SEBI Grade A (General Stream) Mock Test - 7 - Bank Exams MCQ

The correct answer is Future Generali India Life Insurance.

In News

• Future Generali India’s newly launched women’s health insurance plan.

Key Points

• Future Generali India Insurance Company (FGII), a private general insurer, recently launched its latest women’s health insurance plan, tailored to address women’s distinctive needs.
  • FGII’s “HEALTH POWHER” initiative aims to cater to the diverse needs of women throughout various stages of their lives.
  • This product is designed through rigorous research- by the women, for the women - and we are proud to put it out to the market.
  • The policy has several key features, including increased limits for female cancer treatment, coverage for puberty and menopause-related disorders, and emphasis on outpatient care for physical and mental well-being with mental illness benefits restored to 200%.
  • The policy encompasses a range of value-added services such as annual health check-ups, preventive care packages, fitness programs, diet and nutrition guidance, spa wellness treatments, gynaecological consultations, yoga sessions, and more.

Additional Information

• Future Generali India Life Insurance
  • ​Established in - 2007
  • HQ - Mumbai
  • CEO - Anup Rau
• Star Health and Allied Insurance
  • Founded in - 2006​
  • HQ - Chennai, India
  • MD - Dr S Prakash
• Aditya Birla Health Insurance​
  • Founded in - 2016​
  • HQ - Maharashtra, India
  • CEO - Mayank Bathwal
• Ageas Federal Life Insurance
  • ​Founded in - 2008
  • HQ - Mumbai
  • CEO - Vighnesh Shahane
• Kotak Mahindra Life Insurance
  • ​Established in 2001
  • HQ - Mumbai
  • CEO - Mahesh Balasubramanian

The correct answer is the Ministry of Social Justice and Empowerment.

In News

• PM launches Pradhan Mantri Samajik Utthan evam Rozgar Adharit Jankalyan (PM-SURAJ) portal.

Key Points

• The Ministry of Social Justice and Empowerment launched a nationwide initiative aimed at offering credit support to the marginalized segments of society, where Prime Minister Shri Narendra Modi was the Chief Guest of the event.
• During the event, PM unveiled the 'Pradhan Mantri Samajik Utthan and Rozgar Adharit Jankalyan' (PM-SURAJ) national portal online which symbolized the ministry’s dedication to placing the underprivileged at the forefront, towards uplifting the most marginalized sections of society, and supported credit assistance to one lakh entrepreneurs hailing from disadvantaged communities.
• Prime Minister Shri Modi personally interacted with beneficiaries from various states who have benefitted under schemes like NAMASTE, VCF-SC, VCF-BC, and ASIIM from disadvantaged groups, including Scheduled Castes, backward classes, and Safai Mitras.
• Furthermore, Ayushman health cards and personal protective equipment (PPE) kits were distributed by the ministry to sewer and septic tank workers (Safai Mitras) under the National Action for Mechanized Sanitation Ecosystem (NAMASTE).

Additional Information

• Ministry of Social Justice and Empowerment
  • ​It is a Government of India ministry.
  • It is responsible for welfare, social justice, and empowerment of disadvantaged and marginalized sections of society.
  • The current minister is Virendra Kumar.
• PM-SURAJ
  • It signifies the government's commitment to extending credit support and empowering one lakh entrepreneurs from disadvantaged communities.

The correct answer is Ram Nath Kovind.

In News

• High-level Committee submits its report on One Nation, One Election- Simultaneous Elections core to Aspirational India.

Key Points

• The High-level Committee on Simultaneous Elections constituted under the Chairmanship of Shri Ram Nath Kovind, former President of India, met the Hon’ble President of India, Shrimati Droupadi Murmu, and submitted its Report.
  • The Report, comprising 18,626 pages, is an outcome of extensive consultations with stakeholders, experts, and research work over 191 days, since its constitution on 2 September 2023.
  • The Committee held extensive consultations to understand the views of different stakeholders.
  • 47 political parties submitted their views and suggestions, out of which 32 supported simultaneous elections.
  • Many political parties had extensive discussions with the HLC on this matter.
  • Apex business organizations like the CII, FICCI, ASSOCHAM, and eminent economists were also consulted to present their views on the economic repercussions of asynchronous elections.

