UGC NET Official Paper 2: (Management) Held On - 20th Dec 2018 Shift 2 (Previous Year Paper)

The correct answer is (A) is correct, but (R) is incorrect.

Key Points

 Assertion (A) : A price reduction leads to an increase in the quantity demanded of the commodity.

• The quantity that consumers desire is determined by the price of an item/ product or service in a market.
• In an inverse relationship, lower prices lead to increased quantity demand and higher prices lead to reduced quantity demand.
• The term "elasticity of demand" refers to how much the quantity demanded alters in response to a change in price.
• It is correlated with the slope of the demand curve.

So, this statement is absolutely correct.

 Reason (R) : It results from price effects comprising income and substitution effects which are always positive.

• The income effect is always positive when there is a direct relationship between price and quantity demanded via compensating variation in income.
• When a good is inferior, the negative substitution effect outweighs the positive income benefit, resulting in a negative overall price effect.

So, this statement/ reason goes wrong.

Hence, the correct answer is (A) is correct, but (R) is incorrect.

The correct answer is Only (i), (ii) and (iv)

Key Points

• Price Discrimination: A selling tactic known as price discrimination involves charging clients various rates for the same good or service depending on what the vendor believes they can persuade the customer to agree.
• Postage stamp pricing: It is when all destinations, regardless of the buyer's location, are charged the same delivered rate. Because of this, the price shown includes the expected average transportation costs.
• Base Point pricing: With a system known as "basing point pricing," irrespective of where the seller is located, the buyer must pay the whole cost of the product, including shipping.
• The manufacturing or production of a good or service typically takes place at the base site itself.
• FOB pricing: Due to the fact that the seller must cover all shipping costs when using FOB pricing, the actual price of the product will vary depending on the buyer's location.
• Incremental pricing: The process of pricing a product based on incremental cost is known as incremental pricing.
• With this method of pricing, the selling price of a product is established by the variable cost rather than the whole cost of production.
• Incremental cost is the cost of producing additional products using the same setup, meaning that the fixed cost stays unchanged while the variable cost mostly determines the selling price of the product produced.

Hence, the correct answer is Only (i), (ii) and (iv)

The correct answer is- will produce below its economic capacity level when it exhibits satisfaction with the normal profit only.

Key Points

• It refers to a situation in which one seller controls the market and only sells one type of product.
• There is no competition in a monopoly market because of the seller's exclusivity and the absence of a suitable substitute.
• In a market with a monopoly, factors like a government license, copyright, patent ownership, as well as a high entry cost, make one company the only provider of commodities.
• Monopolies may result in unfair business practises.
• Monopoly's negative aspects include:

1. Consumer exploitation

2. Clients that are unsatisfied

3. More costly goods

4. Inferior products and services

5. Pricing discrimination

6. If satisfied with a normal profit and no competitors are present, the company will produce less products than its capacity.

Hence, the correct answer is :will produce below its economic capacity level when it exhibits satisfaction with the normal profit only.

The correct answer is Only (i), (ii) and (iii)

Key Points

• The internal rate of return (IRR) is the rate of return at which all associated costs and a series of future cash flows have present values that add up to one.
• IRR is widely used in capital budgeting to calculate the rate of return on the projected cash flows from an investment.
• The project with the highest IRR is picked for investment goals.
• The net present value (NPV) approach can be used to determine the current worth of a stream of future cash flows.
• It can also be used to compare various cash flows of this type to see which has the highest current value.
• NPV is frequently used to assess capital purchase proposals in order to ascertain if an initial payment for fixed assets and other expenditures will produce net positive cash flows.
• Benefit-cost ratios (BCRs) are widely used in capital planning to evaluate the overall financial value of beginning a new project.
• The BCR is calculated by dividing the project's proposed total cash cost by the anticipated total cash value.
• It is essentially a mechanism that provides more information about a project's NPV and is only usable under NPV.
• The terminal value technique is superior to the net present value method for making judgements about capital investments.
• This strategy assumes that every future cash flow will be invested right away at a predetermined rate of return in a separate project until the project is finished.

Hence, the correct answer is Only (i), (ii) and (iii)

The correct answer is Only (i), (iii) and (iv)

Key Points

• A company's Long Run Average Cost or LRAC, curve shows the lowest average total cost at which it can produce any given amount of output over the long term (when all inputs are variable).​
• The total cost over the long term is divided by the volume of output produced.
• The LRAC is also known as the Planning curve.
• The curve won't have a U-shape for a linearly homogenous production; rather, it will be straight or have only a small decrease in input functions.
• As a result, it is impossible to determine the lowest average cost. In contrast, the curve will take a U-shaped shape in all other scenarios.
• The short-run average total cost (ATC) curves for the firm are all contained in the LRAC, which can be regarded to be a "envelope".

Hence, the correct answer is (i), (iii) and (iv)

The correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A).

 Key Points

Assertion (A): The nominal interest rate comprises of a real interest rate and an expected rate of inflation, and it adjusts when the inflation rate is expected to change. Hence, in the perfect international capital markets, real rate of returns are equal in the two countries.

• Due to the concept of time worth of money, interest rate is the cost of borrowing or return on lending.
• The loan contract specifies the rate, which is referred to as the nominal rate.
• Real interest rate and inflation premium are the two components that make up a nominal interest rate.
• The purchasing power of each dollar gradually decreases over time as an economy expands with inflation.
• As a result, a lender actually receives less money back for each dollar lent than what is specified in the contract.
• The real interest rate is the rate of return after accounting for inflation in the nominal interest rate. Understanding a bond's real interest rate is crucial for a lender.

 Reason (R): The international Fisher Effect states that the nominal interest rate differential must be equal to the expected inflation rate differential in the two countries.

• According to the International Fisher Effect (IFE), the expected difference between two currencies exchange values is roughly equivalent to the difference between their respective nominal interest rates.
• The IFE(International Fisher Effect) asserts that higher nominal interest rates are associated with higher rates of inflation, which will cause a decline in the value of the country's currency relative to other currencies.

Hence, the correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A).

The correct answer is Three rights

Key Points

• Information Given in Statement:
• Number of shares = 900,000
• Required Finance = Rupees 2.25 Crores
• i.e. 2,25,00,000
• Current M.P (Market Price) = Rupees 130 per share
• Subscription price = Rupees 75 per share

​

Computation :

• Firstly, we have to find out the Market value of company:
• = 9,00,000 * 130
• = 1,17,000,000
• A company needs to issue shares, for Rupees 2,25,00,000 with Subscription price of Rupees 75:
• =  2,25,00,000 / 75
• = 3,00,000 shares
• Now**,** with the help of given information we can easily find out the rights that are required to purchase a new share.
• = 9,00,000 / 3,00,000
• = 3 Rights
• So**, three rights** are needed to purchase a new share.

Hence, the correct answer is Three rights.

The correct answer is Purchasing machinery for cash

Key Points

• Working capital is the amount of money required for the day-to-day operations of a company.
• It is basically required for purchasing raw materials, to make payments to the creditors, for handling the inventory (to bear the inventory carrying costs),  to deal with reduction in sales, to make payments to the employees etc.

​

• In contrast to working capital, converting long-term loans or debentures into equity deals with long-term financial activities.

​

• The long-term financial activity of buying land and paying for it by issuing shares to the landowner is classified as an investment and falls under the capital budget category.
• Working capital, which is a component of current obligations, is used to pay creditors in cash.
• Long-term or capital finance activities include the cash purchase of machines.
• Formula of Working Capital

                             = Current Assets - Current Liabilities

Hence, the correct answer is Purchasing machinery for cash.

The correct answer is Statement II is correct, but I is incorrect.

Financial derivatives:

• Derivatives are financial contracts.
• The value of financial derivatives is dependent on the underlying asset.
• The assets can be stocks, bonds, commodities, currencies, etc.
• The key motives of a derivative contract are to speculate on the underlying asset prices in the future and to guard against the price volatility of an underlying asset or commodity.

Important Points

• Currency futures are exchange-traded futures contracts that specify the price in one currency at which another currency can be bought or sold at a future date.
• Intra-market spreads, created only as calendar spreads, mean a trader is in long and short futures in the same underlying commodity. The legs will have the same strike price but expire in different months.
• Intra-currency spread exist when a speculator buys/sells the same currency for two delivery dates.
• Inter-currency spread exist when a speculator buys/sells two or more currencies for the same delivery date.
• Thus Statement II is correct.

