UGC NET Paper 2: Management 24th June 2019 Shift 2 (Previous Year Paper)

The correct option Higher social status

Key Points Transactional Analysis 

• Founded by Eric Berne during the 1960s
• It is a psychometric theory and method of therapy wherein social interactions are analyzed to determine the ego state of the communicator

Important Points They're mainly focusing on three ego states that are

1. Child ego
2. parent ego
3. Adult ego

• The child represents brain recordings of internal events that are directly linked to the external events
• Parent ego where the recording of external events observed and experienced by the child from birth to the proximity of five of life.
• The adult's final ego state is the period in which the child develops the capacity to perceive and understand the situation that is different from what he has observed

Hence the correct answer is Higher social status.

The correct option is Utilitarianism

Key Points Utilitarianism

• The theory states that the right thing to do in any situation is whatever will do the best by taking into consideration all interested parties.
• Utilitarian is part of a larger family of consequentialist ethical theory
• Utilitarians state the right action in any situation which makes a good result
• The approach basically holds that an action is morally right if it produces good for the greatest number of people.
• the concept of the same wage same policy comes under the principle that people get equity on the effort that they put in.

Hence the correct answer is Utilitarianism.

The correct option is

Hence the correct option is (a) - (ii); (b) - (iii); (c) - (iv); (d) - (i)

The correct option is Gherao

Key PointsTypes of the strike which workers carried out are

• Sit-down strike

​ a strike in which workers refuse to leave their workplace employment until a settlement is reached​​​​​​​

• ​Hunger strike​​​​​​
• ​It is a form of non-violent resistance in which participants fast and the act of getting the right to be done by the authority in their struggle
• Due financial and labor disagreement are the reasons for this kind of strikes
• Work-to-rule
• ​It is a job action  where employees do exactly what is stated in the written rules, procedure, and contract and nothing more to put pressure on the employer to agree to a fair contract

​ Important Points

• Gherao is the act tactic used by the labors
• Similar to picketing usually a group of people  will surround the opposite party until their demands are agreed

***​​Hence the correct answer is Gherao.***​

The correct option is Collective Bargaining

Key Points

 The industrial dispute Act 1947

• The industrial dispute act extended to the whole of India and regulated Indian labor law so far
• Enacted on 11 march 1947
• It aims to provide provisions for the prevention and settlement of the industrial dispute and provide a certain safeguard

Important Points Machineries developed by this act are

1. Works Committee
2. National Tribunal
3. Voluntary Arbitration

• The Act provided the mechanism and procedure for  the investigation and settlement of the industrial dispute by conciliation, arbitration, and adjudication

Collective Bargaining

• It is the process of negotiating employment terms  between the employer and a group of workers
• The union also plays a whiter role in the terms of the collective bargaining  process
• The result of collective bargaining is known as a collective bargaining agreement

Hence the correct answer is  Collective Bargaining.

The correct option is

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

The correct answer is $ 70.95

Key Points

• Forward Price: The cost of transferring an underlying asset/  financial derivative to the buyer of a forward contract at a preset date is known as the forward price.

Important Points

• Price of crude oil trading at $ 70
• Annual Interest rate = 6%
• Monthly Storage cost = $ 0.60
• Calculation of one month forward price:

         = Spot price + Monthly Interest rate + Monthly Storage cost 

         =       $70   +$ .35    +  $.60

         =       $ 70.95

Working Note: Monthly Interest Rate 

                      = $ 70 * 6/100 * 1/ 12

                     = $ 0.35 

Hence, the correct answer is $ 70.95

The correct answer is William Sharpe

Key Points

• In the 1960s, William Sharpe is acknowledged for developing the Capital asset pricing model (CAPM).
• The expected returns for a security are calculated by using the CAPM model.
• The risk-free rate, beta, and market risk premium are all the  factors that are consider by Capital Asset Pricing Model in order to determine the expected return, which is a pillar of portfolio management.
• Investors use the Sharpe ratio, one of the CAPM-derived indices, to assess the return on an investment relative to its risk.
• The primary premise of the CAPM model is the optimization of a portfolio's returns in accordance with the risk tolerance of its owner.
• It describes the link between the price of an asset, its risk, and its projected return.
• Formula of CAPM:
• R_i = R_f + Beta (R_m - R_f)
• Here R_i = Return on Asset

                   R_f = Return on Risk Free Asset

                   R_m = Market Risk Premium

Hence, the correct answer is William Sharpe.

The correct answer is Rs. 179.20

Key Points

• Walter Model: One of the most significant dividend theories in financial management is Walter's model.
• This model, put out by Professor James E. Walter, claims that a company's dividend policy is a sign of future worth.

Important Points

• Face Value = Rs. 100
• Profitability Rate = 16%
• EPS (Earning Per Share) = 16% of 100
• Payout Ratio = 80%
• 80% of 16
• 12.8
• Formula:

            P = D + r/ K_e  (EPS - D) / K_e

               = 12.8 + 0.16 / 0.1 (16 - 12.8) / 0.1

               =  12.8 + 1.6 ( 3.2) / 0.1

               = 12.8 + 5.12 / 0.1

               =   17.92 / 0.1

               =  179.2 

Hence, the correct answer is Rs. 179.20

The correct answer is Concentration banking

Key Points

• Concentration banking: A financial institution that serves as the main bank for a certain organization is known as a concentration bank.
• Concentration banking is transferring of funds from a number of bank accounts into an investment account where it can be invested more profitably.
• The Concentration Banking setup is one that businesses utilize to collect or concentrate funds from all regional banks located in several regions into a single bank account.
• Banks usually use concentration accounts in order to make fund transfers, private banking transactions and foreign transactions more easier.
• Concentration accounts combine funds from multiple locations within one consolidated account.
• Some Functions of Concentration banking:
• Increasing Collection
• Reducing accounting errors
• Quick/ timely information etc.
• A large firm operating over a wide geographical area can speed up its collection with the help of concentration banking.

Hence, the correct answer is Concentration banking.

The correct answer is 6

Key Points

• EPS: Earning Per Share is a popular statistic used for determining the corporate value and reveals the amount of cash a firm produces for each share of its stock.
• EPS = Net Income - Preferred Dividend / Average outstanding shares
• P/ E ratio: The ratio for valuing a firm that compares its current share price with its earnings per share is called the price-to-earnings ratio.
• P/ E of Firm B: 
• Market Price of Shares/ Earning Per Share

                   =  20/ 5

                   =  4

• Exchange Ratio: 
• P/ EA  /  P / EB

​                       = 1.5/ 1  =  P/ EA / 4

                By Cross Multiplication:

        P/E A =  1.5 *4

        P/ E A = 6

Hence, the correct answer is 6.

The correct answer is 1.75

Key PointsBeta (β), primarily used in the capital asset pricing model (CAPM), is a measure of the volatility–or systematic risk–of a security or portfolio compared to the market as a whole.

As per CAPM,

E(Rp) = Rf + β (Rm - Rf) 

Where, E(RP) = Expected Return on Portfolio 

Rf = Risk-Free Rate of Interest/ Return 

Beta = Portfolio Beta 

Rm = Expected Return on Market Portfolio

15 = 8 + β (12 - 8) 

7 = 4 β

β = 7/4

β = 1.75

The correct answer is 14 percent 

Key Points

• Equity Capitalisation Rate: ECR is a measure of capitalization that illustrates the relationship between property income and investor equity.
• The Capitalization Rate may take into account a number of variables, however it does not account for future risk.

Important Points

• P (Price per share) = Rs. 50
• Expected Dividend = Rs. 3 per share
• Growth  = 8%

Calculation of Equity Capitalisation Rate:

• P        =    D  / K_e  - g

             50     =   3   /  K_e  -  0.08

          K_e  -  0.08   =  3 / 50

          K_e  - 0.08    = 0.06

           K_e                   = 0.06 + 0.08

           K_e                    = 0.14 

           K_e               = 14%

Hence, The correct answer is 14 percent .

The correct answer is Consumer satisfaction is not different from consumer loyalty. Both are same concepts.

Key Points

• Customer Satisfaction: Customer satisfaction is an indicator for how consumers feel about your product/ brand.
• Information about customer satisfaction, such as surveys and ratings, can assist a business in choosing the most effective way to upgrade its goods and services.
• Maintaining high levels of customer satisfaction is crucial if you want to boost client retention and lifetime value.
• Customer Satisfaction is influenced by various factors, such as:
• Expectations of Customer
• Perceived Product Quality
• Communication
• Complaint Handling etc.
• Customer Loyalty: Customer loyalty is an attitude that a customer exhibits by being devoted towards your brand.
• Customer loyalty can lead to repeat business and help companies build a client they can count on repeatedly, year after year.
• Steps for building up customer loyalty include:
• Knowing about customer
• Creating a customer loyalty program
• Setting up a referral program
• Strengthen your brand (unique offering to customer)
• Engaging customers on social media
• Customer feedback
• Manage customer's data
• So, Customer loyalty is a set of behaviour and attitude that a customer exhibits that demonstrate loyalty to a product/ brand, such as choosing the brand over a rival on multiple occasions.