Additional Information

• The Committee also recommends that there should be a single electoral roll and Electoral Photo Identity Cards (EPIC) for use in elections to all three tiers of Government.
• Upon all-inclusive deliberations, the Committee concludes that its recommendations will significantly enhance the transparency, inclusivity, ease, and confidence of the voters.

The correct answer is Sora.

In News

• Sora is OpenAI's new text-to-video generator.

Key Points

• Sora - OpenAI's new text-to-video generator.
• The tool, which the San Francisco company unveiled, uses generative artificial intelligence to instantly create short videos based on written commands.
• Sora isn't the first to demonstrate this kind of technology. But industry analysts point to the high quality of the tool's videos displayed so far, and note that its introduction marks a significant leap for both OpenAI and the future of text-to-video generation overall.
• Still, as with all things in the rapidly growing AI space today, such technology also raises fears about potential ethical and societal implications.
• Generative AI is a branch of AI that can create something new.
• Examples include chatbots, like OpenAI's ChatGPT, and image-generators such as DALL-E and Midjourney. Getting an AI system to generate videos is newer and more challenging but relies on some of the same technology.

Additional Information

• Sora isn't available for public use yet (OpenAI says it's engaging with policymakers and artists before officially releasing the tool) and there's a lot we still don't know.
• While Sora-generated videos can depict complex, incredibly detailed scenes, OpenAI notes that there are still some weaknesses - including some spatial and cause-and-effect elements.
• The consistency and length of Sora's videos, however, represents "new opportunities for creatives to incorporate elements of AI-generated video into more traditional content, and now even to generate full-blown narrative videos from one or a few prompts.

The correct answer is 'The crisis of rising global food prices.'

Key Points

• The second sentence of the first paragraph says ''While year-to-year volatility is easily managed by most countries through changes in their trade and domestic policies, it is steep and severe periodic price shocks that can lead to some sort of a crisis at the global and national levels'', the third sentence of the first paragraph says "The crisis can emerge in the form of food shortages, trade disruptions, a rise and spread in hunger and poverty levels, depletion of foreign exchange reserves for net food-importing countries, a strain on a nation’s fiscal resources due to an increase in spending on food safety nets, a threat to peace, and even social unrest in some places'' and the last sentence of the first paragraph concludes "Because of these widespread ramifications of food price shocks, it becomes imperative to understand the real causes of such shocks and devise effective mechanisms to deal with them''.
• From the above sentences, we can say that the central theme of the passage is ''​​​​​​​​The crisis of rising global food prices.''

Hence, the only possible answer is option 5.

The correct answer is option 4.

The correct order of the sentences should be FECDAB

The introductory sentence should introduce the basic premise of the passage. The only sentence that highlights the premise i.e. financial frauds should come first. Thus, F should be the first sentence.

Further, examination of records has to be done by someone. E, uses the connector, therefore, and introduces ‘external auditor’ as the ‘someone’.

Further, the passage should highlight the work/task undertaken by the external auditor. This gives us 2 possibilities, sentence A and C. But the use of the word ‘initial’ before assessment narrows down the option to C.

Then, D has already been marked as the next correct sentence.

Further, we are left with A and B. Clearly B highlights the conclusion i.e. disclosure of the fraud. Thus B has to be the concluding sentence and A will be the penultimate sentence.

Therefore, the second sentence should be E.

The correct option is 1 i.e. A-B

Key Points

We can look at the given sentence in the following way:

A fox one day _________ (A) a Cock who was _________ (B) for his_________ (C), and the two _________ (D) fellows began to talk.

• famous: an adjective which means
  known about by many people
• met: a verb which means two or more people or things have come together or connected.
• A Fox one day met a Cock is grammatically and contextually correct.
• Therefore, A and B should be interchanged
• wisdom:
  the quality of having experience, knowledge, and good judgment; the quality of being wise.
• cunning: an adjective which means getting what is wanted in a clever and often deceptive way

​Therefore, the correct sentence is,

A fox one day met a Cock who was famous for his wisdom, and the two cunning fellows began to talk.

Given:

3, 3, 12, 108, 1728, ?

