MH SET Paper 2 Mock Test - 3 (Commerce) - MAHA TET MCQ

The normal distribution is the most important probability distribution in statistics because it fits many natural phenomena. For example, heights, blood pressure, measurement error, and IQ scores follow the normal distribution. It is also known as the Gaussian distribution and the bell curve.
Key Points

Common Properties for All Forms of the Normal Distribution

1. Despite the different shapes, all forms of normal distribution have the following characteristic properties.
2. They’re all symmetric.
3. The normal distribution is a continuous probability distribution.
4. The normal distribution cannot model skewed distributions.
5. The mean, median, and mode are all equal.
6. Half of the population is less than the mean and half is greater than the mean.
7. The Empirical Rule allows you to determine the proportion of values that fall within certain distances from the mean.
8. A normal distribution curve is unimodal (it has only one mode).
9. The normal distribution has two parameters, the mean and standard deviation.

Thus, option 3 is not the correct property of normal distribution.

Gross Annual Value:

• Gross annual value (GAV) is a term used to describe the potential revenue from immovable property.
• Whether or not the property is rented out for business or residential uses, GAV will still apply.
• In Income Tax, the word immovable property comprises buildings such as residential houses, factories, commercial buildings, godowns and land on which bonded warehouses have been established.
• Net Annual Value: In accordance with the Income Tax Act, the municipality taxes are subtracted from the property's gross annual value to determine the Net Annual Value (NAV). NAV is the difference between GAV and the municipal tax that the owner has paid.

Important PointsCalculation of Net Annual Value

Note: Municipality Tax (due not paid) is not be deducted from GAV because it is not yet paid by the owner, so the GAV itself will be the value of NAV.

Hence, the correct answer is 6,00,000.

Important Points

Ind AS 1 — Presentation of Financial Statements:

• This Standard prescribes the basis for the presentation of general-purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities.
• It sets out overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements for their content.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:

• This Standard's goal is to specify the standards for choosing and altering accounting policies, as well as the accounting treatment and disclosure of such modifications as adjustments to accounting estimates and error corrections.
• The objective of the Standard is to improve the financial statements of a business in terms of their relevance, dependability, and comparability through time and with those of other entities.
• Disclosure requirements for accounting policies, except those for changes in accounting
  policies are set out in Ind AS 1, Presentation of Financial Statements.

Ind AS 28 - Investments in Associates and Joint Ventures:

• The purpose of this Standard is to establish the requirements for applying the equity method for accounting for investments in associates and joint ventures, as well as to regulate the accounting for investments in associates.
• This Standard shall be applied by all entities that are investors with joint control of, or significant influence over, an investee.

Ind AS 34 - Interim Financial Reporting:

• This Standard's goals are to establish the minimum requirements for an interim financial report's content as well as the rules for asset recognition and cost accounting in full or consolidated financial statements for interim periods.
• Investors, creditors, and other parties are better able to comprehend an entity's capability to create earnings and cash flows as well as its financial situation and liquidity when interim financial reports are timely and accurate.
• This Standard does not mandate which entities should be required to publish interim financial reports, how frequently, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges, and accountancy bodies
• Often require entities whose debt or equity securities are publicly traded to publish interim financial reports.

Capital budgeting is a process used to determine whether an organization's long-term investments are worth the funding of cash through the firm's capitalization structure. It is a method of estimating the financial ability of capital investment over the lifespan of the investment.

Key Points

Weighted Average Cost of Capital (WACC):

• WACC is referred to as a company's cost of capital.
• When each category of cost of capital employed is calculated proportionately then it is known as the Weighted Average Cost of Capital.
• The purpose of WACC is to the determine cost of capital structure based on the proportion of debt, equity, and preference stock it has.
• The company pays interest on its debts, a fixed yield on its preferred stock, and give a dividend to its equity holders.
• WACC is used as a hurdle rate in order to accept or reject a capital budgeting proposal.
• After accepting the proposal using this method, financing activities take place in the proportions specified, which leads to yield more returns on the basis of the cost spent on that project, which ultimately helps the firm to see an increase in the market price of its stock.

Therefore, both Assertion and Reason are true, and also Reason is the correct explanation of Assertion.

Important Point

WACC Formula:

WACC = (E/V x Re) + [(D/V x Rd) x (1 - T)]

Where,

1. E = market value of firm's equity,
2. D = market value of firm's debt,
3. V = total value of capital,
4. E/V = percentage of capital that is equity,
5. D/V = percentage of capital that is debt,
6. Re = cost of equity,
7. Rd = cost of debt,
8. T = tax rate.

A breach of contract can happen in both a written and an oral contract. The parties involved in a breach of contract may resolve the issue among themselves, or in a court of law. There are different types of contract breaches, including a minor or material breach and an actual or anticipatory breach.

