Mission Ac Saad Test

MISSION AC SAAD TEST
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MISSION AC SAAD
TEST SERIES
TEST NO – 01 ENGLISH SYNOPSIS
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MISSION AC SAAD TEST SERIES -2024
1. The famous definition of management ―Management is what a manager does‖ is given by
a) Peter F. Drucker
b) Henry Fayol
c) Louis A. Allen
d) F.W. Taylor
Ans : C
Explanation:
 Louis Allen‗s definition of management is one of the best, shortest, and sweetest. According to him
―Management is what a manager does.‖
Definitions of Management by Different Authors and Thinkers
 According to Frederick Winslow Taylor (1856-1915), – ―Management is the art of knowing what you
want to do and then seeing that you do it in the best and the cheapest way.―
 According to George R. Terry (1909-1979), ―Management is a distinct process consisting of planning,
organizing, actuating and controlling, performed to determine and accomplish the stated objective by
the use of human beings and other resources.‖
 One popular definition of management by Mary Parker Follett (1868-1933). ―Management is the art
of getting things done through people.‖
 Henri Fayol (1841-1925) – ―Management is to forecast, to plan, to organize, to command, to co-
ordinate and control activities of others.‖
 Koontz O Donnel – ―Management is the art of getting things done through and with people in formally
organized groups.‖
Additional information
Nature of Management:
 Universal Process: Wherever there exists human pursuit, there exists management. Without effective
management, the intentions of the organisation cannot be accomplished.
 The factor of Production: Equipped and experienced managers are necessary for the utilisation of
funds and labour.
 Goal-Oriented: The most significant aim of all management pursuit is to achieve the purposes of a
firm. The aims must be practical and reachable.
 Supreme in Thought and Action: Managers set achievable goals and then direct execution on all
aspects to achieve them. For this, they need complete assistance from middle and lower degrees of
management.
 The system of authority: Well-defined principles of regulation, the regulation of proper power and
efficiency at all degrees of decision-making. This is important so that each self must perform what is
required from him or her and to whom he must report.
 Profession: Managers require to control managerial expertise and education, and have to adhere to a
verified law of demeanour and stay informed of their human and social responsibilities.
 Process: The management method incorporates a range of activities or services directed towards an
object.
Significance of Management:
 Achieving Group Goals: Management encourages collaboration and coordination amongst workers. A
general control must be provided to the organisational and personal objectives in order to favourably
accomplish the aims.
 Increases Efficiency: Management improves productivity by managing resources in a reliable
conceivable way in order to decrease cost upscale potency.
 Creates Dynamic organisation: Management undertakes the conditions by assuring that these
variations are well accepted privately and that objection to change is controlled.
 Achieving personal objectives: Management promotes leadership and furnishes motivation to the
employees to operate effectively in order to accomplish their personal aims while working towards the
organisational goals.
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 Development of Society: Management helps in the enhancement of community by manufacturing
reliable quality commodities, establishing employment chances and fostering innovative technologies.
2. Match the following : Match the following :

List – I List – II
A. Henry L. Gantt i. Kanban approach
B. Clayton Paul ii. Theory Z Alderfer
C. Taichi Ohno iii. ERG theory
D. William Ouchi iv. Task and bonus plan
Codes :
(a) (b) (c) (d)
a) (ii) (iii) (iv) (i)
b) (iv) (iii) (i) (ii)
c) (iv) (i) (ii) (iii)
d) (iii) (i) (iv) (ii)
Ans : B
Explanation:
 Henry L. Gantt - Task and bonus plan
 Clayton Paul Alderfer - ERG theory
 Taichi Ohno - Kanban approach
 William Ouchi - Theory Z Alderfer
Henry L. Gantt -Task and bonus plan
 Gantt Task Bonus Plan is a wage incentive method of rewarding the employees who outperform the
expected set output by the organization. In this case, high task efficiency is maintained by providing a
bonus expressed in percentage form as a recompense for producing extra above the setstandard output.
 Gantt Task Bonus Plan sets a standard time as a benchmark against completion of a task based on a
careful time and motion study.
 The employee‘s actual performance is compared against the standard time to determine his efficiency
and make the payments as supposedly.
ERG theory by Clayton Paul
 Definition: Alderfer‘s ERG Theory is the extension of Maslow‘s Needs Hierarchy, wherein the
Maslow‘s five needs are categorized into three categories, Viz. Existence Needs, Relatedness Needs,
and Growth Needs.
Alderfer‘s ERG theory, which comprises of the condensed form of Maslow‘s needs.
Alderfer‘s ERG Theory

 Existence Needs: The existence needs comprises of all those needs that relate to the physiological and
safety aspects of human beings and are a prerequisite for the survival. Thus, both the physiological and
safety needs of Maslow are grouped into one category because of their same nature and a similar impact
on the behavior of an individual.
 Relatedness Needs: The relatedness needs refer to the social needs, that an individual seeks to establish
relationships with those for whom he cares. These needs cover the Maslow‘s social needs and a part of
esteem needs, derived from the relationship with other people.
 Growth Needs: The growth needs cover Maslow‘s self-actualization needs as well as a part of esteem
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needs which are internal to the individual, such as a feeling of being unique, personnel growth, etc.
Thus, growth needs are those needs that influence an individual to explore his maximum potential in the
existing environment.
Kanban approach
 Kanban is an inventory control system used in just-in-time (JIT) manufacturing to track production
and order new shipments of parts and materials.
 Kanban approach was developed by Taiichi Ohno,
 One of the main goals of kanban is to limit the buildup of excess inventory at any point on the
production line.
 Kanban also strives to limit bottlenecks by promoting communication and information sharing between
individuals and departments.
 Successful implementation of kanban may lead to reduced expenses, greater customer satisfaction, more
efficient processes, and minimized risk due to unforeseen problems.
William Ouchi - Theory Z
 According to Ouchi, the benefits of using Theory Z include reducing employee turnover, increasing
commitment, improving morale and job satisfaction, and drastically increasing productivity.
To realize these benefits, he argued that an organization should have the following:
 A Strong Company Philosophy and Culture: The company philosophy and culture needs to be
understood and embodied by all employees, and employees need to believe in the work they're doing.
 Long-Term Staff Development and Employment: The organization and management team has
measures and programs in place to develop employees. Employment is usually long-term, and
promotion is steady and measured. This leads to loyalty from team members.
 Consensus in Decisions: Employees are encouraged and expected to take part in organizational
decisions.
 Generalist Employees: Because employees have a greater responsibility in making decisions, and
understand all aspects of the organization, they should be "generalists." However, employees are still
expected to have specialized career responsibilities.
 Concern for the Happiness and Well-Being of Workers: The organization shows sincere concern for
the health and happiness of its employees, and for their families. It puts measures and programs in place
to help foster this happiness and well-being.
 Informal Control With Formalized Measures: Employees are empowered to perform tasks the way
they see fit, and management is quite "hands off." However, there should be formalized measures in
place to assess work quality and performance.
 Individual Responsibility: The organization recognizes the contributions of individuals, but always
within the context of the team as a whole.
3. When actual achievement is compared with the job objectives, it is called

a) Job evaluation
b) Job condition
c) Job performance
d) Job description
Ans : C
Explanation:
 The process of actual achievements compared with the objective of the job is called job performance.
 Job performance refers to how well someone fulfills the duties and objectives of their job. It's about
comparing what is achieved with what was expected.
 Job evaluation focuses on the worth of a job relative to other jobs within an organization.
 Job conditions are the environmental aspects of a job, such as salary, benefits, and work-life balance.
 Job description outlines the tasks, responsibilities, and skills required for a particular job.
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Job evaluation
 Job evaluation is a systematic process used by organizations to assess the relative worth of different jobs
within their structure. It involves analyzing various factors to determine appropriate compensation levels
and job classifications. Here's a breakdown of the key points:
Methods:
There are several job evaluation methods, but some of the most common include:
 Ranking Method: Jobs are ranked from most to least valuable based on overall impression.
 Job Classification Method: Jobs are grouped into pre-defined classes based on similar characteristics.
 Point-Factor Method: Points are assigned to different job factors, and the total score determines the
job's worth.
 Factor-Comparison Method: Jobs are compared to benchmark jobs with predetermined point values for
each factor.
 Market pricing Method: also known as market analysis or benchmarking, is a method used in job
evaluation that focuses on external data to determine compensation. It's a complementary approach to
traditional job evaluation methods that rely on internal factors.
A job description
 A job description is a document that outlines the duties, responsibilities, qualifications, and requirements
of a specific job role within an organization.
 It typically includes details such as job title, job summary, essential functions, qualifications, skills, and
sometimes reporting relationships. It serves as a guideline for both employers and employees to
understand the expectations and requirements associated with a particular position.
Job condition
 Job conditions refer to the environmental aspects of a job, encompassing various factors that influence
how you experience the work you do
 "Job condition" typically refers to the overall state or circumstances of a particular job or work
environment.
 It encompasses factors such as the physical environment, safety conditions, equipment availability,
workload, scheduling, and other elements that can affect an individual's ability to perform their job
effectively.
 Assessing job conditions is important for ensuring employee well-being, productivity, and job
satisfaction. It can also involve considerations of workplace policies, culture, and organizational
dynamics that impact the overall work environment.
4. Effective leader is an individual who influences his

a) Mentors
b) Co-workers
c) Followers
d) Other leaders
Ans : C
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Explanation :
 Effective leader is an individual who influences his Followers.
 According to John P. Kotter Leadership is, most fundamentally, about changes. What leaders do is
create the systems and organizations that managers need, and, eventually, elevate them up to a whole new
level or change in some basic ways to take advantage of new opportunities.
Qualities of an effective leader
 Self-awareness. One often overlooked quality in leadership discussions is self-awareness.
 Credibility
 Relationship building
 Bias for action
 Humility
 Empowerment of team members. ...
 Authenticity
 Consistency
5. ――Exports are per se good and imports are per se bad‖ is related to
a) Theory of Mercantilism
b) Theory of Absolute Advantage
c) Theory of Comparative Advantage
d) Heckscher-Ohlin Theory
Ans : A
Explanation:
 The statement "exports are per se good and imports are per se bad" suggests a belief in the theory of
mercantilism.
 Mercantilism is an economic theory that emphasizes self-sufficiency through a favorable balance of
trade.
 Mercantilist policies focus on the accumulation of wealth and resources while maintaining a positive
trade balance with other countries. By maximizing exports and minimizing imports, mercantilism is also
viewed as a form of economic protectionism.
Theory of Absolute Advantage
 Absolute advantage is when a producer can provide a good or service in greater quantity for the same
cost, or the same quantity at a lower cost, than its competitors.
 A concept developed by Adam Smith, absolute advantage can be the basis for large gains from trade
between producers of different goods with different absolute advantages
Assumptions of the Absolute Advantage Theory
 Smith assumed that the costs of the commodities were computed by the relative amounts of labor
required in their respective production processes.
 He assumed that labor was mobile within a country but immobile between countries.
 He took into consideration a two-country and two-commodity framework for his analysis.
 He implicitly assumed that any trade between the two countries considered would take place if each of
the two countries had an absolutely lower cost in the production of one of the commodities.
Theory of Comparative Advantage
 Comparative advantage is an economic theory stating that countries, businesses, and manufacturers who
produce goods and services at a lower opportunity cost have the edge over others. The main purpose of
this theory is to provide the maximum benefit possible by producing the right combination of goods.
 Comparative advantage is an economy's ability to produce a particular good or service at a lower
opportunity cost than its trading partners.
 The theory of comparative advantage introduces opportunity cost as a factor for analysis in choosing
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between different options for production.
 Comparative advantage suggests that countries will engage in trade with one another, exporting the
goods that they have a relative advantage.
 There are downsides to focusing only on a country's comparative advantages, which can exploit the
country's labor and natural resources.
 Absolute advantage refers to the uncontested superiority of a country to produce a particular good
better.
Heckscher-Ohlin Theory
 Heckscher-Ohlin's theory is based on the idea that countries have different resources. These resources
can be things like land, labour, and capital (which includes things like machines and factories).
 The theory suggests that countries tend to export (sell to other countries) the goods that use their
abundant resources and import (buy from other countries) the goods that use their scarce resources.
The Heckscher-Ohlin's theory is based on the following assumptions:
 Countries are endowed with different factors of production, such as labour, land, and capital.
 Factors of production are mobile within a country but not between countries.
 Goods are produced using different combinations of factors of production.
 Countries that use their abundant factors of production intensively tend to specialise in producing goods.
6. The most significant management skills are

a) Technical, Human and Conceptual
b) Technical, Behavioral and Conceptual
c) Human, Conceptual and Systematic
d) Technical, Human and Cognitive
Ans : A
Eplanation:
 Managerial skills fall into three basic categories: technical, human relations, and conceptual skills.
Specialized areas of knowledge and expertise and the ability to apply that knowledge make up a
manager's technical skills.
 Management skills can be defined as a particular set of capabilities someone in a management position
should possess to run a business department effectively.
Top 8 managerial skills all managers need
 Communication skills- Successful managers need good communication skills — both verbal and
written.
 Technical skills - Technical skills refer to the knowledge and proficiency in performing specific
methods, procedures, and processes. It involves knowing how to use particular tools, techniques, and
software to achieve the best results.
 Decision-making skills - Managers need to be able to make decisions that‘ll benefit the business as a
whole and help it attain its goals. This may sometimes involve tough choices, such as letting employees
go who aren‘t benefiting the company, scrapping a product line, and more.
 Problem-solving skills - Problems often arise in the business world. From a problem with a supplier or
a customer to a problem with a production order, many issues will inevitably happen. An excellent
manager knows how to identify these problems and resolve them before any damage can be done.
 Organisational skills -Managers must be excellent at organising their duties, meetings, and deadlines to
ensure all tasks are completed on time.
 Motivational skills - Motivating team members can make a huge difference in the long run. When
subordinates respect their managers and trust them, it creates a positive work environment.
 Leadership skills - A leader is someone who not only gives instructions but also works alongside their
subordinates to achieve maximum success. They provide guidance, offer helpful feedback, and do some
of the heavy lifting themselves.
 Conceptual skills - The ability to see the ―big picture‖ is essential in any business setting and that‘s
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why it‘s one of the top managerial skills. Conceptual skills help managers achieve this.
7. Identify the sequence through which ‗Active Listeners‘ constantly cycle through
i. Interpreting
ii. Sensing
iii. Responding
iv. Evaluating
Codes :
a) ii iii iv i
b) ii iv i iii
c) i ii iii iv
d) iv ii iii i
Ans : B
Explanation:
 The sequence of interpreting, sensing, responding, and evaluating reflects the iterative and dynamic
nature of active listening.
More information
 Sensing: This is the initial stage where the active listener pays full attention to the speaker. They focus
on both verbal and nonverbal cues, like body language and tone of voice.
 Evaluating: The listener doesn't just passively accept what they hear. They analyze the information,
considering its validity, logic, and potential biases.
 Interpreting: The listener processes the information received, trying to understand the speaker's
message beyond just the words themselves. They consider the context, emotions, and possible
underlying meaning.
 Responding: This is the final stage where the listener provides feedback to the speaker. This can
involve verbal responses like asking clarifying questions, summarizing what they heard, or offering
their own perspective. However, it can also include nonverbal cues like nodding or maintaining eye
contact to show they're engaged.
8. ―Green washing‖ means

a) Transforming products to be more ethical
b) Making a product appear more ethical than it really is
c) Converting the company to green production methods
d) Convincing customers to buy ethically
Ans : B
Explanation:
 Greenwashing is where companies make misleading or unsubstantiated claims about products or
activities in order to appear more environmentally friendly than they really are.
 Greenwashing is a term used to describe a false, misleading or untrue action or set of claims made by an
organization about the positive impact that a company, product or service has on the environment.
More information
Green washing
 Greenwashing describes deceptive marketing and advertising practices that make a company or product
appear more environmentally friendly than it truly is. Companies engage in greenwashing to capitalize
on the growing consumer demand for sustainable products and practices.
Greenwashing Techniques:
 Vague Environmental Claims: Using ambiguous terms like "eco-friendly" or "natural" without clear
explanation can be misleading.
 Partial Information: Highlighting positive environmental aspects while downplaying negative ones
creates an unbalanced picture.
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 Misleading Imagery: Using visuals of nature or sustainability symbols that don't reflect the product's
actual environmental impact.
 Irrelevant Certifications: Using irrelevant or unsubstantiated environmental certifications to create a
false impression of eco-friendliness.
Motives for Greenwashing:
 Boost Sales: Companies may use greenwashing to attract environmentally conscious consumers and
gain a competitive advantage.
 Enhance Brand Image: Greenwashing can be a strategy to portray a company as environmentally
responsible, deflecting criticism, and improving brand reputation.
9. Ensuring a fair balance between an employee‘s contribution to the job and the rewards received in
return from that job is the essence of
a) Equity theory
b) Expectancy theory
c) Agency theory
d) Contingency theory
Ans : A
 This theory simply means that all the workers in the organization should be treated equally, then only
they will be motivated& thereby work efficiently & effectively for attaining organizational goals.
Equity theory
 People develop beliefs about what is a fair reward for one' job contribution - an exchange
 People compare their exchanges with their employer to exchanges with others-insiders and outsiders
called referents
 If an employee believes his treatment is inequitable, compared to others, he or she will be motivated to
do something about it -that is, seek justice.
This Theory show:
 Inputs: Inputs include all the rich and diverse elements that employees believe they bring or contribute
to the job - thei. education, experience, effort, loyalty, commitment.
 Outcomes: Outcomes are rewards they perceive they get from their jobs and employers outcomes
include- direct pay and bonuses, fringe benefit, job security, social rewards and psychological.
 Over rewarded: if employees fell over-rewarded equity theory predicts then they will feel an
imbalance in their relationship with their employee and seek to restore that balance.
 Equity: if employees perceive equity then they will be motivated to continue to contribute act about the
same level.
 Unrewarded: unrewarded who feel they have been unrewarded and seek to reduce their feeling in
equity through the same types of strategies but same of this specific action are now reverse.
Expectancy Theory
 The expectancy theory was developed by Victor Vroom, business school professor at the Yale School of
Management, in 1964. It states that the "intensity of work effort depends on the perception that an
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individual's effort will result in the desired outcome."
 Simply put, people work harder when they believe increasing their efforts will improve their
performance and lead to rewards. Employees are motivated when they believe:
o Their work contributes to a larger goal or value
o They're competent at the work
o They'll be rewarded for their efforts
 The expectancy theory emphasizes the connection between effort, rewards, and goals. People are
motivated to work and contribute when they believe they'll achieve a positive outcome and be rewarded
for their efforts.
Elements Of Expectancy Theory
 The expectancy theory hinges on three elements:
 Expectancy
 Instrumentality
 Valence
Expectancy
 Expectancy is the belief that increased effort put into a task will result in the desired outcome. This may
be influenced by the individual's confidence and the perceived difficulty of the desired goal. Three
factors needed to manage expectancy are:
 Perceived goal difficulty: The perceived difficulty of a goal influences how much effort you put in
and thus the eventual performance and outcome.
 Confidence: A person's belief in their ability to complete a task significantly influences effort,
performance, and eventual outcome.
 Control: This can also be called authority levels. The level of control employees have over their roles
can influence their effort.
Instrumentality

Instrumentality is the belief that you'll be rewarded if you meet the goal expectations. The
instrumentality element at work is the belief that the rewards depend on each person's job performance
and effort.
 For instrumentality to increase motivation, managers should follow these guidelines:
 Communicate the rewards employees can expect to receive
 Define clear expectations about the reward
 Build trust and motivation by keeping your word and giving rewards when they're due
Valence
 Valence is how much an individual values the reward. It's how important the reward is to you. This
typically depends on the employee‘s individual needs, goals, preferences, experience, and background.
Contingency theory
 The contingency theory of leadership states that effective leadership is contingent upon the situation at
hand. Essentially, it depends on whether an individual's leadership style befits the situation. According
to this theory, someone can be an effective leader in one circumstance and an ineffective leader in
another.
 What does the contingency theory of leadership focus on?
 Firstly, the contingency theory of leadership focuses on leadership styles. To apply this theory or any of
its models, leaders must be aware of their own leadership style as well as their strengths and
weaknesses.
Some Of The Leadership Styles Include:
 Delegating style: Leaders who easily delegate goals, projects, and tasks to team members
 Participating style: Leaders who share ideas to motivate their team members, gain buy-in, and help
them build confidence and autonomy
 Selling style: Leaders who "sell" their instructions and tasks to team members who may need extra
motivation
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 Telling style: Leaders who delegate and supervise their team members who may lack experience or
confidence in their roles
 Supportive style: Leaders who consider their team members' personal preferences and treat well-being
as important as productivity
 Participative style: Leaders who work alongside their team and ask for input or feedback before
making decisions
 Directive-clarifying style: Leaders who give explicit tasks and instructions
 Achievement-oriented style: Leaders who set high expectations and goals for their team and encourage
autonomy and independence
 Autocratic style: Leaders who make decisions independently
 Consultative style: Leaders who consult their team members but ultimately make decisions
independently
 Collaborative style: Leaders who make decisions democratically
10. A group of customers who share a similar set of needs and wants are called
a) Niche marketing
b) Market segment
c) Micro marketing
d) Green marketing
Ans : B
Explanation:
 A market segment consists of a group of customers who have similar needs and wants. It is the
marketer's goal to identify the appropriate subgroups of consumers. It is possible to segment consumers
based on demographic, geographic, psychographic, and behavioral factors.
Niche marketing
 A niche market is a specialized segment of a larger market that has specific and unique needs,
preferences, and characteristics. Various factors, such as demographics, behaviours, interests, or
geographic location, may define this segment.
Green marketing
 Green marketing is the practice of promoting products or services that are sustainable and eco-friendly.
Companies that invest in green marketing benefit from increased customer loyalty and a positive brand
reputation, while also helping protect the planet and contributing to a more sustainable future.
Micro marketing
 Micromarketing is an approach to advertising that tends to target a specific group of people in a niche
market. With micromarketing, products or services are marketed directly to a targeted group of
customers.
More information
Niche marketing
 Niche marketing is a targeted marketing strategy that focuses on a specific, well-defined audience with
unique needs and interests. Instead of trying to appeal to a broad market, niche marketing tailors its
message and products to resonate deeply with a smaller, more concentrated group.
Elements of a Successful Niche Marketing Strategy
 Clearly Define Your Niche: Who are you targeting? What are their specific needs and demographics?
 Develop a Compelling Value Proposition: Why should your target audience choose you over
competitors?
 Targeted Messaging: Tailor your marketing communication to resonate with your niche's language and
interests.
 Choose the Right Marketing Channels: Focus on channels where your target audience spends their
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time, both online and offline.
Market segment
 In marketing, a market segment is a subgroup of a larger market that shares similar characteristics and
needs. Marketers identify and target these segments to tailor their marketing messages and products
more effectively. Here's a deeper dive into market segmentation:
Common Market Segmentation Bases:
 Demographic: Age, gender, income level, education level, family size, location (geographic).
 Psychographic: Personality traits, lifestyle, values, interests, hobbies.
 Behavioral: Usage habits, purchase behavior, brand loyalty, benefits sought.
 Firmographic (B2B): Industry, company size, location, purchasing authority.
Market Segmentation Process:
 Market Identification: Define the broad market you're interested in entering or already operating
within.
 Segmentation Bases: Identify the characteristics you'll use to segment the market (demographics,
psychographics, etc.).
 Segmentation Criteria: Develop specific criteria within each base to define different segments (e.g.,
age groups within demographics).
 Segment Profiling: Describe each segment in detail, including its size, needs, preferences, and buying
behavior.
 Evaluation and Targeting: Evaluate the attractiveness and accessibility of each segment. Choose the
segment(s) that best align with your company's goals and resources.
Green marketing
 Green marketing, also known as environmental marketing or eco-marketing, is a strategy that
incorporates environmental and social responsibility principles into a company's marketing efforts. It
aims to promote products and services that are perceived to be environmentally friendly, while also
educating consumers about the company's sustainability practices.
Green Marketing Strategies:
 Developing Eco-Friendly Products: Design products with recycled materials, energy efficiency, and
reduced environmental impact.
 Sustainable Packaging: Minimize packaging waste and use recycled or biodegradable materials
whenever possible.
 Green Manufacturing Practices: Implement energy-efficient processes, reduce pollution, and
conserve resources.
 Transparency and Communication: Clearly communicate the environmental benefits of products and
company sustainability efforts.
 Cause Marketing: Partner with environmental organizations or support environmental causes.
Micro marketing
 Micro marketing, also known as hyperlocal marketing or niche marketing on a smaller scale, is a
targeted marketing strategy that focuses on a very specific and well-defined customer group within a
niche market. It goes beyond traditional niche marketing by tailoring messages and products to an
incredibly granular level.
Characteristics:
 Ultra-Specific Audience: Micro marketing targets a very narrow audience segment with highly specific
needs, preferences, and behaviors.
 Highly Targeted Communication: Messages and communication are crafted to resonate deeply with
this specific audience, using their language and addressing their unique pain points.
 Data-Driven Approach: Micro marketing relies heavily on customer data and analytics to understand
the target audience intimately.
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 Personalized Marketing: The goal is to create personalized experiences that feel custom-made for each
individual customer.
11. The method which generates excitements creats publicity and conveys new relevant brand related
information through unexpected means is called
a) Buzz marketing
b) Mobile marketing
c) Tele marketing
d) Catalog marketing
Ans : A
Explanation:
 Buzz marketing is a marketing technique that creates visibility and excitement around a brand through
word-of-mouth promotion tactics. It's like a chain reaction, where marketers kickstart an unconventional
campaign and draw customers using buzz.
 Mobile marketing is a way in which technology can be used to create personalized promotion of goods
or services to a user who is constantly connected to a network.
 Telemarketing is the direct marketing of goods or services to potential customers over the telephone,
Internet, or fax. Telemarketing may either be carried out by telemarketers or increasingly by automated
telephone calls or "robocalls."
 Catalog marketing is a form of direct marketing that allows a company to sell products and services
from a printed or online catalog. Consumers can buy directly from the catalog sender by phone or online
using the information in the catalog.
More information:
Buzz marketing
 Buzz marketing is a strategic approach to generate excitement and word-of-mouth promotion for a
product, service, or brand. It leverages the power of social media, influencers, and online communities
to create a buzz or "conversation" around the offering.
Techniques for Buzz Marketing:
 Creating Engaging Content: Develop unique, informative, or entertaining content (videos, articles,
social media posts) that grabs attention and sparks conversation.
 Influencer Marketing: Partner with social media influencers or industry experts to promote the product
or service to their audience.
 Interactive Campaigns: Launch contests, giveaways, or interactive experiences that encourage user
participation and online sharing.
 Seeding Products or Services: Provide complimentary products or services to relevant influencers,
bloggers, or early adopters to generate reviews and discussions.
 Social Media Engagement: Actively engage with your audience on social media platforms, responding
to comments and participating in conversations.
Catalog marketing
 Catalog marketing is a direct marketing strategy that uses physical catalogs or online catalogs to reach
potential customers and promote products or services. It's a traditional yet effective way for businesses
to showcase their offerings and drive sales.
Types of Catalogs:
 Printed Catalogs: Traditional paper catalogs mailed directly to customers or available in stores.
 Online Catalogs: Digital versions of catalogs accessible on websites or mobile apps.
Common Uses of Catalog Marketing:
 Retail: Promoting clothing, jewelry, homeware, electronics, and various other consumer goods.
 Business-to-Business: Marketing office supplies, industrial equipment, or other products to businesses.
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 Subscription Services: Showcasing subscription boxes or membership programs.
 Travel and Tourism: Promoting vacation packages, tours, and travel destinations.
Mobile marketing
 Mobile marketing refers to any marketing activity that reaches potential customers through their mobile
devices, such as smartphones and tablets. It's a rapidly growing field due to the increasing prevalence of
mobile devices and the constant connectivity they provide.
Mobile Marketing Channels:
 SMS Marketing: Sending text messages with promotional offers, appointment reminders, or alerts.
 Mobile Apps: Developing branded apps to provide a dedicated channel for customer engagement and
marketing.
 Mobile Websites: Creating websites optimized for mobile browsing to offer a seamless user
experience.
 Mobile Advertising: Displaying targeted ads on websites and apps accessed through mobile devices.
 Push Notifications: Sending short messages directly to users' devices to deliver timely updates and
promotions (with user permission).
 Social Media Marketing: Utilizing social media platforms with a strong mobile presence to reach and
engage your audience.
 Mobile In-app Messaging: Sending targeted messages within mobile apps to promote new features,
special offers, or personalized recommendations.
12. Price skimming strategy means

