UGC NET Paper 2 Commerce Mock Test - 9 - UGC NET MCQ

The correct answer is A ‐ lll, B ‐ lV, C ‐ ll, D ‐ l.

Key PointsHedging - By purchasing a second investment that you anticipate will perform in the opposite way, you can use the investment strategy known as hedging to offset a potential loss on the first one.

Important PointsEuropean option -  An option contract that only allows for the day of expiration for right exercise is known as a European option.

Option premium - The current market value of an option contract is known as an option premium. Thus, it is the money that the seller (writer) of an option contract receives from the opposite side. Premiums for in-the-money options are made up of intrinsic and extrinsic value.

In-money option- A call option that is in the money allows the holder to purchase the securities for less than its current market value. If a put option is in-the-money, it allows the holder to sell the security for a higher price than it is currently trading for.

American option - An American Option is a form of options contract (Call or Put) that allows the option holder to exercise the option whenever they choose prior to the expiration date. It enables the option holder to profit from the security or stock whenever it is advantageous to do so.

The correct answer is Time Keeping.

Key Points The activities that are not associated with workforce planning are:

Timekeeping: Timekeeping is the process of recording the hours that employees work. It is not directly related to workforce planning, which is the process of ensuring that an organization has the right number of employees with the right skills in the right places at the right time.

Assessing capability of workforce to develop any requisite skills: This is part of workforce planning, not separate from it.

The activities that are associated with workforce planning are:

Forward planning: This involves forecasting future demand for labor and supply of labor.
Reviewing internal and external labor supply: This involves identifying the skills and competencies of the current workforce and the skills and competencies that will be needed in the future.
Identifying areas where recruitment will be needed: This involves identifying the departments or functions where there will be a shortage of workers in the future.
Developing strategies to address any gaps in the workforce: This may involve recruitment, training, or redeployment.
Workforce planning is an important process for ensuring that an organization has the right number of employees with the right skills in the right places at the right time. It is a continuous process that should be reviewed regularly to ensure that it is still aligned with the organization's goals and objectives

The correct answer is Building customer loyalty.

Key Points Holistic marketers achieve profitable growth by focusing on three key areas:

Expanding customer share: This means attracting new customers and increasing the amount of business that existing customers do with the company.

Building customer loyalty: This means creating a strong emotional connection with customers so that they keep coming back for more.

Capturing customer lifetime value: This means maximizing the amount of revenue that a company can generate from each customer over their lifetime.

By focusing on these three areas, holistic marketers can achieve profitable growth in the long term.

 Additional Information

Here are some specific strategies that holistic marketers can use to build customer loyalty:

Personalization: Holistic marketers use data to personalize the customer experience. This can include things like sending targeted emails, offering personalized discounts, and providing personalized customer service.

Community: Holistic marketers create a sense of community around their brand. This can be done by sponsoring events, creating online forums, or simply encouraging customers to interact with each other on social media.

Value: Holistic marketers provide customers with value beyond the product or service they are selling. This can include things like free shipping, loyalty programs, or educational content.

By building customer loyalty, holistic marketers can create a sustainable source of revenue that will help them achieve profitable growth in the long term.

The correct answer is July 2017.

Key Points

• Goods and Service tax
  • In 2016, the Indian Parliament passed a law, the Goods and Services Tax Act 2016, to simplify and introduce a unified indirect tax system in India.
  • This is expected to generate additional revenue for the government, reduce tax evasion and create ‘one nation, one tax, and one market’.
  • Another component of reform in this area is simplification. To encourage better compliance on the part of taxpayers, many procedures have been simplified and the rates have also been substantially lowered.
  • The GST is a value-added tax levied on most goods and services sold for domestic consumption.
  • The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.
  • GST, which subsumed almost all domestic indirect taxes (petroleum, alcoholic beverages, and stamp duty are the major exceptions) under one head, is perhaps the biggest tax reform in the history of independent India.
  • It was launched into operation on the midnight of 1^st July 2017. Hence, Option 1 is correct.
  • GST is applicable on ‘supply of goods or services as against the old concept on the manufacture of goods or sale of goods or the provision of services.
  • GST is based on the principle of destination-based consumption taxation as against the principle of origin-based taxation.
  • It is a dual GST with the Centre and the States simultaneously levying tax on a common base.
  • The GST to be levied by the Centre is called Central GST (CGST) and that to be levied by the States is called State GST (SGST).
  • Import of goods or services would be treated as inter-state supplies and would be subject to Integrated Goods & Services Tax (IGST) in addition to the applicable customs duties.
  • GST rates to be mutually decided: CGST, SGST & IGST are levied at rates to be mutually agreed upon by the Centre and the States.
  • The rates are notified on the recommendation of the GST Council.
  • GST is levied at four rates viz. 5%, 12%, 18% and 28%. The schedule or list of items that would fall under these multiple slabs is worked out by the GST council.