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

Key PointsGTI or Gross Total Income is the sum of all revenue sources, whereas TI or Total Income is GTI minus deductions. To compute TI, subtract the following deductions from GTI as per Section 80 in Chapter VI of the Income Tax Act.

Important PointsDeduction from Gross Total Income [Section 80A to 80U] (Chapter VIA)
These deductions are of two types:—

• Deductions on account of certain payments and investments covered under sections 80C to 80GGC.
• Deductions on account of certain incomes which are already included under Gross Total Income covered under sections 80-IA to 80U.
• The income arrived at, after claiming the above deductions from Gross Total Income, is known as Total Income. It may also be called Taxable Income. The Total Income, thus calculated, should be rounded off to the nearest Rs. 10.
• The aggregate of income computed under each head, after giving effect to the provisions for clubbing of income and set off of losses, is known as "Gross Total Income". In computing the total income of an assessee, certain deductions are permissible under sections 80C to 80U from Gross Total Income.

These deductions are however not allowed from the following incomes although these incomes are part of Gross Total Income

1. Long-term capital gains.
2. Short-term capital gain on transfer of equity shares and units of equity oriented fund through a recognised stock exchange i.e. short-term capital gain covered under section 111A.
3. Winnings of lotteries, races, etc.
4. Incomes referred to in sections 115A, 115AB, 115AC, 115ACA, 115AD and 115D.

​Hence, it can be concluded that the deductions under Chapter VI-A of the Income Tax Act, 1961 are allowed after excluding Long-term capital gains, Short-term capital gains under Section 111A and Income from lotteries.

The Regression Coefficient is the constant ‘b’ in the regression equation that tells about the change in the value of the dependent variable corresponding to the unit change in the independent variable.

The Regression Coefficient is also called a slope coefficient because it determines the slope of the line i.e. the change in the independent variable for the unit change in the independent variable.

Key Points

Properties Of Regression Coefficient: 

1. The correlation coefficient is the geometric mean of two regression coefficients. Symbolically, it can be expressed as:
   Coefficient of correlation  = √(byx × bxy)r=(byx×bxy)−−−−−−−−−√
2. The value of the coefficient of correlation cannot exceed unity i.e. 1. Therefore, if one of the regression coefficients is greater than unity, the other must be less than unity.
3. The sign of both the regression coefficients will be the same, i.e. they will be either positive or negative. Thus, it is not possible that one regression coefficient is negative while the other is positive.
4. The coefficient of correlation will have the same sign as that of the regression coefficients, such as if the regression coefficients have a positive sign, then “r” will be positive and vice-versa.
5. The regression coefficients are independent of the change of origin, but not of the scale. By origin, we mean that there will be no effect on the regression coefficients if any constant is subtracted from the value of X and Y. By scale, we mean that if the value of X and Y is either multiplied or divided by some constant, then the regression coefficients will also change.

Thus, option 2 is the correct answer.

In terms of Section 22 of the Act, Reserve Bank has the sole right to issue banknotes in India.

• The Reserve Bank, in consultation with the Central Government and other stakeholders, estimates the number of banknotes that are likely to be needed denomination-wise in a year and places indents with the various currency printing presses for the supply of banknotes.
• The Reserve Bank in terms of its clean note policy provides good quality banknotes to the members of the public.
• In respect of coins, the role of RBI is limited to the distribution of coins that are supplied by the Government of India.
• The Government of India is responsible for the designing and minting of coins in various denominations as per the Coinage Act, 2011.

Important Points

• Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee note.
• The One Rupee note is issued by the Ministry of Finance and it bears the signatures of the Finance Secretary, while other notes bear the signature of Governor RBI. 

Thus, option 1 is the correct answer.

Devaluated assets is not a category of non-performing assets.

Debt is classified as NPA when payment due is not paid within 90 days. NPAs are classified into 3 categories:

• Loss assets
• doubtful debts
• Substandard assets

The correct answer is Purchasing power parity theory

Key PointsPurchasing Power Parity Theory:

• Purchasing-power parity is a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries.
• The purchasing-power parity theory is the simplest and most widely accepted theory explaining the variation of currency exchange rates.
• The theory of purchasing-power parity is based in principle called the law of one price.
• When the central bank prints large quantities of money, the money loses value both in terms of the goods and services it can buy and in terms of the amount of other currencies it can buy.

Additional Information 1. The Fisher Effect:

• The Fisher Effect states that nominal interest rates (r) are a function of the real interest rate (a) and a premium (i) for inflation expectations.  R = a + i
• Real Rates of Interest (i) Should tend toward equality everywhere through arbitrage  (ii) With no government interference, nominal rates vary by inflation differential.
• According to the Fisher Effect, countries with higher inflation rates have higher interest rates.
• Due to capital market integration globally, interest rate differentials are eroding.