Key Points

• A forward contract, often shortened to just forward, is a contract agreement to buy or sell an asset at a specific price on a specified date in the future.
• Since the forward contract refers to the underlying asset that will be delivered on the specified date, it is considered a type of derivative.
• If a speculator believes that the future spot price of an asset will be higher than the forward price today, they may enter into a long forward position(buying position).
• If the future spot price is greater than the agreed-upon contract price, they will profit.
• Thus, Statement I is incorrect.

Hence, the correct answer is Statement II is correct, but I is incorrect.

The correct answer is Removal of tariff barriers on intra-trade.

Key Points

Regional economic groupings:

• With the objective of understanding various means and strategies to strengthen the economies, different nations of the world are motivated to form regional and global economic groups like SAARC, European Union, ASEAN, etc.
• The formation of such regional and economic groups helps the member countries to know the development strategies and measures adopted by other member countries.
• Regional economic groupings aim at creating a larger economic unit from smaller national economies.
• For this purpose, they aim to remove trade barriers and establish closer coordination and cooperation among the countries involved.

Important Points

Common market:

• A common market is a form of regional economic group.
• This type allows for the creation of economically integrated markets between member countries. (Removal of tariff barriers on intra-trade)
• Trade barriers are removed, as are any restrictions on the movement of labor and capital between member countries. (Free movement of labor and capital)
• Like customs unions, there is a common trade policy for trade with nonmember nations. (Common external tariff)
• The primary advantage to workers is that they no longer need a visa or work permit to work in another member country of a common market.
• An example is the Common Market for Eastern and Southern Africa (COMESA).

Hence, the common market does not provide the removal of tariff barriers on intra-trade.

The correct answer is It allows a narrow margin of fluctuations as compared to adjustable peg system.

Key Points

Crawling Peg System of exchange rate:

• A crawling peg is a system of exchange rate adjustments in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates.
• It was introduced as an alternative to the adjustable peg system.
• It was introduced by IMF in 1971.
• The par value of the stated currency and the band of rates may also be adjusted frequently, particularly in times of high exchange rate volatility.
• Crawling pegs are often used to control currency moves when there is a threat of devaluation due to factors such as inflation or economic instability.
• The system is a method to fully use the key attributes of the fixed exchange regimes as well as the flexibility of the floating exchange rate regime.
• Thus Statement I, III & IV are correct. However, Statement II is incorrect.

Hence, the correct answer is It allows a narrow margin of fluctuations as compared to adjustable peg system.

The correct answer is Dutch disease phenomenon.

Key Points

Dutch disease phenomenon:

• In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agriculture).
• The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of the large Groningen natural gas field in 1959.
• The presumed mechanism is that as revenues increase in the growing sector (or inflows of foreign aid), the given nation's currency becomes stronger (appreciates) compared to currencies of other nations (manifest in an exchange rate).
• This results in the nation's other exports becoming more expensive for other countries to buy, and imports becoming cheaper, making those sectors less competitive.

Additional Information

British disease phenomenon:

• In economics, British disease was a derogatory term to describe the period of economic stagnation in the United Kingdom in the 1970s at the time the country was widely described as the "sick man of Europe".
• It was characterized by rates of capital investment and labor productivity which lagged behind continental Europe, as well as strained industrial relations.
• The term relates to a lack of social vitality during industrial disputes in the 1970s.
• A lack of productivity in the UK economy was one factor behind Margaret Thatcher's economic reforms.
• However, there are no such terms as the French disease phenomenon and the Spanish disease phenomenon.

Hence, a situation where the prosperity of one sector leads to the neglect of other sectors is referred to as Dutch disease phenomenon.

The correct answer is (i) and (ii).

International logistics:

• In business, international logistics is the study, planning, and implementation of how a business moves physical goods and materials from supplier to customer in a way that involves crossing at least one international border.
• It also includes the international movement of money and information.
• Said another way, it’s simply business logistics that span two or more countries.

Key Points

Five major components of logistics management: 

• Planning: storage, warehousing, and materials handling- Fixed facilities location
• Packaging and utilization
• Inventory management
• Transportation
• Information and Control

Planning: Storage, Warehousing, and Materials Handling:

• The market is unpredictable and highly susceptible to imbalances between supply and demand.
• Supply can be steady, but the demand for goods from consumers is not. It is directly affected by different factors, making it unpredictable.
• Logistics management plays a key role in ensuring a constant and continuous supply of goods from the manufacturer to the consumer. Great planning becomes essential to maintain a healthy supply chain.
• During the fluctuation of supply and demand, there can be an insufficient supply of goods or a surplus of goods produced.
• In such cases, storage units and warehouses become part of the process.
• Proper logistics planning provides organization and synergy and becomes essential to ensure proper maintenance and handling of the goods.

Inventory Management:

• Inventory is closely related to storage and warehousing and is important to ensure consumer requirements are met.
• It is about controlling the flow of goods and products going in and out of the warehouses.
• It determines how much stock to hold, where to store it, and how much is to be stored.
• Inventory management is about predicting the demand for goods by consumers with the help of sales data, and mathematical and statistical tools.

Hence, (i) Fixed facilities location and (ii) Inventory management are the components of international logistics.

The correct answer is Brooke Bond and Lipton with Hindustan Lever.

Key Points

Conglomerate merger:

• A conglomerate merger is a merger between firms that are involved in totally unrelated business activities.
• These mergers typically occur between firms within different industries or firms located in different geographical locations.
• There are two types of conglomerate mergers: pure and mixed.
• Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.

Important Points

• In the given examples, Brooke bond and Lipton are dealing in tea whereas Hindustan Unilever is an FMCG company. Thus their merger is unrelated businesses and hence is a conglomerate merger.
• Renusagar power supply & Hindaleo are working in the power generation & distribution sector, thus merger is a vertical merger.
• Vodafone India and Idea Cellular Ltd. are firms operating in the same industry and are classified as a horizontal mergers.
• Godrej Soaps with loss-making Godrej Innovative Chemicals is an example of acquisition as one becomes the subsidiary of another.

Additional Information 

• Horizontal merger: A horizontal merger is a merger or business consolidation that occurs between firms that operate in the same industry. Competition tends to be higher among companies operating in the same space, meaning synergies and potential gains in market share are much greater for merging firms.
• Vertical merger: A vertical merger is the combination of two or more companies involved in different stages of the supply chain of a common product or service. Most often, the merger is effected to increase synergies, gain more control of the supply chain process, and ramp up business.
• Acquisition: An acquisition is a corporate action in which one company purchases most or all of another company's shares to gain control of that company.

Hence, Brooke Bond and Lipton with Hindustan Lever is the case of a conglomerate merger.

The correct answer is (ii), (i), (iv), (iii).

World Trade Organisation:

• WTO – World Trade Organisation, was established in 1995 as the heir organization of the GATT (General Agreement on Trade and Tariffs).
• GATT was founded in 1948 with 23 nations as the global (international) trade organization to serve all multilateral trade agreements by giving fair chances to all nations in the international exchange for trading prospects.
• WTO is required to build a rule-based trading government in which countries cannot place unreasonable constraints on trade.

Objectives of WTO:

• To set and execute rules for international trade
• To present a panel for negotiating and controlling additional trade liberalization
• To solve trade conflicts
• To improve the clarity of decision-making methods

Important PointsOrganisation Chart of WTO:

Thus the correct sequence for the organizational structure of WTO on the basis of decision-making authority is 

• (ii) Ministerial Conference
• (i) General Council
• (iv) Council for Trade in Goods
• (iii) Specialised Committees

Hence, the correct answer is (ii), (i), (iv), (iii).

The correct answer is Both the statements I and II are correct.

Key Points

Technology transfer:

• Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology from the person or organization that owns or holds it to another person or organization, in an attempt to transform inventions and scientific outcomes into new products and services that benefit society.
• Technology transfer is closely related to (and may arguably be considered a subset of) knowledge transfer.
• Intellectual property (IP) is an important instrument of technology transfer, as it establishes an environment conducive to sharing research results and technologies.
• Various modes of technology transfer include licensing, management contracts, franchising, strategic alliance, import of techniques and machinery etc.
• Technology transferred through the government for common welfare is considered a free-market transfer and is not subject to patent laws.
• A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.