Hence, the correct answer is Consumer satisfaction is not different from consumer loyalty. Both are same concepts.

The correct answer is Marketing myopia. 

Key PointsMarketing Myopia: 

• Marketing Myopia, first expressed in an article by Theodore Levitt in Harvard Business Review, is a short-sighted and inward-looking approach to marketing that focuses on the fulfillment of the immediate needs of the company rather than focusing on marketing from the consumers’ point of view.
• When a company focuses more on sales than on marketing or consumers’ needs, that’s when marketing myopia strikes in.
• Marketing myopia is when a company has a narrow-minded marketing approach and focuses mainly on one aspect out of many possible marketing attributes.
• A brand focusing on developing high-quality products for customers who disregard quality and only focus on the price is a classic example of marketing myopia.

Examples of Marketing Myopia:

• More focus on selling rather than building relationships with the customers.
• Predicting growth without conducting proper research.
• Mass production without knowing the demand.
• Giving importance to just one aspect of the marketing attributes without focusing on what the customer actually wants.
• Not changing with the dynamic consumer environment.

Additional Information

• Marketing Phobia- “The fear of self-promotion does not only apply to salespeople making cold calls – it can even prevent your average mom-and-pop store owner from engaging in the tamest marketing possible, even something as simple as saying 'hello' to their customers.”
• Marketing Trivia- A trivia game or competition is one where the competitors are asked questions about interesting but unimportant facts in many subjects. Marketing Trivia contains questions on little-known facts based on seven different areas of marketing: Companies and Personalities, Market Behavior, Products and Brands, Distribution, Advertising and Promotion, Pricing, and International Marketing.
• Marketing inertia- Inertia is a scientific term that describes the tendency of a physical object to resist change. In marketing, the word has been used to describe businesses that do not adapt or change their marketing strategies to meet growing consumer concerns, changes in the marketplace, or economic situations.

Hence, the mistake of paying more attention to the specific products of a company offers than to the benefits and experience produced by these products is known as marketing myopia.

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

Marketing: 

• Marketing definition includes activities undertaken by a business establishment or an individual to promote their services and products.
• Marketing includes promotion, advertisement, and selling products and services to consumers.
• Marketing is the key component of any venture and includes aspects like writing product descriptions, designing website pages, improving customer services, establishing business & market segments, and conducting market research.

Key Points

• Peter Drucker, the father of business consulting, stated that: "Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."
• Marketing is generally considered as the actions or strategies for promoting and selling products and services, including market research and advertising.
• Whereas innovation is the combination of creativity to solve human problems and create business values.
• Thus Statement I is correct.

Important Points

• The product concept is based on the philosophy that customers will prefer products that offer quality, performance, or innovation-related features and aims at producing creative and innovative products that are new or improved versions of existing products.
• The production concept is focused on operations and is based on the assumption that customers will be more attracted to products that are readily available and can be purchased for less than competing products of the same kind. This concept came about as a result of the rise of early capitalism in the 1950s, at which time, companies were focused on efficiency in manufacturing to ensure maximum profits and scalability.
• Thus Statement II is incorrect.

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

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

Key Points Product Life cycle: 

• The term product life cycle refers to the length of time from when a product is introduced to consumers into the market until it's removed from the shelves.
• This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.
• A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline.

Important Points 

A product has a life cycle to assert the following things:

• Products have a limited life, and thus every product has a life cycle.
• Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller.
• Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
• A company's positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle.
• Thus Both Statements I & II are correct.

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

The correct answer is Difference between buyers' willingness to pay (WTP) and suppliers willingness to sell (WTS) is greater than the competitor's difference between the WTP and WTS. 

Key PointsCompetitive Advantage:

• Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals.
• These factors allow the productive entity to generate more sales or superior margins compared to its market rivals.
• Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property, and customer service.
• A competitive advantage is something that cannot be easily replicated and is exclusive to a company or business.
• This value is created internally and is what sets the business apart from its competition.
• Competitive advantage is best described as the difference between buyers' willingness to pay (WTP) and suppliers' willingness to sell (WTS) is greater than the competitor's difference between the WTP and WTS.

Additional InformationWillingness to Pay:

• Willingness to pay is the highest price a customer is willing to pay for your product or service.
• Customers are more likely to make a purchase when companies charge any amount up to that threshold.
• The difference between the customer’s willingness to pay and the final price of the purchase is known as customer surplus.

Willingness to sell:

• Willingness to sell, also known as the willingness to accept, is the lowest price a firm’s suppliers are willing to accept in exchange for the raw materials needed to create products.
• While many suppliers would like to sell goods for the highest amount possible to maximize profits, most are willing to reduce prices to a certain extent to make a sale.
• The difference between the suppliers’ willingness to sell and what they charge the firm is known as supplier surplus.

Hence, A firm's competitive advantage over its competitor is best described by the difference between buyers' willingness to pay (WTP) and suppliers' willingness to sell (WTS) is greater than the competitor's difference between the WTP and WTS.

The correct answer is turnaround strategy.

Key Points

Turnaround Strategy:

• The Turnaround Strategy is a retrenchment strategy followed by an organization when it feels that the decision made earlier is wrong and needs to be undone before it damages the profitability of the company.
• Simply, a turnaround strategy is backing out or retreating from the decision wrongly made earlier and transforming from a loss-making company to a profit-making company.
• It becomes necessary for the company to follow the turnaround strategy because of the changes in the external environment like government policies, the demand for the product in the market, the threat of the substitute product, changes in the preferences of customers, and the external environment.
• A turnaround strategy is a process of restructuring and transforming the company from loss to profitability.
• Re-engineering is the re-designing of business processes and is used for a turnaround strategy.

Additional InformationExpansion Strategy/ Growth Strategy:

• An expansion strategy is synonymous with a growth strategy.
• A firm seeks to achieve faster growth, compete, achieve higher profits, grow a brand, capitalize on economies of scale, have a greater impact, or occupy a larger market share.
• This may entail acquiring more market share through traditional competitive strategies, entering new markets, targeting new market segments, offering new products or services, and expanding or improving current operations.

Diversification strategy:

• A business diversification strategy is when companies introduce new products to a new market with the goal of expansion.
• The diversification approach is more suitable for large multinational corporations.
• The strategy can be implemented by identifying the product, coming up with the product, drafting a strategy, managing finances, and introducing the product.
• The three main types of diversification strategies include concentric, horizontal, and conglomerate strategies.

Hence, Re-engineering, a radical redesign of business processes, is essential and integral to turnaround strategy.

The correct answer is (a), (b) and (d) only.

Key Points

Binomial Distribution:

The binomial distribution describes the behavior of a count variable X if the following conditions apply:

1: The number of observations n is fixed.

2: Each observation is independent.

3: Each observation represents one of two outcomes ("success" or "failure").

4: The probability of "success" p is the same for each outcome. 

Hence, the correct answer is (a), (b), and (d) only.

The correct answer is 0.736

Important Points

Total number of misprints=100

Total number of pages in a book = 100

Expected mean value= \lambda=\frac{100}{100}=1

Poisson distribution formula :

P(X=x)=\frac{e^{-\lambda}\lambda^{x}}{x!}

Using the formula

P(x\leq1)=P(x=0)+P(x=1)

P(x\leq1)=\frac{e^{-1}(1)^0}{0!}+\frac{e^{-1}(1)^1}{1!}

P(x\leq1)=\frac{2}{e}

P(x\leq1)=\frac{2}{e}

P(x\leq1)=0.736

Hence, the probability that a page selected at random will contain at most one misprint will be 0.736.

The correct answer is 3.5 percent

Key Points India's trade policy:

• A foreign trade policy consists of laws and regulations and a set of principles that govern imports and exports to other countries from India.
• It is issued by the government of India.
• The Foreign Trade Policy (FTP) 2015-2020  aims at facilitating foreign trade by reducing the cost and time of transactions.

Important Points

• The Foreign trade policy was announced in April 2015.
• India's Foreign trade policy 15-20 aimed at increasing India's share of global trade from 2.1 to 3.5 percent. And to double its exports to $900 billion by 2020.

​Hence the correct answer is 3.5 percent.

The correct answer is the Relative trade performance of individual countries in particular commodities.

Key Points Balassa Index:

• The Balassa index was introduced by Bela Balassa(1965).
• It is used in international economics.
• Balassa index is alternatively known as Revealed comparative advantage.
• It is used to ascertain the relative advantage or disadvantage that a country has in certain classes or goods and services.

