5 6287056106652959223

UGC NET COMMERCE PREVIOUS QUESTION PAPERS
December 2019
Answer Key (1-100)
Q A Q A Q A Q A Q A Q A Q A Q A Q A Q A
1 1 11 1 21 1 31 4 41 1 51 4 61 3 71 3 81 3 91 1
2 1 12 3 22 4 32 1 42 1 52 4 62 1 72 4 82 3 92 2
3 2 13 2 23 1 33 1 43 2 53 2 63 3 73 2 83 3 93 1
4 2 14 3 24 2 34 1 44 2 54 4 64 1 74 4 84 3 94 4
5 4 15 3 25 3 35 1 45 2 55 3 65 3 75 2 85 4 95 3
6 2 16 4 26 1 36 3 46 3 56 2 66 3 76 2 86 2 96 4
7 3 17 3 27 2 37 3 47 3 57 4 67 2 77 2 87 2 97 1
8 4 18 2 28 1 38 1 48 2 58 2 68 2 78 4 88 1 98 1
9 3 19 3 29 2 39 1 49 4 59 2 69 2 79 3 89 2 99 4
10 4 20 3 30 4 40 2 50 2 60 2 70 4 80 1 90 1 100 3
Note: * Marks Given to all Candidates
www.dikshaclassroom.com
June 2019
Answer Key (1-100)
1 4 11 4 21 1 31 1 41 2 51 3 61 3 71 1 81 3 91 3
2 1 12 4 22 2 32 1 42 2 52 3 62 1 72 1 82 2 92 4
3 4 13 1 23 3 33 1 43 2 53 2 63 4 73 2 83 * 93 2
4 3 14 3 24 2 34 1 44 3 54 4 64 2 74 2 84 3 94 1
5 3 15 1 25 3 35 4 45 3 55 1 65 3 75 2 85 1 95 2
6 2 16 4 26 1 36 3 46 4 56 3 66 2 76 3 86 2 96 1
7 4 17 3 27 3 37 2 47 4 57 2 67 3 77 1 87 4 97 1
8 4 18 1 28 1 38 4 48 3 58 2 68 4 78 3 88 3 98 1
9 1 19 2 29 2 39 2 49 1 59 2 69 1 79 4 89 1 99 2
10 4 20 4 30 2 40 2 50 4 60 1 70 2 80 3 90 3 100 4
For Free NTA NET Paper 1 Materials Send JOIN to 9847478690[WhatsApp]
2018 DECEMBER
List – I List - II
(a) AS – 1 (i) Accounting for fixed assets
(b) AS – 3 (ii) Disclosure of accounting policies
(c) AS – 10 (iii) Leases and its accounting
(d) AS – 19 (iv) Cash flow statements
1. Match the item of list I with the items of List II and choose the correct answer from
the code given below.
options
1. (a) – (iii); (b) – (i); (c) – (iv); (d) – (ii)
2. (a) – (iii); (b) – (iv); (c) – (ii); (d) – (i)
3. (a) – (iii); (b) – (ii); (c) – (i); (d) – (iv)
4. (a) – (i); (b) – (ii); (c) – (iii); (d) – (iv)
2. Cost plus pricing is considered appropriate for which combination of the following?
(i) Product Tailoring
(ii) Public Utility Pricing
(iii) Refusal Pricing
(iv) Monopoly Pricing
Choose the correct answer from the code given below :

Code:
options
1. Only (i) and (ii)
2. Only (iii) and (iv)
95
Diksha UGC NTA NET Commerce Previous Questions E Book
3. Only (ii), (iii) and (iv)
4. Only (i), (ii) and (iii)
3. Choose the correct code for the following statements being correct or incorrect.
Statement I : Punctuality and team spirit among employees of an organization has

great contribution in enhancing profits of the business but they do not appear as an
asset in the balance sheet.
Statement II : Financial statements do not reflect the correct financial position of a

business.
Code:
Options
1. Both the statements I and II are incorrect.
2. Statement I is correct, but II is incorrect.
3. Statement I is incorrect, but II is correct.
4. Both the statements I and II are correct.
4. "Everyone benefits when the focus is on common interest and promotion of

harmony" is the underlying assumption of which one of the following approaches to
industrial relations?
Options
1. Unitary approach
2. Human Relations approach
3. Marxist approach
4. Pluralistic approach
5. Which one of the following statements is not true?
Options
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1. Long-term liabilities due for payment within a year should be treated as

current liabilities.
2. Cost of sales is a better numerator than sales while calculating stock turnover.
3. Higher operating ratio indicates higher profits.
4. Conversion of debentures into preference shares will decrease debt – equity
ratio
6. Given is the information related to a house :
Municipal Value (M. V.) ₹ 1,50,000

Fair Rent ₹ 1,80,000
Standard Rent ₹ 1,60,000
Actual Rent ₹ 20,000 pm
Municipal tax paid by owner is 20% of M.V. Unrealised rent ₹ 40,000 (conditions
of rule 4 satisfied). What is the annual value of the house?
Options
1. ₹ 2,10,000
2. ₹ 1,60,000
3. ₹ 1,70,000
4. ₹ 1,50,000
7. Which Of the following are included in the international liquidity? Indicate the
correct code.
(i) Foreign exchange

(ii) Borrowing capacity of the various countries
(iii) Gold reserves
Code:
Options
1. (ii) and (iii)
2. (i) and (ii)
3. (i) and (iii)
97
4. (i), (ii) and (iii)
8. Which one of the following statements is not true?
Options
1. Profits earned from non-operating activities is added to net profit while
calculating profits from operations.
2. Any transaction that increases working capital is a source of funds.
3. Major source of working capital in the long run, is profits from operations.
4. Depreciation is a source of funds.
List – I List – II
(Type of Interview) (Usual Application)
(a) Structured (i) A realistic approach that yields comparable

answers plus indepth insights
(b) Unstructured (ii) Useful to understand applicant's reasoning and

analytical abilities under modest stress
(c) Mixed (iii) Useful for valid results, especially when dealing
with large number of applicants
(d) Behavioural (iv)Useful when the interviewer tries to probe

personal details of the candidate to why they are
not fit for the job
Options
98
1. (a) – (i); (b) – (iv); (c) – (ii); (d) – (iii)

2. (a) – (iii); (b) – (iv); (c) – (i); (d) – (ii)
3. (a) – (iv); (b) – (ii); (c) – (i); (d) – (iii)
4. (a) – (iii); (b) – (i); (c) – (ii); (d) – (iv)
10. The monopoly involves a social cost mainly due to its emphasis on which one of the
following?
Options
1. Attempting to stall entry of other firms in the market.
2. Earning net profit in all possible situations.
3. Charging different prices from different categories of buyers of the same product.
4. Lower output at a higher cost in a normal profit situation.
11. Which one of the following demands states are adequately buying all the products
put into the marketplace?
Options
1. Irregular demand
2. Overfull demand
3. Latent demand
4. Full demand
12. Which one of the following is not true for introducing multiple brand in a category?
Options
1. Yielding economics of scale in advertising, sales merchandising and physical
distribution
2. Attracting consumers seeking variety who may otherwise have switched to
another brand
3. Increasing shelf presence and retailer dependence in the store
4. Decreasing interval competition within the firm
99
List I List II
(a) Claims (i) Company car, club memberships,
paid
(b) Fringe benefits (ii) Telephone/mobile allowance,
internet allowance medical allowance
(c) Perquisites (iii) Canteen, uniform, accident relief
Code:
Options
1. (a) – (i), (b) – (ii), (c) – (iii)
2. (a) – (ii), (b) – (i), (c) – (iii)
3. (a) – (iii), (b) – (ii), (c) – (i)
4. (a) – (ii), (b) – (iii), (c) – (ii)
14. “Skimming in e- Banking method of

Options
1. Stealing credit card information
2. Intimating the customer about his heavy withdrawals
3. Converting Debit Card into Credit Card
4. Transferring cash from one account to another account
15. Which one of the following item is not a part of job specification ?
Options
1. Location
2. Judgement
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3. Emotional Characteristics
4. Initiative
List I List II
(a) The economy was characterised by (i). Mass marketing
small region suppliers who sold
goods on local basis
(b) Standardised, branded goods were (ii) Hyper-segmentation
sold art national level
(c) Era of market differentiation based (iii) Segmentation
on demographic, socio-economic
and life style factors
(d) Technological advancements, (iv) Fragmentation
especially in the area of digital
communication, allow marketers to
communicate with individual
consumers or very small groups
Code:
Options
1. (a) – (i); (b) – (iv); (c) – (ii); (d) – (iii)
2. (a) – (iv); (b) – (i); (c) – (ii); (d) – (iii)
3. (a) – (i); (b) – (ii); (c) – (iii); (d) – (iv)
4. (a) – (iv); (b) – (i); (c) – (iii); (d) – (ii)
17. Which one of the following statement is correct?
Options
1. One of the objectives of setting up SEBI is to protect the interests of investors
2. SEBI is constituted from amongst the directors of various stock exchanges
101
3. The purpose of issuing different type of rules and regulations by SEBI is to

bring monetary gains to investors
4. SEBI has been constituted under the Securities (Contract and Regulation)
Act,1956.
18. Who among the following is not an observer country of the SAARC?
Options
1. Canada
2. USA
3. Iran
4. China
19. Given below are two statements, one labelled as Assertion (A) and the other labelled
as Reason (R). Read the statements and choose the correct answer using the code
given below.
Assertion (A) : Training aids in encouraging and achieving self-development and self-
confidence
Reason (R) : It helps a person handle stress, tension, frustration and conflict.
Code:
Options:
1. Both (A) and (R) are correct and (R) is the right explanation of (A).
2. Both (A) and (R) are correct and (R) is not the right explanation of (A).
3. Both (A) and (R) are incorrect.
4. (A) is correct but (R) is not correct.
Statement I : An option which gives its holder the privilege of selling to other party a
fixed amount of some stock at a stated price on or before a predetermined date is
known as call option.
102
Statement II : In an option ,the holder has the privilege of purchasing from other
party a fixed amount of some stock at a stated price on or before a predetermined
date is known as put option.
Code:
Options:
1. Statement II is correct, but I is incorrect.
2. Both the Statement I and Statement II are correct.
3. Both the Statement I and Statement II are incorrect.
4. Statement I is correct, but II is incorrect.
21. A company purpose to introduce a now product in the market. The company wants
to maintain P/V ratio at 25%. If variable cost of the product is ₹ 300, what will be the
selling price?
Options:
1. ₹100
2. ₹400
3. ₹300
4. ₹200
22. Which of the following variables is not known in Internal Rate of Return method of
capital budgeting?
Options:
1. Amount of cash outflows
2. Discount rate
3. Amount of cash inflows
4. Life of the project
23. X Ltd forfeited 40 shares of ₹10 each and on which ₹ 4 per share were paid. If the
forfeited shares are reissued as ₹ 8 per share paid up, what is the minimum price the
company must charge?
Options:
103
1. ₹ 4 per share
2. ₹ 10 per share
3. ₹ 2 per share
4. ₹ 8 per share
as Reason (R). Read the statements and choose the correct answer using the code
given below.
Assertion (A) : Among all methods of charging deprecation on fixed assets,

diminishing balance method is the best method
Reason (R) : Diminishing balance method of charging deprecation has been
permitted under the Income Tax Act,1961 for claiming deduction for depreciation.
Code:
Options:
1. Both (A) and (R) are correct and (R) is not the right explanation of (A).
2. Both (A) and (R) are correct.
3. Both (A) and (R) are correct and (R) is the right explanation of (A).
4. (A) is correct but (R) is not correct.
25. In which One of the following forms of workers participation in management is the
role of the workers council not just advisory but the management is under a moral
obligation to acknowledge, accept and implement the unanimous decision of the
council?
Options:
1. Decisive Participation
2. Administrative Participation
3. Associative Participation
4. Consultative Participation
26. The probable error of the coefficient of correlation (r) is calculated by which one of
the following formula ?
104
Options:
27. Which of the following statements is / are false?
(i) capital profits can never be distributed as dividend to the shareholders
(ii) dividends are paid out of profit and therefore do not affect the liquidity position of
the firm
(iii) every company should follow the policy of low dividend payment
(iv)walters model suggest that dividend payment does not affect the market price of the
share
Option
1.(ii) (iii) and (iv)
2.(i) (ii) (iii) and(iv)
3.(i) (ii)and (iii)
4.(iii) and (iv)
105
28.The inverse relationship between the variation in the price and the variation in the
quantity demanded is not due to
Option
1.Gossen’s laws of consumption
2. Law of substitution
3. Price effect
4. entry and exit of buyers
29.Which one of the following is not the function of the reserve Bank of India?
Option
1. Issue of banknotes
2. controller of credit
3. custodian of cash reserves of commercial banks
4. Accepting deposits and advancing loans to public
30.Indicate the most popular route of privatisation adopted by the government of India
in recent decades
Option
1. cross holdings
2. Strategic sale
3. Spontaneous privatization
4. Management employee buyout
31. A firm has inventory turnover of 3 e and cost of goods sold is rupees 270000.With
better inventory management the inventory turnover is increased to would result in
Option
106
1. Increase in inventory by rupees 54000
2. Decrease in inventory by rupees 36000
3. decrease in inventory by rupees 90000
4. Increase in cost of goods sold by rupees 20000
32. Match the items of List I with the items of List II and choose the correct answer from
List I List II
(a) Job context (i) Procedures used
(b) Job-related tangibles and intangibles (ii) Work schedule
(c) Work activities (iii) Work standards
(d) Work performance (iv) Services rendered
Option
1. (a)-(ii), (b)-(iv), (c)-(i), (d)-(iii)
2. (a)-(i), (b)-(iv), (c)-(ii), (d)-(iii)
3. (a)-(iv), (b)-(iii), (c)-(i),(d)-(ii)
4. (a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
33.To examine whether the company is pursuing its best opportunities with respect to
markets, products and channels is the purpose of which one of the following types of
marketing control?
Option
1. Annual plan control
2. strategic control
3. profitability control
4. Efficiency control
107
34.if a perpendicular on x axis from the point of intersection of both “less than” and
“more than” frequency curve is drawn, it gives the value of
Option
1. Median
2. Mode
3. Arithmetic mean
4. third quartile
35. Which one of the following is agricultural income under Income tax Act?
Option
1. Income from the land used for storing agricultural products
2. Dividend from a company engaged in agriculture
3. Income from the sale of replanted trees where denuded parts of the forest and
subsequent operations in forestry are carried out
4. Income from dairy farm, poultry farm etc
36.The theory suggesting that the patterns of international trade are determined by
factor endowment rather than productivity was propounded by which one of the
following?
Option
1.Michael Porter
2. David Ricardo
3.Heckscher and Bertil Ohlin
4.Adam Smith
37.which one of the following is not the correct property of normal distribution?
108
Option
1. Continuous distribution
2. equality of Central values (mean , median and mode)
3. Standard deviation is the sole parameter of the distribution
4. Uni model distribution
38.Arrange the following stages of staffing in correct sequence and indicate the code of
correct sequence
Option
(i) performance appraisal

(ii) Recruitment
(iii) Transfers
(iv) Selection
(v) Induction and orientation
Choose the correct answer from the code given below:
Code:
Options
1. (iv) (ii) (v) (iii) (i)
2.(i) (ii) (iv) (v) (iii)
3.(ii) (i) (iv) (v) (iii)
4.(ii) (iv) (v) (i) (iii)
39.Combined leverage can be used to measure the relationship between
Option
1. EBIT andEPS
2.Sales and EBIT
109
3.Sales and EPS
4.PAT and EPS
40.Which among the following is not included in seven Ps of marketing mix given by
Booms and Bitner?
Option
1. Politics
2. Physical evidence
3. People
4. process
List I List II
(a) Behaviour referent (i)Wide ranging cultural. structural and
personnel strategies
(b) Focus of attention for interventions (ii) Manage climate and culture
(c) Conflict handling (iii) Few
(d) Job categories and grades (iv)Values/mission
Option
1. (a)-(iii ), (b)-(i), (c)-(ii), (d)-(iii)
2. (a)-(i), (b)-(ii), (c)-(iv), (d)-(iii)
3. (a)-(iv), (b)-(i), (c)-(ii),(d)-(iii)
4. (a)-(iv), (b)-(ii), (c)-(i), (d)-(iii)
42.on fulfilling certain conditions for an undertaking setup in special economic zones,
deduction under section 10 AA of the Income tax Act is allowed for
110
Option
1. 10 years
2. Unlimited period
3. 5 years
4. 15 years
43. choose the correct code for the following statements being correct or incorrect.
Statement 1: thousands of employees died everyday in factories due to accidents
Statement 2: to make an accident free plant to cost and decrease productivity
Code:
Option
1. Statement 1 is correct but 2 is incorrect
2. Both the statements 1 and 2 are incorrect
3. Statement 2 is correct but 1 is incorrect
4. Both statements 1 and 2 are correct
44. Given below are two statements one labelled as assertion (A) and other labelled as
reason(R).Read the statements and choose the correct answer using the code given
below.
Assertion (A):purchase decisions are not based on how customers perceive prices but on
the marketers stated price
Reason (R):customers may have a lower price threshold below which prices signal
inferior or un acceptable quality and an upper price threshold were the the product
appears not worth the money
Option
1. Both (A) and (R) are correct but (R) is not the right explanation of (A)
2. Both (A) and (R) are incorrect
111
3. Both (A) and (R) are correct and (R) is write explanation of (A)
4.(A) is incorrect but (R) is correct
45. Cardinal utility analysis of consumers behaviour is based on which combination of

the following assumptions:
(i) utility is measurable in terms of Cardinal numbers
(ii) constancy of the marginal utility of money
(iii)Utilities of different goods are interdependent
(iv)Gossen's first law of consumption
Choose the correct answer from the code given below
Option
1.Only (iii) and (iv)
2. Only (ii) (iii) and (iv)
3. Only (i) (ii) and (iv)
4. Only (i) and (ii)
46. Match the items of List I with the items of Lin II and choose the correct answer from
List I List II
(a) Rival Firms (i) External Environment
(b) Technology (ii) Social and Cultural Environment
(c) Improving Quality (iii) Internal Environment
(d) Ethics in Business (iv) Global Environment
Option
1. (a)-(iv ), (b)-(i), (c)-(ii), (d)-(iii)
2. (a)-(ii), (b)-(iii), (c)-(iv), (d)-(i)
3. (a)-(i), (b)-(ii), (c)-(iii),(d)-(iv)
112
4. (a)-(iii), (b)-(i), (c)-(iv), (d)-(ii)
47.Which among the following is not an internal factor of pricing decision?
Option
1.Consumer expectation from company by past pricing
2. Consumer behaviour for given product
3. position of product in product cycle
4. Price elasticity as per sales of product
48. Banking Ombudsman scheme was introduced by RBI with effect from
Option
1. 2005
2. 1998
3. 1995
4. 2001
49. which one of the following is not the basic function of WTO?
Option
1. to facilitate the implementation, administration and operation of trade agreements
2.to facilitate the expansion and balanced growth of international trade
3. to carry out periodic reviews of the trade policies of its member countries
4. To settle differences and disputes among its member countries
50. Given below are two statements one labelled as assertion (A) and other labelled as
reason(R).Read the statements and choose the correct answer using the code given
below.
113
Assertion (A):technological change and skill requirements have been made a subject of
investigation in an organisation
Reason (R): the neoclassical economic theory stated that technological changes required
a border variety of skills and higher average skills from the code given below.
Options
1. Both (A) and (R) are correct but (R) is not the right explanation of (A)
3. Both (A) and (R) are correct and (R) is write explanation of (A)
4.(A) is incorrect but (R) is correct
4. Both (A) and (R) are incorrect
51.Match the items of List I with the items of List II and choose the correct answer from
List I List II
(i)Balance of trade (A) Imports and exports of goods and services

and unilateral transfer of goods and services
(ii) Current account (B) Transactions leading to changes in the

financial assets and liabilities of a country
(iii) Balance of payments (C) All economic transactions between a

country's residents and residents of other
countries
(iv) Capital account (D) Value of exports and imports of a county
Code :
(1) (i)-(D), (ii)-(C),(iii)-(B) (iv)-(A)
(2) (i)-(D), (ii)-(A),(iii)-(C) (iv)-(B)
(3) (i)-(C),(ii)-(B),(iii)-(D), (iv)-(A)
(4) (i)-(A), (ii)-(B), (iii)-(C),(iv)-(D)
52.Which of tho following statements is/are true ?
114
(i)Tax-shield on depreciation and interest is an important variable both for the lessor
and the lessee.
(ii) Lease transactions in India are governed by the lease Act.
(iii) A lessee should evaluate the lease options against the buying option.
(iv) As per AS — 19, financial lease is shown in the balance sheet of the lessee as an
asset.
Code:
(1) (i), (iii) and (iv)
(2) Only (ii)
(3) (ii), (iii) and (iv)
(4) (i) and (iv)
53.Banks are required to classify Non-Performing Assets into
(1) Doubtful assets, bad debts and loss assets

(2) Standard assets, and sub-standard assets
(3) Doubtful assets, and bad debts
(4) Sub-standard assets, doubtful assets, and loss assets
54. Tho companies having business in a large number of countries around the world at
present are called
(1) Global Corporations (GCs)

(2) Multinational Corporations (MNCs)
(3) Multinational Enterprises (MNEs)
(4) Transnational Corporations (TNCs)
55.Bretton Woods Conference resulted into the establishment of which of the
following ?
(1) IDA and ADB

(2) IMF and IDA
(3) IMF and IBRD
115
(4) IBRD and IFC
Statement I : A well-chosen marketing channel must be aligned to company's marketing
strategy with respect to segmentation, targeting and positioning.
Statement II : Marketing channels are set of interdependent organizations participating

in the process of making the product available for the use of consumption.
Code :
(1) Both the statements I and II are incorrect.

(2) Both the statements I and II are correct.
(3) Statement I is correct, but II is incorrect.
(4) Statement II is correct, but I is incorrect.
57.Choose the correct code for the following statements being correct or incorrect.
Statement 1: FX Spot is an agreement between two parties to buy one currency against
selling another currency at an agreed price for settlement on the spot date.
Statement 11: The date of maturity of a forward contract is more than two business days
in future.
Code :

(2) Both the statements I and II are incorrect
(3) Statement I is correct, but H is incorrect.
as Reason (R). Read the statements and choose the correct answer using the code given
below.
Assertion (A): Databases assist in market segmentation, especially behavioural

segmentation such as developing loyalty segments
Reason (R) : Customer Relationship Management (CRM) databases have become an

asset for the analysis of customer behaviour.
Code :
116
(1) Both (A) and (R) are correct and (R) is the right explanation of (A).
(2) Both (A) and (R) are incorrect.
(3) (A) is correct but (R) is not correct
(4) Both (A) and (R) are correct but (R) is not the right explanation of (A).
59. Match the items of list I with the items of List II and choose the correct answer from
List I (Propounder of Theory) List II (Theory of Motivation)
(i) Dr. Willian Ouchi (A) X Theory
(ii) Douglas McGregor (B) Need Hierarchy Theory
(iii) Frederick Herzberg (C) z Theory
(iv) A.H. Maslow (D) Hygiene Theory
Code :
(1) (i)-(B), (ii)-(A), (iii)-(C), (iv)-(D)
(2) (i)-(C), (ii)-(A), (iii)-(D), (iv)-(B)
(3) (i)-(D), (ii)-(A),(iii)-(C),(iv)-(B)
(4) (i)-(B), (ii)-(C), (iii)-(D), (iv)-(A)
Statement I: When the two securities returns are perfectly positively correlated, the risk
of their portfolio is just a weighted average of the individual risks of the securities. In
such case, diversification does not provide risk reduction but only risk averaging.
Statement II : Total risk of a portfolio of two risk securities can bo completely eliminated
when their returns are perfectly negatively correlated and their proportionate holdings
in the portfolio are inversely related to the relative individual risks of the securities.
Code :
117
61. Foreign investment can be made through which of the following routes ?
(i)Foreign Direct Investment (FDI)
(ii) Foreign Portfolio Investment (FPI)
(iii) Private Equity Investment (PM)
(iv) Foreign Venture Capital Investors (FVCI)
Code :
(1) (i),(ii), (iii) and (iv)
(2) (i), (iii) and (iv)
(3) (i), (ii) and (iv)
(4) (i) and (iv)
62. Which one among the following is the oldest form of organization ?
(1) Line Organization

(2) Committee Organization
(3) Functional Organization
(4) Project Organization
63. Which one of the following is not the advantage of database management system?
(1) Shared data

(2) Improved data integrity
(3) Centralized control
(4) High acquisition costs
64. Match the items of list I with the items of List II and choose the correct answer from
List I List II
118
(i) Mobile defense (A)ccupying the most desirable position in

consumers' minds, making the brand almost
impregnable.
(ii) Contraction defense (B) The leader stretches its domain over new
territories through market broadening and
market diversification.
(iii) Position defense (C) Large companies give up weaker markets

and reassign resources to stronger ones.
(1) (i)-(A),(ii)-(B),(iii)-(C)
(2) (i)-(A),(ii)-(C),(iii)-(B)
(3) (i)-(B),(ii)-(C),(iii)-(A)
(4) (i)-(B),(ii)-(A),(iii)-(C)
List I List II
(i)Income elasticity less than unity (A) Competitive goods
(ii) Cross elasticity less than unity (B) Inferior goods
(iii) Cross elasticity less than zero (C) Superior goods
(iv) Income elasticity less than zero (D) Complementary goods
Code :
(1) (i)-(A),(ii)-(B)-(iii)-(C), (iv)-(D)
(2) (i)-(C), (ii)-(A), (iii)-(D), (iv)-(B)
(3) (i)-(D),(ii)-(C) (iii)-(A), (iv)-(B)
(4) (i)-(D), (ii)-(A), (iii)-(B), (iv)-(C)
Statement I : If the value of i.e, , of a distribution gives the value more than 3,
its curve is platykurtic.
119
Statement II : In a moderately asymmetrical distribution, the standard deviation is 1.25

times of mean deviation.
Code :

67. Under Sec. 194 IB of the Income Tax Act, 1961 an individual or HUF (who is not
required to get his accounts audited u/s 44 AB) who is responsible for paying to a
resident any rent, shall deduct income tax, for the use of any land and building or both,
if the rent exceeds
(1) Rs 15,000 per month

68. Sales of a firm are 40 lacs; variable costs 10 lacs; fixed costs 15 lacs; interest 5 lacs.
Combined leverage of the firm will be
(1) 2
(2) 3
(3) 8
(4) 2.5
69. The Industrial Policy, 1956 has been prompted by which combination of the
following developments ?
(i) Adoption of the Constitution of India.
(ii) Implementation of Economic Planning.
(iii) Acceleration of Economic Growth and Industrialisation.
(iv) Availability of Sufficient Funds for Investment in Public Sector.
Code :
120
(1) Only (ii) and (iv)

(2) Only (i), (ii) and (iv)
(3) Only (ii), (iii) and (iv)
(4) Only (i) and (ii)
70.Match the items of List I with the items of List II and code given below.
List I List II
(i) Compensation received by an (A) Exemption upto specified limit
employee from his employer on

termination of job
(ii) Pension received by the widow (B) Profits in lieu of salary

of an employee
(iii) Foreign allowance for rendering (C) Income from other sources
services abroad
(iv) Children hostel allowance (D) Fully exempt from tax
Code :
(1) (i)-(B),(ii)-(C) (iii)-(D), (iv)-(A)
(2) (i)-(B), (ii)-(D), (iii)-(C), (iv)-(A)
(3) (i)-(C), (ii)-(D), (iii)-(B), (iv)-(A)
(4) (i)-(D),(ii)-(C), (iii)-(A), (iv)-(B)
71. Which one of the following initiatives is not the strategy for managing shortage of
employees in an organisation ?
(1) Offer incentives to postpone retirement

(2) Hire temporary employees
(3) Attempt to reduce turnover
(4) Employee training
121
72.Production function is based on which combination of the main characteristics of the

inputs from the following :
(i) Substitutability
(ii)Complementarity
(iii) Flexibility
(iv) Specificity
Code:
(1) Only (ii), (iii) and (iv)

(2) Only (i), (ii) and (iv)
(3) Only (i) and (ii)
(4) Only (iii) and (iv)
73. Which one of the following is the main government agency responsible for
development and monitoring international trade in India ?
(1) Federation of Indian Export Organisations

(2) Department of Commerce
(3) Export Promotion Council
(4) Indian Institute of Foreign Trade
74. Which one of the following is not an advantage of external recruitment ?
(1) Compliance with reservation policy becomes easy

(2) Benefits of new skills, new talents and new experiences to organisations are available
(3) Good performance is rewarded
(4) Scope for resentment, jealousies and heartburn are avoided
75 .Choose the correct code for the following statements being correct or incorrect.
Statement I : Intellectual Property (IP) is a category of property that includes intangible
creations of the human intellect.
Statement II : IPR does not include trade secrets and moral rights.
Code :
122

76. Critical path indicates which one of the following ?
(1) Recorded time of completing a task

(2) Average time of completing a task
(3) Shortest route of completing a task
(4) Longest route of completing a task
77.In which one of the following modes of entry into foreign market are risk and profit
potential the highest ?
(1) Direct exporting

(2) Direct investment
(3) Indirect exporting
(4) Joint ventures
78. Which of the following is not a method of preparation of cash budget ?
(1) Proforma Balance Sheet method

(2) Receipts and Payments method
(3) Cash Cycle method
(4) Adjusted Net Income method
79. For the following two statements regarding infrastructural services in the country,
choose the correct code for the statements being correct or incorrect.
Statement I : Most infrastructure services are provided by public monopolies which

generally suffer with severe problems like lack of accountability, low productivity, poor
financial performance and over-employment.
Statement H : There is a need now to induce more private sector investment and
participation in provision of social overheads as it may encourage better risk sharing,
accountability, monitoring and management of infrastructure sector.
Code :
(1) Both I and II are correct.
123
(2) I is correct, but II is incorrect.

(3) I is incorrect, but II is correct.
(4) Both I and II are incorrect.
80 .Which one of the following modes is not an example of Direct and Database
marketing communication ?
(1) Catalogues
(2) Social media marketing
(3) Telemarketing
(4) Mailings
81 .Given below are two statements, one labelled as Assertion (A) and the other labelled
below.
Assertion (A.) The multilateral trading system is an attempt by governments to make the
business environment stable and predictable.
Reason (R) : Promising not to raise trade barriers can be as important as lowering one,
because the promise gives businesses a clearer view of their future market
opportunities.
Code :
(4) (A) is correct but (R) is incorrect.
List I List II
(i) NPA (A) The percentage of deposits to be kept with RBI in the form of
cash.
(ii) SLR (B) The rate at which RBI lends money to commercial banks.
(iii) Repo Rate (C) Loans and advances not paid for more than 90 days.
124
(iv) CRR (D) The percentage of net demand and time liabilities to be kept in
the form of liquid assets.
Code :
(1) (i)-(C), (ii)-(D), (iii)-(B), (iv)-(A)
(2) (i)-(C),(ii)-(B), (iii)-(D), (iv)-(A)
(3) (i)-(B), (ii)-(C), (iii)-(D), (iv)-(A)
(4) (i)-(C), (ii)-(D), (iii)-(A), (iv)-(B)
83. 'Finance for exporting companies' as part of major programmes of the Exim Bank of
India does not include
(1) Post-shipment credit

(2) Term loans
(3) Overseas investment finance
(4) Working capital
below.
Assertion (A) : There exists excess capacity of the production for the firms if these incur
losses.
Reason (R) : Their production level has to remain below their economic capacity level.
Code :
(3) Both (A) and (10 are correct but (R) is not the right explanation of (A).
(4) (A) is incorrect but (R) is correct.
85 .Which of the following statements relating to the sampling theory are correct ?
(i) The values of the statistical measures based on the sampled units are called values of
statistic.
125
(ii) In the simple random sampling technique, the element of the population and the
unit of the sample are different.
(iii) Snow-ball sampling technique is a probability based sampling technique.
( iv) The law of statistical regularity' and the law of inertia of large numbers' are the main
bases of the sample to become representative of the population. Choose the correct
answer from the code given below :
Code :
(1) (i), (ii) and (iii)
(2) (i) and (iv)
(3) (ii), (iii) and (iv)
(4) (ii) and (iii)
86. For performance assessment of employees, "helping to meet legal requirements" is

the application of which one of the following ?
(1) Administrative purpose

(2) Documentation purpose
(3) Developmental purpose
(4) Organisational maintenance purpose
87. Corporations are controlled and directed by which one of the following ?
(1) Corporate ethics

(2) Corporate codes
(3) Corporate governance
(4) Corporate mechanism
88.According to Donald Kirkpatrick, training programmes can be evaluated at four

levels. Indicate the code of correct sequence from the following :
(i) Result
(ii) Reaction
(iii) Learning
(iv) Behaviour
126
Code :
(1) (iv), (iii),(ii) ,(i)
(2) (ii), (iii), (iv), (i)
(3) (i),(ii),(iii), (iv)
(4) (iii), (iv), (i), (ii)
89.Given below are two statements, one labelled as Assertion (A) and the other labelled
below.
Assertion (A) : Consumers need to be given legal protection against certain trade
practices and business methods.
Reason (R) : Protection as per market forces and 'Caveat Emptor' is not enough as
perfectly competitive market is an economist's dream and consumer sovereignty is a
myth.
Code :
90. Which of the following sources of finance has an implicit cost of capital ?
(1) Debentures
(2) Equity share capital
(3) Retained earnings
(4) Preference share capital
below.
127
Assertion (A) : A low debt-equity ratio is generally recommended for a newly started
business.
Reason (R) : During the initial years of the business, debt servicing will prove to be less
burdensome.
Code :
(1) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(2) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(3) (A) is correct but (R) is not correct.
(4) (A) is not correct but (R) is correct.
92. When RBI reduces CRR, it results into
(1) Increase in deposits

(2) Decrease in lendable resources
(3) Decrease in deposits
(4) Increase in lendable resources
93. Second generation reforms in our country do not comprise of which one of the
following ?
(1) Clean environment

(2) Population control measures
(3) Growing Indian transnational corporations
(4) Exploiting the knowledge based global economy
Statement I : An identifiable group of people contributing their efforts towards

attainment of goals is called organization
Statement II : In its broadest sense, organization refers to the relationship between the
various factors present in a given endeavour.
Code :
(1) Statement H is correct, but I is incorrect.

128
95. Advertising method in which a commercial is broadcast simultaneously on several

radio stations and/or television channels is known as
(1) Exclusive drive

(2) Intensified campaign
(3) Road side
(4) Road block
96. A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit X as a
partner for 1/3 share in profits of the firm. The new profit sharing ratio of A, B and X is
(1) 3:2:1
(2) 3:2:3
(3) 6:4:5
(4) 3:2:2
97.Match the items of List I with the items of List II and choose the correct answer from
List I List II
(i) Direct investment overseas aimed (A) Inward FDI

at manufacturing products not
manufactured by the firm in the
home country
(ii) Direct investment in a foreign (B) Backward Vertical FDI
country aimed to sell the output
of the firm's domestic production.
(iii) Direct investment overseas aimed (C) Conglomerate F'DI
at providing inputs for the firms
production process in the home country.
(iv) Foreign firms investing overseas (D) Forward Vertical FDI
and taking control over foreign assets.
129
Code :
(1) (i)-(D), (ii)-(C),(iii)-(B) (iv)-(A)
(2) (i)-(A), (ii)-(D), (iii)-(B), (iv)-(C)
(3) (i)-(C), (ii)-(D), (iii)-(B), (iv)-(A)
(4) (i)-(C), (ii)-(B), (iii)-(A), (iv)-(D)
98. Merger of two companies under the Board for Industrial and Financial
Reconstruction (BIFR) supervision is known as
(1) Arranged merger

(2) Negotiated merger
(3) Offer for sale
(4) Reverse merger
99. Which one of the following is not the fund based business of commercial banks ?
(1) RTGS/NEFT transactions

(2) Overdraft facility
(3) Issuance of Letters of Credit
(4) Acceptance of deposits
Statement I : The geometric mean of the two regression coefficients of X and Y variables
gives the value of the coefficient of correlation.
Statement II : If the population distribution is not normal and a sampling distribution of

mean is prepared by taking small sized samples, the sampling distribution of mean is
not normal.
Code :

130
December 2018
Answer Key (1-100)
1 * 11 4 21 2 31 2 41 3 51 2 61 1 71 4 81 1 91 2
2 4 12 4 22 2 32 1 42 4 52 1 62 1 72 2 82 1 92 4
3 4 13 4 23 1 33 2 43 1 53 4 63 4 73 2 83 1 93 2
4 1 14 1 24 2 34 1 44 4 54 1 64 3 74 3 84 1 94 4
5 3 15 1 25 3 35 3 45 3 55 3 65 2 75 4 85 2 95 4
6 3 16 4 26 1 36 3 46 2 56 2 66 1 76 4 86 2 96 3
7 4 17 1 27 2 37 3 47 2 57 1 67 3 77 2 87 3 97 3
8 4 18 1 28 2 38 4 48 3 58 1 68 2 78 1 88 2 98 1
9 2 19 2 29 4 39 3 49 2 59 2 69 2 79 3 89 4 99 3
10 4 20 3 30 2 40 1 50 2 60 2 70 1 80 2 90 3 100 3
www.dikshaclassroom
JULY 2018
PAPER - II
Note : This paper contains hundred (100) objective type questions of two (2) marks each. All
questions are compulsory.
1. The central bank can significantly influence the savings, investments and consumer spending
in the economy through which of the following policy ?
(1) Fiscal Policy (2) Monetary Policy
(3) Industrial Policy (4) Foreign Exchange Policy
2. Which one of the following is not the characteristic of capitalism ?

(1) Individuals and associations behave with economic motive of maximising their profit
with least sacrifice or cost.
(2) The country’s major means of production are either owned by the Government or their
use is controlled by the Government.
(3) Producers, consumers and employees compete among themselves, as the resources and
opportunities are limited.
(4) Price, the invisible hand, plays a predominant role in the flow of the factors of production
and consumption.
3. Which of the following is not the salient feature of the industrial policy developments since
1991 ?
(1) The scope of the private sector has been enormously expanded.
(2) Public sector has been withdrawing partially or fully from several of the enterprises by
divestment.
(3) The Indian industry is increasingly exposed to foreign competition.
(4) Monopoly or dominant position for the public sector in most of the industries and
control of the commanding heights of the economy by the public sector.
4. Which of the following does not form the part of the important information to be incorporated
in the Memorandum of Association as specified in the Companies Act, 2013 ?
(1) The name of the company and the state in which it is situated.
(2) The objects for which the company is proposed to be incorporated.
(3) The rules, regulations and bye-laws for the internal management of the company.
(4) The liability of the members of the company, whether limited or unlimited.
132
5. Assertion (A) : The volume of imports tends to be very high when there is a conjecture of
high rate of economic growth and a sharp fall in the relative price of imports
and vice versa.
Reason (R) : High rate of growth, ceteris paribus, is associated with rise in imports and
increase in the imports, ceteris paribus, is associated with a fall in the relative
price of imports.
Code :
(4) (R) is correct but (A) is not correct.
6. Which of the following statements is not correct relating to consumerism ?

(1) Consumerism is a manifestation of the failure of the business to guarantee and ensure
consumer legitimate rights.
(2) The government does not have any role in consumer protection as it is the part of
business organisations alone.
(3) The consumers should accept consumerism as a means of asserting and enjoying their
rights.
(4) Consumerism evolution is not a set-back for marketing but rather points to the next
stage in the evolution of enlightened marketing.
7. Which one of the following is not covered in the approach adopted by “Niti Aayog” ?
(1) Five year planning approach (2) Three year action agenda
(3) Seven year strategy (4) Fifteen year vision
8. Assertion (A) : Personal transactions of the owners of the business are not recorded in the
books.
Reasoning (R) : According to the business entity concept, each business enterprise is
considered as an accounting unit separate from owners.
Code :
(2) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(4) (A) is wrong but (R) is correct.
9. Which one of the following is not an example of ‘financing activities’ with reference to cash
flow statement ?
(1) Repayment of bank loan
(2) Interest on debentures/Dividend paid
(3) Cash proceeds from public deposits
(4) Sale of fixed assets
133
10. Which one of the following statements is true about estimated costs and standard costs ?
(1) Standard costs are based on scientific analysis and engineering studies while estimated
costs are based on historical basis.
(2) Standard cost emphasis is on “what cost will be” while estimated cost emphasis is on
“what cost should be”.
(3) Standard costs are more frequently revised compared to estimated cost.
(4) Estimated costs are more stable than standard costs.
11. Which one of the following statements is not true ?

(1) An expenditure intended to benefit current year is revenue expenditure.
(2) Amount paid for acquiring goodwill is capital expenditure.
(3) Wages paid for installation of a new machine is usually debited to wages account.
(4) Revenue expenditure is not intended to benefit future period.
12. X Ltd. forfeited 20 shares of ` 10 each, ` 8 called up, on which John had paid application and
allotment money of ` 5 per share, of these, 15 shares were reissued to Parker as fully paid up
for ` 6 per share. What is the balance in the share Forfeiture Account after the relevant
amount has been transferred to Capital Reserve Account ?
(1) NIL (2) `5 (3) ` 25 (4) ` 100
13. X and Y sharing profits in the ratio of 7 : 3, admit Z for 3/7 share in the new firm in which he
takes 2/7 from X and 1/7 from Y. The new ratio of X, Y and Z will be :
(1) 7:3:3 (2) 4:2:3 (3) 14 : 6 : 15 (4) 29 : 11 : 30
14. Assertion (A) : A high operating ratio indicates a favourable position.

Reasoning (R) : A high operating ratio leaves a high margin to meet non operating expenses.
Code :
(1) (A) and (R) both are correct and (R) correctly explains (A).
(2) Both (A) and (R) are correct but (R) does not explain (A).
134
15. The following are the two statements regarding concept of profit. Indicate the correct code
of the statements being correct or incorrect.
Statement (I) : Accounting profit is a surplus of total revenue over and above all paid-out
costs, including both manufacturing and overhead expenses.
Statement (II) : Economic or pure profit is a residual left after all contractual costs have
been met, including the transfer costs of management, insurable risks,
depreciation and payments to shareholders sufficient to maintain investment
at its current level.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while Statement (II) is incorrect.
(4) Statement (I) is incorrect while Statement (II) is correct.
16. Which one of the following sets is incorrect to show the inter-relationships among price
elasticity coefficient, change in price and change in total revenue ?
Price elasticity Change Change in Total
coefficient in price Revenue
(1) Zero Increase Increase
Decrease Decrease
(2) Less than 1 Increase Decrease
Decrease Increase
(3) Equal to 1 Increase No change
Decrease No change
(4) More than 1 Increase Decrease
Decrease Increase
17. Which one of the following is not the basic property of indifference curves ?
(1) Indifference curves have a negative slope.
(2) Indifference curves of imperfect substitutes are concave to the origin.
(3) Indifference curves do not intersect nor are they tangent to one another.
(4) Upper indifference curves indicate higher level of satisfaction.
135
18. When labour is plotted on X-axis and capital is plotted on Y-axis and an iso-quant is prepared,
then which of the following statements is/are false ?
(a) Marginal rate of technical substitution of labour for capital is equal to the slope of the
iso-quant.
(b) Marginal rate of technical substitution of labour for capital is equal to change in the
units of capital divided by the change in the units of labour.
(c) Marginal rate of technical substitution of labour for capital is the ratio of marginal
productivity of capital to marginal productivity of labour.
Code :
(1) (a) and (b) statements (2) Only (c) statement
(3) Only (a) statement (4) Only (b) statement
19. Match the items of List - II with the items of List - I and indicate the code of correct matching.
The items relate to economies of scale/scope.
List - I List - II
(a) Economies of scale (i) arise with lower average costs of manufacturing a product
when two complementary products are produced by a
single firm
(b) Internal economies (ii) Mean lowering of costs of production by producing in bulk
(c) External economies (iii) Arise when cost per unit depends on size of the firm
(d) Economies of scope (iv) Arise when cost per unit depends on the size of the
industry, not the firm
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (i) (ii) (iii) (iv)
(3) (ii) (iii) (iv) (i)
(4) (iv) (iii) (ii) (i)
20. A firm that produces highly substitute goods can adopt which one of the following pricing
strategies ?
(1) Transfer pricing (2) Going Rate pricing
(3) Product bundling (4) Full cost pricing
21. In a perfectly competitive market, a firm in the long run operates at the level of output
where :
(1) AC = MC when MC is lowest (2) MC = AR = MR when MC is lowest
(3) MR = MC (4) AR = MR =AC = MC
!J-0818-PAPER-II!
136
22. Assignment of numerals to the objects to represent their attributes is known as :

(1) Nominal data (2) Ordinal data (3) Interval data (4) Ratio data
23. A graph of a cumulative frequency distribution is called :

(1) Frequency polygon (2) Frequency curve
(3) Ogive (4) Pie diagram
24. In the case of classification of data, the class having its upper limit is treated as the lower
limit of its next class is called :
(1) Open ended class (2) Close ended class
(3) Exclusive class (4) Inclusive class
25. For a standard normal probability distribution, the mean (µ) and the standard deviation (σ)
are :
(1) µ=0, σ= 1 (2) µ=16, σ=4
(3) µ=25, σ=5 (4) µ=100, σ=10
26. Match the items of List - II with the items of List - I and select the code of correct matching.
List - I List - II
(a) Standard error of mean (i) Ha : µ1 ≠ µ2
(b) Base of point estimate of (ii) Values based on all the observations of
the mean of the population the population
(c) Non-specific hypothesis (iii) Mean of the sampling distribution of
mean
(d) Parameter value of descriptive statistics (iv) Standard deviation of the sampling
distribution of mean
Code :
(a) (b) (c) (d)
(1) (iv) (iii) (i) (ii)
(2) (i) (ii) (iii) (iv)
(3) (iv) (iii) (ii) (i)
(4) (iii) (iv) (i) (ii)
27. There is a very high inverse relationship between measures of ‘Overweight’ and ‘life
expectancy’. Which one of the following value of the coefficient of correlation is consistent
with the statement ?
(1) 0.80 (2) 0.20 (3) −0.20 (4) −0.80
!J-00818-PAPER-II!
137
List - I List - II
(a) Chi-square Test (i) Testing the significance of the differences of the mean
values among more than two sample groups.
(b) ANOVA (F-test) (ii) Testing the goodness of fit of a distribution
(c) Z - test (iii) Testing the significance of the difference of the mean
values between two large sized samples
(d) t - test (iv) Testing the significance of the difference of the mean
values between two small sized samples when population
standard deviation is not available
Code :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iv) (iii) (ii) (i)
(3) (i) (ii) (iv) (iii)
(4) (ii) (i) (iii) (iv)
29. Match the items of List - II with List - I and choose the correct code :
List - I List - II
(a) Sales Executive (i) Top- middle Management
(b) Branch Manager (ii) Middle Management
(c) Foreman (iii) Lower Management
(d) Production Manager (iv) Operating Force
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (iii) (i)
(2) (ii) (iii) (iv) (i)
(3) (iii) (iv) (ii) (i)
(4) (i) (ii) (iii) (iv)
30. Select the correct code of the statements being correct or incorrect.
Statement (I) : It is a significant feature of human that he plans.
Statement (II) : A plan is a trap to capture the future.
Code :
(1) Statement (I) is correct but (II) is incorrect.
(2) Statement (II) is correct but (I) is incorrect.
(3) Both the statements (I) and (II) are correct.
(4) Both the statements (I) and (II) are incorrect.
138
31. Assertion (A) : Management is a set of principles relating to its functions.

Reasoning (R) : Management is essential to run all types of organizations.
Code :
(1) (A) and (R) both are correct ; and (R) is the right explanation of (A).
(2) (A) and (R) both are correct ; but (R) is not the right explanation (A).
(4) (A) is correct ; but (R) is incorrect.
32. Match the items of List - II with List - I ; and choose the correct code :
List - I List - II
(Critical Control Standards) (Critical Points)
(a) Physical standards (i) Material cost per unit
(b) Cost standards (ii) Labour hours per unit of output
(c) Revenue standards (iii) Timing of production
(d) Program standards (iv) Average sales per customer
Code :
(a) (b) (c) (d)
(1) (ii) (i) (iv) (iii)
(2) (ii) (i) (iii) (iv)
(3) (i) (ii) (iv) (iii)
(4) (iv) (i) (iii) (ii)
33. Which among the following is not a correct statement with regard to Corporate Governance
in India ?
(1) Every company must appoint an individual or firm as auditor.
(2) The independent directors must attend at least three meetings a year.
(3) One or more women directors are recommended for certain classes of companies.
(4) The maximum number of permissible directors cannot exceed 15 in a public limited
company.
34. The popular statement, - “if all you have is a hammer, everything looks like a nail”, is given
by :
(1) A.H. Maslow (Hierarchy of Needs)
(2) Henry Fayol (Industrial and General Administration)
(3) F.W. Taylor (Scientific Management)
(4) Fredrick Herzberg (Hygiene Theory)
35. Functional Leadership Theory is associated with :

(1) Hackman and Walton and McGrath
(2) Bernard and Ordway Tead
(3) Koontz and O’Donnell
(4) Alford and Beatty
139
36. When two separate companies or two divisions within the same company agree to place
both of their respective brands on a particular product or enterprise, this arrangement is
termed as :
(1) Differential Branding (2) Cobranding
(3) Dual Branding (4) Both Cobranding and Dual Branding
37. The tangible goods for which a consumer wants to compare quality, price and perhaps style
in several stores before making a purchase are called :
(1) Convenience Goods (2) Shopping Goods
(3) Speciality Goods (4) Unsought Goods
38. When a company treats each single customer as a separate segment, this is called :
(1) Niche Marketing (2) Nano Marketing
(3) Single Marketing (4) Micro Marketing
39. Under which of the following conditions, the level of consumer’s involvement will not be
high ?
(1) The consumer considers the amount of money involved to be large.
(2) The product is seen as having low potential for providing significant benefits.
(3) The consumer lacks information about alternatives for satisfying the need.
(4) The product has considerable social importance.
40. Statement (I) : The mindset which is commonly associated with a long - ago era when the
demand for goods generally exceeded the supply, and the primary focus in
business was to effectively produce medium quantities of products ; finding
the customers was viewed as a relatively major function.
Statement (II) : The firms with product orientation typically focus on the quality and quantity
of offerings while assuming that customers will seek out and buy reasonably
priced, well made products.
From the above statements indicate the correct code of being statements correct or incorrect
The statements relate to concepts of marketing.
(1) Both the statements (I) and (II) are not correct.
(3) Statement (I) is correct but statement (II) is not correct.
(4) Statement (I) is not correct but statement (II) is correct.
140
41. Match the items of List - II with List - I to identify the correct code which are related to legal
forces affecting international marketers.
List - I List - II
(a) Tariff (i) A regulation specifying the proportion of a finished
product’s components and labour that must be provided
by importing country.
(b) Import Quota (ii) Tax imposed on product entering a country and used to
protect domestic producers and/or raise revenue.
(c) Local-content Law (iii) A requirement that a product contain or exclude certain
ingredients or that it be tested and certified as meeting
certain restrictive standards.
(d) Local-operating Law (iv) Limiting amount of a particular product that can be
brought into a country, to protect domestic industry or
broadening access to its markets.
(e) Standards and (v) A refusal to buy products from a particular company or
Certification country.
(f) Boycott (vi) A constraint on how, when or where retailing can be
conducted.
Code :
(a) (b) (c) (d) (e) (f)
(1) (iii) (iv) (ii) (i) (vi) (v)
(2) (vi) (ii) (i) (iv) (iii) (v)
(3) (ii) (iv) (i) (vi) (iii) (v)
(4) (iv) (vi) (i) (ii) (iii) (v)
42. Match the items of List - II with List - I which are related to personal selling process and
identify the correct code :
List - I List - II
(a) Prospecting (i) Attention, Interest, Desire, Action
(b) Preapproach (ii) Identifying Profiles, leads, Records and Qualifying
capability and willingness
(c) Presentation (iii) Reduce Dissonance, Build goodwill
(d) Post sales services (iv) Information, habits, preferences
Code :
(a) (b) (c) (d)
(1) (i) (iii) (iv) (ii)
(2) (iii) (iv) (ii) (i)
(3) (ii) (iv) (i) (iii)
(4) (iv) (iii) (ii) (i)
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43. Which of the following is not an approach to the Capital Structure ?

(1) Gross Profit Approach (2) Net Operating Income Approach
(3) Net Income Approach (4) Modigliani and Miller Approach
44. Which one of the following methods of Capital Budgeting assumes that cash-inflows are
reinvested at the project’s rate of return ?
(1) Net Present Value (2) Accounting Rate of Return
(3) Internal Rate of Return (4) Discounted Pay Back Period
45. Cost of Equity Share Capital is more than cost of Debt because :
(1) Equity shares are not easily saleable.
(2) Equity shares do not provide the fixed dividend rate.
(3) Generally the face value of equity shares is less than the face value of debentures.
(4) Equity shares have high risk than debts.
46. Negative Net Working Capital implies that :

(1) Long-term funds have been used for fixed assets.
(2) Short-term funds have been used for fixed assets.
(3) Long-term funds have been used for current assets.
(4) Short-term funds have been used for current assets.
47. Which of the following is an implicit cost of increasing proportion of debt of a company ?
(1) P.E. Ratio of the company would increase.
(2) Rate of return of the company would decrease.
(3) Tax-shield would not be available on new debts.
(4) Equity shareholders would demand higher return.
48. Profitability Index of a Project is the ratio of present value of cash inflows to :
(1) Total cash inflows (2) Total cash outflows
(3) Present value of cash outflows (4) Initial cost minus Depreciation
49. Which one of the following statements is false ?