Hence,  Both the statements I and II are correct.

The correct answer is - Free Trade Area = Customs Union - Common external tariff

Key Points

• Free Trade Area ≠ Customs Union - Common external tariff
• This equation is mathematically misleading and conceptually incorrect in economics.
• A Free Trade Area (FTA) involves removal of internal tariffs among member countries but allows each country to maintain its own external trade policy.
• A Customs Union includes all FTA features plus a Common External Tariff (CET) against non-members.
• You cannot "subtract" CET from a Customs Union to define an FTA — the institutional structures and rules of origin mechanisms are fundamentally different.

Additional Information

• Free Trade Area (FTA)
• Examples: NAFTA (now USMCA), ASEAN Free Trade Area (AFTA).
• Countries reduce or eliminate tariffs among themselves.
• Each member sets independent external tariffs on non-members.
• Requires rules of origin to prevent trade deflection.
• Customs Union
• Examples: European Union Customs Union, MERCOSUR.
• Combines FTA features with a common external tariff for non-members.
• Reduces complexity of trade among members by eliminating the need for rules of origin.
• Common Market
• Includes all features of a Customs Union.
• Adds free movement of labor and capital between member countries.
• Example: European Economic Area (EEA).
• Economic Union
• Includes Common Market features.
• Adds monetary coordination (e.g., common currency like the Euro) and macro-economic policy alignment.
• Represents a deeper level of regional integration.

The correct answer is 2000 units

Key Points

• EOQ stands for Economic Order Quantity.

​

• It is the optimal number of units/ quantity that should be ordered, so as to minimizing the Inventory Carrying cost and Ordering cost.

​

• The optimal circumstances for using the EOQ formula are those in which demand, ordering and holding costs are stable across the time.

​

• EOQ can be calculated as follows:

           EOQ =  

Here, D stands for Demand in units (No. of units)

          S stands for Order cost (per order)

          H stands for Holding cost (per unit/ per year)

Important Points

• D = 50,000

• S = 20

• H = 0.50

• Now, Putting these values into the formula:

• EOQ  =  

• EOQ    =    √2 * 50,000 20  / 0.50*

• EOQ   =   √40,00,000

• EOQ   =    2000 units

​

• So, the company must order 2000 units at a time, which is also considered as the optimum quantity.

Hence, the correct answer is 2000 units

List I: Role of Manager

a. Informational role: Managers play the informational role by collecting, processing, and disseminating information both inside and outside the organization. They act as spokespeople, disseminators of information to employees, and monitors of information about the external environment.

b. Interpersonal role: This role involves interactions with people inside and outside the organization. Managers act as figureheads (symbolizing the organization), leaders (providing direction and guidance to employees), and liaisons (building networks and alliances both inside and outside the organization).

c. Decisional role: Managers perform various roles related to decision-making and problem-solving. This includes being disturbance handlers (addressing conflicts and crises), resource allocators (determining where resources are best utilized), negotiators (engaging in negotiations, contracts, and agreements), and entrepreneurs (innovating and seeking opportunities for organizational growth).

List II: Functions of Manager

i. Figurehead, leader, liaison: These are interpersonal roles. Being a figurehead means being a symbolic head of the organization, a leader involves providing guidance and direction to employees, and being a liaison involves building and maintaining networks and relationships both inside and outside the organization.

ii. Disturbance handler, resource allocator, negotiator, Entrepreneur: These are decisional roles. Managers act as disturbance handlers when they resolve conflicts and crises, resource allocators when they decide how to distribute resources effectively, negotiators when they engage in negotiations and agreements, and entrepreneurs when they seek and create new opportunities for the organization.

iii. Disseminator, monitor, spokesperson: These are informational roles. Managers act as disseminators when they communicate information to employees, monitors when they observe and gather information about the internal and external environment, and spokespersons when they represent the organization to the outside world.

Therefore, the correct match between List I and List II is as follows:

a - Informational role - iii (Disseminator, monitor, spokesperson)

b - Interpersonal role - i (Figurehead, leader, liaison)

c - Decisional role - ii (Disturbance handler, resource allocator, negotiator, Entrepreneur)

The correct answer is (iii), (i), (ii), (v), (iv)

 Key Points

• Succession Planning: The process of creating new leaders to take over from established ones when they leave, retire or pass away is known as succession planning.
• Employees are cross-trained as part of succession planning to assist them acquire information, skills and an understanding of the company.
• In order to fill roles internally when openings occur, management maintains better track of the worth of employees with the help of succession planning.
• The correct sequence with regard to the steps of succession planning are:
• ​ Identify key roles for succession or replacement planning.
• Define competencies required to perform roles.
• With future orientation, assess people against criteria.
• Identify pool of talent that can potentially perform highly in key roles.
• Develop employees to be ready for future key roles.​​

Hence, the correct answer is (iii), (i), (ii), (v), (iv)

The correct option is (i), (ii) and (iii).

Key Points

The correct answer is Code: (i), (ii)and (iii).

Statement (i) is true because the concept of wage boards was first enunciated by the Minimum Wage Committee in its report in 1948.

Statement (ii) is also true because a wage board is a bipartite body, i.e., it has representatives from both employers and workers.

Statement (iii) is also true because the government appoints representatives of employers and workers on wage boards after consulting the concerned organisations.

Here is a brief explanation of each statement:

• Statement (i): The Minimum Wage Committee was set up by the Government of India in 1948 to recommend a national minimum wage for industrial workers. In its report, the committee recommended the establishment of wage boards to fix minimum wages for different industries.
• Statement (ii): A wage board is a bipartite body because it has representatives from both employers and workers. The representatives of employers are usually drawn from industry associations, while the representatives of workers are usually drawn from trade unions.
• Statement (iii): The government appoints representatives of employers and workers on wage boards after consulting the concerned organisations. This is to ensure that the representatives of employers and workers are representative of their respective constituencies.

The correct option is (vii), (i), (iii), (ii), (iv), (viii), (v), (vi)

Key Points

 Disciplinary procedure sequence

1)Preliminary investigation

2)issue of charge sheet

3)Suspension pending enquiry

4)Notice of enquiry

5)Conduct of enquiry

6)Recording of findings

7)Awarding punishment

8)communicating punishment

This is the correct sequence of the decipilanary procedure maintained by the concerned firm.

Hence the correct answer is (vii), (i), (iii), (ii), (iv), (viii), (v), (vi).

The correct option is recognition of union by employer.

Key Points

• A Union security agreement is a contractual agreement  between an employer and labor, union that outline the conditions under which employees are required to join or support  the union
• This agreement mainly falls into three categories are

​1)Closed shop

2)Union Shop

3)Agency shop

• The primary aim of the union security agreement is to ensure that the union has the necessary resources to negotiate better wages,  working conditions, and benefits.
• This is all ensured by a bargain with the employer by the concerned union

​Hence the correct option is recognition of union by employer.

The correct option is Employer

Key Points

• In many countries employer is responsible to pay layoff compensation
• Lay-off compensation is the type of compensation paid to workers who are laid off or temporarily suspended due to reasons beyond their control.
• Under Industrial Dispute Act 1947 in India workman who has been laid off for more than 45 days in a year, is entitled to receive compensation from employers.

Hence the correct answer is Employer

Key Points Here's the explanation for each match:

a. Cool drinking water during hot season: According to Section 19 of the Factories Act, 1948, factories with more than 250 workers must provide cool drinking water during hot weather.

b. Employment of safety officer: The Factories Act mandates the appointment of a safety officer in factories with more than 1000 workers. This requirement is outlined in Section 40B of the Act.

c. First aid box: As per Section 44 of the Factories Act, every factory must have a first-aid box readily accessible to workers during work hours. The number of first-aid boxes depends on the number of workers employed, with one box required for every 150 workers.

d. Ambulance room: Factories with more than 500 workers are required to maintain an ambulance room as per Section 45 of the Factories Act. This room must be of prescribed size and equipped with necessary medical supplies.

Therefore, the above matching matches the provisions of the Factories Act, 1948, accurately.

The correct answer is (3) Shopping products/services

Key Points Characteristics of shopping products

• Bought less often
• Medium-priced
• Frequently compared to other products
• consumers often spend a great amount of time comparing these products before purchasing them.

E.g., Airline tickets are only available through airline companies and can vary greatly in price.