a) Pricing a product starting from high and slowly drop over time
b) Pricing a product starting from low and rise it slowly later
c) Pricing the product as a market follower
d) Pricing the product considering the competition in the market
Ans : A
Explanation:
 Skim pricing, is a pricing strategy in which a firm charges a high initial price and then gradually lowers
the price to attract more price-sensitive customers. The pricing strategy is usually used by a first mover
who faces little to no competition.
Types of Pricing Strategies
 Cost-plus Pricing - It is the simplest pricing method. The firm calculates the cost of producing the good
and adds on a percentage (profit) to that price to give the selling price.
 Limit Pricing- A limit price is a price set by a monopolist to discourage economic entry into a market.
The limit price is often lower than the average cost of production.
 Penetration Pricing - Setting the price lower than what it is offered by other competitors in order to
attract customers and gain market share. The price can be raised later once this market share is gained.
 Price Discrimination - Price discrimination is setting a different price for the same product in different
segments to the market. For example, this can be for different classes of buyers, such as ages, or for
different opening times.
 Psychological Pricing - In this pricing designed to have a positive psychological impact on the
customers. For example, selling goods on profit at ₹ 4.95 or ₹ 4.99, rather than ₹ 5.00.
 Dynamic Pricing - A flexible pricing mechanism made possible by advances in information technology
and this strategy is mostly employed by internet-based companies.
 Target Pricing - Target pricing is a pricing method whereby the selling price of a product is calculated
to produce a particular rate of return on investment for a specific volume of production.
 Absorption Pricing - It is a method of pricing which recovers all costs. The price of the goods or
services includes the variable cost of each item plus a proportionate amount of the fixed costs and is a
form of cost-plus pricing.
 High-low Pricing - High-Low pricing is a method of pricing where the goods or services offered by the
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organization are regularly priced higher than competitors, but through promotions, advertisements, and
coupons, lower prices are offered on key items.
 Marginal Cost Pricing - This pricing method is a practice of setting the price of products and goods to
be equal to the additional cost of producing an extra unit of output.
13. Match the following :

List – I (Theory) List – II
(Proposed by)
A. Entrepreneurship 1. A. D. Chandler Jr.
and Dynamic
Capitalism
B. The Affluent 2. J. K. Galbraith
Society
C. Theory of 3. JosephSchumpeter
Economic
Development
D. The Dynamics of 4. B.A. Kirchoff
Industrial
Capitalism
Codes :
abcd
a) 1 3 2 4
b) 1 2 3 4
c) 4 3 2 1
d) 4 2 3 1
Ans : D
Explanation:
 Entrepreneurship and Dynamic Capitalism - B.A. Kirchoff
 The Affluent Society - J. K. Galbraith
 Theory of Economic Development - JosephSchumpeter
 The Dynamics of Industrial Capitalism - A. D. Chandler Jr.
Important management theories along with their authors:
 Scientific Management - Frederick Winslow Taylor
 Administrative Management - Henri Fayol, Mary Parker Follett
 Bureaucratic Management - Max Weber
 Theory X and Theory Y- Douglas McGregor
 Systems Theory - Ludwig von Bertalanffy
 Contingency Theory- Fred Fiedler, Joan Woodward
 Theory of Constraints (TOC) - Eliyahu M. Goldratt
 Human Relations Theory- Abraham Maslow, Douglas McGregor, Rensis Likert
 Organizational Development (OD) -Kurt Lewin, Richard Beckhard
 Transactional Leadership and Transformational Leadership- James MacGregor Burns, Bernard M.
Bass
 Situational Leadership- Paul Hersey, Kenneth H. Blanchard
 Knowledge Management- Peter Drucker, Ikujiro Nonaka
 Emotional Intelligence- Daniel Goleman
 Six Sigma- Bill Smith, Mikel J. Harry
 Equity Theory- J. Stacy Adams
 Expectancy Theory- Victor Vroom
 Organizational Culture Theory - Edgar Schein
 Transformational Change Theory - Kurt Lewin, John P. Kotter
 Authentic Leadership- Bill George
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 Theory of Organizational Learning - Chris Argyris, Donald A. Schön
 Theory of Organizational Change- Rosabeth Moss Kanter
 Theory of Authentic Leadership- Bill George
 Theory of Emotional Intelligence- Daniel Goleman, Peter Salovey, John D. Mayer
 Theory of Dual Leadership - David A. Nadler, Michael L. Tushman
 Theory of Ethical Leadership - Linda K. Treviño, Michael E. Brown
 Theory of Corporate Social Responsibility- Archie B. Carroll
 Theory of Decision - Making: - Herbert Simon
 Theory of Transaction Cost Economics - Oliver E. Williamson
 Theory of Organizational Power and Politics- Jeffrey Pfeffer
 Theory of Social Capital - Robert Putnam
 Theory of Intellectual Capital - Thomas A. Stewart
14. This is an example of ‗It is believed that employees' attitude influences their perception of work,
but the employees' experience at work may also modify or shape their attitudes.‘
a) Contingency Approach.
b) Democratic Approach.
c) Interactional Approach.
d) Socio-technical system Approach
Ans : C
Explanation:
Interactional Approach.
 The interactional approach in psychology, particularly in the context of organizational behavior and
management, focuses on the dynamic interplay between individuals and their environments.
 This approach emphasizes that behavior is influenced by a combination of personal factors (such as
traits, attitudes, and values) and situational factors (such as organizational culture, leadership style, and
social norms).
Key principles of the interactional approach in management include:
 Leadership Flexibility: Effective managers adapt their leadership styles to fit the needs of different
situations and individuals.
 Social Context: The interactional approach emphasizes the importance of social dynamics within
organizations..
 Individual Differences: The interactional approach acknowledges that individuals bring unique
characteristics, experiences, and perspectives to the workplace.
 Feedback and Communication: Open and effective communication is vital for facilitating interactions
within organizations.
 Organizational Culture: The interactional approach highlights the influence of organizational culture
on employee behavior and performance.
Contingency Approach.
 The term ―contingency approach‖ holds significant importance in Human Resources. It‘s a framework
that provides HR professionals with a strategic perspective on managing employees and organizational
processes.
The contingency approach encompasses various theories, offering a distinct perspective on managing
organizations. These theories are:
 Fiedler‘s Contingency Theory - Developed by Fred Fiedler, this theory states that a leader‘s
effectiveness depends on the match between their leadership style and their situation.
 Situational Leadership Theory- This contingency theory suggests that leaders should adapt their
leadership style based on their followers‘ readiness or maturity level.
 Path-Goal Theory - It was developed by Robert House. This theory is based on the application that
leaders should clarify the path to achieving organizational goals and offer the necessary support and
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motivation to help employees reach them.
 Decision-Making Theory- In this approach, managers tailor their decision-making strategies to suit the
circumstances.
Democratic Approach.
 The democratic approach, also known as participative or inclusive leadership, is a management style
characterized by the involvement of employees in decision-making processes and the promotion of open
communication, collaboration, and empowerment within the organization.
 In this approach, leaders seek input and feedback from their team members, encourage participation in
problem-solving and decision-making, and share responsibility and accountability for outcomes.
Socio-technical system Approach
 The socio-technical system (STS) approach is a management and organizational theory that views
organizations as complex systems comprising both social and technical components.
 It emphasizes the interaction and interdependence between these two components and advocates for the
design of work systems that optimize the relationship between them to enhance organizational
performance and employee well-being.
15. Which one of the following approaches stresses that there are no universal rules for managers to
follow in order to perform the job?
a) Contingency.
b) Empirical
c) Mathematical.
d) System
Ans : A
Explanation:
The approach that stresses that there are no universal rules for managers to follow in order to perform the job
is the "Contingency Approach."
 The empirical approach in management emphasizes the importance of using empirical evidence, data,
and observation to inform decision-making and management practices. This approach relies on the
scientific method to generate knowledge and test hypotheses about organizational behavior and
performance.
 The "Mathematical Approach" in management refers to the application of mathematical models,
techniques, and tools to analyze and solve complex organizational problems. This approach leverages
mathematical principles and methods from fields such as operations research, statistics, optimization,
simulation, and decision theory to support decision-making and improve organizational performance.
 The "System Approach" in management is a holistic approach that views organizations as complex
systems made up of interconnected and interdependent parts. This approach emphasizes understanding
the interactions and relationships between various components of the organization and the broader
environment in which it operates.
16. Who has given the meaning of ―Conjunction‖ industrial relations as ―a state of relationship under
which the parties, instead of offer‐ing their best, offer the least in the absence of which the
relationship will break
a) Neil W. Chamberlain
b) Frencis Walker
c) Ian Clegg
d) seling Perlman
Ans : A
Explanation:
 The meaning of "Conjunction" in industrial relations as described, "a state of relationship under which
the parties, instead of offering their best, offer the least in the absence of which the relationship will
break," is attributed to Neil W. Chamberlain. Therefore, the correct answer is A. Neil W. Chamberlain
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Important Management Quotes By Popular Authors:
 Peter Drucker: "Management is doing things right; leadership is doing the right things."
 Stephen Covey: "The key is not to prioritize what's on your schedule, but to schedule your priorities."
 Jim Collins: "Great vision without great people is irrelevant."
 Ken Blanchard: "The key to successful leadership today is influence, not authority."
 Warren Buffett: "It takes 20 years to build a reputation and five minutes to ruin it. If you think about
that, you'll do things differently."
 Tom Peters: "Excellent firms don't believe in excellence—only in constant improvement and constant
change."
 Sheryl Sandberg: "Leadership is not bullying and leadership is not aggression. Leadership is the
expectation that you can use your voice for good."
 Michael Porter: "The essence of strategy is choosing what not to do."
 John Kotter: "Leaders establish the vision for the future and set the strategy for getting there."
 Seth Godin: "Leadership is the art of giving people a platform for spreading ideas that work."
17. Which one of the following is a disadvantage of MBO as a performance appraisal tool?
a) Difficult to develop
b) Time-consuming
c) Difficult to rate or rank employees relative to one another
d) Can cause disagreements among employees
Ans : B
Explanation:
 The biggest disadvantage of MBO as a performance appraisal tool is Time-consuming
MBO
 MBO stands for Management by Objectives. It's a structured approach to setting goals and evaluating
performance within an organization.
 A collaborative process where managers and employees jointly define specific, measurable, achievable,
relevant, and time-bound (SMART) goals.
 Aims to align individual efforts with the overall objectives of the organization.
 Emphasizes clear communication, ongoing monitoring, and regular feedback.
Advantages
 Improved employee motivation and commitment through participation in goal setting.
 Enhanced clarity on roles, responsibilities, and expectations.
 Better communication and collaboration between managers and employees.
 Increased focus on achieving results.
Disadvantages:
 Can be time-consuming to set up, monitor, and evaluate progress.
 Overemphasis on goals might neglect the importance of behaviors used to achieve them.
 May not be suitable for fast-paced environments with constantly changing priorities.
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18. Arrange the following steps in the segmentation process in sequential order:
a) Group customers into segments based on similar needs and benefits sought by them
b) Determine overall attractiveness of each segment based on some predetermined criteria
c) Create a "value proposition" and product-price positioning strategy for each segment
d) Create 'segment story board‘ to list the attractiveness of each segment‘s positioning strategy
e) Determine which demographics, life styles and usage behaviour make the segment distinct and
actionable
Choose the correct answer from the options given below :
Options:-
a) (c), (a), (d), (e),(b),
b) (c), (a), (d), (b). (e)
c) (a), (c), (d), (b), (e),
d) (a), (d), (b), (c), (d),
Ans : D
Explanation:
 Segmentation is the process of dividing a large market into smaller, more manageable groups of
customers with similar characteristics.
Segmentation Process In Sequential Order
 Group customers into segments : This is the first step. You need to identify groups of customers with
similar needs and wants.
 Determine which demographics, life styles and usage behaviour make the segment distinct and
actionable : Once you have your segments, you need to understand what makes them unique. This
involves analyzing demographics, lifestyles, and usage behaviors.
 Determine overall attractiveness of each segment based on some predetermined criteria : Now that
you know your segments, you need to assess their attractiveness based on factors like size, growth
potential, and profitability.
 Create a "value proposition" and product-price positioning strategy for each segment : After
evaluating segment attractiveness, you can develop targeted messaging and product strategies specific to
each segment's needs.
 Create 'segment story board‘ to list the attractiveness of each segment‘s positioning strategy : This
is the final step where you document your findings and plan for each segment.
19. Following are the statements on the Mintzberg's organisational type. Choose the correct
statements:
a) Professional organisations primarily focus on output standardisation
b) Entrepreneurial organisations primarily focus on skills standardization
c) Missionary organisations primarily focus on norms standardisation
d) Innovative organisations do not focus on mutual adjustment Choose the correct answer
e) Innovative organisations primarily focus on mutual adjustment
from the options given below:
a) a, c, d and e only
b) a, b, c and e only
c) a, b and e only
d) c and e only
Ans : D
Explanation:
 Mintzberg's organizational typology categorizes organizations into five main configurations based on
their structural characteristics. These configurations are:
 Simple Structure: This type of organization is characterized by a flat structure with low formalization
and a centralized decision-making process. It's typically found in small entrepreneurial ventures.
 Machine Bureaucracy: In this type, organizations have highly formalized structures with standardized
processes and a clear hierarchy. They function like well-oiled machines and are often found in large
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manufacturing companies.
 Professional Bureaucracy: These organizations rely on the expertise of professionals and have a
decentralized structure with standardization of skills. They're often seen in professions like law firms or
hospitals.
 Divisionalized Form: Organizations with this structure have semi-autonomous units or divisions, each
with its own functions and resources. This structure allows for flexibility and responsiveness to different
market segments or product lines.
 Adhocracy (Innovative Organization): Adhocracies are characterized by a decentralized structure
with a focus on flexibility, innovation, and adaptability. They often exist in dynamic environments such
as creative industries or technology startups.
20. In context of Industry Analysis which matrix allows strategists to summarise and
evaluateeconomic, social, cultural, demographic, environmental, political, governmental, legal,
techno‐logical and competitive information?
a) EFE Matrix
b) CPM Matrix
c) BCG Matrix
d) IFE Matrix
Ans : A
Explanation:
 The EFE Matrix, which stands for External Factor Evaluation Matrix, is a strategic management tool
used to assess and prioritize the external opportunities and threats that can impact a company's
performance.
Steps in Using the EFE Matrix:
 Identify External Factors: Conduct research and brainstorming to identify relevant opportunities
and threats. Consider factors like economic, social, technological, legal, and competitive forces
(often referred to as PESTEL analysis).
 Assign Weights: Allocate weights to each factor based on its perceived significance to the
organization's success.
 Rate the Impact: Score each factor based on its potential impact on the business (positive or negative).
 Calculate Weighted Scores: Multiply the weight by the rating for each factor.
 Analyze and Interpret: Sum the weighted scores to obtain a total score. Higher scores indicate a more
favorable external environment. Analyze the results to understand which opportunities to capitalize on
and which threats to mitigate.
CPM Matrix
 The Competitive Profile Matrix (CPM) identifies a firm's major competitors and its particular strengths
and weaknesses in relation to a sample firm's strategic position.
Process:
 Identify Key Competitors: Determine the main companies you compete with directly.
 Define Critical Success Factors: Brainstorm and agree on the factors that are most important for
success in your industry.
 Assign Weights: Allocate weights to each CSF based on its significance. A higher weight indicates a
more critical factor.
 Rate Competitors: Evaluate each competitor's performance on each CSF. Be objective and use data or
evidence to support your ratings.
 Calculate Scores: Multiply the weight of each CSF by the rating for each competitor on that factor.
Sum these products for each competitor to get a total weighted score.
 Analyze Results: Analyze the total scores and individual ratings to identify a company's strengths and
weaknesses relative to its competitors. Look for opportunities to improve weaknesses and leverage
strengths.
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BCG Matrix
 The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic management tool
used to analyze a company's portfolio of businesses or products based on two dimensions: market
growth rate and relative market share. It was developed by the Boston Consulting Group in the early
1970s and remains widely used in strategic planning.
Based on these dimensions, the BCG Matrix categorizes products or businesses into four quadrants:
 Stars: Products or businesses with high market share in high growth markets. Stars typically require
substantial investment to maintain and strengthen their market position. They have the potential to
become cash cows in the future if they maintain their market dominance.
 Question Marks (or Problem Children): Products or businesses with low market share in high growth
markets. Question marks require careful consideration and strategic investment to determine whether
they should be nurtured to become stars or phased out if they fail to gain market traction.
 Cash Cows: Products or businesses with high market share in low growth markets. Cash cows generate
significant cash flows due to their established market dominance but have limited growth prospects.
They require minimal investment and often serve as a source of funds for other business units.
 Dogs: Products or businesses with low market share in low growth markets. Dogs typically have limited
growth prospects and may consume resources without generating significant returns. They may be
candidates for divestiture or restructuring unless they serve a strategic purpose such as complementing
other products or providing essential capabilities.
IFE Matrix
 Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm‘s internal environment
and to reveal its strengths as well as weaknesses. The internal and external factor evaluation matrices
have been introduced by Fred R. David in his book Strategic Management[1]. According to the author,
both tools are used to summarize the information gained from company‘s external and internal
environment analyses.
Following are the important components of the IFE Matrix:
Internal Factors
 Internal factors are the outcome of a detailed internal audit of a firm Obviously, every company has
some weak and strong points, therefore the internal factors are divided into two categories namely
strengths and weakness.
Strengths
 Strengths are the strong areas or attributes of the company, which are used to overcome weaknesses and
capitalize to take advantage of the external opportunities available in the industry. The strengths could
be tangible or intangible; such as brand image, financial position, income, human resource.
Weaknesses
 Weaknesses are the risky areas that need to be addressed on priority to minimize its impact. The
competitors always searching for the loopholes in your company and put their best effort to capitalize
on the identified weaknesses.
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21. DUPONT analysis refers to

a) Earning Per Share = (Net Profit⟋Number of Equity Shares)
b) Return on Assets = (Net Profit Margin) ⟋ (Total Assets Turnover Ratio)
c) Total Assets Turnover Ratio = (Sales Average) ⟋ (Total Assets)
d) None of the above
Ans : B
Explanation:
 DuPont analysis breaks down Return on Equity (ROE) into its component parts, including Return on
Assets (ROA). The formula you provided accurately reflects this calculation.
 The DuPont analysis is a formula used to track a company's financial performance. It was developed in
1914 by F. Donaldson Brown, who worked for the DuPont Corporation. His formula incorporates
earnings, investment, and working capital together into a single figure that he called return on
investment (ROI).
The 3-step DuPont analysis model is the simpler version. In the 3-step model, the ROE is broken down
into three ratio components:
1. Net Profit Margin
2. Asset Turnover
3. Financial Leverage Ratio
Net Profit Margin
 The net profit margin calculates a company‘s ―bottom line‖ profitability after all expenses have been
accounted for. The net profit margin is an operating efficiency ratio. It compares the company‘s bottom
line to its revenue to see how efficiently the company is turning revenue into profit by maximizing
revenue and minimizing expenses.
Asset Turnover
 Asset turnover calculates a company‘s ability to generate revenue based on the dollar value of the assets
it owns. It is an efficiency ratio because the ratio increases when a company is more efficient at
generating revenue with a smaller dollar value of assets.
Financial Leverage Ratio
 The financial leverage ratio analyzes a company‘s capital structure– the proportion of its debt to equity.
Specifically, the financial leverage ratio looks at the company‘s assets in relation to its stockholders‘
equity.
3-Step DuPont Analysis Formula
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The formulas for these three components are:
 Net Profit Margin = Net Income / Revenue
 Asset Turnover = Revenue / Average Total Assets
 Financial Leverage Ratio = Average Total Assets / Average Shareholders‘ Equity
Therefore, the DuPont Analysis formula can be combined to the following:
 3-Step DuPont Analysis ROE = (Net Income / Revenue) x (Revenue / Average Total Assets) x
(Average Total Assets / Average Shareholders‘ Equity)
Additional information
The asset turnover ratio
 The asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency with which
a company uses its assets to produce sales. The asset turnover ratio formula is equal to net sales divided
by the total or average assets of a company.
 Formula and Calculation of the Asset Turnover Ratio

Earning Per Share
 Earnings per share, or EPS, is a standard term used to assess a company's profitability. EPS is defined as
the value of earnings per outstanding share of a company's common stock. In other words, EPS
measures a company's profitability by revealing how much money it can make per share.
EPS formula –
 EPS = (Net Income − Preferred Dividends)/End-of-Period Common Shares Outstanding
22. The best model to compute the probability that a machine functioning well in one period will
continue to function or will break down in the next period is
a) Delphi Model
b) Markov-Process Model
c) Decision-tree Model
d) Multiplicative Model
Ans : B
Explanation:
 The best model to compute the probability that a machine functioning well in one period will continue
to function or break down in the next period is Markov-Process Model
Markov-Process Model
 The Markov Process Model, also known as a Markov Chain, is indeed the appropriate model for
computing the probability of transitions between states over discrete time intervals. It's widely used in
various fields including engineering, economics, finance, and biology.
Delphi Model
 The Delphi Method is a structured communication technique used to gather and distill the knowledge
and insights of a group of experts to make informed decisions or predictions about the future.
Process:
 Identify Experts: Select a group of knowledgeable and experienced individuals in the relevant field.
 Round 1: Distribute an anonymous questionnaire to the experts, asking them to provide their forecasts
or opinions on the topic.
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 Summarize Responses: Compile and analyze the responses, including a summary of the range of
opinions.
 Round 2 (Optional): Distribute a new questionnaire with the summarized responses and allow experts
to revise their initial estimates based on the group's insights.
 Repeat Rounds (Optional): Depending on the level of consensus achieved, additional rounds can be
conducted with further refinements.
 Analyze Results: After the final round, analyze the final responses and reach a consensus forecast or
decision.
Decision-tree Model
 A decision tree model is a powerful tool used in machine learning, statistics, and data mining for
predictive modeling and decision-making under uncertainty. It's a graphical representation of decisions
and their possible consequences, including chance events and their probabilities.
Structure:
 Root Node: The starting point of the tree, representing the entire dataset.
 Internal Nodes: These decision points contain conditions based on features (e.g., age, income) that split
the data into subsets.
 Leaf Nodes: These terminal nodes represent the final predicted outcome or class label (e.g., loan
approval, customer churn).
 Branches: These connect nodes, showing the flow of data based on the decision made at each internal
node.
Multiplicative Model
 A multiplicative model is a statistical or mathematical framework used to describe relationships
between variables where the effect of one variable on another is proportional or multiplicative rather
than additive. In such models, the relationship between variables is expressed in terms of ratios or
products rather than sums.
Mathematically, a multiplicative model can be represented as:
Y=T×S×R
Where:
 Y - is the observed variable.
 T-is the trend component, representing the long-term movement or pattern in the data.
 S -is the seasonal component, capturing periodic fluctuations that occur regularly over time.
 R- is the random component, representing the residual or error term.
 Multiplicative models are particularly useful when the variability of the data increases as the magnitude
of the data increases. They are also often preferred when the relationship between variables is expected
to be multiplicative in nature, such as in growth or decay processes.
23. Arrange the following stages involved in DBMS in proper sequence:

1. Creating
2. Defining
3. Data structuring
4. Updating
5. Interrogating
Codes:
a) 1,3, 2,4 and 5
b) 2,1, 3,5 and 4
c) 3,2, 5,4 and 1
d) 2,3, 1,4 and 5
Ans : C
Explanation:
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The proper sequence for the stages involved in a Database Management System (DBMS) would be:
1. Data structuring
2. Defining
3. Interrogating
4. Updating
5. Creating
 Data Structuring : This stage focuses on organizing the data within the database. This includes
defining data types, constraints (rules for valid data), and relationships between tables. This is
essentially what " Data structuring" refers to.
 Defining: This stage involves identifying the purpose of the database and the kind of information it will
hold. This includes defining the entities (data subjects) and their attributes (data points).
 Interrogating : This stage involves retrieving data from the database. This can be done using queries
written in a specific language like SQL.
 Updating : This stage where data within the database is modified. This includes adding new data,
editing existing data, or deleting data that is no longer needed.
 Creating : Once the data is defined, the database itself is created using a DBMS software. This involves
setting up the tables, data types, and relationships between them.
DBMS
 Database Management System (DBMS) is software that enables its users to manage, access the
databases and also helps in manipulating and reporting the data. Some of the examples of DBMS are
MySQL, PostgreSQL, Microsoft Access, SQL Server, Oracle, etc.
Application of DBMS
 HR Management: Employees‘ information and salary-related activities can be managed in DBMS
software.
 Banking: Customer records , customer information, account activities, payments, deposits, loans can be
managed by DBMS software
 Educational Institution: All the information regarding the students is handled by DBMS software.
 Finance: For storing information about stock, sales, is handled by DBMS software.
 Sales: DBMS is used for storing customer‘s information.
24. Human Resource Management (HRM) is a part of the broad Human Resource Development
(HRD) System, as this focus to
a) Selection, Induction, Training and Development
b) Operational and Organizational Options
c) (A) and (B) above
Ans : C
Expalation:
 Human Resource Management (HRM) is indeed a part of the broader Human Resource Development
(HRD) system. HRD encompasses a wider range of activities related to developing human resources
within an organization, which includes not only HRM functions like selection, induction, training, and
development (option A) but also operational and organizational options (option B). Therefore, the
correct answer is: option c) (A) and (B) above
Human Resource Management
 Human Resource Management (HRM) is the strategic and comprehensive approach to managing an
organization's most valuable asset: its people. It involves the recruitment, selection, training,
development, compensation, and retention of employees, as well as addressing any issues or
concerns that may arise in the workplace. HRM aims to maximize employee performance and
productivity while also ensuring that the organization's goals and objectives are met.
Core Functions:
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 Workforce Planning & Acquisition: This involves analyzing talent needs, recruiting qualified
candidates, and selecting the best fit for open positions.
 Training & Development: Providing employees with the skills and knowledge they need to perform
their jobs effectively and contribute to the organization's success.
 Performance Management: Setting clear expectations, evaluating employee performance, and
providing feedback for continuous improvement.
 Compensation & Benefits: Establishing competitive pay and benefit packages to attract, retain, and
motivate employees.
 Employee Relations: Fostering a positive work environment, maintaining good communication
channels, and addressing employee concerns.
 Safety & Health: Ensuring a safe work environment and promoting employee well-being.
Importance of HRM
 Improved Employee Engagement: Effective HRM practices can lead to a more engaged workforce,
which translates to higher productivity and better business outcomes.
 Enhanced Talent Acquisition & Retention: Strong HRM strategies help attract top talent and create a
work environment that encourages employees to stay.
 Compliance with Labor Laws: HR professionals ensure the organization adheres to labor laws and
regulations.
 Strategic Alignment: HRM helps align the workforce with the organization's overall goals and
objectives.
Human Resource Development
 Human Resource Development (HRD) is a specific field within Human Resource Management (HRM)
that focuses on the growth and development of employees. It's all about investing in your people to
empower them and improve their capabilities, which ultimately benefits both the employee and the
organization.
Functions
 Training & Development: Providing employees with formal training programs, workshops, and
development opportunities to enhance their skills and knowledge relevant to their current and future
roles.
 Career Development: Helping employees identify their career goals and aspirations within the
organization. This can involve coaching, mentorship programs, and opportunities for internal job
postings.
 Performance Management & Development: Using performance reviews not just for evaluation, but
also to identify areas for improvement and provide feedback to guide employee development.
 Succession Planning: Developing a plan to ensure a smooth transition when key employees retire or
move on. This involves identifying high-potential employees and investing in their development to
prepare them for future leadership roles.
 Knowledge Management: Creating a system for capturing, sharing, and leveraging the knowledge and
expertise within the organization. This can involve mentorship programs, knowledge-sharing platforms,
and cross-training initiatives.
25. Entrepreneurship as a theory of business was propounded by

a) Douglas McGregor
b) Thomas A. Coleman
c) Joseph A. Schumpeter
d) Adam Smith
Ans : C
Explanation:
 Joseph Alois Schumpeter is widely credited with introducing the concept of entrepreneurship as a
theory of business. He emphasized the role of entrepreneurs as drivers of innovation and economic
growth through creative destruction.
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More information
 Douglas McGregor is known for his Theory X and Theory Y, which describe different management
styles and assumptions about employee behavior.
 Thomas A. Coleman is not as widely recognized in the field of entrepreneurship theory.
 Adam Smith is considered the father of modern economics and focused on the concept of the invisible
hand, where individual self-interest leads to an overall benefit for society. While Adam Smith's work
does touch on free markets and competition, it doesn't specifically address entrepreneurship as a theory
of business.
Entrepreneurship
 Entrepreneurship is the dynamic process of creating new businesses or ventures to take advantage of
opportunities.
It involves a combination of:
 Innovation: Identifying new ideas, products, services, or business models that add value for customers.
 Opportunity Recognition: Spotting unmet needs or problems in the market and developing solutions.
 Risk-Taking: Entrepreneurs are willing to take calculated risks to pursue their vision, despite the
inherent uncertainty involved in starting a new business.
 Resourcefulness: Entrepreneurs need to be resourceful in securing funding, building a team, and
managing their resources effectively.
 Vision and Leadership: Having a clear vision for the business and the ability to inspire and motivate
others to achieve it.
26. In a mixed economy, the central problems are solved through which of following?
a) Price mechanism
b) Regulated market mechanism
c) Market mechanism and economic planning
d) Economic planning and control
Ans : C
Explanation:
 The central problems in a mixed economy are solved through Market mechanism and economic
planning.
 In a mixed economy, there's a coexistence of both the private and public sectors.
Here's a breakdown of how these two mechanisms work together
 Market Mechanism: This refers to the system where supply and demand forces determine the prices of
goods and services. The private sector plays a major role here, with businesses responding to consumer
preferences and competition to allocate resources and production.
 Economic Planning: The government intervenes in the market to achieve specific social and economic
objectives.
This planning can involve:
 Public spending: Investing in infrastructure, education, healthcare, and other areas deemed crucial for
economic growth and social well-being.
 Regulations: Setting rules and standards to protect consumers, promote fair competition, and address
negative externalities (costs imposed on third parties not involved in the transaction) that might arise
from market activity.
 Subsidies and taxes: The government can use subsidies to encourage certain industries or activities,
and taxes to discourage others.
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27. Bain and Clegg (1974) argue that industrial relations are concerned with:
a) The making and administering of rules that regulate the employment relationship in unionized firms,
regardless of whether these are seen as formal or informal, structured or unstructured
b) The making and administering of rules that regulate the employment relationship in nonunionised
firms, regardless of whether these are seen as formal or informal, structured or unstructured
c) The making and administering of rules that regulate the employment relationship, regardless of
whether these are seen as formal or informal, structured or unstructured
Ans : C
Explanation:
 Bain and Clegg (1974) consider industrial relations as the study of all aspects of job regulations and this
involves the making and administering of the rules which regulate employment relationships -regardless
of whether these are seen as being formal or informal, structured or unstructured.
More information
 Bain and Clegg (1974) argued for a broader understanding of industrial relations than what was
prevalent at the time.
Here are some key points from their perspective:
 Focus on Rules: They emphasized the importance of rules, both formal and informal, in shaping the
employment relationship. These rules can be written contracts, company policies, government
regulations, or unwritten customs and traditions within the workplace.
 Beyond Unions: Industrial relations weren't solely about unionized firms. Even in non-unionized
settings, there exist implicit rules and power dynamics that govern interactions between employers and
employees.
 Structured and Unstructured: The rules themselves could be structured (explicitly defined) or
unstructured (implicit and understood through common practice).
28. Which of the following statements are applicable to Mckinsey's 7S framework?

a) A priori, it is obvious which of the seven factors will be the driving force in changing a particular
organisation at a particular point of time.
b) Effective organisational change is the relationship between seven factors of the framework.
c) Change in any one element effects change in other elements for effective organizational change.
d) Framework can be used for facilitating organisational change,
e) Strategy. Structure. Systems and Style are 'Hard S‘ of the Model while Staff. Skill and Shared
values are the 'Soft S‘ of the framework.
Choose the correct answer from the options given below:
a) a, b and d only
b) b, c and d only
c) a, b, c and d only
d) a, b, c and e only
Ans : B
 A priori, it is obvious which of the seven factors will be the driving force in changing a particular
organisation at a particular point of time. - This is not applicable. The 7S framework highlights that
it's difficult to pinpoint a single factor as the sole driver for change. It's the interconnectedness of all
elements that matters.
 Effective organisational change is the relationship between seven factors of the framework. - This is
absolutely true. The 7S model emphasizes that all seven elements (Strategy, Structure, Systems,
Skills, Staff, Style, and Shared Values) are interrelated and need to be aligned for successful
organizational change.
 Change in any one element effects change in other elements for effective organisational change. - This
is also a core principle of the 7S framework. A change in one element creates a ripple effect,
requiring adjustments in other elements to maintain balance and effectiveness.
 Framework can be used for facilitating organisational change. - Yes, the 7S framework is a valuable
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tool for analyzing an organization's current state, identifying areas of misalignment, and planning for
effective change initiatives.
 Strategy. Structure. Systems and Style are 'Hard S‘ of the Model while Staff. Skill and Shared values are
the 'Soft S‘ of the framework. - This statement is correct. The McKinsey 7S categorizes the elements
into "Hard S" and "Soft S."
McKinsey's 7S framework
 McKinsey's 7S framework is a management model developed by management consulting firm
McKinsey & Company.
 It's used to analyze and assess the internal alignment and effectiveness of an organization. The
framework identifies seven interdependent factors that are crucial for organizational success. These
factors are divided into "Hard Ss" and "Soft Ss":
 Hard Ss:
 Strategy: The plan devised to maintain and build competitive advantage over the competition.
 Structure: The organizational structure and hierarchy that determines how tasks are divided,
controlled, and coordinated.
 Systems: The formal and informal procedures, processes, and routines used to manage the
organization's operations.
 Soft Ss:
 Shared Values (or Shared Vision): The core values, beliefs, and norms that shape the
organization's culture and guide its behavior.
 Skills: The competencies, capabilities, and expertise possessed by the organization's employees.
 Staff: The organization's workforce, including their size, composition, and capabilities.
 Style: The leadership and management style prevalent within the organization, including decision-
making processes and communication patterns.
29. Which one of the following performance appraisal methods prevents supervisors from rating all or
most employees "satisfactory" or "high"?
a) Alternation Ranking Method
b) Forced Distribution Method
c) Critical Incident Method
d) Paired Comparison Method,
Ans : B
Explanation:
 The Forced Distribution Method is the only option that enforces a specific distribution of ratings,
preventing supervisors from assigning high evaluations to all or most employees.
More information
 Alternation Ranking Method: This method doesn't inherently prevent supervisors from rating all or
most employees high. It involves ranking employees within a group, but doesn't dictate a specific
distribution of ratings.
 Critical Incident Method: This method focuses on documenting specific examples of employee
behavior, positive or negative. While it can be used for evaluation, it doesn't address the distribution of
ratings.
 Forced Distribution Method: This method is specifically designed to prevent supervisors from
assigning a majority of ratings to the top or bottom categories. It forces supervisors to distribute ratings
according to a predetermined curve, ensuring a spread of performance evaluations.
 Paired Comparison Method: This method involves comparing employees in pairs and choosing the
better performer in each comparison. While it can help differentiate performance, it doesn't necessarily
prevent high ratings for everyone.
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30. Technical feasibility analysis will include which of the following
a) Plant location
b) Engineering requirements
c) Product development
d) Product testing
e) Crucial technical specifications with respect to the design and product safety
a) b, c , d and e only.
b) a, b, c, d and e
c) a, c, d and e only
d) c, d and b only
Ans : A
Explanation:
 A technical feasibility analysis focuses on the technical aspects of bringing a product to life, including
specifications, engineering requirements, testing needs, but doesn't delve into the broader product
development process or plant location decisions.
More information
 Plant location: This isn't necessarily part of the technical feasibility analysis itself. Plant location is a
separate decision often made after considering factors like production costs, logistics, and availability of
labor, which might be informed by the technical feasibility analysis but not directly part of it.
 Engineering requirements: Yes, this is a core aspect. The analysis needs to assess the engineering
resources, skills, and technologies needed to develop the product.
 Product development: While technical feasibility is a critical step before full-fledged product
development, understanding the development process can inform the analysis. However, the technical
feasibility analysis itself focuses on determining if the product can be built with available technology,
not the entire development process.
 Product testing: Yes, technical feasibility analysis should consider the testing methods and resources
needed to ensure the product functions as intended.
 Crucial technical specifications with respect to the design and product safety: Absolutely!
Technical feasibility analysis needs to consider the technical specifications required to achieve the
design and ensure the product's safety.
31. Industrial Dispute Act, 1947 provides the following industrial relations machinery for resolution of
conflicts:
a) Negotiation
b) Conciliation
c) Meditation
d) Arbitration
Ans : B
Explanation:
 The Industrial Disputes Act, 1947 promotes a tiered approach to conflict resolution, starting with
conciliation, and then moving towards negotiation, mediation or arbitration if necessary.
More information
 Negotiation: This is the first attempt to resolve the dispute directly between the employer and the
employees or their representatives. It's encouraged for both parties to come to a mutually agreeable
settlement.
 Conciliation: If negotiation fails, the government appoints a Conciliation Officer to facilitate
communication and explore potential solutions acceptable to both sides.
 Adjudication: This can involve two options:
 Mediation: A neutral third party (mediator) helps the parties reach an agreement through guided
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discussions and exploring common ground.
 Arbitration: An impartial arbitrator issues a binding award that resolves the dispute. This is typically
the final step if other methods fail.
The Industrial Disputes Act, 1947
 The Industrial Disputes Act, 1947 (IDA) is a crucial piece of legislation in India that aims to promote
harmonious relations between employers and employees, and to provide a mechanism for resolving
industrial disputes.
Objectives:
 To prevent industrial disputes.
 To investigate and settle industrial disputes through peaceful means.
 To provide for certain matters connected with industrial disputes.
Key Provisions:
 Work definition and exclusions: The Act defines an "industrial dispute" and excludes certain
categories like agricultural workers and employees of the armed forces from its purview.
 Works committees: The Act encourages the formation of Works Committees in establishments with
100 or more workers. These committees serve as a platform for communication and address grievances
at the initial stage.
 Collective bargaining: The Act recognizes the right of workers to form trade unions and engage in
collective bargaining with employers.
 Conciliation: The Act provides for the appointment of Conciliation Officers by the government to
intervene in disputes and promote a settlement.
 Adjudication: If conciliation fails, the Act allows for adjudication through either:
 Arbitration: An impartial arbitrator delivers a binding award on the dispute.
 Courts: Certain disputes can be referred to industrial tribunals or labor courts for adjudication.
 Strikes and lockouts: The Act regulates strikes and lockouts by outlining conditions under which they
become illegal and outlining cooling-off periods.
32. Rearrange the steps of Maslow's Need Hierarchy Theory.

A. Self - Actualisation Needs
B. Physiological needs
C. Belongingness and love needs
D. Self-esteem needs
E. Safety needs
a) ABCDE
b) ADCBE
c) DCBEA
d) ADCEB
Ans : D
Explanation:
 Self-actualization needs : This is the highest level of the hierarchy, representing the desire to reach
one's full potential, achieve personal growth, and fulfill one's unique capabilities.
 Esteem needs : After social needs are met, individuals develop a need for self-esteem, confidence,
achievement, recognition, and respect from others.
 Love and belonging needs : Humans have a natural desire for love, affection, belonging, and social
connection. This includes feeling part of a family, group, or community.
 Safety needs : Once basic physical needs are met, individuals focus on feeling safe and secure. This
includes security from physical harm, emotional stability, and protection from threats.
 Physiological needs : These are the fundamental needs for survival, such as food, water, air, shelter,
sleep, and sex.
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Maslow's Need Hierarchy Theory
 Maslow's hierarchy of needs is a motivational theory in psychology comprising a five-tier model of
human needs, often depicted as hierarchical levels within a pyramid.
 Needs lower down in the hierarchy must be satisfied before individuals canattend to needs higher up.
From the bottom of the hierarchy upwards, the needs are: physiological, safety, love and belonging,
esteem and selfactualization.
33. What are the main elements of motivation.

a) Intensity
b) Direction
c) Persistence
d) All the above
Ans : D
Explanation:
 All three elements intensity, direction, and persistence are essential components of motivation.
Main Elements Of Motivation.
 Intensity: Motivation influences the level of effort and energy individuals are willing to invest in
pursuing their goals. It determines the vigor, enthusiasm, and persistence with which individuals engage
in goal-directed behavior.
 Persistence: Motivation sustains behavior over time, even in the face of obstacles, challenges, or
setbacks. It involves maintaining commitment and perseverance in pursuing goals despite difficulties or
delays.
 Choice: Motivation influences individuals' choices and decisions regarding which goals to pursue and
how to allocate their resources, time, and effort. It involves weighing the costs and benefits of different
options and selecting the most desirable course of action.
 Adaptability: Motivation can be dynamic and responsive to changes in internal and external
circumstances. It involves adjusting goals, strategies, and behaviors in response to new information,
feedback, or changing priorities.
Types of Motivation:
 Intrinsic Motivation: This arises from within ourselves. We're driven by the inherent satisfaction of the
activity itself, the joy of learning something new, or the sense of accomplishment from completing a
task.
 Extrinsic Motivation: This comes from external rewards or pressures. We're motivated by factors like
grades, money, praise, or recognition from others.
Theories of Motivation:
 Goal-Setting Theory: This theory emphasizes the importance of setting specific, measurable,
achievable, relevant, and time-bound (SMART) goals. Setting challenging yet achievable goals can be a
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powerful motivator.
 Self-Determination Theory: This theory focuses on three psychological needs that are crucial for
motivation: autonomy (feeling in control), competence (feeling capable), and relatedness (feeling
connected to others).
34. Regarding leadership, which statement is false?