(1) Effective dividend policy is an important tool to achieve the goal of wealth maximisation.
(2) According to Walter, the optimal payout ratio for a growth firm is 100%.
(3) MM model asserts that the value of the firm is not affected whether the firm pays
dividend or not.
(4) ‘Bird-in-the-hand theory’ in reference to dividend decision has been developed by Myron
Gordon.
142
50. Which one of the following statements defines the correct meaning of the term “boundary
spanning” ?
(1) It refers to an obligation of an individual, firm or institution to account for its activities
and accept responsibility for them.
(2) It refers to the process that helps the organization and its employees to link with their
external environment through specific activities/functions.
(3) It refers to the science of morals, principles and rules of conduct.
(4) It refers to multiculturism management.
51. The VRIO framework, used in HR function in today’s era, refers to four criteria. Identify the
correct code which stands as correct explanation to VRIO as proposed by Barney.
(1) Valence - Recruiting - Industrial relations - Opportunities
(2) Vision - Rewards - Improvements - Options
(3) Value - Rarity - Imitability - Organization
(4) Versatile - Resource - Information - Outsourcing
52. Assertion (A) : Induction is an informal information sharing session on miscellaneous issues
in an organization.
Reasoning (R) : The rationale of induction is to ensure effective integration of staff into or
across the organization for their mutual benefit.
Code :
(1) Assertion (A) and Reasoning (R) both are correct and (R) is correct explanation of (A).
(2) Assertion (A) and Reasoning (R) both are correct but (R) is not the correct explanation
of (A).
(3) Assertion (A) is correct statement but Reasoning (R) is an incorrect statement.
(4) Assertion (A) is an incorrect statement but Reasoning (R) is a correct statement.
143
53. Match the items of List - II with the items of List - I pertaining to the ranking methods used
in performance management systems ; and select the code of correct matching.
List - I List - II
(Ranking methods) (Methodology)
(a) Simple ranking (i) Based on overall performance.
(b) Alternation ranking (ii) Ends up with predetermined number of people in
each group.
(c) Paired comparison (iii) Based on particular trait only for quantity/quality
of work.
(d) Forced distribution (iv) Based on a trait or a set of trait and avoids central
tendency.
Code :
(a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (i) (iv) (iii) (ii)
(3) (iv) (ii) (i) (iii)
(4) (iii) (i) (ii) (iv)
54. Assertion (A) : Compensation has two vital domains economic concept and psychological
concept.
Reasoning (R) : Compensation basically represents an employment contract.
Code :
(1) (A) is correct and (R) is right explanation of (A).
(2) (A) is correct but (R) is not the right explanation of (A).
55. Which of the following is not the primary objective of industrial relations and labour laws ?
(1) Maintaining social equity (2) Providing credit facilities to industries
(3) International uniformity (4) Promoting economic growth
56. Assertion (A) : In real terms, workers’ participation in management has failed in India.
Reasoning (R) : There is lack of attitudinal change, multiplicity of unions and absence of a
procedure to determine a sole bargaining agent in an organization.
Code :
(1) (A) is correct and (R) is correct explanation of (A).
(2) (A) is correct but (R) is not the correct explanation of (A).
144
57. Which one of the following is not the function of NABARD ?

(1) To provide refinance assistance by way of short term credit to state cooperative banks
and sectoral rural banks, etc., approved by the RBI for some specific purposes.
(2) To undertake inspection of cooperative societies other than primary cooperative societies
and RRBs.
(3) To promote research in various aspects of the problems of urban development.
(4) To subscribe to share capital or invest in securities of any institution concerned with
agricultural and rural development.
58. Which one of the following financial institutions co-ordinates the functions and operations
of all the financial institutions into a single integrated financial structure so that each may
contribute to the growth of the economy ?
(1) IFCI (2) UTI (3) IDBI (4) SIDBI
59. Assertion (A) : The Reserve Bank of India is entrusted with the management of the public
debt and issue of new loans and treasury bills on behalf of the central and
state Governments.
Reasoning (R) : The Governor and the Deputy Governors of Reserve Bank of India are
appointed by the Central Government.
Code :
(2) (A) and (R) both are correct but (R) is not the right explanation of (A).
(3) (A) and (R) both are correct and (R) is the right explanation of (A).
(4) (A) and (R) both are not correct.
60. __________ refers to the process of removing or stripping the legal status of a currency.
(1) Digitisation (2) Financial Inclusion
(3) Demonetisation (4) Micro finance
61. Which one of the following is not the objective of UTI ?

(1) To mobilise savings of the community by offering savers the triple benefits of safety,
liquidity and profitability of Investments.
(2) To channelise the pooled savings into productive outlets.
(3) To provide finance under hire purchase finance and housing finance to its members.
(4) To give every one a chance to indirectly own shares and securities in a large number of
select companies.
145
62. Which one of the following is the main objective of IFCI ?
(1) To offer both small and large investors the means of acquiring shares in the widening
prosperity resulting from the steady industrial growth of the country.
(2) To upgrade technology, modernization and to promote marketing of products of small

scale sector.
(3) To serve as the apex institution for term finance for industry with coordination,
regulation and supervision of the working of other financial institution.
(4) To provide medium and long term financial assistance to industrial undertakings,
particularly in those circumstances in which banking accommodation is in appropriate
or resource to capital market is impracticable.
63. Match the items of List - II with the items of List - I and indicate the correct code :
List - I List - II
(a) Term finance (i) Providing finance to new or existing industrial units for
encouraging commercial application of technology/
expansion.
(b) Refinance (ii) Delivering of banking services at affordable cost to the vast
sections of disadvantaged and low income groups.
(c) Financial inclusion (iii) Providing replenishment finance to eligible institutions for
their loans to industrial concerns.
(d) Venture capital (iv) Providing finance to the borrowers for expansion and
modernization of plant and equipment.
Code :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (i) (ii) (iv) (iii)
(3) (iv) (iii) (ii) (i)
(4) (iv) (iii) (i) (ii)
146
64. Assertion (A) : An export processing zone is different from free trade zone as it promotes
units primarily devoted to exports.
Reasoning (R) : Goods imported to a free trade zone may be re-exported without any
processing, in the same form. But, goods exported by units in an EPZ are
expected to have undergone some value addition by manufacturing/
processing.
Code :
65. Match the items of List - II with the items of List - I relating to liberalisation of agricultural
trade.
List - I List - II
(a) Tariffication (i) They have demonstrably adverse effects on other

member countries.
(b) Prohibited subsidies (ii) They act on goods which are contingent upon export
performance.
(c) Actionable subsidies (iii) Replacement of existing non-tariff restrictions.
(d) Non-actionable subsidies (iv) For industrial research in disadvantaged regions.
Code :
(a) (b) (c) (d)
(1) (ii) (iii) (i) (iv)
(2) (iv) (i) (ii) (iii)
(3) (iii) (ii) (i) (iv)
(4) (ii) (iv) (iii) (i)
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66. Match the items of List - II and with the items of List - I relating to WTO impact :
List - I List - II
(a) NAMA (i) Liberalisation of international investments.
(b) GATTS (ii) Includes industrial goods, textile, jewellery, fish and fisheries
product manufacturing industries.
(c) TRIMs (iii) Liberalisation of trade in goods and services.
(d) TRIPs (iv) Provides monopoly power to owners of intellectual property.
Code :
(a) (b) (c) (d)
(1) (ii) (i) (iv) (iii)
(2) (iv) (ii) (iii) (i)
(3) (ii) (iii) (i) (iv)
(4) (iii) (ii) (iv) (i)
67. Indicate the correct code of the following statements being correct or incorrect. The statements
relate to the type of transactions recorded in the current/capital accounts of the Balance of
Payments.
Statement (I) : The capital account consists of long-term capital transactions only.
Statement (II) : The current account includes all transactions which give rise to or use up
national income.
Code :
148
68. Select the correct code of the following statements being correct or incorrect.
Statement (I) : International liquidity encompasses the international reserves only.
Statement (II) : International liquidity covers only official holdings of gold, foreign exchange,
SDRs and reserve position in the IMF available for the settlement of the
international transactions.
Code :
The items relate to International Trade Theories.
List - I List - II
(a) Comparative Cost Theory (i) Adam Smith
(b) Opportunity Cost Theory (ii) Gottfried Haberler
(c) Factor Endowment Theory (iii) David Ricardo
(d) Absolute Cost Theory (iv) Eli Heckscher and Bertil Ohlin
Code :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iii) (ii) (iv) (i)
(3) (iv) (iii) (ii) (i)
(4) (i) (iv) (iii) (ii)
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70. Which one of the following is not the guiding principle of the World Bank regarding it’s
lending operations ?
(1) Proper assessment of the repayment prospects of loans.
(2) Lending should be only for specific projects which are economically and technically
sound and of a high priority nature.
(3) The lending should be to enable a country to meet foreign exchange content of the
project cost.
(4) The bank does expect the borrowing country to spend the loan in a particular country.
71. Total return on a security is equal to the following :
Periodic cash receipts + Capital gains

(1) Purchase Price of the security
Periodic cash receipts + Capital gains

(2) Current Market Price of the security
Periodic cash receipts

(3) Current Market price of the security
Periodic cash receipts − Capital gains

(4) Purchase Price of the security
72. Risk of a portfolio can be minimised by which one of the following ?
(1) Combining two securities having perfect positive correlation in their expected returns.
(2) Combining two securities having perfect negative correlation in their expected returns.
(3) Combining two securities having partially positive correlation in their expected returns.
(4) Combining two securities having partially negative correlation in their expected returns.
73. The certificate which evidences an unsecured corporate debt of short-term maturity, is known
as :
(1) Certificate of Deposit (2) Short-term loan certificate
(3) Treasury Bill (4) Commercial paper
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74. Which of the following statements are false ? Indicate the correct code.
(a) Grey market is a market for dealing in listed securities.
(b) OTCEI is mainly intended for big investors.
(c) Insider Trading is legally permitted in the capital market.
(d) The device adopted to make profit out of the differences in prices of a security in two
different markets is called ‘arbitrage’.
Code :
(1) (a), (b), (c) (2) (a), (b), (d)
(3) (a), (b), (c), (d) (4) (b), (c), (d)
75. Which of the following statements are false ? Indicate the correct code.
(a) Share capital issued by a company for the first time is known as venture capital.
(b) All Venture Capital Funds in India are promoted by the Government.
(c) In addition to capital, venture capitalists provide managerial and technical support
also to the assisted firms.
(d) Benefits from venture capital financing can be realised in long run only.
Code :
(1) (a), (b) and (d) (2) (a) and (b)
(3) (b), (c) and (d) (4) (c) and (d)
76. Match the items of List - II with the items of List - I and select the correct code :
List - I List - II
(a) Liquidity Risk (i) Risk related to purchasing power of Income.
(b) Business Risk (ii) Risk related to Firm’s capital structure.
(c) Financial Risk (iii) Risk related to inability to pay its dues on time.
(d) Inflation Risk (iv) Risk related to fluctuation in profits.
Code :
(a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (i) (iv) (iii) (ii)
(3) (iii) (ii) (iv) (i)
(4) (iii) (iv) (ii) (i)
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77. Statement (I) : Designing a distribution system for a service (for-profit or non-business
context) involves to select the parties only through which ownership will
pass.
Statement (II) : The ownership channel for most of the services is long and quite complex
because of inseparability characteristic.
Statement (III) : Short channels usually mean more control on the part of the seller.
Identify the correct code of being the statements correct or incorrect. These statements relate
to channel strategies of products/services.
(1) Statements (I) and (II) are correct but (III) is not correct.
(2) Statements (I) and (III) are correct but (II) is not correct.
(3) Statements (I) and (II) are not correct but (III) is correct.
(4) Statements (I), (II) and (III) all are not correct.
78. An enormous collection of data on various topics from a variety of internal and external
sources, compiled by a firm for its own use or for use by its clients, is called :
(1) Data-base (2) Data warehouse
(3) Data mining (4) M.I.S.
79. Statement (I) : A form of non-store retailing that uses advertising to contact consumers
who, in turn, purchase products without visiting a retail store is called Direct
selling.
Statement (II) : A form of non-store retailing in which personal contact between a sales
person and a consumer occurs away from a retail store is called Direct
Marketing.
In the light of above statements, identify the correct code of statements being correct or
incorrect.
(1) Statement (I) is correct but Statement (II) is not correct.
(2) Statement (I) is not correct but Statement (II) is correct.
(4) Both the statements are not correct.
152
80. 34% of the customers who fall in one of the categories of diffusion process who are deliberate
customers to accept an innovation just before the average adopter in a social system. Such
customers who are above average in social and economic measures, rely quite a bit on
advertisements and salesmen are known as :
(1) Early Adopters (2) Early Majority (3) Late Majority (4) Late Adopters
81. The G. E. Business Model is explained on which one of the following parameters ?
(1) Market Attractiveness and Business Position.
(2) Business Attractiveness and Market Position.
(3) Industry Growth rate and Company’s Market share.

(4) Company’s Growth rate and Industry’s Position.
82. A reduction from the list price that is offered by a seller to buyers in payment for marketing
functions the buyers will perform is known as :
(1) Trade Discount (2) Functional Discount
(3) Cash Discount (4) Both Trade and Functional Discount
83. Match the items of List - II with the items of List - I relating to Personnel Management (PM)
and Human Resource Management (HRM) ; and select the code of correct matching.
List - I List - II
(a) Focus of PM (i) Development attitude by making people contribute their

best.
(b) Focus of HRM (ii) Exercising it as a functional area of management.
(c) Philosophy of PM (iii) Exercising it as humane management.
(d) Philosophy of HRM (iv) Profit maximization by controlling people.

Code :
(a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)

(2) (iii) (ii) (i) (iv)
(3) (iv) (i) (ii) (iii)
(4) (i) (iii) (iv) (ii)
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I Strategic HRM focuses on specific organizational intentions about what needs to be
done while HR strategies focus on long-term issues only.
II Strategic HRM focuses on macro concerns such as structure and culture while HR
strategy focuses on specific issues assigned.
III Human Resource strategy decisions are derived from strategic HRM.
Code :
(1) Statements I and II are correct while III is incorrect.
(2) Statements II and III are correct while I is incorrect.
(3) Statements I and III are correct while II is incorrect.
(4) All the statements are correct.
85. Which of the following code represents the full form of the term “BARS” in performance
management systems ?
(1) Business Appraisal and Rating Systems.
(2) Balanced Assessment Reviewing Scorecard.
(3) Behaviourally Anchored Rating Scale.
(4) Benchmarking Appraisal Reviewing Strategy.
86. Match the items of List - II with the items of List - I relating to training, and select the code
of correct matching.
List - I List - II
(a) Andragogy (i) Strategies or styles of instructions
(b) Pedagogy (ii) Ultimate knowledge level with which trainee leaves the
training sessions
(c) Terminal behaviour (iii) Lack of commitment of management and scarcity of
resources in training
(d) Training impediments (iv) Art and Science of training the adults
Code :
(a) (b) (c) (d)
(1) (i) (iv) (iii) (ii)
(2) (ii) (iii) (i) (iv)
(3) (iv) (i) (ii) (iii)
(4) (iii) (ii) (iv) (i)
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87. Which of the following statements does not stand as a principle of compensation
administration ?
(1) An enterprise should have a clear -cut plan to determine differential pay level in terms
of divergent job requirements.
(2) People and jobs should never be mingled.
(3) The compensation system should be designed with subjectivity with respect to individual
skill sets exercised from time to time.
(4) There should be established wage grievance handling procedures.
88. Match the items of List - II with the items of List - I relating to industrial relations and select
the code of correct matching.
List - I List - II
(a) Healthy labour–management relations (i) Industrial Disputes Act
(b) Industrial Peace Law (ii) Guiding principles for a grievance

procedure
(c) Industrial Democracy (iii) Workers’ participation in management
(d) National Commission on Labour, 1969 (iv) Voluntary arbitration and responsible
trade union
Code :
(a) (b) (c) (d)
(1) (iv) (i) (iii) (ii)
(2) (ii) (iii) (iv) (i)
(3) (iii) (i) (iv) (ii)
(4) (ii) (iv) (i) (iii)
89. In recent years which among the following countries has been the largest source of foreign
investment in India ?
(1) Australia (2) Japan (3) China (4) Mauritius
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90. Assertion (A) : The Government of India has been opening up domestic market to foreign
players in baby steps.
Reasoning (R) : Allowing foreign firms free play in India’s retail sector has always been a
political hot potato.
Code :
(1) (A) and (R) both are correct ; and (R) is the right explanation of (A).
(2) (A) and (R) both are correct ; but (R) is not the right explanation of (A).
(3) (A) and (R) both are incorrect.
(4) (A) is correct ; but (R) is incorrect.
Statement (I) : A Global Depositary Receipt (GDR) is a bank certificate issued in more than
one country for shares in a foreign company.
Statement (II) : A GDR is very similar to American Depositary Receipt (ADR)
Statement (III) : GDRs are called EDRs when private markets are attempting to obtain Euros.
Code :
(1) Statements (I), (II) and (III) are correct.
(2) Statements (I) and (II) are correct but (III) is incorrect.
(3) Statements (I) and (III) are correct but (II) is incorrect.
(4) Statements (II) and (III) are correct but (I) is incorrect.
92. In December 1999, European commission members signed a treaty that committed them to
adopting a common currency known as Euro. This is better known as :
(1) Treaty of Rome (2) Treaty of Maastricht
(3) Treaty of Lisbon (4) Treaty of London
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156
Statement (I) : The ‘law of one price’ states that in competitive markets free of transportation
costs and barriers to trade, identical products sold in different countries
must sell for the same price when their price is expressed in terms of the
same currency.
Statement (II) : An ‘Efficient market’ has no impediments to the free flow of goods and
services, such as trade barriers.
Code :
(3) Both statements (I) and (II) are correct.
(4) Both statements (I) and (II) are incorrect.
94. Which among the following is not a correct statement regarding patent ?
(1) A patent is a legal protection granted for an invention that is new, non-obvious and
useful.
(2) The patent grants the patent holder the exclusive right to make use or sell the patented
products or process.
(3) The exclusive purpose of the patent system is to benefit the patent holder.
(4) The Indian Patent Act, 1970, was amended and made effective from January 1, 2005.
95. Which one of the following is agricultural income under the Income Tax Act, 1961 ?
(1) Interest on arrears of rent in respect of agricultural land.
(2) Interest received by a money-lender in the form of agricultural produce.
(3) Income from sale of trees of forest which are of spontaneous growth and in relation to
which forestry operations alone are performed.
(4) Interest on capital received by a partner from the firm engaged in agricultural operations.
157
96. Under the Income Tax Act, 1961 “block of assets” for the purpose of charging depreciation
means :
(1) Value of all the assets after depreciation
(2) Value of all tangible assets after charging depreciation
(3) Value of all those assets to which one rate of depreciation is applicable
(4) Gross value of machinery and plant less accumulated depreciation
97. The maximum amount of exemption of compensation received at the time of voluntary
retirement U/S 10(10C) of the Income Tax Act, 1961, is :
(1) ` 1,00,000 (2) ` 2,50,000 (3) ` 5,00,000 (4) ` 10,00,000
98. Which one of the following statements is not correct with reference to the assessment of
firms ?
(1) All partnership firms formed under the Indian Partnership Act, 1932, are assessed as
firms under the Income Tax Act, 1961.
(2) Income of a firm is taxable at a flat rate of 30% without any exemption.
(3) Partners’ share in the income of a firm is not chargeable to tax in the hands of partners.
(4) Remuneration paid to partners of a firm (assessed as such) is allowed as deduction
subject to statutory limit.
99. The due date of first instalment of advance tax by assessees other than companies is :
(1) 15th April (2) 15th June (3) 15th September (4) 15th December
100. Which one of the following items is not allowed as deduction while computing income from
business and profession ?
(1) Fees paid to the lawyer for drafting partnership deed
(2) Loss due to embezzlement by an employee
(3) Legal expenses paid to protect the building of the business
(4) Cost of installing a new telephone
-oOo-
158

JULY 2018
Answer Key (1-100)
1 2 11 3 21 4 31 2 41 3 51 3 61 3 71 1 81 1 91 1
2 2 12 3 22 1 32 1 42 3 52 4 62 4 72 2 82 4 92 *
3 4 13 4 23 3 33 2 43 1 53 2 63 3 73 4 83 3 93 3
4 3 14 3 24 3 34 1 44 3 54 2 64 1 74 1 84 2 94 3
5 1 15 1 25 1 35 1 45 4 55 2 65 3 75 2 85 3 95 4
6 2 16 2 26 1 36 4 46 2 56 1 66 3 76 4 86 3 96 3
7 1 17 2 27 4 37 2 47 4 57 3 67 4 77 3 87 3 97 3
8 1 18 2 28 4 38 4 48 3 58 3 68 4 78 2 88 1 98 1
9 4 19 3 29 1 39 2 49 2 59 2 69 2 79 4 89 4 99 2
10 1 20 2 30 3 40 4 50 2 60 3 70 4 80 2 90 2 100 1
159
NOVEMBER
PAPER - II
Note : This paper contains fifty (50) objective type questions of two (2) marks each. All questions
are compulsory.
1. From the following statements of Assertion (A) and Reasoning (R), indicate the correct
code :
Assertion (A) : Industrial liberalisation became an imperative condition for the growth of
forces of competition leading to high efficiency and productivity in Indian
industries.
Reasoning (R) : Industrial development and curbing of poverty is only possible through
government intervention.
Code :
2. Which of the following statements are not correct ?

Statement (I) : Sustainable development means an attempt to achieve the balance
between economic growth and conservation / protection of
environment.
Statement (II) : Sustainable development means meeting the needs of industries
without compromising the needs of import - export balancing.
Statement (III) : Sustainable development means creation of sufficient surplus budgets
through stock of capital assets including land.
Code :
(1) Statements (I) and (III) (2) Statements (II) and (III)
(3) Statements (I) and (II) (4) Statements (I), (II) and (III)
3. Match items of List - I with List - II relating to macro environment of business and indicate
the code of correct matching :
List - I List - II
(a) Economic environment (i) Ethical issues
(b) Political and government (ii) Trade and transport policies
environment
(c) Socio - cultural environment (iii) Economic stratification of population
(d) Demographic environment (iv) Judiciary powers
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (i) (iii) (ii) (iv)
(3) (iv) (ii) (iii) (i)
(4) (iii) (i) (iv) (ii)
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4. For which one of the basic reasons, the “Structural Adjustment Programme” was undertaken
in India in 1991 ?
(1) Curbing competition among private sector
(2) Establishing predominant role of public sector
(3) Establishing a free market economy
(4) Regional balancing through planning and licensing
5. Match the items of List - I with List - II and indicate the correct code of matching :
List - I List - II
(a) Micro external environment (i) Economic and political factors
(b) Macro external environment (ii) Competition among diverse products
targetting disposable income of consumers
(c) Non - price competition (iii) Input suppliers
(d) Desire competition (iv) Sponsoring of events like sports
Code :
(a) (b) (c) (d)
(1) (iii) (i) (iv) (ii)
(2) (ii) (iii) (iv) (i)
(3) (iv) (ii) (iii) (i)
(4) (iv) (i) (ii) (iii)
6. Assertion (A) : Debt - equity ratio indicates the long term solvency of a company.
Reasoning (R) : It measures the ability of the company to pay off its long term liabilities.
Select the correct answer from the code given below :
(1) Both (A) and (R) are correct and (R) is the correct reason for (A).
(2) Both (A) and (R) are correct but (R) does not explain (A) correctly.
(3) (A) is correct but (R) is wrong.
7. The balance of property at cost has been ` 20,000 and ` 17,000 in 2015 and 2016, respectively.
The profit on the sale of property of ` 2,000 is credited to Capital Reserve Account. New
property costing ` 5,000 was bought in 2016. Determine the sale proceeds from property.
(1) ` 3,000 (2) ` 7,000 (3) ` 10,000 (4) ` 15,000
8. Goodwill of a firm of X and Y is valued at ` 30,000. It is appearing in the books at ` 12,000.

Z is admitted for 1/4 share. What amount he is supposed to bring for goodwill ?
(1) ` 3,000 (2) ` 4,500 (3) ` 7,500 (4) ` 10,500
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9. A Ltd. issued a prospectus inviting applications for 2,000 shares. Applications were received
for 3,000 shares and pro-rata allotment was made on the applications of 2,400 shares. If A
has been allotted 40 shares, how many shares he must have applied for ?
(1) 40 (2) 44 (3) 48 (4) 52
10. Which one of the following receipts is of revenue nature ?

(1) Amount realised from the sale of investments
(2) Dividend received on investment
(3) Amount borrowed from a bank
(4) Compensation received from municipal corporation for the acquisition of land for the
construction of road.
11. Statement (I) : Business decision makers deal with the complex, rather chaotic, business
conditions of the real world and have to find the way to their destination,
i.e, achieving the goal that they set for themselves.
Statement (II) : Even without application of economic logic and tools of analysis, business
decisions are always rational and real and are not counter productive.
Code :
(3) Statement (I) is correct while statement (II) is incorrect.
(4) Statement (I) is incorrect while statement (II) is correct.
12. Which one of the following statements is true ?

(1) Pure profit is the return in excess of the opportunity cost
(2) Accounting profit is the excess of total revenue over and above the explicit and implicit
costs
(3) Profit maximization is the sole objective of the modern firms
(4) Profit is maximum when the difference between marginal revenue and marginal cost
is maximum
13. Which one of the following is not the assumption on which the theory of consumer behaviour
is based on the cardinal utility approach ?
(1) Rationality
(2) Constant marginal utility from successive units
(3) Constant marginal utility of money
(4) Utility is measurable
162
14. Statement (I) : Point price elasticity of demand in terms of marginal and average revenues
can be measured with the following formula :
AR
AR−MR
Statement (II) : The point price elasticity of demand is the product of the slope of the demand
function and the ratio between corresponding price and quantity.
Code :
(3) Statement (I) is correct while statement (II) is incorrect.
(4) Statement (I) is incorrect while statement (II) is correct.
15. Which one of the following is not the basic property of indifference curves ?
(1) Negative slope
(2) Indifference curves of two imperfect substitutes are concave to the point of origin
(3) The indifference curves do not intersect nor are they tangent to one another
(4) Upper indifference curves indicate a higher levels of satisfaction
16. The scale of measurement which has no order, distance and unique origin is known as which
one of the following ?
(1) Nominal scale (2) Ordinal scale (3) Interval scale (4) Ratio scale
17. The formula to determine the number of classes given by Sturge’s Rule is which one of the
following ?
(1) K=1+3.322(log N)
(2) K=(log N)1.322
1 + 3.322
(3) K=
(log N)
3.322
(4) K=
(log N) + 1
Where : K = Number of classes
N = Total number of observations
(log N) = Logarithm of the total number of observations
18. Which one of the following is not the characteristics of normal distribution ?
(1) Bell - shaped and symmetric
(2) Mean, Median and Mode of the distribution are equal
(3) The total area under the curve for the normal probability distribution is one
(4) The two tails of the distribution in both the directions touches the horizontal axis
163
19. Assertion (A) : A reasonably sized sample drawn randomly from large sized population
contains almost all the characteristics which exist in the population.
Reasoning (R) : The theory of sampling is based on the two important laws of statistics,
viz., Law of statistical Regularity and law of inertia of large numbers.
Code :
(1) Both (A) and (R) are correct and (R) is the complete explanation of (A).
(2) Both (A) and (R) are correct but (R) is not the complete explanation of (A).
(3) (A) is not correct while (R) is correct.
(4) Both (A) and (R) are not correct.
20. Statement (I) : If the alternative hypothesis is as Ha : µ ≠ µ0 ; a researcher requires two -

tailed test in hypothesis - testing.
Statement (II) : The mean of the sampling distribution of mean is not equal to the parametric
value of mean.
Code :
(1) Both the statements are true.
(2) Both the statements are false.
(3) Statement (I) is true, while statement (II) is false.
(4) Statement (I) is false, while statement (II) is true.
21. Match the items of List - I with List - II ; and choose the correct code of combination :
List - I List - II
(a) The Fundamentals of Top Management (i) Peter F. Drucker
(b) Middle Management (ii) R.C. Davis
(c) The Essence of Management (iii) E.L.F. Brech
(d) Principles and Practice of Management (iv) Mary Caushing Nile
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (iii) (i)
(2) (ii) (iv) (i) (iii)
(3) (ii) (iii) (i) (iv)
(4) (iii) (iv) (i) (ii)
22. Statement (I) : Management is not just a creature of the economy; it is a creator as well.
Statement (II) : He who can manage, can manage anything.
Code :
164
23. Assertion (A) : Due to these experiments (Time, Motion and Fatigue Studies ) a factory
does not remain a factory, it is converted into a laboratory.
Reasoning (R) : Management succeeds or fails as human relations in business are intelligently
or unintelligently handled.
Code :
(4) (R) is correct but (A) is not correct.
24. Who among the following is not associated with theories of motivation ?
(1) A.H. Maslow (2) Cris Argyris
(3) Frederick Herzberg (4) Peter F. Drucker
25. As per the Herzberg’s Hygiene Theory of motivation, which among the following is not a
motivational factor ?
(1) Recognition (2) Working Conditions
(3) Responsibility (4) Achievements
26. When Walt Disney World’s Magic kingdom lets customers visit a fairy kingdom, a pirate
ship, or a haunted house, then what is marketed in this example ?
(1) Services (2) Events (3) Experiences (4) Ideas
27. Which one of the following statements is true according to VALS framework of psychographic
segmentation ?
(1) The consumers who are primarily motivated by ideals are guided by knowledge and
principles.
(2) The consumers who are motivated by achievement look for knowledge and principles.
(3) The consumers who are motivated by self expression don’t desire social or physical
activity, variety, and risk.
(4) The consumers who are motivated by achievement desire social or physical activity,
variety, and risk.
28. From the following two statements of Assertion (A) and Reason (R), indicate the correct
code :
Assertion (A) : A transformational appeal of communication elaborates on a non-product
related benefit or image.
Reasoning (R) : Transformational appeals often do not attempt to stir up emotions that will
motivate purchase.
Code :
(1) (A) and (R) both are correct. (2) (A) is correct (R) is not correct.
(3) (A) is not correct (R) is correct. (4) (A) and (R) both are incorrect.
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29. Select the correct sequence for Hierarchy-of-effects model related to marketing
communication :
(1) Awareness → Knowledge → Liking → Preference→ Conviction → Purchase
(2) Knowledge → Awareness → Liking → Conviction → Preference → Purchase
(3) Awareness → Liking → Knowledge → Conviction → Preference → Purchase
(4) Liking → Awareness → Knowledge → Preference → Conviction → Purchase
30. Match the items of List - I with the items of List - II and denote the code of correct
matching :
List - I List - II
(a) Basic Product (i) Set of attributes and conditions buyers normally expect
(b) Expected Product (ii) Possible augmentation and transformation the product
might undergo in future
(c) Augmented Product (iii) Exceed customer expectations
(d) Potential Product (iv) Converting core benefits into product
Code :
(a) (b) (c) (d)
(1) (iii) (iv) (i) (ii)
(2) (i) (iii) (iv) (ii)
(3) (i) (iv) (iii) (ii)
(4) (iv) (i) (iii) (ii)
31. Which of the following statements is false ?

(1) The opportunity cost of an input is considered in capital budgeting
(2) Capital budgeting decisions are reversible in nature
(3) Cash flows and accounting profits are different
(4) An expansion decision is a capital budgeting decision
32. Match the items of List - I with those of List - II and indicate the correct code :
List - I List - II
(a) ABC Analysis (i) Dividend Decision
(b) Walter Model (ii) Capital Budgeting Decision
(c) Capital Rationing (iii) Capital Structure Decision
(d) Net Operating Income (iv) Working Capital Management Decision
Approach
Code :
(a) (b) (c) (d)
(1) (i) (iii) (ii) (iv)
(2) (ii) (i) (iii) (iv)
(3) (iv) (i) (ii) (iii)
(4) (iii) (i) (ii) (iv)
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33. Main objective of employing Financial Leverage is to :

(1) Reduce the risk associated with profits
(2) Maintain the stability in profits
(3) Decrease the cost of debt capital
(4) Magnify the return on equity share capital
34. Which one of the following is not a method of calculating cost of equity capital ?
(1) Dividend yield method
(2) Dividend yield plus growth method
(3) Yield to maturity method
(4) Earnings yield method
35. Which one of the following equates the present value of cash out flows and the present value
of expected cash inflows from a project ?
(1) Net Present Value (2) Internal Rate of Return
(3) Pay back Period (4) Accounting Rate of Return
36. Which one of the following is not true ?

(1) Material resources are subject to laws of mechanics and they cannot have an output
greater than the input.
(2) Human resources are capable of exponential growth and development.
(3) Human resources cannot yield an output that may be far greater than what the value
of their input warrants.
(4) In current scenario, gradually, the emphasis has shifted from muscle power to use of
mind power.
37. The pluralistic approach of industrial conflict is based on which one of the following basic
assumption / premise ?
(1) That conflict occurs when the tendency of industrial society is to treat worker as an
isolated individual and deprive him of all control over his environment
(2) That an enterprise contain people with coalition of different interests
(3) That industrial conflict is a part of the broader social conflict between classes
(4) That no consensus is possible, in case of conflicts, because people are with different
socio - cultural backgrounds.
38. The Job Description Index (JDI) Technique is used for measuring which one of the
following ?
(1) Job attitudes (2) Job descriptions/definitions
(3) Job analysis records (4) Job skill requirements
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167
39. From the following two statements of Assertion (A) and Reasoning (R) indicate the correct
code :
Assertion (A) : Development in HRM is a short-term educational process with temporary
intervention.
Reasoning (R) : It is a educational process utilizing a systematic and organized procedure
for development of operative employees performance in current jobs.
Code :
(2) (A) is correct, but (R) is not correct explanation of (A).
(3) (A) is not correct, but (R) is correct.
40. Match items of List - I with List - II relating to methods of performance appraisal and
indicate the correct code of matching.
List - I List - II
(a) Paired comparison method (i) Reviewing employee records and holding
interview on definite test questions.
(b) Forced choice description method (ii) Set of pair phrases or descriptive statements
(c) Critical Incidents method (iii) Differentiating between effective and non -
effective performance on basis of achievements
(d) Field review method (iv) Relative ranking method
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (iii) (i)
(2) (ii) (iii) (iv) (i)
(3) (iii) (i) (iv) (ii)
(4) (ii) (iv) (i) (iii)
41. Match the following items of List - I with the items of List - II and indicate the code of
correct matching :
List - I List - II
(Name of organisation) (Year of establishment)
(a) IDBI (i) 1956
(b) ICICI (ii) 1955
(c) LIC of India (iii) 1990
(d) SIDBI (iv) 1964
Code :
(a) (b) (c) (d)
(1) (iii) (i) (ii) (iv)
(2) (iii) (i) (iv) (ii)
(3) (iv) (ii) (i) (iii)
(4) (i) (ii) (iii) (iv)
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168
42. Statement (I) : Capital adequacy norms help banks in strengthening their capital base.
Statement (II) : Capital adequacy norms help banks in sanctioning more loans.
Code :
(1) Both the Statements (I) and (II) are correct.
(2) Both the Statements (I) and (II) are incorrect.
(4) Statement (I) is incorrect but (II) is correct.
43. What is Hawala ?

(1) Tax evasion (2) Illegal trading in stock exchanges
(3) Bank robbery (4) Illegal transactions of foreign exchange
44. Read the following events :

(i) Capital adequacy norms for commercial banks
(ii) Establishment of IDBI
(iii) Allowing convertibility of rupee at the market rate in the current account.
(iv) Nationalisation of general insurance business
Arrange the events in the ascending order of their occurrance :
(1) (i), (ii), (iii), (iv) (2) (iv), (iii), (ii), (i)
(3) (iv), (ii), (i), (iii) (4) (i), (ii), (iv), (iii)
45. Assertion (A) : The future will see mostly the electronic money clearance through satellite
networking.
Reasoning (R) : RBI is encouraging e-banking.
Code :
(1) (A) is true but (R) is false.
(2) (A) is false but (R) is true.
(3) Both (A) and (R) are true and (R) is the correct explanation of (A).
(4) Both (A) and (R) are true but (R) does not support (A).
46. Statement (I) : Developing countries can borrow more than their quota under Extended
Fund Facility (EFF) of IMF.
Statement (II) : The Extended Fund Facility (EFF) was created in 1984 to help the developing
countries over longer period upto 3 years.
Code :
(1) Statement (I) is correct but (II) is not correct.
(2) Statement (II) is correct but (I) is not correct.
(4) Both the statements (I) and (II) are not correct.
169
47. Match the items of List - I with those of List - II; and choose the correct code of
combination :
List - I List - II
(a) Poverty Reduction (i) 1997
and Growth Facility(PRGF)
(b) Supplemental Reserve Facility (SRF) (ii) 1974
(c) Extended Fund Facility(EFF) (iii) 1999
Code :
(a) (b) (c)
(1) (iii) (i) (ii)
(2) (iii) (ii) (i)
(3) (ii) (i) (iii)
(4) (i) (iii) (ii)
48. Who among the following has given Absolute Advantage Model of international trade ?
(1) Adam Smith (2) David Recardo
(3) Hackscher Ohlin (4) William Petty
49. Which among the following is not an international economic institution ?

(1) IMF (2) IBRD (3) ADB (4) IFRS
50. Assertion (A) : The fall in aggregate expenditure or aggregate demand in the economy
works to reduce imports and help in solving the balance of payment
problems.
Reasoning (R) : The important way to reduce imports and thereby reduce deficit in
balance of payments is to adopt monetary and fiscal policies that aims
at reducing aggregate expenditure in the economy.
Code :
(1) (A) and (R) both are correct and (R) supports (A).
(2) (A) and (R) both are correct but (R) does not support (A).
(4) (R) is correct but (A) is incorrect.
-o0o-
170
NOVEMBER 2017 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 2 11 3 21 * 31 2 41 3
2 2 12 1 22 4 32 3 42 3
3 1 13 2 23 2 33 4 43 4
4 3 14 1 24 4 34 3 44 *
5 1 15 2 25 2 35 2 45 3
6 1 16 1 26 3 36 3 46 1
7 3 17 1 27 1 37 2 47 1
8 3 18 4 28 2 38 1 48 1
9 3 19 1 29 1 39 4 49 4
10 2 20 3 30 4 40 1 50 1
171
NOVEMBER 2017
PAPER - III
Note : This paper contains seventy five (75) objective type questions of two (2) marks each.
All questions are compulsory.
1. Assertion (A) : Buyers, for several industries, are potential competitors-they may integrate
backwards.
Reasoning (R) : They have different degrees of bargaining power.
Code :
(1) (A) and (R) are correct and (R) is the correct reasoning of (A).
(2) (A) and (R) are correct but (R) is not the correct reasoning of (A).
(3) (A) is incorrect while (R) is a correct statement.
2. Which one of the following is the governing factor in deciding the type of redressal agency
which will deal with the dispute of a consumer ?
(1) Area of sale of goods and services
(2) Type of goods and services sold
(3) The choice of the consumer
(4) The value of goods and services sold
3. Match List - I with List - II relating to the roles played by government in an economy and
indicate the correct code of their matching.
List - I List - II
(Roles) (Examples)
(a) Regulatory role (i) Deciding timing and usage of resources
(b) Promotional role (ii) Capital intensive projects of public sector
(c) Enterpreneurial role (iii) Imposing of high import duty
(d) Planning role (iv) Measures to control and cover risk in priority sectors
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (i) (iii)
(2) (iii) (i) (iv) (ii)
(3) (iii) (iv) (ii) (i)
(4) (i) (iii) (iv) (ii)
4. Which one of the following statement is not correct relating to Competition Policy and
Law ?
(1) Collusion and dominance have potential for unfair competition.
(2) The appeal against decisions of Competition Commission of India can be made to the
Competition Appellate Tribunal.
(3) State monopolies, government’s business policies and functioning of Regulatory
Authorities cannot be scrutinized under this law.
(4) Abuse of dominance rather than dominance should be the key for Competition Policy/
Law.
172
5. Which one of the following is not correct with reference to standard costing ?
(1) Standard costing is a system where pre determined costs are used for control of entire
organisation
(2) Standard may be expressed in quantitative and monetary measures
(3) Only adverse variances are investigated intensively
(4) Standard is determined for each element of cost
6. Which one of the following is not correct ?
Profit
(1) Margin of Safety =
P/V ratio
Change in Contribution
(2) P/V Ratio = × 100
Change in sales
Fixed cost
(3) Break-even point in units =
Contribution per unit
Desired profit
(4) Required sales to earn desired profits =
P/V ratio
7. Schedule III Part II of the Companies Act, 2013 deals with which one of the following ?
(1) Format of Balance Sheet (2) Format of Profit and Loss Account
(3) Format of Trading Account (4) Format of Cash Flow
8. Which one of the following statements is not true ?
(1) When there is one liquidation and one formation it is known as external construction
(2) Goodwill or Capital reserve arises only when the amalgamation is in the nature of
merger
(3) Under the pooling of interest method, the transferee company incorporates the assets
and liabilities of the transferor company at book value
(4) The vendor company transfers preliminary expenses (at the time of absorption) to equity
shareholders’ account
173
9. Statement - I : The least - cost or optimal input combination of labour and capital requires
that the marginal revenue productivity ratio of the two inputs should be
equal to their price ratio.
Statement - II : In a hypothetical production function of the following form
Q=−L3+15 L2+10 L
Where, Q=Quantity of the product and L=No. of variable input (labour), the marginal
physical productivity of labour is −L2+15 L+10.
Code :
(3) Statement - I is true while statement - II is false.
(4) Statement - I is false while statement - II is true.
10. Match the items of List - I with the items of List - II and indicate the code of correct matching.
List - I List - II
(a) Technological advantages (i) Managerial economies
(b) Large scale purchase of material (ii) Economies in transport and storage
inputs
(c) Specialized departments under (iii) Economies in marketing
Specialized personnel
(d) Oil companies having their own (iv) Economies in production
fleet of tankers
Code :
(a) (b) (c) (d)
(1) (iv) (iii) (i) (ii)
(2) (iii) (iv) (ii) (i)
(3) (iii) (i) (ii) (iv)
(4) (iv) (ii) (iii) (i)
11. Manufacturing of T.V. sets and refrigerators and their pricing in India belong to which one
of the following market structures ?
(1) Monopolistic competition (2) Perfect competition
(3) Monopoly (4) Oligopoly
12. Statement - I : Pricing at par with the market price of the existing brands is considered to
be the most reasonable pricing strategy for a product which is being sold in
a strongly competitive market.
Statement - II : Pricing below the market price has been found to be more successful when
a seller intends to achieve a prestigious position among the sellers in the
locality for selling prestigious goods of much superior quality.
Code :
(1) Both the statements are correct
(2) Both the statements are incorrect
(3) Statement - I is correct while Statement - II is incorrect
(4) Statement - I is incorrect while Statement - II is correct
174
13. Which of the following statements are true ? Select the correct code.
(a) The coefficient of rank correlation has the same limits as the Karl Pearson’s coefficient
of correlation.
(b) The coefficient of correlation is independent of the change of origin but not of scale.
Σxy
(c) The covariance between X and Y is defined as where x = (X − X) , y = (Y − Y)
n
and n = no. of paired observations.
(d) bxy is called regression coefficient of X variable on Y variable.
(e) If bxy is 0.4 and byx is 1.6, coefficient of determination would be 0.8.
Code :
(1) (a), (b) and (c) (2) (a), (c) and (d)
(3) (c), (d) and (e) (4) (b), (c) and (e)
14. The application of x 2 -test as parametric test will be in which one of the following
situations ?
(1) Test of independence of attributes

(2) Test of goodness of fit of a specific type of distribution
(3) Test for population variance on the basis of small sized sample variance
(4) Test of homogeneity of several populations with respect to some characteristic of interest
15. In which one of the following situations is the application of t-test is most appropriate ?
(1) Testing the significance of coefficient of correlation between paired observations of

small sized sample
(2) Testing the significance of coefficient of correlation between paired observations of
large sized sample
(3) Comparing variances of two small sized samples
(4) Testing the significance of the difference among mean values of more than two samples
groups
16. Which of the following is not a logical data structure ?
(1) Chain (2) Stack (3) List (4) Tree
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175
17. Match the items of List - I with those of List - II; and choose the correct code of combination :
List - I List - II
(a) A committee consist of a group of people (i) C.I. Barnard
specifically designated to perform some
administrative work
(b) Staff service in organisation means the service (ii) W.H. Newman
or advice or council, as distinguished from
the function of authority or command
(c) Organisation is informal when the aggregate (iii) McFarland
interpersonal relationships are without
conscious joint purpose
(d) An identifiable group of people contributing their (iv) James D. Mooney
efforts towards the attainment of goals is called
organisation
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (iv) (ii) (iii) (i)
(3) (iv) (iii) (i) (ii)
(4) (i) (ii) (iv) (iii)
18. Which among the following is not a physical barrier of communication ?

(1) Poor vocabulary (2) Noise
(3) Improper time (4) Overload information
19. Statement - I : Management control seeks to compel events to conform to plans.

Statement - II : Controlling is determining what is motivational to the employees of the
organization.
Code :
(1) Statement - I is correct but II is incorrect
(2) Statement - II is correct but I is incorrect
(3) Both the statements I and II are correct
(4) Both the statements I and II are incorrect
20. Assertion (A) : Sound planning is one of the essential elements for the success of corporate
entities.
Reasoning (R) : Planning is deciding in advance what is to be done. It involves the selection
of objectives, policies, procedures and programmes from among alternatives.
Code :
(3) Both the statements (A) and (R) are incorrect.
176
21. Match the items of List - I with List - II and denote the code of correct matching :
List - I List - II
(a) Acceptability (i) Convenience Aspect
(b) Affordability (ii) Functional and Psychological Aspects
(c) Accessibility (iii) Information and knowledge Aspects
(d) Awareness (iv) Economic and Psychological Aspects
Code :
(a) (b) (c) (d)
(1) (i) (iii) (ii) (iv)
(2) (iii) (ii) (i) (iv)
(3) (ii) (iv) (i) (iii)
(4) (iv) (ii) (i) (iii)
22. Match the items of List - I with the items of List - II which are related to dimensions of brand
personality. Denote the code of correct matching.
List - I List - II
(a) Sincerity (i) Upper class, Charming
(b) Excitement (ii) Reliable, Intelligent, Successful
(c) Competence (iii) Down to earth, Cheerful, Wholesome
(d) Sophistication (iv) Outdoors, Tough
(e) Ruggedness (v) Spirited, Imaginative, Up-to-date
Code :
(a) (b) (c) (d) (e)
(1) (v) (ii) (i) (iii) (iv)
(2) (i) (iv) (iii) (ii) (v)
(3) (iii) (v) (ii) (i) (iv)
(4) (ii) (i) (iii) (v) (iv)
23. One of the techniques of stimulating creativity for developing new product where you start
with an idea then thinking of the next idea and link, then think of the next association and
do this with all association that come up with each new idea, is known as :
(1) Attribute Listing (2) Forced Relationship
(3) New Contexts (4) Mind Mapping
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24. Statement - I : We are motivated to re-evaluate our beliefs, attitudes, opinions or values
occurred at two different time.
Statement - II : The difference due to some intervention occurred at either point of time
motivates us to search a newer option and thus satisfies our mind/ anxiety.
Code :
(1) Statement - I is correct, Statement - II is not correct.
(2) Statement - II is correct, Statement - I is not correct.
(3) Both statements are correct.
(4) Both statements are incorrect.
25. Operating Leverage and Financial Leverage of a firm are 3 and 2, respectively. If sales increase
by 6%, then earnings before tax will rise by :
(1) 18% (2) 12% (3) 36% (4) 30%
List - I List - II
(a) Net Income Approach (i) Working Capital Management
(b) Profitability Index (ii) Over- capitalisation
(c) Concentration Banking (iii) Capital Structure Planning
(d) Lower Rate of Return (iv) Capital Budgeting Decision
Code :
(a) (b) (c) (d)
(1) (iii) (iv) (i) (ii)
(2) (iii) (iv) (ii) (i)
(3) (iv) (ii) (iii) (i)
(4) (ii) (iii) (i) (iv)
27. Statement - I : In payback period method, the risk of the project is adjusted by lessening
the target payback period.
Statement - II : Sensitivity Analysis helps in calculation of net present value of the proposal.
Code :
(1) Statement - I is correct, but statement - II is wrong
(2) Statement - I is wrong, but statement - II is correct
(3) Statement - I and statement - II, both are correct
(4) Statement - I and statement - II, both are wrong
28. Dividend irrelevance argument of MM Model is based on :

(1) Hedging (2) Issue of Debentures
(3) Liquidity (4) Arbitrage
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29. Match the items of List - I with List - II and indicate the correct code of their matching
relating to human resource management philosophy :
List - I List - II
(a) Rational System Approach (i) F.W. Taylor
(b) The Ahmedabad Experiments (ii) Max Weber’s theory of bureaucracy
to improve productivity
(c) Social System Approach (iii) A.K. Rice
(d) Functional organisation concept (iv) Hawthorne studies
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (iii) (i)
(2) (iii) (ii) (iv) (i)
(3) (iv) (iii) (i) (ii)
(4) (iii) (i) (ii) (iv)
30. Which one of the following is not a method of deciding acceptable level of reliability or
consistency of measurement in selection methods ?
(1) Regiocentric approach (2) Split half method
(3) Test related method (4) Expectancy diagrams
31. Put the following steps of discrete selection process in correct sequence and select the correct
code :
(a) Preliminary interview
(b) Completion of application blank
(c) Background investigation
(d) Physical examination
(e) Employment tests
(f) Comprehensive interview
(g) Final employment decision
Code :
(1) (b), (a), (c), (d), (e), (f), (g) (2) (b), (a), (e), (f), (c), (d), (g)
(3) (a), (b), (e), (f), (c), (d), (g) (4) (a), (b), (d), (c), (e), (f), (g)
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32. Match List - I with List - II relating to wage theories and its propounders and indicate the
code representing correct matching :
List - I List - II
(Theory) (Propounder)
(a) Subsistence Theory (i) Karl Marx
(b) Surplus Value Theory (ii) Francis Walker
(c) Wage Fund Theory (iii) David Richardo
(d) Residual Claimant Theory (iv) Adam Smith
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (iv) (i) (ii) (iii)
(3) (iii) (i) (iv) (ii)
(4) (iv) (ii) (iii) (i)
33. When was paper currency first started in India ?

(1) 1542 (2) 1611 (3) 1705 (4) 1801
34. ‘RWA’ with regard to capital adequacy stands for which one of the following ?
(1) Risk Withdrawal Adjustments (2) Risk Withdrawal Arrangements
(3) Risk Weighted Assets (4) Risk-free Weighted Assets
35. Match the items of List - I with List - II and denote the code of correct matching :
List - I List - II
(a) Future (i) Consists of purchase or sale of commodities in two different
markets with the expectations that a future change in price in
one market will be off set by an opposite change in the other
market
(b) Swap (ii) A contract in which a seller agrees to deliver an asset to a buyer
at a predetermined price at some future date as privately
negotiated
(c) Hedging (iii) A contractual agreement for exchanging a steam of payments
with opposite and matching needs, to reap the benefit arising
due to market discrepancies
(d) Forward (iv) A contract covering the purchase and sale of physical
commodities or financial instruments for future delivery on a
future exchange floor
Code :
(a) (b) (c) (d)
(1) (iv) (iii) (ii) (i)
(2) (i) (ii) (iii) (iv)
(3) (ii) (i) (iii) (iv)
(4) (iv) (iii) (i) (ii)
180
36. Which of the following are the forms of e - banking ? Select the correct code.
(a) Internet Banking
(b) Telephone Banking
(c) Electronic Cheque Conversion
(d) Electronic Bill Payment
(e) Direct Fund Transfer Through RTGS
Code :
(1) (a), (c) and (d) (2) (a), (b), (c) and (d)
(3) (b), (c) and (d) (4) (a), (b), (c), (d) and (e)
37. Which one among the following has the largest share of exports from India ?
(1) Agriculture and Allied Commodity
(2) Gems and Jewellery
(3) Handicrafts
(4) Electronic Goods
38. Which one among the following is not a part of TRIPS agreement ?
(1) Industrial Design (2) Geographical Indications
(3) Interior Design (4) Layout Designs of Integrated Circuits
39. Which one among the following is not correct ?

(1) IMF’s headquarters is in Washington, D.C.
(2) IMF has 198 countries as its members.
(3) IMF is an outcome of the Bretton Woods Conference.
(4) IMF was found on July 7, 1944.
40. Statement - I : Served From India Scheme (SFIS) has been replaced with Service Exports
from India Scheme (SEIS).
Statement - II : The rate of reward under SEIS would be based on net foreign exchange
earned.
Code :
(1) Statement - I is correct but statement - II is incorrect.
(2) Statement - II is correct but statement - I is incorrect.
(3) Both the statements - I and II are incorrect.
(4) Both the statements - I and II are correct.
181
List - I List - II
(Accounting standard) (Relationship)
(a) AS - 6 (i) Accounting for Consolidated Financial Statements
(b) AS - 3 (ii) Accounting For Fixed Assets
(c) AS - 10 (iii) Depreciation Accounting
(d) AS - 21 (iv) Accounting For Cash Flow Statement
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (iii) (i)
(2) (iii) (iv) (ii) (i)
(3) (iv) (iii) (i) (ii)
(4) (i) (ii) (iii) (iv)
42. Which of the following statements are False ? Indicate the correct code.
(a) RBI has prescribed guidelines for the operations of credit rating agencies in India.
(b) All venture capital funds in India have been promoted by Government.
(c) A mutual fund can operate as venture capital fund.
(d) Credit rating is an authoritative guarantee regarding the credit position of a person.
Code :
(1) (a), (b), (c) and (d) (2) (a), (b) and (d)
(3) (a), (b) and (c) (4) (a) and (c)
43. Which of the following are the examples of systematic risk ? Indicate the correct code.
(a) Elimination of Government Subsidy
(b) Increase in Bank Rate
(c) Labour Problem
(d) High Levered Fund
Code :
(1) (a), (b) and (c) (2) (a), (b) and (d)
(3) (a) and (b) (4) (a) and (d)
44. Which of the following are the benefits of responsibility accounting ?