Consumers often spend time comparing that fulfil their needs and fits within the budget.

Additional InformationFeatures of Unsought products

·        Not in the forefront of consumers’ minds

·        Extensive advertising and marketing efforts needed

Features of Convenience products

·        Bought frequently

·        Low-priced

·        Easily accessible

Features of specialty products

·        Standout attributes 

·        Unique brand perception

·        Higher price point

·        Available only at select locations

Thus, the correct answer is (3) Shopping products/services

The correct answer is (2) Statement II is correct, but I is incorrect.

Key PointsSocial media are interactive digital technologies including websites and applications that allow people to create and share files through online communities and networks, including information, ideas, career interests, and other ways to communicate.

 Important Points

• Social media allow users to interact among themselves.
• It is typically where users first communicate with one another or with the outside community.
• Social media helps facilitate the consumer's decision process by encouraging need recognition, information search, alternative evaluation, likes, dislikes, needs, wants, purchase and popost-purchaseeviews.

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

The correct answer is (4) Cognitive campaigns

Key Points

• To raise awareness of the nutritional benefits of various foods is the objective of cognitive campaigns.
• It is a way to build customer relationships and fostering brand loyalty

Additional Information

• Value Campaigns: Promoting to the ethical and moral beliefs of consumers.
• Action campaigns:  encourage the public to support a brand.
• Cognitive campaigns: Finds the connection between desire and the need to nurture among consumers.
• Behavioral Campaigns: Deal with customer behaviour such as discounts, offers, cash back, return policy, free, gifts, coupons, and so on.

Hence, Above example explains the nutrition value of the different foods in there marketing program which is the cognitive campaign.

The correct answer is (iv), (i), (v), (ii), (vi), (iii)

Key Points A distribution or marketing channel is a network of businesses or distributors through which  products and services travels before reaching the final consumer or buyer.

Wholesalers, merchants, distributors, and even the internet are examples of distribution channels.

• Telemarketing: The act of selling, soliciting, or advertising a good or service over the phone is known as telemarketing. The telephone is the most affordable and adaptable channel of marketing.
• Internet : Social media networks are widely seen as the industry standard and transforming marketing methods. Online advertising through social networks and search engines targeting certain geographic or demographic areas where there is mass reach of customers with low cost per transaction.
• Retail store: Direct sales from a producer to a retailer, who then sells the product to the final customer. This level includes only one intermediary which cost very low.
• Value-added partners: When two or more separate businesses decide to collaborate in order to give the end customer related goods and services, this is known as a value-added partnership (VAP). All parties must add value to what the other parties are offering; it is not just about one business reselling the products of another. It cost high but also the reach towards customer is high.
• Sales force (World's No.1 CRM platform): Salesforce develops and manages marketing campaigns, monitors client concerns according to their escalation and remedies, and offers rich reporting tools. It is the most expensive tool of reaching customers.

To represent how  a manufacturer, focuses on the following marketing channel alternatives to market its products, the correct sequence in order of increasing cost per transaction.

Internet ⇒ Telemarketing ⇒ Retail stores ⇒ Distributors ⇒ Value-added partners ⇒ Sales force 

Hence, The correct answer is (iv), (i), (v), (ii), (vi), (iii)

The correct answer is (3) (a) - (ii), (b) - (iv), (c) - (i), (d) - (iii)

Key Points

• X̅-chart : a chart that is used to keep track of sample variation and can be used to measure continuous variables like temperature or weight.
• P chart: a quality assurance statistical tool used to graph the proportions of defective units.
• C chart: It monitors the total number of defectives per unit.
• R chart: a statistical control process chart that shows how the subgroup range changes over time within samples

Hence, The correct answer is (3) (a) - (ii), (b) - (iv), (c) - (i), (d) - (iii)

The correct answer is (3) Data processing system

Key Points

Data processing system is one of the following MIS systems which is designed to capture, collect or enter the data to process in a certain specified manner for further processing.

Additional Information

Business function processing system: Business processes are a collection of actions involving one or more business functions that assist in achieving the objectives of the organization.

Transaction processing system: The data transactions of an enterprise are gathered, stored, modified, and accessed using this kind of information system.

Data processing system: It is a kind of information system that gathers raw data, transforms it into a more useful format, and then stores it for later processing.

Integrated information processing system: It consists of various information sets that are logically connected.

The correct answer is (3) Unauthorised access

Key Points

Database Security Threats

Breaches could be caused by a variety of software flaws, incorrect setups, or habits of abuse or carelessness.

Below are some of the most well-known root causes and cyber threat subtypes for database security.

Physical: Data or information loss may result via theft, tampering, surveillance, sabotage, vandalism, un-authorised access to local devices, and violence.

Environmental: Hazards to the infrastructure in which data assets are located include tornadoes, power outages, fires, and floods.

Hence, The correct answer is (3) Un-authorised access

The correct answer is (1) I and V

Key Points

Hypothesis testing involves determining whether or not differences between two sample distributions may simply be attributed to chance.

As it is probabilistic, there is always a potential that you could draw the wrong conclusions.

There are possibilities for having two types of error: type I and type II. 

1. Type 1 error: It occurs when true null hypothesis gets rejected.

2. Type 2 error: It occurs when false null hypothesis gets accepted.

● Where the region of rejection is on both sides of the sampling distribution, it is called a two-tailed test and where it is in one side of the sampling distribution, it is called one-tailed.

● Level of significance is the probability of rejecting the null hypothesis when it is true. The critical value of z statistic for two-tailed test at 5% level of significance is 1.96.

Hence, Statement I & V are correct and Statement II, III & IV are incorrect.

The correct answer is  Statement II is correct, but I is incorrect.

Key Points

​

Statement I: Sampling Distribution of Mean is Normally Distributed

Statement I claims that the sampling distribution of the mean is normally distributed irrespective of the type of population distribution and size of samples. This is partially true.

While the central limit theorem states that the sampling distribution of the mean approximates a normal distribution for large enough sample sizes, it doesn't hold true for all sample sizes and population distributions.

Here's a breakdown of the statement's validity:

Validity:

Large sample sizes: For large sample sizes (generally n > 30), the central limit theorem applies, and the sampling distribution of the mean will be approximately normal, regardless of the population distribution. This is due to the averaging effect, where random deviations from the population mean tend to cancel each other out.

Normal population distribution: Even for small sample sizes, if the population distribution is already normal, the sampling distribution of the mean will also be normal.

Invalidity:

Small sample sizes: For small sample sizes (n < 30), the sampling distribution of the mean may not be normal, especially if the population distribution is non-normal. In such cases, the shape of the sampling distribution depends on the specific population distribution.

Statement II: Standard Deviation of Sampling Distribution

Statement II claims that the standard deviation of the sampling distribution of mean is less than the standard deviation of the population distribution. This is true and is known as the standard error of the mean.

The standard error of the mean (SEM) is calculated as:

SEM = σ / √n

where:

σ is the population standard deviation

n is the sample size

As the sample size increases, the SEM decreases, indicating that the sampling distribution of the mean becomes more concentrated around the population mean.

Therefore:

Statement I is false: It holds true for large sample sizes or normal population distributions.

Statement II is true: The standard deviation of the sampling distribution of the mean is always less than the standard deviation of the population distribution.

Hence, The correct answer is Statement II is correct, but I is incorrect.

The correct answer is 14

 Key PointsAs per the formula, y=a+bx, where y is the dependent variable, x is the independent variable, while a and b are parameters for the linear function.

Putting values in the equation,

y = dependent variable = 4 + 2*5 = 14.

Thus, Option C is correct.

Hence, the correct answer is 14.

The correct answer is Both the statements I and II are incorrect.

Key PointsStatement I: When ‘p' and 'q' are equal in the binomial distribution, the shape of the distribution is perfectly symmetrical irrespective of the size of 'n'.

​This statement is incorrect. In the binomial distribution, 'p' represents the probability of success on a single trial, 'q' represents the probability of failure (1 - p), and 'n' represents the number of trials. The shape of the binomial distribution is not perfectly symmetrical when 'p' and 'q' are equal, regardless of the size of 'n'. The symmetry of the binomial distribution depends on the value of 'p' and 'q' relative to 0.5, as well as the size of 'n'.

Statement II: The mean and the variance of Poisson distribution are not equal.