a) Leadership does not necessarily take place within a hierarchical structure of an organisation
b) When people operate as leaders their role is always clearly established and defined
c) Not every leader is a manager
d) All of the above
Ans : B
Explanation:
 The false statement is: When people operate as leaders their role is always clearly established and
defined
More information
 Leadership can occur outside hierarchies: Leadership can emerge in any situation where someone
inspires and motivates others towards a shared goal. It's not limited to formal positions within an
organization chart.
 Not all leaders are managers: Managers have formal authority to assign tasks and oversee work.
Leaders, however, can inspire and influence others even without such authority.
 Not all statements are false: The previous explanations highlight why statements a and c are true,
leaving b as the false statement.
Leadership
 Leadership is the process of influencing and inspiring others to achieve common goals and objectives. A
leader is someone who guides, motivates, and directs individuals or groups toward the accomplishment
of a shared vision or mission
Essential Traits of Leaders:
 Vision: Leaders have a clear vision for the future and can articulate it in a way that inspires others.
 Communication: Effective leaders can communicate their vision clearly, concisely, and in a way that
resonates with their audience.
 Motivation: Leaders can motivate others to take action and work towards shared goals.
 Inspiration: They can inspire people to reach their full potential and do great things.
 Integrity: Leaders are ethical and trustworthy, and they lead by example.
 Decision-Making: They can make sound decisions, even in uncertain situations.
 Delegation: Effective leaders empower others by delegating tasks and trusting them to get the job done.
 Adaptability: The ability to adjust to changing circumstances and be flexible in their approach.
Leadership Styles:
 Transformational Leadership: These leaders inspire and motivate followers to reach their full
potential and achieve extraordinary things.
 Transactional Leadership: This style focuses on meeting specific goals and objectives through a
system of rewards and punishments.
 Servant Leadership: Servant leaders prioritize the needs and well-being of their followers and
empower them to succeed.
 Charismatic Leadership: These leaders have a magnetic personality and can inspire strong loyalty and
devotion in their followers.
Theories of Leadership:
 Trait Theory: This theory suggests that certain personality traits, such as intelligence, extroversion, and
decisiveness, are essential for effective leadership.
 Behavioral Theories: These theories focus on the behaviors that differentiate effective from ineffective
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leaders.
 Contingency Theories: These theories propose that the most effective leadership style depends on the
specific situation and context.
35. Many consumers seek to be different and exclusive by demanding less of a commodity as more
people consume it, is called?
a) Bandwagon effect
b) Snob effect
c) Veblen effect
d) Substitution effect
Ans : B
Explanation:
 The snob effect describes the situation where consumers lose interest in a good or service as its
popularity increases and it becomes more widely consumed. Essentially, they seek exclusivity and
distinction, and when a product becomes mainstream, it loses its appeal for them.
More information
 Bandwagon effect: This is the opposite of the snob effect. It describes the tendency of people to
adopt a product or service because it's popular and widely used by others.
 Veblen effect: This concept, also known as conspicuous consumption, refers to the purchase of
luxury goods to display wealth and social status.
 Substitution effect: This is an economic principle that explains how consumers switch from one
good to another when the price of the first good increases relative to the second good.
36. Penetration price strategy is followed under which of the following conditions'?
A. When company must keep demand within its production capacity
B. When company wants to recoup its research and development expenditure
C. Where there is a high degree of price elasticity of demand
D. When strong competition is expected soon after product introduction
Choose the most appropriate answer from the options given below:
Options:-
a) (a) and (c) only,
b) (b) and (d) only
c) (c) and (d) only
d) (a) and (d) only,
Ans : C
Explanation:
 Penetration pricing strategy is most suitable when there's a high degree of price elasticity of demand and
when strong competition is anticipated in the near future. This allows the company to quickly gain
market share and establish a foothold before competitors enter the market.
More information
 Recoup R&D expenditure: Penetration pricing doesn't necessarily target recouping R&D
expenditure quickly. The initial focus is on gaining market share, and profits may come later as the
price potentially increases or production volumes rise.
 Keep demand within production capacity: While production capacity is a consideration for any
business, it's not the primary driver for a penetration pricing strategy. The goal is to stimulate
demand, and the company might need to adjust production capacity if the strategy is successful.
 High degree of price elasticity of demand: This is a core condition for a penetration pricing
strategy. It means that a small decrease in price leads to a significant increase in demand, allowing the
company to capture a larger market share quickly.
 Strong competition expected soon after product introduction: This is another driver for a
penetration pricing strategy. By setting a lower introductory price, the company can discourage
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potential competitors from entering the market and establish a strong customer base before the
competition arrives.
Penetration price strategy
 Penetration pricing is a marketing strategy commonly used by businesses to launch new products or
enter new markets. It involves setting a lower initial price for a good or service compared to competitors
or the expected long-term price.
Objectives:
 Gain Market Share: The primary goal is to quickly attract a large customer base and establish brand
awareness.
 Discourage Competition: A low introductory price can discourage potential competitors from entering
the market, giving the company time to solidify its position.
 Stimulate Demand: Lower prices can entice customers to try a new product and potentially become
loyal users in the long run.
Conditions Favorable for Penetration Pricing:
 Highly Elastic Demand: If demand for the product is highly responsive to price changes (elastic), a
lower price can lead to a significant increase in sales volume.
 Strong Anticipated Competition: If competition is expected to emerge soon after launch, a penetration
pricing strategy can help capture market share quickly.
 Economies of Scale: If the product's production cost decreases as production volume increases, a lower
initial price can be justified with the expectation of higher profits in the long run.
Potential Drawbacks:
 Price Wars: If competitors also adopt aggressive pricing strategies, it can lead to price wars that erode
profitability for all involved.
 Cheap Brand Image: A very low price might create a perception of low quality and make it difficult to
raise prices later.
 Customer Dependence on Low Prices: Customers might become accustomed to the lower price and
resist future price increases.
Alternatives to Penetration Pricing:
 Premium Pricing: This strategy targets customers who value quality and exclusivity, launching the
product at a higher price point.
 Freemium Model: Offer a basic version of the product for free and charge for premium features or
functionalities.
37. Which of the following is NOT a primary function of a Management Information System (MIS)
a) Data collection and storage
b) Generating reports and summaries
c)Facilitating communication andcollaboration
d) Controlling physical machinery in a factory
Ans : D
Explanation:
 While MIS can be used to monitor production processes, directly controlling physical machinery is
typically handled by Manufacturing Execution Systems (MES) or Industrial Control Systems (ICS).
MIS focuses on information management for decision-making, not real-time control.
Management Information System
 A Management Information System (MIS) is a system that gathers, processes, stores, analyzes, and
distributes information to support decision-making, coordination, control, analysis, and visualization of
information in an organization.
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Functions of MIS:
 Dta collection and storage: MIS collects data from various sources within an organization, such as
sales transactions, inventory levels, and customer relationship management (CRM) systems. This data is
then stored in a centralized database for easy access and analysis.
 Generating reports and summaries: MIS can generate a variety of reports and summaries that provide
managers with insights into the organization's operations. These reports can be used to track trends,
identify problems, and make better decisions.
 Facilitating communication and collaboration: MIS can be used to facilitate communication and
collaboration between different parts of an organization. For example, an MIS can be used to create a
platform where employees can share information and documents.
 Supporting decision-making: MIS provides managers with the information they need to make
informed decisions. This information can be used to make decisions about everything from product
development to marketing strategy.
Elements of MIS
 Management Information System often referred to simply as MIS, is a planned system of collecting,
storing, and disseminating data in the form of information needed to carry out the functions of
management.
There are 3 elements of MIS:
 MANAGEMENT: Management is a process in which people work together for the goals of the
organization. Processes are planning, organizing, and controlling. There are three stages of
management. Upper-level management includes CEO‘s, middle-level management includes managers
and lower-level management includes workers of an organization.
 INFORMATION: Information in the MIS means the process that helps the management in planning,
organizing, and controlling. Data is recorded, summarized, analyzed, and then presented to the
management in the form of MIS reports. Data is processed to information.
 SYSTEM: Data is processed into information with the help of a system. A system is made up of inputs,
processing, output, and feedback or control.
Structure of MIS
38. Which of the following methods is NOT used to solve a transportation problem?
a) Vogel's Approximation Method
b) North-West Corner Method
c)Hungarian Method
d) Least Cost Method
Ans : C
Explanation:
 Hungarian Method (used for Assignment Problems) addresses a different type of optimization problem
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and is not suitable for solving transportation problems.
 Transportation problems deal with allocating resources (supply) from different origins to destinations
(demand) at minimum transportation cost. They involve finding the optimal shipping plan that
minimizes total cost while satisfying supply and demand constraints.
 Vogel's Approximation Method, North-West Corner Method, and Least Cost Method are all
techniques used to find an initial solution for a transportation problem. These methods are relatively
simple and can be a good starting point for finding the optimal solution using more advanced
algorithms.
 The Hungarian Method, on the other hand, is specifically designed to solve assignment problems.
Assignment problems involve assigning a set of indivisible tasks to a set of agents with the goal of
minimizing the total assignment cost. Unlike transportation problems, there are no supply and demand
constraints in assignment problems.
More information
 Vogel's Approximation Method (VAM) :is an iterative approach used to find an initial feasible
solution to a transportation problem. It aims to minimize the total transportation cost by efficiently
allocating goods from supply points (origins) to demand points (destinations).
 The North-West Corner Method: is a straightforward and easy-to-use method for finding an initial
feasible solution to a transportation problem. While it may not always be the most efficient approach, it
provides a clear step-by-step process to ensure all supply and demand constraints are met.
 Hungarian Method: The Hungarian method, also known as the Kuhn-Munkres algorithm, is a
powerful and efficient approach to solving the assignment problem in polynomial time. Unlike the
North-West Corner Method and Vogel's Approximation Method, which are specifically designed for
transportation problems, the Hungarian method has broader applications in various assignment
scenarios.
 Least Cost Method : is a straightforward approach to finding an initial feasible solution to the
transportation problem. It aims to minimize the total transportation cost by efficiently allocating goods
from supply points (origins) to demand points (destinations).
39. Which of the following factors contributes MOST to a wage differential between two jobs?
a) Working hours (e.g., full-time vs. part-time)
b) Educational requirements of the job
c) Location of the job (e.g., rural vs. urban)
d) All of the above
Ans : D
Explanation:
 Each factor can play a role, the combined effect of all these elements typically determines the most
significant wage differential between two jobs.
More information
 Working hours (full-time vs. part-time): Full-time positions typically offer higher wages than part-
time positions, even for similar work, due to benefits and the expectation of greater commitment.
 Educational requirements: Jobs requiring higher education or specialized skills often command higher
wages because they represent a greater investment in human capital for the employer.
 Location: Cost of living can significantly impact wages. Jobs in high-cost urban areas often pay more
than comparable positions in rural areas to reflect the higher living expenses.
 Other factors: Several additional factors can influence wage differentials, including experience, danger
level, physical demands, and job security.
40. A company needs to produce a customized product with varying specifications for each customer.
Which technique is most suitable?
a) Job shop production
b) Assembly line production
c) Batch production
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(d) Project production
Ans : A
Explanation:
 The most suitable technique for a company producing customized products with varying specifications
for each customer is Job shop production
More information
 Job shop production is specifically designed for low-volume, high-variety production. It excels at
handling jobs with unique requirements and frequent changes in specifications.
 Assembly line production, on the other hand, thrives on high-volume production of standardized
products. It wouldn't be suitable for the customization needs mentioned in the question.
 Batch production can handle some customization but typically involves producing batches of similar
items. It wouldn't offer the level of individualization required for this scenario.
 Project production is used for large, one-time projects and wouldn't be ideal for ongoing production of
customized products.
Job shop production
 Job shop production is a manufacturing system suited for creating custom or small-batch items. Here's a
breakdown of its key characteristics:
Products:
 Made-to-order (MTO): Jobs are produced based on specific customer requirements.
 Low volume, high variety: Each job might be unique or have slight variations, resulting in a wide
range of products.
 Customization: Adapting the production process to accommodate specific customer needs is a
hallmark of job shops.
Workflow:
 Functional layout: Machines are grouped by function (e.g., drilling, welding, painting) rather than
product flow.
 Job scheduling: Planning the sequence of tasks and allocating resources for each job is crucial.
 Flexibility: The ability to adapt to changing customer demands and handle a variety of tasks is
essential.
Workforce:
 Highly skilled workers: Employees need a broad range of skills and the ability to handle diverse tasks.
 Problem-solving: Workers often encounter unique challenges and need to find solutions on the fly.
Assembly line production
 Assembly line production, also known as mass production, is a manufacturing process designed for
high-volume output of standardized products. It's the opposite of job shop production, which focuses on
customization. Here's a closer look at its defining characteristics:
Products:
 Standardized: All units of a product are identical in design and function.
 High volume: Assembly lines are geared towards producing large quantities of the same product
efficiently.
 Limited variation: Little to no customization is involved in the assembly process.
Workflow:
 Product flow layout: Machines and workstations are arranged sequentially based on the assembly
steps, creating a production line.
 Division of labor: Each worker performs a specific, repetitive task on the product as it moves down the
line.
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 Standardized tasks: Simple and repetitive tasks are assigned to workers to maximize efficiency.
 Automation: Assembly lines often incorporate automated equipment and robots to perform specific
tasks.
Workforce:
 Less specialized skills: Workers typically require training for their specific task, but a broad range of
skills isn't necessary.
 Repetitive work: Workers perform the same task repeatedly, which can be less mentally stimulating
Batch production
 Batch production falls between the two manufacturing extremes you previously explored: assembly line
(mass production) and job shop production. Here's a breakdown of key features that define batch
production:
Products:
 Similar items in groups: A batch refers to a group of identical or very similar products made together.
 Medium volume: Batch production is suitable for creating moderate quantities of products compared to
high-volume assembly lines.
 Variety possible: While products within a batch are similar, there can be some variation between
batches based on customer needs or product revisions.
Workflow:
 Batch flow layout: Machines are grouped functionally to some extent, but with some consideration for
the production sequence within a batch.
 Batch scheduling: Production is planned and scheduled in batches, optimizing the use of machines and
resources for each group.
 Changeovers: Switching between production of different batches involves equipment adjustments and
setups.
Workforce:
 Skilled workers: Employees need to be proficient in operating the machinery and adapting to different
products within a batch.
 Teamwork: Effective communication and collaboration are essential for smooth production within a
batch.
Project production management
 Project production management (PPM) is a specific approach to managing projects that draws principles
from operations management. Here's a breakdown of the key concepts:
Core elements of Project Production Management:
 Planning and Scheduling: Similar to traditional methods, PPM involves detailed planning and
scheduling of tasks, resources, and dependencies. However, it places a stronger emphasis on optimizing
the workflow and minimizing waste.
 Work Breakdown Structure (WBS): The project is broken down into smaller, manageable work
packages, similar to a WBS in traditional methods. However, PPM focuses on analyzing the
relationships and dependencies between these work packages for efficient execution.
 Resource Management: Effectively allocating and managing resources like personnel, equipment, and
materials is crucial. PPM uses techniques like capacity planning to ensure resources are available when
needed.
 Performance Measurement: Tracking progress and identifying areas for improvement is essential.
PPM utilizes performance metrics that go beyond just schedule and budget to measure efficiency and
flow.
 Continuous Improvement: PPM emphasizes ongoing evaluation and improvement of the project
production system. Techniques like lean manufacturing principles can be applied to identify and
eliminate waste.
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41. Risk arising from the unique uncertainties of individual securities is known as
a) Systematic risk
b) Unsystematic risk
c) Market risk
d) Total risk
Ans : B
Explanation:
 Since the question refers to the unique uncertainties of individual securities, unsystematic risk is the
most suitable answer.
More information
 Systematic risk refers to risks that affect the entire market or a whole industry, and cannot be
diversified away through portfolio diversification. Examples include economic recessions, interest rate
changes, or political events.
 Unsystematic risk, also known as specific risk or diversifiable risk, arises from the unique
characteristics of an individual company or industry. It can be reduced by investing in a diversified
portfolio of assets. This includes risks like a company losing a key executive, a product recall, or a new
competitor entering the market.
 Market risk is the risk of loss on an investment due to overall market fluctuations. It refers to the
possibility that the entire market, or a whole asset class, experiences a decline in value.
 Total risk in finance refers to the combined effect of both systematic risk and unsystematic risk on an
investment or portfolio.
42. Mutual funds pool money from investors and invest it in a variety of assets. What is the primary
benefit of this for investors?
a) Guaranteed high returns
b) Diversification to reduce risk
c) Access to exclusive investment opportunities
d) Lower management fees
Ans : B
Explanation:
 diversification to reduce risk is the most significant benefit of investing in mutual funds.
More information
 Diversification: By spreading investments across different assets (stocks, bonds, etc.), mutual funds
reduce the overall risk for investors. If one asset class performs poorly, the losses may be offset by gains
in other asset classes.
 Guaranteed high returns: Mutual funds cannot guarantee high returns. Investment performance
depends on the underlying assets held by the fund.
 Access to exclusive investment opportunities: While some mutual funds may invest in niche areas,
most provide access to a broad range of assets that individual investors might not be able to access
directly due to cost or minimum investment requirements.
 Lower management fees: While there are fees associated with mutual funds, professional management
can potentially outweigh the cost for some investors, especially those unfamiliar with individual stock
or bond picking.
Mutual funds
 A mutual fund is a type of investment vehicle that pools money from many investors and invests it in a
variety of assets, such as stocks, bonds, and short-term debt instruments. This pooled money is managed
by a professional fund manager who makes investment decisions on behalf of the shareholders
(investors) in the fund.
key characteristics of mutual funds:
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 Diversification: As mentioned earlier, a key benefit of mutual funds is diversification. By investing in a
variety of assets, the fund reduces the overall risk for investors compared to putting all their eggs in one
basket (investing in a single asset).
 Professional Management: Mutual funds are managed by experienced professionals who research and
select investments based on the fund's objectives. This can be a significant advantage for investors who
lack the time or expertise to manage their own portfolios.
 Variety of Investment Options: Mutual funds come in a wide range of styles and investment
objectives. Some examples include:
 Stock Funds: Invest primarily in stocks of companies in a particular sector (e.g., technology), size
(e.g., large-cap), or geographic region (e.g., emerging markets).
 Bond Funds: Invest primarily in bonds, which are essentially loans to governments or
corporations. Bond funds can offer lower risk than stock funds but typically provide lower potential
returns.
 Balanced Funds: Combine stocks and bonds in a single fund, aiming for a balance between risk
and return.
 Target Date Funds: Designed with a specific retirement date in mind, these funds automatically
adjust their asset allocation over time to become more conservative as the target date approaches.
 Liquidity: Most mutual funds allow investors to redeem their shares (sell them back to the fund) on a
daily basis at the net asset value (NAV), which is the value of the fund's underlying assets divided by
the number of shares outstanding.
43. Which of the following analysis is suitable for risk return analysis in financial decisions?
a) CAMP analysis
b) SWOT analysis
c) Capital analysis
d) EVA analysis
Ans: A) CAMP Analysis
 The Capital Asset Pricing Model (CAPM) is used to determine a appropriate required rate of return of
an asset, if that asset is to be added to an already well- diversified portfolio, given that asset's non-
diversifiable risk.
 Developed by Markowitz, Sharpe, and Lintner who are researchers credited with its development.
 CAPM model assumes that all active and potential shareholders have access to the same information and
agree about the risk and expected return of all assets (homogeneous expectations assumption).
 Its attempts to measure the risk of a security in a port polio sence .
Therefore answer a is correct
The Capital Asset Pricing Model (CAPM) curve
Advantages of CAPM Analysis

 Provides a benchmark: CAPM provides a standard against which the performance of a portfolio or individual
security can be measured.
 Incorporates market risk: CAPM accounts for market risk, which is a crucial factor in investment decisions. By
considering market risk, investors can make informed decisions about potential investments.
 Helps in determining required rate of return: CAPM helps investors determine the required rate of return for a
given investment based on its risk profile. This can aid in portfolio management by helping investors optimise
their portfolio for risk and return.
Disadvantages of CAPM Analysis
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 Assumptions may not hold: CAPM relies on certain assumptions, such as the efficient market hypothesis, which
may not always hold true in real-world scenarios. Therefore, the model may not be an accurate representation of
the market and may lead to poor investment decisions.
 Limited in scope: CAPM only takes into account market risk and assumes that all investors have access to the
same information. This means that it may not fully capture other factors that can impact the value of an
investment.
 Relies on historical data: CAPM relies on historical data to estimate market risk and return, which may not
always be a reliable predictor of future performance.
SWOT Analysis
 A SWOT Analysis is one of the most commonly used tools to assess the internal and external
environments of a company and is part of a company‘s strategic planning process. In addition, a SWOT
analysis can be done for a product, place, industry, or person.
 A SWOT analysis helps with both strategic planning and decision-making, as it introduces opportunities
to the company as a forward-looking bridge to generating strategic alternatives.
 SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.
Capital analysis
 Capital analysis is a process used to identify and assess the financial risks associated with a company's
assets. The goal of capital analysis is to help decision-makers determine whether a company is
financially stable and able to meet its debt obligations.
Type of capital analysis
Benefits of Capital Analysis

 Capital Analysis is the process of determining an organization‘s financial health by examining its assets
and liabilities.
 Knowing an organization‘s financial strength allows for better decision-making about how to allocate
resources.
 Helping identify potential risks and opportunities.
 Assessing the adequacy of an organization‘s financial cushion in the event of unexpected events or
declines in business activity.
 Determining whether investments are necessary and if so, how much money should be allocated to
them.
 Helping to identify areas where improvements can be made.
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EVA analysis
 EVA is a value based financial performance measure, an investment decision tool and it is also a
performance measure reflecting the absolute amount of shareholder value created. It is computed as the
product of the ―excess return‖ made on an investment or investments and the capital invested in that
investment or investments.
Advantages of EVA
 providing a comprehensive and objective view of project performance, progress, and scope.
 It integrates time, cost, and scope dimensions to quantify deviations from the baseline plan.
 EVA can alert project managers to potential issues before they become critical and suggest corrective
actions.
 it uses standardized and easy-to-understand metrics and indicators that can be communicated to
stakeholders, sponsors, and team members.
 It also generates graphical and visual representations of the project status and trends.
 EVA can help project managers evaluate alternatives, trade-offs, and risks while providing reliable
estimates of the project.
Disadvantages of EVA analysis
 It depends on the quality and validity of the data collected and reported on the project activities, costs,
and deliverables.
 EVA can be complex and time-consuming due to its calculations, formulas, and assumptions.
 It also must be updated regularly to reflect changes in the project environment.
 EVA can be misinterpreted or misused if the project managers or stakeholders do not understand its
assumptions and limitations.
 It also does not capture all aspects of the project value, as it focuses mainly on time and cost dimensions
44. Combined leverage can be used to measure the relationship between ____?
a) EBIT and EPS
b) Sales and EPS
c) PAT and EPS
d) Sales and EBIT
Ans : B
Business Risk
Operating Leverage
 The business risk is concerned with the sensitivity or variability of EBIT; it is the risk of being unable to
cover operating costs.
 Operating expenses refer to expenses incurred in order run operations of business. From the income
statement of a firm, operating expenses can be easily traced out given the nature of business of that
particular firm.
Or
Graphical Presentation of Operating Leverage
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 On horizontal axis, the level of output (in units), and on vertical axis, revenue and costs are scaled. The line
parallel to horizontal axis is of fixed cost which shows no change in cost at different level of output. The line
starting from point 'a' is total variable cost which includes fixed as well as variable cost, thus it is parallel to
variable cost line. The line starting from point of origin and intersecting the total cost line representing revenue of
the firm. The intersecting point is break-even point ( B .E.P) at which there is no loss and no profit. Below BEP
the area covered is of loss, and above BEP it signifies operating profits.
Degree of operating leverage
Financial Leverage
 Financial risk is another component to determine value of cost of equity or expected return on equity. As we have
discussed that cost of equity refers to proportion relation of earnings per share to market price of the share. The
earnings per share (EPS) is a function of availability of profit percentage to equity shareholders (EBIT) to number
of equity shares.
Graphical Presentation of Financial Leverage
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 There are two ways to show financial leverage on a graph, first, taking change in EPS divided by change in EBIT.
Second, by showing equity capitalization on graph along with fixed financial charges.
Combined or Total leverage
 The total effect of operating and financial leverage is called combined leverage. The combined leverage (CL)
may be defined as the firm's ability to use fixed costs, both operating and financial, to magnify the effect of
changes in sales on the firm's earning per share. The combined leverage can be measured with the help of
following equation.
Therefore answer is b is right
45. Interest on loan taken for the purchase of fixed assests is a _____?
a) Revenue Expenditure
b) Capital Expenditure
c) Deferred Revenue Expenditure
d) Capital loss
Answer : B) Capital Expenditure
Budget
 There is two types accounts- those that relate to the current financial year only are included in the
1.Revenue account (also called revenue budget)
2.Capital account (also called capital budget).
Capital budget
Classification of Receipts
 Revenue Receipts: Revenue receipts are those receipts that do not lead to a claim on the firm. They are
therefore termed non-redeemable. They are divided into tax and non-tax revenues. Tax revenues, an
important component of revenue receipts, have for long been divided into direct taxes (personal income
tax) and firms (corporation tax), and indirect taxes like excise taxes (duties levied on goods produced
within the country), customs duties (taxes imposed on goods imported into and exported out of India)
and service tax.
 Capital Receipts: The government or firm also receives money by way of loans or from the sale of
its assets. Loans will have to be returned to the agencies from which they have been borrowed.
Classification of Expenditure
Revenue Expenditure
 Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or
financial assets of the firm. It relates to those expenses incurred for the normal functioning of the
government departments and various services, interest payments on debt incurred by the government,
and grants given to state governments and other parties (even though some of the grants may be meant
44
for creation of assets).
 Non-plan expenditure, the more important component of revenue expenditure, covers a vast range of
general, economic and social services of the government.
 The main items of non-plan expenditure are interest payments, defence services, subsidies,
salaries and pensions. Interest payments on market loans, external loans and from various reserve
funds constitute the single largest component of non-plan revenue expenditure.
 Apart from providing implicit subsidies through under-pricing of public goods and services like
education and health, the government also extends subsidies explicitly on items such as exports,
interest on loans, food and fertilisers. Hence b is correct
Capital Expenditure
 There are expenditures of the firm which result in creation of physical or financial assets or reduction
in financial liabilities.
 This includes expenditure on the acquisition of land, building, machinery, equipment, investment
in shares, and loans and advances by the central government to state and union territory
governments, PSUs and other parties.
 Capital expenditure is also categorised as plan and non-plan in the budget documents. Plan capital
expenditure, like its revenue counterpart, relates to central plan and central assistance for state and
union territory plans.
 Non-plan capital expenditure covers various general, social and economic services provided by the
firm.
46. The basic exemption limite incase of a Hindu Undivided Family is Rs______?
a) Rs 200000
b) Rs 250000
c) Rs 300000
d) Rs 500000
Ans : C
 Government had introduced a new scheme with effect from Assessment Year 2020-21 for
Individuals and HUFs in the Finance Act 2020 with lower rates for those foregoing certain
exemptions/ deductions.
 It is now provided that the New Tax Regime under section 115BAC would also be applicable to
Association of Persons (other than co-operative society), Body of Individuals and artificial
jurisdiction person in addition to Individuals and HUFs.
 The rates applicable under the Tax Regime under section 115BAC to Individuals, HUF and
others are as under:
Hencec is correct
45
 India, the Income Tax applies to individuals based on a slab system, where different tax rates are
assigned to different income ranges.
 As the person's income increases, the tax rates also increase. This type of taxation allows for a fair
and progressive tax system in the country.
 The income tax slabs are revised periodically, typically during each budget.
47. X and Y are Partners in firm sharing profits in a ratio of 2:1 Z is admitted with a 1/4 profit
sharing .What will be the new profit sharing ratio of X , Y and Z ?
a) 2 : 1 : 2
b) 3 : 1 : 2
c) 2 : 1 : 3
d) 2 : 1 : 1
Ans : D
Calculation of New profit sharing ratio
\
Hence d is correct
46
48. Purchase of a furniture for office use wrongly debited to Purchase Account .it is an error of _____?
a) Omission
b) Commission
c) Principle
d) Compensating Errors
Ans : C
Errors Not Identified by Trial Balance
The errors and omissions not revealed by the trial balance are:
 Error of Omission or Duplication: An entry has been completely omitted to be recorded in the book
of original entry.
 Error of Commission: When a wrong amount has been entered in the correct accounts, or a account is
involved while recording the transactions.
 Errors of Principle: recording not in accordance with accounting principles, e.g., the purchase of
office furniture debited to purchases account, instead of furniture and fittings account.
Hence answer c correct
 Errors of Original Entry - if the amount of a transaction is entered incorrectly in a subsidiary book.
 Compensating Errors - two or more mistakes in the books which result in cancelling each other out.
49. The accounting equations is presented as ?