(a) It facilitates the centralisation of decision taking.
(b) It provides a system of closer control.
(c) It measures the performance of individuals in an objective manner.
(d) It develops a sense of cost consciousness among managers and their subordinates.
Code :
(1) (a), (b) and (c) (2) (b), (c) and (d)
(3) (a), (b) and (d) (4) (a), (c) and (d)
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45. Which of the following statements are True ? Indicate the correct code.
(a) Tax-shield on depreciation and interest is an important variable both for lessor and
lessee.
(b) A lessee may evaluate the lease options as against the buying option.
(c) Sale and Lease-back, and leveraged lease are types of financial lease.
(d) Lease financing is a type of capital budgeting decision from the point of view of the
lessee.
Code :
(1) (a), (b) and (d) (2) (b), (c) and (d)
(3) (a), (c) and (d) (4) (a), (b) and (c)
46. Which one of the following methods of Inflation Accounting has been proposed by Sandilands
Committee of U.K ?
(1) General Price Level Method
(2) Specific Price Level Method
(3) Current Cost Accounting Method
(4) Generally Accepted Accounting Principles
47. Which of the following are the motives of mergers ? Indicate the correct code.
(a) To gain the economies of scale.
(b) To utilise under - utilised resources.
(c) To break the monopoly.
(d) To reduce the tax liability.
Code :
(1) (a), (c) and (d) (2) (a), (b) and (d)
(3) (b), (c) and (d) (4) (a), (b) and (c)
48. A research technique used particularly in retailing (online and offline), in which consumers
are recruited by researchers to act as anonymous buyers in order to evaluate customer
satisfaction, service quality and customer’s own evaluation of their experiences, is known
as :
(1) Consumer Jury (2) Projective Technique
(3) Mystery Shopping (4) Semiotic Research
49. Match the items of List - I with items of List - II and select the correct code of
matching :
List - I List - II
(a) Market Leader (i) Avoid hostile attacks on rivals
(b) Market Challenger (ii) Attack the market leader
(c) Market Follower (iii) Provide high level of specialisation
(d) Market Nicher (iv) Attack the market
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (i) (iii)
(2) (ii) (iv) (iii) (i)
(3) (iii) (i) (iv) (ii)
(4) (i) (iii) (iv) (ii)
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50. Which of the statements are correct ? Select correct code.

Statement (I) : Opinions can be described as the slow responses we might give to opinion
poll questions about any issue.
Statement (II) : Attitudes are held with a greater degree of conviction, over longer duration
and more likely to influence behaviour.
Statement (III) : Values are held more strongly than attitudes and underpin our attitudinal
behaviour.
Code :
(1) (I) and (II) (2) (II) and (III) (3) (I) and (III) (4) (I), (II) and (III)
51. Which of the following is not a major aspect of digital marketing ?

(1) Jurisdiction (2) Ownership (3) Security (4) Entertainment
52. Which of the following statements are correct ? Select the correct code.
Statement (I) : Horizontal conflict between channel members is caused due to channel
members impinge on the market territory of other intermediaries at different
level.
Statement (II) : Vertical conflict is caused due to intense price competition, disagreement
about promotional activities, attempts to bypass intermediary and distribute
direct, differing expectations as to channel or intermediary performance.
Statement (III) : Hybrid channel conflict arises due to grey marketing.
Code :
(1) (I) and (III) (2) (I) and (II)
(3) (II) and (III) (4) (I), (II) and (III)
53. Which of the following statements are incorrect ? Indicate the correct code.
Statement (I) : As consumer’s income increases, the percentage of income spent for food
items decreases, for rent, fuel and light remains the same, for clothing remains
the same and for sundries increases.
Statement (II) : Societal marketing period was from 1960 onwards.
Statement (III) : Our debt to social anthropology decreases more and more as we use
qualitative market research approaches.
Statement (IV) : The economic concepts of perfect competition and matching of supply and
demand underlie the marketing concept, particularly in relation to the
concepts of the price at which goods are sold and quantity distributed.
Code :
(1) (I) and (II) (2) (II) and (III)
(3) (II) and (IV) (4) (I) and (IV)
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54. Which of the following statements are correct ? Indicate the correct code.
Statement (I) : Virtue ethics is a form of ethical approach associated with Aristotle which
stresses the importance of developing virtuous principles, ‘right’ character
and the pursuit of a virtuous life.
Statement (II) : Utilitarianism is an ethical approach where an action is right if, and only if,
it conforms to the principle of utility, whereby utility is minimised and pain
and unhappiness minimised more than any alternative.
Statement (III) : ‘Deontological Ethics’ is an ethical approach where rightness or wrongness
of an action or decision is not judged to be based exclusively on the
consequences of that action or decision.
Code :
(1) (I), (II) and (III) (2) (I) and (II) (3) (I) and (III) (4) (II) and (III)
55. Assertion (A) : The matter of succession planning is often deferred.

Reasoning (R) : The succession charts need utmost confidentiality.
Code :
(1) (A) is correct and (R) is right reasoning of it.
(2) (A) is correct but (R) is not the correct reasoning of it.
(3) (A) is correct but (R) is not correct statement.
(4) (A) is not correct while (R) is a correct statement.
56. Bethel Maine of USA was the pioneer of which one of the following Laboratory training
methods of employee training ?
(1) Transactional Analysis (2) Business Games
(3) Critical Incident Technique (4) T-group
57. Which of the following statements relating to appraisal methods are not correct ? Indicate
the correct code.
Statement (I) : The MBO program is built on the assumption that individuals always need
not be responsible and self - directed and thus need to be motivated to work
towards objectives.
Statement (II) : Forced distribution method was developed by Karl Marx.
Statement (III) : Peer evaluation and self - appraisal need to be done on well - defined
parameters in check-list method.
Statement (IV) : Forced choice method consists of seven main factors on three point rating
scale.
Code :
(1) Statements (I) and (II) (2) Statements (III) and (IV)
(3) Statements (I), (II) and (III) (4) Statements (I), (II), (III) and (IV)
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58. Match the main concerns of HRD sub-systems given in List - I with List - II and choose the
correct code of matching :
List - I List - II
(HRD sub - systems) (Main concerns)
(a) Individual’s career (i) Competence
(b) Development of teams (ii) Power
(c) Socialisation of organisation (iii) Commitment and integration
(d) Management of organization (iv) Values
Code :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (iv) (ii) (iii) (i)
(3) (iii) (i) (iv) (ii)
(4) (ii) (iii) (i) (iv)
59. Match the items of List - I with List - II and indicate the correct code of matching :
List - I List - II
(Wage Theory) (Basis of determining wage)
(a) Subsistence theory (i) Capitalists first set aside predetermined surplus
income and then decide the wages
(b) Surplus value theory of wages (ii) Growth of the population brings down to level
of subsistence
(c) Wage Fund theory (iii) Balance claimed upon the output of industry
(d) Residual Claimant theory (iv) Natural price for labour
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (i) (iii)
(2) (ii) (iv) (i) (iii)
(3) (iii) (i) (ii) (iv)
(4) (i) (iii) (iv) (ii)
60. Statement (I) : Selection of wrong criteria during performance appraisal can result in serious
dysfunctional consequences.
Statement (II) : Generally the evaluator becomes more critical about performance evaluation
technique rather than which criteria need to be evaluated.
Code :
(3) Statement - I is correct while statement - II is incorrect.
(4) Statement - I is incorrect while statement - II is correct.
186
61. Which of the statements are not correct ? Indicate the correct code.
Statement (I) : Social assistance is financed by tripartite or bipartite contributions.
Statement (II) : Social insurance ignores the income and means of liable relation.
Statement (III) : Social assistance makes the beneficiary a first charge on the liable relations.
Statement (IV) : Social assistance aims at to provide maximum subsistence to those who can
not make it on their own.
Code :
(1) (I) and (II) (2) (II) and (III)
(3) (I) and (IV) (4) (III) and (IV)
62. According to which one of the following theories, differences in nominal interest rates will
be eliminated in the exchange rate ?
(1) Leontief Paradox Trade Theory (2) Fisher Effect Economic Theory
(3) Purchasing Power Parity Theory (4) Combined Equilibrium Theory
63. According to the Purchasing Power Parity Theory, the level of foreign exchange rate is
determined by which of the following ?
(1) Domestic Price level (P) divided by foreign price level (P*)
(2) P*−P
(3) P−P*
(4) P*/P
64. Match the items of List - I with List - II and choose the correct code of combination :
List - I List - II
(a) It abolishes all restrictions on trade (i) Common Market
among the members
(b) It not only eliminates all restrictions (ii) Economic Union
on trade among members but also
adopts a uniform commercial policy
against the non-members
(c) It allows free movement of labour and (iii) Free Trade Area
capital within the common market
(d) It achieves some degree of harmonization (iv) Customs Union
of national economic policies, through
a common central bank, unified monetary
and fiscal policy, etc.
Code :
(a) (b) (c) (d)
(1) (iv) (ii) (i) (iii)
(2) (iv) (iii) (i) (ii)
(3) (iii) (iv) (i) (ii)
(4) (ii) (i) (iv) (iii)
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65. Assertion (A) : Indian companies have established subsidiaries and joint ventures in a
number of countries in different manufacturing industries and service
sectors.
Reasoning (R) : By restricting the areas of operations and growth, the government policy
seriously constrained the potential of Indian companies to make a foray
into the foreign countries.
Code :
66. Statement (I) : Automatic variations in the exchange rates, in accordance with the
variations in the balance of payments position, tend to automatically restore
the balance of payments equilibrium.
Statement (II) : A deficiency in the balance of payments increases the exchange rate.
Code :
67. Which among the following is not a correct statement ?

(1) Designated bank refers to any bank in India, which has been authorised by the RBI to
act as banker to FII.
(2) Domestic custodian includes any person carrying on the activities of providing custodial
services in respect of securities.
(3) Sub-account includes those institutions, established or incorporated in India, whether
incorporated or not, on whose behalf investments are proposed to be made in India by
FIIs.
(4) A domestic portfolio manager or domestic asset management company shall also be
eligible to be registered as FII to manage the funds of sub-accounts.
68. Identify the incorrect statement from the following :

(1) Broken-date contract is a full - month forward contract.
(2) Currency arbitrage refers to making profit by buying a currency cheap in one market
and selling it dear in the other market at a particular point of time.
(3) Currency Futures Market refers to organised foreign exchange market where a fixed
amount of a currency is exchanged on a fixed maturity date in the pit.
(4) Currency Options Market refers to market for the exchange of currency where the
option buyer enjoys the privilege of not exercising the option if the rate is not favourable.
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69. Dividends declared by Unit Trust of India or by mutual fund is :

(1) Fully exempt in the hands of unit holders
(2) Fully taxable in the hands of unit holders
(3) Fully exempt in the hands of individual unit holders and fully taxable in the hands of
institutional unit holders
(4) Included in the gross total income but a deduction is allowed under section 80 L
70. Match the items of List - I with the items of List - II and choose the correct answer from the
code given below :
List - I List - II
(Types of Income) (Heads of Income)
(a) Salary, bonus, commission, etc. received by (i) Income from other Sources
a working partner from the firm
(b) Pension received by the widow of a (ii) Income from (short term) Capital
government employee Gains
(c) profits on the sale of machinery used in (iii) Income from Capital Gains
business
(d) Compensation received from the (iv) Income from Business and
government on compulsory acquisition Profession
of land and profit earned
(v) Income from Salaries
Code :
(a) (b) (c) (d)
(1) (v) (ii) (i) (iii)
(2) (iv) (ii) (iii) (v)
(3) (v) (iv) (iii) (ii)
(4) (iv) (i) (ii) (iii)
71. Which of the following will be considered as tax planning effort ?

(a) Mr. A purchased a house for self residence of ` 80 lacs by taking a loan of ` 60 lacs
from SBI at 10% interest, instead of using his own funds.
(b) Mr. A made investment in purchasing 12% redeemable debentures of TISCO worth
` 1.50 lac
(c) Mr. A purchased 100 gram gold biscuits of ` 2.5 Lac from SBI on the occasion of Diwali.
(d) Mr. A invested ` 1 crore in purchasing 5 acres of agricultural land in his native village
in Gaya.
Code :
(1) (a) and (b) (2) (b) and (c) (3) (a) and (d) (4) (c) and (d)
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72. Assertion (A) : If the interest is payable outside India, tax must be deducted at source.
Reason (R) : If tax has not been deducted at source, the amount paid as interest will not
be allowed as a deduction in computing business income.
Select the correct answer from the code given below :
(2) (A) and (R) both are correct but (R) is not the correct explanation of (A).
73. Under the Income Tax Act, 1961 the education cess of (2% + 1%) is calculated on the amount
of :
(1) Income Tax (2) Income Tax Plus surcharge (if any )
(3) Gross total Income (4) Taxable Income
74. Exemption, under Sec.54 F of the Income Tax Act, 1961, shall not be allowed if the assessee,
on the date of transfer owns :
(1) Any residential house
(2) A residential house which is let out
(3) A house which is self occupied
(4) More than one residential house
75. The income from the sale of a machinery used in business is treated as :
(1) Income from business and profession
(2) Short-term capital gain
(3) Long-term capital gain
(4) Income from other sources
-oOo-
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NOVEMBER 2017 Paper III

Answer Key (1-75)
Q A Q A Q A Q A Q A Q A Q A Q A
1 1 11 1 21 3 31 3 41 2 51 4 61 3 71 3
2 4 12 3 22 3 32 3 42 2 52 3 62 2 72 1
3 3 13 2 23 4 33 * 43 3 53 2 63 1 73 2
4 3 14 3 24 1 34 3 44 2 54 3 64 3 74 4
5 3 15 1 25 3 35 4 45 4 55 2 65 2 75 2
6 4 16 1 26 1 36 4 46 3 56 4 66 1
7 2 17 1 27 1 37 2 47 2 57 4 67 3
8 2 18 1 28 4 38 3 48 3 58 3 68 1
9 3 19 1 29 1 39 2 49 1 59 1 69 1
10 1 20 1 30 1 40 4 50 2 60 1 70 4
191
JANUARY 2017
Paper – II
Note : This paper contains fifty (50) objective type questions of two (2) marks each. All
1. Assertion (A) : Corporate culture is generally considered as either closed and threatening
or as open and participatory.
Reason (R) : Corporate culture and style of functioning of top managers is important
factor for determining the internal environment of a company.
Codes :
(1) (A) is correct, but (R) is incorrect.
(3) Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
(4) (R) is correct, but (A) is incorrect.
2. Statement I : If the workers develop an attitude of non-cooperation with Management, a

repressive economic system may be needed to set right this industrial disorder.
Statement II : By fulfilling social responsibility towards shareholders, employees,
consumers, government and community, a business achieves economic growth and
increases public image.
Codes :
(3) Statement II is correct but I is incorrect.
3. Match the items of List-I with List-II.

a. Planning Commission i. 1993
b. Competition Act ii. 2002
c. Adrian Cadbury Committee iii. 1951
d. Rangrajan Committee on Disinvestment in iv. 1991
PSEs
Codes :
a b c d
(1) i ii iii iv
(2) iii i iv ii
(3) iii ii iv i
(4) iii ii i iv
4. From which Five Year Plan “Growth with Social Justice” has received emphasis ?
(1) 5th (2) 6th
(3) 7th (4) 10th
192
5. Which of the following is not the objective of the Competition Act, 2002 ?
(1) Prohibition of Restrictive Trade Practices.
(2) Prohibition of Dominant Position
(3) Prohibition of Anti-competitive Agreements
(4) Regulation of Combinations
6. Consolidated financial statements are prepared on the principle

(1) In form the companies are one entity, in substance they are separate.
(2) In form companies are separate, in substance they are one.
(3) In form and substance the companies are one entity.
(4) In form and substance the companies are separate.
7. Match the items of List-I with those of List-II and indicate the correct code :
a. Acid Test Ratio i. Profitability analysis
b. Debt Service Coverage Ratio ii. Activity analysis
c. Debt Equity Ratio iii. Liquidity analysis
d. Stock Turnover Ratio iv. Long-term solvency analysis
Codes :
a b c d
(1) ii i iii iv
(2) ii iii iv i
(3) iii iv i ii
(4) iii i iv ii
8. From the following two statements of Assertion (A) and Reason (R), indicate the correct
code :
Assertion (A) : From the marginal costing approach point of view, the marginal cost is
compared with the purchase price.
Reason (R) : If the marginal cost is less than the purchase price it should be purchased
rather than manufactured.
Codes :
(1) (A) and (R) both are correct.
(2) (A) is correct, but (R) is not correct.
9. Which one of the following statements is true about standard labour time ?
(1) Standard labour time indicates the time in hours needed for a specific process.
(2) It is standardized on the basis of past experience.
(3) In fixing standard time due allowance should not be given to fatigue and tool setting.
(4) The Production Manager does not provide any input in setting the labour time
standards.
193
10. Under the yield method of valuation of equity share capital, if for an equity share of ` 50,
the normal rate of return is 10% and expected rate of return is 5%, then the value of an
equity share will be
(1) ` 25 (2) ` 40
(3) ` 50 (4) ` 100
11. Match the items of List-I with the items of List-II and denote the code of correct matching.
a. Hypothesis of Sales Revenue i. W.J. Baumol
Maximization
b. Hypothesis of Maximization of ii. Robin Marris
Firm’s Growth Rate
c. Hypothesis of Maximization of iii. O.E. Williamson
Managerial Utility Function
d. Hypothesis of Satisfying Behaviour iv. Cyert and March
Codes :
a b c d
(1) ii i iii iv
(2) ii iii i iv
(3) i ii iii iv
(4) i iv ii iii
12. Which of the following is not a correct matching with regard to price elasticity, change in
price and change in total revenue ?
Price elasticity coefficient Change in price Change in total revenue

(1) Zero Increase Increase
Decrease Decrease
(2) Less than one Increase Decease
Decrease Increase
(3) Equal to one Increase No change
Decrease No change
(4) More than one Increase Decrease
Decrease Increase
13. The short-run production function for a firm is as follows :
Q = – L3 + 15L2 + 10L
Where Q denotes total output in physical units and L denotes units of labour which are
homogeneous, but are not perfectly divisible and change in labour does not tend to
become zero.
Statement I : In this production function, the marginal product of 5th unit of labour is 85.
Statement II : Similarly, in this production function, the average product of the 5th unit of
labour is 60.
Codes :
(1) Both the Statements are true.
(2) Both the Statements are false.
(3) Statement I is true, while Statement II is false.
(4) Statement I is false, but Statement II is true.
194
14. The Kinked demand curve model of oligopoly was developed by

(1) Augustin Cournot (2) Stackelberg
(3) Edgeworth (4) Sweezy
15. For the success of the penetration price policy, which one of the following is not
desirable ?
(1) Short-run demand for the product to have elasticity greater than unity.
(2) Availability of economies of large scale production.
(3) Product to have very low cross-elasticity of demand.
(4) Easy acceptance and adoption of the product by the consumers.
16. Statement I : The absolute value of the difference between an unbiased estimate and the
corresponding population parameter is called sampling error.
Statement II : Multi-stage sampling is a restricted non-probability based sampling
technique.
Indicate the correct code :
(1) Both the Statements are correct.
(2) Both the Statements are incorrect.
(3) Statement I is correct, while Statement II is incorrect.
(4) Statement I is incorrect, while Statement II is correct.
17. Match the following items of List-I and List-II with regard to hypothesis-testing and
indicate the code of correct matching.
a. The ability of test to reject the null hypothesis when i. Level of significance
it is false.
b. The probability of accepting a false null hypothesis. ii. Type I error
c. The probability of rejecting a true null hypothesis iii. Type II error
due to sampling error.
d. The probability of rejecting a true null hypothesis. iv. Power of a test
Codes :
a b c d
(1) iv ii i iii
(2) iv iii i ii
(3) i ii iii iv
(4) ii iii i iv
18. Which one of the following is a false statement ?

(1) The signs of the regression coefficients are always the same.
(2) Correlation coefficient is the geometric mean of the two regression coefficients.
(3) The co-variance between two variables divided by the product of their standard
deviations produces the value of coefficient of correlation.
(4) Coefficient of correlation is independent of origin but not of scale.
195
19. If the two regression coefficients are 0.8 and 0.2, then the value of coefficient of
correlation is
(1) – 0.16 (2) + 0.50
(3) + 0.40 (4) – 0.40
20. Process of arranging data into a new order is called

(1) Manipulation of data (2) Standardization of data
(3) Sequencing of data (4) Standardized input
21. Developed by the Special Projects Office of the U.S. Navy; this technique was first
formally applied to the planning and control of the Polaris Weapon System in 1958 and
worked well in expediting the completion of that programme. The technique is known as
(1) Gantt Chart (2) PERT
(3) CRM (4) Milestone budgeting
22. Consider the following statements relating to planning and find out which of the following
are correct :
Statement I : The operating personnel should not be associated with the preparation of
the budget.
Statement II : A programme indicates the principal operations to be carried out to
accomplish a work.
Statement III : Under MBO technique, the Managers should be provided with a freehand
to laydown the objectives.
Codes :
(1) Only Statement I is correct. (2) Only Statement II is correct.
(3) Only Statement III is correct. (4) Only Statements I and III are correct.
23. Assertion (A) : Sympathetic listening in upward communications often leads to

resentment in communicator.
Reason (R) : Sympathetic listening and encouraging remarks often lead the
communicator to believe that his proposal will receive action not contemplated by
superior (communicatee).
Codes :
(1) (A) is correct and (R) is the right explanation to it.
(2) (A) is correct, but (R) is not the right explanation to it.
(3) (A) is not correct while (R) is a correct statement.
24. Assertion (A) : Herzberg believes that today’s motivators are tomorrow’s hygiene factors.
Reason (R) : Some job conditions operate primarily to dissatisfy employees when they
are absent, but their presence does not motivate them in strong way.
Codes :
(2) (A) and (R) both are correct, but (R) is not the right explanation of (A).
(3) (A) is not correct while (R) is a correct.
196
25. Which of the following statements relating to Henry Fayol are correct ?
Statement I : Authority and responsibility are related and former arises from latter.
Statement II : Espirit de Corps is an extension of the principle of unity of command.
Statement III : Unity of command means only one command at a time.
Statement IV : There are fourteen basic principles identified by Henry Fayol.
Codes :
(1) Statements I, II and IV (2) Statements II and III
(3) Statements I and IV (4) Statements II and IV
26. Match the following items of List-I (sources of competition) with List-II (examples for
these sources of competition) and indicate the code of correct matching.
a. Directly similar products i. OLA Taxi and Metro Rail
b. Available substitutes ii. Mercedes and BMW
c. Unrelated products iii. PVR and Amusement park
Codes :
a b c
(1) iii ii i
(2) i iii ii
(3) i ii iii
(4) ii i iii
27. The marketing task which finds ways to alter the time pattern of demand through flexible
pricing, promotion and other incentives is called
(1) Demarketing (2) Synchromarketing
(3) Fleximarketing (4) Gorilla Marketing
28. Which of the following is not a reason for a firm to lose its market share to competitors ?
(1) A product/model is perceived by the target customer group as satisfying needs.
(2) Customers not being covered by the company’s sales force and distribution outlets.
(3) Customers may have been lost to competitors due to poor service by the firm or its
sales personnel or product becoming obsolete or more expensive.
(4) All the above are correct reasons for given condition.
29. Match the items of List-I with List-II and denote the code of correct matching.
a. Invest Strategy i. No receiving of new resources.
b. Protect Strategy ii. Well financed marketing efforts.
c. Harvest Strategy iii. Selective resource allocation
d. Divest Strategy iv. Not warranting substantial new resources.
Codes :
a b c d
(1) ii iii iv i
(2) i iii ii iv
(3) ii i iv iii
(4) iv iii ii i
197
30. An elaborated version of the idea expressed in meaningful consumer term is called
(1) Product image (2) Product idea
(3) Product concept (4) Prototype
31. Which one of the following combination of rules stands true while preparing schedule of
changes in working capital ?
A. An increase in current assets increases working capital.
B. An increase in current assets decreases working capital.
C. An increase in current liabilities decreases working capital.
D. An increase in current liabilities increases working capital.
Codes :
(1) A and D (2) A and C
(3) B and C (4) C and D
32. Assertion (A) : The primary motive of a company in using financial leverage is to
magnify shareholders’ return under favourable economic conditions.
Reason (R) : To magnify shareholders’ return fixed charges funds can be obtained at a
cost higher than the firm’s rate of return on net assets.
Codes :
(1) (A) is correct and (R) is the correct explanation of (A).
(2) (A) is correct, but (R) is wrong.
(3) (R) is correct, but (A) is wrong.
(4) Both (A) and (R) are wrong.
33. Debt financing is a cheaper source of finance because of

(1) Time value of money (2) Rate of interest
(3) Tax deductibility of interest (4) Dividends are not payable to lenders
34. Which of the following is not true with reference to capital budgeting?
(1) Capital budgeting is related to asset replacement decisions.
(2) Cost of capital is equal to minimum required rate of return.
(3) Timing of cash flows is relevant.
(4) Existing investment in a project is not treated as sunk cost.
35. Which of the following statements is not correct ?

(1) The cost of capital is required rate of return to ascertain the value of the firm.
(2) Different sources of funds have a specific cost of capital related to that source only.
(3) Cost of capital does not comprise any risk premium.
(4) Cost of capital is basic data for NPV technique.
36. Which of the following is not the quality of human resources in any organization ?
(1) Their behaviour to stimuli is often inconsistent and unpredictable.
(2) They depreciate with passage of time in terms of skills.
(3) They are heterogeneous.
(4) Retaining qualified human resources is a challenge for managers.
198
37. Human Resource Planning benefits to an organization are reflected in which of the
combination of the following ?
a. Balance between demand and supply of human resources.
b. Non-compulsion on management to assess critically and continuously the employees
and personnel policies.
c. Duplication of efforts and conflicts are avoided.
d. Minimizing the future returns on investment in human resources.
Codes :
(1) a and b (2) a and c
(3) a, b and c (4) a, c and d
38. A statement containing items such as job title, location, summary, duties, materials used,
working conditions etc., is called
(1) Job specification (2) Job evaluation
(3) Job description (4) Job analysis
39. Match List-I with List-II relating to theory of wages.

(Wage Theory) (Propounder)
a. Wage Fund Theory i. John Davidson
b. Subsistence Theory ii. David Recardo
c. Residual Claimant Theory iii. Adam Smith
d. Bargaining Theory of Wages iv. Francis Walker
Codes :
a b c d
(1) ii iv i iii
(2) iii ii iv i
(3) iv i iii ii
(4) ii iii iv i
40. Which organizational analysis method is used, among the following, to develop various
efficiency indices relating to contribution of human capital in meeting the organizational
goals ?
(1) Objectives analysis
(2) Resource utilization analysis
(3) Task analysis
(4) Organizational climate analysis
199
41. Match the items of List-I with the items of List-II regarding evaluation of project
application and suggest the correct code.
a. Managerial Appraisal i. Analysis of working results.
b. Economic Appraisal ii. Disposal of factory effluents.
c. Financial Appraisal iii. Analysis about traits of an entrepreneur
d. Technical Appraisal iv. Analysis on employment potential
Codes :
a b c d
(1) i ii iv iii
(2) ii i iii iv
(3) iii iv i ii
(4) iv iii ii i
42. Match the items of Column-I with the items of Column-II and suggest the correct code.
Column – I Column – II
a. Relationship Banking i. Dealing in hundis and acceptance of deposits.
b. Merchant Banking ii. Widening the entrepreneurial base and assist in
a rapid rate of industrial growth.
c. Indigenous Banking iii. Engaged in the business of Issue Management.
d. Development Banking iv. Creating, maintaining and enhancing strong
relationship with customers.
Codes :
a b c d
(1) iv ii i iii
(2) ii iv iii i
(3) iv iii i ii
(4) ii i iv iii
43. In which year, IFCI Act was amended in order to make it possible to provide assistance,
inter alia, for medical, health or other allied services ?
(1) 1960 (2) 1970
(3) 1973 (4) 1986
44. SIDBI was set up as a subsidiary of IDBI to

(1) Take over the functions of small business financing of IDBI.
(2) Take over the venture capital operations of ICICI.
(3) Reconstruct and rehabilitate the sick and closed industrial units financed by IDBI.
(4) Facilitate, finance and promote India’s Foreign trade.
200
45. Letters of credit, Guarantees, Forward Contracts etc., come under which one of the
following ?
(1) Liabilities of a bank
(2) Assets of a bank
(3) Foreign exchange items of a bank
(4) Off-balance sheet items of a bank
46. Consider the following statements with regard for the “Theory of Absolute Cost
Advantage” :
(i) Productive efficiency differed among different countries because of diversity in
natural and acquired resources possessed by them.
(ii) The difference in natural advantage manifests in varying climate, quality of land,
availability of minerals, water and other resources.
(iii) The difference in acquired resources manifests in different levels of technology and
skills available.
Identify the correct code from the following :
(1) Statement (i) is correct, but (ii) and (iii) are incorrect.
(2) Statements (i) and (ii) are correct, but (iii) is incorrect.
(3) All the statements (i), (ii) and (iii) are correct.
(4) None of the statements is correct.
47. Match the items of List-I with List-II and indicate the correct code.
a. Absolute Cost i. The empirical evidence based on US export of
Advantage Theory labour intensive goods challenging the factor
endowment theory.
b. Comparative Cost ii. A country having a direct cost advantage in the
Advantage Theory production of a product on account of greater
efficiency.
c. Factor Endowment iii. A country should produce and export a
Theory commodity that primarily involves a factor of
production abundantly available within the
country.
d. Leontief Paradox iv. A country should specialize in the production
and export of a commodity in which it possesses
greatest relative advantage.
Codes :
a b c d
(1) ii iv iii i
(2) ii iv i iii
(3) ii i iii iv
(4) i iv iii ii
201
48. Match the items of List-I with List-II and indicate the code of correct matching :
a. Accommodating i. Creation of international reserve assets by
capital flow the IMF and their allocation among
member countries in order to improve
international liquidity.
b. Autonomous capital ii. Estimate of foreign exchange flow on
flow account of either variations in the
collection of related figures or unrecorded
illegal transactions of foreign exchange.
c. SDR Allocation iii. Inflow of foreign exchange to meet the
balance of payments deficit, normally
from the IMF.
d. Statistical discrepancy iv. Flow of loans/investments in normal
course of business.
Codes :
a b c d
(1) i ii iv iii
(2) iii iv i ii
(3) iii iv ii i
(4) iii i ii iv
49. Statement I : TRIMS agreement refers to conditions or restrictions imposed on foreign

investors.
Statement II : TRIMS agreement specifically forbids imposing restrictions on operations
of an enterprise which result in protecting domestic products and making imports
disadvantageous.
Codes :
50. Assertion (A) : Revenue from indirect taxes was the major source of tax revenue till tax
reforms were taken during nineties.
Reason (R) : Traditionally India’s tax regime relied heavily on indirect taxes including
customs and excise.
Codes :
(1) (A) and (R) both are correct, but (R) is not the correct explanation of (A).
(3) (A) and (R) both are correct and (R) is the correct explanation of (A).
__________
202
JANUARY 2017 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 2 11 3 21 2 31 2 41 3
2 2 12 2 22 2 32 2 42 3
3 3 13 4 23 1 33 3 43 4
4 1 14 4 24 2 34 4 44 1
5 1 15 3 25 4 35 3 45 4
6 3 16 3 26 4 36 2 46 3
7 4 17 2 27 2 37 2 47 1
8 2 18 4 28 1 38 3 48 2
9 1 19 3 29 1 39 2 49 3
10 1 20 1 30 3 40 2 50 3
203
JANUARY 2017
PAPER – III
Note : This paper contains seventy five (75) objective type questions of two (2) marks each. All
1. Put the following steps of strategic Management Process in correct sequence :

a. Scanning and Evaluation of Business Environment
b. Formulating strategies
c. Implementation of Corporate Strategy
d. Deciding about the Mission of the organisation
e. Setting Corporate Level Objective
Codes :
(1) a, b, c, d and e (2) d, a, b, c and e
(3) d, a, e, c and b (4) d, a, e, b and c
2. Match the items of List-I with those of List-II and indicate the code of correct matching.
a. Indian Railways i. Government Company
b. Unit Trust of India ii. Department Undertaking
c. Bharat Heavy Electricals Limited iii. Statutory Corporation
Codes :
a b c
(1) i ii iii
(2) ii iii i
(3) ii i iii
(4) iii ii i
3. Identify the correct statement from the following :

(1) The liability of the Karta is limited.
(2) A joint Hindu family business continues to exist on the death of a co-partner.
(3) A joint Hindu family business ceases to exist on the death of the Karta.
(4) A joint Hindu family business comes into existence by Hindu law.
4. Statement I : “Working in harmony with the community and environment around us and
not cheating our customers and workers we might not gain anything in the short run
but in the long term it means greater profits and shareholders value”.
Statement II : According to Mahatma Gandhi, capitalist class owns wealth or capital as
trustees of the society.
Codes :
204
5. Match the items of List-I with items of List-II and indicate the code of correct matching.
a. Principle of Separate i. Valuing Plant and Machinery at cost less
Entity depreciation.
b. Principle of ii. Recording punctuality and honesty of
Conservatism employees of an organization.
c. Principle of Money iii. Capital contributed by proprietor is shown
Measurement as liability in Balance Sheet.
d. Historical cost concept iv. Valuing inventories at cost or market price
whichever is less.
Codes :
a b c d
(1) iii ii i iv
(2) iii iv ii i
(3) iv iii i ii
(4) iii i ii iv
6. Which of the following is not true ?
(1) When all the forfeited shares are not reissued, the forfeited shares account will also
show as credit balance equal to gain on forfeiture of shares not yet reissued.
(2) Loss on reissue of shares cannot be more than gain on forfeiture of those shares.
(3) At the time of forfeiture of shares, securities premium is debited along with share
capital when premium has not been received.
(4) When forfeited shares are issued at premium, the premium amount is credited to
Capital Reserve Account.
7. Preparation of consolidated Balance Sheet of Holding Company and its subsidiary
company is done as per
(1) AS 11 (2) AS 21
(3) AS 22 (4) AS 23
8. Amount due to outgoing partner is shown in the balance sheet as his
(1) Liability (2) Asset
(3) Capital (4) Loan
9. Match the items of List-I with items of List-II and indicate the code of their correct
matching.
a. Non-price quantity relationships i. Extension and contraction of demand.
of demand.
b. Income effect of a price rise ii. Ordinal utility approach.
greater than its substitution effect.
c. Transitivity and consistency of iii. Increase and decrease in demand.
choices.
d. Price-quantity relationships of iv. Giffen goods
demand.
Codes :
a b c d
(1) iv ii iii i
(2) ii i iv iii
(3) iii iv ii i
(4) i ii iii iv
205
10. The short-run cost function of a firm is as follows :

TC = 200 + 5Q + 2Q2
Where TC = Total Cost
Q = Physical units of the product of the firm
What would be the level of optimum output ?
(1) 05 (2) 10
(3) 12 (4) 15
11. Short-run demand and total cost functions for a monopoly firm are as under :
Demand function : Q = 100 – 0.2 P
Price function : P = 500 – 5 Q
Cost function : TC = 50 + 20 Q + Q2
Where Q = Total quantity of the product in physical units.
P = Price of the product per unit
TC = Total cost
What is the profit maximizing output of the pure monopoly firm ?
(1) 20 (2) 35
(3) 40 (4) 50
12. In which one of the following market situations, the pricing above the prevailing market
price is used as a more common practice ?
(1) Markets where the selling firms face perfect competitive situations.
(2) Markets where the selling firms want to gain popularity of the products having high
cross elasticity of their demand.
(3) Markets where sellers rely on their customers’ high propensity to consume a
prestigious commodity.
(4) Markets where the selling firms have entered into the stages of maturity and
saturation.
13. Which one of the following statements is false regarding normal distribution ?
(1) Mean, Median and Mode always coincide.
(2) Within ± 1.96 σ limits from Mean value, the area under the distribution is 99 percent
of the total area.
(3) The area under the normal curve represents probabilities for the normal random
variable and the total area for the normal probability distribution is one.
(4) For every pair of values of Mean and Standard deviation, the curve of the
distribution is bell-shaped and symmetric.
14. If unexplained variation between variables X and Y is 36%, what is the coefficient of
correlation between the variables ?
(1) 0.36 (2) 0.64
(3) 0.60 (4) 0.80
15. Which one of the following is the formula to calculate standard error of mean differences
of two sample groups ?
σp σ21 σ22
(1) (2) n1 + n2
n
σ21 p1q1 p2q2
(3) when σ21 < σ22 (4) + n
σ22 n1 2
206
16. A researcher wants to test the significance of the difference between the average
performance of the two small sized samples when the information of the population
standard deviation is not available, which one of the following hypothesis-testing is
suitably used ?
(1) Z-test (2) Chi-square test
(3) F-test (4) t-test
17. Which of the following statements are not correct ? Indicate the correct code.
Statement I : Organizational culture means the general pattern of behaviour, belief and
values that organization members have in individuality.
Statement II : As per contingency theory of Leadership, people become leader only
because of the demand of group members.
Statement III : The group judgement can only be obtained through the formal
committees.
Statement IV : Ombudsperson in communication function is a person assigned to
investigate employee concerns and providing valuable upward communication link.
Codes :
(1) Statements I, II and IV (2) Statements I, III and IV
(3) Statements I, II and III (4) Statements II, III and IV
18. Assertion (A) : The organization is a closed system that operates within and interacts with
the external environment.
Reasoning (R) : The system approach to management includes the outputs from the external
environment on the basis of interactions between management and employees.
Codes :
(1) (A) and (R) are correct and (R) is the correct reasoning of (A).
(2) (A) and (R) are correct, but (R) is not the correct explanation of (A).
(3) (A) is incorrect while (R) is a correct statement.
19. Match List-I with List-II relating to corporate ethics and indicate the code of their correct
matching.
a. Utilitarian theory i. Behaviour guiding statements.
b. Code ii. Making public known about unethical
company practices.
c. Whistle blowing iii. Society with varied interest groups.
d. Pluralistic society iv. Evaluation of plans with its consequences
Codes :
a b c d
(1) i iii iv ii
(2) ii iii iv i
(3) iii i ii iv
(4) iv i ii iii
207
20. Find out the correct sequence of planning function of the following elements :
a. Diagnosis of opportunity
b. Establishing objectives
c. Indentifying and comparing alternatives
d. Formulating derivative plans
e. Choosing an alternative
Codes :
(1) a, c, b, e, d (2) b, e, a, c, d
(3) a, b, c, e, d (4) a, b, c, d, e
21. Creating the capability of making purchases directly from a firm’s website is known as
(1) Electronic Networking (2) Electronic Transactions
(3) Electronic Data Interchange (4) Electronic Information Transfer
22. For the following two statements of Assertion (A) and Reasoning (R) indicate the correct
code :
Assertion (A) : The self image could be an individual’s own perceived image and actual
image based on how others perceive the individual.
Reasoning (R) : Large number of products like credit cards, automobiles, readymade
garments, designer ware, cosmetics and perfumes are bought due to self image and
demographic variables like income may not be important in purchase decisions for
these products.
Codes :
(3) (A) is correct and (R) is correct explanation for (A).
23. Match the media factors given in List-I with examples given in List-II and indicate the
code of current matching.
a. Media class i. Prime time at 9:00 PM, full page ad of Honda City
b. Media vehicles ii. Magazine, T.V., Radio
c. Media option iii. Flighting, Pulsing
d. Scheduling & timing iv. Times of India, T.V. serial Bhabhi Ji Ghar Pe Hain
Codes :
a b c d
(1) ii iv i iii
(2) iii i iv ii
(3) i ii iv iii
(4) iv ii iii i
24. In integrating specialist functions of product management with the line function of sales as
major challenge to top management can be achieved by which type of marketing
organization ?
(1) Functional organization (2) Territorial organization
(3) Matrix organization (4) None of the above
208
25. Assertion (A) : The important aspect of dividend policy is to determine the amount of
earnings to be distributed to shareholders and the amount to be retained in the firm.
Reasoning (R) : Dividend policy of the firm has its effect on both the long term financing
and the wealth of shareholders.
Codes :
(4) (R) is correct, but (A) is wrong.
26. Match the items in List-I with items in List-II and indicate the code of correct matching :
a. ABC Inventory Control i. Developing ancillary units around the
System manufacturing sites and supplying parts to
manufacturing units.
b. Just-in-time (JIT) System ii. Enables a company to easily track large
items of inventory.
c. Out sourcing System iii. It eliminates the necessity of carrying large
inventories and saves carrying cost.
d. Computerized Inventory iv. Tends to measure the significance of each
Control System item of inventories in terms of its value.
Codes :
a b c d
(1) ii iii i iv
(2) iv ii iii i
(3) iv iii i ii
(4) iii i ii iv
27. In certainty-equivalent approach, risk adjusted cash flows are discounted at
(1) Accounting Rate of Return (2) Internal Rate of Return
(3) Hurdle Rate (4) Risk-free Rate
28. ‘That personal leverage can replace corporate leverage’ is assumed by
(1) Traditional Approach (2) M M Model
(3) Net Income Approach (4) Net Operating Income Approach
29. Match the List-I with List-II relating to Human Resource Planning activities and indicate
the code of correct matching.
a. Forecasting i. Optimal employment
b. Inventorying ii. Development activities
c. Anticipating manpower problems iii. Mathematical projections of industrial trends
d. Planning programs iv. Projecting present resources into future
Codes :
a b c d
(1) ii i iv iii
(2) i iv iii ii
(3) iv ii i iii
(4) iii i iv ii
209
30. Which council was established in India by Government of India in the year 1966 to
promote safety consciousness among workers in industries ?
(1) Factory Advise Council (2) National Safety Council
(3) National Industrial Council (4) Safety Regulations Council
31. Assertion (A) : Recruitment is positive while selection is negative in its application.
Reasoning (R) : Recruitment aims at increasing the job seekers while selection rejects a
large number of unqualified applicants.
Codes :
(2) (A) and (R) both are correct, but (R) is not the right explanation of (A).
32. Match the List-I with List-II relating to Social Security measures in India and indicate the
code of correct matching.
a. Social Assistance i. Payable to workers in accidents & injuries
during employment.
b. Social Insurance ii. Covers individual risks primarily.
c. Commercial Insurance iii. Maternity benefits.
d. Workmen’s Compensation iv. Provident Funds
Codes :
a b c d
(1) iii iv ii i
(2) iv iii ii i
(3) iv iii i ii
(4) ii i iii iv
33. Match the following items of List-I with the items of List-II and indicate the code of
correct matching.
(Name of Bank) (Year of establishment)
a. IFCI i. 1981
b. SIDBI ii. 1982
c. NABARD iii. 1948
d. EXIM Bank iv. 1990
Codes :
a b c d
(1) iii i ii iv
(2) iv ii iii i
(3) iv iii ii i
(4) iii iv ii i
210
34. With a view to encourage newer classes of entrepreneurs and bringing about wider
dispersal of ownership and control of industrial undertakings, IDBI operates a special
scheme for supplementing the equity contribution to projects made by small and new
entrepreneurs. This scheme is known as
(1) Bridge Loan Scheme
(2) Soft Loan Scheme for Modernisation
(3) Technical Development Fund Scheme
(4) Seed Capital Assistance Scheme
35. Which one of the following is not the objective of UTI ?
(1) To give everyone a chance to indirectly own shares and securities in a large number
of select companies.
(2) To maximise mobilisation of people’s savings by making insurance linked savings
adequately attractive.
(3) To channelize the pooled savings into productive outlets.
(4) To mobilise savings of the community by offering savers the triple benefits of
safety, liquidity and profitability of investments.
36. Under which of the following schemes, the IFCI procures equipment for an actual-user
industrial concern by making payment to the machinery/equipment supplier, and then
resells/transfers the equipment to the actual-user-industrial concern at the same cost,
subject, however, to any liability arising out of taxes and other levies, being put to the
account of the actual user industrial concern ?
(1) Equipment Credit Scheme (2) Equipment Procurement Scheme
(3) Equipment Finance Scheme (4) Scheme of Equipment Leasing
37. Match the items of List-I with List-II and denote the code of correct matching.
a. International Bank for Reconstruction and Development i. 1945
b. International Finance Corporation ii. 1956
c. Asian Development Bank iii. 1966
d. Export-Import Bank of India iv. 1981
Codes :
a b c d
(1) i ii iii iv
(2) iv iii ii i
(3) i iii ii iv
(4) ii i iv iii
38. Assertion (A) : International Finance Corporation (IFC) contributes to increase
sustainable agriculture opportunities, improve health and education and increase
access to financing for micro finance and business client.
Reasoning (R) : The IFC has focused on a set of development goals to ensure that its
projects are expected to achieve the target.
Codes :
(1) Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
211
39. Under TRIPS Agreement, patent is granted subject to which of the following ?
a. The product or the process is new one.
b. It contains an inventive step.
c. It is capable of industrial application for 15 years from the grant of the patent.
d. It is capable of industrial application for 20 years from the grant of the patent.
Codes :
(1) Only a and b (2) Only a, b and c
(3) Only a, b and d (4) Only a and d
40. Statement I : During the period of prosperity, prices of goods fall and income of people
go down. These changes in incomes of the people and prices of goods affect exports
and imports of goods and thereby influence the balance of payments.
Statement II : Secular disequilibrium in balance of payments occur because of short-run
changes in an economy.
Codes :
41. Which of the following correctly depicts differences between a merger and an acquisition
of stock ?
(1) An acquisition of stock results in the total absorption of a firm whereas a merger
does not.
(2) In case of a merger, the firm can deal directly with the shareholders of the acquired
firm but not in the case of acquisition of stock.
(3) Shareholders of the acquired or target firm vote by their response to a tender offer in
an acquisition of stock but cast a formal vote in a merger situation.
(4) A formal vote by the acquired firm’s shareholders is required for an acquisition of
stock but not for a merger.
42. Match the items of List-I with the items of List-II and indicate the correct code :
a. Value added Model i. It is based on the process audit thereby evaluating the
corporate social performance.
b. Bauer-Fenn Model ii. It takes into account the social benefits and costs.
c. ABT Model iii. It reflects the impact of a business enterprise on its
employees, the local community and the public at large.
d. ESTs Model iv. It shows the value added by the value of production of
socially desirable outputs minus the value of socially
undesirable effects.
Codes :
a b c d
(1) i ii iii iv
(2) iv i iii ii
(3) iv iii ii i
(4) iv i ii iii
212
43. You are given the following information :

X-Security Market-Security
Expected Return (%) 15 12
Standard Deviation of the return (%) 6 4
Coefficient of Correlation between the returns 0.4
What is the Beta-coefficient of security X to measure its systematic risk ?
Codes :
(1) 1 (2) 1.5
(3) 0.6 (4) 0.4
44. Lease which includes a third party (a lender) is known as

(1) Direct lease (2) Sales and lease-back
(3) Leveraged lease (4) Inverse lease
45. Which of the following activities should be shown separately in the cash flow statement
prepared as per Accounting Standard-3 ?
a. Cash flow from borrowing activities.
b. Cash flow from operating activities.
c. Cash flow from financing activities.
d. Cash flow from investing activities.
e. Cash flow from miscellaneous activities.
Codes :
(1) a, b, c (2) a, c, e
(3) b, c, d (4) a, b, e
46. Which of the following statements is correct ?
(1) The oldest stock exchange of India is OTCEI.
(2) Sensex is an index number of 30 scrips.
(3) In book-building process, the price of the security is announced by the company.
(4) Futures and options in shares are traded at all stock exchanges of India.
47. Match the items of List-I (Developers) with the items of List-II (Methods of measuring
human assets) and indicate the correct code :
a. Hekimian and Zones i. Stochastic Rewards Valuation Model
b. Hermanson ii. Competence Bidding Method
c. R. Likert iii. Adjusted Discounted Future Wages Model
d. Flamholtz iv. Behavioural Variables Model
Codes :
a b c d
(1) i ii iii iv
(2) ii iii iv i
(3) iv iii i ii
(4) iii iv ii i
48. The concept of achieving maximum profits through increased consumer satisfaction for
raised market share focuses on
(1) Product (2) Selling
(3) Customer (4) Production
213
49. Which of the following is not a measure for quality of service for consumer ?
(1) Responsiveness (2) Competition
(3) Empathy (4) Tangibility
50. Which of the following is not a targeting strategy ?

(1) Standardization (2) Differentiation
(3) Focus (4) All of the above
51. Match the items of List-I with items of List-II and indicate the code of correct matching.
a. Real Needs i. Expecting good service from car dealer.
b. Unstated Needs ii. Customer expects to be seen by his friends as value-oriented
savvy consumer.
c. Delight Needs iii. Customer wants car at low operational cost and not initial cost.
d. Secret Needs iv. Customer receives free insurance on purchase of car.
Codes :
a b c d
(1) iii i iv ii
(2) i iii ii iv
(3) ii iv i iii
(4) iv ii i iii
52. Statement I : The firm should “stick to its niching” but not necessarily to its niche.
Statement II : Multiple niching is not preferable to single niching.
Codes :
(1) Both the Statements are true.
(2) Both the Statements are false.
(3) Statement I is true, but Statement II is false.
(4) Statement II is true, but Statement I is false.
53. A descriptive thought that a person holds about something is called
(1) Belief (2) Learning
(3) Attitude (4) Perception
54. Deferment, Autonomy of object, use of the common place, involvement/detachment and
use of metaphor are description of which of the following technique ?
(1) Brainstorming (2) Synectics
(3) Forced Relationship (4) Attribute listing
55. Which of the following statements are correct ? Indicate the correct combination :
a. A well motivated individual tends to experience a low degree of morale.
b. A group characterized by a high state of morale may or may not have a high degree
of motivation to perform.
c. Morale can always be built up by a combination of rewards and penalties.
d. Organizations, in general, devote more direct attention towards motivational aspects
of people’s behaviour than the aspects of morale.
Codes :
(1) a, b and d (2) c and d only
(3) a, c and d (4) b and d only
214
56. Assertion (A) : Organizations are increasingly getting de-jobbed.

Reasoning (R) : Jobs are becoming more amorphous and more difficult to define.
Codes :
(4) (A) is correct and (R) is right explanation of (A).
57. Which of the following statements relating to incentive payments is correct ?

(1) In Halsey incentive plan, bonus paid to a worker is equal to 50 percent of time saved
divided by rate per hour.
(2) In Rowan incentive plan, bonus paid to employee is equal to the proportion of the
time saved to the standard time.
(3) In Taylor’s differential piece rate system, a worker whose output exceeds standard
output is paid 100 per cent of piece rate and a worker whose output falls short of
standard is paid only 50 percent of piece rate.
(4) The Rowan incentive plan is the base of all other incentive, payment plans.
58. Match the most common rating errors made during performance appraisal with their right
explanations. Indicate the code of correct matching.
(Common Rating Errors) (Description)
a. Leniency i. Subjective assessment
b. Halo error ii. One aspect of individual’s performance
influence his entire performance
c. Spillover effect iii. Past performance appraisal ratings
unjustifiably influencing current ratings.
d. Rater effect iv. Favoritism and stereotyping
Codes :
a b c d
(1) i ii iii iv
(2) ii iii iv i
(3) iii iv ii i
(4) iv iii ii i
59. Which one of the following industrial relations approach believes in state intervention via
legislation and the creation of industrial tribunals as supporting management’s interest
rather than ensuring a balance between the competing groups ?
(1) Unitary approach (2) Pluralistic approach
(3) Marxist approach (4) Judiciary approach
215
60. What is the term coined for the system of communication and consultation, either formal
or informal, by which workers of an organization are kept informed, as and when
required, about the affairs of the undertaking and through which they express their opinion
and contribute to decision-making process of management ?
(1) Collective Bargaining
(2) Empowerment
(3) Workers’ participation in management
(4) Welfare state
61. Match the items of List-I with those of List-II with regard to operative functions of HRM
and indicate the code of correct matching.
a. Procurement i. Performance appraisal
b. Development ii. Discipline
c. Integration iii. Induction
d. Maintenance iv. Personnel research
Codes :
a b c d
(1) ii i iv iii
(2) i iv iii ii
(3) iii i ii iv
(4) ii iii i iv
62. What is the popular term used for that type of option in Foreign Exchange Market which
provides the holder the right to purchase or sell foreign currency at the most favorable
exchange rate realized over the life of the option ?
(1) Forward reversing option (2) Preference option
(3) Look back option (4) Basket option
63. What is the term used popularly for the situation when a speculator, being dominant in the
market, expects a drop in the value of a particular currency and he begins selling it
forward ?
(1) International Fisher Effect (2) Bandwagon Effect
(3) Interest Rate Parity Effect (4) Relative Version Effect
64. Identify the correct statement.