The mean and the variance of a Poisson distribution are equal. In a Poisson distribution, both the mean (λ) and the variance (σ^2) are equal to the parameter λ, which represents the average rate of occurrence of an event. 

Hence the correct answer is Both the statements I and II are incorrect.

The correct answer is Supplementing balance of trade deficit and helping a nation to overcome balance of payment crisis.

Key Points

• WTO do not deal with the supplementing of finance or balance trade deficit to nations under payment crisis.

Additional Information 

Below are the functions of the WTO:

• The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the framework for the implementation, administration and operation of the multilateral Trade Agreements.
• The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement.
• The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes.
• The WTO shall administer Trade Policy Review Mechanism.
• With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies.​

Hence, Statement 2 is not the function of WTO. So, the correct answer is Supplementing balance of trade deficit and helping a nation to overcome balance of payment crisis.

The correct answer is (a) - (iv), (b) - (iii), (c) - (ii), (d) - (i)

Key Points 

• Floating Forex Rate: A floating exchange rate is a regime where the currency price is set by the forex market based on supply and demand compared with other currencies. Hence (a) From List I matches with (iv) in List II.
• Translation Effect of Change in Forex Rate: The principal issues in accounting for foreign currency transactions and foreign operations are to decide which exchange rate to use and how to recognize in the financial statements. The financial effect of changes in exchange rates in translating the financial statements of foreign operations. Hence (b) From List I matches with (iii) in List II.
• Transaction Effect of Fluctuation of Forex Rate: Exchange rate fluctuations have an effect on a company's obligations to make or receive payments denominated in foreign currency in future. Unanticipated exchange rate fluctuations can have a huge effect on a company's competitive position. Hence (c) From List I matches with (ii) in List II.
• Geocentric Solution in Financial Planning and Control: To avoid the transactional & Transitional effect of changes in forex rate is to get the extreme decentralization & centralization in finance decision & execution. Hence (d) From List I matches with (i) in List II.

Hence, the correct answer is (a) - (iv), (b) - (iii), (c) - (ii), (d) - (i)

The correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A)

Important Points 

According to Archie Carroll's concept, an organization's four most fundamental forms of responsibility are as follows, listed in priority order:

• Economic Responsibility: Responsibility relates to profit and long-term survival through benefiting society
• Legal Responsibilities: Obey all applicable laws and regulations.
• Ethical Duty: To conduct oneself morally and ethically
• Philanthropic responsibility is the obligation to support society.

Hence the correct answer is  Both (A) and (R) are correct and (R) is the right explanation of (A)

The correct answer is Disclosure norms of Earning per share

Key Points

• Corporate governance: Corporate governance is the structure of rules and practices that are used to manage a company.
• The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.

Important Points

• The  Companies Act,2013 contains a number of provisions relating to good corporate governance, such as the composition of the board of directors, the admission of women and independent directors, the training and evaluation of directors, the composition of the audit committee, internal audit, the risk management committee, the scope of the SFIO, the management of subsidiaries companies, the compliance center, etc.
• Clause 49 has been introduced by SEBI in India for the improvement of corporate governance in all listed companies.
• Disclosure norms of Earning per share are not included in norms of corporate governance.

Hence the correct answer is Disclosure norms of Earning per share

The correct answer is (a) - (ii), (b) - (i), (c) - (iv), (d) - (iii)

Important Points

• Cadbury Committee: In 1991 London stock exchange set up the Cadbury committee, this committee issued a code of best practices in 1992.
• Clause 49 of the listing agreement: It has been introduced by SEBI, It deals with norms of corporate governance that a listed company should follow.
• The minimum number of specified board meetings a year: .Companies Act, 2013 specifies a minimum number of specified board meetings a year.
• Whistleblowing: when someone reports wrongdoing within an organisation then this is termed as whistleblowing as per workplace ethics.

​Hence the correct answer is  (a) - (ii), (b) - (i), (c) - (iv), (d) - (iii).

The correct answer is Both (A) and (R) are correct, but (R) is not the right explanation of (A).

Key Points Assertion (A): The United Nations' Inter-governmental Panel on Climate Change has concluded that there is a discernible human influence on the global climate.

• It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred.
• The scale of recent changes across the climate system as a whole – and the present state of many aspects of the climate system – are unprecedented over many centuries to many thousands of years.
• Human-induced climate change is already affecting many weather and climate extremes in every region across the globe. Evidence of observed changes in extremes such as heatwaves, heavy precipitation, droughts, and tropical cyclones, and, in particular, their attribution to human influence, has strengthened since the Fifth Assessment Report.
• Approximately 3.3 to 3.6 billion people live in contexts that are highly vulnerable to climate change.
• Vulnerability of ecosystems and people to climate change differs substantially among and within regions.
• If global warming transiently exceeds 1.5°C in the coming decades or later, then many human and natural systems will face additional severe risks, compared to remaining below 1.5°C.
• Reducing GHG emissions across the full energy sector requires major transitions, including a substantial reduction in overall fossil fuel use, the deployment of low-emission energy sources, switching to alternative energy carriers, and energy efficiency and conservation.

Reason (R): The United Nations' Groups conclusions are unformed; some experts differ and say that a reliable estimate of the human imprint's magnitude remains a distance off.

According to the UN Intergovernmental Panel on Climate Change (IPCC), humans cause a dramatic increase in global temperatures. Humans are the leading cause of global warming, and humans should be the ones who may stop it.

Hence, the correct answer is Both (A) and (R) are correct, but (R) is not the right explanation of (A).

The correct answer is Both statements I and II are correct.

• a shared set of basic principles among all employees that is alive and well. A culture that is shaped by unambiguous norms that serve as a foundation and guiding principles for activity, decision-making, and a feeling of value.
• Values are suggested, discussed, and defined by the management in a value-based organisation while taking human involvement and ethical values into account. People's perspectives on the ideals of organisations are therefore very similar, and success may be attained with ease.

Hence the correct answer is  Both statements I and II are correct.

The correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A).

Key Points Assertion (A): The stakeholder model can be used as a tool for managers, who are asked to handle the stakeholders relations as a guide to achieve ultimate goals.

• Stakeholders management helps to organise, monitor improve relationships.
• It is used as a tool for managers and involves identifying and analyzing stakeholders' needs and expectations and implementing various tasks to engage with them.
• The stakeholder model is descriptive - it provides a language and concepts to describe corporations, the way they work and their impacts on the wider environment.
• Stakeholder Theory is useful in helping to understand, and manage organizations, which is why the language of stakeholder theory is used widely in business, not for profit, government etc.
• The stakeholder model is instrumental, in that managing stakeholders should result in the achievement of business goals: increased profitability, growth, sustainability.
• The stakeholder model also allows for the testing of the connections between managing stakeholders and reaching business targets.
• The third aspect of the stakeholder model is the presumption that stakeholders have inherent value.
• As Donaldson and Preston explain stakeholder theory accepts that stakeholders have legitimate stakes in corporate activity based on their interest in the corporation and that stakeholders have intrinsic value.

 Reason (R): Corporation is an economic institution which has a social service as well as a profit making function while shareholder control is similar to Adam Smith's 'invisible hand' argument.

• Firm that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners.
• Corporations are owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations, and have three distinct characteristics:
• (1) Legal existence- a firm can (like a person) buy, sell, own, enter into a contract, and sue other persons and firms, and be sued by them. It can do good and be rewarded, and can commit offense and be punished.
• (2) Limited liability: a firm and its owners are limited in their liability to the creditors and other obligors only up to the resources of the firm unless the owners give personal guarantees.

Hence, the correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A).

The correct answer is Both Statements I and II are correct.

Key Points Statement I: Nature of a corporation has been analysed by theorists as private rights theory, social institution theory, contractual theory of the firm.

• A living, breathing culture of shared core values among all employees.
• A culture shaped by a clear set of ground rules establishing a foundation & guiding principles for decision-making, action & a sense of commodity.
• Social contract theory, nearly as old as philosophy itself, is the view that persons’ moral and/or political obligations are dependent upon a contract or agreement among them to form the society in which they live.
• Socrates uses something quite like a social contract argument to explain to Crito why he must remain in prison and accept the death penalty.

Statement II: Nature of the corporation has been explained by input-output model under stakeholder theory; each stakeholder group constituency is integral to the operation of a corporation.