a) Assets = Liabilities + Equity
b) Assets = Liabilities + (Capital +( Revenue – Expenses) – Drawings)
c) Assets + Expenses + Drawings = Liabilities + Capital + Revenue
d) all the above
Ans : D
Accounting Equation
 The accounting equation is a representation of how the three important components of accounting
namely Assets, Liabilities and Equity are associated with each other.
 In the most simplistic form, the accounting equation is presented as: Assets=Liabilities+Equity .
 Assets represent the valuable resources controlled by the company such as cash, accounts receivable,
fixed assets, inventory etc.
 Liabilities represent its obligations of an organization to its external stakeholders, while Equity
represents owners net claim on the assets. It is to be noted that, the liabilities and equity represent how
the assets of the organization has been financed.
 All three components of the accounting equation appear in the balance sheet, which reveals the
financial position of an entity at any given point in time.
 Expanded Accounting Equation: The above equation can be further expanded by incorporating the
various elements of the Equity component as under:
Assets=Liabilities+Equity
Assets=Liabilities+[Capital+(Revenue-Expenses)Drawings]
Assets+Expenses+Drawings=Liabilities+Capital+Revenue
 This equation is considered to be the foundation of the double-entry accounting system. At a general
level, this means that whenever there is a recordable transaction, the choices for recording it all involve
keeping the accounting equation in balance.
Hence answer d is correct
50. in India the Accounting Standards for non-corporate entities including Small and Medium sized
Enterprises are issued by the ____of Institute of Chartered Accountants of India.
a) Accounting Standards Board
b) National Standard Setters
c) Financial Accounting Standard Board
d) Accounting Standard Committee
Ans : A
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 Accounting Standards for non-corporate entities, such as Small and Medium-sized Enterprises (SMEs),
in India are determined by the Accounting Standards Board (ASB) of ICAI. These standards adhere
to Indian GAAP (Generally Accepted Accounting Practices), aiming to enhance comprehension of
financial statements for users. Conversely, corporate entities follow the Accounting Standards mandated
by the MCA. Hence a is correct
 The Accounting Standards Board of ICAI has put out a booklet called ―Accounting Standards: Quick
Referencer‖ so that everyone can quickly look up the most important parts of the Accounting
Standards.
 This booklet has a summary of the Accounting Standards put out by the ICAI and the Companies
(Accounting Standards) Rules, 2006, which were put out by the Ministry of Corporate Affairs,
Government of India, to protect the interests of the people who make or audit financial statements as
well as the interests of other stakeholders.
51. what are the correct statements about the Rank Correlation.
1) If the no. of items exceeds 30 it is then difficult to find out rank and their differences.
2) With help of this method one can estimate an dependent variable using known independent
variable.
3) when only ranks of the values are given .it is then the only method left to calculate the degree of
correlation
4) It gives direction as well as degree of the relationship between variables.
a) 1 and 2 only
b) 1 , 2 and 4 only
c) 1 and 3 only
d) all the above
Ans : C
Rank Correlation
 Karl pearson's Coefficient of Correlation can be calculated only if the characteristics under study are
quantitative. But spearman's Coefficient of rank Correlation can be calculated even
 if the characteristics under study are qualitative such as beauty, intelligence, morality, honesty and the
like. If it is possible to assign ranks to the units regard to the two characteristics, Spearson's Coefficient
of rank Correlation can be calculated.
Merits:
 It is very simple to calculate and easy to understand
 When only ranks of the values are given, it is then the only method left to calculate the degree of
correlation.
 This is method is employed when the data is given in a qualitative nature.
Demerits:
 This method can not be employed for a frequency distribution.
 If the no. of items exceeds 30, it is then difficult to find out ranks and their differences.
 This method lacks precision in results as compared to Pearson's method because values are not at all
taken into account.Hence c is correct
52. Which of the following statements are true regarding international trade operations?
a) Import tariffs are taxes imposed on goods imported into a country.
b) Free trade agreements (FTAs) aim to reduce or eliminate trade barriers between participating
countries.
c) Export subsidies are payments made by the government to domestic producers to encourage exports.
d) Dumping occurs when a country sells goods in another country at a price lower than the domestic
market or production cost.
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Ans : A
Fair international trade practices
 Reduced Trade Barriers: This includes minimizing or eliminating tariffs, quotas, and other
restrictions on imports and exports.Hence a is correct
 Non-discrimination: Countries should treat imports and exports equally, regardless of their origin or
destination. This prevents unfair advantages for specific countries.
 Fair Competition: There should be a level playing field for businesses in different countries. Practices
like dumping (selling goods at a lower price in a foreign market than domestically) are discouraged.
 Transparency and Predictability: Trade laws and regulations should be clear, transparent, and
predictable for businesses to operate effectively.
 Consumer Protection: Consumers should be protected from unsafe or misleading products through
standards and regulations.
 Environmental Protection: Trade policies should consider the environmental impact of production
and transportation of goods.
 Labor Rights: Fair labor practices, including decent working conditions and fair wages, should be
upheld in all countries involved in international trade.
Unfair international trade practices
 Dumping: Selling goods in a foreign market at a price lower than the domestic market price or
production cost. This can harm domestic producers in the importing country.
 Subsidies: Government financial assistance to domestic producers that gives them a cost advantage
over foreign competitors. This can lead to an increase in exports or a decrease in import prices.
 Import Restrictions: These include quotas (limits on the quantity of imported goods) and tariffs (taxes
on imported goods). While some tariffs are acceptable, excessive restrictions can hinder fair
competition.
 Export Restrictions: Limiting the export of certain goods, often for domestic consumption or to
control prices. While some restrictions exist (e.g., endangered species), excessive limitations can create
shortages in the international market.
 Currency Manipulation: Artificially devaluing a country's currency to make exports cheaper and
imports more expensive. This can lead to unfair advantages for exporters in the manipulating country.
 Intellectual Property (IP) Theft: Copying or using trademarks, patents, or copyrights of another
company without permission. This can stifle innovation and harm the original developer.
 Non-Tariff Barriers (NTBs): Technical regulations, standards, or sanitary/phytosanitary (SPS)
measures that are overly complex or discriminatory can create unnecessary hurdles for foreign
companies entering a market.
53. Given below are two statements, one labeled as Assertion (A) and the other labeled as Reason (R):
Assertion (A): Sinking fund is a charge against Profit and Loss Account.
Reason (R): Sinking fund is created for repayment of a long term liability In the context of the above two
statements,
which one of the following is correct?
Codes:
a) (A) is correct, but (R) is wrong
b) (A) is wrong, but (R) is correct
c) Both (A) and (R) is correct
d) Both (A) and (R) are wrong?
The correct option is: b) (A) is wrong, but (R) is correct.
Explanation:
 Assertion (A): sinking fund is not typically treated as a charge against the Profit and Loss Account.
Instead, it's a provision made to accumulate funds for the repayment of a long-term liability therefore
A is incorrect
 Reason (R): Sinking funds are indeed created for the specific purpose of repaying long-term liabilities,
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such as bonds or loans, by regularly setting aside funds for this purpose.therefore B is correct
Sinking Fund
 A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that
issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship
of a large outlay of revenue.
 A sinking fund is an account containing money set aside to pay off a debt or bond.
 Sinking funds may help pay off the debt at maturity or assist in buying back bonds on the open market.
 Callable bonds with sinking funds may be called back early removing future interest payments from
the investor.
 Paying off debt early via a sinking fund saves a company interest expense and prevents the company
from being put in financial difficulties in the future.
Sinking fund method
 Sinking fund method is used when the cost of replacement of an asset is too large. Depreciation is
charged every year to the profit and loss A/c. But, it may sometimes happen that the amount is not
readily available at the time of purchase of the new asset. Thus, the sinking fund method is used.
54. Comparison of the financial statements of the current year with the performance of previous years
of the same firm', is known as:
a) Trend Analysis
b) Horizontal Analysis
c) Intra firm comparison
d) All of the above
Ans : D
Ratio analysis
 Ratio analysis refers to the analysis and interpretation of the figures appearing in the financial
statements (i.e., Profit and Loss Account, Balance Sheet and Fund Flow statement etc.).
 It is a process of comparison of one figure against another. It enables the users like shareholders,
investors, creditors, Government, and analysts etc. to get better understanding of financial statements.
Trend Analysis
 Trend analysis involves the collection of information from multiple time periods and plotting the
information on a horizontal line for further review.
 The intent of this analysis is to spot actionable patterns in the presented information. Revenue and cost
information from a company's income statements can be arranged on a trend line for multiple reporting
periods and examined for trends and inconsistencies.
 For example, a sudden spike in expense in one period followed by a sharp decline in the next period
can indicate that an expense was booked twice in the first month.
 Thus, trend analysis is quite useful for examining preliminary financial statements for inaccuracies, to
see if adjustments should be made before the statements are released for general use.
Horizontal analysis
 Horizontal analysis is the comparison of historical financial information over various reporting periods.
It helps determine a companies' growth and financial position versus competitors.
 The horizontal analysis technique uses a base year and a comparison year to determine a company's
growth.
Intra-firm comparison
 Intra-firm comparison is the comparison of the financial data of a company with its own previous
financial data. The purpose of intra-firm comparison is to determine the performance of a company
over a period of time.
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Hence option d is correct
51
55. From the following information, find out the number of units that must be sold by the firm to earn
profit of Rs. 80,000 per year.
Sales price: Rs. 25 per unit
Variable manufacturing costs - Rs. 12 per unit Variable selling costs - Rs. 3 per unit
Fixed factory overheads - Rs. 5,00,000
Fixed selling costs -Rs. 3,00,000
a) 60,000 units
b) 88,000 units
c) 98,000 units
d) 1,00,000 units
Ans : B
Explain:
Hence b is correct
56. Which of the following statements is NOT correct regarding the duties of an auditor?
a) Physical verification of fixed assets is primarily the responsibility of the auditor
b) Ownership of fixed assets should be verified by examining the title deed by the auditor
c) Auditor should ascertain that the assets are in the possession of the client
d) The auditor should satisfy himself that the assets have been valued in the financial statements
according to the accounting principles.
Ans : A
Company Auditor
 An auditor is an individual who is appointed to inspect the books of accounts of a company, the
validity and accuracy of the transactions contained therein. He also forms an opinion on the overall
view of the financial statements, whether the statements depict a true and fair view of the entity‘s
financial position.
Auditor Duties and Responsibility
 Every auditor has a right of access to the books of account and vouchers of the company at all times,
whether they are at the registered office of the company or at any other place.
 The auditor of a holding company also has a right of access to the records of the subsidiary company if
they are necessary for the purposes of the consolidation.
 An auditor also has a right to receive notice of any general meeting. He may attend it himself or
through his authorized representative who is also qualified to be an auditor. He also has a right to be
heard on any part of the business which concerns him.
 The auditor also has a right to receive information and explanation regarding the matters which are
necessary for the performance of his duties. He needs to know whether:
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 The company makes loans and advances against proper security and the terms of these are prejudicial
to the interests of the company.
 Transactions that merely represent a book entry are prejudicial to the interests of the company.
 In the case of a company which is not an investment or banking company, it sells the assets. They are
in the form of shares, debentures, and other securities at a price less than their purchase price.
 The company shows the loans and advances that it makes as deposits.
 It charges the personal expenses to revenue account.
 It states in the books and documents that where it has allotted the shares in cash, it has received the
cash or not. Also, whether the position in the books and Balance Sheet is correct and not misleading.
57. Which of the following statements is not correct?

a) For the purpose of Funds Flow Statement, the term 'fund ' generally refers to net working capital
b) The capitalization of reserves by the issue of bonus shares also involves flow of funds
c) Funds flow is a wider concept than the Cash flow
d) The flow of funds must arise due to external and not internal transactions of the business
Ans : D
 Hence option d is correct
 The flow of funds must arise due to external and not internal transactions of the business
Fund Flow Statement:
 A fund flow statement is a document created to examine the factors that led to changes in a company's
financial situation between two balance sheets. It depicts the inflow and outflow of funds during a
specific time period, including the sources and uses of that money.
Uses Of The Funds Flow Statement
 Fund Flow Statement acts as an important tool for financial analysis and shows the brief reasons for
change in the Working Capital between two Balance Sheet dates.
 Fund_Flow Statement explains how the financial position has changed from the beginning of an
accounting period to the end of that period.
 It acts as an important instrument for allocation of resources of a concern.
 Fund Flow Statement explains how the financial position has changed from the beginning of an
accounting period to the end of that period.
 It acts as an important instrument for allocation of resources of a concern.
 It can be used in planning a sound dividend policy.
 It is useful in forecasting the flow of funds and in projecting the working capital requirements.
Limitations Of Fund Flow Statement
 Fund Flow Statement is not a basic Financial Statement, but is a supplementary statement. It does
not disclose any new fact which is not reflected in the Income Statement and the Balance Sheet.
 It provides a partial financial information to the management.
 It cannot present the continuous changes in the financial position.
 It does not indicate the structural change of an asset or a liability.
 It cannot present the continuous changes in the financial position.
 It does not indicate the structural change of an asset or a liability.
 It is prepared on the basis of historical data.
 It exhibits the changes in the Fund position, but does not indicate the changes in the cash position,
which is most important for every business concern.
Preparation of Fund Flow Statement
 The changes which occurred in the current accounts as a result flow of fund are reflected in a statement
known as 'schedule of changes in working capital'.
 The similar changes in non current accounts are shown in 'Fund Flow Statement'.
Therefore, following two statements under this techniques.
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1. Statement Working Capital. or Schedule of Changes in working capital
2. Statement of Sources and Uses of Funds or Funds Flow Statement.
58. . Which of the following expenditures are to be treated as revenue expenditure?

1. Interest paid on money borrowed during construction period
2. Loss of uninsured stock due to fire
3. Cost of patent rights
4. Retirement gratuity paid to an employee
Select the correct answer using the codes given.
a) 1 and 3 only
b) 2 and 4 only
c) 1 and 4 only
d) all the above
Ans : B
Revenue Expenditure
 According to Kohler ―it is an expenditure charged against operation; a term used to contrast with
capital expenditure‖.
 Revenue expenditure is incurred in the current period or in one period of account. The benefit of the
revenue expenditure is utilized in that period itself.
Revenue expenditure is incurred for the following purpose:
 All establishment and other expenses incurred in the normal course of business. For instance,
administration expenses of a business, expenses incurred in manufacturing and selling products.
 Expenses incidental to the carrying of a business, the benefit of which is consumed within the
accounting period. For instance, Rent, Wages, Salaries, Advertising, Taxes, Insurance Retirement
gratuity etc.
 Expenditure on goods purchased for resale. For instance, cost of goods purchased or cost of raw
materials etc.
 For maintaining fixed assets in working order. For instance, repairs, renewals and replacement of
existing assets, depreciation etc. These revenue expenditure items appear in Trading and Profit
and Loss Account.
Items of Revenue Expenditure
 Expenditure on rent, wages, carriage, salaries, postage, insurance, advertising etc.
 Interest on loan borrowed for running business.
 Cost of goods bought for resale.
 Cost of raw materials consumed in the course of manufacturing.
 Expenses incurred for maintenance of various assets by way of repairs, renewals and replacement on
building, plant, machinery, tools, fixtures, van, car etc. To keep them in the good condition.
 Depreciation of fixed assets.
 Taxes and legal expenses.
 Loss arising from sale of fixed assets.
 Maintenances of lights and fans.
 All expenses incurred in the manufacturing and distribution of the products handled.
 Wages paid for sale of goods.
 Loss of goods by fire or other reasons.
 Discounts and allowances.
Hence option b is correct
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59. From the following, select the right option with reference to the working capital:
a) Higher net working capital leads to higher liquidity and higher profitability
b) According to hedging approach. current assets should be financed from long- term sources.
c) There is an inverse relationship between the length of operating cycle of a firm and its working
capital requirements.
d) Trade-off plan, in general, is considered an appropriate financing strategy for working capital.
Ans : D
Working captial
 Working capital management is a topic of funds allocation as well as assets allocation in an appropriate
manner. If finance is blood of the business, then working capital is an organ which propels and
generates new blood in the body of the business.
Classification of Working captial
Importance of working capital

 Working capital ensure the liquidity position of the firm, as well as indicates the short-term solvency
position of the firm.
 A sufficient amount of working capital ensures regular and timely payment to creditors and other short-
term lenders which increases the goodwill of the firm.
 Timely payment to creditors or bankers enables the firm to get regular supply of goods and availability
of short-term loans, as it also increases creditworthiness of the firms in the records of banking
institutions.
 Availability of cash and early payments to creditors gives opportunity to a firm to avail cash discounts.
 Making payment of wages to labour on time is also crucial for turnover of raw material into sales, thus,
increase in overall productivity of the firm. It is possible if firm has adequate source of funds.
 An adequate working capital enables firm to compete with rivals, and to face difficult situations, e.g.,
an increase in prices of raw material etc.
 To increase the profitability of a concern, increase in total revenues is must, andto increase revenue,
adequate working capital is much needed. Thus adequate working capital contributes in profit making.
 Hence d is correct
60. Presumptive taxation involves which one of the following?

a) The use of indirect methods to calculate tax liability, which differ from the usual sales basedon the
tax payers accounts.
b) Transfer of tax liability from State to the Centre.
c) Calculation of short term capital gain.
d) Calculation of rebate U / S 89.
Ans : A
 Presumptive taxation simplifies the process for certain taxpayers by estimating their income based on a
predetermined percentage of their total revenue, The use of indirect methods to calculate tax liability,
which differ from the usual sales based on the tax payers accounts. Hence is a correct
 Transfer of tax liability from State to the Centre: It refers to specific situations where the responsibility
for collecting a tax might be shifted between federal and state governments. hence option b is incorrect.
 Calculation of short term capital gain: This is a separate concept that refers to the profits earned
from selling assets held for a short period. Presumptive taxation focuses on income from business or
professional activities. hence option c is incorrect.
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 Calculation of rebate U / S 87A: The calculation of rebate under Section 87A of the Income Tax Act,
1961, depends on the tax regime you choose: old tax regime or new tax regime (introduced in Budget
2023). Hence option d is incorrect
61. Goodwill account is closed at the time of dissolution by transferring it to :

a) Realization account
b) capital account
c) Liability account
d) drawings account
Ans : A
 At the time of dissolution of a partnership, the goodwill account is closed by transferring it to the
realization account. Hence a is correct
 Goodwill is good name or the reputation of the business, which is earned by a firm through the hard
work and honesty of its owners. If a firm renders good service to the customers, the customers who feel
satisfied will come again and again and the firm will be able to earn more profits in future. Thus,
goodwill is the value of the reputation of a firm which enables it to earn higher profits in comparison to
the normal profits earned by other firms in the same trade.
Features of Goodwill
1. It is an intangible asset: Goodwill cannot be seen or touched. It does not have any physical existence.
Thus, it belongs to the category of intangible assets such as patents, trademarks, copy rights, etc.
2. It does not have an existence separate from that of an enterprise: Goodwill of an enterprise entirely
depends on the enterprise and the situation of its profits. Thus, normally it has realisable value when
business is sold.
3. It is helpful in earning higher profits.
4. It is an attractive force: It is an attractive force as it brings in customers regularly to the place of
business.
5. It comes into existence due to various factors: The factors affecting the value of a firm‘s goodwill
may be locational advantages, favourable contracts, brands, trademarks, copyrights, market
reputation, etc.
6. It is difficult to place an exact value on goodwill: This is because its value may fluctuate from time to
time due to changing circumstances which are internet and external to business. Moreover, the value
of goodwill is subjective as it depends on the assessment of the valuer.
7. Its value is liable to constant fluctuations: While goodwill does not depreciate, its value is liable to
constant fluctuation, its value is liable to constant fluctuations. It is always present as a silent asset in
a business where there are super profits (i.e. More than the normal) but declines in value with the
decline in earnings.
Methods of valuation of goodwill:
there are three methods of valuing goodwill:
A) Average profit method
B) Super profit method
C) Capitalization method
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62. The interest charged on the hire purchase should appear in the profit and loss account in what
manner?
a) The total interest levied should be divided equally over the total period the for purchase
agreement
b) The interest charged in that period only should be included
c) Interest should instead be capitalised on the balance sheet
d) I nterest should be apportioned in proportion to the repayment totals.
Ans : B
 In hire purchase agreements, the interest charged during a specific period should be recognized in
the profit and loss account for that period. This approach ensures that the interest expense is
matched with the revenue earned during the same period, adhering to the matching principle of
accounting. Therefore, option (b) is the correct.
Debtors Method, Stock-Debtors Method & Final Accounts Method in Hire purchrase system
 When the per unit sale price of the goods sold under hire purchase is small, but the number of items
sold is large, it becomes infeasible for the Hire vendor to maintain a separate account for individual
hire purchaser. So Hire Vendor maintains a Day book for recording the hire purchase transactions. This
is called the Hire Purchase Sales Register. The Hire Vendor can ascertain the profit using the
information contained in the Hire Purchase Sales Register by adopting any of the following methods:
A.Debtors Method
B.Stock-Debtors Method
C.Final Accounts Method
 In such transactions no separate accounting is done for the interest element. In other words, no
distinction is done between trading profit and interest charged.
Debtors Method Or Hire Purchase Trading (Stock Approach)
 Under this method both double entry ledger accounts and memoranda accounts are maintained for
recording hire purchase transactions. The double entry accounts maintained are H.P. Trading A/c,
General Trading A/c (if any), Goods sold on H.P. A / c and the Memorandum accounts are
Memorandum H.P. Stock A/c, Memorandum H.P. Debtors A/c, Memorandum Shop/ Godown Stock
A/c (if any). The profit/ loss from hire purchase transaction gets determined through H.P. Trading A/c.
63. In case of rising prices (inflation), FIFO method will:

a) provide lowest value of closing stock and profit
b) provide highest value of closing stock and profit
c) provide highest value of closing stock but lowest value of profit
d) provide highest value of profit but lowest value of closing stock
Ans : B
Inventory Accounting & Valuation
Valuation of Material Receipts
 Principles of valuation of receipt of materials as per CAS - 6 are as follows:
 The material receipt should be valued at purchase price including duties and taxes, freight inwards,
insurance and other expenditure directly attributable to procurement (net of trade discounts, rebates,
taxes and duties refundable or to be credited by the taxing authorities) that can be quantified with
reasonable accuracy at the time of acquisition.
 Materials issued from stores should be priced at the price at which they are carried in inventory.
 Material may be purchased from different suppliers at different prices in different situations, where as
consumption may happen the entire inventory at a time or at different lots etc. So, issue of materials
should be valued after considering the following factors:
a. Nature of business and production process.
b. Management policy relating to the closing stock valuation.
c. Frequency of purchases and price fluctuations.
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Several methods of pricing of material issues have been evolved; these may be classified into the
following:
Cost Price Method
i. First in First Out
ii. Last in First Out
iii. Base Stock Method
Specific price method
i. Average Price Method
ii. Simple Average Price Method
iii. Weighted Average Price Method
iv. Moving Simple Average Method
v. Moving Weighted Average Method
Market Price Methods
i. Replacement Method
ii. Realisable Price Method
Notional Price Methods
i. Standard Price Method
ii. Inflated Price Method
1. First in First Out Method (FIFO Method)
It is a method of pricing the issue of materials in the order in which they are purchased. In other
words, the materials are issued in the order in which they arrive in the store. This method is
considered suitable in times of falling price because the material cost charged to production will be
high while the replacement cost of materials will be low. In case of rising prices this method is not
suitable.
Advantages
i. It is simple and easy to operate.
ii. In case of falling price, this method gives better results.
iii. Closing stocks represents the market prices.
Disadvantages
i. If the prices fluctuate frequently, this method may lead to clerical errors.
ii. In case of rising prices this method is not advisable.
iii. The material costs charged to same job are likely to show different rates.hence b is correct
2. Last in First Out Method (LIFO Method)
Under this method the prices of last received batch (lot) are used for pricing the issues, until it is
exhausted and so on. During the inflationary period or period of rising prices, the use of LIFO would
help to ensure the cost of production determined approximately on the above basis is approximately
the current one. Under LIFO stocks would be valued at old prices, but not represent the current
prices.
Advantages
i. The cost of materials issued will be either nearer to and/or will reflect the current market price.
ii. In case of falling prices profit tends to rise due to lower material cost.
Disadvantages
i. The computations become complicated if too many receipts are there.
ii. Companies having JIT system will face this problem more.
58
3. Base Stock Method
A minimum quantity of stock under this method is always held at a fixed price as reserve in the
stock, to meet a state of emergency, if arises. This minimum stock is known as Base Stock and is
valued at a price at which the first lot of materials is received and remains unaffected by subsequent
price fluctuations. The quantity in excess of the base stock may be valued either on the LIFO basis or
FIFO basis. This method is not an independent method as it used FIFO or LIFO. Its advantages and
disadvantages therefore will depend upon the use of the other method.
4. Specific Price Method
This method is useful, especially when the materials are purchased for a specific job or work order,
and as such these materials are issued subsequently to that specific job or work order at the price at
which they were purchased. The cost of materials issued for production purposes to specific jobs
represent actual and correct costs. This method is specific for non-standard products. This method is
difficult to operate, especially when purchases and issues are numerous.
5. Simple Average Price Method
 Under this method materials issued are valued at average price, which is computed by dividing the
total of the unit prices of each purchase by the total number of units.
64. Arrange the following in the proper order for decision under capital budgeting.
1. Estimating the cost and benefits of proposals.
2. Deciding the investment objective.
3. Selecting the best investment proposal.
4. Applying the capital budgeting decision technique.
Codes:
a) 2 4 1 3
b) 2 4 3 1
c) 2 1 4 3
d) 2 1 3 4
Ans : C
Capital Budgeting Decisions
 Capital budgeting is used to describe how managers plan significant investments in projects that have
long-term implications (realize future net cash inflows)
Capital budgeting processing
Typical Capital Budgeting Decisions

 Plant expansion
 Equipment selection
 Lease or buy
 Equipment replacement
59
 Cost reduction
Cash Flows versus Operating Income
 Payback Method
 Net Present Value
 Internal Rate of Return
These methods focus on analyzing the cash flows associated with capital investment projects.
The simple rate of return method focuses on incremental net operating income.
Hence c is correct
65. Giffen goods are those goods ___________

a) For which demand increases as price increases
b) That have a high income elasticity of demand
c) That are in short supply
d) None of these
Ans : A
Giffen theory
 A Giffen good is a low income, a non-luxury product that defies standard economic and consumer
demand theory.
 Demand for Giffen goods rises when the price rises and falls when the price falls. In econometrics, this
results in an upward-sloping demand curve, contrary to the fundamental laws of demand which create
a downward sloping demand curve. Hence a is corect
 The term "Giffen goods" was coined in the late 1800s, named after noted Scottish economist,
statistician, and journalist Sir Robert Giffen.
 The concept of Giffen goods focuses on a low income, non-luxury products that have very few close
substitutes. Giffen goods can be compared to Veblen goods which similarly defy standard economic
and consumer demand theory but focus on luxury goods.
 Examples of Giffen goods can include bread, rice, and wheat. These goods are commonly essentials
with few near-dimensional substitutes at the same price levels.
 Giffen goods are a rarity in economics because supply and demand for these goods are the opposite of
standard conventions. Giffen goods can be the result of multiple market variables including supply,
demand, price, income, and substitution. All of these variables are central to the basic theories of
supply and demand economics.
 Giffen goods cases study the effects of these variables on low-income, non-luxury goods which result
in an upward sloping demand curve.
Supply and Demand
 When prices fall, demand is expected to increase creating an upward sloping curve. Income can
slightly mitigate these results, flattening curves since more personal income can result in different
behaviours. Substitution and the substitution effect can also be significant. Since there are typical
substitutes for most goods, the substitution effect helps strengthen the case for standard supply and
demand.
 In the case of Giffen goods, the income effect can be substantial while the substitution effect is also
impactful. With Giffen goods, the demand curve is upward sloping which shows more demand at
higher prices.
 Since there are few substitutes for Giffen goods, consumers continue to remain willing to buy a
Giffen good when the price rises. Giffen goods are usually essential items as well which then
incorporates both the income effect and a higher price substitution effect.
 Since Giffen goods are essential, consumers are willing to pay more for them but this also limits
disposable income which makes buying slightly higher options even more out of reach.
 Therefore, consumers buy even more of the Giffen good. Overall, both the income and substitution
effects are at work to create the unconventional supply and demand results.
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66. In case of a straight line demand curve meeting the two axes , the price elasticity of demand at the
mid-point of the line would be:
a) 0
b) 1
c) 1.5
d) 2
Ans : B
 In the case of a straight-line demand curve meeting, the two Axes the price elasticity of demand
at the midpoint of the line would be 1.
Hence b is correct
 price elasticity of demand is the ratio of the percentage change in quantity demanded of a product to
the percentage change in price. Economists employ it to understand how supply and demand change
when a product's price changes
 Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a
change in its price. It is computed as the percentage change in quantity demanded—or supplied—
divided by the percentage change in price.
 Elasticity can be described as elastic—or very responsive—unit elastic, or inelastic—not very
responsive.
 Elastic demand or supply curves indicate that the quantity demanded or supplied responds to price
changes in a greater than proportional manner.
 An inelastic demand or supply curve is one where a given percentage change in price will cause a
smaller percentage change in quantity demanded or supplied.
 Unitary elasticity means that a given percentage change in price leads to an equal percentage change in
quantity demanded or supplied.
67. Which of the following statements is false?