Samples

• A sample is a group of people or objects used in the study that is taken from a wider population for analysis. 
• It should be representative of the whole population for generalization of results. 

Important Points Sampling error:

• A sampling error is a sampling error occurred when the selected sample does not represent the entire population. 
• And result generated does not match the results to be obtained from the whole population.
• Here, the point estimate is the sample selected and a parameter is called the entire population.
• So, Sampling error or Estimation error is the difference between the point estimate (sample statistics) and the true value of the population parameter.

Hence, the difference between the point estimate and the true value of population parameter being estimated is known as Sampling error or Estimation error.

Additional Information

Probable error:

• The correlation coefficient that aids in determining the precise values of the coefficients is the Probable error coefficient. 
• The correlation coefficient, or probable error, is essentially what determines the value and accuracy of the coefficients.

Standard error:

• By utilizing standard deviation, the standard error is a statistical concept that assesses how accurately a sample distribution represents a population.
• The standard error shows how varied the population mean is likely to be from a sample mean.

The correct answer is Option 1

Key Points

• The cartel is defined u/s 2(c) of the Competition Act, 2002. 
• Cartel is defined in section 2, clause (c) of the Act: “Cartel” includes an association of producers, sellers, distributors, traders or service providers who, by agreement. amongst themselves, limit, control or attempt to control the. production, distribution, sale or price of, or, trade in goods or.

Important Points

•  Section 2(f) in the Competition Act, 2002 defines 'Consumer'
• Section 2(h) in the Competition Act, 2002 defines 'Enterprise'
• Section 2(i) in the Competition Act, 2002 defines 'Person'

The correct option Older Population and less-educated sections.

Key Points As per the passage  "Cybersecurity threats, inadequate digital infrastructure in rural areas, and limited digital literacy among the older and less-educated sections of the society still persist."

The correct answer is Internal Rate of Return

Key Points

The following is the explanation of the right answer.

Therefore, Option 1 is the correct answer.

The correct answer is "Product or services".

Key Points

Additional Information

• Distribution channel - A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer. Distribution channels can include wholesalers, retailers, distributors, and even the internet.
• Market trend - It is the direction of movement of the financial market over time. An example of a market trend is a bull market which is an upward movement of the market while a bear market is a downward movement of the market.
• Production - The production Concept is a belief that states that the customers would always acquire products that are cheaper and more readily available (or widely available). The production concept advocates that the more products or production the more would be sales. In countries where labor is cheap and easily available, production can be maximized while minimizing costs, hence increasing production efficiency.

The Correct answer is Option 1.

Key Points

 Coefficient of Range:

• The range is the difference between the highest and the lowest value of frequency for a given frequency distribution.
• The coefficient of range on the other hand is the ratio of the difference between the highest and lowest value of frequency to the sum of the highest and lowest value of frequency.
• The coefficient of Range shows how much of the data is spread. It shows the relative measure of the dispersion of the range. 
• In order to calculate, the formula used is- (Highest Value of frequency - The lowest value of frequency)/ (Highest Value of frequency + Lowest value of frequency)

 Coefficient of Quartile Deviation (QD):

• Quartiles are the values that divide a group of observations into four equal parts. 
• The coefficient of quartile deviation is a measure of dispersion used to describe the spread or distribution of data.
• It is calculated as - Coefficient of quartile deviation = (Q3 – Q1) / (Q3 + Q1)

Coefficient of Mean Deviation (MAD):

• Mean deviation or average deviation is the average difference between the items in a series from the mean, median, or mode.
• The coefficient of mean deviation is calculated by dividing the mean deviation by the average. If deviations are taken from the mean, we divide it by the mean.
• It is calculated as Mean Deviation/ x or Me.