• In value-based organization, values are proposed, discussed, defined by the management with help of peoples involvement and ethical values in consideration.
• So there is many commonalities in the mindset of people about the values of organizations and success can be achieved easily.

 Hence, the correct answer is both Statements I and II are true.

The correct answer is Beatrice Webb

Key Points

• collective bargaining: Working people negotiate contracts with their employers through collective bargaining to establish their terms of employment, including salary, benefits, hours, leave, workplace health and safety standards, ways to balance work and family, and more.

Important Points

• Beatrice Webb, a British pioneer in the field of industrial relations, coined the phrase "collective bargaining" in 1891.

Hence the correct answer is Beatrice Webb

The correct answer is Recruitment

Key Points

• Sons of the soil' policy is associated with Recruitment.

​

• According to the sons of the soil philosophy, residents should be provided with the chance to work for a company based in their community or state of domicile.
• According to this belief, local residents should be given priority over migrants from other regions when it comes to receiving employment openings from various businesses located in that area.
• As a result of the creation of new employment prospects in remote regions, the poverty rate is significantly reduced, which has a significant impact on the nation's economic growth.
• Instead of making the extra effort to engage a more expensive group of labourers from outside regions, the company might obtain cheap labour directly from the locals for the needs of building.

Hence, the correct answer is Recruitment.

The correct answer is (a) - (iii), (b) - (iv), (c) - (i), (d) - (ii)

Key Points 

BCG Matrix: A planning tool developed by the Boston Consulting Group (BCG) uses graphical representations of a company's goods and services to help it in deciding what to keep, sell or invest.

Hence, the correct answer is (a) - (iii), (b) - (iv), (c) - (i), (d) - (ii)

The correct answer is Growth stage

Key Points

• Product life cycle: A product's life cycle is the period of time from when the product is initially made available to consumers until it is discontinued.
• There are mainly four stages of PLC, namely:
• Introduction stage
• Growth stage
• Maturity stage
• Decline stage

​

• Introduction stage: Customers are first exposed to the new product during the introduction phase.
• In general, a business must make a sizable (large) expenditure in marketing and advertising aimed at educating consumers about the product and its advantages.
• Growth stage: The product then enters the growth stage if it is a successful.
• This is characterized by a rise in demand, an expansion in supply and a rise in production.
• At this stage a firm improves product quality, adds new features and improved styling.

​

• ​Maturity stage: The most lucrative stage of a product's life cycle is when it reaches maturity, when production and marketing expenses start to fall.
• Sales will peak at this point when the product hits market saturation and the level of competition also rises.
• Decline stage: As a result of market saturation and competition from alternative items, product sales start to decline at this point.
• The firm may decide not to pursue further marketing initiatives at this point since clients may already be certain about their loyalty to the company's products or not.

Hence, the correct answer is Growth stage.

The correct answer is Super market

Key Points

• Discount store: A retail establishment known as a discount store or discount shop which sells goods for less than the going rate in the market.
• Considering that they provide a large variety of products, some discount stores are comparable to department stores; in fact, some are referred to as discount department stores.
• "Category killers" are discount retailers that focus on a particular selection of products inside a retail category.
• Super market: A supermarket is a self-service store with a vast selection of foods, drinks and household items arranged on shelves and in sections.
• This type of store is bigger and has a wider variety than older grocery stores, but it is narrower and offers a lower selection of goods than a hypermarket.
• For Example: D Mart.

​

• Convenience store: A corner or convenience store is a small retail establishment that sells a variety of necessities like groceries, confections, soft drinks, tobacco, newspapers etc.
• These stores typically operate near a busy commercial area or a popular residential neighbourhood.
• For Example: Reliance Fresh.

​

• Catalogue store: A retail business establishment is referred to as a "Catalogue Store" if it accepts orders for the purchase of goods that are included in a catalogue that it offers and sells part or all of the items featured in the catalogue.
• Customers choose the products from printed catalogues in the store and fill out an order form, unlike a self-serve retail establishment where the majority of the items are displayed.

Hence, the correct answer is Super market.

The correct answer is Both the statements I and II are incorrect.

Key Points

 Statement I: People who purchase mutual funds are more likely to believe that they cannot predict the market and probably have an internal locus of control.

• A corporation that pools money from several people and invests it in securities like stocks, bonds and short-term debt is known as a mutual fund.
• Investors frequently choose mutual funds because they typically provide the following benefits:
• Liquidity
• Affordability
• Diversification etc.
• Locus of Control demonstrates a person's confidence in their own ability to succeed.
• An individual's financial behaviour improves when they have a higher internal locus of control because they are thought to value their income more profoundly and make an effort to manage it well.
• Systematic risk is unavoidable while investing in the market and is an essential component, but there is no scope for internal locus of control.

So, this statement is wrong.

Statement II : People who purchase stocks believe that they can predict the market and have an external locus of control.

• People with an external locus of control view the world from the standpoint that they have no influence over the forces that shape their lives, such as fate, opportunity etc.
• Investors invest in stocks because they think the company will beat the market with dividend and capital gains in the future.
• But the fact is that, no one can predict the market completely, due to which this statement goes wrong.

So, this statement is wrong.

Hence, the correct answer is Both the statements I and II are incorrect.

The correct answer is Statement II is correct, but I is incorrect.

 Key Points

Statement I: The major controllable decision variables for deciding the credit policy are the credit standards and analysis and the credit terms only.

• By giving potential consumers or clients credit, credit control, often referred to as credit policy, is a business tactic used to boost sales of goods or services.
• Companies generally prefer to give credit to people with "excellent" credit background and try to limit credit to riskier borrowers who could have a history of default.
• Credit management or credit control may be used interchangeably, depending on the situation.
• There are many factors on which the credit policy depends:
• Credit period: The amount of time a consumer has to make payments.
• Cash discounts: If a customer pays with cash before the end of the discount period, certain firms will reduce their discount on the sales price by a certain percentage. Cash reductions encourage buyers to make faster cash payments.
• Credit requirements: Describes the minimum level of financial stability a customer must have to be approved for credit. Reduced credit requirements improve sales but can lead to more bad debts.

Statement II : Factoring is a popular mechanism of managing, financing and collecting receivables.

• A company can use factoring, a form of finance, to cover its short-term cash needs by selling its accounts receivable (invoices) to a third party.
• As per agreement between the two parties, the factor would pay the invoices' outstanding balance less any commission or fees.
• Selling receivables to a business that specializes in their collection and administration, commonly referred to as a factor, is a way to turn non-productive, inactive assets into productive assets known as factoring.

Hence, the correct answer is Statement II is correct, but I is incorrect.

The correct answer is Statement I is correct, but II is incorrect.

Key Points Statement I: Beta is a measure of a security's risk relative to the risk of the market portfolio.

• Beta refers to the measure of risk of a stock relative to the market portfolio.

​

• The beta of a stock indicates how volatile it is in comparison to the entire market.
• Individual businesses are rated based on how far they depart from the market, with the S&P 500 Index, for instance, having a beta of 1.0 by definition. A stock that has a beta value above 1.0 will fluctuate more than the market over time.

Statement II: The value of Beta measures both the systematic and the unsystematic risks of a security.

• Beta does not assess unsystematic risk, which is the risk unique to a single company, but rather simply the systematic risk, which is the risk relating to the entire market or sector.
• This is due to the fact that it gauges a security's propensity to move concurrently with the stock market's general return.

​

• A measure of a security's volatility in proportion to market volatility is known as beta.

Hence, the correct answer is Statement I is correct, but II is incorrect.

The correct answer is Statement II is correct, but I is incorrect.

Key Points Statement I: When an option is allowed to be exercised only on the maturity date, it is called an American option.

• A European option is an option contract that limits action to the expiration date.
• In other words, an investor would not be able to exercise the option early and take delivery of or sell the shares if the underlying security, such as a stock, has changed in price.
• European options are frequently valued using the Black-Scholes option model.
• Even though American options include an early exercise option, it has a cost because the premiums are frequently higher than those of European options.

Statement II : If the option holder does not lose or gain whether he exercises his option or buys or sells the asset from the market, the option is said to be at-the-money.

• At-the-money options are those having a strike price equal to the cost of the underlying stock.

​

• These options do not have any intrinsic value, which implies that they cannot result in gains / losses, but they do have temporal value or extrinsic value because they may generate profits before expiration.

Hence, the correct answer is  Statement II is correct, but I is incorrect.