Important Points

• The Balassa index is used for determining any country's strong and weak sections.
• Let us take an example, many countries export geysers, to see if any country say A holds a strong position in this industry, Balassa argued that one should compare the share of geysers exports in A’s total exports with the share of geysers exports in a group of reference country’s total exports. 

 if BI^A_j is country A’s Balassa index for industry j, this is defined as to:

 BI^Aj = share of industry J in country A's exports/share of industry J in reference country exports.

If BI^A_j >1, country A is said to have a  comparative advantage in the industry.​

​Hence the correct answer is the Relative trade performance of individual countries in particular commodities.

The correct answer is Ownership, location, and internalisation.

Key PointsFDI(Foreign direct investment):

• When an organisation or individual of any one country makes an investment or acquires shares or stakes in the business of another country then this is known as Foreign direct investment.

Important Points

• Prof.John Harry dunning developed the eclectic paradigm or OLI framework in the 1980s.
• OLI framework analyses the attractiveness of Foreign direct investment by following a three-tier framework i.e.

1. Ownership
2. Location
3. Internalisation.

• OLI framework suggests that an investor makes an FDI if he gets an ownership advantage, location advantage, and internalisation advantage through the FDI.

Hence the correct answer is Ownership, location, and internalisation.

Additional Information OLI framework:

• ownership advantage over foreign competitors? --->yes
• locational advantage in foreign country ?---> yes
• advantage from internalising production?-->yes

If the answers are yes, make FDI.

The correct answer is International Development Agency

Key Points WORLD BANK:

• The World Bank is an international financial institution.
• It provides loans and grants to low and middle-income countries.
• Headquarters of the World bank are situated in Washington, D.C., United States.
• The world bank was established in 1944.

​SOFT LOAN:

• A soft loan is provided by the world bank and other financing institutions at concessional rates to developing countries.
• It is provided at low-interest rates than the market or at no interest.
• Terms are more lenient in the case of soft loans such as extended grace periods.

Important Points

• International Development Agency is a multinational financing institution that provides loans and grants to the poor and developing countries of the World.
• It is also known as the soft loan window of the world bank.

Hence the correct answer is  International Development Agency.

Additional Information

• International Monetary Fund: The IMF is an organization of countries as members it works for the stability of global monetary cooperation and to secure financial stability, facilitate international trade, and promote sustainable economic growth.
• International Finance Corporation:  IFC is a member of the World Bank Group. It encourages private-sector development in less developed countries through investment, advisory, and asset-management services.
• Asian Development Bank: ADB is a regional development bank consisting of 68 countries as members. It supports projects in developing member countries to promote social and economic development in Asia.​

The correct answer is Director General of Foreign Trade (DGFT)

Important Points

• The Director General of Foreign Trade (DGFT) organisation is an attached office of the ministry of commerce and industry and is headed by DGFT.
• Headquarters are in New Delhi and is responsible for formulating and implementing foreign trade policy and thus responsible for the execution of India's import-export policies.

​Hence The correct answer is Director General of Foreign Trade (DGFT).

Additional Information

• Chief Controller of Imports and Exports: Chief Controller of Imports and Exports is a government regulatory department of Bangladesh concerning export and import and is located in Dhaka.
• Federation of Indian Export Organisations: Federation of Indian Export Organisations is the trade promotion organisation in India set up by the Ministry of Commerce, the Government of India, and the private trade and industry segment in 1965. It is responsible for representing and assisting Indian entrepreneurs in foreign markets.
• Export Promotion Councils and Commodity Boards:

1. Export promotion Councils are registered as non-profit organizations under the Companies Act. These councils promote and support export firms in developing their foreign trade.
2. Commodity boards are established by the government of India to promote traditional commodities that have high export potential.

The correct answer is National Treatment Rule.

Key Points National Treatment Rule:

• The national treatment rule prohibits countries from using domestic taxes and regulations to offset the value of tariff concessions and is, therefore, a significant tool in promoting trade liberalization.
• National treatment provisions, as well as the MFN clause, are often invoked in WTO disputes.
• Under national treatment, a state that grants particular rights, benefits, or privileges to its own citizens must also grant those advantages to the citizens of other states while they are in that country.
• In the context of international agreements, a state must provide equal treatment to the citizens of the other states participating in the agreement. Imported and locally produced goods should be treated equally - at least after the foreign goods have entered the market.

Additional Information Plurilateral agreement-  

• A plurilateral agreement is a multi-national legal or trade agreement between countries.
• In the jargon of global economics, it is an agreement between more than two countries, but not a great many, which would be multilateral agreement.

Protection through tariffication- 

• Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry.
• They aim to make imported goods cost more than equivalent goods produced domestically, thereby causing sales of domestically produced goods to rise, supporting local industry.

Most Favoured Nation- 

• In international economic relations and international politics, most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade.
• The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas).
• In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.

Hence, the correct answer is National Treatment Rule.

The correct answer is Open source operating system

Key Points

• Operating system: It is a system software useful for managing hardware and software resources of the computer and providing common services for computer programs

 Important Points

• LINUX: Linux belongs to the family of open-source Unix-like operating systems based on the Linux kernel.
• Linux is beneficial for all types of server applications and is designed to support multithreading applications.

Hence the correct answer is Open source operating system.

Additional Information

• Java platform: The Java platform is the environment for developing and managing Java applets and applications.
• Communication software: Communication software exchanges files and messages in text, audio, and video formats between different computers or users.
• System software: A system software is a set of programs that manages and controls a computer's hardware and applications. Examples of system software include operating systems, search engines, and game engines.

The correct answer is A. T. Kearney

Key Points

 **FDI:**​

• Whenever any organisation or individual invests in the business of a foreign country then it is called foreign direct investment.

Important Points

• The Kearney FDI confidence index is an annual survey of global business executives.
• ​ The Index is created utilising original data from a confidential survey of senior executives of the top firms around the globe. The rankings are based on inquiries into respondents' organisations' propensity to invest directly in a market over the following three years.

Hence The correct answer is A. T. Kearney.

The correct answer is Option 3.

Key Points Data Scrubbing:

• Data scrubbing refers to the procedure of modifying or removing incomplete, incorrect, inaccurately formatted, or repeated data in a database.
• The key objective of data scrubbing is to make the data more accurate and consistent.
• Data scrubbing is a vital strategy for ensuring that databases remain accurate.
• It is especially important in data-intensive industries, including telecommunications, insurance, banking and retailing.
• Data scrubbing systematically evaluates data for flaws or mistakes with the help of look-up tables, rules and algorithms.
• Data scrubbing is also referred to as data cleansing.

Hence, the correct answer is Option 3.

The correct answer is MIS.

Important Points Manager information system(MIS):

• An information system used for decision-making, as well as for the coordination, control, analysis, and visualisation of information inside an organisation, is known as a management information system.
• Middle managers utilise management information systems (MIS) to track the organization's present performance status. A management information system receives its input from a transaction processing system's output.

Hence the correct answer is MIS.

Additional Information

• The transaction processing system(TPS): A transaction processing system is employed by organisations to keep track of daily business activities. Users at the operational management level use them. A transaction processing system's primary goal is to provide answers to common inquiries.
• Decision support system(DSS): Senior management uses decision support tools to make complex decisions. Both internal (such as transaction processing systems and management information systems) and external systems provide input to decision support systems.
• Executive support system(ESS): It is a computer-based system that provides internal and external information to top managers which is relevant to organisational goals.

Key Points

The Bounded Rationality Approach

• This theory was stated by Herbert A. Simon.
• According to the bounded rationality approach, people base their decisions on their cognitive abilities and a limited amount of available information.
• There are three constraints faced while making the decision:
• Limited information is available
• Limited time is available to take a decision
• Human beings have a limited capacity to interpret all available information
• Due to these constraints, individuals take decisions that are optimal for them in such circumstances.

Hence, Bounded rationality is the approach in which the manager takes a decision that in his opinion is satisfactory under specific circumstances. 

Additional Information

The Behavioural Approach

• This theory is coined by John B Watson.
• Behaviorists opine that the behavior of individuals can be systematically studied and evaluated regardless of interior mental states like moods, emotions, etc.
• It is predicated on the idea that behavior is an outcome of experience that comes from interaction with external environmental factors.
• Hence, individuals can learn how to behave irrespective of their internal emotions.

The 'Garbage Can’ Approach

• Created by Michael D. Cohen, James G. March, and Johan P. Olsen.
• The decision-making model acknowledges that issues arise in every organization, though many of these issues are brought on by an abundance of pointless solutions (organizational garbage) that were developed to address ambiguous problems.
• The garbage can model demonstrates how various problems and solutions are thrown into opportunities like trash would be put into a garbage can when choice opportunities or opportunities to make a decision about a problem arise.