(1) The Maastricht Treaty signed in February 1992 renamed European Community (EC)
as European Economic Community (EEC).
(2) The main objective of the formation of ASEAN Free Trade Area in 1993 was to
soften the restrictions on the movement of professionals in the region and helping
poorer countries.
(3) The SAARC is a regional grouping scheme among Six South Asian Countries.
(4) The European Union, including European Monetary Union, was the biggest and
most important regional integrative scheme.
216
65. Match List-I with List-II relating to benefits and cost of economic integration and identify
the code representing correct matching.
a. Trade creation i. Movement of production and resources in opposite
directions.
b. Trade diversion ii. Become active when a member country does not
augment export but simply shifts its imports from low
cost source to high cost source.
c. Trade deflection iii. Shifting the locus of production from high cost to low
cost centre within the union.
d. Polarisation forces iv. Goods produced in a third country entering a free trade
area through a member country having lower tariff.
Codes :
a b c d
(1) ii iii iv i
(2) ii iv i iii
(3) iii i iv ii
(4) iii ii i iv
66. What is the situation referred to as, amongst the following, when intra-region trade is duty
free but there is variation in tariff structure for import from a third country ?
(1) Customs Union (2) Common Market
(3) Free Trade Area (4) Economic Union
67. Which of the following statements is not correct relating to comparison of FDI with trade ?
(1) Only one market can better be served with differentiated products.
(2) FDI overcomes tariff and transport cost involved in trade.
(3) It reduces financial risk through greater diversification.
(4) It creates harmonious political relations.
68. Match List-I with List-II regarding the grouping of Multi-national Corporations and
identify the code representing correct matching.
(Type of MNC) (Basic feature)
a. Ethnocentric firms i. Maintain a balance in home and host
market oriented policy.
b. Polycentric firms ii. Seldom distinguish between domestic
& global operation policies.
c. Geo-centric firms iii. Follow a host market policy.
Codes :
a b c
(1) iii i ii
(2) iii ii i
(3) ii iii i
(4) ii i iii
217
69. An equipment was acquired at a cost of ` 10 lacs and was put to use in Scientific
Research. After one year of research the equipment was brought into another business of
the assessee. For charging depreciation, Block of Assets shall be increased by
(1) ` 10 lacs.
(2) Market value of the equipment on the date it was brought into another business.
(3) Cost or market value of the equipment, whichever is less.
(4) NIL.
70. If an assessee is engaged in the business of growing and manufacturing tea in India, the
portion of agricultural income in that case shall be
(1) 100% (2) 60%
(3) 50% (4) 40%
71. Which of the following statements is not correct ?

(1) X is an individual assessee. He pays a monthly rent of ` 10,000 pm. He cannot
deduct tax at source.
(2) On salaries, tax is deducted at source according to provisions of Sec. 192.
(3) No tax is deducted at source in respect of interest on securities issued by a domestic
company.
(4) Bank will deduct tax at source @ 10% if bank fixed deposit’s interest credit is more
than ` 10,000 in a year.
72. X donated ` 20,000 to a charitable institution, which is eligible for deduction u/s 80 G,
during the financial year 2015-16. His total income during the period was ` 1,50,000.
How much deduction he can claims u/s 80 G ?
(1) ` 7,500 (2) ` 10,000
(3) ` 15,000 (4) ` 20,000
73. X is employed in a private company at a salary of ` 70,000 per month and ` 10,000 per
month as dearness pay. He received ` 2,000 per month as house rent allowance. He paid
` 2,500 per month as house rent. What is the exempted portion of house rent allowance ?
(1) ` 2,500 (2) ` 2,000
(3) ` 1,000 (4) NIL
74. Surcharge is payable by an individual where the total income exceeds

(1) ` 10 lacs (2) ` 25 lacs
(3) ` 50 lacs (4) ` 1 crore
75. Which one of the following statements is not correct ?

(1) A person may not have assessable income but still be an assessee.
(2) In some cases, the assessment year and the previous year can be same.
(3) An Indian company is always resident assessee.
(4) Surcharge is additional tax calculated on total income.
_________
218
JANUARY 2017 Paper III

Answer Key (1-75)
1 4 11 3 21 2 31 3 41 3 51 1 61 3 71 3
2 2 12 3 22 3 32 1 42 2 52 3 62 3 72 1
3 * 13 2 23 1 33 4 43 3 53 1 63 2 73 4
4 4 14 4 24 3 34 4 44 3 54 2 64 4 74 4
5 2 15 2 25 1 35 2 45 3 55 4 65 3 75 4
6 4 16 4 26 3 36 2 46 2 56 4 66 3
7 2 17 3 27 4 37 1 47 2 57 2 67 1
8 4 18 4 28 2 38 2 48 3 58 1 68 3
9 3 19 4 29 4 39 3 49 2 59 3 69 4
10 2 20 3 30 2 40 * 50 * 60 3 70 2
219
JULY 2016
Paper – II
1. For the following statements of Assertion (A) and Reasoning (R) indicate the correct code
from the alternatives given :
Assertion (A) : Liberalization means corporatisation of departmental undertakings
and public undertakings.
Reasoning (R) : Freedom to public sector undertakings to access capital market.
Codes :
(1) Both (A) and (R) are true and (R) is correct explanation of (A).
(2) Both (A) and (R) are true but (R) is not a correct explanation of (A).
2. Match the items of List – I with List – II and indicate the correct code :
a. Fiscal Policy i. Mitigation of National hazards
b. Technology Policy ii. Balance of Payment
c. Macro-Economic Policy iii. Fiscal Federalism
d. Monetary Policy iv. Inflation
Codes :
a b c d
(1) i ii iii iv
(2) iii i ii iv
(3) iv iii i ii
(4) ii i iv iii
3. Which of the following factor is not directly responsible for slowing down the growth of
infrastructure ?
(1) High level of perceived political risk.
(2) High level of sunk cost.
(3) High probability of time and cost over-run.
(4) Introduction of competition in all sectors.
4. Out of the following which is not a major component of Gross Domestic Product (GDP) ?
(1) Personal Consumption Expenditure
(2) Gross Private Domestic Investment
(3) Net Personal Income
(4) Net Exports
5. Which of the following is not a forum of Consumer Dispute Redressal System ?

(1) Local forum (2) District forum
(3) State Forum (State Commission) (4) National Commission
220
6. X Ltd. purchased 70 percent of the shares of Y Ltd. at a price of ` 1,00,000. Share capital
of Y Ltd. was of ` 70,000 and its accumulated profits amounted to ` 90,000. What would
be the amount of Minority Interest in the consolidated Balance Sheet ?
(1) ` 25,000 (2) ` 70,000
(3) ` 1,00,000 (4) ` 40,000
7. Match the items in Column – I with the items in Column – II and indicate the correct code :
a. Debt-Equity Ratio Net Profit before interest and tax
i. Interest on long term loans
b. Proprietary Ratio Equity share capital + Reserves
ii. Preference share capital + Interest bearing finance
c. Interest coverage ratio Long term debts

iii. Shareholder's Funds
d. Capital gearing ratio Shareholder's Funds

iv. Total Assets
Codes :
a b c d
(1) i ii iii iv
(2) iii iv i ii
(3) iii iv ii i
(4) ii iii iv i
8. Ram and Shyam are partners in a firm with capital of ` 4,80,000 and ` 3,10,000,
1
respectively. They admitted Ganesh as a partner with 4th share of profit. Ganesh brings
` 3,00,000 as his capital. Ganesh’s share of goodwill will be
(1) ` 1,10,000 (2) ` 27,500
(3) ` 17,500 (4) ` 70,000
9. Which of the following is a deferred revenue expenditure ?

(1) Legal expenses incurred on the purchase of land.
(2) Expenses on a mega advertisement campaign while launching a new product.
(3) Expenses incurred on installation of a new machine.
(4) Wages paid for construction of an additional room in the building.
10. The amount of depreciation charged to Profit and Loss Account varies every year under :
(1) Fixed instalment method (2) Annuity method
(3) Diminishing balance method (4) Insurance policy method
221
11. Ordinal utility analysis of the consumer’s behaviour is considered superior to the cardinal
utility analysis mainly due to
(1) assumption of the rationality of the consumer’s behaviour.
(2) possibility of the derivation of the consumer’s demand.
(3) bifurcation of price effects into income and substitution effects.
(4) consideration of the available limited resources for satisfying consumer’s demand.
12. For the following statements of Assertion (A) and Reasoning (R) indicate the correct code :
Assertion (A) : Price reduction normally leads to an increase in the demand for a
commodity.
Reason (R) : Price reduction leads to the entry of new buyers of the commodity in
the market.
Codes :
(3) Both (A) and (R) are correct and (R) offers full explanation of (A).
(4) Both (A) and (R) are correct but (R) does not offer full explanation of (A).
13. The minimum Long Run Average Cost (LAC) can be determined on a
I. LAC curve for a normal production function
II. LAC curve for a linear production function
III. Planning curve
IV. Envelope curve
Codes :
(1) I II III
(2) II III IV
(3) I III IV
(4) I II IV
14. Monopoly is not considered desirable from the point of view of the society mainly
because the monopolist endeavours to
(1) earn net revenue on sale of all goods including those involving no cost of
production.
(2) earn net revenue on sale of goods in short run as well as long run.
(3) charge different prices for the same product from the different categories of buyers.
(4) produce below economic capacity level when he exhibits satisfaction with normal
profit only.
15. Product-line pricing strategy includes which combination of the following ?

I. Public utility pricing
II. Complementary goods pricing
III. Spare parts pricing
IV. Load factor pricing
Codes :
(1) I II III
(2) II III IV
(3) I II IV
(4) I III IV
222
16. When the data are classified only on the basis of descriptive characteristics which cannot
be quantified is known as
(1) Geographical classification (2) Chronological classification
(3) Qualitative classification (4) Quantitative classification
17. Which one of the following is a false description ?

(1) In a moderately asymmetrical distribution, the empirical relationship between Mean,
Mode and Median suggested by Karl Pearson is
Mean – Mode = 3 (Mean – Median)
(2) Coefficient of variation is an absolute measure of dispersion.
(3) Measure of skewness indicates the direction and extent of skewness in the
distribution of numerical values in the data set.
(4) Kurtosis refers to the degree of flatness or peakedness in the region around the mode
of a frequency curve.
18. Match the items of List – I with the items of List – II and indicate the code of correct
matching :
a. Coefficient of determination σx
i. γxy
σy
b. Spearman’s Rank correlation 6 Σd2
coefficient ii. 1–
n(n2 – 1)
c. Regression coefficient of x on y Σxy
iii.
variable nσxσy
d. Karl Pearson’s formula of iv. γ2
calculating γ
Codes :
a b c d
(1) i ii iii iv
(2) i iv ii iii
(3) iv iii ii i
(4) iii ii iv i
19. Statement – I : When the null hypothesis is true but as per the hypothesis-testing, it is
rejected, it is known as beta type error in hypothesis testing.
Statement – II : Chi-square test is exclusively a non-parametric test.
Codes :
(3) Statement – I is true while Statement – II is false.
(4) Statement – I is false while Statement – II is true.
20. Computers that recognize data as discrete signals are called ?

(1) Analog computers (2) Digital computers
(3) Hybrid computers (4) Super computers
223
21. Herbert Simon’s concept of administrative man assumes that

(a) He has satisfying approach in decision making rather than the maximising approach.
(b) He can make decisions without determining all possible alternatives.
(c) He is completely rational in decision making.
(1) (a) only (2) (b) only
(3) Both (a) and (b) (4) (a), (b) and (c)
22. Which of the following statement(s) is/are correct about scalar chain principle as given by
Fayol ?
(a) Each communication, going up or down, must flow through each position in the line
authority.
(b) Chain of communication cannot be broken under any circumstances.
(1) Only (a) is correct. (2) Only (b) is correct.
(3) Neither (a) nor (b) is correct. (4) Both (a) and (b) are correct.
23. A mission statement should be

(a) Self-explanatory
(b) Elaborate
(c) Distinctive
(d) Feasible
Codes :
(1) (a) only (2) (a) and (b)
(3) (a), (b) and (c) (4) (a), (c) and (d)
24. Match List – I and List – II and indicate the correct code :
a. Equity theory i. Motivation depends on ratios of inputs
and outcomes of self and others.
b. Vroom’s theory ii. People are motivated to achieve a goal
to the extent that they expect that
certain action will help them to reach
the goal.
c. Porter and Lawler model iii. There exists a complex relationship
among motivation, performance and
satisfaction.
d. Herzberg’s theory iv. A challenging job that has
opportunities for achievement,
recognition, responsibility and growth
will motivate employees.
Codes :
a b c d
(1) i ii iii iv
(2) ii i iii iv
(3) iii ii i iv
(4) i iii ii iv
224
25. Assertion (A) : ‘Grapevine’ tends to be more active during periods of change,
excitement, anxiety and sagging economic conditions.
Reason (R) : Employees use this communication to fill in important information
gaps and clarify management decisions.
Codes :
(1) (A) is right and (R) is wrong.
(2) (A) is wrong and (R) is right.
(3) Both (A) and (R) are right and (R) explains (A).
(4) Both (A) and (R) are right but (R) does not explain (A).
26. Which type of differentiation is used to gain competitive advantage through the way a
firm designs its distribution coverage, expertise and performance ?
(1) Channel differentiation (2) Services differentiation
(3) People differentiation (4) Product differentiation
27. Which one of the following is the most likely result of a marketing strategy that attempts
to serve all potential customers ?
(1) All customers will be delighted.
(2) Customer-perceived value will be increased.
(3) The company will need to follow up with a demarketing campaign.
(4) Not all customers will be satisfied.
28. Which of the following is not a primary activity in Michael Porter’s value chain ?
(1) Inbound logistics (2) Operations
(3) Outbound logistics (4) Procurement
29. Which of the following represents consistency of results when the test instrument is used
repeatedly ?
(1) Validity (2) Reliability
(3) Relativity (4) Sensitivity
30. Assertion (A) : Too many stimuli make a person accommodated to those sensations.
Sensory adaptation is a problem that concerns many advertisers,
which is why they try to change their advertising campaigns
regularly.
Reason (R) : To cut through advertising clutter and to ensure that consumers
perceive advertisement, marketers try to increase sensory input.
Codes :
(3) Both (A) and (R) are right but (R) does not explain (A).
(4) Both (A) and (R) are right and (R) explains (A).
225
31. Which of the following is not a feature of payback period method ?

(1) It is simply a method of cost recovery and not of profitability.
(2) It does not consider the time value of money.
(3) It does not consider the risk associated with the projects.
(4) It is very difficult to calculate.
32. Which of the following is not a source of credit information of prospective customers ?
(1) Letter of credit (2) Bank Reference
(3) Trade Enquiry (4) Credit Bureau
33. The portion of earnings which is distributed among shareholders in the form of dividend is
called
(1) Proprietary Ratio (2) Earnings-yield Ratio
(3) Payout Ratio (4) Retention Ratio
34. Select the correct code regarding motives for holding inventories by firms :
(a) Transaction motive
(b) Environmental motive
(c) Precautionary motive
(d) Speculative motive
(e) Competitive motive
Codes :
(1) (a), (b), (c), (d)
(2) (a), (b), (d), (e)
(3) (a), (d), (e)
(4) (a), (c), (d)
35. Which of the following formulae is related to operating leverage ?

Contribution Sales – Variable Cost
(1) Operating Profit (2) Earnings before Interest and tax
Percentage change in EBIT

(3) Percentage change in sales (4) All of the above
36. Which of the following is not true in case of HRM ?

(1) Employees are seen as an investment to be nurtured as well as a cost to be controlled.
(2) Conflicts are dealt with by team members within their teams.
(3) Preference is for collective bargaining of pay and working conditions.
(4) Emphasis is on competitive pay and conditions to stay ahead of competitors.
226
37. Which one of the following is an advantage of Magazines as a source of recruitment ?

(1) Less expensive
(2) Long lead time for advertisement placement
(3) Reach a diverse audience
(4) Many unmotivated applicants
38. Examine the following statements and choose the correct code :
Assertion (A) : Human Resource planning must always be seen within the strategy
making context.
Reason (R) : Human Resource planning process removed from the realities of the
business will be a waste of time.
Codes :
(1) Both (A) and (R) are correct.
39. Match the items of List – I with the items of List – II and select the correct code :
a. Golden parachutes i. The right to purchase a stated
number of shares of a company
stock at today’s price at some time
in the future.
b. Gain sharing ii. An incentive plan that engages
employees in a common effort to
achieve productivity objectives and
share the gains.
c. Stock-option iii. Payments companies make in
connection with a change in
ownership or control of a company
d. Annual bonus iv. Plans designed to motivate short
term performance of managers and
are tried to company profitability.
Codes :
a b c d
(1) iii i ii iv
(2) i ii iii iv
(3) ii iii i iv
(4) iii ii i iv
227
40. Which one of the following is not a function of plant council ?

(1) Recommend and improve safety, health and welfare measures.
(2) Determination of productivity schemes taking into consideration the local
conditions.
(3) Planning, implementation and review of monthly targets and schedules.
(4) Review of working of shop level bodies.
41. Assertion (A) : “Banks globally are facing more challenges now, and Macro
sustainability is a necessity but not sufficient for sustainable
economic growth.”
Reason (R) : “Putting regulations in place is only one part and their implementation
is equally important for achieving growth and sustainability.”
Codes :
(1) (A) and (R) both are true and (R) is correct explanation of (A).
(2) (A) and (R) both are true but (R) is not the correct explanation of (A).
(3) (A) is true and (R) is false.
(4) (A) is false and (R) is true.
42. Banking on telephone service includes :

(i) Automatic balance voice out
(ii) Inquiry all term deposit account
(iii) Direct cash withdrawl
(iv) Utility bill payment
(v) Voice out last five transactions
Codes :
(1) (i), (ii), (iii) and (v)
(2) (i), (ii), (iv) and (v)
(3) (ii), (iii), (iv) and (v)
(4) All (i), (ii), (iii), (iv) and (v)
43. Which one of the following banks currently ranks number one in India in terms of market
capitalization ?
(1) State Bank of India
(2) I.C.I.C.I. Bank
(3) U.T.I. Bank
(4) I.D.B.I. Bank
228
44. Match the items of Column – I with the items in Column – II and suggest the correct code :
a. Interbank call market i. Money market
b. Commercial Bills ii. Promissory note
c. Commercial paper market iii. Short-term maturity
d. Treasury bills iv. Government papers
Codes :
a b c d
(1) i ii iv iii
(2) iii i ii iv
(3) i iii iv ii
(4) iv iii ii i
45. Match the items of List – I with List – II with regard to the BASEL III norms and select the
correct code :
a. Pillar 1 i. Supervisory review process
b. Pillar 2 ii. Market discipline
c. Pillar 3 iii. Minimum regulatory capital
requirements based on Risk
Weighted Assets (RWAs)
Codes :
a b c
(1) i ii iii
(2) i iii ii
(3) iii ii i
(4) iii i ii
46. Assertion (A) : Comparative cost theory is static in character.

Reason (R) : Comparative cost theory is based on fixed supplies of factors of
production.
Codes :
(2) (R) is correct, but (A) is incorrect.
229
47. Match the items of List – I with List – II with regard to Balance of Payments equilibrium :
a. Exchange control i. Exporters surrender foreign exchange to the central
bank.
b. Trade Policy ii. Bank rate raised by the central bank
Measure
c. Expenditure iii. Reduction in foreign exchange rate
reducing policy
d. Expenditure iv. Enhancing exports by granting subsidies
switching policy
Codes :
a b c d
(1) i iv ii iii
(2) i ii iii iv
(3) iii ii iv i
(4) iv iii ii i
48. Which among the following is closely associated with intellectual property rights ?
(1) GATS (2) TRIMS
(3) TRIPS (4) MFN
49. What is not correct about International Development Association (IDA) ?

(a) Following earthquake in 2015, IDA has helped Nepal rebuild and recover.
(b) IDA ranks as the highest performing multilateral development bank in 2016.
(c) IDA is a subsidiary bank of IBRD.
(d) India has procured highest amount of international loan from IDA.
Codes :
(1) (a) and (b) (2) (c)
(3) (d) (4) (a) and (c)
50. As per the Foreign Trade Policy 2015-2020, a three star export house should have :
(1) Export performance (FOB/FOR) of US $ 100 million during current and previous
two years.
two years.
two years.
two years.
_____________
230
JULY 2016 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 1 11 3 21 3 31 4 41 1
2 2 12 4 22 1 32 1 42 2
3 4 13 3 23 4 33 3 43 1
4 3 14 4 24 1 34 4 44 2
5 1 15 2 25 3 35 4 45 4
6 * 16 3 26 1 36 3 46 4
7 2 17 2 27 4 37 3 47 1
8 2 18 * 28 4 38 1 48 3
9 2 19 2 29 2 39 4 49 3
10 3 20 2 30 4 40 1 50 1
231
JULY 2016
Paper – III
1. Read the following and select the right code :

Statement – I : A custom to be valid should be proved to be immemorial but may not
be ancient.
Statement – II : The principle of judicial decision which is only authoritative is known
as ‘ratio decidendi’.
(3) Statement – I is true but Statement – II is false.
(4) Statement – II is true but Statement – I is false.
2. To become a director in a company the person must obtain
(1) Business Licence (2) Director’s Licence
(3) TIN (4) DIN
3. Which of following is not a “Maharatna” industry in India ?
(1) CIL (2) SAIL
(3) OIL (4) GAIL
4. Match the items of Column – I with those of Column – II :
a. Exchange control i. Adverse BOP
b. Price control ii. Domestic firms
c. Import control iii. Mass consumption product
d. Legislative control iv. Industrial location
Codes :
a b c d
(1) ii i iii iv
(2) iv ii iii i
(3) iii ii i iv
(4) ii iii i iv
5. Match the items of List – I with those of List – II and choose the correct code :
a. Provision for taxation i. Current Assets
b. Live-stock ii. Unsecured loans
c. Sundry Debtors iii. Fixed Assets
d. Interest accrued on unsecured loans iv. Provisions
Codes :
a b c d
(1) iv iii i ii
(2) iv iii ii i
(3) iii iv ii i
(4) ii i iii iv
232
6. A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. They
1
agreed to take D into partnership and gave him 8 share. What will be their new profit
sharing ratio ?
(1) 4 : 3 : 2 : 1 (2) 28 : 21 : 14 : 9
(3) 28 : 21 : 14 : 8 (4) 4 : 1 : 2 : 1
7. From the following information, find out the number of units that must be sold by the firm
to earn profit of ` 80,000 per year.
Sales price : ` 25 per unit
Variable manufacturing costs – ` 12 per unit
Variable selling costs – ` 3 per unit
Fixed factory overheads – ` 5,00,000
Fixed selling costs – ` 3,00,000
(1) 60,000 units (2) 88,000 units
(3) 98,000 units (4) 1,00,000 units
8. Which of the following is not a cash inflow ?

(1) Decrease in creditors (2) Decrease in debtors
(3) Issue of shares (4) Sale of a fixed asset
9. Match the items of List – I with those of List – II and indicate the correct code from the
following :
a. Postage stamp pricing i. Equality of marginal and average cost
b. Loss leader ii. Constant average and marginal cost
c. Economic capacity iii. Product line pricing
d. Reserve capacity iv. Differential pricing
Codes :
a b c d
(1) iii iv ii i
(2) iv iii i ii
(3) ii i iii iv
(4) i ii iv iii
code :
Assertion (A) : Low initial pricing for new products is regarded as the principal
instrument for entering into mass markets.
Reasoning (R) : Firms generally go for production of new products with excess
capacity initially.
Codes :
(1) Assertion (A) and Reasoning (R) both are correct but (R) does not offer full
explanation for (A).
(2) Assertion (A) and Reasoning (R) both are wrong.
(3) Assertion (A) is correct but Reasoning (R) is wrong.
(4) Assertion (A) and Reasoning (R) both are correct and (R) offers full explanation for
(A).
233
code :
Assertion (A) : Gossen’s first law of consumption is invariably applicable in case of
individuals’ consumption behaviour.
Reasoning (R) : It serves as an important determinant of demand for the goods and
services in the market.
Codes :
(1) Assertion (A) and Reasoning (R) both are correct.
(2) Assertion (A) and Reasoning (R) both are incorrect.
(3) Assertion (A) is correct but Reasoning (R) is incorrect.
(4) Assertion (A) is incorrect but Reasoning (R) is correct.
12. Production function for a product is based on certain assumptions. Indicate the correct
code from the following :
(a) Complementarity
(b) Substitutability
(c) Product elasticity
(d) Specificity
Codes :
(1) (a) (b) (c)
(2) (b) (c) (d)
(3) (a) (c) (d)
(4) (a) (b) (d)
13. Which one of the following is not the characteristic of normal distribution ?
(1) Mean, median and mode for the normal distribution are equal.
(2) The two tails of the normal curve extend to infinity in both directions but never
touch the horizontal axis.
(3) For different values of standard deviation, the height of the mean ordinate remains
the same.
–
(4) The number of independent constraints of normal distribution are N, X and σ.
14. Which one of the following formulae is used to calculate the standard error of coefficient
of correlation between 25 paired observations of a sample ?
(1 – r2) (1 – r2)
(1) (2) (n – 2)
n
⎛ 1 – r 2⎞ (n – 2)
(3) (0.6745) ⎜ ⎟ (4)
⎝ n ⎠ (1 – r2)
234
15. Read the following statements and choose the correct code :
Statement – I : Non-parametric tests are based on some assumptions about the parent
population from which the sample has been drawn.
Statement – II : The standard deviation of the sampling distribution of mean is called
standard error of mean.
Codes :
(1) Both statements are true.
(2) Both statements are false.
(3) Statement – I is true while Statement – II is false.
(4) Statement – I is false while Statement – II is true.
16. Match the items of List – I with the items of List – II and indicate the code of correct
matching :
i. Contingency coefficient for N–n
any size of contingency table a. N–1
ii. Statistical approach to decide σp
size of a sample b.
n
iii. Finite population multiplier x2
c.
x2 + n
iv. Standard error of mean 2
z2 . σp
d.
e2
Codes :
a b c d
(1) i ii iii iv
(2) iii iv i ii
(3) i iii ii iv
(4) iii ii iv i
17. Which of the following is a deterioration of mental efficiency, reality testing and moral
judgement that results from in-group pressure ?
(1) Harassment (2) Group think
(3) Group burnout (4) Group control
18. According to Fiedler’s contingency model of leadership, favourableness of situation

depends on which combination of the following ?
(a) Leader-member relationship
(b) Member-member relationship
(c) Leader’s position power
(d) Degree of task structure
(e) Degree of training
Codes :
(1) (a), (b) and (c) (2) (a), (c) and (d)
(3) (c), (d) and (e) (4) (a), (b) and (e)
235
19. The apex body at the highest level of the unit/division, which oversees the functioning of
quality circles, is called
(1) Facilitator (2) Coordinator
(3) Steering committee (4) Supervisory committee
20. Which of the following is related to the practical means of determining a moral course of
action ?
(1) Meta ethics (2) Virtue ethics
(3) Normative ethics (4) Applied ethics
21. Match List – I and List – II and indicate the correct code :
a. Convenience goods i. Consumer purchases them frequently,
immediately and with minimal effort.
b. Shopping goods ii. Consumer compares them on the basis
of suitability, quality, price and style.
c. Speciality goods iii. These are goods with unique
characteristics or brand identification.
d. Unsought goods iv. Consumers are not aware of them and
normally do not think of buying them.
Codes :
a b c d
(1) i iv ii iii
(2) i ii iii iv
(3) iv iii ii i
(4) ii i iii iv
22. Which of the following marketing strategies is/are not used in ‘growth stage’ of the
product life cycle ?
(1) Improving quality and adding new features.
(2) Adding new models of product.
(3) Entering new market segments.
(4) Using awareness and trial communications.
23. Who among the following take(s) both title to and possession of goods from the preceding
member(s) and channelize them to the subsequent members ?
(a) Agent intermediaries
(b) Merchant intermediaries
(3) Both (a) and (b) (4) Neither (a) nor (b)
24. Which of the following is not a determinant of service quality ?

(1) Reliability (2) Responsiveness
(3) Sensitivity (4) Assurance
236
25. Sales of a firm are ` 74 lakh, variable costs ` 40 lakh, fixed costs ` 8 lakh. Operating
leverage of the firm will be
(1) 1.48 (2) 1.78
(3) 1.31 (4) 2.42
26. From the following techniques of capital budgeting decision, indicate the correct
combination of discounting techniques :
I. Profitability index
II. Net present value
III. Accounting rate of return
IV. Internal rate of return
Codes :
(1) I II III
(2) II III IV
(3) I II IV
(4) I III IV
27. Insufficient working capital may result into which combination of the following ?
I. Failures to adapt to changes.
II. Enhancement in credit-worthiness of the firm.
III. Reduced availability of trade and cash discounts.
IV. Reduced volume of sales.
Codes :
(1) I, II, III, IV
(2) I, III, IV
(3) I, II, IV
(4) I, II, III
28. Which combination of the following represents the assumptions of the Walter’s dividend
model ?
I. The company has a very long or perpetual life.
II. All earnings are either reinvested internally or distributed as dividend.
III. There is no floatation cost for the company.
IV. Cost of capital of the company is constant.
Codes :
(1) I II III
(2) II III IV
(3) I II IV
(4) I III IV
237
29. Match the items of List – I with the items of List – II and indicate the correct code :
a. Job specifications i. The procedure for determining the
duties and skill requirements of a job
and the kind of person who should be
hired for it.
b. Job description ii. A list of human requirements
c. Job analysis iii. A list of job’s duties, responsibilities,
reporting relationships, working
conditions and supervisory
responsibilities.
Codes :
a b c
(1) i ii iii
(2) ii iii i
(3) iii ii i
(4) ii i iii
30. A training technique in which trainees are first shown good management techniques in a
film, are asked to play roles in a simulated situation, and are then given feedback and
praise by their supervisor is known as.
(1) Behaviour modelling (2) Role playing
(3) In-house development center (4) Management game
31. Which combination of the following statements is correct about the code of discipline in
industry ?
(a) It aims at preventing disputes by providing for outside agency or adjudication.
(b) It is a government imposed involuntary principle of discipline.
(c) It restrains the parties from unilateral action.
Codes :
(1) (a), (b) and (c) (2) (b) and (c)
(3) (a) only (4) (c) only
32. A conciliation proceeding is deemed to be pending until any combination of the following
conditions is fulfilled :
(a) a settlement is arrived at a memorandum of settlement is signed by parties to the
dispute.
(b) no settlement is arrived at, the report of conciliation officer is received by the
appropriate government.
(c) a reference is made to the court of Inquiry, Labour Court, Tribunal or National
Tribunal during the pendency of conciliation proceedings.
Codes :
(1) only (a) is correct. (2) only (b) is correct.
(3) (a) and (c) are correct. (4) (a), (b) and (c) are correct.
238
33. Identify the correct combination of statements with regard to banking in India.
(a) For many years the presidency banks had acted as quasi-central banks.
(b) The Bank of Hindustan was liquidated during 1829-32.
(c) General Bank of India was an unsuccessful bank and was dissolved in 1791.
(d) Bank of Calcutta was renamed as Bank of Bengal in 1921.
Codes :
(1) (a), (b) and (c) (2) (b), (c) and (d)
(3) (a), (b) and (d) (4) (a), (b), (c) and (d)
34. Which combination of the following methods indicates quantitative methods of control of
credit creation practiced by the Reserve Bank of India ?
(a) Bank Rate
(b) Open Market Operations
(c) Variable Reserve Ratios
(d) Credit Rationing
Codes :
(1) (a), (b) and (c) (2) (a), (b) and (d)
(3) (b), (c) and (d) (4) (a), (c) and (d)
35. Which one of the following development financial institutions in India has started the
special refinance scheme for the resettlement and rehabilitation of voluntary retired
workers of the National Textile Corporation of India ?
(1) IDBI (2) SIDBI
(3) ICICI (4) None of the above
36. Read the following statements and choose the correct code :
Statement – I : Small Industry Development Bank of India (SIDBI) was set up as a
wholly owned subsidiary of RBI.
Statement – II : SIDBI has taken over the responsibility of administering small
industry development fund managed by IDBI.
Codes :
(1) only (I) is correct. (2) Only (II) is correct.
(3) Both (I) and (II) are correct. (4) Both (I) and (II) are wrong.
37. Under the Foreign Trade Policy 2015-2020, following additional ports are allowed for
export and import :
(a) Calicut Airport, Kerala
(b) Rajkot Airport, Gujarat
(c) Arakonam ICD, Tamil Nadu
(d) Ludhiana Airport, Punjab
Codes :
(1) (a) and (c) (2) (a) and (d)
(3) (b) and (d) (4) (c) and (d)
239
38. Assertion (A) : Under FEMA, the receiver of laundered money is to be made culpable,
instead of sender/distributor.
Reasoning (R) : FEMA differs from the earlier exchange regulation Act FERA with
regard to penalties and punishment in case of violation of the Act.
Codes :
39. Match the items of List – I with those of List – II with regard to international monetary
fund’s various schemes :
a. Extended Fund Facility (EFF) i. Repayment period 4 to 10 years
b. Stan Arrangements ii. Repayment period 3 to 5 years
c. Supplemented Reserve Fund (SRF) iii. Repayment period 2 to 5 years
d. Poverty Reduction and Growth iv. Repayment period 10 years
Facility (PRGF)
Codes :
a b c d
(1) i ii iii iv
(2) iv iii ii i
(3) iv ii iii i
(4) i iv ii iii
40. Which combination of the following is correct with regard to World Trade Organization
(WTO) :
(a) WTO initiates peace process among the member countries to enhance international
trade.
(b) WTO avoids the task of “Settlement of Disputes” among the member countries.
(c) WTO administers the “Trade Review Mechanism”.
(d) WTO cooperates in an appropriate manner with the IMF and the World Bank.
Codes :
(1) (b), (c) and (d) (2) (a) and (c)
(3) (c) and (d) (4) (a), (b) and (d)
41. Choose the code representing the correct sequence of steps in a merging transaction :
(I) Screening and investigation of merger proposal.
(II) Approval of Central Government
(III) Approval of respective High Courts
(IV) Negotiation Stage
(V) Approval of proposal by Board of Directors, Shareholders and Creditors
Codes :
(1) (I) → (V) → (IV) → (III) → (II)
(2) (I) → (IV) → (V) → (III) → (II)
(3) (I) → (IV) → (III) → (V) → (II)
(4) (I) → (III) → (V) → (II) → (IV)
240
42. Which of the following are the important features of option contracts ?
(I) Buyers of option have limited liability.
(II) Options have high degree of risk to option-writers.
(III) Options are exercisable only by buyers of option.
(IV) Buyers of option have all rights which are available to equity shareholders of the
concerned companies.
Codes :
(1) (I), (II), (III) (2) (I), (II), (III), (IV)
(3) (I), (II), (IV) (4) (I), (III), (IV)
43. Which of the following approaches is adopted for the valuation of human resource
according to economic concept ?
(1) Replacement cost approach (2) Opportunity cost approach
(3) Historical cost approach (4) None of the above
44. Match the items of List – I with those of List – II and select the correct code :
a. High levered fund i. Market risk
b. Increase in bank rate ii. Purchasing power risk
c. Inflation iii. Financial risk
d. Political instability iv. Interest rate risk
Codes :
a b c d
(1) iii i ii iv
(2) i iii iv ii
(3) iii iv ii i
(4) ii iii i iv
45. Which of the following are the instruments of money market ?

(i) Call money market
(ii) Commercial bill market
(iii) Industrial securities market
(iv) Short-term loans market
(v) Treasury bill market
Codes :
(1) (i), (ii), (iv), (v) (2) (i), (ii), (v)
(3) (i), (ii), (iii), (iv), (v) (4) (i), (ii), (iii), (iv)
46. Accounting Standard-6 is meant for

(1) Accounting for Fixed Assets (2) Accounting treatment for goodwill
(3) Depreciation Accounting (4) Disclosure of Accounting policies
47. Which of the following is not a feature of OTCEI ?

(1) Quick transfer and disposal system
(2) Nationalised computerised networking
(3) Ringless trading system
(4) Fragmentation of regional stock exchanges
241
48. Which of the following requires consumers to interpret ambiguous stimuli ?

(1) Focus group method (2) Projective techniques
(3) Rejective techniques (4) Semantic differential scales
49. Which of the following passes through the four stages of distinctiveness, emulation, mass
fashion and decline ?
(1) Style (2) Fashion
(3) Fad (4) Style and Fashion
50. Which of the following positioning strategies is adopted by marketers to position their
product in two categories simultaneously ?
(1) Point of Difference (2) Point of Parity
(3) Straddle Positioning (4) Emotional Positioning
51. Statement (I) : Marketing is the process by which a firm profitably translates
customer needs into revenue.
Statement (II) : Marketing is the messages and/or actions that causes messages and/or
actions.
Codes :
(1) (I) is correct but (II) is not correct.
(2) (II) is correct but (I) is not correct.
(3) (I) and (II) both are correct.
(4) (I) and (II) both are incorrect.
52. Assertion (A) : Odd pricing aims at maximising profit by making micro-adjustments in
pricing structure.
Reasoning (R) : Odd pricing refers to a price ending in 1, 3, 5, 7, or 9. When examining
a price, the first digits carry more weight than the last ones.
Codes :
(3) Both (A) and (R) are right.
53. Name the process in which a buyer posts its interest in buying a certain quantity of item
and sellers compete for the business by submitting lower bid until there is only one seller
left.
(1) Internet (2) Reverse auction
(3) B2B market place (4) B2C market place
54. Advertising method in which an advertisement is broadcasted simultaneously on several

radio stations and / or television channels is known as
(1) Black-out (2) Consolidation
(3) Road-block (4) Cornering
242
55. Which of the following is the mental condition or attitude of individuals and groups which
determines their willingness to cooperate ?
(1) Motivation (2) Morale
(3) Excitement (4) Delight
56. Which of the following is not provided under the Factories Act, 1948 ?
(1) The certificate of fitness is granted by a certifying surgeon on the application of any
young person or a parent or a guardian.
(2) An adolescent who has not been granted a certificate of fitness shall be deemed to be
a child for the purpose of the act.
(3) The certificate of fitness granted or renewed remains valid for a period of six
months from the date of issue.
(4) Any fee payable for the certificate of fitness shall be paid by occupier and not by the
young person or his parent or guardian.
57. Arrange the following steps of developing Behaviourally Anchored Rating Scales (BARS)
in the right sequence :
(a) Developing performance dimensions
(b) Generate critical incidents
(c) Scale the incidents
(d) Reallocate the incidents
(e) Develop the final instrument
Codes :
(1) (a), (b), (c), (d), (e) (2) (b), (a), (d), (c), (e)
(3) (a), (b), (d), (c), (e) (4) (a), (c), (b), (d), (e)
58. Within how much period from the close of accounting year, bonus must be paid, if there is
no dispute about the payment of bonus ?
(1) Two months (2) Six months
(3) Eight months (4) Ten months
59. Which of the following statements is correct about Wage Boards in India ?
(a) A Wage Board is a tripartite body.
(b) Labour and management representatives on a Wage Board can be selected from
industries other than the one which is investigated.
(c) Wage Boards are always statutory in nature.
(d) Wage Boards work on the principle of living wage.
Codes :
(1) (a) only (2) (b) and (c)
(3) (c) and (d) (4) (a), (b), (c) and (d)
60. Who gave the surplus value theory of wage ?

(1) David Ricardo (2) Karl Marx
(3) Adam Smith (4) F.A. Walker
61. Who gave the systems approach to industrial relations ?

(1) Beatrice Webb (2) John Dunlop
(3) Eric Trist (4) Henry Fayol
243
62. Which among the following are multinational corporations ?

(a) A multinational, decentralized corporation with strong home country presence.
(b) A global, centralized corporation that acquires cost advantage through centralized
production when cheaper resources are available.
(c) An international company that builds on the parent corporations technology and R & D.
(d) A transnational enterprise that combines the (a), (b) and (c).
Codes :
(1) (a) and (b) (2) (b) and (c)
(3) (a), (b) and (c) (4) (a), (b), (c) and (d)
63. Which among the following are full member countries of ASEAN ?
(a) Brunei Darussalam (b) Cambodia
(c) Vietnam (d) Myanmar
(e) Sri Lanka
Codes :
(1) (a), (b) and (e) (2) (a), (b), (c) and (e)
(3) (b), (c), (d) and (e) (4) (a), (b), (c) and (d)
64. Assertion (A) : Capital Account convertibility is introduced only sometime after the
introduction of convertibility on current account when exchange rate of
currency of a country is relatively stable.
Reasoning (R) : Capital Account convertibility is necessary for faster growth and
development of economy and it makes foreign exchange rate more stable.
Codes :
65. Statement (I) : WTO is only international organization which deals with the rules of
trade between organizations.
Statement (II) : The limit of holding by individual foreign institutional investors in a
company has been raised from 5 to 10% of company’s share while the
aggregate limit has been increased from 24 to 34%.
Codes :
(1) Statement (I) is correct but Statement (II) is false.
(2) Statement (II) is correct but Statement (I) is false.
(3) Statements (I) and (II) both are correct.
(4) Statements (I) and (II) both are false.
66. In case a farmer in India buys a wheat option on future :

(a) The farmer must accept a wheat futures contract and not take physical possession of
wheat.
(b) The farmer must accept delivery of the wheat at a higher price.
(c) The farmer has the right to deliver the wheat and will do so only if the price is
favourable.
(d) The farmer must deliver the wheat at market price.
Codes :
(1) (a) and (d) (2) (d) only
(3) (c) only (4) (b) and (c)
244
67. Sector specific policy of government of India in case of B2B is when

(1) FDI is upto 100%
(2) FDI is upto 49%
(3) FDI is upto 100% subject to condition that the investment in favour of Indian public
to the tune of 20% within 5 years to be done.
(4) FDI is upto 100% subject to condition that the investment in favour of Indian public
to the tune of 26% within 10 years to be done.
68. Statement I : In India a “copyright” of an unpublished book can be registered under

copyright Act of India.
Statement II : Once granted by the European Patent Office, the proprietor has a patent
which is effective in all contracting states of the patent cooperation
treaty and the agreement on the trade related aspects of IPR.
Codes :
(1) Statement (I) is correct and (II) is false.
(2) Statement (II) is correct and (I) is false.
(3) Statements (I) and (II) both are correct.
(4) Statements (I) and (II) both are false.
69. As per the Income Tax Act, 1961 for the assessment year 2015-16, a deduction u/s 80
QQB for authors of books of literacy, artistic or scientific nature is allowed upto
(1) ` 1,00,000 (2) ` 2,00,000
(3) ` 2,40,000 (4) ` 3,00,000
70. Gratuity received by a government employee is

(1) exempted upto ` 3,50,000 (2) exempted upto ` 10,00,000
(3) fully exempted (4) fully taxable
71. Match the items of the List – I with those of the List – II and indicate the correct code :
a. Residential status of i. Section 10 (13A)
an individual
b. Agricultural income ii. Section 10 (10)
c. House rent allowance iii. Section 6
d. Gratuity iv. Section 10 (1)
Codes :
a b c d
(1) i iii ii iv
(2) iii iv i ii
(3) ii i iii iv
(4) iv ii i iii
245
72. Match the items of the List – I with List – II and indicate the correct code :
a. House rent allowance i. A deduction from income
b. Casual income ii. A step taken by tax authorities
c. Collection charges of iii. Taxable income
interest on securities
d. Best judgement assessment iv. Partly taxable allowance
Codes :
a b c d
(1) iv iii ii i
(2) iv iii i ii
(3) iii iv i ii
(4) ii iv i iii
73. The statutory limit for deduction u/s 80 GG of Income tax Act, 1961, for the assessment
year 2015-16 is
(1) ` 2,000 per month (2) ` 3,000 per month
(3) ` 2,500 per month (4) ` 5,000 per month
74. For the purpose of assessment under Income Tax Act, 1961, which combination of the
following represent income ?
(I) Tax-free salary from the private sector employer.
(II) Pin money received by a family member.
(III) Awards received by the sports persons.
(IV) Loss incurred by the assessee.
(V) Perquisites received by employees.
Codes :
(1) (I), (II), (III), (IV) (2) (II), (III), (IV), (V)
(3) (I), (III), (IV), (V) (4) (I), (II), (IV), (V)
75. Indicate the correct code for forms for filing income tax return from the following Income
Tax Return Forms :
(a) ITR-4S
(b) ITR-2
(c) ITR-2B
(d) ITR-3
Codes :
(1) (a), (b) and (c) (2) (b), (c) and (d)
(3) (a), (b) and (d) (4) (a), (c) and (d)
___________
246
JULY 2016 Paper III

Answer Key (1-75)
1 4 11 4 21 2 31 4 41 2 51 3 61 2 71 2
2 4 12 4 22 4 32 4 42 1 52 3 62 4 72 2
3 3 13 3 23 2 33 1 43 2 53 2 63 4 73 1
4 4 14 2 24 3 34 1 44 3 54 3 64 1 74 3
5 1 15 4 25 3 35 2 45 1 55 2 65 3 75 3
6 2 16 2 26 3 36 2 46 3 56 3 66 3
7 2 17 2 27 2 37 1 47 4 57 2 67 3
8 1 18 2 28 3 38 3 48 2 58 3 68 3
9 2 19 3 29 2 39 1 49 3 59 1 69 4
10 1 20 3 30 1 40 3 50 3 60 2 70 3
247
DECEMBER 2015
PAPER II
Note : Thio paper containo fifty (50) objective type queotiono oo two (2) marko each. All queotiono
are compulsory.
1. Environmental degeneration does not consist of :

(1) Land degeneration and soil erosion
(2) Problem of over grazing and ecological degeneration
(3) Floods
(4) None of the above
2. Which of the following is not the main objective of Fiscal Policy of India ?
(1) To increase liquidity in economy
(2) To promote price stability
(3) To minimize the in-equality in income and wealth
(4) To promote employment opportunities
3. Liberalization means :
(1) Reducing number of reserved industries from 17 to 8
(2) Liberating the industry, trade and economy from unwanted restriction
(3) Opening up economy to the world by attaining international competitiveness
(4) Free determination of interest rate
4. Assertion (A) : Industrialization of an economy is considered synonymous with growth.

Reasoning (R) : The transfer of resources from agrarian to industrial may be capital or labour
or both.
Codes :
(1) Both (A) and (R) are true and (R) is correct explanation of (A).
(2) Both (A) and (R) are true but (R) is not the correct explanation of (A).
5. Globalization is the term used to describe process of removal of restriction on which one of
the following ?
(1) Foreign trade (2) Investment
(3) Both (1) and (2) (4) None of the above
248
6. Interest on loan taken for the purchase of fixed assets is a :

(1) Revenue Expenditure (2) Capital Expenditure
(3) Deferred Revenue Expenditure (4) Capital Loss
7. Dual Aspect Concept results in the following accounting equation :

(1) Revenue5Expenses (2) Capital1Profits5Assets1Expenses
(3) Capital1Liabilities5Assets (4) Capital1Drawings5Owners Equity
8. Match the items in Column - 1 with the items in Column - 2 :

Column - 1 Column - 2
(a) Materiality Concept (i) The same accounting method used by a firm from
one period to another
(b) Going Concern Concept (ii) An inappropriate assumption of a firm being
bankrupt
(c) Historical Cost Concept (iii) A normal basis used for accounting assets
(d) Consistency Concept (iv) Relates to the importance of an item or event
Codes :
(a) (b) (c) (d)
(1) (iv) (ii) (iii) (i)
(2) (i) (ii) (iii) (iv)
(3) (ii) (iii) (iv) (i)
(4) (iv) (ii) (i) (iii)
9. X Ltd. has a liquid ratio of 2 : 1. If its stock is ` 40,000 and its current liabilities are of
` 1 Lac, its current ratio will be :
(1) 1.4 times (2) 2.4 times (3) 1.2 times (4) 3.4 times
10. Comparison of the financial statements of the current year with the performance of previous
years of the same firm, is known as :
(1) Trend Analysis (2) Horizontal Analysis
(3) Intra - firm comparison (4) All of the above
11. The Marshallian utility analysis is based on a less valid assumption of :

(1) cardinal measurability of the utility
(2) given marginal utility of money
(3) diminishing marginal utility of the goods
(4) additivity of the utility
249
12. Match the items of the List - I with those of the List - II and indicate the correct code :
List - I List - II
(a) Convexity of the indifferences curve to origin (i) Indifference curve analysis
(b) Quantity of certain goods sacrificed for a (ii) Consumers equilibrium
large quantity of other goods
(c) Equality of the ratio of the marginal (iii) Substitutability/complementarity
utilities with that of the prices of the of the two goods
two goods
(d) Separation of substitution and income (iv) Marginal rate substitution
effects from the total price effect
Codes :
(a) (b) (c) (d)
(1) (iv) (ii) (i) (iii)
(2) (iii) (iv) (ii) (i)
(3) (iii) (i) (iv) (ii)
(4) (i) (iii) (ii) (iv)
13. Firms producing and selling a large variety of goods will generally follow :
(1) Cost plus pricing (2) Marginal pricing
(3) Skimming pricing (4) Product line pricing
code :
Assertion (A) : All firms under perfect competition in long run earn only normal profit.
Reasoning (R) : All firms under perfect competition in long run operate at the minimum
average cost level.
Codes :
(1) (A) and (R) both are correct. (2) (A) is correct but (R) is not correct.
(3) (A) is not correct but (R) is correct. (4) (A) and (R) both are incorrect.
List - I List - II
(a) Substitute Goods (i) Negative Cross Elasticity
(b) Complementary Goods (ii) Low Price Elasticity
(c) Giffen Goods (iii) Positive Cross Elasticity
(d) High Income Group Consumption Goods (iv) Positive Price Elasticity
Codes :
(a) (b) (c) (d)
(1) (iii) (iv) (ii) (i)
(2) (iii) (i) (iv) (ii)
(3) (ii) (iii) (i) (iv)
(4) (i) (ii) (iii) (iv)
250
16. Which one of the following is not a method of studying association of attributes ?
(1) Concurrent Deviation Method (2) Proportion Method
(3) Yules Metho (4) Coefficient of Contingency
17. Identify which of the following steps would be included in hypothesis testing :
(a) State the null and alternative hypothesis.
(b) Set the significance level before the research study.
(c) Eliminate all outliers.
(d) Obtain the probability value using a computer program such as SPSS.
(e) Compare the probability value to the significance level and make the statistical decision.
Codes :
(1) (a), (c) and (d) (2) (c), (d), and (e)
(3) (a), (b), (d) and (e) (4) (b), (c), (d) and (e)
18. Select the methods of finding out correlation from the following :
(a) Karl Pearsons Method
(b) Spearmans Rank Method
(c) Yules Method
(d) Coefficient of Contingency
(e) Concurrent Deviation Method
Codes :
(1) (a), (b), (c) (2) (a), (b), (c), (d)
(3) (a), (b), (e) (4) (c), (d), (e)
19. A set of data can be distinguished from other set of data by means of :
(1) Central value and dispersion
(2) Central value, dispersion and skewness
(3) Central value, dispersion, skewness and Kurtosis
20. The advent of computers in research has led to :

(1) Limitations of options in analysis
(2) Tremendous amount of flexibility with marginal increase in cost
(3) Myopic exposure of statistics to the researcher
251
21. Who among the following is not related to the planning function given by Taylor ?
(1) Route clerk (2) Time and cost clerk
(3) Inspector (4) Disciplinarian
22. Match the following :

(Book) (Author)
(a) Functions of the Executive (i) Charles Babbage
(b) On the Economy of Machinery and Manufactures (ii) Henri Fayol
(c) The Effective Executive (iii) Chester Barnard
(d) General and Industrial Administration (iv) Peter Drucker
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iii) (i) (iv) (ii)
(3) (iv) (iii) (i) (ii)
(4) (iii) (iv) (i) (ii)
23. The classical organisation theory treats organisation as a/an :

(1) Open system (2) Closed system
(3) Technical system (4) Macro system
24. Which of the following is a systematic interactive forecasting method that relies on a panel of
experts ?
(1) Pay-off matrix (2) Game theory
(3) Queing theory (4) Delphi technique
25. According to Hersey and Blanchards situational approach to leadership, the participating
style of leadership has :
(1) High task and low relationship orientation
(2) High task and high relationship orientation
(3) Low task and high relationship orientation
(4) Low task and low relationship orientation
252
26. Which of the following is not a reason for the failure of new products ?
(1) Good idea but overestimated market size.
(2) Correctly positioned new product, not promoted effectively or overpriced.
(3) Development costs are lower than or equal to estimated or expected.
(4) Competitors fight back harder than expected.
27. Which one of the following is true for the calculation of overall market share ?
(1) (Customer penetration)3(Customer loyalty)3(Price selectivity)
(2) (Customer loyalty)3(Customer selectivity)3(Price selectivity)
(3) (Customer selectivity)3(Price selectivity)3(Customer penetration)
(4) (Customer penetration)3(Customer loyalty)3(Customer selectivity)3(Price selectivity)
28. __________ is wielded by a manufacturer that threatens to withdraw a resource or terminate

a relationship if intermediaries fail to cooperate.
(1) Coercive Power (2) Legitimate Power
(3) Expert Power (4) Reference Power
29. When the consumers favour those products which offer the most quality, performance or
innovative features, then it is called as :
(1) Production concept (2) Product concept
(3) Sales concept (4) Marketing concept
30. Match the items of List - I with List - II where the PLC curve patterns are given for different
categories :
List - I List - II
(a) Product category (i) One of several variant shapes
(b) Product forms (ii) Longest PLC
(c) Products (iii) Standard PLC
(d) Branded Products (iv) Short or long PLC
Codes :
(a) (b) (c) (d)
(1) (iii) (iv) (ii) (i)
(2) (i) (ii) (iv) (iii)
(3) (iv) (ii) (i) (iii)
(4) (ii) (iii) (i) (iv)
253
31. The term capital structure implies :

(1) Share Capital1Reserves1Long-Term Debts
(2) Share Capital1Long and Short-Term Debts
(3) Share Capital1Long-Term Debts
(4) Equity and Preference Share Capital
32. A company has issued 10 percent perpetual debt of ` 1 lac at 5 percent premium. If tax rate
is 30 percent, then the cost of debt will be :
(1) 10 percent (2) 15 percent
(3) 6.66 percent (4) 8.21 percent
33. Dividend is not relevant in determining the value of the company. Who among the
following held this opinion ?
(1) J.E. Walter (2) Ezra Soloman
(3) Modigliani-Miller (4) M.J. Gordon
Q
34. The formula is used to compute the :
2
(1) Total ordering cost (2) Total carrying cost
(3) Opportunity cost (4) Re-order point
35. Financial Leverage is measured by :
EBIT EBIT EAIT C

(1) (2) (3) (4)
EAT EBT EBT EBIT
36. Which of the following is a key role of HR Manager as defined by Ulrich et al (2009) ?
(1) Personnel Administrator (2) Business Ally
(3) Payroll Advisor (4) Organizational Geographer
37. Which of the following is the most serious problem that might arise due to excessive reliance
on internal recruitment ?
(1) reduced job performance (2) high labour turnover
(3) lack of motivation (4) internal resistance
254
38. Match the methods of performance appraisal given in List - I with the explanations given in
the List - II :
List - I List - II
(a) Behaviourally Anchored Rating Scale (BARS) (i) Evaluator keeps a log of
critical incidents to evaluate
performance
(b) Management By Objectives (MBO) (ii) Evaluator indicates on a scale

how often the appraise was
actually observed engaging in
the specific behaviours
already identified
(c) Critical incident method (iii) Evaluator rates on the scale

described in the form of
critical incidents
(d) Behaviour observation scale (iv) Systematic and organized

approach that allows
management to focus on
achievable goals
Codes :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (i) (iv) (ii) (iii)
(3) (iii) (iv) (i) (ii)
(4) (ii) (i) (iv) (iii)
39. The internal factors affecting the wage mix include :
(a) Relative worth of the job (b) Area wage rates
(c) Employers ability to pay (d) Manpower market conditions
Codes :
(1) (a), (b) and (c) (2) (a) and (c)
(3) (b), (c) and (d) (4) All of the above
255
40. Match the items of List - I with the items of List - II :

List - I List - II
(a) Giri Approach (i) The utility of non-violence as the means of
conflict resolution.
(b) Industrial Sociology Approach (ii) Organizations are made up of people and the
success of management lies in its dealing with
these people.
(c) Gandhian Approach (iii) Voluntary negotiations between employers
and employees are a means of settling disputes.
(d) Human Relations Approach (iv) Investigating the underlying trends and
patterns in the cause and effect of industrial
disputes.
Codes :
(a) (b) (c) (d)
(1) (ii) (iii) (i) (iv)
(2) (iii) (iv) (i) (ii)
(3) (i) (iii) (ii) (iv)
(4) (i) (ii) (iv) (iii)
41. Assertion (A) : Taking of deposits and granting of loans single out banks.
Reasoning (R) : Banks act as intermediaries when they mobilize savings from surplus units
to shortage units in order to finance productive activities.
Codes :
(1) Assertion (A) is correct and Reasoning (R) is the correct explanation of (A).
(2) Both Assertion (A) and Reasoning (R) are correct but (R) is not the correct explanation
of (A).
(3) Assertion (A) is correct but Reasoning (R) is incorrect.
(4) Reasoning (R) is correct but Assertion (A) is incorrect.
42. Skimming in e-banking refers to :

(1) Identifying fraudsters copying vital information from credit cards
(2) Multiple transactions by one credit card
(3) Conversion of a debit card into credit card
256
43. Match the items of List - I with List - II in terms of functions of a bank :
List - I List - II
(Activities) (Functions)
(a) Underwriting (i) Primary Functions
(b) Transfer of funds (ii) Granting Advances
(c) Overdraft (iii) Utility Functions
(d) Recurring Deposits (iv) Agency Functions
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iv) (iii)
(2) (iv) (iii) (ii) (i)
(3) (iii) (iv) (ii) (i)
(4) (ii) (iv) (iii) (i)
44. Which among the following is not a subsidiary of Reserve Bank of India ?
(a) Deposit Insurance and Credit Gaurantee Corporation of India.
(b) Bharatiya Reserve Bank Note Mudran Private Limited.
Codes :
(1) Only (a) (2) Only (b)
(3) Both (a) and (b) (4) Neither (a) nor (b)
45. Which among the following is not associated with NABARD ?