Coefficient of Variation (CV): 

• The coefficient of variation (CV) is the ratio of the standard deviation to the mean and shows the extent of variability in relation to the mean of the population. The higher the Coefficient of Variation, the greater the dispersion.
• It is calculated as - 

Hence, the correct answer is Option 1.

A company can be compared to a river, which maintains its identity. Although the parts from which it is made are constantly changing. The suitable characteristic here is Continuous succession.

• A company is capable to survive beyond the lives of its members.
• As a company is created by law therefore it can be dissolved only by law alone and it remains unaffected by the change, lunacy, retirement, death, or insolvency of its members
• The members of the company may come and go but a company goes on forever and remains the same entity
• The existence of the company continues even if its all members are dead.
• There can not be a succession forever without the incorporation.

1. Limited liability: An Limited Liability Company (LLC) is a type of business in which the owners are called members. The business entity is separate from the members so only the entity may be held liable if the company is sued or fails to pay its debts. An LLC contains elements of a sole proprietorship, a partnership, and a corporation.
2. An artificial person is an entity created by law and given similar legal rights and duties to that of a human being. It can be real or imaginary and for the purpose of legal reasoning is treated more or less as a human being. 

A transferable letter of credit is a type of financial guarantee, known as a letter of credit, that additionally allows the first beneficiary to transfer some or all of the credit to another party, which creates a secondary beneficiary. The party that initially accepts the transferable letter of credit from the bank is referred to as the first, or primary beneficiary.

Road blocking advertisement refers to advertising a product on multiple TV channels at the same time.

Road Blocking Advertisement is the practice of placing an advertisement on each available media within a market, to appear at exactly (or as near as possible) the same time.

Road blocking is most often used as a means of building high reach levels within a short period of time.

All of the above are the provisions of the Right to Information Act, 2005.

Right to Information (RTI),2005, is an act set up by the Parliament of India that frames the procedures and rules for the right to information to the citizen. RTI is replaced by the Freedom of information act, 2002. The following are the features of the RTI Act:

• It promotes accountability and transparency in every public authority.
• It promotes effective and timely dissemination of correct information by the public authority to any individual.
• It promotes the establishment of district, state, and central level information commission as an appellate body.

In most countries with income taxation, corporate entities are subject to tax on their profits and, in addition, are taxed in the hands of shareholders is known as surcharges.

A surcharge is an additional charge or tax to the tax being already levied. The separate taxation of the incomes of corporations and their shareholders follows the legal principle that corporations and shareholders are distinct entities.

Job evaluation is a systematic way of determining the worth of a job in relation to other jobs to establish the pay structure. The purpose of job evaluation is wage fixation.

The minimum amount of securities purchases through GSAP in the first quarter of the current fiscal year is Rs. 1 lakh crore.

According to the passage, "The RBI announced a government securities acquisition programme (GSAP), essentially a calendar of its bond-buying programme, starting with Rs. 1 lakh crore of securities purchases in the first quarter of the current fiscal year."

The rate of GDP growth that is predicted for FY22 is 10.5%.

According to the passage, "In Wednesday’s statement, the MPC retained its assessment of FY22 GDP growth of 10.5 percent."

The correct answer is Combined rates.

Key Points Non-Tariff barriers:

Import quotas: These are limitations on the quantity or value of goods that can be imported into a country within a specific period. Quotas can restrict competition and limit the availability of foreign products in the domestic market.

Import licenses: Governments may require importers to obtain licenses or permits to import certain goods. These licenses can create administrative hurdles and delays in the importation process.

Technical barriers to trade (TBT): TBTs include regulations, standards, and requirements related to product quality, safety, labeling, packaging, and testing. While these measures aim to protect consumers and ensure product quality, they can also create obstacles for foreign exporters who need to comply with different sets of regulations.

Sanitary and phytosanitary measures (SPS): SPS measures are regulations related to food safety, animal health, and plant health. They are intended to protect human, animal, or plant life from risks associated with imported goods. However, SPS measures can also be used as non-tariff barriers when applied in a discriminatory or overly restrictive manner.

Subsidies and domestic support: Domestic subsidies provided to domestic industries can distort international trade by giving them a competitive advantage. This can make it difficult for foreign competitors to compete on a level playing field.

Government procurement restrictions: Governments may impose restrictions on foreign companies' participation in government procurement contracts, favoring domestic suppliers or requiring certain levels of local content.