Calculation:

The logic follows here is:

3 × 1² = 3 × 1 = 3

3 × 2² = 3 × 4 = 12

12 × 3² = 12 × 9 = 108

108 × 4² = 108 × 16 = 1728

1728 × 5² = 43200 ≠ 43300

There should be 43200 instead of 43300.

∴ 43300 is the wrong term.

Alternate Method

The efficiency of (A + B), (B + C), and (C + A) = (5 + 2 + 1)

Efficiency of A, B and C to complete the whole work:

⇒ 2(A + B + C) = 8

⇒ (A + B + C) = 4

Time is taken by A, B and C to complete the whole work:

⇒ 50/4

⇒ 25/2

∴ A, B and C together complete the whole work in 25/2 day.

Traditional method

Given:

(A + B) complete a work = 10 days

(B + C) complete a work = 25 days

(C + A) complete a work = 50 days

Concept:

Efficiency = Time taken × Work done

Calculation:

Let the efficiencies (work done per day) of (A + B), (B + C), and (C + A) be a, b and c respectively.

Let total work be 1 unit.

Efficiency of (A + B)

⇒ a × 10 = 1

⇒ a = 1/10

Efficiency of (B + C)

⇒ b × 25 = 1

⇒ b = 1/25

Efficiency of (C + A)

⇒ c × 50 = 1

⇒ c = 1/50

Time Taken by (A + B), (B + C), and (C + A) to complete the whole work:

⇒ 1/{1/10) + (1/25) + (1/50)

⇒ 50/8

Efficiency of A, B and C to complete the whole work:

⇒ (A + B) + (B + C) + (C + A) = 8

⇒ 2(A + B + C) = 8

⇒ (A + B + C) = 4

Time is taken by A, B and C to complete the whole work:

⇒ 50/4

⇒ 25/2

∴ A, B and C together complete the whole work in 25/2 days.

Given:

From the given data, we can calculate the number of iPhones and Android phones sold by store A, B, C, D, E

So, the number of iPhones sold by store A = {1200 × (1/6)} = 200

The number of Android phones sold by store A = (1200 - 200) = 1000

Similarly, we can calculate other data and put those data in a table

Calculation:

From the table that we made from the given data, we can easily say that store C sold the maximum number of iPhones.

∴ Among all the stores, store C sold the maximum number of iPhones.

Given

Speed of swimmer in still water = 15 km/hour

Speed in upstream river = 3 × Speed in downstream river

Formula used

Speed = Distance/Time

Calculation

Let the speed of the river = x km/hour

So, speed of the swimmer with the flow (downward speed) = 15 + x

Similarly speed of swimmer against the flow (upward speed) = 15 - x

Let the swimmer covers distance = y km

So time taken to cover the distance y when he swims up the river

⇒ 3 × time taken to cover the distance y when he swims down the river.

⇒ y/ (15 – x) = 3 × y /(15 + x)

⇒ 15y + xy = 45y – 3xy

⇒ x = 15/2 = 7.5 km/hour

∴ the speed of the river is 7.5 km/hour.

Alternate Method:

If the speed of swimmer = a And

speed of stream = b

Downstream speed = (a + b)

Upstream speed = (a - b)

Ratio of time 1 : 3

Ratio of speed 3 : 1

Let Downstream speed = 3 units

Upstream speed = 1 units

So, Speed of swimmer = 2 units and

Speed of stream = 1 unit,

As we know that,

⇒ 2 unit = 15 km/hr

⇒ 1 unit = 7.5 km/hr

Hence, the speed of stream will be 7.5 km/hr

Given:

Circumference of the base of circular cylinder = 12π cm.

Height of the cylinder = Diameter of the cylinder

Diameter of the spherical balls = 3 cm

Concept used:

Diameter = 2 × radius

Circumference of the base of circular cylinder = 2πr

→ r = radius of the cylinder

Volume of the cylinder = πr²h

→ r = radius of cylinder

→ h = height of cylinder

Volume of the sphere = (4/3)πR³

→ R = Radius of the sphere

Volume of the cylinder = Number of balls × Volume of each spherical ball

Calculations:

Circumference of the base of circular cylinder = 2πr

⇒ 12π = 2πr

⇒ r = 6

Height of the cylinder = 2r = 12

Volume of the cylinder = πr²h

⇒ π × 6 × 6 × 12

⇒ 432π

Radius of each spherical ball = Diameter/2 = 3/2 cm.