(a) NIEAF (b) BIRD (c) RIDF (d) SHPI
Codes :
(3) (b) and (c) only (4) None of the above
Statement - (I) : Companies with Low cash reserves normally prefer Licensing mode rather
than Foreign Direct Investment.
Statement - (II) : Cash rich firms normally prefer Foreign Direct Investment.
Codes :
(1) Both (I) and (II) are correct (2) Both (I) and (II) are wrong
(3) (I) is correct but (II) is wrong (4) (I) is not correct but (II) is correct
257
47. Which one of the following is not a feature of Business Process Outsourcing (BPO) ?
(1) It enables executives to concentrate on strategy
(2) It improves process and saves money
(3) It decreases organizational capabilities
48. The major outcome of the Bretton Woods Conference was :

(1) Establishment of IMF and IFC (2) Establishment of IBRD and IFC
(3) Establishment of IBRD and ADB (4) Establishment of IMF and IBRD
49. Which one of the following is an important activity of the World Bank borrowings ?
(1) It borrows in the international capital market
(2) It borrows on currency on swap agreements
(3) It borrows under the discount net programme
(4) All of the above

(1) IFC was established in July 1956
(2) IFC encourages the growth and development of Public Sector Enterprises in member
countries
(3) IFC is an affiliate of the World Bank
(4) IFC encourages the growth of productive private enterprises in member countries
-o0o-
258
December 2015 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 4 11 2 21 3 31 1 41 1
2 1 12 2 22 2 32 3 42 1
3 3 13 4 23 2 33 3 43 3
4 2 14 1 24 4 34 2 44 4
5 3 15 2 25 3 35 2 45 4
6 2 16 1 26 3 36 2 46 1
7 3 17 3 27 4 37 4 47 3
8 1 18 3 28 1 38 3 48 4
9 2 19 3 29 2 39 2 49 4
10 4 20 2 30 4 40 2 50 2
259
DECEMBER 2015
PAPER
Note : This paper csntains o eventy five (75) s bjective type questisns s s two (2) marks each.
1. The method being used for Transferring Complex Technology is known as :

(1) Licensing Agreement (2) Transfer of Technology
(3) Turnkey Contract (4) None of the above
2. Which of the following is not a force in the Porter Five Forces Model ?
(1) Buyers (2) Suppliers
(3) Complementary produce (4) Industry rivalry
3. LIBOR term is used for :

(1) Deposit rate in European market
(2) Interest rate in Euro currency market
(3) Deposit rate applicable to interbank loans in London
(4) Interest rate in Euro bond market
4. Which of the following characterises the early stage financial crises ?

(1) Falling the price of residential properties
(2) Excessive euphoria about the future price of certain assets
(3) Excessive pessimism about future assets price
(4) Stragnating share price
5. Assertion (A) : In 1991 Government decided to allow all foreign investments to any industry
without any restrictions.
Reason (R) : Government has enhanced the investment limit of small scale industrial
units.
Codes :
(1) Both (A) and (R) are true and (R) is the correct explanation of (A).
(2) Both (A) and (R) are true but (R) is not the correct explanation of (A).
260
6. When a business is purchased, any amount paid in excess of the total of assets, minus the
liabilities taken, is called :
(1) Share Premium (2) Goodwill
(3) Capital Employed (4) Working Capital
7. Indicate the correct code as regards the sources of funds for a Funds Flow Statement from
the following :
(a) Increase in working capital
(b) Decrease in working capital
(c) Writing off the intangible/fictitious assets
(d) Issuing equity shares for acquisition of a building for office
(e) Charging depreciation on fixed assets
Codes :
(1) (a), (c), (d) (2) (b), (c), (e) (3) (a), (d), (e) (4) (b), (c), (d)
8. Which of the following statements are correct ?

(a) Analysis and interpretation of financial statements, is a function of accounting.
(b) Profit and Loss account is prepared for ascertaining financial position of a firm.
(c) Goodwill is a wasting asset.
(d) Balance Sheet is prepared for ascertaining financial position of a firm.
Select the correct answer using the codes given below :
Codes :
(1) (a) and (b) (2) (a) and (c) (3) (a) and (d) (4) (b) and (c)
9. Match the items of List - I with those of the List - II and indicate the correct code for the
following :
List - I List - II
(a) Debtors Turnover Ratio (i) Solvency Ratio
(b) Proprietary Ratio (ii) Liquidity Ratio
(c) Operating Ratio (iii) Activity Ratio
(d) Acid Test Ratio (iv) Profitability Ratio
Codes :
(a) (b) (c) (d)
(1) (ii) (iv) (iii) (i)
(2) (iii) (ii) (i) (iv)
(3) (iii) (i) (iv) (ii)
(4) (iv) (iii) (ii) (i)
261
10. For the following two statements of Assertion (A) and Reasoning (R), indicate the correct
code :
Assertion (A) : Cash Flow Statement as per the financial statements as well is incapable in
revealing the overall financial position of a firm.
Reasoning (R) : Cash is an important constituent of the working capital based on the
recorded facts only.
Codes :
(1) (A) and (R) both are correct and (R) is an explanation of (A).
(3) (A) is not correct but (R) is correct
(4) (A) and (R) both are incorrect
11. For the following two statements of Assertion (A) and Reasoning (R), indicate the correct
code :
Assertion (A) : The quantity of a commodity demanded invariably changes inversely to

changes in its price.
Reasoning (R) : The price effect is the net result of the positive substitution effect and negative
income effect.
Codes :
(1) (A) and (R) both are correct. (2) (A) is correct but (R) is incorrect.
(3) (A) is incorrect but (R) is correct. (4) (A) and (R) both are incorrect.
12. Economic capacity of a plant represents its :
(1) maximum physical output level
(2) average output level over a period
(3) break-even output and sales level
(4) output level that equates the average and the marginal costs
262
13. Match the items of List - I with those of the List - II and indicate the correct code :
List - I List - II
(a) Excess capacity of the plant (i) Cost reduction with output expansion
(b) Resorting to New Technology (ii) Constant cost with output expansion
(c) Setting up of the Training Institutions (iii) Internal economies
(d) Reserve capacity of the plant (iv) External economies
Codes :
(a) (b) (c) (d)
(1) (i) (iii) (iv) (ii)
(2) (iii) (i) (iv) (ii)
(3) (ii) (iii) (i) (iv)
(4) (iv) (ii) (iii) (i)
14. In case the elasticity of demand on an average revenue curve is equal to unity, the marginal
revenue will be :
(1) more than unity (2) equal to unity
(3) equal to a fraction of unity (4) equal to zero
15. Match the items of the List - I with those of the List - II and indicate the correct code :
List - I List - II
(a) Trade Channel Discount (i) Oligopoly Pricing
(b) Loss Leadership (ii) Locational Price Differentials
(c) Pricing being non - responsive to changes in (iii) Differential Pricing
the demand and the cost
(d) Basing Point Pricing (iv) Product - Line Pricing
Codes :
(a) (b) (c) (d)
(1) (iv) (iii) (ii) (i)
(2) (iii) (iv) (i) (ii)
(3) (ii) (iii) (iv) (i)
(4) (i) (ii) (iii) (iv)
263
16. Statement - I : When a null hypothesis gets rejected in statistical hypothesis testing, it is
known as II type - error in hypothesis testing.
Statement - II : When a sample is small sized and parametric value of the standard deviation
is not known, z - test is the most appropriate test for hypothesis testing.
Codes :
(1) Both statements are correct
(2) Both statements are incorrect
(3) Statement - I is correct while statement - II is incorrect
(4) Statement - I is incorrect while statement - II is correct
17. The following are the estimated regression equations for x and y variables :
x50.85y
y50.89x
With this information, the value of the coefficient of correlation would be :
(1) 0.87 (2) 0.86 (3) 0.89 (4) 0.75
18. The power of the statistical hypothesis testing is denoted by :

(1) a (alpha) (2) b (beta) (3) 1 - a (4) 1-b
19. Match the items of List - I and List - II and indicate the code of correct matching of the
items :
List - I List - II
z 2 . s p2
(a) (i) Measurement for Kurtosis
e2
X1 2 X 2
(b)  1 1  (ii) Calculated value of F ratio

s p2  1 
 n1 n2 
m4
(c) (iii) Statistical approach to find out the size of sample
m22
s s21
(d) (iv) Calculated z value of mean differences
s s22
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (ii) (iv) (iii) (i)
(3) (iii) (iv) (ii) (i)
(4) (iii) (iv) (i) (ii)
264
20. Assertion (A) : A reasonably large sized sample drawn randomly from a given population
contains almost all the characteristics of the population.
Reason (R) : As per the sampling theory, the assertion is based only on the Law of Inertia
of Large Numbers.
Codes :
(1) Assertion (A) is correct and Reason (R) as per the sampling theory is also fully correct.
(2) Assertion (A) is correct but the Reason (R) as per the sampling theory is not fully
correct.
(3) Both Assertion (A) and Reason (R) are incorrect.
(4) Assertion (A) is incorrect but the Reason (R) is sufficient as per the sampling theory.
21. Which of the following approaches of team building is based on the belief that each person
possesses positive and negative characteristics that must be owned up to a permitted
expression ?
(1) Process approach (2) Gestalt approach
(3) Role analysis approach (4) Parallel learning structure approach
22. Which of the following factors lead to group cohesiveness ?

(a) agreement on group goals (b) high intra-group competition
(c) frequent interaction of members (d) personal attractiveness
Codes :
(1) (a) and (b) (2) (a), (b) and (c) (3) (a), (c) and (d) (4) (a), (b) and (d)
23. Assertion (A) : Uncertainty Avoidance is one of the dimensions of cultural differences, as
identified by Geert Hofstede.
Reasoning (R) : Uncertainty Avoidance is the extent to which people feel threatened by
ambiguous situations. To avoid such situations, organisations provide
greater career stability, make more formal rules and reject deviant
behaviours.
Codes :
(1) (A) is wrong (R) is right
(2) Both (A) and (R) are wrong
(3) Both (A) and (R) are right and (R) is the correct explanation of (A)
(4) Both (A) and (R) are right but (R) is not the correct explanation of (A)
265
24. Which of the following is the internal conflict or anxiety that occurs when people receive
information incompatible with their value systems, prior decisions and knowledge ?
(a) Polarisation (b) Cognitive dissonance
(c) Premature evaluation (d) Projection
Codes :
(1) (a) and (b) (2) Only (b)
(3) Only (d) (4) (a), (b), (c) and (d)
25. Matrix organisation structure is essentially a violation of the principle of :

(1) Unity of Command (2) Scalar Chain
(3) Unity of Direction (4) Division of Labour
26. Which of the following statements is not true ?

(1) One sided messages work best with audiences those are initially predisposed to
communicators position.
(2) Two sided arguments work best with audiences who are similar and not opposed.
(3) Two sided messages tend to be more effective with better educated audiences.
(4) Two sided messages tend to be more effective with audiences those are likely to be
exposed to counter propaganda.
27. In the course of converting to a marketing-oriented company, a company may face which of
the following hurdles ?
(1) Organised resistance (2) Slow learning
(3) Fast forgetting (4) All of the above
28. A persons distinguishing psychological characteristics that lead to relatively consistent and
enduring responses to his or her environment is called :
(1) Life style (2) Self-concept (3) Personality (4) Attitude
29. When electronic markets permit prices to change faster even daily as a function of demand
and supply then this practice is called :
(1) competitive pricing (2) e-marketing pricing
(3) yield management pricing (4) none of the above
266
30. Match the strategies given in List - I with the examples given in List - II :
List - I List - II
(Strategies) (Examples)
(a) Differential Pricing (i) Customer lounges to sit in while waiting for a
table at service centres, etc.
(b) Complimentary Service (ii) Breakfast service by McDonalds and mini
vacation and weekends by hotels
(c) Reservation System (iii) Low prices for early and evening movies,
weekend discounts for car parking rentals
(d) Non-peak Demand Cultivation (iv) Airlines, Hotels and Physicians employ
extensively
Codes :
(a) (b) (c) (d)
(1) (i) (iii) (ii) (iv)
(2) (iv) (ii) (i) (iii)
(3) (ii) (i) (iv) (iii)
(4) (iii) (i) (iv) (ii)
31. From investors point of view, the cost of capital is :

(1) Interest Rate (2) Market Value
(3) Yield of Capital Sacrifice (4) Stock Exchange Value
32. Formula for net cash inflow of a project is :

(1) Sales2Operating Expenses2Interest2Tax
(2) Sales2Operating Expenses
(3) Net Profit after tax1Depreciation
(4) Gross Profit1Depreciation
33. Concentration Banking is a method of :

(1) Decentralised collection (2) Centralised collection
(3) Direct collection (4) Payment only through cheques
34. In case, cost of capital is 10%, EPS ` 10, IRR 8% and Retention Ratio is 60%, then the value
of equity share as per Gordons Model will be :
(1) ` 100 (2) ` 87 (3) ` 90 (4) ` 77
267
35. A firm with high operating leverage has :
(1) Low fixed cost in its production process
(2) High variable cost in its production process
(3) High fixed cost in its production process
(4) Low variable cost in its production process
36. Match the items of List - I with List - II according to The Harvard Framework developed
for HRM :
List - I List - II
(a) Stakeholders interest (i) Work systems
(b) Situational factor (ii) Cost - effectiveness
(c) HRM policy choice (iii) Individual well-being
(d) HR outcome (iv) Government
(e) Long - term consequence (v) Business strategy
Codes :
(a) (b) (c) (d) (e)
(1) (iv) (i) (ii) (iii) (v)
(2) (v) (iv) (ii) (i) (iii)
(3) (iv) (v) (i) (ii) (iii)
(4) (i) (v) (ii) (iii) (iv)
37. The committees which promote workers participation in management are usually established
only at the :
(1) Corporate level (2) Plant level
(3) Shop-floor level (4) All of the above
268
38. Choose the correct code for the statements given below :
Statement (I) : T-group and sensitivity training are not the same.
Statement (II) : T-group participants belong to a diverse groups and may not be familiar
with each other.
Statement (III) : T-group training sessions are well structured.
Codes :
(1) Statements (I) and (II) only are correct
(2) Only (II) and (III) statements are correct
(3) All the three statements are correct
(4) Only statement (II) is correct
39. A review is heavily influenced only by any one characteristic of the employee whose
performance is being reviewed is known as :
(1) Recency of Events Error (2) Central Tendency
(3) Logical Error (4) Halo Effect
40. Which one of the following tests is not recommended for the top level positions ?
(1) Presentations (2) Role plays
(3) Interviews (4) Leaderless group discussions
41. Select the major principles which banks strive to incorporate in their working from the
following :
(a) Profitability (b) Labour welfare
(c) Social welfare (d) Safety
(e) HRD (f) Liquidity
Codes :
(1) (a), (b), (d), (e) (2) (a), (c), (d), (f) (3) (c), (d), (e), (f) (4) (a), (b), (c), (d)
269
42. Identify the years in which different phases of Bank Nationalisation took place in India :
(a) 1950 (b) 1955 (c) 1969 (d) 1949 (e) 1980
Codes :
(1) (a), (b), (c), (d) (2) (b), (c), (e) (3) (b), (d), (e) (4) (c), (d), (e)
43. SWIFT stands for :
(1) Society for Worldwide Inter-bank Fund Transfer
(2) Society for Worldwide Inter-bank Fast Transmission
(3) Society for Worldwide Inter-bank Financial Telecommunications
44. Select the techniques of monetary control adopted by RBI from the following :
(a) Cash Reserve Ratio (b) Statutory Liquidity Ratio
(c) Bank Rate (d) Currency Rate
Codes :
(1) (a), (b), (c), (d) (2) (b), (c), (d) (3) (a), (c), (d) (4) (a), (b), (c)
45. Which of the following is not a development banking institution ?
(1) IDBI (2) IFCI
(3) EXIM Bank (4) ICICI
46. Which of the following is not a characteristic of bartering internationally ?
(1) Bartering can be time - consuming.
(2) Bartering can be expensive.
(3) Bartering is a type of service export and import.
(4) Bartering can be risky.
270
47. Assertion (A) : International business has grown in more recent years at a faster pace than
global production.
Reason (R) : Growth through trade has increased, but growth through foreign direct
investment has not.
Codes :
(1) Both (A) and (R) are correct (2) (A) is correct but (R) is incorrect
(3) (A) is incorrect but (R) is correct (4) Both (A) and (R) are incorrect
48. Identify the multinational corporations (MNCs) from the following :
(a) IOCL (b) GAIL (c) SBI
(d) SAIL (e) Tata Steel (f) Bharat Petroleum
Codes :
(1) (a), (b), (c), (d) (2) (b), (c), (d), (e) (3) (c), (d), (e), (f) (4) (a), (c), (e), (f)
49. Statement-I : Legal agreements between two countries govern how both the countries
tax earnings.
Statement-II : International Law may determine how and whether companies can operate
in a certain locale.
Codes :
(1) Both the statements are true
(2) Both the statements are false
(3) Statement-I is true but Statement-II is false
(4) Statement-I is false but Statement-II is true
50. Which of the following is an example of an issue for which an agreement has not been made
between two or more countries ?
(1) Restricting harmful emissions
(2) Deep-sea mining in non-coastal areas of the oceans
(3) Preserving endangered species
(4) Banning the use of certain pesticides
271
51. Match the items of List - I with List - II :

List - I List - II
(a) Intangible Assets (i) Ind AS 31
(b) Impairment of Assets (ii) Ind AS 34
(c) Interim Financial Reporting (iii) Ind AS 36
(d) Interests in Joint Ventures (iv) Ind AS 38
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iv) (iii) (ii) (i)
(3) (iv) (i) (ii) (iii)
(4) (iv) (ii) (i) (iii)
52. Assertion (A) : Human Resource Accounting is the measurement of the cost and value of
people to the organization.
Reasoning (R) : Human Resource Accounting involves measuring costs incurred by the
organizations to recruit, select, hire, train and develop employees and judge
their economic value to the organization.
Codes :
(1) Assertion (A) and Reasoning (R) are correct and (R) is the right explanation of (A)
(2) Assertion (A) and Reasoning (R) are correct and (R) is not the right explanation
of (A)
(3) Assertion (A) is correct but Reasoning (R) is incorrect
(4) Both Assertion (A) and Reasoning (R) are incorrect
53. For the discharge of its functions efficiently, SEBI has been vested with the following
powers :
(a) to approve by-laws of stock exchanges
(b) to direct the stock exchanges to amend their by-laws
(c) inspect the books of accounts and call for periodical returns from recognized stock
exchanges
(d) inspect the books of accounts of financial intermediaries
(e) compel certain companies to list their shares in one or more stock exchanges
(f) registration of brokers
Codes :
(1) (a), (b), (c) and (f) (2) (a), (c), (d) and (f)
(3) (b), (c), (d), (e) and (f) (4) (a), (b), (c), (d), (e) and (f)
272
54. Consider the following characteristics :
(a) High risk high return opportunity
(b) Small and medium size enterprise
(c) Private equity stakes in start-ups
(d) Investment fund
The above attributes are found in :
(1) Mutual Funds (2) Venture Capital Funds
(3) Qualified Institutional Buyers (4) Domestic Institutional Investors
55. Identify the incorrect statement(s), regarding money market, among the following :
(a) The call money market deals in short term finance repayable on demand, with a maturity
period varying from one day to 14 days.
(b) Treasury bills are instruments of short-term borrowing by the Government of India,
issued as promissory notes under discount.
(c) A reduction in the repo rate helps banks to get money at a cheaper rate.
(d) Money market mutual funds invest money in specifically, high-quality and very short
maturity-based money market instruments.
Codes :
(1) (a) and (c) (2) (b)
(3) (d) (4) None of the above
56. Buyers are less price sensitive when they cannot easily compare the quality substitutes.
Which of the following factors of price sensitivity is reflected from this statement ?
(1) Substitute - awareness effect (2) Unique value effect
(3) Price quality effect (4) None of the above
57. The model of decision support where there is recommendation of the type of advertisement
with humourous and slice of life kinds of appeals to use for given marketing goals and
characteristics of products, target markets and competitive situations is known as :
(1) MEDIAC (2) PROMOTOR (3) ADCAD (4) COVERSTORY
273
58. Which of the following statements is not true ?

(1) Marketing profitability analysis measures the profitability of different marketing
activities.
(2) Marketing efficiency studies try to determine how various marketing activities could
be carried out more efficiently.
(3) Each company needs to reassess periodically its marketing effectiveness through a
control instrument called marketing audit.
(4) All the above are true
59. Industry boundaries are blurring at an incredible rate as companies are recognizing that the
new opportunities lie at the intersection of two or more industries, it is called :
(1) Globalization (2) Customization
(3) Industry convergence (4) Acquisition
60. A picture of two characters is presented, with one making a statement. Respondents are
asked to identify with the other and fill in the empty balloon.
This description belongs to which one of the following projective techniques ?
(1) Thematic Apperception Test (2) Picture Completion Test
(3) Sentence Completion Test (4) Story Completion Test

List - I List - II
(Job Analysis) (Examples)
(a) Task (i) Payroll processing
(b) Element (ii) Compensation policy administrator
(c) Duty (iii) Compensation design manager
(d) Position (iv) Compensation specialist
(e) Job (v) Preparing forms
(f) Occupation (vi) Signing pay- cheques
Codes :
(a) (b) (c) (d) (e) (f)
(1) (i) (ii) (iii) (iv) (v) (vi)
(2) (v) (vi) (i) (ii) (iii) (iv)
(3) (vi) (v) (iv) (ii) (iii) (i)
(4) (vi) (i) (ii) (iii) (iv) (v)
274
62. In which of the following types of collective bargaining, one party gains at the expense of the
other ?
(1) Distributive bargaining (2) Integrative bargaining
(3) Centralized bargaining (4) None of the above
63. Which one of the following dispute settlers cannot make a binding decision ?
(1) Arbitrator (2) Adjudicator
(3) Conciliator (4) Industrial tribunal member
64. Ensuring the safety, health and welfare of the employee is the primary purpose of which one
of the following Acts ?
(1) The Factories Act, 1948
(2) The Payment of Wages Act, 1936
(3) The Equal Remuneration Act, 1976
(4) The Industrial Disputes Act, 1947
65. Match the items of List - I with the items of List - II and select the correct code :
List - I List - II
(a) Pension scheme (i) Health Care for family
(b) Personal security (ii) Severance Pay
(c) Financial assistance (iii) Provident Fund
(d) Allowance (iv) Transport Allowance
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iii) (i) (ii) (iv)
(3) (iii) (ii) (i) (iv)
(4) (i) (iv) (ii) (iii)
275
66. Examine the following statements and choose the correct answer :
Statement - I : FIIs do not invest in unlisted securities. They participate only through Stock
Exchanges.
Statement - II : FIIs cannot invest at the time of initial allotment.
Codes :
(1) Both the statements are wrong
(2) Both the statements are correct
(3) Statement-I is correct but the statement-II is wrong
(4) Statement-I is wrong but the statement-II is correct
67. Which one of the following is not a member country in the Association of South-East Asian
Nations (ASEAN) ?
(1) Singapore (2) Malaysia (3) Thailand (4) Vietnam
68. Match the items of List - I with the items of List - II and select the correct answer with the
codes given below :
List - I List - II
(a) SAAR (i) Philippines
(b) ASEAN (ii) Canada
(c) EU (iii) Afghanistan
(d) NAFTA (iv) Hungary
Codes :
(a) (b) (c) (d)
(1) (ii) (iv) (i) (iii)
(2) (iv) (ii) (i) (iii)
(3) (iii) (i) (iv) (ii)
(4) (iii) (iv) (ii) (i)
276
69. Which among the following are criticisms given against World Trade Organization (WTO) ?
(a) It is not a democratic and transparent institution.
(b) It has domination of international trade by rich countries for the benefit of their
individual interests.
(c) It encourages a race to the bottom in wages by pitting workers against each other
rather than promoting internationally recognized labor standards.
(d) It is seeking to privatize essential public services.
Codes :
(1) (b), (c) and (d) (2) (a), (b) and (c)
(3) (a), (b) and (d) (4) (a), (b), (c) and (d)
70. Domestic Currency tends to depreciate owing to :
(1) Constant inflation rate (2) Lowering of inflation rate
(3) High inflation rate (4) All of the above
71. Consider the following conditions :
(a) An individual is in India for a period of 182 days in the financial year in which he is
getting his salary income.
(b) An individual is in India for a period of 60 days or more during financial year in which
he gets his salary and 365 days or more during 4 years immediately preceding to that
financial year.
If one of the above conditions is satisfied, as per the provisions of Income Tax Act, 1961, he
is :
(1) Resident but not ordinarily resident of India
(2) Non-resident citizen of India
(3) Resident and categorised citizen of India U/S 29
(4) Ordinary resident of India
72. Agriculture income is exempted from income tax under the following section of Income Tax
Act, 1961 :
(1) 2 (1A) (2) 10 (1) (3) 10 (2) (4) 10 (4)
277

List - I List - II
(a) When the assessee is in default or is deemed to be (i) Section 271 (1) (c)
in default in making payment of tax, including
the tax deducted at source
(b) Failure to pay the advance tax as directed by the (ii) Section 273 (1)
Assessing Officer
(c) Concealment of particulars of income or (iii) Section 201 (1)
furnishing of inaccurate particulars of
income
Codes :
(a) (b) (c)
(1) (i) (ii) (iii)
(2) (iii) (ii) (i)
(3) (iii) (i) (ii)
(4) (ii) (i) (iii)
74. Assertion (A) : Tax evasion is undertaken by employing unfair means.

Reasoning (R) : Payment of tax is avoided through illegal means or fraud for tax evasion.
Codes :
(1) Assertion (A) is correct and Reasoning (R) is the right explanation of (A).
(2) Assertion (A) is correct but Reasoning (R) is not the right explanation of (A).
(3) Both Assertion (A) and Reasoning (R) are correct independently and (R) may be
considered as an explanation of (A).
(4) Both Assertion (A) and Reasoning (R) are incorrect.
75. Which among the following are necessary documents to file Income Tax Return for an
employed person in India ?
(a) Adhar Card
(b) PAN Card
(c) Form No. 16 issued by employer
Codes :
(1) (a) only (2) (a) and (b) (3) (a), (b) and (c) (4) (b) and (c)
-o0o-
278
December 2015 Paper III

Answer Key (1-75)
1 3 11 3 21 2 31 3 41 2 51 2 61 2 71 4
2 3 12 4 22 3 32 3 42 2 52 1 62 1 72 2
3 3 13 1 23 3 33 1 43 3 53 4 63 3 73 2
4 2 14 4 24 2 34 4 44 4 54 2 64 1 74 1
5 4 15 2 25 1 35 3 45 3 55 4 65 3 75 4
6 2 16 2 26 2 36 3 46 3 56 4 66 1
7 2 17 2 27 4 37 4 47 2 57 3 67 *
8 3 18 4 28 3 38 1 48 4 58 4 68 3
9 3 19 4 29 3 39 4 49 1 59 3 69 4
10 1 20 2 30 5 40 2 50 2 60 2 70 3
279
JUNE 2015
PAPER II
Note : Thio paper containo fifty (50) objective type queotiono oo two (2) marko each. All queotiono
are compulsory.
1. The worlds first electronic stock market is :

(1) KOSPI (2) Nikkie (3) NASDAQ (4) Dow Jones
2. The Human Development Index (HDI) is introduced by :

(1) UNDP (2) UNICEF (3) IMF (4) World Bank

Assertion (A) : American style option, compared to European style, provides more freedom
to option holders in exercising the option.
Reason (R) : American style option can be exercised only at a specified date which is
generally the expiration date.
Codes :
(1) Both (A) and (R) are correct. (2) Both (A) and (R) are wrong.
(3) (A) is correct, but (R) is wrong. (4) (A) is not correct, but (R) is correct.
4. From the statements given below, identify the correct code :

Statement (I) : The key strategy behind acquiring a company is to create share holders
value.
Statement (II) : Conglomeration is a merger between two companies that have common
business areas.
Statement (III) : MRTP Act got replaced by the Competition Act, 2002 in India.
Codes :
(1) All the three statements are correct.
(2) Statements (I) and (II) only are correct.
(3) Statements (I) and (III) only are correct.
(4) Statement (II) only is correct.
280
5. From the following, identify the tools of fiscal policy :

(i) Public expenditure
(ii) Open market operations
(iii) Deficit financing
(iv) Taxation
(v) Reserve requirements
Codes :
(1) (i), (iii), (iv) and (v) (2) (i), (ii), (iv) and (v)
(3) (ii) and (v) (4) (i), (iii) and (iv)
6. The basic difference between a static budget and flexible budget is that :
(1) A flexible budget considers only variable costs but a static budget considers all costs.
(2) Flexible budgets allow management latitude in meeting goals, whereas static budget is
based on fixed standards.
(3) A flexible budget is applicable for a single department only but a static budget for
entire production facility.
(4) A flexible budget can be prepared for any production level within a relevant range but
a static budget is based on one specific level of production.
7. A retiring partner continues to be liable for obligations incurred after his retirement :
(1) If unpaid amount is transferred to his loan account.
(2) If he does not give public notice.
(3) If he starts a similar business elsewhere.
(4) In all the situations till he survives.
8. In what order, the following assets are shown in the balance sheet of a company ?
(i) Trade receivables
(ii) Cash
(iii) Furniture and fittings
(iv) Investment in shares and debentures
Codes :
(1) (ii), (i), (iv), (iii) (2) (i), (ii), (iii), (iv) (3) (iii), (iv), (i), (ii) (4) (iv), (iii), (ii), (i)
281
9. When opening stock is ` 50,000, closing stock is ` 60,000 and the cost of goods sold is
` 2,20,000, the stock turnover ratio is :
(1) 2 times (2) 3 times (3) 4 times (4) 5 times
10. If : Stock turnover ratio is56 times
Average stock 5` 8,000
Selling price 525% above cost
What is the amount of gross profit ?
(1) ` 2,000 (2) ` 4,000 (3) ` 10,000 (4) ` 12,000
11. A rectangular hyperbola shaped demand curve on all its points has :
(1) Equal slopes of the price demand curve
(2) Price elasticity equal to unity
(3) Varying price elasticity
(4) Both slope and price elasticity equal
12. In case of short-run equilibrium, a perfectly competitive firm while earning abnormal profits
operates at an output level where :
(1) Marginal cost is the minimum
(2) Average cost is the minimum
(3) Both marginal cost and average cost are equal
(4) Marginal cost is higher than average cost
(1) Normally, a price demand curve slopes downward from left to right.
(2) Economies of scale and economies of scope are the same.
(3) For optimization, equality between marginal cost and marginal revenue is a necessary
condition but it is not a sufficient one.
(4) Law of variable proportions denotes input-output relationship during short-run.
282
14. Match the items of List-I with the items of List-II :

List-I List-II
(a) Law of diminishing marginal (i) Cross demand
utility
(b) Relationship between price of (ii) Oligopoly
one commodity and demand for
other commodity
(c) Skimming the cream policy (iii) Cardinal approach
(d) Price rigidity (iv) Pioneer pricing
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (iii) (i) (ii) (iv)
(3) (ii) (iv) (i) (iii)
(4) (iv) (iii) (ii) (i)
15. The following are the demand and supply equations in a perfectly competitive market :
P51210.3 Qs
P54020.4 Qd
The equilibrium market price would be :
(1) 24 (2) 10 (3) 40 (4) 20
16. Which of the following is not an accounting software package ?

(1) Quick Books (2) Sage one (3) Sage M (4) Sage 50
17. Which one of the following formula is used to calculate probable error of correlation-coefficient
between two variables of n pairs of observations ?
 1 2 r2   1 2 r2 
(1) 0.6745   (2) 0.5758  
 n   n 
 1 2 r2   1 2 r2 
(3) 0.675   (4) 0.5758  
 n   n 
18. If the population is heterogeneous, which one of the following probability sampling methods
is more appropriate ?
(1) Sequential sampling (2) Quota sampling
(3) Double sampling (4) Stratified sampling
283
19. Which of the following relating to normal distribution are not correct ?
(i) Co-efficient of skewness is three.
(ii) It is mesokurtic.
2
(iii) Mean deviation for it is s.
3
(iv) m62s covers 95.45% area.
(v) Mean, median and mode are equal.
(vi) The standard normal variate z has mean one and SD zero.
Codes :
(1) (i), (iii) and (vi) (2) (iii), (iv) and (v) (3) (i), (iii) and (v) (4) (i), (iii) and (iv)

(1) Both correlation and regression co-efficients have same sign.
(2) Arithmetic mean of the regression co-efficients is always more than the correlation
co-efficient.
(3) Regression co-efficients are independent of both the origin and scale.
(4) Correlation co-efficient is the square root of two regression co-efficients.
21. Match the items of List-I with List-II :

List-I List-II
(a) He who can manage, can manage (i) Henry Fayol
anything.
(b) Due to these experiments, a factory (ii) William B. Cornell
does not remain a factory, it is converted
into a laboratory.
(c) Management succeeds or fails as (iii) F.W. Taylor
human relations in business are
intelligently or unintelligently handled.
(d) A place for everything, and (iv) Lawrance A. Appley
everything in its place.
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (i) (ii) (iv) (iii)
(3) (iv) (iii) (ii) (i)
(4) (iii) (ii) (i) (iv)
284
22. Assertion (A) : Management is mainly associated with economic affairs.

Reasoning (R) : Big business houses are the result of effective financial management.
Codes :
(1) (A) is correct and (R) is the right explanation of (A).
(3) (A) is incorrect but (R) is correct in isolation.
23. Areas of establishing objectives under MBO are :

(i) Market Standing
(ii) Innovation
(iii) Industrial Relations
(iv) Public Accountability
(v) Productivity
(vi) Industrial Policy
Codes :
(1) (iii), (iv), (v) and (vi) (2) (i), (ii), (iv) and (v)
(3) (i), (ii), (v) and (vi) (4) (ii), (iii), (iv) and (v)
24. Match the items of List-I with List-II :

List-I List-II
(a) Management of Tomorrow (i) Chris Argyris
(b) Motivation and Personality (ii) Fredrick Hergberg
(c) The Motivation of Work (iii) L.F. Urwick
(d) Personality and Organisation (iv) A.H. Maslow
Codes :
(a) (b) (c) (d)
(1) (i) (iv) (ii) (iii)
(2) (iii) (iv) (i) (ii)
(3) (iv) (iii) (ii) (i)
(4) (iii) (iv) (ii) (i)
285
25. Narayan Murthy Committee revised its recommendations on Corporate Governance as on

29th October 2004 which diluted the following areas :
(i) Independence of Directors
(ii) Whistle Blower Policy
(iii) Performance evaluation of Non-Executive Directors
(iv) Mandatory training of Non-Executive Directors
Codes :
(1) (i), (ii) and (iii) only (2) (i) and (iii) only
(3) (i), (ii) and (iv) only (4) All (i), (ii), (iii) and (iv)
26. The service marketing mix is an extended marketing mix and includes :
(i) People
(ii) Process
(iii) Service
(iv) Physical evidence
Codes :
(1) (ii), (iii) and (iv) (2) (i), (ii) and (iii) (3) (i), (ii) and (iv) (4) (i), (iii) and (iv)
27. Black box model in marketing relates to :

(1) Marketing planning (2) Marketing mix
(3) Marketing control (4) Consumer behaviour
28. Items, considered part of the augmented product, do not include :

(1) Guarantee (2) Warranty
(3) Complementary products (4) Channels of distribution
29. Which of the following is not a type of direct marketing ?

(1) Direct mail marketing (2) Retail marketing
(3) Telemarketing (4) Email direct marketing
30. Press release is a part of :

(1) Public relations (2) Advertising
(3) Sales promotion (4) None of the above
286
31. In capital budgeting, the term capital rationing implies :

(1) that no retained earnings are available.
(2) that limited funds are available for investment.
(3) that no external funds can be raised.
(4) that no fresh investment is required in current year.
32. In certainty equivalent approach, adjusted cash flows are discounted at :

(1) Accounting Rate of Return (2) Internal Rate of Return
(3) Hurdle Rate (4) Risk Free Rate
33. Combined leverage is calculated as :

(1) Operating Leverage1Financial Leverage
34. Which of the following is not true with reference to capital budgeting ?
(1) Capital budgeting is related to asset replacement decisions.
(2) Cost of capital is equal to minimum required return.
(3) Existing investment in a project is not treated as sunk cost.
(4) Timing of cash flows is relevant.
35. What is Economic Order Quantity ?

(1) Cost of an order (2) Cost of stock
(3) Reorder level (4) Optimum order size
36. Which of the following is not a basic objective of HRM ?

(1) To attract HR into the organisation
(2) To develop and motivate HR for better performance
(3) To have the reward and punishment system for HR
(4) To integrate and maintain HR in the organisation
287
37. What is gate hiring ?
(1) To select people who approach on their own for employment in the organisation.
(2) To select people who are recommended by the employees.
(3) To select people from public employment exchanges.
(4) To select people supplied by labour contractors.
38. Matching essential managers and essential positions is a step in the process of :
(1) Career Cycle (2) Succession Planning
(3) Career Planning (4) Career Stages
39. The barriers to effective performance appraisal are :
(i) Psychological blocks of managers
(ii) Faulty assumptions of the parties concerned
(iii) Technical pitfalls
(iv) Faulty written communications
Codes :
(1) All are correct. (2) Only (ii) and (iii) are correct.
(3) Only (i) and (ii) are correct. (4) Only (i), (ii) and (iii) are correct.
40. Who has developed the Systems Approach of industrial relations ?
(1) John Dunlop (2) Garry S. Becker
(3) Michael J. Jucius (4) Edwin B. Flippo
41. In 1992, the banking sector reforms were introduced as per :
(1) C. Rangarajan Committee Report
(2) M. Narasimham Committee Report
(3) Suresh Tandulkar Committee Report
(4) Sukhamoy Chakrabarty Committee Report
288
42. For the purpose of extending rural banking and agro finance, the NABARD :
(1) Directly lends and monitors the rural borrowers
(2) Refinances the banks extending rural finance
(3) Refinances the rural borrowers obtaining credit from banks
(4) Directly finances the rural borrowers and gets refinance from government
43. When RBI grants loan to commercial banks and charges interest on it, it is called :
(1) Rapo rate (2) Reverse Rapo rate
(3) Sweep stack rate, basic rate (4) Bank rate
44. E-banking business is essentially regulated by the Information Technology Act, 2000, under
which personal signature is replaced by :
(1) Encrypted signature (2) Image signature
(3) Digital signature (4) Online signature
45. In order to control inflation and ensure stability in money market :
(1) The RBI works under the direction of ministry of finance, government of India.
(2) The RBI acts independently and can refuse the government directive.
(3) The RBI acts under the board of directors.
(4) The RBIs board of governors shall abide by the government directive.
46. In respect of international business, a project is called a turnkey project because :
(1) The licensee agrees to construct an entire plant in his home county and hands over the
key.
(2) The licensor starts the operation and hands over the key of the operating plant to the
licensee.
(3) The licensor starts the operation and then invites the licensee and hands over the key to
complete the remaining work.
(4) The licensor and the licensee jointly carry out the project and agree to share profit
equally.
289
47. Match the items in List-I with the items in List-II :

List-I List-II
(a) Bretton woods conference (i) WTO
(b) Soft loan window (ii) World Bank
(c) Geneva (iii) IFC
(d) Loan to private sector (iv) IDA
Codes :
(a) (b) (c) (d)
(1) (i) (iii) (ii) (iv)
(2) (iv) (iii) (ii) (i)
(3) (ii) (iv) (i) (iii)
(4) (iv) (ii) (iii) (i)
48. Assertion (A) : The member nations, consistently finding balance of payments crisis, may
approach the World Bank seeking financial accommodation to mitigate the
cirsis.
Reasoning (R) : The member nations facing balance of payments crisis can approach the
IMF seeking redressal of the BOP crisis.
Codes :
(3) (R) is correct and (A) is wrong.
49. In computation of balance of payments, overall balance of payments5

(1) Balance of current account1Balance of capital account1Statistical discrepancy
(2) Export of goods and invisibles2Import of goods
(3) Foreign exchange inflow2Foreign exchange outflow
(4) Export of goods and invisibles1Import of goods and invisibles
50. The instrument chosen for enhancement of international liquidity is :

(1) Society for World wide Inter bank Financial Telecommunications (SWIFT)
(2) Special Drawing Rights (SDRs)
(3) Multilateral Netting
(4) Netting of Payments
290
JUNE 2015 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 3 11 2 21 3 31 2 41 2
2 1 12 4 22 3 32 4 42 2
3 3 13 2 23 2 33 3 43 4
4 3 14 3 24 4 34 3 44 3
5 4 15 1 25 4 35 4 45 2
6 4 16 3 26 3 36 3 46 2
7 2 17 1 27 4 37 1 47 3
8 3 18 4 28 4 38 2 48 3
9 3 19 1 29 2 39 4 49 1
10 4 20 3 30 1 40 1 50 2
291
JUNE 2015
PAPER III
Note : This paper csntains o eventy five (75) s bjective type questisns s s two (2) marks each.
1. GNP at market prices2Indirect taxes1subsidies is referred to as :

(1) GNP at factor cost (2) GDP at factor cost
(3) NNP at factor cost (4) NDP at factor cost
2. EDI system got legal recognition under which one of the following Acts ?
(1) Electronics Act, 1996 (2) Right to Data Act, 1998
(3) DGFT Act, 1999 (4) Information Technology Act, 2000
3. Following statements are related to futures contracts. Choose the statements that are not
true :
(a) Purchase of a futures contract is called short position.
(b) Currency futures are traded on an exchange in standardised form and in fixed quantity.
(c) Default risk in futures contract is high compared to forward contract.
Codes :
(1) only (a) and (b) (2) only (a) and (c) (3) (a), (b) and (c) (4) only (b)
4. From the following, identify the trading blocks in the world and choose the correct code :
(a) European Union
(b) North American Free Trade Agreements
(c) South Asian Association of Regional Co-operation
(d) Central American Common Market
(e) Central African Customs Union
Codes :
(1) (a), (b) and (c) (2) (a), (b), (c) and (d)
(3) (a), (b), (c), (d) and (e) (4) (a), (b) and (e)
292
5. Match the items of List - I with items of List - II and choose the correct code :
List - I List - II
(a) Carroll Model (i) International trade
(b) Corlett - Hague Rule (ii) Interest rate
(c) Hecksher Ohlin Theorem (iii) Principles of taxation
(d) Knut Wick sells Theory (iv) Social responsibility of business
Codes :
(a) (b) (c) (d)
(1) (iv) (iii) (i) (ii)
(2) (iii) (ii) (i) (iv)
(3) (iii) (i) (ii) (iv)
(4) (ii) (iii) (i) (iv)
6. Labour Rate of Pay Variance can be calculated by which one of the following equations ?
(1) Budgeted Labour Costs2Actual Labour Costs
(2) (Standard Hours2Actual Hours)3Actual Wage Rate
(3) (Standard Wage Rate2Actual Wage Rate)3Actual Hours Worked
(4) (Standard Wage Rate2Actual Wage Rate)3Standard Hours Worked
7. Given :
Margin of Safety ` 80,000
Profit ` 20,000
Sales ` 3,00,000
What is the amount of Fixed Cost ?
(1) ` 1,00,000 (2) ` 75,000 (3) ` 55,000 (4) ` 20,000
8. Preparation of consolidated statement of accounts as per AS - 21 is :

(1) Optional
(2) Mandatory for Private Ltd. Companies
(3) Mandatory for Listed Companies
(4) Mandatory for all Companies
293
9. Which one of the following is not true of cash Budget ?

(1) The shortage or excess of cash would appear in a particular period.
(2) All inflows would arise before outflows for those periods.
(3) Only revenue nature cash flows are shown.
(4) Proceeds from issue of share capital is shown as an inflow.
10. Study the following transactions :

(a) Raising of short term loans
(b) Goods purchased for cash
(c) Payment of bonus in the form of shares
(d) Issue of shares in lieu of raw materials
Flow of funds is :
(1) (a), (b), (c), and (d)
(2) (b), (c), and (d)
(3) (c) and (d)
(4) Only (d)
11. When a consumer increases units of X - commodity by giving up some units of Y- commodity
and even to attain the same level of satisfaction, the marginal rate of substitution, will be
calculated by :
(1) Change in X - Commodity divided by change in Y - Commodity
(2) Change in X - Commodity divided by marginal utility of Y - Commodity
(3) Change in Y - Commodity divided by change in X - Commodity
(4) Change in Y - Commodity divided by marginal utility of X - Commodity
12. The following is the demand function in the small market :

Q55025P
Where Q denotes quantity in physical units and P denotes price of the commodity. At
price ` 5, the point price elasticity of demand would be :
(1) Zero (2) Equal to unity
(3) Highly elastic (4) Highly inelastic
294
13. Match the items of List - I with the items of List - II and find out the correct matching.
List - I List - II
Production functions Name of the shapes of returns to scale
(a) Q510.2 K0.19 L0.88 (i) Constant Returns to scale
(b) Q51.01 L0.75 K0.25 (ii) Diminishing Returns to scale
(c) Q50.84 L0.63 K0.3 (iii) Increasing Returns to scale
Codes :
(a) (b) (c)
(1) (i) (ii) (iii)
(2) (ii) (i) (iii)
(3) (ii) (iii) (i)
(4) (i) (iii) (ii)
14. In the short-run, when a simple monopoly firm attains equilibrium and earns only normal
profit, its level of output will correspond to :
(1) Lowest average cost
(2) Average cost above optimum level of output
(3) Average cost equals marginal cost
(4) Marginal cost much below average cost
15. Which one of the following is a false statement ?

(1) Ramsey pricing rates to the methodology of pricing to situations where firms are
regulated and the maximization of allocative efficiency is the objective of pricing
together with the objective of profit - maximization.
(2) Peak-load pricing is a pricing practice where price varies with time of the day.
(3) Value-pricing is the practice of pricing where the price is set based on its value to
the customer.
(4) Two - part tariff refers to a price structure which has two parts - a lump sum
charge and a variable charge.
16. All the properties of order, interval and zero origin are simultaneously possessed by :
(1) Nominal Data (2) Interval Data (3) Ratio Data (4) Ordinal Data
295
17. Under which of the following situations, chi - square test is applicable ?
(a) testing homogenity
(b) testing goodness of fit
(c) testing equality of two sample means
(d) testing equality of two sample proportions
(e) testing independence of attributes
Codes :
(1) Only (a), (b) and (c) (2) Only (a), (b) and (e)
(3) Only (c), (d) and (e) (4) Only (a), (c) and (e)
18. Which one of the following is not the correct statement regarding sampling distribution of
mean ?
(1) Sampling distribution of mean is normally distributed for large sized samples.
(2) Sampling distribution of mean is normally distributed for small sized samples
drawn from not normally distributed population.
(3) t distribution is not normally distributed.
(4) Mean of the sampling distribution of mean is equal to the parametric value of mean.
19. Consider the following statements and identify the wrong statements :
Statement - I : Accepting null hypothesis, when it is false, is called a level of
significance.
Statement - II : 12a is called power of a test.
Statement - III : Critical value of Z - static for two - tailed test at 5% level of significance
is 1.96.
Codes :
(1) Statements I, II and III
(2) Statements I and III
(3) Statements II and III
(4) Statements I and II
20. The process of thoroughly checking the collected data to ensure optimal quality level is referred
to as :
(1) Validation (2) Editing (3) Classification (4) Entry
296
21. Statement - (I) : Management is the art of knowing what you want to do and then
seeing that it is done in the best and the cheapest way.
Statement - (II) :Management is the process of planning and regulating the activities
of an enterprise.
(1) Statement (I) is correct, but (II) is incorrect
(2) Statement (II) is correct, but (I) is incorrect
(3) Both the statements (I) and (II) are incorrect
(4) Both the statements (I) and (II) are correct
22. Assertion - (A) : No business runs itself, even on momentum . . . . . every business
needs repeated stimulus.
Reasoning - (R) : The management is the dynamic, life giving element in every business,
without its leadership, the resources of production remain as resources
and never become production.
(1) Assertion (A) and Reasoning (R), both are correct, and (R) is the correct explanation
of (A).
(2) Assertion (A) and Reasoning (R), both are correct, but (R) is not the correct explanation
of (A).
(3) Assertion (A) is correct, but Reasoning (R) is incorrect.
(4) Reasoning (R) is correct, but Assertion (A) is incorrect.

List - I List - II
(a) Credit Mobilier (i) Charles Babbage
(b) Charleton Twist Company (ii) Henry Fayol
(c) Difference Engine (iii) Claud Henri Saint Simon
(d) Commentry Four Chambault (iv) Robert Owen
Codes :
(a) (b) (c) (d)
(1) (iii) (iv) (i) (ii)
(2) (iii) (i) (iv) (ii)
(3) (i) (iii) (iv) (ii)
(4) (ii) (i) (iv) (iii)
24. Find out the correct combination of statements with regards to business ethics :
(a) Business ethics is the behaviour that a business adheres to in its daily dealings.
(b) The ethics of a particular business can be diverse.
(c) Business ethics has normative and descriptive dimensions.
(1) Only (a) and (b) (2) Only (a) and (c)
(3) Only (b) and (c) (4) All (a), (b) and (c)
297
25. Which one of the following is not correct about business ethics ?
(1) Business ethics reflects the philosophy of business.
(2) Business ethics is a form of applied ethics.
(3) Business ethics are governed by the Government Policies.
(4) Ethics are the standards which govern decisions on daily basis.
26. A marketing network consists of :
(1) The tasks to devise marketing activities.
(2) The tasks of hiring, training and motivating employees.
(3) The activities that help in designing and implementing the marketing programmes.
(4) The company and its supporting stakeholders with whom it has built mutually profitable
business relationships.
27. Target marketing involves which of the following activities ?
(a) Market positioning
(b) Market targeting
(c) Market behaviour
(d) Market segmentation
Code :
(1) (a) and (b)
(2) (b) and (d)
(3) (a), (b) and (d)
(4) (b), (c) and (d)
28. The pricing strategy which adjusts the basic price to accommodate differences in customers,
products and locations is called :
(1) Differentiated pricing (2) Promotional pricing
(3) Geographical pricing (4) Price discounts and allowances
298
29. Horizontal marketing system comprises of :

(1) the producer, wholesaler and retailer acting in a unified system.
(2) multichannel marketing.
(3) two or more marketing channels to reach one or more customer segments.
(4) two or more unrelated companies put together resources to exploit an emerging market.