Intellectual property rights (IPR) protection: Inadequate protection or enforcement of intellectual property rights, such as patents, copyrights, and trademarks, can hinder foreign companies from effectively competing in the market.

Hence, the correct answer is Combined Rates.

Inferior good:

• An inferior good is a good whose demand decreases when consumer income rises and demand increases when consumer income decreases.
• Unlike normal goods, for which the demand rises as consumer income rises.
• Inferiority relates to affordability rather than a statement about the quality of the good.
• As a rule, these goods are affordable and also adequately fulfill their purpose but as more costly substitutes that offer more pleasure becomes available, the use of inferior goods diminishes.
• Thus, inferior goods are narrowly defined for which suitable substitutes are available.
• For example, cheaper cars; consumers will prefer cheaper cars when their income is constricted and as the consumer's income increases, the demand for inferior cars will decrease.
• A special type of inferior good may exist known as the Giffen good which disobeys the 'law of demand'.
• When the price of Giffen good increases, the demand for that good increases too.
• The observed demand curve would slope upward indicating positive elasticity.
• Giffen goods were first noted by Sir Robert Giffen.
• It is usual to attribute Giffen's observation to the fact that in Ireland during the 19th century there was a rise in the price of potatoes.
• However, it has been noticed that Giffen did not use potatoes as an example of Giffen goods and it was presented in terms of bread.
• This phenomenon is often described as "Giffen's Paradox".
• However, Giffen's paradox rarely occurs in the real world.

Therefore, both (A) and (R) are correct.

Assertion (A): “Price Discovery” is a function of the derivatives market.

Reason (R): ‘Price Discovery’ deals with the study of the influence of futures price on the spot price.

Here Both (A) and (R) are correct. Hence option4 is the correct answer.

Key Points

• Price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency.
• The process of price discovery looks at a number of tangible and intangible factors, including supply and demand, investor risk attitudes, and the overall economic and geopolitical environment.
• Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
• The derivatives market serves as an important source of information about prices. Prices of derivative instruments such as futures and forwards can be used to determine what the market expects future spot prices to be.
• The information is accurate and reliable. Thus, the futures and forwards markets are especially helpful in the price discovery mechanism.

Statement I: If the value of , of a distribution gives the value more than 3, its curve is platykurtic.

Explanation:

1. Leptokurtic Curve - Value of β₂ is greater than 3.
2. Mesokurtic Curve - Value of β₂ is equal to 3.
3. Platykurtic Curve - Value of β2 is less than 3.

Thus, Statement I is incorrect.

Statement II: In a moderately asymmetrical distribution, the standard deviation is 1.25 times of mean deviation.

Explanation:

In a moderately asymmetrical distribution (variable occurs at the irregular frequency), the standard deviation is 1.25 times of mean deviation.

This statement is correct.

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

The correct answer is ​Buttle's Model.

Key Points

Buttle's Model:

• The Customer Relationship Management (CRM) value chain model is a model that shows firms how to build and implement CRM strategies.
• It was created in the year 2004 by Francis Buttle.
• This model's major goal is to connect an organization's internal and external processes in order to provide value for customers while making a profit. In addition, the concept can be used in both B2B (Business to Business) and B2C (Business to Customer) companies.

Additional Information

IDIC Model:

• The Peppers and Rogers Group created the IDIC model as a basic framework for adopting CRM in a range of settings.
• It was developed in the year 2004.
• IDIC stands for identify, differentiate, interact, and customize, which are the four steps of CRM deployment.

Payne's Model:

• The Five Forces CRM model was developed by Adrian Payne and Pennie Frow.
• Payne & Frow’s Five-Step Process Model ensures that the customer experience is consistent across all departments.

1. Agency by estoppel:

• The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorized to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if the third person acting on his behalf.
• It is based on principles of natural justice and equity.

2. Agency by necessity

• It is a type of legal relationship in which one party can make essential decisions for another party.
• The courts recognize agency by necessity during an emergency or urgent situation under which the beneficiary is unable to provide explicit authorization.

3. Agency by Ratification:

• A confirmation by the principal of an act or contract performed or entered into on his or her behalf by another, who assumed, without authority, to act as his or her agent.

Therefore, the only statement I is correct.

Budgets may be classified on the basis of:

(A) Functions

(B) Conditions

(C) Periods (time)