Volume of each spherical ball = (4/3)πR³

⇒ (4/3) × π × (3/2)³

Volume of the cylinder = Number of balls × Volume of each spherical ball

⇒ 432π = Number of balls × (4/3) × π × (3/2)³

⇒ 432 = Number of balls × 4/3 × 3/2 × 3/2 × 3/2

⇒ 96 = Number of balls

∴ The number of balls = 96

Six persons: Priya, Anuj, Mohit, Lata, Kartik, and Rahul

Months: January, March, April

They travel each month on the 3^rd and 16^th dates.

1) Mohit travels in the month which is 30 days. Two persons travel in between the person who travels by Metro and Mohit.

The month of April has 30 days only. So, Mohit could have traveled on the 3^rd of April or the 16^th of April. It gives rise to two cases.

2) One person travels between Rahul and the one who travels by Metro. Rahul does not travel in January.

In case 1 Rahul could be placed on the 3 January place but it is given that Rahul does not travel in January. So, that case is not possible.

3) Priya travels by Car and travels on an even number date of a month. No person travels between Priya and Rahul who travel by Bicycle.

In case 2, Priya could be placed on 16^th April. But, then one person would travel in between Rahul and Priya which contradicts the given condition. So, Case 2 is eliminated.

4) Anuj travels immediately before Lata. Lata does not travel by Metro.

5) Three persons travel in between who travel by Auto Rickshaw and Train. The Person traveling by Auto Rickshaw travels before the person who travels by Train.

The only person left to be placed is Kartik and the vehicle that is to be placed is Scooter.

The final arrangement is:

Hence, Priya traveled on 16^th March.

Six persons: Priya, Anuj, Mohit, Lata, Kartik, and Rahul

Months: January, March, April

They travel each month on the 3rd and 16th dates.

1) Mohit travels in the month which is 30 days. Two persons travel in between the person who travels by Metro and Mohit.

The month of April has 30 days only. So, Mohit could have traveled on the 3rd of April or the 16th of April. It gives rise to two cases.

2) One person travels between Rahul and the one who travels by Metro. Rahul does not travel in January.

In case 1 Rahul could be placed on the 3 January place but it is given that Rahul does not travel in January. So, that case is not possible.

3) Priya travels by Car and travels on an even number date of a month. No person travels between Priya and Rahul who travel by Bicycle.

In case 2, Priya could be placed on 16th April. But, then one person would travel in between Rahul and Priya which contradicts the given condition. So, Case 2 is eliminated.

4) Anuj travels immediately before Lata. Lata does not travel by Metro.

5) Three persons travel in between who travel by Auto Rickshaw and Train. The Person traveling by Auto Rickshaw travels before the person who travels by Train.

The only person left to be placed is Kartik and the vehicle that is to be placed is Scooter.

The final arrangement is:

Hence, Kartik traveled with Metro.

Seven persons Kriti, Lavanya, Mahesh, Narender, Pooja, Rajat, and Suman are sitting around a circular table.

Some of them are facing outside and some of them are facing inside the centre.

1) Rajat is sitting second to the left of Layanya. One person is sitting between Pooja and Rajat.

2) Three persons are sitting between Pooja and Kriti. Mahesh and Suman are immediately left of each other. Suman is not the immediate neighbor of Pooja.

3) Narender sits second to the right of Kriti. Rajat and Kriti face opposite directions. The immediate neighbor of Narender faces the same direction. Narender faces inside

​

4) No three persons facing the same direction sit together.

In Case 1, Narender, Rajat, Pooja, and Mahesh are facing the same direction. This contradicts the given condition. So, case 1 is eliminated.

The final arrangement is:

Rajat is sitting between Kriti and Narender.

