as proposed by Barney.
(1) Valence - Recruiting - Industrial relations - Opportunities
(2) Vision - Rewards - Improvements - Options
(3) Value - Rarity - Imitability - Organization
(4) Versatile - Resource - Information - Outsourcing
Answer: 3

52. Assertion (A) : Induction is an informal information sharing session on miscellaneous issues in an organization.
Reasoning (R) : The rationale of induction is to ensure effective integration of staff into or across the organization for their mutual benefit.
Code :
(1) Assertion (A) and Reasoning (R) both are correct and (R) is correct explanation of (A).
(2) Assertion (A) and Reasoning (R) both are correct but (R) is not the correct explanation of (A).
(3) Assertion (A) is correct statement but Reasoning (R) is an incorrect statement.
(4) Assertion (A) is an incorrect statement but Reasoning (R) is a correct statement.
Answer: 4

53. Match the items of List - II with the items of List - I pertaining to the ranking methods used in performance management systems ; and select the code of correct matching.
                 List - I                               List - II
       (Ranking methods)                (Methodology)
(a) Simple ranking             (i) Based on overall performance.
(b) Alternation ranking     (ii) Ends up with predetermined number of people in each group.
(c) Paired comparison    (iii) Based on particular trait only for quantity/quality of work.
(d) Forced distribution   (iv) Based on a trait or a set of trait and avoids central tendency.
Code :
     (a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (i) (iv) (iii) (ii)
(3) (iv) (ii) (i) (iii)
(4) (iii) (i) (ii) (iv)
Answer: 2

54. Assertion (A) : Compensation has two vital domains economic concept and psychological concept.
Reasoning (R) : Compensation basically represents an employment contract.
Code :
(1) (A) is correct and (R) is right explanation of (A).
(2) (A) is correct but (R) is not the right explanation of (A).
(3) (A) is correct but (R) is incorrect.
(4) (A) is incorrect but (R) is correct.
Answer: 2

55. Which of the following is not the primary objective of industrial relations and labour laws ?
(1) Maintaining social equity 
(2) Providing credit facilities to industries
(3) International uniformity 
(4) Promoting economic growth
Answer: 2

56. Assertion (A) : In real terms, workers’ participation in management has failed in India.
Reasoning (R) : There is lack of attitudinal change, multiplicity of unions and absence of a procedure to determine a sole bargaining agent in an organization.
Code :
(1) (A) is correct and (R) is correct explanation of (A).
(2) (A) is correct but (R) is not the correct explanation of (A).
(3) (A) is correct but (R) is incorrect.
(4) (A) is incorrect but (R) is correct
Answer: 1

57. Which one of the following is not the function of NABARD ?
(1) To provide refinance assistance by way of short term credit to state cooperative banks and sectoral rural banks, etc., approved by the RBI for some specific purposes.
(2) To undertake inspection of cooperative societies other than primary cooperative societies and RRBs.
(3) To promote research in various aspects of the problems of urban development.
(4) To subscribe to share capital or invest in securities of any institution concerned with agricultural and rural development.
Answer: 3

58. Which one of the following financial institutions co-ordinates the functions and operations of all the financial institutions into a single integrated financial structure so that each may contribute to the growth of the economy ?
(1) IFCI 
(2) UTI 
(3) IDBI 
(4) SIDBI
Answer: 3

59. Assertion (A) : The Reserve Bank of India is entrusted with the management of the public debt and issue of new loans and treasury bills on behalf of the central and state Governments.
Reasoning (R) : The Governor and the Deputy Governors of Reserve Bank of India are appointed by the Central Government.
Code :
(1) (A) is correct but (R) is not correct.
(2) (A) and (R) both are correct but (R) is not the right explanation of (A).
(3) (A) and (R) both are correct and (R) is the right explanation of (A).
(4) (A) and (R) both are not correct.
Answer: 2

60. __________ refers to the process of removing or stripping the legal status of a currency.
(1) Digitisation 
(2) Financial Inclusion
(3) Demonetisation 
(4) Micro finance
Answer: 3

61. Which one of the following is not the objective of UTI ?
(1) To mobilise savings of the community by offering savers the triple benefits of safety, liquidity and profitability of Investments.
(2) To channelise the pooled savings into productive outlets.
(3) To provide finance under hire purchase finance and housing finance to its members.
(4) To give every one a chance to indirectly own shares and securities in a large number of select companies.
Answer: 3