a) Economic costs include the opportunity costs of the resources owned by the firm.
b) Accounting profit is equal to total revenue less implicit costs.
c) Accounting costs include only explicit costs.
d) Economic profit will always be less than accounting profit if resources owned and used by the firm
have any opportunity costs.
Ans : B
 Accounting profit is calculated by subtracting explicit costs from total revenue. Implicit costs,
which represent the opportunity costs of resources used by the firm, are not considered in
accounting profit calculations. Therefore, option (b) is false.
 Profit = Total Revenue - (direct costs+ opportunity costs)
 profit takes into account both direct and indirect costs, including opportunity costs. Therefore,
economic profit will generally be less than accounting profit if there are any opportunity costs
associated with the resources owned and used by the firm.
 Opportunity cost refers to the benefit or value that is sacrificed when one alternative is chosen over
another, representing the next best alternative foregone.
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68. Hire Purchase Act is passed in the year
a) 1932
b) 1956
c) 1972
d) 1872
Ans : C
The Hire-Purchase Act was passed by 1972.hence c is correct
Hire Purchase System.
 When goods are sold on credit, for which payment is made by the buyer in instalments over a period of
time. It is called Hire Purchase System.
FEATURES
 Hire Purchase is an agreement between two parties called Hire Vendor & Hire purchaser
 The agreement provides for parting the possession of goods, by the seller, with an option to purchase
or hire the goods by buyer
 Payment for the goods will be made by the hire purchaser in instalments If the hire purchaser pays all
the instalments, the ownership of the goods will be transferred on payment of last instalment, resulting
the transaction in ‗purchase‘
 If hire purchaser stops paying the instalments, the hire vendor repossesses the goods resulting the
transaction in ‗hire‘.
 In such case, each earlier instalment paid will be treated as hire charges In case the transaction
resulting in purchase, each instalment paid will be inclusive of:
a. Payment towards price of the goods (i.e., principal amount)
b. Payment of interest
69. units of capital give 400 units of output and 5 units of labour and 5 units of capital give 1000 units
of output then this is a case of:
a) Constant returns to scale.
b) Increasing returns to scale.
c) Decreasing returns to scale.
d) None of these.
Ans : B
Explain:
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 Since the output increased more than proportionally with respect to the increase in capital while labor
remained constant, this indicates increasing returns to scale. Hence b is correct.
70. FATCA stands for

a) Foreign Account Tax Compliance Act
b) Foreign Account Trade Company Act
c) Financial Account Tax Compliance Act
d) Fiscal Account Tax Compliance Act
Ans : A
The Foreign Account Tax Compliance Act (FATCA)
 The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that was enacted in
2010.
 It requires foreign financial institutions (FFIs) to report information about financial accounts held by
US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest, to the
Internal Revenue Service (IRS).
 The purpose of FATCA is to help the IRS identify and combat tax evasion by US taxpayers through
the use of foreign financial accounts.
 Under FATCA, FFIs are required to enter into an agreement with the IRS to report certain information
about their US account holders.
 If an FFI fails to comply with the terms of the agreement, it may be subject to a 30% withholding tax on
certain payments it receives from US sources.
Hence a is correct
71. Which of the following is/are false about Dishonour of Cheque?

1) Section 138 defines Dishonour of cheque for insufficiency, etc., of funds in the account.
2) Such cheque has been presented to the bank within a period of twelve months from the date on which
it is drawn or within the period of its validity, whichever is earlier
3) Imprisonment for such offence may be extended for period of five year
4) Section 138 apply unless – the drawer of such cheque fails to make the payment of the said amount of
money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen
days of the receipt of the said notice.
a) 1 and 4 only
b) 2 and 3 only
c) 2,3 and 4 only
d) all the above
Ans : B
 Section 138 defines Dishonour of Cheque for insufficiency of funds. The cheque needs to be presented
within its validity or 12 months, whichever is earlier. The drawer is liable for imprisonment unless they
make the payment within 15 days of receiving the dishonor notice.
Punishment & Penalty
 The court will issue summons and hear the case after receiving the complaint, as well as an affidavit
and related document trail. If proven guilty, the defaulter may be penalised with a monetary penalty of
double the amount of the cheque, or imprisonment for a time of up to two years, or both. For repeated
bounced cheque offences, the bank has the power to suspend the cheque book facility and cancel the
account.
 If the drawer pays the amount of the check within 15 days after receiving the notice, the drawer is not
guilty of any offence and Imprisonment for such offence may be extended for period of five year
Otherwise, the payee has one month from the notice‘s expiration date to submit a complaint in the
jurisdictional magistrate‘s court.
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Cases of Dishonour
The above means that there can be several cases leading to dishonour of a negotiable instrument, some of which
are
 When the maker, drawer or acceptor actively does something so as to intentionally obstruct the
presentment of the instrument, e.g., deprives the holder of the instrument and keeps it after maturity.
 When his business place is closed on the due date.
 In a situation, when there is no person present to make payment at the specified place for payment.
 When we cannot find the person even after due searching.
 In the case of a promise to pay notwithstanding non-presentment.
 When the party entitled to presentment waives the presentment in an express or implied manner.
 When there would have been no damage to the drawer in the case of non-presentment.
 If the drawer is incompetent to contract.
 In a case where the drawer and the drawee is the same person.
 In the case of the situation that renders the presentment impossible for e.g. the declaration of war
between the countries of the holder and the drawee.
 When there is a non-acceptance on some other grounds, even though the presentment has been
irregular.
72. Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act
popularly known as SARFAESI Act was enacted in which of the following year:
a) 21th June 2002
b) 30th May 2002
c) 21th July 2002
d) 21th April 2002
Ans : A
 The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, more commonly known by its shorter name SARFAESI Act, is a legislation that allows
banks and other financial organizations to recover bad loans effectively.
 It shall be deemed to have come into force on the 21st day of June, 2002.hence a is correct
 The act can be utilized to tackle the problem of Non-Performing Assets (NPAs) through different
procedures. However, this is possible only for secured loans. For unsecured loans, banks should move
the court to file a civil case of defaulting.
 This act makes court‘s intervention unnecessary in case of secured loans. The first asset
reconstruction company (ARC) of India, ARCIL, was set up under this act.
 The SARFAESI Act, secured creditors (banks or financial institutions) have many rights for
enforcement of security interest under section 13 of this act.
 If the borrower of financial assistance makes any default in repayment of a loan or any instalment and
his account is classified as Non-performing Asset by secured creditor, then secured creditor may
require before expiry of period of limitation by written notice to the borrower for repayment of due in
full within 60 days by clearly stating amount due and intention for enforcement.
 The SARFAESI Act empowers financial institutions to ‗seize and desist‘. They should give a
notice to the defaulting borrower asking to repay the amount within 60 days. If the debtor doesn‘t
comply, the bank can resort to one of the three following measures:
1. Take the possession of the loan security.
2. Sell or lease or assign the right over the security.
3. Manage the asset or appoint someone to manage the same.
 The Act also provides for the establishment of Asset Reconstruction Companies (ARCs) to acquire
assets from banks and other financial institutions. ARCs are regulated by the RBI.
73. The absolute measure of skewness is based on the difference between
a) Mean and Mode
b) Mean and Median
c)Median and Mode
d) None
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Ans : A
 The skewness of a distribution is defined as the lack of symmetry. In a symmetrical distribution, the
Mean, Median and Mode are equal to each other and the ordinate at mean divides the distribution into
two equal parts such that one Mean and Mode.
Karl pearson's Measure of Skewness
Mean = Mode in a symmetrical distribution, (Mean - Mode) can be taken as an absolute measure of
skewness.hence a is correct
74. What is expected rent?

a) Municipal value of Fair value whichever is lower
b) Fair value value of Municipal value whichever is higher
c) Municipal value of Fair value whichever is higher subject to standard rent
d) None of these
Ans : C
Municipal value of Fair value whichever is higher subject to standard rent. hence c correct
 Municipal Value: This is the value assigned to the property by the local authorities for tax purposes.
 Fair Rent: This is the rent that a similar property in the same locality would typically command in the
open market.
 Standard Rent: This is the maximum rent that can be charged for a property, as determined by the
Rent Control Act (applicable in some areas).
Expected rent considers both the government valuation and the market value, but it cannot exceed the
standard rent if applicable.
75. Which among the following is not the instrument of monetary policy
a) Deficit financing
b) Statutory liquidity Ratio
c) Cash reserve ratio
d) Open market operation
Ans : A
Monetary Policy is nothing but an economic policy which is able to manage the growth rate and size of the money
supply in a given economy. Monetary policy is one powerful tool that regulates macroeconomy-based variables like
unemployment and inflation. In the following article, we shall learn and understand about all the major aspects related
to the monetary policy in India.
 Monetary policy is created and adopted by the monetary authoritative body of a nation that controls the
short-term borrowings, money supply, and interest rates.
 The monetary policy generally focuses on inflation and/ or interest rates in order to make sure that
there is price stability and general trust in the currency of the economy.
 Monetary Policy in India is undertaken by the authority of the Reserve Bank of India (RBI).
The following section elaborates each of the monetary policy instrument in detail:
CRR (Cash Reserve Ratio)
 CRR is the average daily balance that a bank is needed to maintain with the RBI, one of the prime regulators of
banks and financial institutions.
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 The CRR is a share of such a percentage of its NDTL (Net Demand and Time Liabilities) that the RBI may
alter on a regular basis in the Gazette of India.
SLR (Statutory Liquidity Ratio)
 The SLR is the share of NDTL that banks are mandated to maintain in the form of safe and liquid assets. These
include government securities, cash, and gold.
 If there is any change in the SLR, it influences the availability of resources in the banking industry for extending
loans to the private sector.
Repo Rate
 The rate of interest the RBI charges from its customer base on their short-term borrowings is the Repo Rate.
 Hence, it is basically an abbreviated form of ―rate of purchase‖. In practical form, it is not called an interest rate.
Instead, it is considered as a discount on the dated government securities that are deposited by the institution to
borrow for a short term.
 Repo Rate is fixed to be in the range of 5% to 9%
Reverse Repo Rate
 It is the rate of interest that the RBI pays to its customer base that offers short-term loans to it. As the
name suggests, it is the reverse of the repo rate and it was started in November 1966 as a part of the LAF
(Liquidity Adjustment Facility) by the RBI.
 An LAF enables the banks to get money through repurchase agreements. The Reverse Repo Rate is utilized by
the RBI in the wake of over money supply with the banks and lower loan disbursal to serve both the purposes of
cutting down losses in the prevailing interest rates.
 The reverse repo rate ranges from 5% to 9% Read more about Basics of Banking
Marginal Standing Facility (MSF)
 The MSF enables the banks to borrow overnight up to 1% of their NDTL from the RBI at the interest
rate 1% higher than the current repo rate.
 The bank rate is fixed in the range of 5% to 7%
Qualitative Measures
 Qualitative measures are the ones that are related to the financial system and are managed like flow according to
rates or taxes. In these, the volume of money is not controlled.
Margin Requirement
 The RBI follows the margin requirement strategy to avoid bank loss. Under this system, the RBI provides loans
less than the requirement of the bank. It is done at some calculated extent (Security value – Loan amount =
Margin Requirement).
Open Market Operations (OMOs)
 The OMOs are organized by the RBI via the sale and/ or purchase of securities of the government to/ from the
market with the main intention of regulating rupee liquidation in the market.
 OMOs are effective quantitative tools in the RBI‘s inventory, they are constrained by the stock of government
securities available with it at a point of time.
Standard Deposit Facility Scheme (SDFS)
 The SDFS scheme has been proposed by the Union Budget of 2018-19. However, such a tool was proposed
by the RBI back in November 2015. The scheme is aimed at helping the RBI to manage liquidity in a better
way, especially when the economy is flush with excess funds (after demonetization of the high value
currency notes in November 2016)
Hence a is correct
76. Members of Bombay stock exchange are unofficially classified into___________
a) brokers and tarawaniwalas
b) brokers and jobbers
c) jobbers and tarawaniwalas
d) there is no such classification of members of stock exchange
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Ans : A
Members of Bombay stock exchange are unofficially classified into brokers and tarawaniwalas.
 In India there are two types of members in the Mumbai stock exchange.
 They are called Brokers and Tarawaniwalas. All this is done unofficially.
 The Tarawaniwalas act both as jobbers and brokers.
 A tarawaniwala makes transactions on his behalf like a jobber but he may also act as a broker on
behalf of the public
Hence a is correct
Bombay Stock Exchange
 BSE Ltd (formerly known as Bombay Stock Exchange Ltd) was established in 1875 and was Asia‘s
first Stock Exchange.
 It was granted permanent recognition under the Securities Contract (Regulation) Act, 1956. It has
contributed to the growth of the corporate sector by providing a platform for raising capital.
 It is known as BSE Ltd but was established as the Native Share Stock Brokers Association in 1875.
 Even before the actual legislations were enacted, BSE Ltd already had a set of Rules and Regulations
to ensure an orderly growth of the securities market.
 Head office:Mumbai
 Present chairman: Shri Pramod Agrawal
National Stock Exchange of India
 The National Stock Exchange is the latest, most modern and technology driven exchange. It was
incorporated in 1992 and was recognised as a stock exchange in April 1993.
 It started operations in 1994, with trading on the wholesale debt market segment. Subsequently, it
launched the capital market segment in November 1994 as a trading platform for equities and the
futures and options segment in June 2000 for various derivative instruments.
 Head office:Mumbai
 Present chairman :Girish Chandra Chaturvedi
The Securities and Exchange Board
 The Securities and Exchange Board of India was established by the Government of India on 12
April 1988 as an interim administrative body to promote orderly and healthy growth of securities
market and for investor protection.
 It was to function under the overall administrative control of the Ministry of Finance of the
Government of India.
 The SEBI was given a statutory status on 30 January 1992 through an ordinance. The ordinance was
later replaced by an Act of Parliament known as the Securities and Exchange Board of India Act,
1992.
 Head office: Mumbai
 Present chairman: Madbabi Puri Buch
77. Match the items of List - I with List - II in terms of functions of a bank:
List-1 (Activities) List-II
(Functions)
A. Underwriting 1. PrimaryFunctions
B. Transfer of funds 2. Granting Advances
C. Overdraft 3. Utility Functions
D. Recurring 4. Agency Functions
Deposits
Codes:
a b c d
a) 1 2 4 3
b) 3 4 2 1
c) 4 3 2 1
d) 4 2 1 3
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Ans : B
Functions of bank/banker
 Two principal functions of banks are- accepting deposits and availing loans & advances. We will
discuss these two functions in quite detail in the following text:
Accepting deposits:
 As mentioned earlier, banks accept money from the public or organizations/businesses and provide
services for on-demand withdrawal and interests. There are primarily four types of deposit accounts as
follows:
Saving deposit:
 it is the simplest of all other types, and the important perk of this deposit account is the facility for on-
demand payment. Depositors also get a small amount of interest on money deposited. Obligation to
maintain a minimum balance amount and restriction on the amount & number of withdrawals one can
make are the limitations of this account. This type is also known as a demand deposit.
Fixed deposit:
 This type of deposit gets better interest, but a fixed amount of money has to be invested for a fixed
period. The depositor can not make withdrawals before the maturity period. These are also called
term/time deposits.
Recurring deposits:
 This type of deposit, like fixed deposits, does not support withdrawal before the completion of the
maturity period. This has a longer duration for maturity, and deposits have to be made at regular
intervals.
Current deposits:
 Unlike other call types, these deposits are neither bound to any withdrawal limitations nor provide any
interest on deposits. These are usually used for business purposes.
Availing loans & advances:
 As mentioned earlier, banks use the money collected in the form of deposits to offer loans with quite
higher interests in return to the needy. Loans or advances offered by the bank are of the following
types:
Cash credit facility:
 Banks provide these short-term loans with higher interests to businesses, generally against some assets
as a security.
Overdraft facility:
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 This service is also provided against some collateral and applies to current account holders. This
facility enables bank users to have a current account for withdrawals of the high amount at the cost of
high interests.
Bill/invoice discounting:
 This is the discounting facility provided to businesses by a bank against due payments of
organizations.
Loans:
 Bank provides secured or unsecured loans to an individual like home loans, car loans, education loans,
etc. these can be long-term/short term, and payments to a bank can be made in installments.
 Other than these two principal functions, banks also deal with other work aiding Government or
organizations policies and financial affairs. These are known as secondary functions of a bank, and
these can be grouped into two broad categories-
Agency functions:
 These include functions related to making bill payments, collection of due payments, etc. following are
some specific examples of these functions-
 Periodic payments
 Periodic collection
 Fund transfer
 Cheques negotiation
 Advisory services
Utility functions:
 These include services such as locker services, house taxes, pension, AEPS withdrawal, etc.
78. DAGMAR approach in marketing is used to measure

a) Public relations
b) Advertising results
c) Selling volume
d) Consumer satisfaction
Ans : B
Explanation:
The DAGMAR approach is specifically used to measure advertising results. So the answer is (B) correct.
 the DAGMAR approach, marketers can create targeted advertising campaigns that deliver measurable
results and contribute to achieving broader marketing objectives.
 Public relations: While public relations can impact brand perception, DAGMAR focuses on the
effectiveness of specific advertising campaigns.
 Selling volume: DAGMAR helps understand how advertising influences sales, but it doesn't directly
measure total selling volume.
 Consumer satisfaction: While satisfied consumers might be a result of successful advertising,
DAGMAR doesn't directly measure that satisfaction.
DAGMAR approach
 DAGMAR stands for Defining Advertising Goals for Measured Advertising Results. It's a framework
used in marketing to set clear objectives for advertising campaigns and then measure how effectively
those objectives are achieved.
Key aspects of DAGMAR:
 Focus on Measurable Goals: DAGMAR emphasizes setting specific and measurable goals for
advertising campaigns. This could involve increasing brand awareness by a certain percentage,
improving understanding of a product's features, or driving a specific number of website visits.
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 ACCA Model: DAGMAR uses a four-stage model known as ACCA to guide the advertising journey:
 Awareness: Making the target audience aware of the brand or product.
 Comprehension: Ensuring the audience understands the product's features and benefits.
 Conviction: Persuading the audience that the product is relevant and valuable to them.
 Action: Motivating the audience to take a desired action, such as making a purchase or visiting a
store.
 Measurement and Evaluation: A key part of DAGMAR is tracking the campaign's performance
against the pre-defined goals. This involves using appropriate metrics to assess the effectiveness of the
advertising efforts.
79. The list of voters, number of students in a university and the telephone directory are some of the
examples of
a) Sampling frames
b) Sampling unit
c) Systematic sampling
d) Cluster sampling
Ans : A
Explanation: Sampling frames are lists or databases from which a sample is drawn. They provide the source
from which the sample is selected. Examples include lists of voters, the number of students in a university,
telephone directories, lists of customers, and so on. These frames serve as the basis for selecting the sample
units in a sampling process.
 Sampling frame: A sampling frame is a list of all elements (people, objects, etc.) in a population from
which a sample can be drawn. The list of voters, number of students in a university and the telephone
directory all represent the entire population (voters in an area, students in a university, phone line
owners) from which a sample can be selected.
 Sampling unit: This refers to the individual element chosen from the population. In the examples, a
single voter, a particular student, or a specific phone number would be a sampling unit.
 Systematic sampling: This is a specific type of probability sampling where elements are chosen at
regular intervals from a sampling frame. While the frame itself isn't the sampling method, it can be used
for systematic sampling.
 Cluster sampling: This involves dividing the population into groups (clusters) and then randomly
selecting some of those clusters. While the phone directory could be used for cluster sampling (dividing
by geographic area), it's not the inherent characteristic of a sampling frame.
80. Nikkie belongs to

a) Nigerian Stock Exchange Centre
b) Tokyo Stock Exchange Centre
c) Nepal Stock Exchange Centre
d) N. Korean Stock Exchange Centre
Ans : B
Explanation:
 The Tokyo Stock Exchange (TSE) is a stock exchange located in Tokyo, Japan. It is one of the world's
largest stock exchanges by market capitalization. The TSE is owned by the Japan Exchange Group
(JPX), which also owns the Osaka Securities Exchange (OSE) and the Tokyo Commodity Exchange
(TOCOM).
More information
Stock exchange markets in india
 Bombay Stock Exchange (BSE)
 National Stock Exchange (NSE)
 Multi-Commodity Exchange (MCX)
 National Commodity and Derivates Exchange (NCDEX)
 India International Exchange (India INX)
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 NSE IFSC
 Indian Commodity Exchange (ICEX)
 Calcutta Stock Exchange (CSE)
Nigerian Stock Exchange Centre
 The Nigerian Stock Exchange (NSE), now known as the Nigerian Exchange Group (NGX Group), has
only one physical location for trading activities.
 The NGX Group headquarters is situated in Lagos, Nigeria.
Nepal Stock Exchange Centre
 The Nepal Stock Exchange (NEPSE) operates as a single exchange with its headquarters located in
Kathmandu, Nepal. There are no physical trading floors, as all trading is done electronically through
member stock brokers.
 There is currently no established stock exchange in North Korea. North Korea is a closed economy
with limited participation in the global financial system.
81. In which one of the following modes of entry into foreign market risk and profit potential are the
highest?
a) Indirect exporting
b) Direct exporting
c) Direct investment
d) Joint ventures
Ans : C
Explanation:
 In terms of risk and profit potential, direct investment typically carries the highest level of risk but also
potentially offers the highest profit potential among the options listed. Therefore, the correct answer is
C. Direct investment
More information
 Indirect exporting: Involves relying on intermediary companies to handle distribution and sales in the
foreign market. This minimizes risk but also limits control over branding, pricing, and profit margins.
 Direct exporting: You handle the exporting process yourself, giving you more control over branding
and pricing. However, it requires establishing distribution channels and marketing efforts abroad,
increasing risk compared to indirect exporting.
 Direct investment: This involves setting up your own operations in the foreign market, such as a
subsidiary or branch office. It offers the highest potential for profit due to greater control over all
aspects of the business. However, it also comes with significant risk, including political and economic
instability in the foreign country, managing a foreign workforce, and the initial investment required.
 Joint ventures: Partnering with a local company in the foreign market can reduce some risks associated
with direct investment, such as navigating regulations and understanding local consumer preferences.
However, it also means sharing profits and potentially encountering challenges due to differing
management styles or goals with the joint venture partner.
Direct investment
 Direct investment in a foreign market involves establishing a significant ownership stake in a business
or project located in another country.
This can take several forms:
 Wholly-owned subsidiary: You own and control 100% of the foreign business entity. This offers the
most control over operations and profits, but also carries the full risk.
 Majority-owned subsidiary: You own more than 50% of the foreign company, giving you controlling
influence but potentially sharing some ownership and profits with minority shareholders.
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 Greenfield investment: You establish a new business operation from scratch in the foreign country.
This allows full customization but involves building infrastructure, hiring staff, and navigating
regulations from the ground up.
 Brownfield investment: You acquire an existing business in the foreign country. This provides faster
access to the market and existing infrastructure, but might require integrating your operations with the
existing ones.
 Benefits: Direct investment can offer several benefits for both the investor and the host country. For the
investor, it allows for greater control, potential for higher returns, and a physical presence in a new
market. For the host country, it can bring in capital, technology, and job creation.
82. BIFR was established on the basis of recommendations of . . . . . . . . committee.

a) Goswami
b) Manmohan Singh
c) Rangarajan
d) Tiwari
Ans : D
Explanation:
The BIFR (Board for Industrial and Financial Reconstruction) was established on the basis of
recommendations of the Tiwari Committee.
 The Board for Industrial and Financial Reconstruction (BIFR) was established in India in 1987 under
the Sick Industrial Companies (Special Provisions) Act (SICA).
 The primary objective of BIFR was to identify and revive potentially viable sick industrial companies
and, where revival wasn't possible, to recommend measures for their closure or winding up.
 BIFR played a crucial role in the restructuring and revival of sick companies in India, although it faced
criticism for its effectiveness and efficiency over the years.
More information
 The Goswami Committee, also known as the Committee on Electoral Reforms, was set up in 1990 by
the Government of India. The committee was chaired by Justice Dinesh Goswami, a former judge of the
Supreme Court of India. The Committee's mandate was to review the electoral process in India and
recommend measures to improve its efficiency, fairness, and transparency.
 Rangarajan Committee on Financial Inclusion: In 2007, Dr. Rangarajan chaired a committee to
examine the issue of financial inclusion in India. The committee submitted its report, titled "A Hundred
Small Steps," which outlined strategies and recommendations to enhance financial inclusion in the
country. Financial inclusion aims to provide access to formal financial services, such as banking and
insurance, to all sections of society, particularly the marginalized and underserved populations.
83. What is the purpose of CRM‘s territory management feature?