The Cooperative Social Systems Approach

• The strategy makes use of purpose-driven cooperative groups.
• Both interpersonal and group behavioral issues are covered in this theory.
• This theory states that there is a direct relation between the internal and external environment and cooperation among all cooperative social groups is necessary.
• It also states that there must be coordination between organizational aims and group goals.

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

Key Points 

• Strategic management is the ongoing planning, monitoring, analysis, and assessment of all necessities an organization needs to meet its goals and objectives.
• Changes in business environments will require organizations to constantly assess their strategies for success.
• The strategic management process helps organizations take stock of their present situation, chalk out strategies, deploy them and analyze the effectiveness of the implemented management strategies.

Important Points

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

The correct answer is Normal goods. 

Key Points

Normal goods

• There is a direct relationship between the income of consumers and demand for normal goods.
• It indicates that when consumer income rises, so does the demand for normal goods.
• But it gets slowed with the further incline in income.
• Example: Let's take the example of a normal pencil worth 5 rs. and inferior pencil worth 1 rs.
• When the income inclines, the consumer increases demand for 5 Rs. pencil.

However, when the income rises further, then consumers may shift to another expensive better-quality pencil and stop demanding the normal 5 Rs pencil.

Additional InformationInferior goods

• A type of good whose demand decreases as income increases is known as an inferior good.
• There is an inverse relationship between the demand for inferior goods and the income of consumers.
• Example: There are two goods- 1. wheat flour (Superior goods) 2. Bajra flour (Inferior goods)
• As the income rises, the consumer starts buying wheat flour but if income declines, the consumer starts buying Bajra flour which is less expensive.

Essential consumer goods

• Goods that are essential for the survival of human beings are essential goods.
• These goods have inelastic demand in relation to price and income.
• Toothpaste, matchsticks, gasoline, etc are a few examples of necessary goods.

Luxury and prestige goods

• A luxury good is one whose demand rises proportionately with income.
• The desire for luxury items is known to be highly income elastic.
• In other words, consumers will purchase more and more luxury commodities as their income increases.

Hence, for normal goods, the demand increases rapidly with the increase in consumer's income but slows down with further increases in income

The correct answer is human capital. 

Key Points

• Human capital is an intangible asset not listed on a company's balance sheet.
• Human capital is said to include qualities like an employee's experience and skills.
• Since all labor is not considered equal, employers can improve human capital by investing in the training, education, and benefits of their employees.
• The term human capital refers to the economic value of a worker's experience and skills.
• Human capital includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.
• Human capital is perceived to increase productivity and thus profitability.
• The more investment a company makes in its employees, the chances of its productivity and success become higher.

Additional Information

• Human resource planning (HRP) is the continuous process of systematic planning ahead to achieve optimum use of an organization's most valuable asset—quality employees. Human resources planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.
• Human resource management (HRM) is the practice of recruiting, hiring, deploying, and managing an organization's employees. A company or organization's HR department is usually responsible for creating, putting into effect, and overseeing policies governing workers and the relationship of the organization with its employees.
• The number of employees refers to the total number of full-time employees an enterprise employs during a calendar month.

Hence, Human capital refers to the stock of employee skills, knowledge, and capabilities that may not show up on a balance sheet but have a significant impact on a firm's performance.

The correct option is 

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

The correct option is The Constitution (42 Amendment Act), 1976

Key Points Worker's participation management in the industry

• It is the process by which subordinate employees either individually or collectively become involved in one or more aspects of organizational decision-making within the enterprise in which they work.
• The concept creates a sense of belongingness in the mind of workers

Important Points

• They will perform their duties in a more responsible manner
• The Constitution (42 Amendment Act), 1976 is  provided an opportunity to workers for  participating in management in the industry
• The 42nd amendment is considered the mini-constitution
• The state shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings, establishments, or organizations, engaged in any industry

​Hence the correct answer is The Constitution (42 Amendment Act), 1976.

The correct option is The Industrial Disputes Act, 1947

Key Pointscollective bargaining

• The term collective bargaining was first used in 1891 by Beatrice Webb
• Webb's definition emphasizes the importance of collective action on the part of workers in establishing and negotiating a formal agreement.

Important Points

• Collective bargaining is the process of negotiation between employers and groups of employees aimed at an agreement to regulate working salary, working conditions, and compensation and rights.
• The result of collective bargaining is  called collective bargaining agreement
• The process takes place between the company, management, and labor union
• the aim of collective bargaining come up with collective bargaining contract or agreement
• There are several types of collective bargaining it including

1. Composite bargaining
2. Concessionary baragaing
3. Distributive bargaining
4. Integrative bargaining
5. Productivity bargaining

Hence the correct answer is The Industrial Disputes Act, 1947.

The correct option is Change in leadership 

Key Points

 Important Points

Forces of change The forces which mainly categorized into two that are

1)Internal forces

• internal forces  are under the control of the organization
• its consisting of some of the insides thinks new ways of doing that will be beneficial to the organization
• it includes mainly

1. Leadership
2. Structure
3. Strategy
4. people
5. Technology
6. Culture

2)External forces

• External forces are beyond the control of the organization and are more challenging
• As  a growing world rapid changes happening in each and every aspect like technology, the information sector
• In order to sustain the market it is important that firm should adopt these changes on time and should implement it
• The external forces include mainly

1. political
2. Economical
3. Natural disaster
4. technology
5. Governmental
6. Environmental

Hence the correct answer is Change in leadership.

**The correct option is **career management

Key Points Career management 

• A career is the mobility of path within a single organization or multiple employees
• career management is thoughtfully planning occupational progress to maximize professional growth and stability in an individual career.
• It is a lifelong process of investing.
• It is an attempt to affect the career development of others
• which progressing from an entry-level position to a managing position
• Career management focussing on gaining knowledge and skill

Important Points There are mainly two types of career management is there

1. Individual career management
2. Organizational career management

Importance of career management

• Helps in adapting to rapid changes happening in the world due to technological upgradation
• Employees can easily adapt to changes happening in the organization
• Helps in maintaining talent within the organization

Hence the correct answer is career management.

The correct answer is Revenue Expenditure

Key Points

• Revenue expenditure is also known as operating expenditure.
• It consists of that cost which does not lead to the creation of an asset.
• Basically, revenue expenditure is the cost that a company pays each day to continue operating its regular business operations/ work, i.e. cost of repair/ maintenance etc.
• Revenue expenditure is not indicated in a company's balance sheet; rather, it is recorded in the income statement.
• Revenue expenses incurred to sustain the continuous operations of the firm and have no bearing on the lifespan of the assets that generate revenue.
• There are basically two types of revenue expenditure, namely: Direct and Indirect revenue expenditure.
• Direct Revenue Expenditure refers to that cost which is directly incurred by the organization during the production of goods and services.
• Indirect Revenue Expenditure refers to that cost which is incurred by the organization at the time of sale / distribution of goods and services.

Hence, the correct answer is Revenue Expenditure.

Additional Information

• Capital Expenditure: It refers to those funds that are used by business in order to purchase and maintain tangible assets, i.e. land, buildings, machinery etc.
• Deferred Revenue Expenditure: Investing on deferred revenue involves incurring costs in the present accounting period but receiving benefits in future accounting periods.
• For Example: Expenditure on Advertisement.
• Contingent Expenses: Any expenses, including store expenses which is incurred for managing an office is referred to as contingent expenses.

The correct answer is Total Variable cost

Key Points

• Total Variable cost: The sum total of all variable expenses related to the cost of products sold within a reporting period is known as the total variable cost.
• Example Cost of raw material
• TVC changes with the level of output.
• Cost related elements of Total Variable Cost are:
• Direct material
• Freight in
• Commission etc**.**
• Only costs that change in relation to production or sales volume are included as parts of the total variable cost.
• If actual production of units are lower than the budgeted level of production, then total variable cost would be lower than the budgeted costs.
• Total Variable cost = Average Variable Cost/ Quantity

​Hence, the correct answer is Total Variable cost.

Additional Information

• Variable cost per unit: The production cost for each unit produced that is modified by changes in a firm's output is known as variable cost per unit.
• Variable cost per unit = Total Variable Expenses/ Output
• Total Fixed Cost: Total fixed costs are the expenses that remains constant regardless of changes in output level.
• Example: Salary.

The correct answer is Highest cost flow and lowest inventory

Key Points

• LIFO refers to the Last in First Out approach of valuation of inventory.
• This is the method where the new/ fresh inventory is sold out first (last in, will be first out).
• In essence, the LIFO approach is based on the notion/ idea that businesses can save money on taxes during the period of growing prices.
• It is more beneficial to use LFO as compared to FIFO, at the time of rising prices.
• When there is inflation (increasing prices), new stock will cost more, and when it is sold out first, the COGS (Cost of Goods Sold) will be greater, which will result in higher cost flow and ultimately lower net income (profits).
• Since the remaining inventory is older and less expensive than new one, so it is valued lower on the company's balance sheet.