62. Which one of the following is the main objective of IFCI ?
(1) To offer both small and large investors the means of acquiring shares in the widening prosperity resulting from the steady industrial growth of the country.
(2) To upgrade technology, modernization and to promote marketing of products of small scale sector.
(3) To serve as the apex institution for term finance for industry with coordination, regulation and supervision of the working of other financial institution.
(4) To provide medium and long term financial assistance to industrial undertakings, particularly in those circumstances in which banking accommodation is in appropriate or resource to capital market is impracticable.
Answer: 4

63. Match the items of List - II with the items of List - I and indicate the correct code :
                  List - I              List - II
(a) Term finance            (i) Providing finance to new or existing industrial units for encouraging commercial application of technology/ expansion.
(b) Refinance                (ii) Delivering of banking services at affordable cost to the vast sections of disadvantaged and low income groups.
(c) Financial inclusion (iii) Providing replenishment finance to eligible institutions for their loans to industrial concerns.
(d) Venture capital       (iv) Providing finance to the borrowers for expansion and modernization of plant and equipment.
Code :
      (a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (i) (ii) (iv) (iii)
(3) (iv) (iii) (ii) (i)
(4) (iv) (iii) (i) (ii)
Answer: 3

64. Assertion (A) : An export processing zone is different from free trade zone as it promotes units primarily devoted to exports.
Reasoning (R) : Goods imported to a free trade zone may be re-exported without any processing, in the same form. But, goods exported by units in an EPZ are expected to have undergone some value addition by manufacturing/processing.
Code :
(1) (A) is correct and (R) is correct explanation of (A).
(2) (A) is correct but (R) is not the correct explanation of (A).
(3) (A) is correct but (R) is incorrect.
(4) (A) is incorrect but (R) is correct.
Answer: 1

65. Match the items of List - II with the items of List - I relating to liberalisation of agricultural trade.
             List - I                                                      List - II
(a) Tariffication                    (i) They have demonstrably adverse effects on other member countries.
(b) Prohibited subsidies      (ii) They act on goods which are contingent upon export performance.
(c) Actionable subsidies     (iii) Replacement of existing non-tariff restrictions.
(d) Non-actionable subsidies (iv) For industrial research in disadvantaged regions.
Code :
      (a) (b) (c) (d)
(1) (ii) (iii) (i) (iv)
(2) (iv) (i) (ii) (iii)
(3) (iii) (ii) (i) (iv)
(4) (ii) (iv) (iii) (i)
Answer: 3

66. Match the items of List - II and with the items of List - I relating to WTO impact :
            List - I               List - II
(a) NAMA (i) Liberalisation of international investments.
(b) GATTS (ii) Includes industrial goods, textile, jewellery, fish and fisheries product manufacturing industries.
(c) TRIMs (iii) Liberalisation of trade in goods and services.
(d) TRIPs (iv) Provides monopoly power to owners of intellectual property.
Code :
      (a) (b) (c) (d)
(1) (ii) (i) (iv) (iii)
(2) (iv) (ii) (iii) (i)
(3) (ii) (iii) (i) (iv)
(4) (iii) (ii) (iv) (i)
Answer: 3

67. Indicate the correct code of the following statements being correct or incorrect. The statements relate to the type of transactions recorded in the current/capital accounts of the Balance of Payments.
Statement (I) : The capital account consists of long-term capital transactions only.
Statement (II) : The current account includes all transactions which give rise to or use up national income.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while Statement (II) is incorrect.
(4) Statement (I) is incorrect while Statement (II) is correct.
Answer: 4

68. Select the correct code of the following statements being correct or incorrect.
Statement (I) : International liquidity encompasses the international reserves only.
Statement (II) : International liquidity covers only official holdings of gold, foreign exchange, SDRs and reserve position in the IMF available for the settlement of the international transactions.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while Statement (II) is incorrect.
(4) Statement (I) is incorrect while Statement (II) is correct.
Answer: 4