The correct answer is two crore rupees.
Key Points

• A company may make a private placement through the issue of a private placement offer letter.
• A company making an offer or invitation under this section shall allot its securities within sixty days from the date of receipt of the application money for such securities.
• Suppose the company is not able to allot the securities within that period. In that case, it shall repay the application money to the subscribers within fifteen days from the date of completion of sixty days.
• If the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of twelve percent per annum from the expiry of the sixtieth day.
• If a company makes an offer or accepts monies in contravention of this section, the company, its promoters, and directors shall be liable for a penalty that may extend to the amount involved in the offer or invitation or two crore rupees, whichever is higher, and the company shall also refund all monies to subscribers within a period of thirty days of the order imposing the penalty.

Additional Information

• Private placement means any offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of a public offer) through the issue of a private placement offer letter that satisfies the conditions specified.

Key Points

Cost accounting - Cost Accounting may be defined as “Accounting for costs classification and analysis of expenditure as will enable the total cost of any particular unit of production to be ascertained with reasonable degree of accuracy and at the same time to disclose exactly how such total cost is constituted”.

There are various types of cost accounting, such as:

• Standard costing
• Activity based costing
• Marginal costing
• Service costing
• Job costing
• Process costing
• Contract costing

Service costing - Service costing, also known as operating costing, is a cost estimation tool used by businesses that offer services. For example, service costing is used by transportation firms, electrical providers, hospitals, movie theatres, hotels, schools, and universities to determine cost per unit.

Process costing - Process costing is a costing approach used mostly in manufacturing, where units are mass-produced in a continuous manner using one or more processes. Manufacturing erasers, chemicals, paper industry, and processed foods are all examples of this.

Contract costing - Contract costing is a type of particular order costing in which work is performed according to the customer's specified requirements and each order is of a long duration. Contractors who perform construction and engineering work such as roads, dams, buildings, canals, railway lines, bridges, a city or town's drainage system, hospital, schools, or colleges buildings or private structures, shipbuilding, and so on use contract costing.

Batch costing - Batch costing is a type of special order costing in which each batch is handled as an independent cost unit, with expenses accrued and calculated individually for each batch. Each batch is made up of a number of similar units. Batch costing is a costing approach used by businesses that produce a similar product or component in large quantities.

Additional Information

Standard costing - The method of calculating the cost of a manufacturing process is known as standard costing. It's a type of cost accounting that allows a company, for example, to budget for miscellaneous expenses such as direct material, direct labour, and overhead for the following year. These companies will also be able to correlate the standard price to the real price.

Activity based costing - A costing approach known as activity-based costing (ABC) assigns overhead and indirect expenses to associated products and services. Unlike traditional costing techniques, this accounting costing method acknowledges the link between expenses, overhead activities, and produced items, attributing indirect costs to products with less arbitrariness.

Marginal costing - The cost of one more unit of output is known as marginal cost. The notion is used to determine the optimum production quantity for a corporation, where producing further units costs the least amount of money. It's computed by multiplying the change in manufacturing expenses by the change in production quantity.

Job costing - Job costing is a way of accounting used to keep track of the costs of different projects and activities. It entails examining direct and indirect expenses, which are often divided into three categories: labour, materials, and overhead.

Seven major elements of the communication process are (1) sender (2) ideas (3) encoding (4) communication channel (5) receiver (6) decoding and (7) feedback.

Important Points
The process of communication:

• Communication may be defined as a process concerning the exchange of facts or ideas between persons holding different positions in an organization to achieve mutual harmony.
• The communication process is dynamic in nature rather than a static phenomenon.
• The communication process as such must be considered a continuous and dynamic inter-action, both affecting and being affected by many variables.

Key Points

1. Sender: The person who intends to convey the message with the intention of passing information and ideas to others is known as the sender or communicator.
2. Ideas: This is the subject matter of the communication. This may be an opinion, attitude, feelings, views, orders, or suggestions.
3. Encoding: Since the subject matter of communication is theoretical and intangible, its further passing requires the use of certain symbols such as words, actions or pictures, etc. Conversion of subject matter into these symbols is the process of encoding.
4. Communication channel: The person who is interested in communicating has to choose the channel for sending the required information, ideas, etc. This information is transmitted to the receiver through certain channels which may be either formal or informal.
5. Receiver: The receiver is the person who receives the message or for whom the message is meant. It is the receiver who tries to understand the message in the best possible manner in achieving the desired objectives.
6. Decoding: The person who receives the message or symbol from the communicator tries to convert the same in such a way so that he may extract its meaning to his complete understanding.
7. Feedback: Feedback is the process of ensuring that the receiver has received the message and understood it in the same sense as the sender meant it.