List - I List - II
(a) Face-to-face interaction with (i) Sales promotion
one or more prospective purchasers
(b) Any paid form of nonpersonal (ii) Public relations
promotion
(c) Short-term incentives to encourage (iii) Personal selling
purchase
(d) Programmes to promote companys (iv) Advertising
image
Codes :
(a) (b) (c) (d)
(1) (iii) (iv) (ii) (i)
(2) (iii) (iv) (i) (ii)
(3) (ii) (i) (iii) (iv)
(4) (ii) (iii) (i) (iv)
31. Which of the following techniques for appraisal of investment proposals are based on time
value of money ?
(a) Accounting Rate of Return
(b) Internal Rate of Return
(c) Profitability Index Method
(d) Earnings Per Share
Codes :
(1) (a) and (b) (2) (b) and (c) (3) (a) and (d) (4) (a), (b) and (d)
299
32. On the basis of the following information, what will be the EBIT corresponding to financial
indifference point ?
Total capital outlay ` 60,00,000
Financing Plans
(a) 100% Equity @ ` 10/- per share
(b) Debt equity ratio 2 : 1
Rate of interest 18% p.a., corporate tax rate 40%
(1) ` 10,00,000 (2) ` 12,00,000 (3) ` 10,80,000 (4) ` 12,80,000
33. Which one of the following assumptions is not included in the James E. Walter Valuation
model ?
(1) All financing by retained earnings only
(2) No change in the key variables such as EPS and DPS
(3) The firm has finite life
(4) All earnings are either distributed as dividends or invested internally immediately
34. Match the items of List - I with the items of List - II and find out the correct matching.
List - I List - II
(Formulae) (Type of leverages)
Contribution
(a) (i) Financial leverage
EBIT
EBIT
(b) Earnings before Tax (EBT) (ii) Super leverage
Contribution
(c) (iii) Operating leverage
EBT
Codes :
(a) (b) (c)
(1) (ii) (iii) (i)
(2) (i) (ii) (iii)
(3) (iii) (ii) (i)
(4) (ii) (i) (iii)
300
35. Statement - I : Working capital leverage measures the responsiveness of Return on Equity
for changes in current Assets.
Statement - II : When the annual demand for an item is 3200 units, unit cost ` 6, inventory
carrying charges 25% p.a. and cost of one procurement ` 150, the economic
ordering quantity would be 700 units.
Codes :
(1) Both statements are correct
(2) Both statements are incorrect
(3) Statement - I is correct and Statement - II is incorrect
(4) Statement - I is incorrect and Statement - II is correct

List - I List - II
Conventional HRM Strategic HRM
(a) Staff specialists (i) Fast and proactive
(b) Slow and reactive (ii) People and knowledge
(c) Capital and products (iii) Line managers
(d) Cost centre (iv) Investment centre
Codes :
(a) (b) (c) (d)
(1) (ii) (i) (iii) (iv)
(2) (ii) (iii) (i) (iv)
(3) (iii) (ii) (i) (iv)
(4) (i) (ii) (iii) (iv)
37. Which one of the following is a traditional method for selection of personnel ?
(1) Interview (2) Selection Test (3) Phrenology (4) Aptitude Test
38. The method of training in crafts, trades and technical areas is known as :
(1) Vestibule training (2) Coaching
(3) Mentoring (4) Apprenticeship
301
39. Behaviourally Anchored Rating Scale is a technique used for :
(1) Selection (2) Succession Planning
(3) Performance appraisal (4) Recruitment
40. Which one of the following is not a mechanism of managing stress ?
(1) Rust out (2) Cognitive therapy
(3) Job enrichment (4) Networking
41. Interest earned by a depositor against a deposit with a commercial bank for custodial
service :
(1) is a fund based income
(2) is a fee based income
(3) is a combination of fund and fee based gain
(4) is a commitment based gain
42. Match the items in List - I with the items in List - II :
List - I List - II
(a) ATM card (i) NPA
(b) Debts due for more than 30 days (ii) John Shephard Barron
(c) Micro finance (iii) State Finance Corporations Act
(d) State level finance corporations (iv) NABARD
Codes :
(a) (b) (c) (d)
(1) (i) (iii) (ii) (iv)
(2) (ii) (i) (iv) (iii)
(3) (iv) (iii) (ii) (i)
(4) (ii) (i) (iii) (iv)
302
43. Assertion (A) : A well developed money market is the basis for an effective monetary policy.
It is in the money market that the Central Bank comes into contact with the
financial sectors of the economy as a whole and it is through the liquidity in
the market that influence the cost and availability of credit.
Reasoning (R) : A well organised money market is an essential condition for the successful
operation of the Central Banking policies, and for holding the conditions of
liquidity within the bounds of what the monetary authorities consider
desirable.
(1) (A) is true but (R) is false
(2) (R) is true but (A) is false
(3) (A) is true and (R) offers correct explanation to (A)
(4) Both (A) and (R) are false
44. The operations of banks and financial institutions are regulated by :
(1) The RBI Act 1934 only
(2) The Banking Regulation Act 1949 only
(3) Information Technology Act 2000 only
45. To operationalise online, internet, mobile banking, debit card and credit card tools, some of
the essential ingredients are :
(1) Compliance with the Information Technology Act 2000
(2) Satellite connection
(3) Selection of a portal and server
46. Any country consistently facing balance of payment deficiency can approach :
(1) The World Bank
(2) The Smithsonian Institute
(3) IMF
(4) The IMF and the IBRD
303
47. Countertrade means :

(1) A sort of bilateral trade where one set of goods is exchanged for another set of goods
and a seller provides a buyer with deliveries.
(2) A company takes full responsibility for making its goods available in the target market
by selling directly to the end-users.
(3) The companies in two separate sovereigns agree to exchange one set of goods for another
set of goods.
(4) A set of multilateral trade where one of goods and services may be exchanged for
another set of goods and services among the trading partners.
48. The floating rate system is characterised by :

(1) the market forces that determine the exchange rate between two currencies.
(2) the central banking authorities of the two countries mutually agree upon the rate.
(3) help realigning the par value of major currencies.
(4) the rate of exchange mutually agreed upon between IMF and its member nations.
49. A practice of selling a commodity in a foreign market at a price lower than the domestic
price; and even at equal to the cost of production to capture foreign market is known as :
(1) Gouging (2) Forging (3) Dumping (4) Forfeiting
50. The highest percentage of export from India went to which of the following regions in
2013-14 ?
(1) OECD countries (2) USA
(3) SAARC (4) Latin America
51. Match the items of List - I with the items of List - II and select a correct code :
List - I List - II
(a) SEB (i) Exchange for small companies
(b) RBI (ii) Secondary market in treasury bills
(c) STCI (iii) Regulation of secondary market
(d) OTCEI (iv) Ad-hoc treasury bills
Codes :
(a) (b) (c) (d)
(1) (iv) (ii) (iii) (i)
(2) (iii) (iv) (ii) (i)
(3) (iii) (i) (ii) (iv)
(4) (ii) (iii) (i) (iv)
304
52. X Ltd. goes into liquidation and a new company Z Ltd. purchases the business of X Ltd. It is
a case of :
(1) Amalgamation (2) Absorption
(3) Internal reconstruction (4) External reconstruction
53. When the cost incurred on recruiting, training and developing the employees is considered
for determining the value of employees, it is called :
(1) The replacement cost approach (2) The historical cost approach
(3) The opportunity cost approach (4) None of the above
54. In India, NIFTY and SENSEX are calculated on the basis of :

(1) Market capitalisation (2) Paid up capital
(3) Free-float market capitalisation (4) Authorized share capital
55. Financial Instruments which are issued with detachable warrants and are redeemable after
certain period is known as :
(1) Deep Discount Bonds (2) Secured Premium Notes
(3) Bunny Bonds (4) Junk Bonds
56. Which of the following can be used by a company as communication mix to reach the target
customers ?
(a) Advertising
(b) Sales promotion
(c) Events and experiences
(d) Public relations
(e) Direct marketing
(f) Personal selling
Codes :
(1) (a), (b), (d) and (f) (2) (a), (b), (e) and (f)
(3) (a), (b), (d), (e) and (f) (4) (a), (b), (c), (d), (e) and (f)
57. In addition to motivation, learning and memory, which one of the following is included in
the main psychological processes affecting consumer behaviour ?
(1) Perception (2) Life cycle (3) Life style (4) Social class
305

List - I List - II
(a) Geographic Segmentation (i) Gender, income, religion
(b) Demographic Segmentation (ii) Knowledge, attitude, response
(c) Psychographic Segmentation (iii) Regions, cities, neighbourhoods
(d) Behavioural Segmentation (iv) Lifestyle, personality traits, values
Codes :
(a) (b) (c) (d)
(1) (ii) (iv) (iii) (i)
(2) (ii) (iv) (i) (iii)
(3) (iv) (ii) (i) (iii)
(4) (iv) (i) (ii) (iii)
59. Which one of the following is not a stage in the product life cycle ?
(1) Introduction (2) Growth (3) Equilibrium (4) Decline
60. Which one of the following is correct statement in respect of co-branding ?

(1) Co-branding is an umbrella branding of goods of a company.
(2) In co-branding, two or more well-known existing brands are combined into a joint
product.
(3) Co-branding is the process of combining two brands for promoting brand equity.
61. Which one of the following is not a major punishment ?

(1) Withholding of increments (2) Demotion
(3) Transfer (4) Suspension
62. Assertion (A) : Job evaluation is essentially a job rating process, not unlike the rating of
employees.
Reasoning (R): Job evaluation is a practice which seeks to provide a degree of objectivity in
measuring the comparative value of jobs within an organisation and among
similar organisations.
(1) Both Assertion (A) and Reasoning (R) are correct
(2) Both Assertion (A) and Reasoning (R) are incorrect
(3) Assertion (A) is correct, but Reasoning (R) is incorrect
(4) Reasoning (R) is correct, but Assertion (A) is incorrect
306
63. Identify the correct combinations from the following :
Training and Development

Skills Target Trainees
Methods
(a) Knowledge Deliberation/Lecture Managerial
(b) Multi-skills Vestibule training Operative
(c) Decision-making skills Management game Managerial
(d) Behavioural skills Sensitivity training Supervisory
Codes :
(1) (a), (b) and (c) (2) (a), (c) and (d)
(3) (b), (c) and (d) (4) (a), (b) and (d)
64. Which among the following are not part of staffing process ?
(a) Human Resource Planning (b) Recruitment
(c) Selection (d) Induction and Orientation
(e) Training and Development (f) Performance Appraisal
(g) Transfers (h) Separations
Codes :
(1) (e), (f), (g) and (h) (2) (g) and (h)
(3) (f) and (h) (4) None of the above
307

List - I List - II
(a) INTUC (i) 1920
(b) AITUC (ii) 1947
(c) CITU (iii) 1955
(d) BMS (iv) 1970
Codes :
(a) (b) (c) (d)
(1) (i) (ii) (iii) (iv)
(2) (ii) (i) (iv) (iii)
(3) (ii) (i) (iii) (iv)
(4) (iii) (i) (iv) (ii)
66. Assertion (A) : Amended Patent Act, in compliance with WTO, provides for grant of
product patent as well as a process patent for a period of 20 years from the
date of application.
Reasoning (R) : Under the Act, patent may be granted to an invention which means a new
product or process involving an inventive step and capable of industrial
application, a technical advance over existing knowledge.
Codes :
(1) Both (A) and (R) are true but (R), is not correct explanation to (A).
(2) (A) is false but (R) is correct.
(3) Both (A) and (R) are true and (R), is correct explanation to (A).
(4) (A) is correct but (R) is false.
67. Which of the following have been recognised under the intellectual property eligible for
creation of rights as per WTO mandate ?
(a) Computer software, music disc, performing art
(b) Geographical indicator
(c) Global positioning system
(d) Journals, books, seeds, design, brand
Codes :
(1) (a), (b) and (c) (2) (d), (c) and (a)
(3) (a), (b) and (d) (4) (c), (a) and (b)
308
68. NAFTA came into force from January, 1994 embracing :

(1) The USA, Canada, Cuba, Trinidad and Tobago
(2) The USA, Canada, Mexico
(3) Cuba, Mexico, USA, Havana
(4) Trinidad, The USA, Mexico
69. A common market is one where :

(1) all the trading nations agree commonly to levy a common and uniform tariff rate for all
goods.
(2) all the trading nations agree commonly to rationalise tariff and non-tariff barriers
mutually to promote intra-region trade.
(3) there is a customs union along with free intra - union movement of factors of production.
(4) there is an economic union along with free intra-union movement of residents.
70. The Maastricht Treaty of February, 1992 renamed the European Community (EC) as :
(1) the European Union (EU)
(2) the European Economic Union (EEU)
(3) the European Monetary Union (EMU)
(4) the European Economic Community (EEC)
71. In which of the following cases, Assessing officer has the discretion to assess the income of
the previous year in the previous year or in the subsequent assessment year ?
(1) Shipping business of non-residents
(2) Association of Persons (AOP) or Body of Individuals (BOI) formed for a particular
event or purpose
(3) Assessment of persons likely to transfer property to avoid tax
(4) Discontinued business
72. Rental income received by a foreign individual, from another foreign individual, in respect of
the property situated in Delhi is taxable in the hands of :
(1) Resident and Ordinarily Resident (OR) only
(2) Ordinarily Resident (OR) and Not Ordinarily Resident (NOR) only
(3) Non Resident (NR) only
(4) Ordinarily Resident (OR), Not Ordinarily Resident (NOR) and Non Resident (NR)
309
73. Which of the following income is not chargeable under the head income from business and
profession ?
(1) Profits and Gains carried on by an assessee during the previous year.
(2) Income derived by a trade professional or similar association from specific services
performed for its members.
(3) Income from the activity of owning or owning and maintaining race horses.
(4) Salary received by a partner of a firm from the same firm.
74. Mr. A earned a capital gain of ` 100 lakhs on 31-2-2014 from the sale of a long term capital
asset (land) within the limits of Jaipur corporation. If he invests ` 60 lakhs, out of
` 100 lakhs, in Rural Electricity Corporation Bonds approved under Sec. 54 EC in 20-2-2014,
what is the amount of exemption he can claim under Sec. 54 EC of Income Tax Act for the
AY 2014-15 ?
(1) ` 60 lakhs (2) ` 50 lakhs (3) ` 100 lakhs (4) ` 30 lakhs
75. Under which of the following situations, the Appellate Tribunal can rectify the mistake in
the order passed by it under Sec 254 (2) of Income Tax Act ?
(a) If subsequent decision of the Supreme Court/High Court is available on the subject
after the Appellate Tribunals order
(b) If an assessee apply for rectification of the Tribunals order by raising fresh grounds
before the Tribunal
(c) If the omission or mistake is on the part of Appellate Tribunal
(d) If the order is passed by the Appellate Tribunal under an erroneous impression of fact
or law
Codes :
(1) (a), (b) and (c)
(2) (b), (c) and (d)
(3) (a), (c) and (d)
(4) only (c) and (d)
310
JUNE 2015 PAPER III

Answer Key (1-75)
1 1 11 3 21 4 31 2 41 1 51 2 61 3 71 4
2 4 12 2 22 1 32 3 42 2 52 4 62 1 72 4
3 2 13 3 23 1 33 3 43 3 53 2 63 2 73 3
4 3 14 4 24 4 34 1 44 4 54 3 64 4 74 1
5 1 15 1 25 3 35 2 45 4 55 2 65 2 75 3
6 3 16 3 26 4 36 2 46 3 56 4 66 3
7 3 17 2 27 3 37 3 47 1 57 1 67 3
8 3 18 2 28 1 38 4 48 1 58 4 68 2
9 3 19 4 29 4 39 3 49 3 59 3 69 2
10 4 20 1 30 2 40 1 50 1 60 2 70 1
311
DECEMBER 2014
Paper – II
1. The responsibility of the organization to the workers includes :

(i) The payment of fair wages
(ii) Arrangement of proper training and education of the workers
(iii) The installation of an efficient grievance handling system
(iv) Welfare of family members
(v) The provision of the best possible working conditions
Identify the correct combination :
(A) (i), (ii), (iii) and (v) (B) (ii), (iii), (iv) and (v)
(C) (i), (ii), (iii) and (iv) (D) (i), (iii), (iv) and (v)
2. Match the items of List – I with List – II :

a. Industries Development Regulation Act i. 1947
b. Import and Export Control Act ii. 1948
c. Foreign Exchange Management Act iii. 1951
d. Factories Act iv. 1999
Codes :
a b c d
(A) i iii iv ii
(B) iii i ii iv
(C) iii i iv ii
(D) iii iv ii i
3. Which among the following is not a correct sequential combination ?

(A) Macro Environment → Economic Environment → National Income → Pattern of
Income Distribution
(B) Business Environment → Internal Environment → Business Ethics → Payment of
Fair Wages
(C) Business Environment → External Environment → Micro Environment →
Suppliers
(D) Macro Environment → External Environment → Customers → Prospects of
Business Development
312
4. Which among the following is not a correct combination ?

(A) Industrial Policy – 1948
(B) Industrial Policy Statement – 1977
(C) Industrial Policy Statement – 1980
(D) Industrial Policy Statement – 1991
5. Statement – I : The industrial policy of the Government of India is aimed at increasing

the tempo of industrial development.
Statement – II : After the New Industrial Policy – 1991, the Balance of Trade for India
has always been positive.
Codes :
(A) Statement (I) is correct, but (II) is incorrect.
(B) Statement (II) is correct, but (I) is incorrect.
(C) Both Statements (I) and (II) are correct.
(D) Both Statements (I) and (II) are incorrect.
6. Current Ratio 2.5, Liquid Ratio 1.5 and Working Capital ` 60,000. What is Current Assets ?
(A) ` 60,000 (B) ` 80,000
(C) ` 1,00,000 (D) ` 1,20,000
7. X, Y, Z are sharing profits in the ratio of 6 : 5 : 3. A is admitted into partnership for 1/8th
share. The sacrificing ratio of X, Y and Z is
(A) Equal (B) 6:5:3
(C) 5/14, 4/14, 5/14 (D) 4 : 5 : 5
8. Accounting information given by a company :

Total assets turnover 3 times
Net profit margin 10%
Total assets ` 1,00,000
The net profit is
(A) ` 10,000 (B) ` 15,000
(C) ` 25,000 (D) ` 30,000
313
9. “Make sufficient provisions for future losses, but do not anticipate future profits.” This
statement is in accordance to the concept of :
(A) Matching (B) Objectivity
(C) Conservatism (D) Materiality
10. When a firm is dissolved, profit or loss on realisation is shared by the partners
(A) Equal
(B) In the ratio of their capital balances
(C) In the profit sharing ratio
(D) In the ratio laid down in Garner Vs. Murray
11. The inverse relationship between variations in the price and quantity demanded is not due
to
(A) Income Effects (B) Substitution Effects
(C) Future Expectations (D) Law of Diminishing Marginal Utility
12. Consumer is said to be in equilibrium, maximizing his total utility, when

(A) the marginal utilities of the two goods consumed are equal.
(B) the proportions of the marginal utilities and respective prices are equal.
(C) the consumer gets full satisfaction from the consumption.
(D) the consumer feels satisfied with his expenditure on the various goods.
13. Match the items of the following two lists and suggest the correct code :
a. Zero Income Elasticity i. Substitute goods
b. Unit Cross Elasticity ii. Complementary goods
c. Positive Cross Elasticity iii. Indifferent goods
d. Negative Cross Elasticity iv. Independent goods
Choose the correct option :
Codes :
a b c d
(A) iii ii i iv
(B) ii iii iv i
(C) iii iv i ii
(D) iv i ii iii
314
14. Statement (A) : The isoquant curves are drawn convex to the origin due to diminishing
technical rate of substitution.
Statement (B) : The lesser the convexity of the isoquant curve the greater the possibility
of the complementarity of the two inputs.
Codes :
(A) Statements (A) and (B) both are correct.
(B) Statement (A) is correct but (B) is incorrect.
(C) Statement (A) is incorrect but (B) is correct.
(D) Statements (A) and (B) both are incorrect.
15. Match the items of the List – I with those of List – II and suggest the correct code :
a. Constant average cost over a i. Economic capacity
range of output
b. Average cost becomes constant ii. Reserve capacity
momentarily
c. Normal average cost is a iii. Production and Managerials
U-shaped curve costs effects
d. Modern Long-run average cost is iv. Economies and Diseconomies
L-shaped
Codes :
a b c d
(A) i ii iii iv
(B) ii iii iv i
(C) iii iv ii i
(D) ii i iv iii
16. Which one of the following is not probability sampling method ?

(A) Simple Random Sampling (B) Cluster Sampling
(C) Judgemental Sampling (D) Systematic Sampling
17. The research carried out to expand the knowledge of a particular field is known as
(A) Applied research (B) Qualitative research
(C) Quantitative research (D) Basic research
315
18. In univariate data analysis t-test is used when the data are in the form of
(A) Metric data with one sample
(B) Non-metric data
(C) Non-metric data with independent variable
(D) Metric data with independent two sample
19. To show the trend for a variable, which one of the presentation method is used ?
(A) Histogram (B) Frequency polygon
(C) Line graph (D) Scatter graph
20. Which one of the following objectives is not the objective of secondary data collection ?
(A) Identify the problem
(B) Test the hypotheses of the relevant present problem
(C) Better define the problem
(D) Interpret primary data more insightfully
21. The structure of an organisation in which there is separation of ownership and

management is called
(A) Sole proprietorship (B) Partnership
(C) Company (D) Cooperative society
22. When a person transacts with a company on matters which is beyond the power of the
company, the person will be governed by the Doctrine of
(A) Management by Exception (B) Constructive Notice
(C) Indoor Management (D) Self Management
23. Assertion (A) : MBO is effective way of planning and organizing the work.
Reason (R) : Employees participate in setting the objectives.
Codes :
(A) Both (A) and (R) are true.
(B) Both (A) and (R) are false.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is correct.
316
24. The appropriate sequence of the formation of a company are in the following order :
(A) Promotion, commencement of business and incorporation
(B) Promotion, incorporation, capital subscription and commencement of business
(C) Capital subscription, promotion, incorporation and commencement of business
(D) Incorporation, capital subscription, commencement of business and promotion
25. Delegation of authority makes the size of the organization :

(A) Smaller organization
(B) Larger organization
(C) Very big organization
(D) It does not affect the size of the organization
26. Managerial Grid suggests the following as the best leader behaviour :
(A) High structure and high consideration
(B) Low structure and low consideration
(C) High concern both for production and people
(D) Low concern both for production and people
27. Marketing strategy development is also known as

(A) Marketing Control (B) Marketing Exercise
(C) Marketing Planning (D) Situation Analysis
28. For most people, the purchase of cheese for daily use can be described as a
(A) Completely novel buy (B) Modified re-buy
(C) Routine re-buy (D) High involvement product
29. The promotion mix of a company consists of these –

(A) Marketing communication, promotion decisions
(B) Personal selling, product objectives
(C) Advertising, personal selling, sales promotion , publicity and public relations
(D) Consumer psychology, buyers motives, brand equity
317
30. Rational buying motives that determine purchase decisions are mostly based on
(A) Price factor (B) Psychological factors
(C) Quality of product (D) Advertisement
31. Statement – I : Capital structure refers to composition of long-term funds.

Statement – II : These include equity share capital, preference share capital, debentures,
all debts and all reserves.
(A) Both Statements I and II are correct.
(B) Statement I is correct but Statement II is incorrect.
(C) Statement I is incorrect but Statement II is correct.
(D) Both statements are incorrect.
a. Pay-back Rate of Return i. Discounted Cash Flow Technique
b. Internal Rate of Return ii. Compounded values of investments
and returns
c. Benefit Cost Ratio iii. Crude method for project evaluation
d. Net Terminal Value Method iv. Varying sized projects evaluation
Codes :
a b c d
(A) ii iii i iv
(B) iii i iv ii
(C) i iv ii iii
(D) iv ii iii i
a. Realised yield method i. Cost of equity share capital
b. Taxation ii. Cost of equity capital
c. Cost of total capital employed iii. Cost of debt capital
d. Dividend growth is a consideration iv. Weighted cost of capital
Codes :
a b c d
(A) iv iii ii i
(B) ii iv i iii
(C) ii iii iv i
(D) i ii iii iv
318
34. Cash Flow Management involves :

I. Lock-box system
II. Marketable securities
III. Playing the float
IV. Concentration Bank Account
Codes :
(A) I, II and III only (B) II, III and IV only
(C) I, III and IV only (D) I, II and IV only
35. Dividend capitalisation model was developed by

(A) Ezra Solomon (B) Myron J. Gordon
(C) James E. Walter (D) Merton H. Miller and Franco Modigliani
36. The process of narrowing a large number of candidates to a smaller field is called
(A) Rushing (B) Recruitment
(C) Selection (D) Enrollment
37. According to which theory, people are motivated to the extent to which they expect that
their actions will help in achievement of goals ?
(A) Vroom’s Vector Valence Theory (B) Need Theory
(C) Z Theory (D) X Theory
38. Match the items of List – I with List – II and select the correct code :
a. Getting Effective Leadership in the i. Dale Yoder
Industrial Organization
b. The Nature of Leadership, ii. Alford and Beatty
Organization and Management
c. Industrial Management iii. Douglas McGregor
d. Personnel Management iv. Chester I. Bernard
Codes :
a b c d
(A) i ii iii iv
(B) iii iv ii i
(C) iii iv i ii
(D) iv iii ii i
319

a. AITUC i. Indian National Congress
b. BMS ii. Socialists
c. INTUC iii. Rashtriya Swayamsevak Sangh
d. CITU iv. Communist Party of India
Codes :
a b c d
(A) iv iii ii i
(B) iv i ii iii
(C) iv iii i ii
(D) iv i iii ii
40. The main characteristics of Weber’s bureaucracy are :

(A) Specialization (B) Hierarchy of authority
(C) System of rules (D) All of the above

a. RBI Nationalization i. 1964
b. Imperial Bank Nationalization ii. 1949
c. Nationalization of 14 Commercial Banks iii. 1955
d. Establishment of IDBI iv. 1969
Codes :
a b c d
(A) i ii iii iv
(B) ii iii i iv
(C) iii ii iv i
(D) ii iii iv i
320
42. As per the RBI Act, 1934, the following functions are described as the functions of a
Central Bank :
(i) Banking functions
(ii) Advisory functions
(iii) Supervisory functions
(iv) Promotional functions
(A) (i), (iii) and (iv) (B) (i), (ii) and (iv)
(C) (ii), (iii) and (iv) (D) Only (i) and (iii)
43. Phishing is an attempt to acquire :

(A) Loan from unauthorized firms
(B) Sensitive information such as username, password, etc.
(C) Personal information from banks
(D) None of the above
44. What is Call Money ?

(A) Money borrowed or lent for a day or overnight.
(B) Money borrowed for more than one day but upto 3 days.
(C) Money borrowed for more than one day but upto 7 days.
(D) Money borrowed for more than one day but upto 14 days.
45. The Regulatory Authority of Regional Rural Banks is

(A) NABARD (B) Central Government
(C) State Government (D) Sponsor Bank
46. Which of the following is not ensured to the consumer in the globalization ?
(A) Lower prices (B) Better selection
(C) Clear origin of goods and services (D) Improved services
321
47. In international trade which of the following is a non-tariff trade barrier ?

(A) Quotas (B) Import bans
(C) Export controls (D) Anti dumping laws
48. Match the items of List – I with items in List – II and select a correct code :
a. Current Account i. Official Capital
b. Capital Account ii. Reserves from foreign countries
c. Unilateral Payments iii. Reparations
d. Official Statement Account iv. Visible Exports and Imports
Codes :
a b c d
(A) i iii ii iv
(B) iv i ii iii
(C) iv i iii ii
(D) iii ii i iv
49. Match the items of List – I with the items in List – II and select a correct code :
a. Vishesh Krishi Upaj Yojana i. Scheme intended to reduce difficulties
of exporters
b. EPCG ii. Duty Entitlement Pass Book
c. DFRC iii. To boost exports of fruits, vegetables,
flowers, minor forest produce etc.
d. DEPB iv. Relating to import of duty free fuel
Codes :
a b c d
(A) iv i ii iii
(B) iv iii i ii
(C) iii iv ii i
(D) iii i iv ii
50. Which of the following is not the agency of World Bank ?

(A) MIGA (B) ICSID
(C) ADB (D) IDA
322

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 A 11 C 21 C 31 B 41 D
2 C 12 B 22 B 32 B 42 A
3 D 13 C 23 A 33 C 43 B
4 D 14 B 24 B 34 C 44 A
5 A 15 D 25 B 35 B 45 A
6 C 16 C 26 C 36 C 46 C
7 B 17 D 27 C 37 A 47 B
8 D 18 D 28 C 38 B 48 C
9 C 19 C 29 C 39 C 49 D
10 C 20 B 30 B 40 D 50 C
323
DECEMBER 2014
Paper – III

(International Economic Groups) (Year of Establishment)
a. European Union (EU) i. 1973
b. European Free Trade Association (EFTA) ii. 1992
c. Caribbean Community (CARICOM) iii. 1985
d. South Asian Association for Regional iv. 1960
Cooperation (SAARC)
Codes :
a b c d
(A) ii iv iii i
(B) ii iv i iii
(C) iv ii i iii
(D) iii i ii iv
2. The important objectives of WTO are :

(i) To improve the quality of technology in the member countries.
(ii) To improve the standard of living of people in the member countries.
(iii) To ensure full employment and broad increase in effective demand.
(iv) To enlarge production and trade of goods.
(v) To increase trade of services
Codes :
(A) (i), (ii), (iii) and (iv) (B) (ii), (iii), (iv) and (v)
(C) (i), (ii), (iii) and (v) (D) (i), (iii), (iv) and (v)
3. Assertion (A) : The industrial growth in India has been hampered by the burden of many
controls and regulations.
Reason (R) : The New Industrial Policy seeks to liberate the industry from the shackles of
Licensing System.
Codes :
(A) Assertion (A) is correct, but Reason (R) is not correct.
(B) Assertion (A) is correct and Reason (R) is right explanation of (A).
(C) Both Assertion (A) and Reason (R) are correct.
(D) Both Assertion (A) and Reason (R) are incorrect.
324
4. Internal environment of a business includes :

(i) Business ethics and moral standards
(ii) Business and managerial policies
(iii) Prospects of business development
(iv) Government rules and regulations
(v) Industrial relations
Codes :
(A) (i), (ii), (iv) and (v) (B) (ii), (iii), (iv) and (v)
(C) (i), (ii), (iii) and (iv) (D) (i), (ii), (iii) and (v)
5. Identify the incorrect combination from the following :

Finance Constituted Report Chairman
Commission (Year) Submitted (Year)
st
(A) 1 1951 1953 K.C. Neogi
th
(B) 7 1977 1978 J.M. Shelat
th
(C) 11 1998 2000 N.K.P. Salve
th
(D) 13 2007 2009 V.L. Kelkar
6. A flexible budget requires careful study and classification of expenses into

(A) Product expenses and period expenses
(B) Past and current expenses
(C) Administrative, selling and factory expenses
(D) Fixed, semi-variable and variable expenses
7. Responsibility accounting aims at collecting and reporting costing information

(A) Department-wise (B) Cost centre-wise
(C) Function-wise (D) Product-wise
8. Return on Investment (RoI) is computed as

(A) Net Profit Ratio × Capital Turnover Ratio
(B) Operating Net Profit Ratio × Shareholders Fund
(C) Net Profit / Sales
(D) Cost of Sales / Capital Employed
9. Margin of Safety is calculated by using

Profit Fixed Cost
(A) P / (B)
V Ratio Contribution
Break Even Sales Profit
(C) (D) Sales
Sales
325
10. Pre-acquisition profit in subsidiary company is considered as

(A) Revenue profit (B) Capital profit
(C) Goodwill (D) Minority interest
11. Assertion (A) : The financial statements prepared on historical cost basis result into an
erosion of capital in the long run.
Reason (R) : Maintaining the books of accounts as per Current Purchasing Power
Technique only may contain the inflationary pressure.
In the context of above two statements, which one of the following is correct one ?
(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).
(D) (A) is false, but (R) is true.
12. Secondary market intermediaries for corporate securities in India are

I. Investors II. Jobbers
III. Brokers and sub-brokers IV. Portfolio consultants
Codes :
(A) I, II and III only (B) II, III and IV only
(C) II and III only (D) III and IV only
13. The type of lease requiring an agreement between the financier and lessor is known as
(A) Financial lease (B) Sale and lease back
(C) Leveraged lease (D) Operating lease
14. Match the various stock exchanges in List – I with the years of their establishment in
List – II as follows and suggest the correct code :
a. National Stock Exchange (NSE) i. 1875
b. MCX Stock Exchange (MCX-SX) ii. 1992
c. Bombay Stock Exchange (BSE) iii. 2000
d. Interconnected Stock Exchange of India (ISEI) iv. 2008
Codes :
a b c d
(A) ii iv i iii
(B) ii iii iv i
(C) i iii ii iv
(D) iii ii iv i
326
15. Monopolists prefer to sell the products in the markets with

(A) Elastic demand (B) Unitary elastic demand
(C) Inelastic demand (D) Absence of elasticity of demand
16. Assertion (A) : In long run under Perfect Competition all firms invariably get only normal
profit.
Reason (R) : All firms incur minimum average cost and incur no selling cost due to
absence of product differentiation.
Codes :
(A) Assertion (A) and Reason (R) both are correct.
(B) Assertion (A) is correct, but Reason (R) is incorrect.
(C) Assertion (A) is incorrect, but Reason (R) is correct.
(D) Assertion (A) and Reason (R) both are incorrect.
17. Assertion (A) : Differential pricing structure is designed to accommodate the various
categories of buyers.
Reason (R) : It aims at increasing sales and revenues and driving the competitors out
from the market.
Codes :
(A) Assertion (A) and Reasoning (R) both are correct.
(B) Assertion (A) is correct, but Reasoning (R) is incorrect.
(C) Assertion (A) is incorrect, but Reasoning (R) is correct.
(D) Assertion (A) and Reasoning (R) both are incorrect.
18. Cost-plus pricing is considered appropriate for :

I. Product Tailoring II. Public Utility Pricing
III. Refusal Pricing IV. Monopoly Pricing
Codes :
(A) I and II only (B) I, II and III only
(C) II, III and IV only (D) III and IV only
19. For promoting sales advertising endeavours may be made as per

I. Competitive parity II. Objective and task
III. Tied sales IV. All-one-can-Afford
Codes :
(A) I and II only (B) II, III and IV only
(C) I, II and IV only (D) III and IV only
327
20. In the hypothesis testing procedure a researcher may commit type II error in which of the
following conditions ?
(A) When the true null hypothesis is rejected.
(B) When the alternative hypothesis is accepted.
(C) When the false null hypothesis is accepted.
(D) When the true null hypothesis is accepted.
21. Which one of the following tenets is not correct in the context of Central Limit Theorem ?
(A) If a population from which a sample is drawn is normally distributed the sampling
distribution of mean (SDM) will be normal for all sample sizes.
(B) The mean of the SDM is the population mean.
(C) If the population is not normal from which the sample is drawn, the SDM is not
normal for any sample size.
(D) If the population is not normal from which a sample is drawn, the SDM approaches
normality as the sample size increases.
22. Which one of the following is not an example of tax evasion?

(A) Submitting misleading documents.
(B) Not maintaining proper accounts of income earned.
(C) Suppression of facts.
(D) Interpreting the tax law in ones own way to minimise tax liability.
23. Which one of the following is not the purpose of performance-monitoring research ?
(A) To provide feedback for evaluation and control.
(B) To indicate things that are not going as planned.
(C) To help the organisation to plan various activities.
(D) It is required to explain why something went wrong.
24. The transformation of raw data into a form that will make them easy to understand and
interpret, rearranging and manipulating data to generate information is called
(A) Descriptive research (B) Descriptive analysis
(C) Causal research (D) Exploratory research
25. Assertion (A) : The span of management at the upper level is generally narrow while at
the lower level span is wide.
Reason (R) : The task allocated to subordinates at the lower level of management are
more specific and precise and thus making supervision easy and simple.
Suggest correct code :
(A) (A) is correct, but (R) is wrong.
(B) (A) is wrong, but (R) is correct.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are wrong.
328

a. To check the quality of work i. Speed loss
b. To see that work is completed in time ii. Inspector
c. To check absenteeism of workers iii. Instruction and check
d. To issue instructions regarding methods of work iv. Shop discipline
Select the code :
Codes :
a b c d
(A) iii ii i iv
(B) ii i iv iii
(C) ii i iii iv
(D) iv iii i ii
27. F.W. Taylor called “The Military type of Foreman” to

(A) Unity of Command (B) Span of Control
(C) Delegated Legislature (D) Department

a. Commentary Four Chambault i. F.W. Taylor
b. Midvale Steel Works ii. Claud Henry Saint Simon
c. Charleton Twist Company iii. Henry Fayol
d. Credit Mobilier iv. Robert Owen
Codes :
a b c d
(A) iii ii iv i
(B) i ii iii iv
(C) iii i ii iv
(D) iii i iv ii
29. Assertion (A) : The risk condition exists when decision makers have absolutely no idea of
what the results of an implemented alternative would be.
Reason (R) : When operating under complete uncertainty condition, decision makers
usually find that sound decisions are a matter of chance.
In the context of the two statements, which one of the following is correct ?
Codes :
(A) Both (A) and (R) are correct.
(B) Both (A) and (R) are wrong.
(C) (A) is correct, but (R) is wrong.
(D) (A) is wrong, but (R) is correct.
329
30. Assertion (A) : In product concept, focus is on innovating and improving products.
Reason (R) : In selling concept, consumers are persuaded to buy products.
Codes :
(A) Both (A) and (R) are true. (B) (A) is true, but (R) is false.
(C) (A) is false, but (R) is true. (D) Both (A) and (R) are false.
31. Which of the following is not a method of segmenting a market ?

(A) Behavioural segmentation (B) Psychographic segmentation
(C) Benefits segmentation (D) Customer segmentation
32. Consumer attitudes and beliefs about diet, health and nutrition are influenced by
(A) Economic environment (B) Cultural environment
(C) Social environment (D) Natural environment
33. Select the phases of Product Life Cycle :

1. Initiation 2. Decline
3. Boom 4. Introduction
5. Maturity 6. Growth
Codes :
(A) 1, 3, 5, 6 (B) 1, 2, 3, 4
(C) 4, 6, 5, 2 (D) 2, 3, 5, 6
34. Which of the following is not a product-mix strategy ?

(A) Trading up (B) Alteration
(C) Simplification (D) Value addition
35. “Relationship” in marketing means

(A) Relation between buyer and seller
(B) Relation between sales person
(C) Relation between company and consumers
(D) All of the above
36. Match the items of List – I with the items of the List – II :
(Company Name) (Brand)
a. HUL i. Cerelac
b. ITC ii. Eclares
c. Nestle iii. Vivel
d. Cadbury iv. Sunsilk
Codes :
a b c d
(A) iv iii i ii
(B) i ii iii iv
(C) iv ii iii i
(D) iv iii ii i
330
37. The following are the steps in designing the market driven distribution :
1. Know what customers want 2. Determine the costs
3. Review assumptions 4. Decide on the outlet
5. Compare alternatives 6. Implement changes
Select the right sequence of the steps from the codes given below :
(A) 1, 4, 2, 5, 3, 6 (B) 1, 2, 3, 5, 4, 6
(C) 1, 3, 4, 5, 2, 6 (D) 2, 3, 4, 5, 6, 1
38. Which of the following are consumption values that customers look for in any product or
service in a society ?
1. Functional value
2. Social value
3. Money value
4. Emotional value
5. Maximum value
Codes :
(A) 1, 2, 3, 5 (B) 1, 3, 4, 5
(C) 5, 4, 3, 2, 1 (D) 1, 2 and 4
39. Franchising is a practice of :

(A) Leasing for a prescribed period of time, the right to use firm’s successful business
model and brand.
(B) Selling out a successful business model and brand.
(C) Hiring a firm’s successful business model and brand.
(D) None of the above.
40. Underwriters of the security issues are required to

(A) Purchase the securities underwritten
(B) Work as agent of the company for marketing the securities
(C) Manage the issues of the securities
(D) Take up securities not subscribed by investors
41. The optimum capital structure of a company is planned as per considerations of

I. Profitability II. Solvency
III. Marketability of shares IV. Control
Codes :
(A) I, II and IV only (B) II, III and IV only
(C) I and II only (D) III and IV only
331
42. Assertion (A) : Investors in capital market seem to be inclined for fixed income securities.
Reason (R) : Debt instruments now have active secondary market.
Codes :
(A) Assertion (A) and Reason (R) both are correct and (R) is correct explanation of (A).
(B) Assertion (A) and Reason (R) both are correct, but (R) is not correct explanation of
(A).
(C) Assertion (A) is correct, but Reason (R) is incorrect.
(D) Assertion (A) is not correct, but Reason (R) is correct.
43. Insufficient working capital in any enterprise may also result into
I. Failure to adapt to changes
II. Overcapitalisation
III. Reduced availability of trade and cash discounts
IV. Reduced volume of production and sales
Codes :
(A) I, II and III only (B) I, III and IV only
(C) II and III only (D) I and IV only
44. Assertion (A) : Arbitrage keeps the cost of capital constant despite change in the capital
structure.
Reason (R) : It ensures compensating inverse change in cost of equity capital with a
change in the cost of debt capital.
Codes :
(A) Assertion (A) and Reason (R) both are correct and (R) is correct explanation of (A).
(B) Assertion (A) and Reason (R) are correct, but (R) is not correct explanation of (A).
(C) Assertion (A) is correct, but Reason (R) is incorrect.
(D) Assertion (A) is not correct, but Reason (R) is correct.
45. Assertion (A) : High morale and high productivity go hand-in-hand.

Reason (R) : Workers do not have their own ways for relief from fatigue and monotony.
Codes :
332
46. Relationship at work is the source of

(A) Status anxiety (B) Managerial stress
(C) Legitimate power (D) Expert power
47. Match the group of words in List – I with the group of words in List – II :
a. Grievances i. Profit sharing
b. Impact of technology ii. Effective planning
c. Adjustment to technology iii. Index of low morale
d. Morale improvement iv. Changes in occupation
Codes :
a b c d
(A) i ii iii iv
(B) iv iii ii i
(C) iii ii iv i
(D) iii iv ii i
48. Assertion (A) : Functional conflict is a type of institutionalised conflict.

Reason (R) : Politics is a kind of emergent conflict.
Codes :
49. Formal conflict is a kind of

(A) Goal Conflict (B) Organisational Conflict
(C) Role Conflict (D) Emergent Conflict
50. One of the objectives of organisational change is

(A) Increased motivation
(B) Greater innovation
(C) Solving inter-group problems
(D) Changes in an organisation’s level of adaptation to its environment
51. Assertion (A) : Job design relates to the manner in which tasks are put together to form
complete job.
Reason (R) : The matrix organisation is a project organisation plus a functional
organisation.
Codes :
333
52. HRD as a total system includes the following major sub-systems :

1. Performance Appraisal
2. Career Planning
3. Role Analysis
4. ABC Analysis
5. Rewards
Select the correct answer from the codes.
Codes :
(A) 1, 2, 3, 4 (B) 1, 2, 3, 5
(C) 2, 3, 4, 5 (D) 1, 3, 4, 5
53. Which of the following is not true about employee grievances ?

(A) Grievance is a sign of employee’s discontent with job or its nature.
(B) Grievance provides a downward channel of communication.
(C) Grievance arises only when an employee feels that injustice has been done to him.
(D) Grievance can be real or imaginary.
54. Which of the following is not a component of Job Analysis ?

(A) Job Description (B) Role Analysis
(C) Job Summary (D) Job Specification
55. As per the Master Circular on “Prudential Norms on Capital Adequacy – Basel I
Framework”, elements of Tier I capital include :
(i) Authorised Capital (Ordinary shares), statutory reserves, all other free reserves
(disclosed), if any.
(ii) Paid-up capital (Preference shares).
(iii) Perpetual Non-Cumulative Preference Shares (PNCPS).
(iv) Innovative Perpetual Debt Instruments (IPDI).
Codes :
(A) (i) and (ii) only (B) (ii) and (iii) only
(C) (i) and (iii) only (D) (iii) and (iv) only
56. What is true about the Basel Committee on Banking Supervision (BCBS) ?
(i) BCBS is an Indian National Committee of banking supervisory authority.
(ii) BCBS was established by a group of 19 nationalized commercial banks.
(iii) BCBS was established in 1996.
(iv) It provides a forum for regular cooperation on banking supervisory matters.
Codes :
(A) (i) and (ii) only (B) (ii) and (iii) only
(C) (iii) and (iv) only (D) (iv) only
334
57. Under the Cooperative Bank structure, the apex institution is

(A) National Cooperative Bank (B) State Cooperative Bank
(C) District Cooperative Bank (D) IDBI Bank
58. What is SLR ratio of a bank ?

(A) Ratio of total deposits against total investments.
(B) Amount deposited by the bank with the Central Bank in the form of cash, gold and
securities.
(C) Amount that commercial banks are required to maintain before providing credit to
customers.
(D) Amount that commercial banks deposit with the foreign banks.
59. Assertion (A) : The USA remains the world’s largest FDI recipient country.
Reason (R) : The global economic crisis of 2009, causes a reduction of global FDI flows
took place to USA.
Select the correct code :
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) (A) is correct, but (R) is not correct.
(C) Both (A) and (R) are incorrect.
(D) Both (A) and (R) are correct, but (R) is not correct explanation of (A).
60. As per the South Asia Free Trade Agreement, 1993 of SAARC, the member countries
have to bring their duties down to
(A) 25 percent by 2006 (B) 15 percent by 2006
(C) 10 percent by 2007 (D) 20 percent by 2007
61. Which of the following is the correct combination ?

(i) A GSA allows an MNE to enter into activities that might too costly and risky to
pursue on its own.
(ii) A GSA does not allow a firm to enhance economics of scale.
(iii) A GSA does not allow a firm to bypass entry barriers into a target foreign country.
(iv) A GSA allows a firm to acquire partner knowledge.
Codes :
(A) (i), (iv) are correct. (B) (i), (ii) are correct.
(C) (i), (ii), (iii) and (iv) are correct. (D) (ii) and (iii) are correct.
335
62. Which of the following are the outcomes of the Sixth Ministerial Conference of WTO
which was held at Hong Kong in December 2005 ?
Select the correct combination :
(i) Resolve to complete the Doha Work Programme fully and to conclude negotiations
in 2006.
(ii) Amendments to TRIPS agreement reaffirmed to address public health concerns of
developing countries.
(iii) To continue export subsidies in agriculture upto 2018.
(iv) Duty free, quota free market access for all LDC’s products to all developed
countries.
Codes :
(A) (i), (ii) and (iv) (B) (i), (ii), (iii) and (iv)
(C) (i) and (iii) only (D) (ii) and (iv) only
63. Which of the following is not a function of Foreign Exchange Market ?