Hence, the correct answer is Highest cost flow and lowest inventory.

The correct answer is Rs. 2.00

Key Points Diluted Earning Per Share:

Diluted Earnings Per Share (EPS) measures the residual net profits distributable to each share of total common equity outstanding.

The formula for diluted EPS is:

Diluted EPS = (Net Income – Preferred Dividends) ÷ Weighted Average of Diluted Common Shares Outstanding

Here. Net Income-Preferred Dividends = Rs 100000

Weighted Average of Diluted Common Shares Outstanding = Rs 50000

Thus, Diluted EPS = Rs 1000000/ Rs 50000 = Rs 2.00

Hence, the correct answer is Rs 2.00

The correct answer is Depreciate if the current home interest rate exceeds current foreign interest rate.

Key Points

According to the International Fisher Effect, changes in exchange rates can be predicted using differences in nominal interest rates between nations.

• Depreciation in a currency means the fall in the value of a currency as compared to other currencies, this depreciation leads to inflation in the country since the imported value of goods and services now increases for that country.
• Appreciation in a currency means the rise in the value of a currency as compared to other currencies, this leads to reduction in inflation in the country since the imported value of goods and services now decreases for that country.
• When the nominal rates (percentage increase in the amount of money paid against the money borrowed) increase in a country, it will lead to depreciation of currency as compared to other currencies because people will prefer investing in a country where the interest rates are low.
• For instance, if nation A (the one where you live) has an interest rate of 10% and country B (a foreign country) has an interest rate of 5%, country B's currency value will increase by around 5% relative to that of country A.

Hence, the correct answer is Depreciate if the current home interest rate exceeds current foreign interest rate.

The correct answer is Zero

Key Points

• A call or put option's strike price, also known as the exercise price, is the set price at which the option's owner can purchase the underlying security/ commodity (in the case of a call option) or sell it (in the case of a put option).
• An investor considers the price of the underlying security and the strike price since it tells the investor whether or not to execute the contract.
• The intrinsic value is basically the worth of an asset, which exists when the price of a stock is more than the strike price. It is zero when the price of a stock is less than or equal to the strike price.
• For instance, if the stock is trading at $51 and the underlying call option has a$50 strike price, the investor can exercise the call, buy the stock for $50, and then sell it for$51 to realise $1 of intrinsic value.
• But if the call option has a $50 strike price and the stock is selling at $49, the investor will not exercise the call since  the intrinsic value will be ZERO.
• The investor will not earn profit if the call option's strike price is lower at the time of maturity. Hence, its return will be 0.

Hence, the correct answer is Zero.

The correct answer is Credit rating

Key Points

• Credit Rating: The term credit rating refers to a quantitative evaluation of a borrower's creditworthiness with respect to a particular debt obligation.
• A credit rating can be assigned to any entity that seeks to borrow money, i.e. an individual,/ corporation/ state etc.
• The amount of credit extended to a borrower and the interest rate at which it will be repaid are both influenced by their credit scores.
• A borrower with a high credit score is more likely to repay the loan in full and on time, while one with a low credit score may find it difficult to make payments.
• The rating organizations do extensive due diligence before assigning credit ratings to borrowers.
• Credit Ratings are of two types: 
• Investment Grade
• Speculative Grade
• Investment Grade: Having an investment grade rating indicates that the rating agency believes the investment to be solid and that the issuer is likely to adhere to the repayment terms.
• Speculative Grade: Investments with a speculative grade carry a higher level of risk and as a result, have higher interest rates.

Hence, the correct answer is Credit rating.

Additional Information

• Credit Policy: This policy outlines how your business will grant credit to clients and collect unpaid invoices.
• A credit policy contains:
• Credit Standards
• Credit Terms
• Collection Policy etc.

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

Product: 

• A product is anything that is offered to a market to satisfy customer wants and needs.
• The product includes both tangible and intangible items available for sale in the market.
• Every product is made at a cost and each is sold at a price.
• The price that can be charged depends on the market, the quality, the marketing, and the segment that is targeted.

Key Points The correct match is as follows: 

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

The correct answer is Statement (I) is correct while Statement (II) is incorrect.

Brand equity:

• Brand equity is a term that represents the value of a company's brand based on its recognition.
• In marketing, a company's brand is a set of features that helps customers identify the company.
• A company has more brand equity when customers can easily recognize the company because of its brand.
• Brand equity is an important concept that can help marketing professionals increase customer loyalty and improve the public's perception of the company.

Key Points Aaker Model of Brand Equity:

• The Aaker model is a brand blueprint developed by marketing expert David Aaker.
• It mostly emphasizes the importance of brand identity and offers unique solutions to building a strong brand.
• Aaker's Model of Brand Equity views brand equity as a set of five categories of brand assets and liabilities linked to a brand that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.
• According to Aaker Model, a particularly important concept for building brand equity is brand identity—the unique set of brand associations that represent what the brand stands for and promises to customers.
• Thus Statement I is correct.
• Brand identity refers to establishing a relationship between brands and consumers by creating a value proposition through core identities and extended identities.
• The core identity–the central, timeless essence of the brand–is most likely to remain constant as the brand travels to new markets and products.
• The extended identity includes brand identity elements, organized into cohesive and meaningful groupings, that provide texture and completeness.
• Thus Statement II is incorrect as core identity does not change.

Hence, the correct answer is Statement (I) is correct while Statement (II) is incorrect.

The correct answer is Customer value.

Key PointsCustomer value:

• Customer value is the customer’s perception of the worth of your product or service.
• Worth can mean several things: the benefit these products or services provide to your target market, or the value for money they offer.
• Customer value is best defined as how much a product or service is worth to a customer.
• It’s a measure of all the costs and benefits associated with a product or service.
• Examples include price, quality, and what the product or service can do for that particular person.
• There are also monetary, time, energy, and emotional costs that consumers consider when evaluating the value of a purchase.
• Customer value is the ratio between customers' perceived benefits and the resources they use to obtain those benefits.

Additional InformationCustomer satisfaction:

• Customer satisfaction is defined as a measurement that determines how happy customers are with a company's products, services, and capabilities.
• Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services.

Customer retention:

• Customer retention refers to the rate at which customers stay with a business for a given period of time.
• This is often referred to as churn rate and is a key metric for practically all B2B and B2C businesses.

Customer loyalty:

• Customer loyalty describes an ongoing emotional relationship between you and your customer, manifesting itself by how willing a customer is to engage with and repeatedly purchase from you versus your competitors.
• Loyalty is the byproduct of a customer's positive experience with you and works to create trust.

Hence, the ratio between customers' perceived benefits and the resources they use to obtain those benefits is known as Customer value.

The correct answer is High-mark up, lower volume group.

Retail store:

• A retail store is a place of business that sells merchandise in small quantities directly to customers.
• Store retailers operate fixed point-of-sale locations (i.e. retail stores) to display and sell merchandise directly to the general public.

Key Points

• A specialty store is a business that focuses on selling a specific product or a narrow line of products.
• Specialty stores are often retail businesses that focus on particular product categories.
• Retail stores sell a small quantity of items for quick consumption instead of selling for resale purposes later on.
• Specialty stores can also sell a wide variety of products but in a specific category of goods.
• Specialty stores can be small retail shops, national chain stores, or locally owned stores.
• Specialty stores are usually smaller than most traditional retail stores; and have higher costs because they operate will less volume.
• Consequently, prices in specialty stores are usually higher than at other retail establishments.

Hence, fine speciality store falls into high-mark-up, lower-volume group

The correct answer is experimental. 

Research design:

• Research design is the process of planning and executing a study to answer specific questions.
• This process allows you to test hypotheses in the business or scientific fields.
• The research design involves choosing the right methodology, selecting the most appropriate data collection methods, and devising a plan (or framework) for analyzing the data.
• In short, a good research design helps us to structure our research.

Key Points Experimental Design: 

• An experimental design is used when the researcher wants to examine how variables interact with each other.
• The researcher manipulates one variable (the independent variable) and observes the effect on another variable (the dependent variable).
• In other words, the researcher wants to test a causal relationship between two or more variables.
• In marketing, to determine if a special Point-of-Purchase (POP) display causes the purchase of the product on display, we need to use experimental research design as it tries to establish the cause-and-effect relationship between POP display and purchase of the product on display.

Additional InformationExploratory Design:

• In this research design, the researcher explores concepts and ideas on a subject to explore more theories.
• The main aim of the research is to explore the subjects’ undiscovered aspects and answer questions like what, how, and why.

Descriptive Design:

• Descriptive research refers to a systematic process of observing and describing what a subject does without influencing them.
• Methods include surveys, interviews, case studies, and observations. Descriptive research aims to gather an in-depth understanding of a phenomenon and answers when/what/where.