69. Match the items of List - II with the items of List - I and select the code of correct matching.
The items relate to International Trade Theories.
                  List - I                             List - II
(a) Comparative Cost Theory    (i) Adam Smith
(b) Opportunity Cost Theory     (ii) Gottfried Haberler
(c) Factor Endowment Theory (iii) David Ricardo
(d) Absolute Cost Theory        (iv) Eli Heckscher and Bertil Ohlin
Code :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iii) (ii) (iv) (i)
(3) (iv) (iii) (ii) (i)
(4) (i) (iv) (iii) (ii)
Answer: 2

70. Which one of the following is not the guiding principle of the World Bank regarding it’s lending operations ?
(1) Proper assessment of the repayment prospects of loans.
(2) Lending should be only for specific projects which are economically and technically sound and of a high priority nature.
(3) The lending should be to enable a country to meet foreign exchange content of the project cost.
(4) The bank does expect the borrowing country to spend the loan in a particular country.
Answer: 4

71. Total return on a security is equal to the following :
(1) Periodic cash receipts + Capital gains / Purchase Price of the security
(2) Periodic cash receipts + Capital gains / Current Market Price of the security
(3) Periodic cash receipts /Current Market price of the security
(4) Periodic cash receipts − Capital gains / Purchase Price of the security
Answer: 1

72. Risk of a portfolio can be minimised by which one of the following ?
(1) Combining two securities having perfect positive correlation in their expected returns.
(2) Combining two securities having perfect negative correlation in their expected returns.
(3) Combining two securities having partially positive correlation in their expected returns.
(4) Combining two securities having partially negative correlation in their expected returns.
Answer: 2

73. The certificate which evidences an unsecured corporate debt of short-term maturity, is known as :
(1) Certificate of Deposit 
(2) Short-term loan certificate
(3) Treasury Bill 
(4) Commercial paper
Answer: 4

74. Which of the following statements are false ? Indicate the correct code.
(a) Grey market is a market for dealing in listed securities.
(b) OTCEI is mainly intended for big investors.
(c) Insider Trading is legally permitted in the capital market.
(d) The device adopted to make profit out of the differences in prices of a security in two different markets is called ‘arbitrage’.
Code :
(1) (a), (b), (c) 
(2) (a), (b), (d)
(3) (a), (b), (c), (d) 
(4) (b), (c), (d)
Answer: 1

75. Which of the following statements are false ? Indicate the correct code.
(a) Share capital issued by a company for the first time is known as venture capital.
(b) All Venture Capital Funds in India are promoted by the Government.
(c) In addition to capital, venture capitalists provide managerial and technical support also to the assisted firms.
(d) Benefits from venture capital financing can be realised in long run only.
Code :
(1) (a), (b) and (d) 
(2) (a) and (b)
(3) (b), (c) and (d) 
(4) (c) and (d)
Answer: 2

76. Match the items of List - II with the items of List - I and select the correct code :
                                            List - I List - II
(a) Liquidity Risk        (i) Risk related to purchasing power of Income.
(b) Business Risk      (ii) Risk related to Firm’s capital structure.
(c) Financial Risk     (iii) Risk related to inability to pay its dues on time.
(d) Inflation Risk      (iv) Risk related to fluctuation in profits.
Code :
(a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (i) (iv) (iii) (ii)
(3) (iii) (ii) (iv) (i)
(4) (iii) (iv) (ii) (i)
Answer: 4

77. Statement (I) : Designing a distribution system for a service (for-profit or non-business context) involves to select the parties only through which ownership will pass.
Statement (II) : The ownership channel for most of the services is long and quite complex because of inseparability characteristic.
Statement (III) : Short channels usually mean more control on the part of the seller. Identify the correct code of being the statements correct or incorrect. 
These statements relate to channel strategies of products/services.
(1) Statements (I) and (II) are correct but (III) is not correct.
(2) Statements (I) and (III) are correct but (II) is not correct.
(3) Statements (I) and (II) are not correct but (III) is correct.
(4) Statements (I), (II) and (III) all are not correct.
Answer: 3

78. An enormous collection of data on various topics from a variety of internal and external sources, compiled by a firm for its own use or for use by its clients, is called :
(1) Data-base 
(2) Data warehouse
(3) Data mining 
(4) M.I.S.
Answer: 2