a) To limit the number of territories in a business
b) To automate territory assignment for sales representatives
c) To eliminate the need for sales territories
d) To randomly assign territories to sales representatives
Ans : B
Explanation:
Customer Relationship Management (CRM) systems often include a territory management feature designed
to help organizations effectively manage their sales territories.
Customer Relationship Management (CRM)
Components Of CRM include:
 Customer Data Management: CRM systems store and organize customer data, including contact
information, purchase history, preferences, and interactions across various channels such as email,
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phone calls, social media, and in-person interactions.
 Sales Automation: CRM software often includes features for managing sales pipelines, tracking leads
and opportunities, automating sales tasks such as follow-up emails and reminders, and forecasting sales
performance.
 Marketing Automation: CRM systems can facilitate targeted marketing campaigns by segmenting
customers based on demographics, behavior, or preferences, and automating personalized marketing
messages across multiple channels.
 Customer Service and Support: CRM software helps organizations deliver better customer service by
providing tools for managing customer inquiries, resolving issues, and tracking customer interactions
and feedback to ensure timely and effective responses.
 Analytics and Reporting: CRM systems offer reporting and analytics capabilities that enable
organizations to gain insights into customer behavior, sales performance, marketing effectiveness, and
overall customer satisfaction. These insights help businesses make data-driven decisions to improve
their strategies and processes.
 Integration: CRM systems can integrate with other business applications such as email marketing
platforms, e-commerce systems, accounting software, and customer support tools to provide a unified
view of customer interactions and streamline workflows across different departments.
How CRM Systems Facilitate Territory Management:
 Territory Definition: Define territories based on various criteria like zip code, industry, or account
size.
 Automated Lead Assignment: Automatically assign incoming leads to the appropriate rep based on
their territory.
 Data Visibility & Reporting: Generate reports that analyze sales performance by territory, allowing for
comparisons and adjustments.
 Access Control: Restrict rep access to accounts and contacts outside their assigned territory.
84. What is the Division of Work in Principles of Management?

a) Workers are given a specialized task to do
b) Necessary to ensure that managerial commands are carried out
c) Needed within an organization for it to run effectively
d) An employee should have only one boss
Ans : A
Explanation:
 The Division of Work principle in management refers to breaking down complex tasks into smaller,
specialized ones that individual workers can perform. This specialization allows workers to become
experts in their assigned tasks, leading to increased efficiency and productivity.
Principles of Management
Common Principles:
 Division of Work: Specializing tasks for increased efficiency and expertise.
 Authority and Responsibility: Granting managers the authority to make decisions while holding them
accountable for the results.
 Discipline: Maintaining order and following established rules within the organization.
 Unity of Command: Each employee has a clear reporting line to one supervisor to avoid confusion.
 Unity of Direction: All activities within the organization should contribute to achieving the overall
goals.
 Subordination of Individual Interests: The needs of the organization should take priority over
individual desires.
 Remuneration: Providing fair and motivating compensation to employees.
 Centralization: The degree to which decision-making authority rests with top management.
 Scalar Chain: The chain of authority that flows from top-level management to lower levels.
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 Order: Maintaining a clean, organized workplace for smooth operations.
 Equity: Treating all employees fairly and with respect.
 Stability of Personnel: Low employee turnover is beneficial for retaining knowledge and experience.
 Initiative: Encouraging employees to take ownership and be proactive.
 Esprit de Corps: Promoting a sense of team spirit and cooperation among employees.
85. Risk of payment or bad debts is overcome by which mode of payment in Mail Order Trading
House?
a) National Electronic Funds Transfer
b) Real-Time Gross Settlement
c) Value Payable Parcel
d) Demand Draft
Ans : C
Explanation:
 Value Payable Parcel (VPP) is a mode of payment commonly used in mail order trading, particularly for
goods delivered by postal or courier services. In VPP, the buyer pays for the goods upon delivery,
directly to the postal or courier agent. This mode of payment helps mitigate the risk of non-payment or
bad debts for the seller, as payment is collected at the time of delivery. Therefore, VPP is an effective
way to overcome the risk of payment or bad debts in mail order trading houses.
More information
Value Payable Parcel
 Value Payable Parcel (VPP) is a postal service offered by postal authorities in many countries. It allows
a sender to dispatch goods to a recipient through postal or courier services with payment to be made by
the recipient upon delivery.
Here's how VPP typically works:
 Sender Dispatches Parcel: The sender prepares the parcel containing the goods they wish to send to
the recipient. They provide the necessary information, including the recipient's address and contact
details.
 Sender Declares Value: The sender declares the value of the goods being sent, along with any
applicable charges or fees associated with the service.
 Parcel Sent with Payment Instructions: The parcel is sent through the postal or courier service, with
instructions for payment upon delivery. The sender may attach a form or label indicating that the parcel
is a "Value Payable Parcel" and specifying the amount to be collected from the recipient.
 Recipient Receives Parcel: The postal or courier service delivers the parcel to the recipient's address.
The recipient is informed that they have a VPP to collect and are provided with details of the amount to
be paid.
 Recipient Pays for Parcel: Upon delivery, the recipient pays the amount specified for the goods and
any associated charges directly to the postal or courier agent. The agent then remits the payment to the
sender, usually through the postal system's financial services.
National Electronic Funds Transfer
 National Electronic Funds Transfer (NEFT) is an electronic system in India that facilitates the transfer
of money between bank accounts on a one-to-one basis. It's a widely used and convenient method for
various purposes, but it might not be the most suitable option for a mail-order house due to the risk of
bad debts.
Characteristics of NEFT
 Function: Enables transfer of funds from one NEFT-enabled bank account to another in India.
 Processing: Transactions are settled in batches throughout the business day, typically at half-hourly
intervals. This means it's not an instantaneous transfer like Real-Time Gross Settlement (RTGS).
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 Cost: NEFT transactions are generally cheaper compared to RTGS. In fact, many banks in India offer
NEFT transfers free of charge for online transactions.
 Availability: NEFT services are typically available 24/7 throughout the year, making it a convenient
option for transfers.
Real-Time Gross Settlement
 Real-Time Gross Settlement (RTGS) is an electronic funds transfer system that facilitates the immediate
settlement of interbank funds transfers. Here's a breakdown of its key features and how it compares to
NEFT in the context of mail-order houses:
Function:
 Allows for the transfer of funds between banks on a real-time and gross basis.
 "Real-time" means the transaction is settled immediately, typically within seconds or minutes, unlike
NEFT's batched processing.
 "Gross" means each transaction is settled individually, without netting with other transactions.
Demand Draft
 A Demand Draft (DD) is a financial instrument that acts as a secure and guaranteed method of payment,
particularly beneficial for mail-order houses facing the risk of bad debts. Here's a closer look at its
characteristics and how it mitigates this risk:
Function:
 A DD is essentially a pre-paid payment instrument issued by a bank.
 The customer pays the bank the amount of the DD upfront, along with a small issuance fee.
 The bank then issues a DD payable to a specific person (payee) or order.
86. What is Endorsement Of Bill?

a) Extra days following the due date of the bill for making payment
b) The procedure by which the holder of the bill transfers the title of the bill with the assistance of his
creditors
c) The date of drawing plus the terms of the bill
d) The date of acceptance plus terms of the bill
Ans : B
Explanation:
 The correct answer is: B. The procedure by which the holder of the bill transfers the title of the bill
with the assistance of his creditors
More information
 Endorsement: In the context of bills of exchange (commercial drafts used for payments), endorsement
refers to the process by which the holder (creditor) transfers the ownership rights of the bill to another
party.
 Transferring Title: The endorsement involves the current holder signing the back of the bill, along
with additional information such as the name of the new holder (endorsee) and any specific instructions.
This signature signifies the transfer of ownership and creates a chain of liability.
 Creditors Not Involved: The endorsement process itself doesn't necessarily involve the holder's
creditors. It's a separate transaction focused on transferring ownership of the bill to a new party.
Incorrect Options Explained:
 Extra days following the due date of the bill for making payment: This concept is not directly
related to endorsement. It might be referred to as a grace period or days of grace, depending on the
specific context.
 The date of drawing plus the terms of the bill: This typically refers to the "tenor" of the bill, which
includes the date it was issued (drawn) and the due date for payment determined by the bill's terms.
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 The date of acceptance plus terms of the bill: Similar to option C, this describes the tenor of the bill,
considering the acceptance date (if applicable) and the bill's terms.
What is Endorsement
 Endorsement refers to the process by which the holder (current owner) of a bill of exchange transfers its
ownership rights to another party. This is done by signing the back of the bill, along with additional
information depending on the type of endorsement.
Who is involved:
 Endorser: The person transferring the bill (original holder).
 Endorsee: The person receiving the bill and ownership rights.
Types of Endorsements:
 Blank Endorsement: Only the holder's signature appears, making the bill payable to whoever possesses
it.
 Special Endorsement: Specifies the name of the new holder (endorsee), making the bill payable only
to that person.
 Restrictive Endorsement: Restricts how the bill can be further negotiated. For example, "pay to X only
for collection" limits the endorsee's ability to transfer the bill again.
87. The Planning Commission of India:

1. Was set up in 1950
2. Is a constitutional body
3. Is an advisory body
4. Is a government department
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) 3 only
Ans : C
Explanation:
 Only statements 1 and 3 (being set up in 1950 and acting as an advisory body) are correct. The Planning
Commission was dissolved in 2014 and replaced by NITI Aayog (National Institution for Transforming
India).
More information
 Was set up in 1950 (True): The Planning Commission of India was established on March 15, 1950.
 Is a constitutional body (False): The Planning Commission was not established by the Constitution of
India. It functioned as an arm of the central government.
 Is an advisory body (True): The Planning Commission primarily played an advisory role, formulating
Five-Year Plans for India's economic development but not having direct executive power.
 Is a government department (False): While it functioned under the Government of India, the Planning
Commission wasn't a traditional government department with its own bureaucratic structure.
The Planning Commission of India
 Founded in 1950, soon after India's independence, the Planning Commission was tasked with
formulating Five-Year Plans, a series of national economic and social development plans guiding
resource allocation and investment across various sectors.
 It functioned as an advisory body to the Government of India, providing recommendations and
strategies for achieving economic growth, poverty reduction, and social progress.
Functions:
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 Five-Year Plan Formulation: The primary function was to develop comprehensive Five-Year Plans
outlining government spending, resource allocation, and development priorities for various sectors like
agriculture, industry, infrastructure, education, and healthcare.
 Monitoring and Evaluation: The Commission monitored the progress of these plans, evaluating their
effectiveness and suggesting course corrections.
 Inter-Ministerial Coordination: It facilitated coordination between different government ministries
and departments to ensure alignment with the overall development goals.
 Resource Mobilization: The Commission played a role in mobilizing resources for development plans
by collaborating with international agencies and negotiating foreign aid.
 Policy Advocacy: It advocated for policies that promoted economic growth and social development,
influencing various government decisions.
Quick Timeline:
 1950: Planning Commission established.
 2014: Planning Commission dissolved.
 2015 (present): NITI Aayog takes over the planning and development function.
 NITI Aayog is a different entity with a revised approach to development planning in India.
NITI Aayog structure
 Chairperson: The Prime Minister of India holds the position of the Chairperson. Currently, it's
Narendra Modi.
 Vice Chairperson: NITI Aayog has a Vice Chairperson who acts as the chief executive. The current
Vice Chairperson is Suman Bery.
Other Members:
 Ex-Officio Members: These are senior cabinet ministers in the Government of India. Some current
members include Amit Shah (Home Minister), Rajnath Singh (Defence Minister), Nirmala Sitharaman
(Finance Minister), etc.
 Special Invitees: These are ministers from other key ministries relevant to NITI Aayog's focus areas.
 Full-time Members: Experts from various fields are appointed as full-time members to provide
specialized knowledge and guidance. Some current members include V.K. Saraswat (former DRDO
Chief), Ramesh Chand (Agriculture Expert), V.K. Paul (Public Health Expert), etc.
 Chief Executive Officer (CEO): B.V.R. Subrahmanyam is the current CEO.
88. Monetary policy affects the ___ and ___.

a) Reserve, unemployment
b) Money supply, interest rate
c) Taxes, exchange rate
d) Stock price, minimum wage
Ans : B
Explanation:
 Monetary policy primarily affects the money supply and interest rates. By adjusting key monetary
policy tools such as open market operations, discount rates, and reserve requirements, central banks aim
to influence the amount of money circulating in the economy and the cost of borrowing. These
adjustments impact various economic variables, including inflation, investment, consumption, and
economic growth. Therefore, option B, "money supply, interest rate," is the most appropriate choice.
Monetary policy is a set of actions taken by a central bank to influence the economy. It primarily
targets two key variables:
 Money Supply: This refers to the total amount of money circulating in the economy. Monetary policy
tools can be used to increase or decrease the money supply.
 Interest Rate: This is the cost of borrowing money. Central banks can influence interest rates by setting
benchmark rates and using open market operations.
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By affecting these two variables, monetary policy can indirectly impact other economic factors:
 Economic Growth: A central bank might aim to stimulate economic growth by increasing the money
supply and lowering interest rates, making it cheaper for businesses and consumers to borrow money
and invest.
 Inflation: If inflation is rising too quickly, the central bank might tighten monetary policy by reducing
the money supply and raising interest rates, aiming to slow down economic activity and price increases.
 Unemployment: Monetary policy can influence unemployment by impacting economic growth.
Generally, periods of economic growth tend to see lower unemployment rates.
Monetary policy
 Monetary policy is a powerful tool wielded by central banks to influence economic activity and achieve
specific goals. Here's a breakdown of its key aspects:
Central Bank's Role:
 Each country's central bank, like the Federal Reserve in the US or the Reserve Bank of India, is
responsible for formulating and implementing monetary policy.
Objectives:
 Price Stability (controlling inflation): Maintaining a stable price level to prevent excessive inflation or
deflation.
 Economic Growth: Promoting economic growth and development by creating an environment
conducive to business investment and consumer spending.
 Maximum Employment: Supporting full employment or low unemployment rates.
Policy Tools:
 Central banks utilize various tools to achieve their objectives. Here are some common instruments:
 Open Market Operations: Buying or selling government securities in the open market to influence
interest rates and money supply.
 Reserve Requirements: Setting the minimum amount of reserves banks must hold, impacting the
amount of money they can lend.
 Discount Rate: The interest rate the central bank charges banks for borrowing reserves, indirectly
influencing commercial banks' lending rates.
Impacts of Monetary Policy:
 By adjusting money supply and interest rates, monetary policy can indirectly affect various aspects of
the economy:
 Interest Rates: Monetary policy influences borrowing costs for businesses and consumers, impacting
investment, spending, and economic activity.
 Credit Availability: Changes in interest rates and reserve requirements can affect the ease of obtaining
credit, impacting loan growth and investment.
 Exchange Rates: Monetary policy decisions can influence a country's currency exchange rate, affecting
exports, imports, and inflation.
89. What is a fictitious asset?

a) An asset that is not physical in nature
b) Assets that have no tangible existence
c) Assets of a company that are expected to be sold or used
d) An asset that can easily be converted into cash
Ans : B
Explanation:
 A fictitious asset refers to assets that are recorded on a company's balance sheet but do not have any
tangible existence or economic value. These assets may include items such as goodwill, deferred
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charges, or fictitious revenue. They are not physical in nature and do not represent any real, tangible
asset owned by the company. Instead, they often arise from accounting conventions or adjustments and
may not reflect actual economic value or cash flows. Therefore, option B, "Assets that have no
tangible existence," is the most accurate description of a fictitious asset.
More information
 Fictitious assets are a specific category within intangible assets. They represent deferred expenses or
losses that a company has incurred but cannot be directly linked to a physical asset. They don't have a
realizable value (meaning they can't be readily converted into cash) and aren't used in day-to-day
operations.
Here's a breakdown of the other options and why they aren't quite accurate:
 An asset that is not physical in nature: This is a broader definition that encompasses all intangible
assets, including things like patents, copyrights, and trademarks, which can have significant value.
Fictitious assets are a subcategory of intangible assets with a more specific meaning.
 Assets of a company that are expected to be sold or used: This definition applies to most assets,
including both tangible (e.g., equipment, inventory) and intangible assets (e.g., patents). Fictitious
assets aren't necessarily expected to be sold; they represent a value associated with past expenses.
 An asset that can easily be converted into cash: This describes a highly liquid asset, which is the
opposite of a fictitious asset. Fictitious assets are not readily convertible to cash.
Fictitious assets
 Fictitious assets represent deferred expenses or losses incurred by a company that cannot be directly
attributed to a physical asset. These expenses or losses have already been paid for but provide benefits
over multiple accounting periods.
Examples of Fictitious Assets:
 Preliminary Expenses: Costs associated with establishing a business, such as incorporation fees, legal
fees, and initial marketing expenses, are recorded as fictitious assets. These expenses benefit the
company over its entire lifespan, and spreading their cost over multiple periods provides a more
accurate picture of profitability.
 Discount on Issue of Shares: When a company issues shares for less than their face value, the
difference is recorded as a fictitious asset. This represents the discount offered to investors and reduces
the company's equity.
 Accumulated Losses: If a company incurs losses in a particular year, and those losses aren't written off
immediately, they might be reflected as a fictitious asset on the balance sheet, especially if the company
expects to recover from these losses in the future.
90. What are Explicit Costs?

a) The excess of estimated future profit than the normal profit
b) The amount of consolidated net income of the Company for such Financial Year
c) A profit metric that takes into consideration both explicit and implicit costs
d) Normal business costs that appear in the general ledger
Ans : D
Explanation:
The correct answer is: D. Normal business costs that appear in the general ledger
 The excess of estimated future profit than the normal profit: This definition describes economic
profit, which considers both explicit and implicit costs. It's not the same as explicit costs alone.
 The amount of consolidated net income of the Company for such Financial Year: This refers to the
company's net profit after all expenses, including both explicit and implicit costs, have been subtracted
from revenue. It's a broader concept than just explicit costs.
 A profit metric that takes into consideration both explicit and implicit costs: This describes
accounting profit, which considers explicit costs but excludes implicit costs. Explicit costs are a part of,
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but not the entire picture of, accounting profit.
Explicit costs
 Explicit costs are the direct, out-of-pocket expenses a business incurs in its daily operations and
production of goods or services. These costs are easily identifiable and measurable in monetary terms.
They are directly tied to the generation of the product or service.
Examples of explicit costs include:
 Raw materials
 Labor costs (wages and salaries)
 Utilities (electricity, water, etc.)
 Rent and lease payments
 Transportation costs
 Marketing and advertising expenses
Types of explicit costs
 Determining pricing relies on accurately classifying your explicit costs. When you precisely grasp the
costs of manufacturing and delivering your goods or services to customers, you can set competitive and
accurate pricing.
 Moreover, it‘s important to note that certain costs are eligible for tax deductions. You can optimize your
deductions and reduce the tax burden by effectively tracking direct and indirect costs.
Direct costs
 Direct costs refer to expenses a company can readily associate with a particular ―cost object,‖ such as a
product, department, or project. It encompasses various items like software, equipment, and raw
materials.
 Additionally, it comprises labor costs, provided that the labor is directly attributable to the product‘s
production, a department‘s functioning, or a project‘s execution.
Indirect costs
 Indirect costs encompass expenses beyond the costs incurred in creating a product. They contain the
broader costs associated with maintaining and operating a company. These overhead costs emerge after
direct cost computation.
91. What does Break-Even indicate?

a) Revenues are more than the cost
b) Revenues and cost are equal
c) Costs are more than revenue
d) None of the Above
Ans : B
Explanation:
You are absolutely right! The answer is: B. Revenues and cost are equal.
The break-even point indicates the sales level at which a business incurs neither a profit nor a loss. In other
words, its total revenue exactly covers all its total costs (both fixed and variable).
 Costs: These can be categorized into fixed costs (expenses that don't change with production volume,
like rent or salaries) and variable costs (expenses that change with production volume, like raw
materials or labor per unit produced).
 Revenue: The total income generated from selling products or services.
At the break-even point:
 Total Revenue = Total Costs (Fixed Costs + Variable Costs)
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Significance of Break-Even Analysis:
 Planning and Budgeting: Understanding the break-even point helps businesses determine the
minimum sales volume required to cover all costs and avoid losses. This information is crucial for
setting sales targets, pricing strategies, and production planning.
 Cost Control: Break-even analysis encourages businesses to identify and manage their costs
effectively. By analyzing the cost structure, they can find ways to reduce expenses or optimize
production processes to improve profitability.
 Financial Performance: The break-even point serves as a benchmark for evaluating a business's
financial performance. Achieving sales above the break-even point translates into profits, while falling
below it results in losses.
break-even point (BEP)
 The break-even point (BEP) is a critical concept in business and financial analysis. It represents the
sales level (quantity of units sold or total revenue) at which a company's total costs and total revenue are
equal. In other words, it's the point where the business neither makes a profit nor incurs a loss.
Components of Break-Even Analysis
 Total Costs: This includes both fixed and variable costs.
 Fixed Costs: These are expenses that remain constant regardless of the production volume.
Examples include rent, salaries, insurance, etc.
 Variable Costs: These expenses vary directly with the production volume. Examples include raw
materials, direct labor costs per unit, utilities used in production, etc.
 Total Revenue: The total income generated from selling products or services.
Calculating the Break-Even Point:
 There's a formula to calculate the BEP, expressed in units or revenue:
 BEP (in units) = Total Fixed Costs / (Price per Unit - Variable Cost per Unit)
 BEP (in revenue) = Total Fixed Costs / Contribution Margin Ratio
 Contribution Margin Ratio: This ratio represents the amount of money available to cover fixed costs
and contribute to profit after each unit is sold. It's calculated as:
 Contribution Margin Ratio = (Price per Unit - Variable Cost per Unit) / Price per Unit
Uses of Break-Even Analysis
 New business: For a new venture, a break-even analysis is essential. It guides the management with
pricing strategy and is practical about the cost. This analysis also gives an idea if the new business is
productive.
 Manufacture new products: If an existing company is going to launch a new product, then they still
have to focus on a break-even analysis before starting and see if the product adds necessary expenditure
to the company.
 Change in business model: The break-even analysis works even if there is a change in any business
model like shifting from retail business to wholesale business. This analysis will help the company to
determine if the selling price of a product needs to change.
92. A recent policy initiative aimed at promoting financial inclusion in rural areas is:
a) Demonetization
b) Pradhan Mantri Jan Dhan Yojana (PMJDY)
c) Goods and Services Tax (GST)
d) Atal Pension Yojana
Ans : B
Explanation: correct answer is (b) Pradhan Mantri Jan Dhan Yojana (PMJDY).
 Pradhan Mantri Jan Dhan Yojana (PMJDY): This is a scheme launched by the Indian government
in 2014 with the specific goal of promoting financial inclusion, particularly in rural areas. It aims to
provide basic banking facilities such as savings accounts, remittance services, and access to credit to
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those who were previously unbanked.
 Demonetization: This was a policy implemented in 2016 that involved the sudden invalidation of old
banknotes. While it had other objectives, it wasn't directly aimed at financial inclusion.
 Goods and Services Tax (GST): This is a national tax introduced in 2017 that applies to the supply of
goods and services. While it can have indirect effects on financial inclusion, it's not the primary focus.
 Atal Pension Yojana: This is a government-backed pension scheme launched in 2015. While it
promotes financial security, it doesn't directly address access to basic banking services like PMJDY.
More information
Goods and Services Tax (GST)
 The Goods and Services Tax (GST) is a value-added tax (VAT) levied on most goods and services sold
for domestic consumption in India. It replaced a multitude of indirect taxes previously levied by the
central and state governments.
Types of GST:
 Central Goods and Services Tax (CGST): Levied by the central government on the intra-state supply
of goods and services.
 State Goods and Services Tax (SGST): Levied by the state government on the intra-state supply of
goods and services.
 Integrated Goods and Services Tax (IGST): Levied on inter-state supply of goods and services.
Primary GST Slabs:
 0% (Exempt or Nil Rated): Certain essential items like basic food grains, unbranded cereals, milk,
fresh fruits and vegetables, and some textiles are exempt from GST.
 5% GST: This rate applies to a range of essential goods and services considered necessities, such as
life-saving drugs, newspapers, and processed foods like milk powder and butter.
 12% GST: This slab covers a wider variety of commonly used goods, including bicycles, non-luxury
cars, processed food items (excluding those at 5%), and footwear below a certain value.
 18% GST: This is the most common slab and applies to a vast range of goods, including electronics,
furniture, televisions, washing machines, and restaurant services.
 28% GST: This slab is for luxury items and certain demerit goods like aerated drinks, tobacco
products, and casino services.
GST Council Composition:
 Chairperson: The Union Finance Minister of India holds the position of the Chairperson.
 Members:
 Finance Ministers of all states and union territories with legislatures.
 A representative nominated by each state government (usually the Finance Minister or Minister in
charge of Taxation).
Atal Pension Yojana (APY)
 Atal Pension Yojana (APY) is a government-backed pension scheme launched in India in 2015. It's
primarily targeted towards workers in the unorganized sector, aiming to provide them with a guaranteed
minimum pension after retirement.
Key Features of APY:
 Eligibility: Open to Indian citizens between 18 and 40 years old who have a savings bank account.
 Contribution: Regular monthly contributions are deposited into the subscriber's APY account. The
contribution amount varies depending on the desired pension amount at retirement and starts from a
minimum of ₹60 per month.
 Government Co-contribution: The government provides a co-contribution for eligible subscribers
who join the scheme before a certain date (check for current validity). This co-contribution can be up to
₹1000 per year.
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 Guaranteed Minimum Pension: Upon reaching the retirement age of 60, subscribers receive a
guaranteed minimum monthly pension based on their chosen contribution tier and the accumulated
corpus.
 Investment: The contributions are invested in government-backed securities, offering a degree of safety
and stability.
 Tax Benefits: Contributions to APY are eligible for tax deductions under Section 80CCD(1) of the
Income Tax Act.
Demonetization
 Demonetization refers to the process of stripping a currency unit of its status as legal tender. In simpler
terms, the government removes a particular denomination of banknotes from circulation, rendering them
invalid.
Actual Impacts (There's debate on the extent of these impacts):
 Short-Term Disruptions: The immediate consequence was a cash shortage, leading to difficulties for
people to access their money and disruptions in various sectors of the economy, particularly those
reliant on cash transactions.
 Limited Impact on Black Money: Experts debate the effectiveness of demonetization in tackling black
money. While some unaccounted cash might have entered the banking system, estimates suggest a
significant portion was reintroduced through various means.
 Formalization of Economy: There might have been a push towards greater formalization of the
informal sector, but the long-term effects are unclear.
 Growth in Digital Payments: Digital payment options did see a significant rise following
demonetization, but cash remains a dominant mode of transaction in many parts of India.
93. Matching of the Input Tax credit on internal stockpile by the beneficiary is embraced with?
a) Inward Supply Filed
b) Outward Supply Filed
c) Monthly Supplies Filed
Ans : B
Explanation: An enlisted individual (counting an Input Service Distributor) can guarantee Input charge
credit on the strength of the accompanying conditions:
 He should have a Tax receipt given by the provider of labor and products or both or Debit notes given
by a provider.
 He probably got a supply of labor and products or both.
 He more likely than not pay the expense for it in real money or as info charge as under area 41 of GST
Act.
 He probably documented legitimate returns under segment 39 of the GST Act.
Input Tax credit
 Input Tax Credit (ITC) is a crucial concept under the Goods and Services Tax (GST) regime in India
(and many other countries). It allows businesses to claim credit for the GST they pay on purchases
(inputs) used for making taxable supplies (outputs). This mechanism helps to avoid cascading of taxes,
where tax is paid on tax, ultimately reducing the tax burden on businesses and consumers.
 Eligibility: A registered business under GST can claim ITC on purchases of goods or services used for
making taxable supplies, further supply of the same goods or services, or for use in the course or
furtherance of business.
Conditions for Claiming ITC:
 The business must be in possession of a valid tax invoice from the supplier reflecting the GST paid.
 The goods or services purchased must be received and used for the intended business purpose.
 The supplier must have filed a return reflecting the supply.
 Claiming Process: Businesses typically claim ITC while filing their monthly GST return. They can
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claim credit for the GST paid on eligible purchases based on the tax invoices received from their
suppliers.
94. Which of the following persons can use ITR 4?