(A) Stabilization function (B) Hedging function
(C) Credit function (D) Transfer function
64. Assertion (A) : The impact of depreciating Indian Rupee leads to less competition for
Indian firms from imports.
Reason (R) : The depreciating Indian Rupee results in downward pressure on inflation .
Codes :
(A) Both (A) and (R) are correct.
(B) (A) is false, but (R) is correct.
(C) Both (A) and (R) are false.
(D) (A) is true, but (R) is false.
65. In which of the following Stock Exchanges the GDR’s are listed ?
(i) London Stock Exchange
(ii) New-York Stock Exchange
(iii) Luxembourg Stock Exchange
(iv) Bombay Stock Exchange
(v) Singapore Stock Exchange
(vi) Hong Kong Exchange
(A) (i), (ii) and (iii) (B) (i), (iv), (v) and (vi)
(C) (iii), (iv), (v) and (vi) (D) (i), (iii), (v) and (vi)
336
66. Statement I : FIIs do not invest in unlisted entities. They participate only through stock
exchanges.
Statement II : FIIs cannot invest at the time of initial allotment.
Codes :
(A) Statements I and II are correct.
(B) Statement I is true and II is false.
(C) Statement I is false and II is correct.
(D) Statements I and II are false.
67. ADRs’ and GDRs’ are an excellent means of investment to invest in India for
(A) NRIs’ (B) Foreign nationals
(C) Both (A) & (B) (D) None of the above
68. Which of the following is not provided by EXIM Bank, for financing overseas
investments ?
(A) Term loans to Indian Companies upto 80% of their equity investment in overseas
JV/WOS.
(B) Term loans to Indian Companies towards upto 100% of loan extended by them to
the overseas JV/WOS.
(C) Term loan to overseas JV/WOS towards part financing.
(D) Guarantee facility to the overseas JV/WOS for raising term loan/working capital
69. Under Section 271 C of the Income Tax Act, 1961 the amount of penalty for failure to
deduct tax at source is
(A) 10% of tax which is otherwise deductible under Section 194 C.
(B) 100% of tax which is otherwise deductible under Section 194 C.
(C) 200% of tax which is otherwise deductible under Section 194 C.
(D) 300% of tax which is otherwise deductible under Section 194 C.
70. Match the following items of List – I and List – II and select the correct answer from the
codes given below :
(Sections) (Maximum Deduction)
a. Section 80C of I.T. Act i. ` 10,000
b. Section 80D of I.T. Act ii. ` 40,000
c. Section 80 DDB of I.T. Act iii. ` 1,00,000
d. Section 80 TTA of I.T. Act iv. ` 15,000
Codes :
a b c d
(A) iii i iv ii
(B) iii iv ii i
(C) iv iii ii i
(D) ii iii i iv
337
71. In which of the following cases, income of previous year is assessable in the previous year
itself ?
(A) A person in employment.
(B) A person engaged in illegal business.
(C) A person who is running charitable business.
(D) A person leaving India permanently.
72. Long term capital loss can be set off from which of the following ?
(A) Short term capital gain only
(B) Long term capital gain only
(C) Income from business and profession
(D) Capital gain head of income
73. In which of the following long term assets, cost indexation benefit is allowed ?
(A) Debentures issued by a company
(B) Self generated goodwill of a business
(C) Bonus shares allotted on 1-4-2000
(D) Jewellery
74. Calculate the Gross Annual Value from the following details :
Municipal Value – ` 45,000
Fair Rental Value – ` 50,000
Standard Rent – ` 48,000
Actual Rent – ` 42,000
(A) ` 50,000 (B) ` 48,000
(C) ` 45,000 (D) ` 42,000
75. Minimum Alternate Tax (MAT) is imposed on

(A) All companies
(B) Public Limited Companies only
(C) Private Limited Companies only
(D) Partnership Firms and Companies
338

Answer Key (1-75)
1 B 11 B 21 C 31 D 41 A 51 A 61 A 71 D
2 B 12 B 22 D 32 B 42 C 52 B 62 A 72 B
3 A 13 C 23 C 33 C 43 B 53 B 63 A 73 D
4 D 14 A 24 B 34 D 44 A 54 C 64 D 74 B
5 C 15 A 25 C 35 C 45 D 55 D 65 D 75 A
6 D 16 C 26 B 36 A 46 B 56 D 66 D
7 D 17 B 27 A 37 A 47 D 57 B 67 C
8 A 18 B 28 D 38 D 48 A 58 C 68 B
9 A 19 C 29 D 39 A 49 B 59 A 69 B
10 B 20 C 30 A 40 D 50 D 60 D 70 B
339
JUNE 2014
Paper – II
1. There is acute shortage of electricity 4. Match the items/terms given in List-I
in some of the states in India. This with those given in and List-II.
reflects a problem in which type of List – I List – II
business environment ?
(A) Economic (a) BIS (i) Print Media
(B) Demographic (b) CERC (ii) Minimum
(C) Politico-legal support price for
(D) Socio-cultural agricultural
products.
2. Match the items given in List-I and (c) CACP (iii) Quality of
List-II. manufactured
List – I List – II products.
(a) Economic (i) IT-enabled (d) PCI (iv) Comparative
liberalisation services product testing.
(b) Out sourcing (ii) SFIO Indicate the correct answer :
(c) Corporate (iii) Macro Codes :
frauds economic
(a) (b) (c) (d)
stability
(d) Second (iv) Increased (A) (iv) (iii) (ii) (i)
generation competition (B) (i) (ii) (iii) (iv)
reforms (C) (iii) (iv) (ii) (i)
Indicate the correct combination : (D) (ii) (iii) (iv) (i)
Codes :
5. Which one among the following is
(a) (b) (c) (d)
not the salient feature of industrial
(A) (i) (ii) (iii) (iv)
policy since 1991 ?
(B) (i) (iii) (ii) (iv)
(C) (ii) (iii) (iv) (i) (A) Enormous expansion of the
(D) (iv) (i) (ii) (iii) private sector.
(B) Redefining the role of public
3. Which of the following is true ? sector.
(A) A consumer court setup under (C) Limited exposure of Indian
the Consumer Protection Act, industry to foreign competition.
does not have the power to (D) Pruning of the list of items
punish for its contempt. reserved for SSI units.
(B) Professional services are 6. A, a partner in a firm, is drawing
outside the purview of the
` 500 regularly on the 16th of every
CPA. month. He will have to pay interest at
(C) A consumer court cannot force the given rate in a year on ` 6000 for
a person indulging in the total period of
misleading advertising to
confess his quit. (A) 5 months (B) 6 months
(D) None of the above. (C) 7 months (D) 12 months
340
7. Subsequent expenditures that extend 11. Which one of the following does not
the useful life, improve the quality of explain the basic nature of Business
output, or reduce operating costs of economics ?
an existing asset beyond their (A) Behaviour of firms in theory
originally estimated levels are and practice.
(A) Capital expenditures (B) Distribution theories like rent,
(B) Revenue expenditures wages and interest along with
(C) Deferred Revenue expenditures the theory of profit.
(D) None of the above (C) Use of the tools of economic
analysis in clarifying problems
in organising and evaluating
8. Marginal-costing technique is useful
information and in comparing
for
alternative courses of action.
(A) Make or Buy decisions
(D) Integration of economic theory
(B) Profit planning with business practices for the
(C) Shut-down decisions purpose of facilitating decision-
(D) All of the above making.
9. Which one is not a feature of 12. At a point of satiety for a commodity

budgetary control ? the marginal utility is
(A) A tool for management control. (A) Negative
(B) An instrument of delegation (B) Positive
and authority. (C) Zero
(C) An instrument for evaluating (D) Highly positive
the overall performance. 13. A rectangular hyperbola shaped
(D) A statement of budget and demand curve on all its points has
forecasts. (A) Equal slopes and equal point
elasticities.
10. The Debt-Equity Ratio of a company (B) Unequal slopes and unequal
is 2 : 1. In this relation, match the point elasticities.
following : (C) Unequal slopes and equal point
List – I List – II elasticities.
(a) Issue of equity 1. No change (D) Equal slopes and unequal point
shares on the ratio elasticities.
(b) Cash received 2. Reduce the
14. Assertion (A) : A perfectly
from debtors ratio
competitive firm is not a price-
(c) Redemption of 3. No change maker but is a price-taker.
debentures on the ratio Reason (R) : The firm is interested
(d) Purchased 4. Reduce the in deciding the level of output
goods on credit ratio only.
Codes : Codes :
(a) (b) (c) (d) (A) Both (A) and (R) are true.
(A) 1 2 3 4 (B) Both (A) and (R) are false.
(B) 2 3 4 1 (C) (A) is false, while (R) is true.
(C) 1 3 4 2 (D) (A) is true, but (R) is not a
(D) 2 4 1 3 correct explanation of (A).
341
15. Match the items of List-I with the 18. If the dependent variable increases as
items of List-II. the independent variable increases in
List – I List – II an estimating equation, the
coefficient of correlation will be in
(a) A market I. Skimming
the range
having high pricing
price elasticity. (A) 0 to (–) 1
(b) A market having II. Differential (B) 0 to (–) 0
high price pricing (C) 0 to (–) 0.05
inelasticity
(D) 0 to 1
(c) A market having III. Penetrating
several segments pricing 19. Assertion (A) : When there is an
differing evidence of a linear
prominently with relationship between two
regard to price variables, it may not always
elasticities of mean an independent-
their demand. dependent relationship between
Codes : the two variables.
I II III Reason (R) : The causal relationship
(A) (b), (c), (a) between the two variables may
(B) (a), (b), (c) not imply a reasonable
theoretical relationship between
(C) (b), (a), (c)
the two.
(D) (a), (c), (b)
Choose the right answer from the
following statements :
16. Which one of the following options
Codes :
deals with the process of making
estimates, predictions and decisions ? (A) Both (A) and (R) are true and
(R) is the correct explanation.
(A) Descriptive statistics
(B) Inferential statistics (B) Both (A) and (R) are true, but
(R) is not the correct
(C) Probability theory explanation.
17. A hypothesis test is being performed
for a process in which a Type-I error 20. Assertion (A) : User interface is
will be very costly, but a Type-II most critical task in DSS
error will be relatively inexpensive design
and unimportant. Which of the
following would be the best choice Reason (R) : DSS is used by outside
Customers frequently.
for alpha (α) in this test ?
(A) 0.10 (A) (A) is correct, but (R) is wrong.
(B) 0.05 (B) Both (A) and (R) are wrong.
(C) 0.01 (C) (A) is wrong, but (R) is correct.
(D) 0.50 (D) Both (A) and (R) are correct.
342
21. Which of the following is not true 25. Taylor’s differential piece work plan
about Matrix Organisation ? provides that
(A) It is relatively permanent. (A) All labourers should be assigned
(B) Its project managers authority different amount of work.
is distributed reasonably. (B) All labourers should be put in
(C) There is slow information different time-period.
processing. (C) Those who produce above
(D) Its project heads have to share standard should receive higher
resources with functional heads. wages than those producing
below standard.
22. Consider the following leadership styles : (D) Payment should be the same on
1. Telling 2. Autocratic a fixed standard.
3. Selling 4. Motivating
5. Participating 6. Delegating 26. Which one of the following stages of
7. Charismatic the marketing research process is
Select the four styles of leadership most expensive ?
explained by Hersey and Blauchard. (A) Data analysis
(A) 1, 2, 6 and 7 (B) 2, 3, 4 and 5 (B) Data collection
(C) 1, 3, 5 and 6 (D) 4, 5, 6 and 7 (C) Developing the research plan
(D) Report writing
23. Given below are two statements, one
labelled as Assertion (A), and the 27. The people to adopt a new product
other labelled as Reason (R). first are called
Assertion (A) : Classical (A) Early adopters
organisations believed in the (B) First users
use of authority to achieve (C) Initial adopters
coordination.
(D) Innovators
Reason (R) : Classical thinkers
consider organisation is an 28. A concept in retailing that helps
open system. explain the emergence of new
Codes : retailers is called the ______
(A) (A) is correct, but (R) is hypothesis.
incorrect. (A) Product life cycle
(B) Both (A) and (R) are correct. (B) Service assortment
(C) (A) is incorrect, but (R) is (C) Retail life cycle
correct.
(D) ‘Wheel-of-retailing’
(D) Both (A) and (R) are incorrect.
24. Who has modified Maslow’s 29. Manufacturers of cars and motor
Hierarchical levels of needs and cycles typically seek_______
developed ERG model ? distribution.
(A) Frederick Herzberg (A) selective
(B) David C. McClelland (B) intensive
(C) Douglas McGregor (C) exclusive
(D) Clayton Alderfer (D) restrictive
343
30. Which method of setting advertising 33. Assertion (A) : When two or more
budget is most scientific and logical ? investment proposals are
mutually exclusive, ranking the
(A) All-you-can afford method
proposals on the basis of IRR,
(B) Competitive parity method NPV and PI methods may give
contradictory results.
(C) Objective-and-task method
Reason (R) : The contradictory
(D) Percentage-of-sales method results in the ranking are due to
differing dimensions relating to
the scale of investments, cash
31. Assertion (A) : Weighted average flow patterns and project lives.
cost of capital should be used Indicate the correct answer :
as a hurdle rate for accepting or
rejecting a capital budgeting Codes :
proposal. (A) Both (A) and (R) are true.
Reason (R) : It is because by (B) (A) is true, but (R) is a
financing in the proportions necessary condition, but not a
specified and accepting the sufficient condition.
project, yielding more than the (C) Both (A) and (R) are false.
weighted average required
(D) Both (A) and (R) are true and
return, the firm is able to
(R) explains the reason
increase the market price of its
sufficiently.
stock.
Codes :
34. Which one of the following
(A) Both (A) and (R) are false. assumptions is not covered in the
Walter’s Model of the dividend policy ?
(B) Both (A) and (R) are true.
(A) All financing is done through
(C) (A) is true, while (R) is false. retained earnings.
(D) (A) is false, while (R) is true. (B) Firm’s business risk does not
change due to additional
investments.
32. A firm wants to know the Degree of
Operating Leverage (DOL) with the (C) The firm has an infinite life.
following information : (D) The key variables like EPS and
Current level of sales : 6000 units DPS keep on changing.
Break-even point sales : 4000 units

35. Which one of the following
What would be the DOL ? emphasizes the qualitative aspects of
(A) 1.50 working capital management ?
(A) Gross working capital
(B) 0.67
(B) Quick working capital
(C) 3.00
(C) Net working capital
(D) None of the above (D) None of the above
344
36. Which of the following training 40. The idea that a manager tends to be
methods exposes the newly recruited promoted to a level of his
employee to the various business incompetence is referred to as
functions, divisions and departments ? (A) the advancement principle
(A) Orientation (B) the Paul principle
(B) Vestibule Training (C) the Peter principle
(C) Transition Analysis (D) the job design principle
(D) Role playing
41. Which of the following committees
is intended to review the working of
37. Match the names of the Authors
the monetory system in India ?
given below with the motivational
theories they are associated with (A) Narasimham Committee
List-I List-II (B) Tandon Committee
1. Herzberg a. ERG Theory (C) Sukhamoy Chakravarty
Committee
2. McGregor b. Three-need
theory (D) Deheja Committee
3. Alderfer c. Theory X and
Theory Y 42. Match the items of List-I with those in
List-II and select the correct answer.
4. David d. Two-factor theory
McClelland List-I List-II
Codes : (a) Bank Rate 1. Involving the
Policy shortening of the
1 2 3 4 currency of bills
(A) a b c d eligible for
(B) d c b a rediscount.
(C) b a d c (b) Credit 2. Involving the
Rationing Purchase and sale
(D) d c a b
of securities in
the open market.
38. Who was closely associated with (c) Variable 3. Involving the
industrial relations in India ? Reserve alteration of
(A) B. Kurien System discount rate.
(B) Gadgil (d) Open 4. Involving the
(C) V.V. Giri Market variation of the
Operations minimum
(D) Vinoba Bhave
reserves
Codes :
39. Under the Trade Union Act 1926,
(a) (b) (c) (d)
how many minimum number of
members are required for a trade (A) 1 4 2 3
union to be registered ? (B) 2 1 3 4
(A) 5 (B) 7 (C) 4 2 1 3
(C) 9 (D) 11 (D) 3 1 4 2
345
43. Match the items of List-I with the 46. International trade theory which
items of List-II and select the correct provides that capital intensive
answer using the codes given below country should export labour-
the lists. intensive goods and import capital
List-I List-II goods is referred to as
(a) Rural (i) Meant for (A) Leontief Paradox
Industries various target (B) Heckscher-Ohlin Theory
Programme groups like
Rural youth, (C) Mercantilism Theory
Ex-serviceman, (D) Theory of Comparative
women and Advantage
Scheduled
Castes/Tribes 47. Which of the following is not a form
(b) Mahila Vikas (ii) Aim at ensuring of economic integration in the
Nidhi flow of credit to context of intra-regional trade ?
Scheme the dis- (A) Customs Union
advantaged (B) European Union
sections of the (C) Economic Union
society.
(c) Entre- (iii) Commercial (D) African Union
preneurship exploitation of 48. ‘Crawling Peg System’ means
Development local resources. (A) Fixed Exchange Rate System.
Programme
(d) Micro Credit (iv) Provides (B) Floating Exchange Rate
Scheme assistance to System.
voluntary (C) Hybrid of Fixed and Floating
organizations Exchange System.
for the benefit (D) None of the above.
of women.
Codes : 49. From the following modes of
(a) (b) (c) (d) international business, identify the
(A) (i) (iii) (ii) (iv) mode which involves strategic alliance
(B) (ii) (iv) (i) (iii) (A) Franchising
(C) (iv) (ii) (iii) (i) (B) Leasing
(D) (iii) (iv) (i) (ii)
(C) Turnkey Project
44. According to the FDI Policy of the (D) Joint venture
Government of India (2012), the FDI
in banks is limited to 50. Which of the following expressions
(A) 20% in Nationalised Banks and amount to the import restriction
74% in Private Sector Banks. measures ?
(B) 20% in Nationalised Banks and
49% in Private Sector Banks. (i) Currency control
(C) 16% in Nationalised Banks and (ii) Establishment of EPZs
74% in Private Sector Banks. (iii) Tariff cuts
(D) 49% in Nationalised Banks and (iv) Imposition of tariffs
51% in Private Sector Banks. (v) Imposition of non-tariff
45. According to the recent guidelines barriers
(2013) of the Reserve Bank of India Codes :
the Private Sector Banks are required (A) (i), (ii) and (iii)
to have a minimum paid up equity
capital of (B) (i), (iv) and (v)
(A) ` 300 crores (B) ` 200 crores (C) (iii), (iv) and (v)
(C) ` 400 crores (D) ` 500 crores (D) (ii), (iii) and (v)
346
JUNE 2014 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 A 11 B 21 C 31 B 41 C
2 D 12 C 22 C 32 C 42 D
3 A 13 C 23 A 33 B 43 D
4 C 14 D 24 D 34 D 44 A
5 C 15 A 25 A 35 C 45 D
6 B 16 B 26 B 36 A 46 A
7 A 17 C 27 D 37 D 47 D
8 D 18 D 28 D 38 C 48 C
9 D 19 A 29 D 39 B 49 D
10 B 20 A 30 C 40 C 50 B
347
JUNE 2014
Paper – III
1. The Competition Act, 2002, seeks to 6. What is the underlying concept that
regulate support the immediate recognition of
(A) Anti-competitive agreements an estimated loss ?
(B) Mergers and amalgamation (A) Substance over form
(C) Unfair trade practices (B) Consistency
(D) (A) and (B) above (C) Matching
(D) Prudence
2. Indicate the true statement :
(A) Large industrial houses are 7. Which is not the limitation of
outside the purriew of the budgetary control ?
Competition Act, 2002 (A) Budgets are based on forecasts
(B) There is no provision for which may not be true
curbing frivolous complaints (B) Installation and operation of a
under the CPA. system of budgetary control is
(C) The Trade Marks Act, 1999 costly.
does not apply to services. (C) Budget is a tool of management
(D) All of the above are true. and not a substitute of
management
3. The time limit for filing a complaints (D) Budgets do not pinpoint the
before the District forum under the lack of efficiency or the
Consumer Protection Act, 1986 is presence of it.
(A) one year 8. Profit volume ratio of an enterprise is
(B) two years 40%. To offset 10% decrease in
(C) three years selling price, how much sales must
(D) There is no such time limit. be increased ?
4. The Foreign Investment Promotion (A) 10% (B) 20%
Board (FIPB) revamps the rules and (C) 25% (D) 40%
regulations pertaining to 9. If debt is ` 220, cash balance is ` 20
(A) Accounting of Foreign Investment and equity is ` 300, then the gearing
(B) Investment by NRIs ratio is
(C) Foreign investments (A) 20% (B) 40%
(D) All of the above (C) 50% (D) 30%
5. Which of the legislation(s) do (does)
10. Responsibility accounting aims to
not form part of the legal
(A) ensure that a manager is
environment of business in India ? punished if things go wrong.
(A) The Drugs and Cosmetics Act, (B) ensure that costs become the
1940 responsibility of a specific
(B) The Prevention of Food manager.
Adulteration Act, 1954 (C) allocate costs to all areas of a
(C) The Monopolies and Restrictive business.
Trade Practices Act, 1969 (D) reduce the costs that a
(D) Both (B) and (C) above department incurs.
348
11. Find the correct matching of the 13. The equilibrium level of output for a
items of List – I with the items of perfect competitive firm is given by
List – II given below : the point where :
List – I List – II (A) MR = MC
(a) Normal (I) Excess of (B) MR < MC
Profit total revenue (C) MR > MC
over total (D) MR = MC, and MC starts
explicit cost rising.
(b) Economic (II) Total
profit revenue
equals total
economic List – I List – II
cost (i) Dumping (a) Monopolistic
(c) Accounting (III) Excess of competitive
firm
profit total revenue
over total of (ii) Kinked (b) Oligopoly
explicit and Revenue firm
Curve
implicit
costs and a (iii) Horizontal (c) Perfectively
straight line competitive
normal rate
revenue curve firm
of return
Codes : (iv) Large number (d) Discrimin-
of buyers and atory
(I) (II) (III) sellers with monopoly
(A) (c) (a) (b) differentiated
(B) (b) (a) (c) products
Codes :
(C) (a) (b) (c)
(i) (ii) (iii) (iv)
(D) (a) (c) (b)
(A) (a) (d) (c) (b)
(B) (b) (d) (a) (c)
12. Assertion (A) : A monopoly firm’s
revenue curve is downward (C) (d) (b) (c) (a)
sloping from left to right. (D) (a) (b) (c) (d)
Reason (R) : The monopoly firm
does not simultaneously enjoy 15. Penetrating pricing strategy is
the freedom to determine both appropriate when
price and quantity to be sold (A) price elasticity of demand in
according to its whims and the market is highly inelastic.
fancy. (B) price elasticity of demand in
Codes : the market is uncertain.
(A) Both (A) and (R) are true. (C) price elasticity of demand in
(B) Both (A) and (R) are false. the market is highly elastic.
(C) (A) is true, but (R) is false. (D) income elasticity of demand in
(D) (A) is false, but (R) is true. the market is negatively elastic.
349
16. Assertion (A) : The expected values 20. Two lists of items are given below :
should be atleast 5 to apply the List – I List – II
chi-square test. (i) Charles (a) Mossai
Reason (R) : The chi-square
distribution provides an Babbage
adequate approximation of the (ii) Herbert A. (b) HTML
sampling distribution. Simon
Indicate the correct answer from the
following : (iii) Tim (c) Computer
Codes : Berners Design
(A) Both (A) and (R) are true, and Lee
(R) is the right explanation.
(B) Both (A) and (R) are true, but (R) (iv) Maarc (d) Decision
is not the correct explanation. Andreessen model
(C) (A) is true, but (R) is false. Which one of the following is the
correct match ?
17. In a decision problem having four
possible alternative decisions and six Codes :
possible states of nature, the pay-off (i) (ii) (iii) (iv)
table will include
(A) Four payoffs (A) (c) (b) (a) (d)
(B) Six payoffs (B) (a) (c) (d) (b)
(C) Twenty four payoff
(C) (b) (a) (c) (d)
(D) Ten payoff
(D) (c) (d) (b) (a)
18. The mathematical formula for joint
probabilities P(AB) = P(A/B) × P(B),
21. Which of the following statements
holds when
(A) The events are statistically are true about informal organization ?
independent. 1. It arises spontaneously.
(B) The events are statistically
dependent. 2. It reflects individual and group
(C) The event is either independent goals.
or dependent. 3. It tends to be permanent and
stable.
19. Which one of the following 4. It tends to be small and
statements is the correct
interpretation of P-value of less than manageable.
0.01 in hypothesis testing ? 5. Its basic purpose is to improve
(A) There is overwhelming human relations.
evidence to infer that the
alternative hypothesis is true. 6. Its basic purpose is to achieve
(B) There is strong evidence to organisation’s goals.
infer that the alternative Codes :
hypothesis is true.
(C) There is weak evidence to (A) 1, 2, 3 andü 5
indicate that the alternative (B) 1, 2, 4 and 6
hypothesis is true.
(D) There is no evidence to infer that (C) 1, 2, 4 and 5
the alternative hypothesis is true. (D) 2, 3, 5 and 6
350
22. Which of the following is not true 25. Match the following :
about an employee-centered leader as List – I List – II
identified by Michigan researchers ? (a) Fayol (1) Economy and
(A) Treats subordinates as human Society
beings.
(b) Taylor (2) General and
(B) Shows concern for their well
Industrial
being.
Administration
(C) Focuses on work standards and
close supervision. (c) Weber (3) Principles of
(D) Encourages and involves them Organization
in goal setting. (d) Mooney (4) Shop
and Reilly Management
23. According to Talcott Parson, Codes :
organizations can be classified
(a) (b) (c) (d)
primarily into four categories, based
on functions. Which of the following (A) (3) (4) (1) (2)
is not an organization in Parson’s (B) (2) (4) (1) (3)
scheme ?
(C) (1) (3) (2) (4)
(A) Political organisations
(B) Integrative organisations (D) (4) (3) (2) (1)
(C) Pattern maintenance

organisations 26. A primary group influencing the
(D) Commercial organisations buyer behaviour is a
(A) Family
24. An MBO programme usually (B) Professional association
involves the following steps : (C) Religious group
1. Establishing unit’s objectives (D) Trade Union
2. Establishing organisational goals
3. Negotiating or agreeing
27. After conducting the business
4. Reviewing the performance analysis for developing a new
5. Creating action plans product, a company must do
Indicate the correct sequence of the
(A) Idea generation
above steps from the following codes :
(B) Product positioning
(A) 1, 2, 3, 4, 5
(C) Product development and
(B) 2, 1, 3, 5, 4
testing
(C) 2, 3, 1, 4, 5
(D) 5, 4, 3, 2, 1 (D) Test marketing
351
28. Match the items in List – I with those 31. Match the items of List – I with the
in List – II : items of List – II :
List – I List – II List – I List – II
(a) Post (i) AIDA (a) Trade credit (i) Maturity
and other Financing
purchase
payables that
behaviour arise in the
(b) Personal (ii) ACMEE firm’s day
selling today
operations
(c) Everitt M. (iii) Diffusion of
(b) Financing and (ii) Factoring
Rogers Innovation
asset needs
(d) Salesperson (iv) Cognitive over time
training dissonance (c) A tool for (iii) Spontaneous
Indicate the correct matching : accelerating financing
Codes : the collection
from the
(a) (b) (c) (d) customers
(A) (i) (ii) (iii) (iv) (d) Seeking (iv) Lockbox
financial system
(B) (iv) (ii) (iii) (i) service to
(C) (iii) (ii) (i) (iv) finance on its
debtors’
(D) (iv) (i) (iii) (ii)
balances
Codes :
29. Which type of retail stores generally
has the highest operating costs ? (a) (b) (c) (d)
(A) (iv) (iii) (ii) (i)
(A) Department store
(B) (iii) (ii) (iv) (i)
(B) Supermarket
(C) (ii) (iv) (i) (iii)
(C) Chain store
(D) (i) (ii) (iii) (iv)
(D) Co-operative Store
32. Indicate the cost of equity capital,

30. Indicate the correct statement :
based on capital asset pricing model,
(A) India has been a pioneer in with the following information :
social marketing. Beta coefficient – 1.40
(B) Advertising Standards Council Risk-free rate of interest – 9%
of India is a statutory body set Expected Rate of Return on
up by the government of India. equity in the market – 16%
(C) Both (A) and (B) are incorrect. (A) 9.8% (B) 18%
(D) Both (A) and (B) are correct. (C) 18.8% (D) 16%
352
33. The degree of super-leverage would 36. Indicate the quantitative methods of
be calculated by : job evaluation
(A) Adding DOL (Degree of (A) Ranking methods and Job
Operating Leverage) and DFL comparison method
(Degree of Financial Leverage) (B) Point rating method and Factor
(B) Dividing DOL with DFL comparison method
(C) Grading method and Job
(C) Multiplying DOL and DFL
classification method
(D) Subtracting DOL from DFL
(D) Factor comparison method and
Ranking method
34. Interim cash inflows are reinvested at
a rate of return equal to the internal 37. Match the items of List – I with those
rate of return is the built-in- List – II :
mechanism for
(A) Net Present Value Method
(1) Career (a) The process
(B) Internal Rate of Return Method goals where in an
(C) Profitability Index Method executive
(D) None of the above serves as a
guide
35. Who formulated the following model (2) Career (b) The future
for estimating the market price of path positions one
equity share ? strives to reach
as part of
Ra
D + R (E – D) career
c
P= (3) Career (c) The sequential
Rc
counseling pattern of jobs
Where, P = Market price of equity share that form a
D = DPS career
E = EPS (4) Mentoring (d) Guiding
people on their
E – D = Retained earning per
possible career
share
path
Ra = Internal rate of return on
Codes :
investment
(1) (2) (3) (4)
Rc = Cost of capital
(A) (b) (c) (d) (a)
(A) Modigliani-Miller
(B) Myron-Gordon (B) (a) (b) (c) (d)
(C) James E. Walter (C) (d) (c) (b) (a)
(D) Clarkson and Elliot (D) (c) (b) (a) (d)
353
38. The process of receiving and 42. Match the items of List – I with those
welcoming an employee when he List – II and select correct answer :
first joins a company and giving him List – I List – II
the basic information he needs to
settle down quickly and happily and (1) Narasimham (a) Lending under
starts working, is referred to as Committee consortium
(A) Placement arrangement
(B) Orientation (2) Shetty (b) Frauds and
(C) Job Rotation Committee Malpractices in
(D) Counseling banks
(3) Ghosh (c) Securities
39. Which is not relevant of succession Committee operations of
planning ? banks and
(A) Analysis of the demand for financial
managers institutions
(B) Review of existing executives (4) Janakiraman (d) Financial system
(C) Planning individuals career Committee in India
paths Codes :
(D) Recruitment to meet immediate (a) (b) (c) (d)
needs
(A) (3) (4) (2) (1)
(B) (2) (3) (4) (1)
40. Where does recognition of an
Employee fall in Maslow’s hierarchy (C) (4) (2) (3) (1)
of needs theory ? (D) (3) (4) (1) (2)
(A) Self-actualisation
(B) Security needs 43. Which of the following financial
(C) Social needs institutions is not with in the
(D) Esteem needs supervisory Purview of Reserve
Bank of India ?
41. The profitability of public-sector (A) Foreign Commercial Banks
banks is low due to Operating in India
(i) Over-cautions approach to (B) Regional Rural Banks
lending (C) Mutual Funds
(ii) Reserve Bank Policies (D) State Co-operative Banks
(iii) High Overhead Costs
(iv) Social-sector lending
44. The Repo and Reserve Repo rates are
Identify the correct code :
resorted to by the RBI as a tool of
Codes :
(A) Credit Control
(A) (i) and (ii)
(B) Settlement Systems
(B) (i) and (iv)
(C) (i), (iii) and (iv) (C) Currency Management
(D) (ii) and (iii) (D) Liquidity Control
354
45. Which one of the following 48. Match the items given in List – I with
institutions is promoted by the IFCI : the most appropriate items in List – II :
(A) Credit Analysis and Research
(a) UNCTAD (i) Foreign
Ltd (CARE) investment
(B) Rashtriya Gramin Vikas Nidhi (b) WTO (ii) Developing
Countries
(RGVN)
(c) TRIMS (iii) UNDP
(C) Clearing Corporation of India (d) ITC (iv) General
Ltd (CCIL) Council
(D) Small Industries Development Codes :
(a) (b) (c) (d)
Bank of India (SIDBI)
(A) (ii) (iv) (i) (iii)
(B) (iii) (iv) (i) (ii)
46. Indicate the right sequence of the (C) (iv) (ii) (i) (iii)
stages of internationalization : (D) (iii) (ii) (i) (iv)
(i) Multinational Company

49. Duty levied on the value of goods
(ii) Global Company imported is referred to as
(iii) Transnational Company (A) Ad valorem Duty
(B) Compound Duty
(iv) International Company
(C) Specific Duty
Codes : (D) Import Duty
(A) (i) (iv) (ii) (iii)
50. Which of the following can be
(B) (iv) (i) (iii) (ii) included in the current account of the
(C) (i) (iv) (iii) (ii) balance of payments ?
(i) Purchase of goods from abroad
(D) (iv) (i) (ii) (iii)
(ii) Sale of services abroad
(iii) Workers’ remittances from
aboard
47. Which of the following is not one of
(iv) Sale of copyright to foreigners
the components of ‘International
(v) Direct investment in equity
Reserve’ ? capital
(A) Special Drawing Rights Codes :
(A) (i), (ii) and (iii)
(B) Reserve Position in IMF
(B) (i), (ii) and (iv)
(C) Monetary Gold (C) (i), (ii), (iii) and (v)
(D) Money Market Instruments (D) (i), (ii), (iii) and (iv)
355
JUNE 2014 Paper III

Answer Key (1-75)
1 D 11 A 21 C 31 C 41 C 51 C 61 A 71 C
2 C 12 A 22 C 32 C 42 B 52 B 62 A 72 C
3 B 13 D 23 D 33 C 43 C 53 C 63 B 73 D
4 C 14 C 24 B 34 B 44 D 54 B 64 B 74 C
5 D 15 C 25 B 35 C 45 B 55 A 65 C 75 A
6 D 16 A 26 A 36 B 46 D 56 C 66 D
7 D 17 C 27 C 37 A 47 D 57 B 67 C
8 B 18 B 28 D 38 B 48 A 58 C 68 A
9 B 19 A 29 A 39 D 49 A 59 A 69 C
10 B 20 D 30 A 40 D 50 A 60 B 70 B
356
DECEMBER2013
Paper – II
1. Who is the fiscal agent and advisor to 4. Uruguay Round pertains to
Government in monetary and (A) WTO
financial matters ?
(A) NABARD (B) IMF
(B) SBI (C) GATT
(C) RBI (D) World Bank
2. Match the items of List – I with the 5. Which of the following are outside
items of List – II : the scope of the Consumer Protection
List – I List – II Act, 1986 ?
(a) National (i) Industrial
Manufactu- Licensing (A) Newspaper industry
ring Policy (B) Services provided under
Competitive-
contract of personal service
ness Council
(NMCC) (C) Banking industry
(b) National (ii) Eleventh Five (D) Both (A) and (B)
Investment Year Plan
Fund (NIP)
(c) The (iii) The 6. Which of the following is ‘true’
Industries Competition regarding the Prudence Principle of
(Develop- Act, 2002
ment and Accounting ?
Regulation) (A) Taking care of the future losses
Act (IDRA),
(B) Taking care of the future
1951
(d) Increase in (iv) Public Sector profits
Employment Undertakings (C) Taking care of bad debts
Codes :
(D) Taking care of inventory and
(a) (b) (c) (d)
(A) (iv) (i) (ii) (iii) depreciation
(B) (iii) (iv) (i) (ii)
(C) (i) (ii) (iii) (iv) 7. Which of the following is a non-
(D) (iv) (iii) (ii) (i)
operating expense ?
3. Kyoto Protocol pertains to (A) Salary of Managing Director
(A) Capital formulation (B) Depreciation
(B) Globalisation
(C) Advertisement expenditure
(C) Environmental protection
(D) Unemployment reduction (D) Interest on loan
357
8. A and B are partners sharing profits 12. Match List – I with List – II and
in the ratio of 3 : 2. Their books select the correct code for the answer :
showed goodwill at ` 3,000. C is List – I List – II
1 (a) Cross (i) Price = AVC
admitted with 4th share of profits and elasticity is
brings ` 10,000 as his capital. But he zero
is not able to bring in cash for his (b) Shut-down (ii) Two
share of goodwill ` 3,000. How will point commodities
you treat this ? are
(A) Goodwill is raised by ` 12,000 independent
(B) C will remain as debtor for (c) Slutsky (iii) Trans-
` 3,000 theorem formation line
(C) C’s A/c. is debited for ` 3,000 (d) Production (iv) Substitution
(D) Goodwill is raised by ` 9,000 Possibility effect
Curve
9. If there is mutual indebtedness Codes :
between the transferor company and (a) (b) (c) (d)
the transferee company in business (A) (ii) (iv) (i) (iii)
combination, which of the following (B) (iii) (ii) (iv) (i)
is correct ? (C) (i) (iii) (ii) (iv)
(A) No adjustment is required in (D) (ii) (i) (iv) (iii)
the books of the transferor 13. Assertion (A) : The demand curve
company. has negative slope showing
(B) Adjustment is required in the inverse relationship between
books of the transferor price and the quantity
company. demanded.
(C) No adjustment is required in Reason (R) : This applies only to
the books of the transferee Giffen goods.
company. Codes :
(D) None of the above (A) Both (A) and (R) are true.
(B) (A) is true, but (R) is false.
10. Improvement of profit-volume ratio (C) (A) is false, but (R) is true.
can be done by (D) Both (A) and (R) are false.
(A) Increasing selling price 14. The consumer is said to be in
(B) Altering sales mixture equilibrium when he plans his
(C) Reducing variable cost expenditure on x, y and z
(D) All of the above commodities in such a way that he
ultimately attains :
11. Business Economics is a subject which (A) MUx = MUy = Mz
(A) studies economic relationships MUx MUy MUz
(B) studies economic activities at (B) Px = Py = Pz
the aggregate level
(C) deals with the tools of MUx MUy MUz
economics used for decision (C) Px = Py = Pz = MUm
making in business MUx MUy MUz
(D) studies optimum allocation of (D)
limited resources Px < Py < Pz < MUm
358
15. Match the items in List – I with those 18. A distribution, where the value of
in List – II and select the correct code arithmetic mean is maximum as
for the answer : compared to median and mode, is
List – I List – II (A) Normal distribution
(a) Monopoly (i) Price Taker (B) Positively-skewed distribution
(b) Monopolistic (ii) Homo- (C) Negatively-skewed distribution
competition geneous (D) None of these
product’s
price maker 19. The most appropriate average to be
(c) Perfect (iii) Hetero- used to compute the average rate of
competition geneous growth in population is
product (A) Arithmetic mean
(d) Oligopoly (iv) Price
(B) Median
Rigidity
(C) Geometric mean
Codes :
(a) (b) (c) (d) (D) Harmonic mean
(A) (ii) (iii) (i) (iv)
(B) (i) (ii) (iv) (iii) 20. “The life expectancy of people in
(C) (iii) (iv) (ii) (i) Kerala is more than that of Tamil
(D) (iv) (i) (iii) (ii) Nadu.” This statement is an example of
(A) Descriptive Hypothesis
16. Match the following items in List – I (B) Causal Hypothesis
with most suitable options in List – II : (C) Correlational Hypothesis
List – I List – II (D) None of the above
(a) Fisher (i) Inverse
probability 21. Match the items of List – I with the
(b) Karl Pearson (ii) Normal items of List – II and choose the
Distribution correct answer :
(c) Thomas (iii) Correlation List – I List – II
Baye’s Coefficient (a) Intrapersonal (i) Informa-
(d) Karl Gauss (iv) Index communication tion
Numbers sharing
Codes : (b) Element of a (ii) Develop-
(a) (b) (c) (d) communication ment of
(A) (iv) (iii) (ii) (i) event ‘will’ to
(B) (iv) (iii) (i) (ii) work
(C) (iv) (ii) (iii) (i) (c) Objective of (iii) Thinking
(D) (iv) (ii) (i) (iii) organisational
communication
17. The law of statistics, which says
(d) Goals of (iv) Purpose
‘Moderately large number of items
organisational
chosen at random from a large group
communication
possess the characteristics of the
large group’, is referred to as : Codes :
(A) The Central Limit Theorem (a) (b) (c) (d)
(B) The Law of Statistical Regularity (A) (i) (ii) (iii) (iv)
(C) The Law of Inertia of Large (B) (iii) (iv) (ii) (i)
Numbers (C) (ii) (iii) (i) (iv)
(D) None of the above (D) (iv) (iii) (ii) (i)
359
22. According to the Boston Consulting 26. Which of the following is not the
Group, a business which has a high major component of holistic
growth rate but a weak market share marketing ?
is referred to as a (A) Relationship marketing
(B) Integrated marketing
(A) Cash Cow
(C) Customer satisfaction
(B) Dog (D) Socially-responsible marketing
(C) Question Mark
(D) Star 27. Which of the legislations listed
below do not form part of the
marketing environment of India ?
23. ‘No ideas are ever criticized’ and ‘the (A) The Drugs and Cosmetics Act,
more radical the ideas are the better’ 1940
– are the rules of which decision (B) The Prevention of Food and
making process ? Adulteration Act, 1954
(A) Programmed decision-making (C) The Monopolies and
Restrictive Trade Practices Act,
(B) Non-programmed decision
1969
making
(D) Both (B) and (C)
(C) Brainstorming
(D) Group discussion 28. The set of all actual and potential
buyers of a product is known as
(A) Customer group
24. According to McClelland’s Needs
(B) Industry
Theory, which of the following is not
(C) Market
a motivating need ?
(A) Need for Power
(B) Need for Security 29. In the model of consumer behaviour
(C) Need for Achievement given by Philip Kotler, what
constitutes the marketing stimuli ?
(D) Need for Affiliation
(A) Marketing environment
(B) Four P’s of marketing
25. In the managerial grid, developed by (C) Consumer needs and wants
Blake and Mouton, a manager who (D) None of the above
has high consideration for production
but little concern for people is known 30. The factor that exerts the broadest
as and deepest influence on consumer
behaviour is
(A) 1.1 Management
(A) Culture
(B) 1.9 Management
(B) Sub-culture
(C) 9.1 Management (C) Social class
(D) 5.5 Management (D) Income
360
31. Which one of the following is not 36. Who propounded “Theory Z” ?
among the assumptions of the (A) William Ouchi
Modigliani-Miller model ? (B) Peter F. Drucker
(A) Perfect capital market
(C) Joseph H. Jurau
(B) Equivalent risk classes
(C) Unity for dividend payout ratio (D) Douglas McGregor
(D) Absence of taxes
37. Another name for MATRIX
32. The most suitable coverage ratio for organisation is
deciding the debt capacity of a firm
(A) Flexible organisation
is
(B) Geographic organisation
(A) Interest Coverage Ratio
(B) Cash Flow Coverage Ratio (C) Project organisation
(C) Debt Service Coverage Ratio (D) None of the above
(D) Fixed Assets Coverage Ratio
38. Which of the following are methods

33. Which one of the following is the
of on-the-job training ?
most popular method for estimating
the cost of equity ? (i) Coaching
(A) Capital asset pricing model (ii) Vestibule training
(B) Dividend yield method (iii) Demonstration
(C) Gordon’s dividend discount
(iv) Role-playing
model
(v) Apprenticeship training
(D) Earnings yield method
Select the right answer from the
34. Which one of the following is not the following codes :
internal factor affecting the weighted (A) (i), (ii), (iii), (iv)
average cost of capital of a firm ? (B) (i), (iii), (v)
(A) Investment policy of the firm
(C) (ii), (iii), (iv)
(B) Capital structure of the firm
(C) Dividend policy followed (D) (i), (ii), (iii), (iv), (v)
(D) Market risk premium for the
firm 39. The idea that a manager tends to be
promoted to the level of his
35. Most common approach for analysing incompetence is referred to as
the capital structure of a firm is
(A) The advancement principle
(A) Ratio Analysis
(B) The Parkinson’s law
(B) Cash Flow Analysis
(C) Comparative Analysis (C) The Peter principle
(D) Leverage Analysis (D) The job design principle
361
40. Assertion (A) : The emphasis in 42. Which of the following are included
industrial psychology has under representation functions of a
shifted from the studies of the bank ?
isolated individual and the (i) Payment of cheques and bills
physical environment to the (ii) Providing remittance facilities
consideration of motivation and (iii) Underwriting of securities
morale. (iv) Advancing clean credit
(v) Allowing overdrafts on current
Reason (R) : A motivated
account
employee with a high morale (vi) Purchase and sale of securities
will always give high Codes :
productivity. (A) (i), (ii), (iii) and (iv)
Codes : (B) (iii), (iv), (v) and (vi)
(A) Both (A) and (R) are correct, (C) (i), (ii), (iii) and (vi)
and (R) is the right explanation (D) (ii), (iii), (v) and (vi)
of (A).
(B) (A) is correct, but (R) is not 43. Call money rate is applicable for a
correct. very short period to
(A) Inter bank advances
(B) Bank to Reserve Bank
(D) Both (A) and (R) are correct, advances
but (R) is not the right (C) Reserve Bank to Bank advances
explanation of (A). (D) Commercial Banks to
Industrial Banks advances
41. Match the following items of List – I
44. Match the following List – I with
and List – II in terms of functions of
List – II :
commercial banks :
List – I List – II (Name of (Type of
(a) Letter of (i) Advancing Securities) Securities)
reference loans (a) Bonds of (i) Semi-
(b) Sale of gold (ii) Receiving Land Government
coins deposits Development Securities
Banks
(c) Recurring (iii) Non-banking
(b) Treasury (ii) First Order
Account function Bills Securities
(d) Overdrafts (iv) Agency (c) Shares of a (iii) Personal
function Public Ltd. Securities
Codes : Co.
(a) (b) (c) (d) Codes :
(a) (b) (c)
(A) (i) (ii) (iii) (iv)
(A) (i) (ii) (iii)
(B) (iv) (iii) (ii) (i) (B) (ii) (i) (iii)
(C) (iv) (ii) (iii) (i) (C) (iii) (ii) (i)
(D) (i) (iii) (ii) (iv) (D) (i) (iii) (ii)
362
45. Reserve Bank of India controls the 47. Identify the one, from the following,
activities of some of the following which is not a type of disequilibrium
banks in India : in the balance of payments of a
(i) Commercial Banks country :
(ii) Cooperative Banks (A) Cyclical disequilibrium
(iii) Foreign Banks (B) Secular disequilibrium
(iv) Rural Banks (C) Structural disequilibrium
Codes : (D) Sectoral disequilibrium
(A) (i), (ii) and (iii)
(B) (i), (iii) and (iv) 48. The participants who take advantage
of different exchange rates in
(C) (ii), (iii) and (iv)
different markets are
(D) (i), (ii), (iii) and (iv)
(A) Speculators
(B) Arbitrageurs
46. Match the following List – I with
List – II and select the correct answer : (C) Hedgers
(D) Investors
(a) Comparative (i) Gottfried
Cost Theory of Haberler 49. Assertion (A) : The liability of the
International option buyer is limited in the
Trade currency options market.
(b) International (ii) J.S. Mill Reason (R) : Option buyer need
Trade Theory not exercise the option if the
of Opportunity exchange rate is not favourable
Cost for him.
(c) Factor (iii) David Codes :
Endowment Ricardo
(A) (R) is correct and (A) is wrong.
Theory of
International (B) (A) is correct and (R) is wrong.
Trade (C) Both (A) and (R) are correct.
(d) Doctrine of (iv) Hecksher- (D) Both (A) and (R) are wrong.
Reciprocal Ohlin
Demand 50. An MNC that maintains a balance
Codes : between the home market and host
(a) (b) (c) (d) market oriented policies is
(A) (iii) (ii) (iv) (i) (A) Ethnocentric firm
(B) (i) (iii) (ii) (iv) (B) Polycentric firm
(C) (iii) (i) (iv) (ii) (C) Geocentric firm
(D) (ii) (i) (iv) (iii) (D) None of the above
363

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 C 11 C 21 B 31 C 41 B
2 B 12 D 22 C 32 B 42 C
3 C 13 B 23 C 33 A 43 A
4 C 14 C 24 B 34 D 44 A
5 B 15 A 25 C 35 C 45 D
6 A 16 B 26 C 36 A 46 C
7 D 17 B 27 D 37 C 47 D
8 D 18 B 28 C 38 B 48 B
9 A 19 C 29 B 39 C 49 C
10 D 20 C 30 A 40 B 50 C
364
DECEMBER2013
Paper – III
1. The present regime of subsidies can 3. The freedom of private enterprise is
the greatest in the free market
be improved by focussing on economy. This is characterized by
which of the following assumptions ?
(i) Reducing the overall scale of (i) The factors of production
subsidies. (labour, land, capital) are
privately owned and production
(ii) Making subsidies as occurs at the initiative of the
private enterprise.
transparent as possible. (ii) Income is received in monetary
form by the sale of services of
(iii) Giving a specific amount to the the factors of production and
from the profits of the private
Member of Parliament for enterprise.
subsidies. (iii) Members of the free market
economy have freedom of
(iv) Setting clear limits on duration choice in so far as consumption,
occupation, savings and
of any new subsidy scheme. investments are concerned.
(iv) The free market economy is not
(v) Eliminating system of periodic planned, controlled or
review of subsidies regulated by the government.
(v) The free market economy is
(vi) Using subsidies for well- prone to corrupt practices.
Codes :
defined economic objectives. (A) (i), (ii) and (iii)
(B) (i), (ii), (iii) and (iv)
Codes : (C) (i), (ii), (iii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
(A) (i), (ii), (iii) and (iv)
4. The important responsibilities of a
(B) (ii), (iii), (iv) and (v) business to the customers are
(i) To ensure family welfare of the
(C) (i), (iii), (iv) and (vi) customers.
(ii) To understand customer needs
(D) (i), (ii), (iv) and (vi) and to take the necessary
measures to satisfy these needs.
(iii) To ensure health condition of
the customers.
2. Which of the following is not (iv) To ensure that the product
regulated by The Competition Act, supplied has no adverse effect
on the customer.
2002 ? (v) To provide an opportunity for
being heard and to redress
(A) Abuse of dominant position genuine grievances.
(B) Anti-competitive agreements Codes :
(A) (i), (ii), (iii), (iv) and (v)
(C) Medical negligence (B) (i), (ii), (iii) and (iv)
(C) (ii), (iv) and (v)
(D) Predatory pricing (D) (ii), (iii), (iv) and (v)
365
5. The rationale of expanding role of 8. If bonus shares are issued out of pre-
the public sector stems mainly from acquisition profit, it will have
which of the following factors ? (A) Direct effect on the
(i) The failure of the private sector Consolidated Balance Sheet
in certain crucial areas (B) No effect on the Consolidated
(ii) The exploitation of the society Balance Sheet
by the private sector (C) No effect on Net Profit
(iii) The revenue need of the (D) None of the above
Central Government
(iv) The demand of economic 9. The present value of the future
justice contributions of employees is one of
(v) The need for accelerating the the methods of
pace of economic growth (A) HR Accounting
Codes : (B) Inflation Accounting
(A) (i), (ii), (iii) and (iv) (C) Social Accounting
(B) (ii), (iii), (iv) and (v) (D) Responsibility Accounting
(C) (i), (iii), (iv) and (v)
(D) (i), (ii), (iv) and (v) 10. A standard which can be attained
6. Which of the following factors may under the most favourable working
lead to a sick industrial unit ? conditions is called
(i) Shortage of funds and faulty (A) Attainable Standard
financial management (B) Basic Standard
(ii) Investment by the FIIs in (C) Current Standard
Indian industries (D) Ideal Standard
(iii) Unauthorized FDI in Indian
industries 11. Which of the following ratios are
(iv) Lack of experience on the part taken into consideration by a banker
of promoters before sanctioning the loan ?
(v) Technological factors including (A) Proprietory Ratio
obsolete or improper technology (B) Stock-Turnover Ratio
Codes : (C) Debt-Equity Ratio
(A) (i), (ii), (iii) and (iv) (D) All of the above
(B) (ii), (iii), (iv) and (v)
(C) (i), (iv) and (v) 12. Match the items of the following two
(D) (i), (ii) and (iii) lists :
7. Indicate what is not correct in respect
(i) Zero-base (a) Internal
of the Consumer Protection Act,
Budgeting Reconstruction
1986.
(A) No complaint can be (ii) Goodwill or (b) Earnings Per
entertained in respect of a Capital Reserve Share
product purchased more than 2 (iii) Reduction of (c) Control of
years back. Capital Expenditure
(B) A complaint against medical (iv) Basic & (d) Business
negligence can be filed by legal Diluted Combination
heir or representative of the Codes :
deceased. (i) (ii) (iii) (iv)
(C) A complaint involving a claim (A) (c) (d) (b) (a)
of ` 15 lakhs is to be filed (B) (d) (c) (a) (b)
before the State Commission. (C) (d) (a) (c) (b)
(D) Both (A) and (C) (D) (c) (d) (a) (b)
366
13. Assertion (A) : Dividend paid out 16. A measure of the responsiveness of
of pre-acquisition profit by the quantity demanded to changes in the
subsidiary company to the price of a related good is known as
holding company is deducted (A) Cross Elasticity of Demand
from the cost of investment.
(B) Substitution Elasticity of
Reason (R) : Dividend paid out
of pre-acquisition profit by the Demand
subsidiary company should be (C) Complementary Elasticity of
treated as a return of capital to Demand
the holding company. (D) Price Elasticity of Demand
Which one of the following is correct ?
(A) Both (A) and (R) are correct. 17. If the total cost is ` 260 and the total
(B) (A) is correct, but (R) is wrong. variable cost is ` 60, what will be
(C) (A) is wrong, but (R) is correct. total fixed cost if output is (a) 100
(D) Both (A) and (R) are wrong. units and (b) 200 units ?
14. Given below are two statements, one (A) ` 200 and ` 200
labelled as Assertion (A) and the
other labelled as Reason (R) : (B) ` 100 and ` 200
Assertion (A) : Increasing the value (C) ` 260 and ` 100
of closing inventory increases (D) ` 160 and ` 100
profit.
Reason (R) : Increasing the value 18. Optimal input combination to
of closing inventory reduces minimize the cost for a given output
cost of goods sold. will be at the point where :
In the context of the above two (A) Isocost is tangent to Isoquant
statements, which of the following is
correct ? (B) MRTS between inputs is equal
Codes : (C) Any movement from optimum
(A) Both (A) and (R) are correct. point will lead to low level of
(B) Only (A) is correct. output
(C) Only (R) is correct. (D) All the above conditions are
(D) Both (A) and (R) are wrong. fulfilled.
15. Match the items of List – I with the
items of List – II and select the 19. What kinds of actions can be taken to
correct code for the answer : put the rivals at a disadvantageous
List – I List – II position under oligopoly market ?
(a) Multiple (i) MRPT = MC = (A) Commitments
plants MRPX = MRPPY
(B) Threats
(b) Cost-plus (ii) MRT = MC =
pricing MR1 = MR2 (C) Promises
(c) Multiple (iii) MR = MCT = (D) All the above
markets MCA = MCB
(d) Multiple (iv) P = (1 + m) ATC 20. There is no exceptions to the law of
products demand in the case of
Codes : (A) Giffen goods
(a) (b) (c) (d) (B) Normal goods
(A) (iv) (ii) (i) (iii)
(B) (i) (iii) (iv) (ii) (C) Articles of conspicuous
(C) (ii) (i) (iii) (iv) consumption
(D) (iii) (iv) (ii) (i) (D) Ignorance of the buyer
367
21. What is the degree of elasticity of 25. The regression equation of profits (X)
demand in case the demand is on sales (Y) of a firm is given as :
represented by a straight line parallel 3Y – 5X + 110 = 0. If the sales of the
to the x-axis ? firm is ` 44,000, the profit will be
(A) e > 1 (A) ` 23,370 (B) ` 26,422
(B) e = 0 (C) ` 24,422 (D) ` 21,370
(C) e = ∝
(D) e < 1 26. Cricketer ‘A’ scores on an average
40 runs with a standard deviation of
22. If a chi-square test is to be performed 5. Scores of players ‘B’ and ‘C’, on
on a contingency table with 3 rows an average, are 75 and 90 with
and 4 columns, how many degrees of standard deviations 10 and 18
freedom should be used ? respectively. Arrange the players in
(A) 6 the descending order of consistency :
(B) 12 (A) A, B and C
(C) 8
(B) C, B and A
(D) 9
(C) B, A and C
23. Assertion (A) : If regression co- (D) C, A and B
efficient of X on Y is greater
than one, regression co- 27. Among the following, choose the
efficient of Y on X must be less most suitable ‘test’ that can be
than one. applied to examine the influence of
Reason (R) : The geometric one factor on different groups :
mean between two regression (A) ‘t’ test
coefficients is the co-efficient (B) ‘F’ test
of correlation. (C) ‘Chi-square’ test
On the basis of the above, choose the (D) None of the above
appropriate answer :
(A) (A) and (R) are correct.
(B) (A) is correct, but (R) is not 28. A machine produced 20 defective
correct. articles in a batch of 400. After
(C) (A) is not correct, but (R) is overhauling, it produced 10%
correct. defectives in a batch of 300. Which
(D) Both (A) and (R) are not test of hypothesis can be applied to
correct. the above situation to examine
whether the machine has improved ?
24. If the sum of squares of deviations (A) Test of significance of a sample
within samples is 140 with 12 proportion (two-tail test)
degrees of freedom and the sum of (B) Test of significance of a sample
squares of deviations between proportion (one-tail test)
samples is 190 with 2 degrees of (C) Test of significance of
freedom, the test statistic will be difference between two sample
(A) 81.4 proportion (two-tail test)
(B) 12.28 (D) Test of significance of
(C) 8.14 difference between two sample
(D) 1.22 proportion (one-tail test)
368
29. Strategies and policies 34. The following are the steps of
(A) are not closely related management control process :
(B) give direction (i) Taking corrective action from
(C) are the framework for
standards
performance appraisal
(D) both (A) and (B) (ii) Establishing standards
(iii) Measuring actual performance
30. According to Vroom’s Expectancy
(iv) Comparing performance
Theory of Motivation,
(A) Force = valence divided by against standard
expectancy Select the correct sequence of these
(B) Force = valence × expectancy steps from the codes given below :
(C) Force = strength of an Codes :
individual preference for an (A) (i), (ii), (iii), (iv)
outcome (B) (ii), (iii), (iv), (i)
(D) Valence = probability that a (C) (iii), (iv), (i), (ii)
particular action shall lead to a
desired outcome (D) (ii), (iv), (i), (iii)
31. In the managerial grid, the managers 35. Consider the following :
who have little or no concern for (i) Planning is today’s action for
production but are concerned only tomorrow’s decision.
for people are known as what type of (ii) Planning is forward looking
managers ? while controlling is looking
(A) 1.1 Management back.
(B) 5.5 Management
(C) 9.1 Management (iii) Motivation is about getting
(D) 1.9 Management voluntary willingness of
subordinates for action.
32. According to the Boston Consulting (iv) Line and staff organisation is
group, a business, which has a strong
market share in a low growth the oldest form of organisation.
industry is referred to as a Select the correct statements from the
(A) Dog codes given below :
(B) Cash Cow Codes :
(C) Star (A) (ii) and (iii) are correct.
(D) Question mark (B) (i), (ii) and (iv) are correct.
33. Which of the following are major (C) (i), (iii) and (iv) are correct
principles of leading ? (D) All are correct.
(i) Principle of motivation
(ii) Principle of continuous 36. Which is not one of the stages in the
development consumer buying-decision process ?
(iii) Principle of harmony of (A) Purchase decision
objectives (B) Post-purchase behaviour
(iv) Principle of open competition (C) Problem recognition
(v) Principle of communication (D) Cultural factors
clarity
Select the correct answer from the 37. At which stage of product-life-cycle
codes given below : are the pricing decisions most
Codes : complex ?
(A) (i), (ii), (iii), (v) (A) Decline
(B) (i), (ii), (iii), (iv), (v)
(C) (i), (iii), (iv), (v) (B) Growth
(D) (i), (iii), (v) (C) Introduction
(D) Maturity
369
38. Which one is not an element of 42. Match the items of List – I with those
market logistics ? of List – II and indicate the correct
(A) Inventory combination from the codes given
below :
(B) Order-processing List – I List – II
(C) Warehousing (i) AIDA (a) Consumer
Model behaviour
(D) Supply chain management
(ii) Hierarchy of (b) Marketing
effects communication
39. Under which legislation, the model
manufacturers and distributors are (iii) Howard (c) Consumer
required to declare Maximum Retail and Sheth buying-
model decision
Price (MRP) on packaged process
commodities ? (iv) Information (d) Advertising
(A) The Bureau of Indian search effectiveness
Standards Act, 1986 Codes :
(i) (ii) (iii) (iv)
(B) The Consumer Protection Act, (A) (a) (b) (c) (d)
1986 (B) (b) (c) (d) (a)
(C) The Standards of Weights and (C) (b) (d) (a) (c)
Measures Act, 1976 (D) (d) (a) (c) (b)
(D) The Essential Commodities 43. Inability of the firm to meet its
Act, 1955 obligations results in financial
distress which may lead to
bankruptcy resulting into the
40. In modern marketing, which of the following :
following functions of a distribution 1. Distress sale of assets at lower
middleman is gaining maximum price.
importance ? 2. Legal and administrative costs
for bankruptcy.
(A) Making persuasive 3. Dilution of stakeholders’
communication commitment to the firm.
(B) Price negotiation 4. Stretching of payments to
suppliers and creditors.
(C) Keeping adequate inventory The direct costs of such financial
(D) Gathering market information distress may be
(A) 1 and 4 (B) 2 and 3
(C) 1 and 2 (D) 3 and 4
41. Which method of setting the
advertising budget of a company is 44. Mutually exclusive projects can be
considered to be the most scientific ? more accurately ranked as per
(A) Internal rate of return method
(A) All-you-can-afford method (B) Net Present Value Method
(B) Percentage of sales method (C) Modified Internal Rate of
Returns Method
(C) Competitive-parity method
(D) Accounting or Average Rate of
(D) Objectives and tasks method Return Method
370
45. Which one of the following does not 50. Which one of the following does not
constitute a Standalone Risk Analysis ? serve the main objective of
performance appraisal ?
(A) Simulation Analysis (A) Developmental uses
(B) Break-even Analysis (B) Administrative uses
(C) Corporate Risk Analysis (C) Ethical and moral values
(D) Scenario Analysis (D) Organisational objectives
51. Statement (I) : Job evaluation is a
46. Financial leverage in a firm is technique of assessing the
positively affected by worth of each job in
comparison with others
(A) Intensity of tangible assets throughout an organization.
(B) Operating leverage Statement (II) : Job evaluation and
(C) Profitability job rating are one and the same
(D) Tax Rate for employees’ appraisal purposes.
Codes :
(A) Statement (I) is correct, but
47. Which combination of the following Statement (II) is incorrect.
two statements (A) and (R) is correct ? (B) Statement (II) is correct, but
Assertion (A) : The IRR of a Statement (I) is incorrect.
project is the discount rate (C) Both the Statements (I) and (II)
which reduces its NPV to zero. are correct.
(D) Both the Statements (I) and (II)
Reason (R) : A project is worth are incorrect.
accepting if the IRR exceeds 52. Match the items of List – I with the
the cost of capital. items of List – II and select the
Codes : correct answer :
(A) (A) is right, but (R) is wrong. List – I List – II
(i) Job (a) Involves conscious
(B) Both (A) and (R) are correct. Rotation efforts, to organise
(C) (A) is wrong, but (R) is correct. tasks, duties and
(D) Both (A) and (R) are wrong. responsibilities into
a unit of work to
achieve certain
48. Assertion (A) : A company should objectives.
pay minimum dividend to its (ii) Job (b) Involves movement
shareholders. Design of employees from
Reason (R) : Dividends are job to job
(iii) Job (c) Seeks to improve
heavily taxed than capital Evalua- both task efficiency
gains. tion and human
Codes : satisfaction and
(A) Both (A) and (R) are correct. more opportunity
for individual
(B) Both (A) and (R) are incorrect. growth
(C) (A) is not correct, but (R) is (iv) Job (d) The formal process
correct. Enrich- by which the
(D) (A) is correct, but (R) is wrong. ment relative worth of
various jobs in the
organisation is
49. Dividend irrelevance hypothesis is determined for pay
implied in the purpose.
Codes :
(A) Traditional Model (i) (ii) (iii) (iv)
(B) Walter Model (A) (a) (b) (c) (d)
(C) Gordon Model (B) (d) (c) (b) (a)
(D) M.M. Model (C) (c) (d) (b) (a)
(D) (b) (a) (d) (c)
371
53. Assertion (A) : Merit rating of an 56. Match the items of List – I with the
employee is the process of items of List – II and select the
evaluating the employees correct answer :
performance on the job in terms
of the requirements of the job. List – I List – II
Reason (R) : Employees’ merit (i) Abraham (a) Achievement
rating is a technique for fair Maslow Motivation
and systematic evaluation of an Theory
employee’s capacities and (ii) Herzberg (b) ERG Theory
abilities and performance on (iii) Alderfer (c) Two Factor
the specific job. Theory
Codes :
(A) Both (A) and (R) are correct, (iv) McClelland (d) Need Hierarchy
and (R) is the right explanation Theory
of (A). Codes :
(B) Both (A) and (R) are correct, (i) (ii) (iii) (iv)
but (R) is not the right (A) (a) (b) (c) (d)
explanation of (A).
(C) Both (A) and (R) are incorrect. (B) (d) (c) (b) (a)
(D) (R) is correct, but (A) is incorrect. (C) (c) (b) (a) (d)
54. The major provisions for employees’ (D) (d) (c) (a) (b)
health and safety are contained in 57. Assertion (A) : The Central Bank
(A) The Industrial Disputes Act, 1947
of the country is responsible to
(B) The Factories Act, 1948
maintain stability of the
(C) The Industrial Employment
(Standing Orders) Act, 1946 monetary standard which
(D) The Employees’ Compensation involves currency circulation
Act, 1923 Reason (R) : The Central Bank is
the only authorized entity to do
55. Indicate your choice through the codes
so.
given below :
1. A club is an industry under the Codes :
Industrial Disputes Act, 1947 (A) (A) and (R) both are correct.
2. Factory as defined under the (B) (A) and (R) both are incorrect.
Factories Act, 1948 includes a (C) (A) is correct, but (R) is
mine. incorrect.
3. For purpose of the payment of (D) (R) is correct, but (A) is
bonus to employees, the gross incorrect.
profits earned by a bank is to be
calculated in the manner specified 58. Identify the quantitative credit control
in Schedule – I of the Payment of methods among the following :
the Bonus Act, 1965. (i) Bank Rate
4. Various labour laws do not apply (ii) Credit Rationing
to public sector undertakings. (iii) Open Market Operations
Codes : (iv) Variable Reserve Ratio
(A) While 1 and 2 are correct, others (v) Selective Credit Control
are not. (vi) Liquidity Ratio
(B) All the statements are correct. Codes :
(C) Only 1 is correct, others are (A) (i), (ii), (iii) and (iv)
incorrect. (B) (ii), (iii), (iv) and (v)
(D) Only 1 is incorrect, all others are (C) (i), (ii), (v) and (vi)
correct. (D) (i), (iii), (iv) and (vi)
372
59. The following activities are mainly 63. Match the following items of List – I
related to which organization ? with List – II :
(i) Micro Finance
(ii) Rural Finance
(i) SWIFT (a) 1996
(iii) Self Help Groups
(iv) Cooperative Banks Finance (ii) NEFT (b) 1988
(A) Industrial Finance Corporation (iii) BASEL I (c) 1973
of India Accord
(B) Ministry of Finance
(iv) BASEL II (d) 2004
(C) Reserve Bank of India
Accord
(D) National Bank for Agriculture
and Rural Development Codes :
(i) (ii) (iii) (iv)
60. PIN in banking transaction is known (A) (a) (b) (c) (d)
as
(B) (b) (c) (a) (d)
(A) Postal Index Number
(B) Permanent Identification (C) (d) (c) (b) (a)
Number (D) (c) (a) (d) (b)
(C) Personal Identification Number
(D) Public Interlocking Numeric
64. The main features of TRIMS are :
61. Reserve Bank of India was (i) All restrictions on foreign