Normative Design:

• Normative research is about defining how the findings should be applied to the study population as well as setting the context or defining phenomena and interpreting the results.
• Normative research is about measuring, assessing, and comparing goodness, value, practicality, and functionality.

Hence, the correct answer is experimental.

The correct answer is (a) and (c). 

Project management: 

• Project management can be defined as a structural way of planning, scheduling, executing, monitoring, and controlling various phases of a project.
• To achieve the end goal of a project on time, PERT and CPM are two project management techniques that every management should implement.
• These techniques help in displaying the progress and series of actions and events of a project.

Key Points 

Difference between PERT and CPM:

• Thus only the following statements are true for PERT and CPM.
• (a) PERT is probabilistic in nature and CPM is deterministic in nature.
• (c) PERT focuses primarily on the time elements and attaches lesser significance to the cost. On the contrary, the CPM puts a strong emphasis on cost.

Hence, the correct answer is (a) and (c).

The correct answer is Snowball sampling.

Key Points Snowball Sampling:

• Snowball sampling is a non-probability sampling method where new units are recruited by other units to form part of the sample.
• Snowball sampling can be a useful way to conduct research about people with specific traits who might otherwise be difficult to identify (e.g., people with a rare disease).
• Also known as chain sampling or network sampling, snowball sampling begins with one or more study participants.
• It then continues on the basis of referrals from those participants. This process continues until you reach the desired sample or a saturation point.
• Here, in this example, the survey first tries to sort out a name of the friends that would likely purchase their product. then they are contacted. Hence, it is an example of Snowball sampling.

Additional Information Judgemental Sampling- Judgment sampling, also referred to as judgmental sampling or authoritative sampling, is a non-probability sampling technique where the researcher selects units to be sampled based on his own existing knowledge, or his professional judgment

Expert Sampling- Expert sampling is used when the research requires individuals with a high level of knowledge about a particular subject. The experts are thus selected based on a demonstrable skill set, or level of experience possessed.

Quota Sampling- Quota sampling is a non-probability sampling method that relies on the non-random selection of a predetermined number or proportion of units. This is called a quota sampling.

Hence, the correct answer is Snowball sampling.

The correct answer is Option 4.

Key Points Statement I: All ideas are opportunities

• A business idea is a concept that could be used to make money, and an opportunity has proven commercial value.
• Knowing the difference between an idea and an opportunity is crucial to avoid wasting significant time and money.

Statement II: An opportunity is an idea that has the qualities of being attractive, durable and timely.

• A business idea is a concept that has the potential to make money. It is tied around a product or service but has no commercial value yet because the concept has not been proven.
• It is usually the first step in founding a business or creating a prospective profitable industry that many other people would eventually want to get into because of the success one or a few entrepreneurs have found in it.
• Since business ideas are usually just abstract and remain in the mind of the innovator or entrepreneur pending when it has materialised successfully or not, every business idea with prospects for growth must have the following:
• A prospective market
• Solve the customer’s problem
• Be unique in the market
• Be innovative
• Prospective revenue sources
• High prospects for profitability in the long run.

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

The correct answer is Small Industries Development Bank of India.

Key Points  Small Industries Development Bank of India:

SIDBI is mandated to serve as the Principal Financial Institution for executing the triple agenda of promotion, financing and development of the MSME sector and coordination of the functions of the various Institutions engaged in similar activities.

Functions of SIDBI:

• Indirect Lending- based on multiplier effect/ larger reach in financing the MSME sector and is undertaken through Banks, SFBs, NBFCs, MFIs and New Age Fintechs.
• Direct Lending- aims to fill the existing credit gaps in the MSME sector and is undertaken through demonstrative and innovative lending products, which can be further scaled up by credit delivery ecosystem.
• Fund of Funds- boosts entrepreneurship culture by supporting emerging startups through the Fund of Funds channel.
• Promotion and Development- promoting entrepreneurship and handholding budding entrepreneurs for holistic development of MSME sector through credit-plus initiatives.
• Facilitator- playing a facilitator through roles like Nodal Agency for the MSME oriented Schemes of the Government.

Hence, the correct answer is Small Industries Development Bank of India.

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

Corporate Governance: 

• Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled.
• Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.

Key Points 

• Investor protection turns out to be crucial because, in many countries, the exploitation of minority shareholders and creditors by the controlling shareholders is extensive.
• Corporate governance is, to a large extent, a set of mechanisms through which outside investors protect themselves against expropriation by insiders.
• Thus, Assertion(A) is correct.
• Strong Corporate Governance is indispensable to resilient and vibrant capital markets and investor protection rests on this foundation.
• Investors use Corporate Governance as an indicator to judge the quality of a company's management and the effectiveness of its Board of Directors.
• Thus Reason (R) is also correct.

Important Points

• The report of Kumar Mangalam Birla Committee on Corporate Governance constituted by SEBI (1999) states that “Strong corporate governance is indispensable to resilient and vibrant capital markets and is an important instrument of investor protection. It is the blood that fills the veins of transparent corporate disclosure and high-quality accounting practices. It is the muscle that moves a viable and accessible financial reporting structure.”
• Thus Reason (R) is the right explanation for Assertion(A).

Additional Information

Kumar Mangalam Birla Committee on Corporate Governance

• Securities and Exchange Board of India (SEBI) 1999 set up a committee under Shri Kumar Mangalam Birla, a member SEBI Board, to promote and raise the standards of good corporate governance.
• The primary objective of the committee was to view corporate governance from the perspective of the investors and shareholders and to prepare a ‘Code’ to suit the Indian corporate environment.
• The committee divided the recommendations into two categories, namely, mandatory and non-mandatory.
• The recommendations which are absolutely essential for corporate governance can be defined with precision and can be enforced through the amendment of the listing agreement is classified as mandatory.
• Others, which are either desirable or may require a change of laws be classified as non-mandatory.

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

Key Points Decision Making 

• Decision-making is the process of making choices by recognizing the problem, gathering information about feasible solutions, and finalizing the best alternative.
• This process is carried out through an intuitive or logical process, or a combination of the two.

Decision Making bias 

• When you have a bias in decision-making, it means you make your decision based on what is usually subconscious processing of your previous experiences and prior knowledge.
• These mental shortcuts can impact how you make your decisions and can result in a decision that's different from what you'd make if biases weren't present.
• Biases differ by the individual and their unique personalities and experiences.

Important Points 

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

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

Organizational culture:

• Organizational culture can be defined as the group norms, values, beliefs, and assumptions practiced in an organization. It brings stability and control to the firm.
• The organization is more stable and its objective can be understood more clearly.

Key Points

• Organizational culture includes an organization’s expectations, experiences, and 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 expectations.
• Culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.
• Organizational culture helps the group members to resolve their differences, and overcome barriers and also helps them in tackling risks.
• Thus, Statement I is correct.
• Since culture influences the way members of the organization to behave, and interact with one another, one way of finding out about a company’s culture is by observing employees or interviewing them.
• At the same time, culture manifests itself in some visible aspects of the organization’s environment.
• Here are ways in which culture shows itself to observers and employees: Mission Statement, Rituals, Rules and Policies, and Stories.
• Thus, Statement II is correct.

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

The correct option is Delphi Technique

Key Points

 Delphi technique

• The Delphi technique is defined as a multistage survey that attempts to ultimately achieve consensus on an important issue
• In its original form Delphi listing of two or more rounds of questionnaires administered to the expert panel for their opinion on certain issues
• Every round the panelist receives feedback in the form o a statistical representation of the overall group response
• The benefits of conducting the Delphi technique are

1. It allows the panels of participants to reconsider and reflect on their opinion in light of the contribution of other people's views
2. Expert knowledge can result in accurate solutions to current problems

• itas the expert opinion is taken into consideration there by the decision can be taken in an easy way.
• it is one of the effective forecasting used

Hence the correct answer is Delphi Technique.

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

Strategy: 

• Strategy is an action that managers take to attain one or more of the organization’s goals.
• Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.

Key Points The correct match is as follows: 

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

The correct answer is Dog.

BCG Matrix: 

• The BCG matrix is a growth-share matrix developed by the Boston Consultancy Group.
• The matrix was developed in the 1970s by Bruce D. Henderson the founder of the Boston Consulting Group.
• The BCG matrix enables companies to analyze their business units and broad product portfolio.
• Thus, giving the company a clear picture of whether to invest, hold or divest a business unit.

Key Points

Based on the two dimensions – relative market share and market growth rate, the company can plot its business units into four categories: Cash Cows, Dogs, Stars, and Question Marks.  

Dogs:

• Dogs operate in a low-growth market and have a low market share.
• Dogs are known to put a strain on company resources.
• They are typically in the decline stage of the product lifecycle.
• The lack of demand coupled with a slow market creates a major hurdle for Dogs to increase their market share.
• For an SBU in this position, the firm should decide to curtail losses by divesting.