79. Statement (I) : A form of non-store retailing that uses advertising to contact consumers who, in turn, purchase products without visiting a retail store is called Direct selling.
Statement (II) : A form of non-store retailing in which personal contact between a sales person and a consumer occurs away from a retail store is called Direct Marketing. 
In the light of above statements, identify the correct code of statements being correct or incorrect.
(1) Statement (I) is correct but Statement (II) is not correct.
(2) Statement (I) is not correct but Statement (II) is correct.
(3) Both the statements are correct.
(4) Both the statements are not correct.
Answer: 4

80. 34% of the customers who fall in one of the categories of diffusion process who are deliberate customers to accept an innovation just before the average adopter in a social system. Such customers who are above average in social and economic measures, rely quite a bit on advertisements and salesmen are known as :
(1) Early Adopters 
(2) Early Majority 
(3) Late Majority 
(4) Late Adopters
Answer: 2

81. The G. E. Business Model is explained on which one of the following parameters ?
(1) Market Attractiveness and Business Position.
(2) Business Attractiveness and Market Position.
(3) Industry Growth rate and Company’s Market share.
(4) Company’s Growth rate and Industry’s Position.
Answer: 1

82. A reduction from the list price that is offered by a seller to buyers in payment for marketing functions the buyers will perform is known as :
(1) Trade Discount 
(2) Functional Discount
(3) Cash Discount 
(4) Both Trade and Functional Discount
Answer: 4

83. Match the items of List - II with the items of List - I relating to Personnel Management (PM) and Human Resource Management (HRM) ; and select the code of correct matching.
                   List - I                                 List - II
(a) Focus of PM                     (i) Development attitude by making people contribute their best.
(b) Focus of HRM                  (ii) Exercising it as a functional area of management.
(c) Philosophy of PM            (iii) Exercising it as humane management.
(d) Philosophy of HRM         (iv) Profit maximization by controlling people.
  Code :
      (a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (iii) (ii) (i) (iv)
(3) (iv) (i) (ii) (iii)
(4) (i) (iii) (iv) (ii)
Answer: 3

84. Select the correct code of the following statements being correct or incorrect.
I Strategic HRM focuses on specific organizational intentions about what needs to be done while HR strategies focus on long-term issues only.
II Strategic HRM focuses on macro concerns such as structure and culture while HR strategy focuses on specific issues assigned.
III Human Resource strategy decisions are derived from strategic HRM.
Code :
(1) Statements I and II are correct while III is incorrect.
(2) Statements II and III are correct while I is incorrect.
(3) Statements I and III are correct while II is incorrect.
(4) All the statements are correct.
Answer: 2

85. Which of the following code represents the full form of the term “BARS” in performance management systems ?
(1) Business Appraisal and Rating Systems.
(2) Balanced Assessment Reviewing Scorecard.
(3) Behaviourally Anchored Rating Scale.
(4) Benchmarking Appraisal Reviewing Strategy.
Answer: 3

86. Match the items of List - II with the items of List - I relating to training, and select the code of correct matching.
               List - I                            List - II
(a) Andragogy                        (i) Strategies or styles of instructions
(b) Pedagogy                         (ii) Ultimate knowledge level with which trainee leaves the training sessions
(c) Terminal behaviour         (iii) Lack of commitment of management and scarcity of resources in training
(d) Training impediments     (iv) Art and Science of training the adults
Code :
     (a) (b) (c) (d)
(1) (i) (iv) (iii) (ii)
(2) (ii) (iii) (i) (iv)
(3) (iv) (i) (ii) (iii)
(4) (iii) (ii) (iv) (i)
Answer: 3

87. Which of the following statements does not stand as a principle of compensation administration ?
(1) An enterprise should have a clear -cut plan to determine differential pay level in terms of divergent job requirements.
(2) People and jobs should never be mingled.
(3) The compensation system should be designed with subjectivity with respect to individual skill sets exercised from time to time.
(4) There should be established wage grievance handling procedures.
Answer: 3

88. Match the items of List - II with the items of List - I relating to industrial relations and select the code of correct matching.
                List - I                                                              List - II
(a) Healthy labour–management relations (i) Industrial Disputes Act
(b) Industrial Peace Law                             (ii) Guiding principles for a grievance procedure
(c) Industrial Democracy                            (iii) Workers’ participation in management
(d) National Commission on Labour, 1969 (iv) Voluntary arbitration and responsible trade union
Code :
      (a) (b) (c) (d)
(1) (iv) (i) (iii) (ii)
(2) (ii) (iii) (iv) (i)
(3) (iii) (i) (iv) (ii)
(4) (ii) (iv) (i) (iii)
Answer: 1