a. Who is director of a company
b. Who has held any unlisted equity shares
c. Who has any asset located outside India
d. A firm (other than LLP) if assessee is a Resident
e. Who has income from other sources
Choose the most appropriate answer from the options given below :
a) a,b, and c only
b) a,b, and d only
c) b,d and,e only
d) d, and e only
Ans : D
Explanation:
 Who is a director of a company: Incorrect. ITR 4 is not for companies. It's for individuals, Hindu
Undivided Families (HUFs), and partnership firms (excluding Limited Liability Partnerships or LLPs).
Directors of companies would typically use ITR 2 or ITR 3.
 Who has held any unlisted equity shares: Incorrect. ITR 4 doesn't have specific restrictions based on
listed or unlisted equity shares. However, income from capital gains (sale of investments) might need to
be reported in a different ITR form depending on the nature and amount of the gains.
 Who has any asset located outside India: Incorrect. While ITR 4 doesn't explicitly exclude those with
foreign assets, depending on the nature and value of the assets, additional disclosures or different ITR
forms might be required.
 A firm (other than LLP) if assessee is a Resident: Correct. ITR 4 is designed for resident individuals,
HUFs, and partnership firms (excluding LLPs) that meet specific income criteria.
 Who has income from other sources: Correct. ITR 4 allows reporting income from other sources like
interest on savings accounts, deposits, or rental income from one house property, subject to certain
limits.
More information
 ITR 4, also known as ITR 4 (Sugam), is a specific Income Tax Return form used in India for filing
taxes. Here's a comprehensive explanation of who can use it, what kind of income it covers, and when it
might not be the right choice for you.
Who can file ITR 4
 Resident Individuals: Indian residents with income from specific sources can use ITR 4.
 Hindu Undivided Families (HUFs): HUFs with income falling under the criteria for ITR 4 can file
using this form.
 Partnership Firms (excluding LLPs): Registered partnership firms (apart from Limited Liability
Partnerships) meeting the eligibility requirements can utilize ITR 4.
What kind of income can be reported in ITR 4
 Business or Profession Income under Presumptive Taxation Scheme: This applies to businesses or
professions that opt for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the
Income Tax Act. These sections specify presumptive income based on estimated turnover, eliminating
the need for detailed expense records.
 Salary Income: Salary income up to a certain limit can be reported in ITR 4.
 Income from One House Property: Rental income from a single house property, subject to specific
limits, can be declared in ITR 4.
 Income from Other Sources (limited): Income from other sources such as interest on savings
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accounts, deposits, or recurring deposits can be included, with limitations on the amount. Income from
capital gains, lottery winnings, or foreign assets might require a different ITR form depending on the
nature and amount.
Who is eligible to file ITR-4 for AY 2023-24
 ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:
 Income not exceeding ₹50 Lakh during the FY
 Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or
44AE
 Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)
 Other sources which include (excluding winning from Lottery and Income from Race Horses):
 Interest from Savings Account
 Interest from Deposit (Bank / Post Office / Cooperative Society)
 Interest from Income Tax Refund
 Family Pension
 Interest received on enhanced compensation
 Any other Interest Income (e.g., Interest Income from unsecured loan)
Who is not eligible to file ITR-4 for AY 2023-24
 ITR-4 cannot be filed by an individual / HUF / Firm (Other than LLP) who:
 is a Resident Not Ordinarily Resident (RNOR), and non-Resident Indian
 has total income exceeding ₹ 50 Lakh
 has agricultural income in excess of ₹5,000/-
 is a Director in a Company
 has income from more than one House Property
 has income of the following nature:
 winnings from lottery
 Activity of owning and maintaining race horses
 Income taxable at special rates u/s115BBDA or Section 115BBE
95. A MIXED STRATEGY GAME CAN BE SOLVED BY

a) Simplex method
b) Hungarian method
c) Graphical method
d) Degeneracy
Ans : C
Explanation:
 The graphical method is a technique used to solve linear programming problems graphically,
particularly in two dimensions. However, it is not typically used to solve mixed strategy games directly.
Steps involved in Graphical method
 Define the decision variables: These are the unknown quantities you're trying to optimize (maximize
or minimize).
 Convert constraints into linear inequalities: Each constraint is expressed as an inequality involving
the decision variables.
 Plot the constraints: Each inequality is plotted as a line on the graph. The feasible region is the area
where all the inequalities are satisfied simultaneously.
 Identify the objective function: This is the function you want to optimize (maximize profit, minimize
cost, etc.).
 Plot the objective function (optional): The objective function can be visualized as a line or a direction
(e.g., arrows for maximization/minimization). The optimal solution lies on the boundary of the feasible
region where the objective function reaches its best value.
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Hungarian method
 The Hungarian method, also known as Kuhn-Munkres algorithm, is an optimization technique
specifically designed to solve assignment problems.
How does the Hungarian method work?
 The Hungarian method is an iterative algorithm that involves a series of steps to find the optimal
assignment. Here's a simplified overview:
 Cost Matrix: The problem is represented by a cost matrix, where each cell shows the cost (or any
relevant measure) of assigning a particular resource to a particular task.
 Reduce the Matrix: The method applies specific rules to modify the cost matrix. This often involves
subtracting the minimum value in each row or column from all the elements in that row or column,
ensuring at least one zero appears in each row and column (called a reduced matrix).
 Covering Zeros: The algorithm then focuses on finding the minimum number of horizontal and vertical
lines that can cover all the zeros in the reduced matrix. This helps identify potential optimal
assignments.
 Optimality Testing: The method checks if the number of covering lines equals the number of rows or
columns (indicating a potentially optimal solution). If not, further modifications are made to the matrix
to create more zeros and repeat steps 3 and 4.
 Assigning and Optimizing: Once an optimal solution is found, the algorithm identifies the assignments
corresponding to the zeros in the final matrix. This represents the optimal assignment of resources to
tasks with the minimum total cost.
simplex method
 The simplex method is a cornerstone algorithm in linear programming (LP) for solving optimization
problems. It's a systematic approach to finding the optimal solution (minimum or maximum value) of an
objective function subject to a set of linear constraints.
Degeneracy
 In the context of linear programming (LP) and the simplex method, degeneracy refers to a specific
condition that can arise during the solution process. It can affect the efficiency and potentially stall the
progress of the simplex method.
Understanding Degeneracy:
 Degeneracy occurs when a basic feasible solution (a starting solution that satisfies all constraints) has
one or more basic variables with a value of zero. This can happen in two main scenarios:
 Tie in Constraint Satisfaction: When multiple constraints are satisfied as equalities at the initial
solution, it might be unclear which variable should leave the basis (set of basic variables) when a new
variable enters.
 Artificial Variables at Zero: If artificial variables (introduced during problem conversion to standard
form) remain at zero in the final solution, it indicates degeneracy. These artificial variables don't
represent real entities in the problem and reaching an optimal solution with them at zero can be
inefficient.
96. Given below are two statements, one labeled as Assertion (A) and the other labeled as Reason (R):
Assertion (A) :Amalgamation means joining of two or more existing companies into one company.
Reason (R) : The joined companies lose their identity and form themselves into a new company.
Choose the correct answer from the options given below :
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 the correct explanation of (A)
c) (A) is true but (R) is false
d) (A) is false but (R) is true
Ans : A
Explanation: The correct answer is: (1) Both (A) and (R) are true and (R) is the correct explanation of (A)
86
 Assertion (A) is true: Amalgamation refers to the merging of two or more existing companies into a
single new entity. This new entity assumes the combined assets, liabilities, and operations of the
original companies.
 Reason (R) is true: In an amalgamation, the original companies cease to exist as separate legal entities.
Their individual identities are dissolved, and they become part of the newly formed company.
Amalgamation
 Amalgamation is a process in the corporate world where two or more companies combine to form a
single new entity. It's a more drastic form of consolidation compared to a merger or acquisition. Here's a
breakdown of key aspects of amalgamation:
Types of Amalgamation:
 Amalgamation in the nature of a merger: This is the most common type. Here, one company (the
acquirer) absorbs another company (the target) into itself. The target company dissolves, and its
shareholders receive shares or other compensation in the acquirer company.
 Amalgamation in the nature of consolidation: In this scenario, two or more companies come together
to form an entirely new company. No single company takes the lead role; all merging companies
contribute assets and liabilities to create the new entity.
Acquisition
 In the world of business, an acquisition occurs when one company (the acquirer) purchases a controlling
interest in another company (the target). This gives the acquirer significant influence or complete
ownership over the target company. Here's a deeper dive into acquisitions, their different forms, and the
reasons companies pursue them.
Types of Acquisitions:
 Stock Acquisition: The acquirer purchases a majority of the target company's shares, giving them
voting control. The target company can continue to operate as a separate legal entity, but the acquirer
has a major say in its decisions.
 Asset Acquisition: The acquirer buys specific assets of the target company, such as factories,
equipment, or intellectual property. The target company may dissolve or continue operating with the
remaining assets.
 Subsidiary Acquisition: The acquirer purchases all or a majority of the target company's shares,
essentially making it a subsidiary. The target company becomes part of the acquirer's corporate structure
but may retain its own brand and operations.
Amalgamation vs. Merger & Acquisition:
 Amalgamation is often used interchangeably with merger and acquisition, but there are key distinctions:
 Merger: In a merger, one company (the acquirer) typically absorbs another (the target) but retains its
own legal identity. The target company dissolves, and its shareholders receive compensation.
 Acquisition: An acquisition involves one company (the acquirer) purchasing a controlling interest in
another company (the target). The target company can continue to operate as a subsidiary or be
integrated into the acquirer's structure.
97. Statement: "Personnel research aims to gather and analyze data on various HR-related aspects to
support decision-making and improve organizational effectiveness."
What is the primary objective of personnel research as indicated by the statement?
a) To decrease employee turnover rates
b) To increase employee absenteeism
c) To understand employee grievances
d) To inform evidence-based HR practices
Ans : D
Explanation:
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 Personnel research involves gathering and analyzing data on various HR-related aspects to provide
insights that can inform evidence-based decision-making in HR management. This includes areas such
as recruitment, training, performance management, employee satisfaction, and organizational culture.
More information
 Decrease employee turnover rates: While reducing turnover is a common goal in HR, the statement
emphasizes research as a tool to inform decisions, not directly control outcomes. Research can identify
factors leading to turnover, but it doesn't guarantee a decrease.
 Increase employee absenteeism: This directly contradicts the purpose of personnel research, which
aims to improve organizational effectiveness. Absenteeism typically hinders productivity.
 Understand employee grievances: Understanding grievances can be a component of personnel
research, but the broader goal is to use data to inform best practices across various HR functions, not
just addressing grievances.
Personnel research
 Personnel research is a systematic process of gathering and analyzing information about employees and
the work environment. Its goal is to improve decision-making in the Human Resources (HR) department
and ultimately enhance organizational effectiveness.
Purposes of Personnel Research:
 Understanding Employee Behavior: Research helps identify trends in employee attitudes,
motivations, and behaviors. This knowledge allows HR to develop targeted programs and initiatives to
improve employee engagement, satisfaction, and performance.
 Evaluating HR Practices: Research can assess the effectiveness of existing HR practices like
recruitment, training, compensation, and performance management. This helps identify areas for
improvement and implement changes that better achieve desired outcomes.
 Identifying Workplace Issues: Research can uncover problems like discrimination, harassment, or low
morale. By understanding these issues, HR can take proactive steps to address them and create a more
positive work environment.
 Informing Strategic Decision-Making: Data from personnel research can be used to inform strategic
decisions related to staffing, talent management, and workforce development. This ensures HR
strategies align with the organization's overall goals.
Common Methods of Personnel Research:
 Surveys and Questionnaires: This is a popular method for gathering data on employee attitudes,
opinions, and experiences. Surveys can be anonymous or confidential, allowing for honest feedback.
 Interviews: In-depth interviews with employees can provide rich qualitative data on specific topics or
issues.
 Focus Groups: Bringing together a small group of employees to discuss a particular topic allows for
exploring different perspectives and generating new ideas.
 Analysis of HR Data: Existing HR data like performance appraisals, absenteeism records, and exit
interview information can be analyzed to identify trends and patterns.
98. Which of the following is NOT considered a negotiable instrument under the Negotiable
Instruments Act, 1881?
a) Promissory Note
b) Bill of Exchange
c) Cheque
d) Money Order
Ans : D
Explanation:
 While the Negotiable Instruments Act (NIA) of 1881 covers promissory notes, bills of exchange, and
cheques as negotiable instruments, money orders are not included. Money orders are typically issued by
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post offices or other financial institutions and function similarly to cash. They lack the key
characteristics of negotiability as defined by the NIA.
More information
 The Negotiable Instruments Act, 1881 (NIA) is a crucial law in India governing the issuance,
negotiation, and dishonor of negotiable instruments.
Key Instruments Covered:
 Promissory Note (Hundi): A written promise to pay a certain sum of money to a named person (payee)
or order at a specified time.
 Bill of Exchange: An order in writing addressed by one person (drawer) to another (drawee) to pay a
certain sum of money to a specified person (payee) or order at a specified time.
 Cheque: A bill of exchange drawn on a banker and payable on demand.
Important Concepts:
 Negotiability: The ability of a negotiable instrument to be transferred from one person to another,
granting the receiver the same rights as the original holder.
 Negotiation: The process of transferring a negotiable instrument to another person.
 Holder in Due Course: A person who acquires a negotiable instrument in good faith, for valuable
consideration, and without notice of any dishonor or defect in the title of the person who negotiated it.
 Acceptance: The drawee's signed agreement to honor a bill of exchange when presented for payment.
 Endorsement: The act of signing the back of a negotiable instrument by the transferor (payee or
subsequent holder) to transfer it to another person.
 Dishonor: The refusal to accept or pay a negotiable instrument when presented as per its terms.
99. Different types of Probability Distribution include

1. Binomial distribution
2. Poisson distribution
3. Normal distribution
4. Exponential distribution
a) 1 and 2 only
b) 1, 2 and 3 only
c) 3 and 4 only
d) 1, 2, 3 and 4
Ans : D
Explanation:
 All four types of probability distributions mentioned - Binomial distribution, Poisson distribution,
Normal distribution, and Exponential distribution - are widely recognized and utilized in various fields
of statistics and probability theory.
More information
 Binomial distribution: Describes the probability of success or failure in a series of independent trials.
Used for situations with a fixed number of trials and two possible outcomes (e.g., coin flips,
passing/failing an exam).
 Poisson distribution: Models the probability of a certain number of events occurring in a fixed interval
of time or space. Useful for analyzing events like customer arrivals, machine breakdowns, etc.
 Normal distribution (Gaussian distribution): Also known as the bell curve, it describes continuous
data with a symmetrical bell-shaped probability curve. Commonly used for representing heights,
weights, test scores, and many other natural phenomena.
 Exponential distribution: Represents the time until the first event occurs in a continuous process with
a constant rate of occurrence. Used for analyzing waiting times, machine failures, etc.
Binomial distribution
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 The binomial distribution is a fundamental concept in probability that describes the likelihood of a
specific number of successes in a series of independent trials, each with only two possible outcomes
(success or failure).
Applications:
 The binomial distribution has a wide range of applications in various fields, including:
 Quality Control: Inspecting manufactured products for defects and determining the probability of
finding a certain number of defective items in a sample.
 Clinical Trials: Testing the effectiveness of a new drug and calculating the probability of observing a
specific number of successful outcomes in a group of patients.
 Opinion Polls: Estimating the proportion of a population that supports a particular candidate or policy
based on a sample survey.
 Gambling: Analyzing the probability of winning or losing in games with binary outcomes (e.g., coin
flips, dice rolls).
Poisson distribution
 The Poisson distribution is another crucial probability distribution used in statistics. It models the
probability of a certain number of events occurring in a fixed interval of time or space. Unlike the
binomial distribution that deals with a fixed number of trials, the Poisson distribution focuses on the
number of events happening within a specific timeframe.
Applications:
 The Poisson distribution finds applications in various scenarios where events occur at a random rate
within a defined timeframe.
 Customer Arrivals: Predicting the probability of a certain number of customers arriving at a store in a
given hour.
 Machine Failures: Estimating the likelihood of a machine experiencing a specific number of
breakdowns within a day.
 Accident Rates: Analyzing the probability of a certain number of accidents occurring on a particular
road segment in a week.
 Radioactive Decay: Modeling the probability of a specific number of radioactive decays happening in a
sample over a certain time period.
Example:
 Imagine a call center receives an average of 5 calls per hour (λ = 5). What's the probability of receiving
exactly 3 calls in the next hour?
Using the Poisson formula with k = 3:
P(3) = (e^-5 * 5^3) / 3! = (0.0067 * 125) / 6 = 0.125
 Therefore, the probability of receiving exactly 3 calls in the next hour is 0.125 or approximately 12.5%.
Normal distribution
 The normal distribution, also known as the Gaussian distribution, is a cornerstone of statistics. It
describes the probability of continuous data and is characterized by its symmetrical bell-shaped curve.
Applications:
 The normal distribution has a vast range of applications due to its prevalence in representing real-world
phenomena. Here are some examples:
 Natural Sciences: Analyzing heights, weights, physical measurements, test scores, and error
distributions in experiments.
 Social Sciences: Studying economic data, opinion polls, and election results.
 Finance: Modeling stock prices, market returns, and risk analysis.
 Engineering: Quality control, product testing, and tolerance limits.
 Example:
 Imagine a standardized test has an average score of 75 and a standard deviation of 10. The normal
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distribution can be used to:
 Calculate the probability of a student scoring between 65 and 85 (within 1 standard deviation of
the mean).
 Estimate the percentage of students scoring below 55 (more than 2 standard deviations below the
mean).
 Analyze the overall distribution of student scores and identify potential outliers.
Exponential Distribution
 The exponential distribution is a continuous probability distribution used to model the time elapsed
between events in a Poisson process.
Applications:
 The exponential distribution finds applications in various scenarios where the time between events
follows a memoryless property and has a constant rate of occurrence. Here are some examples:
 Customer Service: Analyzing the time it takes for a customer to receive service after contacting a call
center.
 Machine Reliability: Modeling the time between failures of a machine or equipment.
 Radioactive Decay: Studying the time it takes for a radioactive atom to decay.
 Arrival Times: Predicting the time interval between customer arrivals at a store or service point.
Example:
 Imagine a computer system experiences an average of 2 hardware failures per hour (λ = 2). What's the
probability of the next failure occurring within the next 30 minutes (0.5 hours)?
 Using the exponential formula:
P(x ≤ 0.5) = 1 - e^(-λx) = 1 - e^(-2 * 0.5) ≈ 0.377
Therefore, the probability of the next hardware failure occurring within the next 30 minutes is
approximately 0.377 or 37.7%.
100. Read the following statements and select the correct combination given thereunder:
Statement – 1 : Linear Programming is a mathematical function.
Statement – 2 : Transportation model is one of the part of Linear Programming.
a) Statement 1 is true but 2 is not true
b) Statements 1 and 2, both are true
c) Statement 1 is not true but 2 is true
d) Both the statements 1 and 2 are not true
Ans : B
Explanation:
 linear programming is the broader concept, and the transportation model is a specialized application
within it. Linear programming provides a framework for solving optimization problems, while the
transportation model focuses on a specific type of optimization problem involving transportation costs.
More information
 Statement 1: Linear Programming is not a mathematical function, but rather a mathematical method for
optimizing a linear objective function (usually minimize cost or maximize profit) subject to a set of
linear constraints. It's a powerful tool used in various applications like resource allocation, production
planning, and scheduling.
 Statement 2: The transportation model is a specific type of linear programming problem. It deals with
optimizing the transportation of goods from multiple origins (sources) to multiple destinations at
minimum cost. The model uses linear constraints to represent supply and demand limitations at each
location.
Linear Programming
 Linear Programming (LP) is a mathematical method for optimizing a linear objective function (usually
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minimizing cost or maximizing profit) subject to a set of linear constraints. It's a powerful tool used in
various applications like resource allocation, production planning, and scheduling.=
Objective Function:
 Represents the goal you want to optimize, typically minimizing cost or maximizing profit.
 Often expressed as a linear equation involving decision variables.
Applications of Linear Programming:
 Production Planning: Determining the optimal production levels for different products to maximize
profit while considering resource limitations.
 Resource Allocation: Assigning resources like budget, labor, materials, etc., to different activities to
achieve the best outcome.
 Transportation Problems: Optimizing the transportation of goods from multiple origins to
destinations at minimum cost.
 Diet Planning: Formulating a nutritionally balanced diet while minimizing cost or maximizing nutrient
intake.
Transportation model
 The transportation model is a special type of linear programming problem used to optimize the
transportation of goods from multiple origins (sources) to multiple destinations at minimum cost.
Applications:
 Production and Distribution: Optimizing shipments from factories to warehouses, stores, etc.
 Supply Chain Management: Improving efficiency by minimizing transportation costs and ensuring
on-time delivery.
 Resource Allocation: Allocating resources like raw materials or personnel to locations at minimum
cost.
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2. Match the following : Match the following :

Alderfer‘s ERG Theory

3. When actual achievement is compared with the job objectives, it is called

4. Effective leader is an individual who influences his

6. The most significant management skills are

8. ―Green washing‖ means

12. Price skimming strategy means

13. Match the following :

21. DUPONT analysis refers to

 Formula and Calculation of the Asset Turnover Ratio

23. Arrange the following stages involved in DBMS in proper sequence:

25. Entrepreneurship as a theory of business was propounded by

28. Which of the following statements are applicable to Mckinsey's 7S framework?

32. Rearrange the steps of Maslow's Need Hierarchy Theory.

33. What are the main elements of motivation.

34. Regarding leadership, which statement is false?

Advantages of CAPM Analysis

Benefits of Capital Analysis

Graphical Presentation of Operating Leverage

Degree of operating leverage

Graphical Presentation of Financial Leverage

Therefore answer is b is right

49. The accounting equations is presented as ?

57. Which of the following statements is not correct?

58. . Which of the following expenditures are to be treated as revenue expenditure?

Importance of working capital

60. Presumptive taxation involves which one of the following?

61. Goodwill account is closed at the time of dissolution by transferring it to :

B) Super profit method

63. In case of rising prices (inflation), FIFO method will:

Typical Capital Budgeting Decisions

65. Giffen goods are those goods ___________

67. Which of the following statements is false?

70. FATCA stands for

71. Which of the following is/are false about Dishonour of Cheque?

74. What is expected rent?

78. DAGMAR approach in marketing is used to measure

80. Nikkie belongs to

82. BIFR was established on the basis of recommendations of . . . . . . . . committee.

83. What is the purpose of CRM‘s territory management feature?

84. What is the Division of Work in Principles of Management?

86. What is Endorsement Of Bill?

87. The Planning Commission of India:

88. Monetary policy affects the ___ and ___.

89. What is a fictitious asset?

90. What are Explicit Costs?

91. What does Break-Even indicate?

94. Which of the following persons can use ITR 4?

95. A MIXED STRATEGY GAME CAN BE SOLVED BY

99. Different types of Probability Distribution include

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88. Monetary policy affects the _ and _.