nationalized on capital are imposed.
(A) January 26, 1948 (ii) No restriction is imposed on
(B) January 01, 1949 any area of investment.
(C) January 26, 1950
(iii) Restrictions on repatriation of
(D) January 01, 1956
dividend is eliminated.
(iv) Imports of raw material is
62. When a banking company is placed
under moratorium under Section 45 allowed freely.
of the Banking (Regulation) Act, (v) No limit on the extent of
1949, the RBI must prepare a scheme
foreign investment.
of
(A) VRS for staff Indicate the correct combination
(B) Capital Buy-Back (A) (i), (ii), (iii) and (v)
(C) Reconstruction of the company (B) (ii), (iii), (iv) and (v)
or amalgamation with any
other bank (C) (iii), (iv) and (v)
(D) IPO of the bank (D) (iv) and (v)
373
65. Assertion (A) : TRIPS requires an 68. Match the items of List – I and items
understanding about the scope of List – II and select the correct
of the new patent regime.
Reason (R) : Patent protection answer :
will be extended to micro List – I List – II
organisms, non-biological and
micro-biological processes and (i) Free Trade (a) MERCOSUR
plant varieties. Area
Codes : (ii) Customs (b) European
(A) (A) and (R) are not related with
Union Union
each other.
(B) (R) is related with (A). (iii) OEEC (c) EFTA
(C) (A) is independent of (R). (iv) Common (d) Marshall
(D) While (R) is related with TRIMS,
(A) is related with TRIPS. Market Plan
Codes :
66. Possible impact of WTO on various
aspects of the Indian economy : (i) (ii) (iii) (iv)
(i) Quantitative restriction will be (A) (a) (b) (c) (d)
allowed.
(B) (b) (d) (a) (c)
(ii) Second hand cars will be
imported. (C) (c) (a) (d) (b)
(iii) There will be dumping of (D) (d) (c) (b) (a)
Chinese goods.
(iv) Increase in population.
(v) Child labour exploitation 69. Assertion (A) : A futures contract
(vi) Unemployment will increase specifies in advance the
Which combination is appropriate ? exchange rate to be used, but it
(A) (i), (ii), (iii)
(B) (iii), (iv), (v) is not as flexible as a forward
(C) (ii), (iii) & (vi) contract.
(D) (iv), (v) & (vi) Reason (R) : A futures contract
is for specific currency amount
67. Assertion (A) : Economic
and a specific maturity date.
integration abolishes cross-
national economic Codes :
discrimination.
(A) (R) is a correct explanation of
Reason (R) : Geographical
proximity is an important (A).
reason for economic integration. (B) (R) is not a correct explanation
Codes :
of (A).
(A) (R) does explain (A).
(B) Both (A) and (R) are correct. (C) (A) and (R) are not related with
(C) Both (A) and (R) are not correct. each other.
(D) (A) is correct, but (R) is not
(D) (R) is irrelevant for (A).
correct.
374
70. Out of the following, which are the 73. Which of the following deductions
important objectives of IMF ? will not come under Sec. 80 of the
(i) To promote exchange rate stability
(ii) To create standby reserves Income Tax Act ?
(iii) To print International currency (A) Deduction in the case of a
notes person with disability
(iv) To establish a multilateral
system of payments. (B) Deduction for interest paid on
(v) To maintain orderly exchange loan taken for pursuing higher
rate stability education
(vi) To create employment
Codes : (C) Deduction for interest on loan
(A) (ii), (iv), (v), (vi) taken for the construction /
(B) (iii), (v), (vi)
purchase of house property
(C) (i), (ii), (iv), (v)
(D) (i), (ii), (v), (vi) (D) Deduction for repayment of
any instalment of principal
71. Given that :
Fair rent of a let out house property amount borrowed for the
is ` 75,000. Its Municipal value is purchase / construction of
` 60,000, standard rent is ` 72,000 house property
and actual rent received is ` 63,000.
What is the Gross Annual Value of
this house property ? 74. X purchased a land in the P.Y. 1997-
(A) ` 60,000 (B) ` 63,000 98 for ` 50,000. This land was sold
(C) ` 72,000 (D) ` 75,000
by him during the P.Y. 2009-10 for
72. Match the items of List – I with the ` 8,00,000. The fair market value of
items of List – II this land on 1-4-81 was ` 1,20,000. If
List – I List – II the Cost Inflation Index for the A.Y.
(i) Amount deposited (a) 80-IA
in PPF 2010-11 is 632, his capital gain for
(ii) Profits and gains (b) 80 G the A.Y. 2010-11 will be
from undertakings (A) ` 4,84,000
engaged in
infrastructure (B) ` 7,50,000
development
(C) ` 6,80,000
(iii) Contribution to (c) 80-IAB
National Defence (D) ` 41,600
Fund
(iv) Profits and gains by (d) 80-C
an undertaking 75. Any amount of money received in
engaged in the excess of ` 50,000 without
development of
consideration is fully taxable in the
Special Economic
Zone hands of
Codes : (A) Individuals
(i) (ii) (iii) (iv)
(A) (d) (c) (b) (a) (B) Individuals and HUF
(B) (d) (a) (b) (c) (C) Individuals, HUF and Company
(C) (d) (a) (c) (b)
(D) (b) (a) (c) (d) (D) All assessees
375

Answer Key (1-75)
1 D 11 C 21 C 31 D 41 D 51 A 61 B 71 C
2 C 12 D 22 A 32 B 42 C 52 D 62 C 72 B
3 B 13 A 23 A 33 D 43 C 53 B 63 B 73 C
4 C 14 A 24 C 34 B 44 B 54 B 64 B 74 D
5 D 15 D 25 B 35 A 45 C 55 A 65 A 75 B
6 C 16 A 26 A 36 D 46 A 56 B 66 C
7 C 17 A 27 B 37 D 47 B 57 C 67 B
8 B 18 D 28 D 38 D 48 A 58 D 68 C
9 A 19 D 29 B 39 C 49 D 59 D 69 A
10 D 20 B 30 B 40 D 50 C 60 C 70 C
376
JUNE 2013
Paper – II
Note : This paper contains fifty (50) objective type questions, each question carrying two (2)
marks. All questions are compulsory.
1. Direct supervision over depositories 4. The apex consumer court in India is
and mutual funds is undertaken by referred to as
(A) NBFCs (A) The Consumer Education and
(B) RBI Research Centre.
(C) SEBI (B) The Consumer Unity and Trust
(D) All of the above Society.
2. In the call/notice money market, (C) National Consumer Disputes
which of the following participants is Redressal Commission.
allowed to trade ? (D) None of the above
(A) All Banks, Primary Dealers and
Mutual Funds 5. Who is Chairman of 13th Finance
(B) All Corporates Commission ?
(C) Only Commercial Banks (A) Dr. C. Rangarajan
(B) Mr. Vimal Jalan
3. Match the items of List-I with the (C) Dr.Vijay C. Kelkar
items of List-II and select the correct (D) None of the above
answer :
(i) Private (a) Secondary 6. Insurance expenses paid to bring an
ownership Market equipment from the place of
and Free purchase to the place of installation is
Enterprise. a type of
(ii) Government (b) Capitalism (A) Revenue expenditure
ownership (B) Capital expenditure
and Central (C) Deferred revenue expenditure
Authority. (D) Operating expense
(iii) The market (c) Primary
for the sale Market
7. ABC Ltd was incorporated with
and purchase
an authorised Share Capital of
of previously
` 1,00,000 equity shares of ` 10
issued
each. The Board of Directors of the
securities.
company decided to allot 10,000
(iv) The market (d) Socialism
shares credited as fully paid to the
for new long
promoters of the company for their
term capital.
services. Which account should be
Codes :
debited in the books of ABC Ltd. ?
(i) (ii) (iii) (iv)
(A) (b) (d) (a) (c) (A) Promoters’ Account
(B) (a) (b) (c) (d) (B) Services Account
(C) (b) (d) (c) (a) (C) Goodwill Account
(D) (a) (c) (b) (d) (D) Share Capital Account
377
8. In a reconstruction scheme, the 12. Match the items of List-I with those
reduction of capital may take the in List-II and select the correct code
form of
for the answer :
(A) Reducing the liability of the
shareholders in respect of any List – I List – II
unpaid amount on the shares (a) Contraction (i) Non-Price
held by them. of Demand change effect
(B) Paying-off any paid-up share
capital which is in excess of its (b) Decrease (ii) Demand curve
requirement. in Demand remains the
(C) Cancelling any paid-up share same
capital which is lost or
(c) Increase in (iii) Price change
unrepresented by available
assets. Demand effect
(D) All of the above. (d) Expansion (iv) Shifts the
of Demand Demand curve
9. While determining the normal rate of
Codes :
return for the valuation of shares in
Market Value Method, which of the (a) (b) (c) (d)
following should be taken into (A) (iii) (i) (iv) (ii)
consideration ?
(A) The degree of risk involved. (B) (iv) (iii) (ii) (i)
(B) The current rate of interest on (C) (i) (ii) (iii) (iv)
gilt-edged securities. (D) (ii) (iv) (i) (iii)
(C) Weighted average cost of
capital.
(D) All of the above. 13. Assertion (A) : As the proportion of
one variable factor in a
10. Master budget is a
combination with fixed factor
(A) Functional Budget
(B) Operating Budget is increased, after a point the
(C) Summary Budget marginal product of the factor
(D) Financial Budget will diminish.
Reason (R) : Beyond the level of
11. Assertion (A) : Want-satisfying
optimum combination of inputs
power of a commodity is called
its utility. leads to this.
Reason (R) : Utility may not have Codes :
the characteristic of morality. (A) (R) is appropriate reason of
Codes :
(A) Both (A) and (R) are correct. (A).
(B) (A) is correct, but (R) is not (B) (R) is not appropriate reason of
correct. (A).
(C) Both (A) and (R) are not
(C) (A) and (R) are not related with
correct.
(D) (R) is correct, but (A) is not each other.
correct. (D) (A) is independent of (R).
378
14. Match the items of List-I with the 17. The difference between sample
items of List-II and select the correct statistic and its corresponding
answer. population parameter is
List – I List – II (A) Sampling error
(a) Indifference (i) Slopes (B) Measurement error
Curve downward to (C) Coverage error
the right (D) Non-response error
(b) Demand (ii) P=AR=MR=d
Curve 18. Match the items in List-I with items
in List-II.
(c) Perfect (iii) Oligopoly List – I List – II
Competition (i) Level of (a) Sample
(d) Price (iv) Convex to significance mean is
Leadership the origin equal to
Codes : population
mean
(a) (b) (c) (d)
(ii) Standard (b) Parameters
(A) (ii) (iii) (iv) (i) deviation of
(B) (iii) (iv) (i) (ii) sampling
(C) (iv) (i) (ii) (iii) distribution
(iii) Numerical (c) Type-I
(D) (i) (ii) (iii) (iv)
value that error
describes the
15. Price, Marginal Revenue and characteristi
Elasticity are related to each other. cs of the
When e = 1, then : population
(A) MR > 0 (iv) Normally- (d) Standard
distributed error
(B) MR < 0
population
(C) MR = 0 Codes :
(D) MR = 1 (i) (ii) (iii) (iv)
(A) (d) (c) (a) (b)
16. Consider the following statistical (B) (c) (d) (b) (a)
tests : (C) (c) (b) (d) (a)
(D) (d) (b) (c) (a)
(i) ‘F’ test
(ii) ‘t’ test 19. Kendall’s co-efficient of
(iii) ‘z’ test concordance is used to
(A) Test the difference among two
(iv) ‘Chi-square’ test
or more sets of data.
Which of these are parametric tests ? (B) Test the relationship between
(A) (i), (ii) and (iv) variables.
(B) (i), (iii) and (iv) (C) Test the variations in the given
data.
(C) (i), (ii) and (iii)
(D) Test the randomness of
(D) (ii), (iii) and (iv) samples.
379
20. Which of the following softwares are 23. Assertion (A) : When span of
used for data processing ? control is wide co-ordination
(i) EXCEL and control becomes difficult.
(ii) ACCESS Reason (R) : In a narrow span, levels
of authority reduces.
(iii) SPSS
Codes :
(iv) STAR (A) Both (A) and (R) are true and
(v) PASW (R) is the correct explanation of
Codes : (A).
(A) (i), (ii), (iii) and (v) (B) Both (A) and (R) are true, but
(R) is not a correct explanation
(B) (ii), (iii), (iv) and (v)
of (A).
(C) (iii) and (iv)
(D) (i), (iii) and (iv) (D) (A) is false, but (R) is true.
21. Match the items of List-I with the 24. The general pattern of behaviour,
items of List-II and select the correct shared belief and values that
answer. members have in common is known
List – I List – II as
(i) Grapevine (a) Task (A) Organisation climate
group (B) Organisation culture
(ii) Formal (b) Field force (C) Organisation effectiveness
group theory (D) Organisation matrix
(iii) Informal (c) Gossip
group 25. Which of the following is not a
(iv) Kurt Lewin (d) National principle of management according
group to Henri Fayol ?
Codes : (A) Subordination of individual
interest over the organisational
(i) (ii) (iii) (iv) interest
(A) (c) (a) (d) (b) (B) Esprit de crops.
(B) (d) (c) (b) (a) (C) Unity of Managers
(C) (a) (b) (c) (d) (D) Unity of Direction
(D) (b) (a) (d) (c)
26. Which of the following concepts is
based on development, design and
22. Who has suggested that achievement
implementation of marketing
motivation among individuals and
programmes, processes and activities
nations can be developed through
that recognise their breadth and
training courses ?
interdependence ?
(A) MeClelland
(A) Product concept
(B) Alderfer (B) Sales concept
(C) Maslow (C) Societal marketing concept
(D) Herzberg (D) Holistic marketing concept
380
27. The concept of marketing-mix, 30. Consumer attitudes and beliefs about
consisting of the 4 P’s of marketing, diet, health and nutrition are
was developed by influenced by
(A) E. Jerome McCarthy (A) Economic environment
(B) Peter F. Drucker (B) Cultural environment
(C) Philip Kotler (C) Social environment
(D) William J. Stonton (D) Natural environment
28. The selling concept is most likely to 31. Positive NPV in project appraised by
be used by firms which sell a firm may not occur an account of
(A) Convenience goods (A) Economics of scale
(B) Shopping goods (B) Market reach

(C) Product differentiation
(C) Speciality goods
(D) Intangible benefits
(D) Unsought goods
32. In case the projects are divisible

29. Match the items of List-I with those under capital rationing an appropriate
of List-II and select the correct project appraisal method is
answer from the codes given below :
(A) Net Present Value Method
(B) Profitability Index Method
(a) Everitt (i) Service
(C) Internal Rate of Return Method
M. Rogers Quality
Model (D) Payback Period Method
(b) J.D. Power (ii) Three types
of 33. Permanent working capital is
marketing generally financed through
for services
(A) Long term Capital Funds
(c) Parasuraman, (iii) Quality
(B) Government Assistance
Zeithaml and rating of
Berry automobiles (C) Internal Financing
(d) Gronroos (iv) Diffusion of (D) Short term loans from Banks
innovation
Codes : 34. The appropriate ratio for indicating
(a) (b) (c) (d) liquidity crisis is
(A) Operating ratio
(A) (iii) (ii) (i) (iv)
(B) Sales turnover ratio
(B) (i) (ii) (iii) (iv)
(C) Current ratio
(C) (ii) (i) (iv) (iii)
(D) Acid test ratio
(D) (iv) (iii) (i) (ii)
381
35. Who proposed a model to apply 39. Statement (i) : Sound industrial
economic order quantity concept of relations are essential to
inventory management to determine achieve individual, team goals
the optimum cash holding in a firm ? and organizational goals.
(A) Keith V. Smith Statement (ii) : Congenial labour
management relations create an
(B) Miller and Orr atmosphere of harmony and
low rate of absenteeism.
(C) William J. Baumol
(A) Statement (i) is true, but (ii) is
(D) J.M. Keynes false.
(B) Statement (ii) is true, but (i) is
false.
36. Which of the following is not (C) Both statements are true.
included in the model of the systems
approach to Human Resource (D) Both statements are false.
Management ?
(A) Human Resource Planning 40. Out of the following, which are the
schemes of Social Security ?
(B) Recruitment and Selection (i) Provident Fund Scheme
(C) Performance appraisal (ii) Health Insurance Scheme
(D) Departmentation (iii) Job Guarantee Scheme
(iv) Maternity Benefit Scheme
(v) Merit Promotion Scheme
37. It is generally easy to measure the (vi) Compulsory and Voluntary
performance of the Social Insurance Scheme
(A) Industrial Relations Manger (vii) Child Insurance Scheme
(B) Research and Development Codes :
Manager (A) (i), (ii), (iv) and (vi)
(C) Sales person (B) (ii), (i), (v) and (vii)
(C) (iii), (v), (iv) and (vi)
(D) (iv), (vii), (iii) and (ii)
38. Which one of the following is not a 41. RBI ensures that banks operate
monetory incentive to sales people ? within the set norms by conducting
______ inspections and _______
(A) Bonus
monitoring.
(B) Staff meeting (A) on site, off site
(C) Travelling allowance (B) off site, on site
(C) on site, field
(D) Both (B) and (C)
(D) field, on site
382
42. Under Section 37 of the Banking 46. Flow of foreign loans and
(Regulation) Act, a moratorium order investments affect
can be issued by the High Court for a (A) Trade balance
maximum total period of
(B) Current Account balance
(A) One month (C) Capital Account balance
(B) Six months (D) None of the above
(C) One year
47. Concessions mainly multinational in
(D) One and a half year character come under the principle of
(A) Non-discrimination
43. Bonds or debentures issued by (B) Reciprocity
Securitization company should bear (C) Market Access
interest not less than
(D) Fair Competition
(A) Bank Rate
(B) Prime Lending Rate 48. From the following identify the one
which is not a commercial counter
(C) 1.5% over the Bank Rate trade ?
(D) 1.5% over the Saving Rate (A) Classical barter
(B) Counter purchase
(C) Pre-compensation
44. Section 131 of the Negotiable
Instruments Act extends protection to (D) Buy-back agreement
the _______
(A) Collecting Banker 49. If the spot price is higher than the
strike price in a call option, it is
(B) Paying Banker referred to as
(C) Advising Banker (A) At-the-money
(B) In-the-money
(D) Confirming Banker
(C) Out-of-the-money
(D) Premium
45. When a customer, by a letter has
advised the bank not to honour/pay a
50. Identity the item which does not
particular cheque, such letter is called
include under Current Account
______
transaction.
(A) Cancellation letter (A) Services
(B) Garnishee letter (B) Non-monetary movement of
gold
(C) Mandate
(C) Unilateral transfer
(D) None of the above (D) Investment income
383
JUNE 2013 Paper II

Answer Key (1-50)
Q A Q A Q A Q A Q A
1 C 11 A 21 A 31 D 41 A
2 C 12 A 22 * 32 B 42 B
3 A 13 A 23 C 33 A 43 C
4 C 14 C 24 B 34 D 44 A
5 C 15 C 25 C 35 C 45 D
6 B 16 C 26 D 36 D 46 C
7 C 17 A 27 A 37 C 47 B
8 D 18 B 28 D 38 D 48 D
9 D 19 B 29 D 39 C 49 B
10 C 20 A 30 B 40 A 50 B
384
JUNE 2013
PAPER – III
1. Under the provisions of the 3. Match the items of List-I with the
Industries (Development and items of List-II and select the correct
Regulation) Act, 1951, a licence is answer :
necessary for List – I List – II
(i) SLR (a) Working in the
(A) Changing the location of an field of consumer
existing industrial undertaking. protection.
(B) producing or manufacturing a (ii) SIDBI (b) Credit control.
‘new article’ in an existing (iii) CUTS (c) Industrial policy.
industrial undertaking. (iv) ILPIC (d) Facilitating Small
(C) Establishing a new Scale Industries.
undertaking. Codes :
(i) (ii) (iii) (iv)
(D) All of the above. (A) (a) (c) (d) (b)
2. Match the items of List-I with the (B) (b) (d) (a) (c)
(C) (a) (b) (c) (d)
items of List-II and select the correct (D) (a) (c) (b) (d)
answer.
List – I List – II 4. Match the following :
(i) Political (a) Important for List – I List – II
and Legal industries (i) National (a) Marks the
Environ- directly Stock beginning of the
ment depending Exchange process of
on imports dematerialisation
or exports. of shares of the
(ii) Demo- (b) Close participating
graphic relationship companies.
Environ- with the (ii) National (b) Facilitation of
ment economic Securities equal access to
system and Depository investors across
economic Limited the country.
policy. (iii) Securities (c) To foster the
(iii) Economic (c) Related to and development of
Environ- natural Exchange an active
ment resources. Board of secondary market
(iv) Geo- (d) Occupational India for Government
graphical and spatial Securities.
and mobilities of (iv) Securities (d) Abolition of
Ecological population Trading Capital issues
Environ- having Corporat- control and
ment implications ion of retaining the sale
for business. India authority for new
Codes : capital issues.
(i) (ii) (iii) (iv) Codes :
(i) (ii) (iii) (iv)
(A) (b) (d) (c) (a) (A) (b) (a) (d) (c)
(B) (b) (d) (a) (c) (B) (a) (b) (c) (d)
(C) (a) (b) (c) (d) (C) (a) (b) (d) (c)
(D) (d) (c) (b) (a)
(D) (a) (b) (d) (c)
385
5. The United Nations Conference on 11. Match the items of the following two
Trade and Development (UNCTAD) lists :
was set up in List – I List – II
(A) 1944 (B) 1954
(C) 1960 (D) 1964 (i) Statement of (a) Cash Flow
changes in Statement
6. Indicate the ground on which a Working
complaint under the Consumer Capital
Protection Act, 1986, shall be invalid. (ii) Deferred (b) Fixed
(A) A product having short weight. Tax Assets
(B) A service provided free of cost. (iii) Three (c) Funds
(C) A misleading advertisement activities Flow
given in newspaper. Statement
(D) None of the above.
(iv) Impairment (d) Balance
7. Out of the following, which are the Loss Sheet
four components of food security ? Codes :
(i) Food availability
(i) (ii) (iii) (iv)
(ii) Food market
(iii) Food accessibility (A) (a) (b) (c) (d)
(iv) Food utilization (B) (c) (d) (b) (a)
(v) Food credit
(C) (c) (d) (a) (b)
Codes :
(A) (iii), (iv) and (v) (D) (d) (c) (a) (b)
(B) (i), (iii) and (iv)
(C) (i), (ii) and (iii)
12. Match the items of the following two
(D) (i), (ii) and (iv)
lists and indicate the correct answer :
8. Performance evaluation of a List – I List – II
responsibility centre can be done by
(i) Earning (a) Basis of
(A) ROI
ability of Accounting
(B) Return on sales
firm
(C) EVA
(D) All of the above (ii) Conserva- (b) P/V ratio
tism
9. Social Balance Sheet shows (iii) Cash profit (c) Cash flow
(A) Social costs statement
(B) Social revenues
(C) Value of employees of the (iv) Cash and (d) Prudence
organisation Accrual
(D) All of the above Codes :
10. Which of the following comes under (i) (ii) (iii) (iv)
efficiency ratios ? (A) (b) (d) (c) (a)
(A) Average collection period (B) (b) (a) (d) (c)
(B) Inventory turnover ratio
(C) Fixed assets turnover ratio (C) (c) (d) (a) (b)
(D) All of the above (D) (c) (d) (b) (a)
386
13. Given below are two statements, one 16. Match the items of List-I with the
labelled as Assertion (A) and the items of List-II and select the correct
other labelled as Reason (R). answer.
Assertion (A) : Only the relevant List – I List – II
costs should be taken into (a) Economic (i) Total
consideration for decision- profit Revenue
making. Explicit cost
Reason (R) : All variable costs are (b) Accounting (ii) Buyers and
relevant costs and all fixed profit Sellers
costs are irrelevant costs. exchanging
In the above two statements, which (c) Collusion/ (iii) Total
one alternative of the following is Cartel Revenue –
correct ? Total cost
Codes : (d) Market (iv) Oligopoly
(A) Both (A) and (R) are correct. Codes :
(B) Only (A) is correct, but (R) is (a) (b) (c) (d)
wrong. (A) (iii) (i) (iv) (ii)
(C) Only (R) is correct, but (A) is (B) (i) (ii) (iii) (iv)
wrong. (C) (iv) (iii) (ii) (i)
(D) Both (A) and (R) are wrong. (D) (ii) (iv) (i) (iii)
17. Which one is not the item of
14. Given below are two statements, one economic cost to the business ?
labelled as Assertion (A) and the (A) Owner supplied resources.
other labelled as Reason (R) : (B) Market supplied resources.
Assertion (A) : Variance analysis is (C) Implicit costs.
undertaken for planning and (D) Non-monetary opportunity
control of costs. costs of using owner supplied
Reason (R) : Future costs are taken resources.
into consideration in budgeting 18. Demand must have the elements
and standard costing. (A) Desire
In the above two statements, which (B) Want
one alternative of the following is (C) Quantity, Price and Time
correct ? (D) All of the above
Codes :
(A) Both (A) and (R) are correct 19. Match the items of List-I and items
and (R) is the Reason for (A). of List-II and select the correct code
(B) Both (A) and (R) are correct for the answer.
and (R) is not the Reason for List – I List – II
(A). (a) Utilitarian (i) Marginal Rate
(C) (A) is correct, but (R) is wrong. Approach of Substitution
(D) (A) is wrong, but (R) is correct. (b) Ordinal (ii) Budget line &
Approach Indifference
15. Assertion (A) : Mark-up pricing is a Curve
method of determining price. (c) Price- (iii) U=f (x, y)
Reason (R) : P = ATC + (m × ATC) Consumption
is the expression for that. Curve
Codes : (d) Consumer (iv) MRSxy =
(A) (A) is correct but (R) is not Equilibrium MRSyx
correct.
(B) Both (A) and (R) are correct. Codes :
(C) Both (A) and (R) are not (a) (b) (c) (d)
(A) (i) (iv) (iii) (ii)
correct. (B) (ii) (iii) (iv) (i)
(D) (R) is correct, but (A) is not (C) (iii) (i) (ii) (iv)
correct. (D) (iv) (ii) (i) (iii)
387
20. The Learner Index measures 24. Which of the following tests can be
(A) Market power applied to ordinal scale data ?
(B) Price (i) Chi-square test
(ii) ‘Z’ test
(C) Price-Marginal cost
(iii) Kruskal-Wallis test
(D) None of the above (iv) Wilcoxon Mann-Whitney test
Codes :
21. Match the items of List-I and items (A) (i), (ii) and (iii)
of List-II and select the correct (B) (ii), (iv) and (iii)
answer. (C) (i), (iii) and (iv)
List – I List – II (D) (i), (ii) and (iv)
(a) Perfect (i) Different
competition prices for the 25. Which of the following tests can be
same based on the normal distribution ?
product (A) Difference between
(b) Monopolistic (ii) Dominant independent means
competition strategy (B) Difference between dependant
means
(c) Oligopoly (iii) Product
(C) Difference between proportions
differentiation
(d) Discriminating (iv) Identical
Monopoly product 26. From the following, identify one
Codes : situation where ‘F’ test cannot be
(a) (b) (c) (d) used ?
(A) (iv) (iii) (ii) (i) (A) To compare more than two
population means.
(B) (i) (ii) (iii) (iv)
(B) To test the hypothesis about a
(C) (ii) (iv) (i) (iii) single population variance.
(D) (iii) (i) (iv) (ii) (C) To test the hypothesis about
two-population variance.
22. If there are 8 possible classes under (D) To study about randomized
consideration for a goodness of-fit, block design.
the number of degrees of freedom
will be 27. Which statistical test should be
applied to test the effectiveness of
(A) 8 ‘special coaching’ on the marks
(B) 7 scored by the students ?
(C) 6 (A) Paired ‘t’ test
(D) Cannot be determined from the (B) ‘Chi-square’ test
given information. (C) ‘Z’ test
(D) ‘F’ test
23. Identify from the following, the test 28. In a linear equation,
statistic for which the value of y = a + bx, ‘a’ refers to
numerator should always be greater (A) Slope
than that of denominator. (B) Y-intercept
(A) ‘Chi-square’ (B) ‘F’ value (C) Dependant variable
(C) ‘Z’ value (D) ‘t’ value (D) Independent variable
388
29. Which among the following is the 33. If a network of interpersonal

most popular approach for relationship that arise when people
accomplishing the results ? associate with each other is an
(A) Management by exception informal organization, then find out
(B) Reward system which of the following is not an
(C) Management by objectives informal organization ?
(D) Mentor system (A) The “machine shop” group
30. The managerial function of (B) Customers’ group
organizing involves (C) The “sixth floor” group
(A) Reviewing and adjusting plan (D) The “Friday evening bowling”
in the light of changing gang
conditions.
(B) Establishing programme for the 34. Which of the following are sources
accomplishment of objectives. of ethics ?
(C) Creating structure of functions (i) Religion
and duties to be performed. (ii) Legal system
(D) Getting things done through (iii) Economic system
others. (iv) Culture
31. A leader who identifies what (v) Family system
subordinates need to do to achieve Select the correct answer from the
objectives, clarify organizational codes given below :
roles and tasks, set up an (A) (i), (ii), (iii), (v)
organization structure, reward (B) (i), (ii), (iv)
performance and provide for the (C) (i), (iv), (v)
social needs of their followers, is (D) (i), (ii), (iii), (iv), (v)
(A) a transformational leader
35. Which of the following has refined
(B) a participative leader
Maslow’s theory of motivation by
(C) a transactional leader
proposing a hierarchy of three
(D) an autocratic leader
needs ?
32. Which of the following is not an (A) MeClelland (B) Aldorfer
assumption of theory X ? (C) Herzburg (D) Vroom
(A) An average human being has
an inherent dislike of work and 36. Which segmentation approach is the
will avoid it if he can.
most compatible with the spirit of the
(B) An average human being
marketing concept ?
prefers to be directed, seeks to
(A) Benefit sought
avoid responsibility, has
(B) Income
relatively little ambition, and
(C) Social class
want security above all.
(C) An average human being learns (D) Family size
under proper conditions, not
only to accept responsibility 37. The description of a product’s
but also to seek it. quality, features, style, brand name
(D) Most people must be coerced, and packaging identifiers the
controlled, directed and (A) Actual product
threatened with punishment to (B) Augmented product
get them put forth adequate (C) Core product
effort. (D) Tangible product
389
38. Consider the following statements 41. Which form of retail outlet has the
and find out the correct alternative highest operating costs ?
from the codes given below : (A) Super market
(i) A firm’s marketing information (B) Consumer co-operative store
system is a component of its (C) Department store
(D) Retail chain store
marketing research system.
(ii) The most common forms of 42. Consider the following statements
marketing researches and indicate the correct alternative
from the codes given below :
conducted in most of the firms (i) The product management
are the measurement of market system often turns out to be
potential and the analysis of costly.
market share. (ii) When customers belong to
(iii) Survey research is seldom used different user groups with
for studying consumer distinct buying preferences and
perception and attitudes. practices, a market
management organization is
(iv) The concept of cognitive not suitable.
dissonance is relevant to study (iii) Advertising department has the
consumer’s post-purchase closest interface with the
behaviour. finance department of the
Codes : company.
(A) All the statements are true. Codes :
(B) All the statements are false. (A) (i) and (ii) are correct.
(B) (ii) and (iii) are correct.
(C) (i) is false and the rest are true. (C) Only (i) is correct.
(D) (ii) and (iv) are true and the rest (D) All are correct.
are false.
43. Match the statements in List-I with
39. In India, which pricing practice is not dividend models in List-II as follows :
permissible ? List – I List – II
(A) Penetrating pricing I Dividend 1. Traditional
Capitalisation Model
(B) Skimming pricing Approach.
(C) Predatory pricing II Dividend Policy 2. Gardon
(D) None of the above has a bearing on Model
the share
40. Consider the following statements valuation.
and find out the correct alternative III Stock Market 3. Walter
from the codes given below : places more Model
(i) A good salesman is one who weight on
can sell refrigerator to an dividends than
on retain
Eskimo. earnings.
(ii) Salesmen are born, not made. IV Dividend payout 4. Modigliani
(iii) Physical distribution is an area is irrelevant to and Miller
where high cost-savings is the value of the Model
possible. firm.
Codes : Codes :
(A) (i) and (iii) are correct. I II III IV
(A) 2 3 1 4
(B) (i) and (ii) are correct. (B) 1 2 4 3
(C) (ii) and (iii) are correct. (C) 4 1 3 2
(D) All are correct. (D) 3 4 2 1
390
44. Venture capital financing at starting 47. The degree to which the returns of
stage is generally not done through the two securities change together, is
(A) Debt instruments reflected by
(B) Deep discount bonds (A) Correlation (B) Leverage
(C) Covariance (D) Beta
(C) Equity shares
48. The transfer by a company of one or
(D) Conditional loans
more of its business divisions to
another newly set up company is
45. Match the statements in List-I with called
the types of lease in the List-II as (A) Demerger
follows : (B) Merger
List – I List – II (C) Equity Carve-out
I Lessor transfers all 1. Indirect (D) Disinvestment
risks and rewards lease 49. What combination of the following
of an asset to the factors influences the working capital
lessee. requirement ?
II Lessor transfers the 2. Operating I Market Conditions
assets to the lessee lease II Production Policy
but bears the cost III Firm’s goodwill
of maintenance IV Supply conditions
III The owner of the 3. Finance Codes :
asset sells it to the lease (A) I, II and III
lessor who in turn (B) II, III and IV
leases it back to the (C) I, III and IV
owner (now lessee) (D) I, II and IV
50. Which of the followings are the
IV Lessor owns/ 4. Direct modern method of performance
acquires the assets lease appraisal ?
that are leased to a (i) 360 degree performance
given lessee. appraisal.
Codes : (ii) Graphic rating scale.
I II III IV (iii) Management By Objectives
(A) 2 3 4 1 (MBO).
(B) 1 4 2 3 (iv) Forced distribution method.
(v) Behaviourally Anchored
(C) 3 2 1 4
Rating Scales (BARS).
(D) 4 1 3 2 Select the correct answer from the
codes given below :
46. Full details for the issue of ADRs by (A) (i), (ii), (iii) (B) (ii), (iv), (v)
a company must be furnished within (C) (i), (iii), (v) (D) (iv), (ii), (i)
30 days from the date of its closure to 51. Which of the following principle
(A) Securities and Exchange serves as a warning to organisations
Commission (SEC) not to take the selection and
promotion process lightly ?
(B) Reserve Bank of India (RBI)
(A) Promotion Principle
(C) Securities and Exchange Board (B) Drucker Principle
of India (SEBI) (C) Validity Principle
(D) Company Law Board (CLB) (D) Peter Principle
391
52. According to D. Katz morale has 56. Which one of the following methods
four dimensions : is not a demand forecasting method
(i) jobs satisfaction of Human Resource Planning ?
(ii) satisfaction with wages and (A) Managerial judgement
promotional opportunities. (B) Managerial grid
(iii) Identification with company. (C) Work study techniques
(iv) Pride in the work group. (D) Statistical techniques
(v) Top Management Support.
57. Transaction of Internet Banking
Select the correct combination.
excludes
(A) Withdrawal of cash anywhere
(B) (i), (ii), (iii) and (v)
in India.
(C) (i), (ii), (iv), and (v)
(B) Statement of account for a
(D) (i), (iii), (iv) and (v)
specific period.
(C) Transfer of funds from one
53. HRM is viewed as a management
account to another account.
process, consisting of four functional
(D) Balance enquiry.
activities :
(i) Acquisition 58. Which among the following is not a
(ii) Motivation category of Non-Performing Assets ?
(iii) Development (A) Substandard Assets
(iv) Resolution of industrial disputes (B) Doubtful Debts
(v) Maintenance (C) Loss Assets
Select the correct combination. (D) Devaluated Assets
(B) (i), (ii), (iii) and (v) 59. When a loan will be NPA ?
(C) (i), (ii), (iv) and (v) (A) Interest and/or loan instalments
(D) (i), (iii), (iv) and (v) overdue for more than 90 days.
(B) Account is out of order for
54. O C TA PA C stands for more than 90 days in case of
(A) Order, Co-ordination, Trust, overdraft/cash credit.
Authority, Personality and Co- (C) Bill remains overdue for more
operation. than 90 days.
(B) Openness, Confrontation, (D) All of the above.
Trust, Authenticity, Pro-action
and Collaboration. 60. Assertion (A) : “The problem of
(C) Organisation, Conflict, Team, rural credit is not primarily one
Authority, People and of rural credit, it may be said to
Collaboration. be one of rural minded credit.”
(D) Oneness, Compromise, Tress Reason (R) : The Indian economy
pass, Authority, Protection and has yet to come out of rural
Combination. mentality.
Codes :
55. Technique of ‘Transaction Analysis’ (A) Both (A) and (R) are correct.
was developed by (B) Both (A) and (R) are incorrect.
(A) Elton Mayo (C) (A) is correct, but (R) is
(B) Peter Drucker incorrect.
(C) Eric Berne (D) (R) is correct, but (A) is
(D) Adam Smith incorrect.
392
61. Match the items of List-I with the 63. Assertion (A) : Most of the
items of List-II and select the correct development bank in India
answer : have setup private commercial
banks after the introduction of
capital adequacy norms.
(i) Debit card (a) Several
storage Reason (R) : Development banks in
India have not adhered to their
(ii) Credit card (b) Online basic objectives.
recovery
of amount Codes :
(iii) Electronic (c) Image (A) (A) and (R) both are correct,
purse processing and (R) is correct explanation
use of (A).
(iv) Cheque (d) Revolving (B) (A) and (R) both are correct,
function credit but (R) is not a correct
explanation of (A).
Codes :
(C) (A) is correct, but (R) is
(i) (ii) (iii) (iv) incorrect.
(A) (c) (a) (d) (b)
(D) (R) is correct, but (A) is
(B) (a) (b) (d) (c) incorrect.
(C) (d) (c) (a) (b)
(D) (d) (c) (b) (a) 64. Match the following items of List-I
with List-II :
62. Assertion (A) : The Indian economy List – I List – II

could survive in the recent (a) Brettonwoods (i) 1947
global recession due to its conference
strong banking system.
(b) General Agreement (ii) 1964
Reason (R) : The Indian economy on Trade and Tariffs
contains a large amount of
black money. (c) ACCRA conference (iii) 1944
Codes : (d) United Nations (iv) 2008
Conference on Trade
(A) Both (A) and (R) are correct
and Development
and (R) is the explanation of
(A). Codes :
(B) Both(A) and (R) are correct, (i) (ii) (iii) (iv)
but (R) is not the correct
explanation of (A). (A) (b) (d) (a) (c)
(C) (R) is correct, but (A) is not the (B) (b) (d) (c) (a)
appropriate assertion of (R). (C) (b) (c) (d) (a)
(D) Both (A) and (R) are incorrect. (D) (c) (a) (b) (d)
393
65. The forces that lend momentum to 67. Assertion (A) : The major economic
the process of globalization have powers have succeeded in
been identified by Michael Porter creating a new international
include the following : regime where the profits and
the dominance of their
(i) Fluid global capital market.
transnational corporations will
(ii) Technological restructuring. be the decisive consideration.
(iii) Decreasing religious command. Reason (R) : This regime will
legitimise the process of
(iv) Ethnic decontrol. progressive erosion of the
(v) New-global competitors. sovereign economic space of
the third-world countries.
(vi) End of the ‘cold war’ in 1990s. (A) Both (A) and (R) are correct,
Codes : and (R) is the right explanation
of (A).
(A) (vi), (v), (iv) and (iii)
(B) Both (A) and (R) are correct,
(B) (vi), (iii), (ii) and (i) but (R) is not the right
(C) (vi), (v), (ii) and (i) explanation of (A).
(D) (iv), (iii), (ii) and (i) (D) (R) is correct, but (A) is not
correct.
66. Statement (I) : Green Box subsidies 68. Assertion (A) : The ‘Balance of
include amount spent on Payments’ presents a classified
Government services such as record of all receipts on
research, disease control, account of goods exported,
infrastructure and food services rendered and capital
security. received by ‘residents’ and
payments made by them on
Statement (II) : Blue Box subsidies account of goods imported and
are certain direct payments services received from capital
made to farmers, to limit transferred to ‘non-residents’ or
production, and are certain ‘foreigners”.
government assistance Reason (R) : The ‘Balance of
programmes to encourage Payments’ of a country is a
agriculture and rural systematic record of all
development. economic transactions between
Codes : the ‘residents’ of a country and
the rest of the world.
(A) Statement (I) is correct, but (II) (A) Both (A) and (R) are correct
is not correct. and (R) is the right explanation
(B) Statement (II) is correct, but (I) of (A).
is not correct. (B) Both (A) and (R) are correct,
but (R) is not the right
(C) Both statement (I) and (II) are explanation of (A).
correct. (C) (R) is correct, but (A) is not
(D) Both statement (I) and (II) are correct.
incorrect. (D) Both (A) and (R) are incorrect.
394
69. Which among the following is not 71. Donation to National Children’s
rightly explained ? Fund will come in which of the
following deduction under Sec. 80G
(i) M1 = Currency with the public of Income Tax Act, 1961.
+ demand deposits of the (A) 100 percent deduction without
public. any qualifying limit.
(ii) M2 = M1 + Post Office Savings (B) 50 percent deduction without
any qualifying limit.
Deposits. (C) 100 percent deduction subject
(iii) M3 = M1 + Time Deposits of to qualifying limit.
(D) 50 percent deduction subject to
the public with Banks. qualifying limit.
(iv) M4 = M3 + Total Post Office
Deposits. 72. If the taxable income of a domestic
company for the Assessment Year
(v) M1 = Narrow money 2011-12 is ` 9,00,000, its tax liability
will be
(vi) M3 = Broad money (A) ` 2,76,800 (B) ` 2,78,100
(A) Only (v) and (vi) (C) ` 3,70,800 (D) ` 3,70,880
(B) Only (i) and (iii) 73. Unabsorbed depreciation which
(C) Only (vi) could not be setoff in the same
assessment year, can be carried
(D) None of the above forward upto
(A) 4 years
(B) 8 years
70. Which of the followings are not (C) 10 years
effect of dumping on importing (D) Indefinite period
country ?
74. If the book profits of a partnership
(i) Domestic industry might be firm is ` 1,10,000, the remuneration
affected adversely by a decline admissible to working partners under
in sales and profits. Sec.40(b) of the Income Tax Act,
(ii) If dumping is continued for a 1961 is
(A) ` 1,10,000
longer period, survival of the
(B) ` 1,50,000
domestic industry may be (C) ` 99,000
threatened. (D) None of the above
(iii) Dumping may create BOP 75. Which of the following expenses is
problems for the country. inadmissible while computing
(iv) It finds market for its surplus income from other sources ?
production. (A) Interest paid on amounts
borrowed to meet tax liabilities.
Codes : (B) Collection charges paid to the
(A) (i), (ii), (iii) and (iv) banker or any other person to
collect interest/dividend.
(B) (ii), (iii) and (iv) (C) Interest on loan taken to invest
(C) (iii) and (iv) in securities.
(D) Depreciation on let-out
(D) Only (iv) machinery and plant.
395
JUNE 2013 Paper III

Answer Key (1-75)
1 D 11 C 21 A 31 C 41 C 51 D 61 B 71 B
2 B 12 A 22 D 32 C 42 C 52 A 62 B 72 B
3 B 13 B 23 B 33 B 43 A 53 B 63 C 73 D
4 A 14 B 24 C 34 C 44 B 54 B 64 A 74 B
5 D 15 B 25 D 35 B 45 C 55 C 65 C 75 A
6 B 16 A 26 B 36 A 46 B 56 B 66 C
7 B 17 B 27 A 37 A 47 C 57 A 67 B
8 D 18 D 28 B 38 D 48 A 58 D 68 A
9 C 19 C 29 C 39 C 49 D 59 D 69 D
10 D 20 A 30 C 40 A 50 C 60 C 70 D
396

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UGC NET COMMERCE PREVIOUS QUESTION PAPERS

Answer Key (1-100)

Note: * Marks Given to all Candidates

Answer Key (1-100)

Note: * Marks Given to all Candidates

(a) AS – 1 (i) Accounting for fixed assets

(b) AS – 3 (ii) Disclosure of accounting policies

(c) AS – 10 (iii) Leases and its accounting

(d) AS – 19 (iv) Cash flow statements

(i) Product Tailoring

(ii) Public Utility Pricing

(iii) Refusal Pricing

(iv) Monopoly Pricing

Choose the correct answer from the code given below :

2. Only (iii) and (iv)

3. Only (ii), (iii) and (iv)

4. Only (i), (ii) and (iii)

Statement I : Punctuality and team spirit among employees of an organization has

Statement II : Financial statements do not reflect the correct financial position of a

2. Statement I is correct, but II is incorrect.

3. Statement I is incorrect, but II is correct.

4. Both the statements I and II are correct.

4. "Everyone benefits when the focus is on common interest and promotion of

2. Human Relations approach

5. Which one of the following statements is not true?

1. Long-term liabilities due for payment within a year should be treated as

6. Given is the information related to a house :

Municipal Value (M. V.) ₹ 1,50,000

(i) Foreign exchange

4. (i), (ii) and (iii)

8. Which one of the following statements is not true?

calculating profits from operations.

2. Any transaction that increases working capital is a source of funds.

4. Depreciation is a source of funds.

(a) Structured (i) A realistic approach that yields comparable

(b) Unstructured (ii) Useful to understand applicant's reasoning and

(d) Behavioural (iv)Useful when the interviewer tries to probe

1. (a) – (i); (b) – (iv); (c) – (ii); (d) – (iii)

2. Attracting consumers seeking variety who may otherwise have switched to

3. Increasing shelf presence and retailer dependence in the store

4. Decreasing interval competition within the firm

2. (a) – (ii), (b) – (i), (c) – (iii)

3. (a) – (iii), (b) – (ii), (c) – (i)

4. (a) – (ii), (b) – (iii), (c) – (ii)

14. “Skimming in e- Banking method of

2. Intimating the customer about his heavy withdrawals

3. Converting Debit Card into Credit Card

4. Transferring cash from one account to another account

17. Which one of the following statement is correct?

3. The purpose of issuing different type of rules and regulations by SEBI is to

Assertion (A) : Among all methods of charging deprecation on fixed assets,

27. Which of the following statements is / are false?

(i) capital profits can never be distributed as dividend to the shareholders

1.(ii) (iii) and (iv)

2.(i) (ii) (iii) and(iv)

3.(i) (ii)and (iii)

4.(iii) and (iv)

1.Gossen’s laws of consumption

4. entry and exit of buyers