The correct answer is Stagflation

Key Points

• Inflation: The rate at which prices increase over a specific time period is known as inflation.
• It measures the rate of increase in price of a group of goods and services over a predetermined time frame, often a year.
• Supply push Inflation: A type of inflation known as "supply push inflation" is brought on by a rise in the cost of inputs like labour, raw materials etc.
• There are few factors that contribute to this supply and demand imbalance, or supply push inflation, are increases in the money supply, increases in government spending and growth in foreign demand.

​

• Deflation: A reduction in the level of prices for goods and services is referred to as deflation. When the inflation rate drops below 0%, it happens.
• Although a decrease in the availability of credit and money is usually an indication of deflation, prices can also drop as a result of rising productivity and advancements in technology.
• Stagflation: Stagflation is a condition in which there is high inflation, weak economic growth and persistently high unemployment.
• In general, when a supply shock occurs, the stage is prepared for stagflation.
• Stagflation happens when there is a high rate of both inflation as well as stagnation and the production of goods and services in an economy slows down.

Hence, the correct answer is Stagflation.

The correct answer is Intra- Scalar communication

Key Points Transferring information from one location, person, or group to another is the act of communication.

• Intra- scalar communication: Cross-contact communication is also known as intra-scalar communication.
• Information sharing between two or more people who are equally bonded to one another is known as intra scalar communication.
• According to S. Khandwale, intra-scalar communication improves comprehension, highlights group cohesion, accelerates activity, boosts morale and offers additional information.
• Inter- scalar communication: Inter-scalar communication is merely a two-way exchange of information. It implies communication between many tiers of authority. Both "upward" and "downward" communication are included.

​

• Extra- organization communication: Extra organizational communication refers to information interchange between employees of the company and external or other company agencies.

​

• Concealed communication: Within or outside of a group, organization or company, it is the communication that is kept private or hidden.

Hence, the correct answer is Intra- Scalar communication.

The correct answer is Both statements I and II are correct

Key Points

Assertion (A): Attitude develops over a period of time.

• An attitude is a group of feelings, thoughts and actions one has towards a certain thing, person or an event.
• Experiences or upbringing frequently influence attitudes
• Although attitudes are persistent, they are also changeable
• It can have a significant impact on how people behave in different circumstances.​

Reason (R): Attitudes are specific whereas values form a broader and more encompassing concept.

• Values are abstract and cross-situational in nature, while attitudes are specific evaluations towards an object.
• Although attitudes are a person's opinions on numerous topics, values are based on a person's moral attributes​
• Values are the underlying principles that direct or inspire a person's attitude. So, it becomes more broader concept as compare to attitude.

Hence, the correct answer is Both the statements I and II are correct

The correct option is: Only (i), (ii) and (iv)

Key Points

• Traditional theory suggests that there is an optimal capital structure, balancing the cost of debt and equity to minimize the overall cost of capital.
• Net income theory also supports the concept of an optimal capital structure, with the view that increasing debt lowers the overall cost of capital up to a certain point.
• Net operating income theory rejects the idea of an optimal capital structure, suggesting that the value of a firm is unaffected by its capital structure.

Pecking order theory focuses on the preference hierarchy of financing sources, rather than the optimal capital structure.

Additional Information

• This topic involves theories on how firms balance debt and equity to achieve an optimal structure.
• Visual aids like a diagram illustrating the trade-off between debt and equity financing might help clarify these concepts.

The correct option is Both (A) and (R) are correct and (R) is the right explanation of (A)

Key Points

M-M hypothesis

• MM approach is also known as the capital structure irrelevance principle.
• the principle states  that the value of the levered firm is equal to the value of the  un-levered firm
• There are no taxes and market imperfections
• This is because if the benefit of the debt  is offset by the cost

Arbitrage 

• The process of arbitrage refers to the buying and selling of assets in different markets to take the advantage of price discrepancies and profit with minimum risk.
• The value of a levered firm is become equal to the value of un-levered firm  and thereby firm balancing situation

Hence the correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A).

Key Points 

Hence the correct answer is (a) - (iii), (b) - (i), (c) - (ii), (d) - (iv)

The correct answer is (4) Enterprise resource planning

Key Points

• Product design is a process that entails the entire process of making products that help users in solving a certain issue.
• Before creating a product that meets customer demands, a product designer comprehend and connect with their audience.

Additional Information 

• Reverse engineering is a procedure that evaluates and recreates a product's design. This repeating process requires several changes to the original idea.
• Standardization is a product design strategy that minimise the number of different parts of the product. Its goal is to minimise product type differences so that the company can sell a standardised product in a worldwide.
• Concurrent engineering consists of several stages of product design and development are carried out concurrently in a process.
• Enterprise Resource Planning is an enterprise-wide information system that coordinates all the resources, information, activities required to complete business processes.

Hence, ERP is not related to product design and The correct answer is (4) Enterprise resource planning.

The correct answer is (1) (a) -(iii), (b) - (i), (c) - (ii), (d) - (iv)

Key Points 

(a) Mean forecast error = Actual or real demand - forecast demand

(b) Mean absolute deviation = It shows variation in a data set. It is the average distance between each data value and the mean.

(c) Mean square error =  actual demand values - Mean of the squares of the deviations of forecast demands.

(d) Mean absolute percent error = actual demand - Mean of the percent deviations of the forecast demands. It measures the accuracy of a forecast system as a percentage.

Hence, The correct answer is (1) (a) -(iii), (b) - (i), (c) - (ii), (d) - (iv)

The correct answer is (1) Classical approach to probability

Key PointsProbability: When we don't know how an event will turn out, we can talk about the probabilities of certain outcomes—how likely they are. 

Statistics is the study of events that follow a probability distribution.

Additional Information

Four Approaches to probability:

1. Classical approach to probability: An approach appropriate for experiments that can be described with equally likely outcomes.
2. Statistical approach to probability: In this approach, probabilities of events were based on the results of actual experiments.
3. Subjective approach to probability: An approach appropriate to represent an individuals judgments based on facts combined with personal evaluations of other information.
4. Modern approach to probability: It includes both the classical and statistical definition as particular cases and overcomes the deficiencies of each of the approaches.

Therefore, The correct answer is (1) the Classical approach to probability

The correct answer is Both (A) and (R) are correct, but (R) is not the right explanation of (A).

Key Points

Assertion (A): The World Investment Report has prepared a transnationality index comprising average of three ratios based on foreign assets, foreign sales, foreign employment. 

• The World Investment Report supports policymakers by monitoring global and regional investment trends and national and international policy developments.
• This year’s report reviews investment in the Sustainable Development Goals (SDGs) and shows the influence of investment policies on public health and economic recovery from the pandemic.

Reason (R) : Given the increasing liberal investment and environment policy in which such companies operate, transnationality would enhance strategy for greater penetration.

• The increasing liberal investment and environment policy in which such companies operate, and transnationality would enhance strategy for greater penetration.

Hence, the correct answer is Both (A) and (R) are correct, but (R) is not the right explanation of (A).

The correct answer is Both the statements I and II are correct.

Key Points

• The UNCTAD developed Transnationality Index (TNI), it is a means of ranking multinational corporations that is employed by economists and politicians.
• It is calculated as the arithmetic mean of the following three ratios (where "foreign" means outside of the corporation's home country): the ratio of foreign assets to total assets, The ratio of foreign sales to total sales, the ratio of foreign employment to total employment.
• The Transnationality Index was developed by the United Nations Conference on Trade and Development.

Hence, the correct option is Both the statements I and II are correct.

The correct answer is Both (A) & (R) are true and (R)is right explanation of (A). 

Key Points

• Organizational culture is defined as the underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization. Organizational culture includes an organization's expectations, experiences, philosophy, as well as the values that guide member behavior, and is expressed in member self-image, inner workings, interactions with the outside world, and future expectation.

Additional Information 

• Culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time.
• Cultural differences cause a great challenge to Team Building. The behavioral attitude of workers, the social environment, values, beliefs, outlooks etc., are important factors, which affect industrial relations, loyalty, productivity etc.
• There are also significant differences in aspects related to labor mobility.
• Cultural factors are very relevant in inter personal behavior also.
• In some countries it is common to address the boss Mr. so and so but in countries like India addressing the boss by name would not be welcome.
• In countries like India people attach great value to designations and hierarchical levels. This makes delivering and organizational restructuring difficult.