Additional Information

Stars: 

• Stars operate in high-growth markets and have a high market share. As the name goes they are at the top of the game in their industry.
• Apart from a high market share, Stars enjoy customer loyalty, goodwill among stakeholders, high brand value, brand recall, etc.
• Managing a star requires ongoing investment to fend off competition in the high-growth market.

Cash Cows: 

• Cash Cows operate in low-growth markets but maintain a high market share.
• Cash Cows dominate the market they operate in and ensure steady cash flow for the company.
• They typically fall into the maturity stage of the product cycle.
• Cash Cows require less investment and are milked by the company for extra cash flow.

Questions Marks:

• Questions Marks also known as Problem Child operates in a high-growth market but has a low market share.
• The rationale is that the business unit has just started operations.
• Question Marks require steady investment so that they gain market share and turn into Stars.

Hence, According to the BCG matrix, for Dog positions of SBU, the firm should decide to curtail losses by divesting.

The correct answer is Intangibility, inseparability, variability and perishability.

Service:

• A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
• Services do not always emerge out of physical products.
• When designing marketing programs, a company must consider the characteristics of services.

Important PointsFour characteristics of service are:

• intangibility
• inseparability
• variability
• perishability

Key PointsIntangibility – Services Cannot Be Felt Before Buying.

• Services are intangible in nature.
• It means that services can not be seen, tasted, felt, heard, or smelled before they are bought.
• For example, an airline passenger has only a ticket and the promise of a safe and comfortable journey.

Inseparability – Services Are Generated and Consumed Together.

• Inseparability is a major characteristic of services.
• It means that services are generated and consumed simultaneously and can not be separated from their providers, whether they are people or machines.
• As the customer remains present as the service is produced, provider­ customer interaction is important in service marketing.
• The result of services is affected by both the provider and the customer.

Variability – Service Quality Never Stay The Same.

• Variability is another important characteristic of services, which means that their quality may vary greatly, depending on who provides them and when, where, and how they are provided.
• Service variability can be managed in several ways.
• Employees can be selected and trained carefully to provide good service.
• Employee incentives can be introduced that emphasize service quality.
• Customer satisfaction can be checked regularly through suggestion and complaint systems, customer surveys, and comparison shopping.

Perishability – Services Cannot Be Stored.

• Services are perishable, which means that services can not be stored for later sale or use.
• A ticket for the evening show of a movie can not be used for watching the night show.
• The perishability of services has important implications for service providers.

Hence, Four distinctive service characteristics greatly affect the design of marketing programs for services and they are intangibility, inseparability, variability, and perishability.

The correct answer is (b) and (d). 

Key Points

Exponential Distribution:

• The exponential distribution is a continuous probability distribution that often concerns the amount of time until some specific event happens.
• It is a process in which events happen continuously and independently at a constant average rate.
• The exponential distribution has the key property of being memoryless.
• The exponential random variable can be either more small values or fewer larger variables.
• For example, the amount of money spent by the customer on one trip to the supermarket follows an exponential distribution.
• The exponential distribution is a right-skewed continuous probability distribution that models variables in which small values occur more frequently than higher values.
• The distribution is supported by the interval [0, ∞).

Important PointsFeatures of Exponential Distribution: 

• It is a continuous distribution.
• It is a family of distributions.
• It is skewed to the right.
• The x values range from zero to infinity [0, ∞).

Hence, the correct answer is (b) and (d).

The correct answer is The Corporate Management (CM) Module.

Enterprise resource planning (ERP)

• Enterprise resource planning (ERP) systems have become a critical tool for businesses over the past several decades.
• An ERP solution automates critical business processes and serves as a shared database for all financial and operational information from across the company.
• It pulls this data from a number of modules built to help various departments, from accounting to supply chain to human resources, perform their individual functions.

Important Points

Basic modules of ERP software:

• Finance and Accounting
• Human Capital Management/Human Resource
• Procurement
• Manufacturing
• Order Management
• Inventory Management
• Warehouse Management
• Supply Chain Management
• Customer Relationship Management
• Project Systems
• Asset Management
• E-commerce

Thus Corporate Management (CM) Module is not part of a typical ERP system. 

Additional Information 

Human Resource Management or HRM Module:

• The HRM module in ERP is used to primarily store employee data and enable the onboarding and training of the existing workforce.
• Employee data stored in the HRM module include the employee’s personal information, designation, payroll data, working hours, and leave-related data.
• Additional features of the HR module include talent management, payroll management, and workforce management.

Asset Management (AM) Module:

• The Asset Management module provides capabilities to track the purchase and disposition of assets, plan, and track scheduled and preventive maintenance activities, and monitor asset costs and depreciation.
• Extended capabilities provide full support for warehouse and inventory management business operations.

Project System (PS) Module: 

• Project systems module \ is an integrated project management tool that monitors all aspects of your project system and other application components.
• PS module ensures that the organization’s business processes are to be handled efficiently and quickly.
• It can handle both small-scale and large-scale projects of an organization.

Hence, the Corporate Management (CM) Module is NOT a part of a typical ERP system.

The correct answer is Chi-square contingency test.

Key Points Chi-Square Contingency test:

• The Chi-Square test of independence is used to determine if there is a significant relationship between two nominal (categorical) variables.
• The frequency of each category for one nominal variable is compared across the categories of the second nominal variable.
• The data can be displayed in a contingency table where each row represents a category for one variable and each column represents a category for the other variable.

Important Points

• For example, say a researcher wants to examine the relationship between gender (male vs. female) and empathy (high vs. low).  The chi-square test of independence can be used to examine this relationship.
• The null hypothesis for this test is that there is no relationship between gender and empathy.  The alternative hypothesis is that there is a relationship between gender and empathy (e.g. there are more high-empathy females than high-empathy males).

Additional Information

Multiple Regression Analysis-  Multiple regression is a statistical technique that can be used to analyze the relationship between a single dependent variable and several independent variables. The objective of multiple regression analysis is to use the independent variables whose values are known to predict the value of the single dependent value.

Simple Correlation coefficient- Complete correlation between two variables is expressed by either + 1 or -1. When one variable increases as the other increases the correlation is positive; when one decreases as the other increases it is negative.

 Pearson correlation of coefficient- The Pearson correlation coefficient (r) is the most common way of measuring a linear correlation. It is a number between –1 and 1 that measures the strength and direction of the relationship between two variables. When one variable changes, the other variable changes in the same direction.

Hence, the correct answer is Chi-square contingency test.

The correct answer is Option 1.

Key Points

• The earliest definition of small-scale industries in 1950 had a limit of 0.5 million rupees in fixed investment, with fewer than 50 workers in units using power or fewer than 100 workers in units not using power for manufacturing.
• The definition has changed several times since then. In 2004 the definition had a limit of 10 million rupees for investment in plant and machinery (original value), without any additional conditions.
• With this amount one can now buy only an obsolete, low-grade, or secondhand plant and machinery. This limit seems to have more adversely affected the capital-intensive industries like metals and electricals.

Hence, the correct answer is Option 1.

the correct answer is Option 2.

Key Points Entrepreneur:

• An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards.
• The process of setting up a business is known as entrepreneurship.
• The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

Intrapreneur:

• An intrapreneur is an employee who is tasked with developing an innovative idea or project within a company.
• The intrapreneur may not face the outsized risks or reap the outsized rewards of an entrepreneur.
• However, the intrapreneur has access to the resources and capabilities of an established company.

Hence, the correct answer is Option 2.

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

Key Points

Statement I : Mudra is an NBFC supporting development scheme of micro enterprise sector in the country. It provides refinance support to Bank/MFIs for lending to micro units having loan requirement up to Rs. 10 lakh. 

 Micro Units Development & Refinance Agency Ltd (MUDRA) was set up by the Government of India (GoI).

MUDRA has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it.

Presently, the authorized capital of MUDRA is 1000 crores and paid up capital is 750 crore, fully subscribed by SIDBI. More capital is expected to enhance the functioning of MUDRA.

Statement II : Mudra has created different products/schemes for refinancing loans. These interventions have been named 'Shishu', 'Kishore' and 'Tarun' to signify the state of growth/development and funding needs of the beneficiary micro unit/entrepreneur.

• Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA has already created the following products / schemes.
• Shishu : covering loans upto 50,000/-
• Kishor : covering loans above 50,000/- and upto 5 lakh
• Tarun : covering loans above 5 lakh and upto 10 lakh

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

The correct answer is Option 3.

Key Points Financial Feasibility- Financial feasibility means the ability of a project to achieve sufficient income, credit, and cash flow to financially sustain the project over the long term and meet all debt obligations.