​ Leader-Member exchange theory

• The Leader-Member Exchange Theory (LMX), also called the Vertical Dyad Linkage Theory, describes how leaders maintain their position in groups and how they develop relationships with other members that can contribute to growth or hinder development.
• The Leader-Member Exchange Theory first emerged in the 1970s.
• It focuses on the relationship that develops between managers and members of their teams.
• The theory states that all relationships between managers and subordinates go through three stages.
• The goal of LMX theory is to explain the effects of leadership on members, teams, and organizations.
• According to the theory, leaders form strong trust, emotional, and respect-based relationships with some members of a team, but not with others.
• LMX theory claims that leaders do not treat each subordinate the same.
• LMX theory is an exceptional theory of leadership as unlike the other theories, it concentrates and talks about specific relationships between the leader and each subordinate.
• Relationships between managers and team players must be good.
• Managers will separate employees into three groups, the in-group, the task group, and the out-group
• Managers expect employees to work hard, be loyal, and trustworthy.
• LMX theory makes a dyadic relationship between leaders and followers the focal point of the process.

Following are the objectives

• Subordinates' responsibilities
• Enhancing decision-making ability of subordinates
• Increasing follower's access to resources

The correct answer is Intangible asset; contingent liability.

Key Points

• An intangible asset called goodwill is created whenever a buyer purchases an existing business organisation for more money than its actual value.
• A contingent liability is a prospective debt that might materialise based on how a future event plays out.

Important Points1. Goodwill:

• An intangible asset connected to the acquisition of a company by another is goodwill.
• In particular, goodwill is documented when the purchase price exceeds the total of the fair values of all tangible and intangible assets acquired in the acquisition as well as the liabilities taken on throughout the process.
• Examples of goodwill include the value of a company's brand name, strong customer base, positive customer and employee interactions, and any patents or proprietary technology.

2. Contingent Liabilities:

• Liabilities classified as contingent may or may not require payment in the future. It is the responsibility of the auditor to ensure that all liabilities, known and unknown, have been entered into the books as of the balance sheet date and are properly displayed as such.
• As of today, a "bill discounted but not matured" is not a liability. However, if the bill has been paid late, it can become your responsibility. If a discounted bill is not honoured, we are responsible for paying the full amount to the bank where the bill was discounted. As a result, it is a contingent liability.

Hence, it can be concluded that the current classification for ‘goodwill’ and ‘bill discounted but not matured’, is Intangible asset, contingent liability respectively.

Explanation:

Six-sigma:

• Six Sigma is a business statistical strategy.
• It is used to identify defects and remove them from the process of products to improve quality.
• Bill Smith, "Father of six-sigma" introduces this quality improvement methodology to Motorola.

6M's of six-sigma:

Process variation in six-sigma is defined in terms of 6M's i.e. 6 elements contribute to variation in a process. They are:

• Method
• Man
• Machines
• Materials
• Measurement
• Mother nature

Key Points

• Auditors are qualified professionals who examine companies' financial records to find any errors or discrepancies.
• They make sure that businesses abide by numerous tax laws and rules.
• A statutory audit is one that is required by a law or statute.
• The main goal of a statutory audit is to give the public and regulators a true and fair representation of a business's book of accounts. Company audits and tax audits are the two types of statutory audits.

Important PointsThe following are the principal statutory obligations of an auditor, as stated in section 143 of the Indian Company Act of 2013.

• The auditor has to inquire whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members.
• The auditor shall enquire the entries made in books are not prejudicial.
• He shall inquire about the company, whether it is an investment company, and if not, whether the assets of the company, consist of shares and debentures.
• He should also check whether loans and advances made by the company have been shown as deposits.
• He should verify whether the personal expenses have been charged to the revenue account.
• In case, in the books of accounts, it has been stated that if any shares have been allotted for cash, he has to verify whether the cash has actually been received in respect of such allotment.

Hence, a duty of an auditor to verify whether loans and advances have been properly secured or not is referred to as statutory duty.