89. In recent years which among the following countries has been the largest source of foreign investment in India ?
(1) Australia 
(2) Japan 
(3) China 
(4) Mauritius
Answer: 4

90. Assertion (A) : The Government of India has been opening up domestic market to foreign players in baby steps.
Reasoning (R) : Allowing foreign firms free play in India’s retail sector has always been a political hot potato.
Code :
(1) (A) and (R) both are correct ; and (R) is the right explanation of (A).
(2) (A) and (R) both are correct ; but (R) is not the right explanation of (A).
(3) (A) and (R) both are incorrect.
(4) (A) is correct ; but (R) is incorrect.
Answer: 2

91. Select the correct code of the following statements being correct or incorrect.
Statement (I) : A Global Depositary Receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company.
Statement (II) : A GDR is very similar to American Depositary Receipt (ADR)
Statement (III) : GDRs are called EDRs when private markets are attempting to obtain Euros.
Code :
(1) Statements (I), (II) and (III) are correct.
(2) Statements (I) and (II) are correct but (III) is incorrect.
(3) Statements (I) and (III) are correct but (II) is incorrect.
(4) Statements (II) and (III) are correct but (I) is incorrect.
Answer: 1

92. In December 1999, European commission members signed a treaty that committed them to adopting a common currency known as Euro. This is better known as :
(1) Treaty of Rome 
(2) Treaty of Maastricht
(3) Treaty of Lisbon 
(4) Treaty of London
Answer: NIL

93. Select the correct code of the following statements being correct or incorrect.
Statement (I) : The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.
Statement (II) : An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.
Code :
(1) Statement (I) is correct but (II) is incorrect.
(2) Statement (II) is correct but (I) is incorrect.
(3) Both statements (I) and (II) are correct.
(4) Both statements (I) and (II) are incorrect.
Answer: 3

94. Which among the following is not a correct statement regarding patent ?
(1) A patent is a legal protection granted for an invention that is new, non-obvious and useful. 
(2) The patent grants the patent holder the exclusive right to make use or sell the patented products or process.
(3) The exclusive purpose of the patent system is to benefit the patent holder.
(4) The Indian Patent Act, 1970, was amended and made effective from January 1, 2005.
Answer: 3

95. Which one of the following is agricultural income under the Income Tax Act, 1961 ?
(1) Interest on arrears of rent in respect of agricultural land.
(2) Interest received by a money-lender in the form of agricultural produce.
(3) Income from sale of trees of forest which are of spontaneous growth and in relation to which forestry operations alone are performed.
(4) Interest on capital received by a partner from the firm engaged in agricultural operations.
Answer: 4

96. Under the Income Tax Act, 1961 “block of assets” for the purpose of charging depreciation means :
(1) Value of all the assets after depreciation
(2) Value of all tangible assets after charging depreciation
(3) Value of all those assets to which one rate of depreciation is applicable
(4) Gross value of machinery and plant less accumulated depreciation
Answer: 3

97. The maximum amount of exemption of compensation received at the time of voluntary retirement U/S 10(10C) of the Income Tax Act, 1961, is :
(1) Rs. 1,00,000 
(2) Rs. 2,50,000 
(3) Rs. 5,00,000 
(4) Rs. 10,00,000
Answer: 3

98. Which one of the following statements is not correct with reference to the assessment of firms ?
(1) All partnership firms formed under the Indian Partnership Act, 1932, are assessed as firms under the Income Tax Act, 1961.
(2) Income of a firm is taxable at a flat rate of 30% without any exemption.
(3) Partners’ share in the income of a firm is not chargeable to tax in the hands of partners.
(4) Remuneration paid to partners of a firm (assessed as such) is allowed as deduction subject to statutory limit.
Answer: 1

99. The due date of first installment of advance tax by assessees other than companies is :
(1) 15th April 
(2) 15th June
(3) 15th September 
(4) 15th December
Answer: 2

100. Which one of the following items is not allowed as deduction while computing income from business and profession ?
(1) Fees paid to the lawyer for drafting partnership deed
(2) Loss due to embezzlement by an employee
(3) Legal expenses paid to protect the building of the business
(4) Cost of installing a new telephone
Answer: 1

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