Product/service feasibility- A new product feasibility study is a market research methodology that aims to provide predictive analytics to guide the next steps for marketing, sales, and product development. The objectives of this type of market research often include obtaining insight on: Product placement. 

Industry/target feasibility- Industry/ market feasibility analysis entails an assessment of the overall appeal of an industry and the target market for the prospective business. There are two components this feasibility analysis should cover; industry attractiveness and target market attractiveness.

**Organizational feasibility-**Organizational feasibility analysis is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.

Hence, the correct answer is Option 3.

Key Points

Opportunity cost

• Opportunity costs are the possible advantages that a person or company forgo while choosing one alternative over another.
• It is necessary to weigh the pros and cons of each choice offered to correctly assess opportunity costs.
• For example, an owner can invest surplus capital in stocks or can buy an asset for the business. He will give up the benefit of one option by choosing an alternative one.

Hence, the income or gain expected from the second-best use of resources lost due to the best use of the scarce resources is known as Opportunity cost.

Additional InformationMarginality principle

• Analysing margins entails determining how a unit change in one variable affects another.
• Changes in total revenue per unit of output sold are referred to as marginal revenue changes.
• Marginal cost is the total change in cost owing to the addition or removal of unit produced.

Equi - marginal principle

 According to Ferguson,

• "Law of Equi-marginal utility states that to maximize utility,
• consumers may allocate their limited incomes among goods and services in such a way.
• that the marginal utilities per rupee of expenditure on the last unit of each good purchased will be equal"

Incremental principle

• Incremental analysis analyses the change in the firm's performance for a specific managerial action.
• It speaks about adjustments in cost and revenue brought on by a change in policy.
• The incremental cost is changing total costs as a result of changing total production.

The correct answer is If AR > AC, there is abnormal profit for the firm. 

Key Points Monopoly

A scenario known as monopoly occurs when there is only one seller in the market and there are many buyers of the product.

There are two conditions of equilibrium for a monopoly firm:

1. The MC curve intersects the MR curve from below
2. Marginal cost (MC) and marginal revenue (MR) are equal.

And the firm can earn normal profits, and abnormal profits or suffer losses in a short-run equilibrium situation. 

Important Points

1. If AR > AC, there is abnormal profit for the firm- True 

2. If AR = AC, there is abnormal profit for the firm- False 

Abnormal Profits

When the average cost of production is lower than the average revenue for production, a monopoly firm makes super-normal profits. 

 When, AR> AC = Abnormal Profit situation

As we can see in the diagram**, AC is less at point B and AR revenue is greater at point A, and the difference between both points is called abnormal profit.** 

3. If AR > AC, the firm earns only normal profit- False 

4. If AR ≤ AC, the firm earns only normal profit- False

Normal Profits

The firm earns normal profits when the average cost is equal to the average revenue of a product. 

Technically, If AR=AC, only, in that case, the firm earns normal profits

Losses

When the average cost of production exceeds the average revenue for the output, a company experiences a loss.

When AR< AC = Losses faced by the firm. 

Hence, If AR > AC, there is abnormal profit for the firm is true for a monopoly firm that operates at the level of output where MR = MC.

The correct answer is Graphical method. 

Key Points Demand Forecasting

• Demand forecasting is the technique of estimating future customer demand over a predetermined time frame.
• In order to provide the most accurate projections, demand forecasting typically takes into account historical data and other analytical information.

Techniques of Demand forecasting

1. Survey Methods
2. Opinion Poll Methods
3. Statistical Methods.

Important Points

1. Survey method

• The demand forecasting method based on consumer surveys involves taking interviews with potential customers directly.
• Surveys are conducted to learn more about customer intent or market trends.

Modes of Survey:

Complete Enumeration Method

• In a thorough enumeration survey,  product's each and every customer is called and asked if they have any plans to buy the product in the future.
• The probable demand of every consumer is added together to calculate the probable sales.

End-Use Method

• It is particularly useful for predicting input demand.
• This strategy identifies the final users, the consuming industries, and other sectors.
• In order to predict the future demand for inputs, the desired norms of product consumption and targeted output are defined and forecasting is made regarding inputs to be used as an intermediate product.
• Accordingly, demand forecasting of the product is estimated.

Sample Survey Method

• This approach involves selecting a sample of possible customers using a scientific process,
• and only those selected are then interviewed.

Delphi Method

• Using their knowledge and expertise, a group of experts creates a demand prediction using the Delphi method.
• A different department inside the organization receives this forecasting report for interpretation.
• The forecast is given to the organization's decision-makers after going through several rounds of interpretation.

Additional Information

Graphical method

• It is a mode of statistical methods
• It aids in predicting an organization's future sales with the use of a graph.
• A line is made by taking into consideration past sales figures through the spots on the graph
• and future estimations of sales were made on the basis of the same.

Hence, it is clear that the graphical method is not covered in the list of survey methods. Rather it is a statistical method that uses statistical techniques to predict sales.

The correct answer is (a) - (ii); (b) – (i); (c) - (iv); (d) - (iii). 

Key Points

Authority

• Authority is defined as institutionalized and legal power inherent in a job, func­tion, or position that enables the job holder to successfully carry out his/her respon­sibilities.
• It refers to the power that is delegated formally and legally.
• It includes the right to command a situation, commit resources, give orders, and expect them to be obeyed.
• It is accompanied by responsibility for one’s actions and failures to act.

Important Points

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

The correct answer is job analysis. 

Key Points

• Job analysis is the process of determining and reporting pertinent information relating to the nature of a specific job. It is the determination of the tasks that comprise the job and the skills, knowledge, abilities, and responsibilities required of the holder for successful job performance.
• Job analysis is studying and collecting information relating to the operations and responsibilities of a specific job.
• The information thus collected is analyzed, and the facts about the nature of job working conditions and qualities of an employee can be easily known.
• Job analysis defines the jobs within the organization and the behaviors necessary to perform these jobs.
• Job Analysis is a systematic exploration, study, and recording of a job’s responsibilities, duties, skills, accountabilities, work environment, and ability requirements.
• It also involves determining the relative importance of a job’s duties, responsibilities, and physical and emotional skills.

Additional Information

• Job evaluation is the process of analyzing and assessing various jobs systematically to ascertain their relative worth in an organization. Job evaluation is an assessment of the relative worth of various jobs on the basis of a consistent set of job and personal factors, such as qualifications and skills required.
• Workforce analysis is a process used to collect, analyze, and interpret data to assess the current state of the workforce and turn it into actionable information which organizations can use to plan to meet their future needs. The current supply of labor is compared to the anticipated future needs of the organization. Organizations can then address any identified gaps with a suitable solution.
• Workload Analysis is a method used to determine the time, effort, and resources needed by an organization in identifying the actual needs of Human Resources (HR) in quality and quantity in accordance with the goals and strategies of the organization.

Hence Job analysis can help banks to identify jobs and duties of employees as well as what kinds of people to hire for different jobs.

The correct answer is ergonomics. 

Key Points

• Ergonomics (or human factors) is the scientific discipline concerned with the understanding of interactions among humans and other elements of a system, and the profession that applies theory, principles, data, and methods to design in order to optimize human well-being and overall system performance.
• Ergonomics is the study of people in their workplace and is the process in which workplaces, products, and systems are designed or rearranged so that they fit the people who use them.
• It aims to improve workspaces and environments to reduce the risk of injury.
• Ergonomics is a science-based discipline.
• It brings together knowledge from anatomy and physiology, psychology, engineering, and statistics and ensures that the designs complement the strengths and abilities of the people who use them.

Additional Information

• Economics is a social science that focuses on the production, distribution, and consumption of goods and services, and analyzes the choices that individuals, businesses, governments, and nations make to allocate resources.
• Physiology is the science of life. It is the branch of biology that aims to understand the mechanisms of living things, from the basis of cell function at the ionic and molecular level to the integrated behavior of the whole body and the influence of the external environment.
• Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts.

Hence, Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and characteristics of individuals so that they can perform their jobs effectively.

The correct option is Payment of Wages Act, 1936

Key Pointssocial security legislation

• Social security legislation can be defined as providing protection to the working class against contingencies like retirement, resignation, retrenchment, maternity, old age, unemployment, etc.
• Purpose to protect from  health and financial risk

Social security legislation 

• Employees' Compensation Act, 1923The Act aims to provide compensation to the workers who have encountered injuries due to an accident during their employment
• ​ Employees' State Insurance Act, 1948
• The Act provides certain befit to employees in case of                         sickness, maternity, or any accident
• Payment of Gratuity Act, 1972         The act provides certain benefits to employees at the time of retirement, which will give financial support to the employees.
• Payment of Wages Act, 1936-its is not social legislation the act aims at avoiding unnecessary delay in payment of wages thereby securing the interest of workers

Hence the correct answer is Payment of Wages Act, 1936