The correct answer is a debt-equity ratio.

Key Points

• The following are the objectives of buyback of shares:
  • To return surplus cash to investors. Companies want to have back their shares since it facilitates them to manage their surplus cash. If it is paid as dividend companies will have to pay dividend tax on the distribution on the other hand; if cash is distributed through buyback, the tax burden shifts to shareholders who have to pay capital gains tax.
  • To increase underlying share value. Buyback reduces equity and enables the company to increase earnings per share, which would result in enhancing the share value. A share buyback may also be announced when share prices are depressed in the market.
  • To prevent hostile takeover bids. By eliminating surplus cash through buyback such a bid can be avoided.
  • Buy–back also facilitate a company to maintain a target capital structure. Buyback aids a company to achieve an optimal debt-equity ratio.

The correct answer is It shows the relationship between economic growth and inequality.

• Kuznets curve shows the relationship between economic growth and inequality.
  • It is inverted U shaped meaning that as initially economic growth leads to greater inequality, followed later by the reduction of inequality.

Additional Information

• Other important curves in economics are as follows:
  • Laffer Curve: The Laffer Curve is a theory to show the relationship between tax rates and the amount of tax revenue collected by governments.​
  • Rahn Curve: It displays the relationship between government spending (on the horizontal) and GDP growth rate (on the vertical) of an economy.
  • Beveridge Curve: It is a graphical representation of the relationship between unemployment (on the horizontal axis) and job vacancy rate (on the vertical axis).​

In democratic leadership, the subordinates are also involved in decision making.

Key Points

1. Democratic Leadership

This style of leadership is also known as a participative style of leadership. In this style, the subordinates are also involved in decision-making. The democratic style of leadership can be further categorized into three types:

• Consensus: A consensus leader makes a decision only after consulting the group members. A decision is not made final until all the members agree with the decisions
• Consultative: A consultative leader takes the opinion of the employees before making a decision
• Democratic: In the democratic style, the final authority of making decisions rests with the subordinates.

Additional Information​

2. Autocratic Leadership

The autocratic style of leadership is also known as the authoritative style or directive style of leadership, in which the autocratic leader retains most of the authority for himself/herself. An autocratic leader gives orders to his/her subordinates and expects that subordinates should give complete obedience to the orders issued. In this type, the decisions are taken by the leader without consulting others.

3. Laissez-Faire Leadership

Laissez-Faire leadership is also known as free-reign leadership. In this style of leadership, the decision-making power is completely left with the subordinates. The leader’s involvement in making decisions is minimized and the people are allowed to make their own decisions. The group members are given complete freedom in setting their own goals and achieving them, which gives them complete autonomy. Employees under this leader, tend to become self-sufficient and guidance is not offered by leaders unless requested

4. Paternalistic leadership

It is a managerial approach that involves a dominant authority figure who acts as a patriarch or matriarch and treats employees and partners as though they are members of a large, extended family. In exchange, the leader expects loyalty and trust from employees, as well as obedience.

5. Transactional Leadership

To get the task done, transactional leadership styles involve "transactions" between a leader and his or her followers, such as rewards, penalties, and other trades. The leader establishes clear objectives, and team members understand how they will be rewarded for their cooperation. This "give and take" leadership style is more concerned with efficiently following established routines and procedures than with implementing significant organisational changes.

Confusion Point

In democratic Leadership, the decision is taken with subordinates while in Laissez-Faire Leadership the decision is taken by subordinates.

The correct answer is Decision analysis.

Key Points

• At the Decision analysis stage, the manager assesses the available information, evaluates alternatives, and analyzes the potential outcomes to make informed decisions.
• During the Decision analysis stage, the manager identifies the types of decisions that need to be made to carry on the work of the organization.
• This includes determining the goals and objectives, evaluating different courses of action, considering the potential risks and benefits, and selecting the most suitable decision based on the available information and analysis.
• ​The Decision analysis stage is crucial for effective management as it helps the manager understand the challenges, opportunities, and requirements associated with the work of the organization.
• By analysing the decisions that need to be made, the manager can develop strategies, allocate resources, and plan the implementation of actions to achieve the desired outcomes.