Hence, we can say Both (A) & (R) are true and (R)is right explanation of (A).

The correct answer is Both (A) and (R) are correct and (R) is the right explanation of (A). 

Key Points

• Growing proportion of the world output is related internationality, causing faster growth of trade among nations.
• This situation is bringing world economic integration, which is reinforced by cross-border capital flows and regional blocs.

Hence, Both statements are correct and R is the right explanation.

The correct answer is ​Both Assertion (A) and Reason (R) are correct and Reason (R) is the right explanation for Assertion (A).

Key Points​Both Assertion (A) and Reason (R) are correct and Reason (R) is the right explanation for Assertion (A).

Here's why:

Assertion (A): Identification and detection of sickness at the incipient stage is crucial for reducing industrial sickness. This is because early intervention allows for timely corrective actions and prevents the situation from deteriorating further.

Reason (R): Sickness in small scale industries is not a sudden phenomenon. It typically develops over a period of 5 to 7 years, with gradual erosion of the unit's financial health. Early detection enables identification of the underlying problems before they become irreversible.

Therefore, identifying and addressing sickness at the early stage proves effective in preventing small-scale industries from progressing towards inevitable closure.

The correct answer is both (A) and (R) are correct and (R) is the right explanation of (A).

Key Points Assertion (A): Entrepreneurial innovation and experimentation constantly destroy the old and introduce new equilibria, making possible higher standards of living.

• The Assertion states that entrepreneurial innovation and experimentation constantly destroy the old and introduce new equilibria, leading to higher standards of living.
• This is generally true as entrepreneurs drive economic growth and progress by introducing new products, services, and business models that disrupt existing equilibria and create new opportunities.

Reason (R): Markets do not passively tend towards equilibrium until profit margins are wiped out.

• The Reason states that markets do not passively tend towards equilibrium until profit margins are wiped out.
• This is also true as markets are dynamic and competitive, with entrepreneurs seeking opportunities to earn profits by introducing innovations and meeting unmet needs.
• The pursuit of profits drives market participants to constantly adapt and innovate, which prevents markets from passively settling into equilibrium.

Important Points

• The book"Theory of Economic Growth," published in 1911,  emphasized the fact that markets do not passively gravitate toward equilibrium unless profit margins are eliminated.
• Instead, entrepreneurial exploration and innovation continuously overthrow the status quo and usher in a new equilibrium, enabling improved levels of living.

Hence the correct answer is both (A) and (R) are correct and (R) is the right explanation of (A).

The correct answer is (i), (iii), (iv) and (v)

Key PointsLet's analyze each statement: 

• (i) Richard Cantillon
• Correct: Richard Cantillon is one of the early theorists who described the role of the entrepreneur in economic theory.
• He defined an entrepreneur as a person who takes on the risk and management of a business, distinguishing him from the wage earner who does not undertake such risks.
• (ii) Lionel Robbins
• Incorrect: Lionel Robbins is primarily known for his definition of economics and contributions to the theory of scarcity and choice.
• He did not specifically focus on the concept of entrepreneurship in his work.
• (iii) Adam Smith
• Correct: Adam Smith recognized the importance of entrepreneurship in his seminal work, "The Wealth of Nations."
• He discussed the role of entrepreneurs in organizing production and contributing to economic development.
• (iv) Jean-Baptiste Say
• Correct: Jean-Baptiste Say was instrumental in emphasizing the entrepreneur’s role in the economy.
• He introduced the term "entrepreneur" into economic theory, highlighting the critical role of the entrepreneur in driving innovation and economic progress.
• (v) Joseph Schumpeter
• Correct: Joseph Schumpeter is one of the most renowned figures associated with the concept of entrepreneurship.
• He defined the entrepreneur as an innovator who uses the process of "creative destruction" to transform industries and foster economic development.

Based on the evaluation above, the correct answer is option 3: (i), (iii), (iv), and (v). These figures are all prominently associated with the concept of entrepreneurship, while Lionel Robbins is not.

The correct answer is Both statements I and II are correct.

Important Points

• Intrapreneur: A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation, is known as an intrapreneur.
• Intrapreneurship:  Acting like an entrepreneur while working for an established company is called intrapreneurship. It involves starting a new enterprise or business within an organisation.

Hence the correct answer is  Both statements I and II are correct.

The correct answer is (a) - (ii), (b) - (i), (c) - (iii)

Key Points 

Important Points a - ii: Pluralistic approach

The pluralistic approach to industrial relations recognizes that conflict between managers and workers is a normal and unavoidable aspect of the employment relationship. It acknowledges that there are inherent differences in interests and perspectives between the two groups.

b - i: Psychological approach

The psychological approach focuses on understanding individual and group behavior within the workplace. It suggests that both management and workers may view each other as less reliable due to psychological factors such as biases, perceptions, and communication issues.

c - iii: Marxist approach

The Marxist approach to industrial relations emphasizes the power dynamics and class struggle between the capitalist owners (management) and the working class (workers). It posits that there is a power relationship between the two classes, with management seeking to exploit workers for their labor.

Therefore, the correct matching is:

a - ii: Pluralistic approach

b - i: Psychological approach

c - iii: Marxist approach

Hence, the correct answer is (a) - (ii), (b) - (i), (c) - (iii)

The correct answer is Scalar chain

Key Points

• Scalar chain: The formal chain of command which runs from highest to lowest rank in a straight line is known as a scalar chain.

​

• This chain outlines the path that the information must take to reach the targeted area/ individual.
• It ensures that orders are clearly communicated throughout the organization.

​

• Fayol emphasized that all information must follow this chain of command.
• But, the information will take a long time to get to the right place in an emergency, which could delay both action and decision-making.
• Gang Plank: Fayol developed the idea of "Gang Plank" to get around this scalar chain constraint.

​

• This idea states that in an emergency, two executives from different departments of the organization can speak with each other directly, allowing for quick choices and actions.

​

• This speeds up the process and promotes efficiency.

Hence, the correct answer is Scalar chain.

The correct option is ​Only (ii), (iii) and (iv)

Key Points

• working capital referees to the liquidity level of the organization to manage the day-to-day affairs of business
• The form normally finances the working capital in different modes
• Bank finance

​The firm can obtain financial assistance from banks through various means such as overdraft facilities, short-term loans, and cash credit.

• commercial papers

Commercial papers are unsecured promissory notes issued by the firm in order to raise short-term funds from the market, they are typically issued by the large creditworthy firm.

• Factoring

Factoring referees to the sale firms' bills receivable or accounts receivable to the third party at discount, the factor who are collecting payments from the customers.

Hence the correct answer is  ​Only (ii), (iii) and (iv)

The correct answer is (2) Both the statements I and II are incorrect.

Important Points 

• Each activity in a critical path method is represented by a single network arrow. As a result, no single activity can have more than one representation in the network.
• Activities can be classified as either critical or non-critical. While each non-essential activity will have some comfort time to either delay or prepone its starting time from the original starting time, no essential activity will have any cushion time to do either.

Hence, both the statements are incorrect.

The correct answer is (1) Both the statements I and II are correct.

Key Points 

• A decision tree is a structure that is frequently employed as an efficient technique of decision making. And it helps to clearly set out the problem and examine the potential repercussions of a decision.

 Important Points

• There are three distinct categories of nodes (chance, decision, end nodes).
• Nodes at the left of a decision tree signify activities that take place before nodes that fall farther to the right.

The correct answer is Statement I is correct, but II is incorrect.

Key Points Statement I: The goal of any sales promotion is to create value for both the consumer and the firm.

• A sales promotion is a type of marketing activity intended to boost sales, foster client loyalty or raise brand awareness.
• Sales promotion acts as a link between advertising and personal selling.

​

• Sales promotion encourages current customers to purchase more of the goods.
• Sales promotion tools increase consumer popularity of products. In the end, they improve the firm's reputation as well.

So, this statement is absolutely correct.

Statement II : Sales promotion always shifts sales from the future to now and thereby leads to short-run benefits at the expense of long-term sales stability.

• Promotional activities generate both short-term and long-term beneficial actions and do not involve any shifting of sales.
• At the consumer level, sales promotion tools include coupons, product samples, product demonstrations, contests, free trials etc.

So, this statement goes wrong.

Hence, the correct answer is Statement I is correct, but II is incorrect.