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Test: Entrepreneurship - CAT MCQ

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20 Questions MCQ Test CMAT Mock Test Series - Test: Entrepreneurship

Test: Entrepreneurship for CAT 2024 is part of CMAT Mock Test Series preparation. The Test: Entrepreneurship questions and answers have been prepared according to the CAT exam syllabus.The Test: Entrepreneurship MCQs are made for CAT 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Entrepreneurship below.
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Test: Entrepreneurship - Question 1

Which of these is not a type of entrepreneurship?

Detailed Solution for Test: Entrepreneurship - Question 1
Intrapreneurship refers to the act of behaving like an entrepreneur while working within a large organization. This involves employees using their entrepreneurial skills to create innovative products or services within the company, which is distinct from establishing and running an independent business.
Test: Entrepreneurship - Question 2

Which of these actions of an entrepreneur will most likely result in creative destruction?

Detailed Solution for Test: Entrepreneurship - Question 2
Creative destruction, a concept introduced by Joseph Schumpeter, involves the dismantling of long-standing practices in order to make way for innovation. Developing a new product can lead to the obsolete of old technologies or methods, embodying the essence of creative destruction. An example of this is how digital photography replaced film photography.
Test: Entrepreneurship - Question 3

According to Schumpeter, innovative entrepreneurs would:

Detailed Solution for Test: Entrepreneurship - Question 3
Schumpeter believed that innovative entrepreneurs play a crucial role in the economy by introducing new technologies or processes. However, over time, these smaller entrepreneurial ventures may become part of larger, more established companies that can provide the resources needed to scale their innovations. This absorption allows the innovation to reach a broader market.
Test: Entrepreneurship - Question 4
Which of these is not a challenge for the entrepreneur?
Detailed Solution for Test: Entrepreneurship - Question 4
Entrepreneurs are typically tasked with navigating existing rules and regulations, not creating them. Challenges they face include managing finances, hiring competent staff, and selecting viable products or services. The formulation of rules and regulations is generally the purview of governmental and regulatory bodies.
Test: Entrepreneurship - Question 5
Which of these theories involve taking a moderate amount of risk as a function of skill and not chance?
Detailed Solution for Test: Entrepreneurship - Question 5
The Need for Affiliation theory suggests individuals are motivated by relationships and interactions with others. While not directly related to risk-taking, individuals with a high need for affiliation might be inclined to make decisions based on the potential for building or maintaining relationships, balancing risks with the rewards of social connections. In entrepreneurial context, however, the "Need for Achievement" is more directly associated with taking calculated risks based on skill, aiming to achieve high standards and success.
Test: Entrepreneurship - Question 6
Which of these is not a category of external forces that affects a business?
Detailed Solution for Test: Entrepreneurship - Question 6
Socio-economic forces are indeed a broad category that encompasses both social and economic factors affecting a business, such as demographics, income levels, and cultural trends. However, in the context of categorizing external forces more distinctly, "Technological forces" would be considered a separate and specific category impacting businesses, especially with the rapid pace of technological innovation. The term "socio-economic" could be seen as overlapping with both social and economic categories rather than being incorrect.
Test: Entrepreneurship - Question 7
Which among these is a money manager who is involved in making risk investments from equity capital with the objective of gaining better returns?
Detailed Solution for Test: Entrepreneurship - Question 7
Venture capitalists are investors who provide capital to startups or small businesses with the potential for long-term growth. Unlike traditional investors, venture capitalists often take on higher risks in exchange for the possibility of higher returns. They play a crucial role in the startup ecosystem by providing not just funding but also mentorship and access to networks.
Test: Entrepreneurship - Question 8
Andrew Carnegie belonged to this century:
Detailed Solution for Test: Entrepreneurship - Question 8
Andrew Carnegie was a prominent industrialist and philanthropist who lived during the late 19th and early 20th centuries. He is best known for leading the enormous expansion of the American steel industry. His philanthropic efforts, including the founding of libraries, educational institutions, and foundations, have left a lasting legacy.
Test: Entrepreneurship - Question 9
Which of these is the first activity of a new business?
Detailed Solution for Test: Entrepreneurship - Question 9
The departure point of a new business involves the initial step where the entrepreneur decides to pursue an idea or opportunity. This crucial phase includes identifying a market need, conceptualizing a product or service to meet that need, and beginning the process of turning an idea into a viable business.
Test: Entrepreneurship - Question 10
Who should be involved in preparing a firm’s business plan?
Detailed Solution for Test: Entrepreneurship - Question 10
The entrepreneur is fundamentally responsible for the creation and initial drafting of a business plan. While professionals such as accountants and engineers may contribute their expertise to certain sections, the entrepreneur must integrate these insights with the vision, strategy, and goals of the startup. The business plan reflects the entrepreneur's understanding of the market, competition, and the roadmap for the company's future.
Test: Entrepreneurship - Question 11
What should be the main worry of a company’s founder who asks for capital in exchange for equity shares in their venture?
Detailed Solution for Test: Entrepreneurship - Question 11
While raising capital in exchange for equity, a founder's primary concern often revolves around control of the company. Diluting equity can mean sharing decision-making power and potentially compromising on the original vision of the company if investors have different ideas. It's crucial for founders to balance the need for capital with maintaining enough control to guide the company's direction.
Test: Entrepreneurship - Question 12
The process of creating something new is called:
Detailed Solution for Test: Entrepreneurship - Question 12
Innovation refers to the process of creating new products, services, or processes that add value or solve problems in unique ways. It's a fundamental aspect of entrepreneurship, driving progress and competitiveness. Innovators challenge the status quo, bringing advancements that can lead to growth and societal benefits.
Test: Entrepreneurship - Question 13
Ownership position of less than 50 percent in a business is known as:
Detailed Solution for Test: Entrepreneurship - Question 13
A minority interest in a business refers to an ownership stake that is less than 50 percent, meaning the holder does not have controlling power in company decisions. This situation is common in partnerships, investment scenarios, and among shareholders in larger corporations. Minority stakeholders have an investment in the company's success but limited authority over its operations.
Test: Entrepreneurship - Question 14
Which of these is also known as corporate venturing?
Detailed Solution for Test: Entrepreneurship - Question 14
Intrapreneurship, or corporate venturing, involves developing new ventures within an existing company. It allows employees to act as entrepreneurs, leveraging company resources to innovate and drive new business ideas. This approach can lead to significant growth and diversification for companies by fostering an entrepreneurial spirit within the corporate structure.
Test: Entrepreneurship - Question 15
If an entrepreneur takes decisions on behalf of their enterprise, it is known as ______:
Detailed Solution for Test: Entrepreneurship - Question 15
Organisational decisions are those made by entrepreneurs or management that affect the direction and operation of the entire company. These decisions are critical for the success and sustainability of the business, ranging from strategic planning to operational improvements. Entrepreneurs often face the challenge of balancing immediate needs with long-term goals through these decisions.
Test: Entrepreneurship - Question 16
Entrepreneurship Development Program is helpful for:
Detailed Solution for Test: Entrepreneurship - Question 16
Entrepreneurship Development Programs are designed to nurture and educate aspiring entrepreneurs, particularly those who are the first in their families to venture into business. These programs provide essential knowledge, skills, and resources, enabling new entrepreneurs to navigate the challenges of starting and growing a business effectively.
Test: Entrepreneurship - Question 17
Ownership position of more than 50 percent in a business is known as:
Detailed Solution for Test: Entrepreneurship - Question 17
A majority interest means owning more than 50 percent of a company's shares, granting the holder controlling power over the business decisions and operations. This control enables the majority owner to influence the strategic direction and management of the company, reflecting a significant commitment to the venture's success and growth.
Test: Entrepreneurship - Question 18
What is the purpose of a feasibility study for starting a new venture?
Detailed Solution for Test: Entrepreneurship - Question 18
A feasibility study aims to evaluate the viability of a new venture by analyzing potential obstacles and determining whether the business idea can be successfully implemented. It covers various aspects, including market analysis, financial feasibility, and operational requirements, providing critical insights that help entrepreneurs make informed decisions.
Test: Entrepreneurship - Question 19
These decisions are concerned with policy matters and they influence the goals and objectives of a business venture:
Detailed Solution for Test: Entrepreneurship - Question 19
Strategic decisions involve long-term planning and policy matters that directly influence a company's direction, goals, and objectives. These decisions require careful analysis and foresight, as they can significantly impact the venture's success and market position. They are fundamental to guiding the business towards its vision.
Test: Entrepreneurship - Question 20
An entrepreneur who is the owner of more than one business is called:
Detailed Solution for Test: Entrepreneurship - Question 20
Portfolio entrepreneurs are individuals who own and manage multiple businesses simultaneously. This diversification strategy can spread risk, maximize returns, and leverage cross-industry insights. Such entrepreneurs are adept at identifying new opportunities and managing various operations effectively, contributing to their overall success in the business world.
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