Additional Information

1. Activities Analysis: Refers to the process of breaking down tasks and activities within the organization to understand their requirements and optimize their efficiency.
2. Relations Analysis: Involves examining the relationships and interactions between individuals, teams, and departments within the organization to ensure effective collaboration and coordination.
3. Operation Analysis: Focuses on analyzing the operational processes and systems within the organization to identify areas for improvement, enhance productivity, and optimize resource allocation.

The correct answer is Partner’s Capital A/c

Key Points Realization Account:

• The nature of the Realization account is a Nominal Account. The purpose of preparing a Realization account is to close the dissolved firm's books of accounts and determine profit or loss on the Realization of assets and payment of liabilities. It is put together by:
  • Transferring all assets, except cash and bank accounts, to the account's debit side.
  • Transferring all liabilities to the credit side of the account except the Partner's Loan Account and the Partners' Capital Accounts.
  • Crediting the asset sale receipt to the account.
  • Debiting the account for the payment of liabilities.
  • Deducting the firm's dissolution expenses.
  • The account balance can be either profit or loss. This balance is transferred to the Partners' Capital Accounts in their profit-sharing ratio.
  • In Certain scenarios Partner voluntarily gives his personal asset to the firm's creditor as payment, the account credited to Partner’s Capital A/c.

The correct answer is Foreign Institutional Investments (Fll).

Key Points

• The Current Account
  • It is the record of trade in goods and services, international factor incomes, and transfer payments.
  • Foreign Institutional Investments (Fils) are international transactions involving financial assets, therefore are a part of the Capital account of the BOP. Hence, Option 1 is not correct.
  • Remittances are the receipts that the residents of a country get from residents abroad in the form of wages etc. or from non-residents as transfers. It is a part of the Current Account. Hence, Option 2 is correct.
  • Service exports are a part of Invisible trades within the Current Account. Hence, Option 3 is correct.
  • Balance of Trade (BOT) is the difference between the value of exports and the value of imports of goods of a country in a given period. Hence, Option 4 is correct.
  • Current Account Convertibility allows free inflows and outflows of foreign currency for all purposes including resident Indians buying foreign goods and services (imports), Indians selling foreign goods and services (exports), Indians receiving and sending remittances, accessing foreign currency for travel, studying abroad, medical tourism purpose etc.
  • On the other hand, Capital Account Convertibility is widely regarded as the hallmark of developed countries. It is also seen as the major comfort factor for foreign investors since it allows them to reconvert local currency back into their own currency and move out from India.

The correct answer is Trading Ledger.

Key Points

• The self-balancing ledger system is a system of bookkeeping where all three types of ledgers (general, sales, and purchase) balance independently.
• It's designed to make error detection easier and minimize the time and effort involved in checking individual ledger account balances during the preparation of the trial balance and final accounts.
• Here's a basic overview of the system:
  • Three Ledger Types: In a self-balancing ledger system, there are typically three separate ledgers employed: the general ledger, sales (debtors) ledger, and purchases (creditors) ledger.
  • Control Accounts: The system relies on the use of control accounts, which are summary accounts in the general ledger. Two primary control accounts are:
    • The Debtors Control Account — which represents the total amount that customers owe the business;
    • The Creditors Control Account — which sums up the total amount the business owes its suppliers.
  • Balancing: Each ledger is made to balance independently.
    • The total of debit balances in the debtor's ledger plus any debit balance in the debtor's control account (general ledger) should equal the total of credit balances in the debtor's ledger plus any credit balance in the debtor's control account. The same goes for creditors.
    • For the general ledger, the total of all debit balances should equal the total of all credit balances.
  • Error Checking: The system is designed to help quickly locate errors. If there's a discrepancy between the balances of the control accounts and the total of individual account balances, an error has occurred in the recording of transactions.
  • Efficiency: The system also allows large businesses to compartmentalize their accounting departments. For example, one department can handle debtors, other creditors, and yet other general accounts.

However, it's worth noting that while the self-balancing ledger system makes it easier to trace errors, creating and maintaining control accounts can require extra work and tends to be more complex than traditional single or double-entry bookkeeping systems. As a result, it is more commonly used in larger businesses that have a significant number of transactions with multiple debtors and creditors.