2. Mint Parity Theory:

• The theory of mint parity describes how the exchange rate between the two gold standard countries is determined.
• The currency of a country on the gold standard is either manufactured of gold or has its value stated in gold.
• The exchange rate under the gold standard is equivalent to the gold content of one currency relative to another, according to the mint parity theory. This rate is referred to as the mint rate.

3. Interest rate parity theory:

• One of the most important theories in international finance is interest rate parity, which is the best approach to explain how exchange rate values are determined and why they fluctuate. Understanding the primary motivations for foreign investment is crucial because the majority of international currency exchanges occur for investment purposes.
• Interest rate parity is a condition in which the rates of return on equivalent assets in two countries are equal. On the basis of how it is described here, the term is a misleading term; it should really be called rate of return parity.

4. Balance of Payment theory

• The free forces of demand and supply in the foreign currency market determine the price of foreign money in terms of domestic money, according to the balance of payments theory of exchange rate.
• As a result, the demand for and supply of a country's currency will determine the currency's external value.
• According to the theory, a balance of payments deficit causes the rate of exchange to decrease or depreciate, whereas a surplus strengthens the exchange reserves, causing the price of the home currency to appreciate in terms of foreign currency.

The correct answer is programmed. 

Key Points

• Programmed decisions tend to be well structured, routine and repetitive, occurring on a regular basis.
• They are usually made at lower levels in the organisation, have short-term consequences and are based on readily available information.
• Due to the fact that the organisation is frequently presented with the decision, a decision rule can be developed that tells the organisation or decision maker which alternative to choose once the information is available.
• The decision rule ensures that a definite method for obtaining a solution can be found and that the decision does not have to be treated as something new each time it occurs. Frequently simple formulae can be applied to the situation.
• Examples of programmed decisions include ordering raw materials or office supplies and calculating holiday pay, sick pay or redundancy payments. 
• Non-programmed decisions, in contrast, are new and unstructured and consequently a previously established decision rule cannot be applied.
• In other words, the organisation has no established procedures or records for dealing with the decision, which can therefore appear to be highly complex.
• Non-programmed decisions tend to occur at higher levels in the organisation, have long-term consequences and require a degree of judgement and creativity.
•  Examples of non-programmed decisions include the decision to try an unproven technology or to expand into a previously unknown market. 

Dumping in economics is a kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price below the price charged in its home market or below its cost of production. Therefore, when goods in the domestic market are sold at a high price and in the foreign market at a low price, it is a situation of dumping.

Key PointsBeginning on June 1, 2013, buyers of immovable properties (which can be a building, a piece of a building, or land, excluding agricultural property) must subtract TDS from the price when paying sellers. Section 194-IA of Income Tax Act, 1961 contains a description of this.

Important PointsSection 194IA of Income Tax Act, 1961

• Any person who is a transferee and must pay a sum to a resident transferor as payment for the transfer of any immovable property (other than agricultural land) must, at the time the sum is credited to the transferor's account or at the time the sum is paid in cash, by issuing a check or draught, or by any other method, whichever occurs first, deduct an amount equal to one percent of the transferor's transfer fee.
• In cases where the consideration for the transfer of an immovable property is less than fifty lakh rupees, no deduction under sub-section (1) of Section 194IA may be made.

Analysis of Section 194IA of Income Tax Act, 1961

1. Buyer has to deduct tax @1%
2. No need to have TAN.
3. File Return by taking Registration based on PAN.
4. Sale consideration should exceed Rs.50 lakhs.
5. Once it is exceed Rs.50 lakhs entire sale consideration subject to TDS
6. TDS has to be deducted on each such installment thereafter.
7. Form 26QB Challan cum Statement – should be filed within 30 days from end of the month in which TDS was deducted.
8. Buyer has to issue Form 16B to seller.
9. Challan 281 should be used for payment of Tax deducted at source.
10. After payment Register on Traces site using PAN and challan number to get Form 16B.

Hence, it can be concluded that rate of TDS is 1% only and no surcharge and health and education cess is applicable because there is no provision of surcharge and education cess under sec 194IA of Income Tax Act,1961.

The correct answer is Stereotyping.

Key Points

• The type of bias being followed in this case is gender stereotyping.
• Gender stereotyping is a type of bias that occurs when an individual or a group of people hold stereotypes or prejudices about one gender or another.
• It can manifest in different ways, including making assumptions or judgments based on gender, attributing certain qualities or characteristics to one gender, or treating individuals differently based on their gender.
• In this case, the manager is making a biased assumption that men perform better than women in oral presentations.
• This assumption is not based on any objective evidence or data, but rather on a biased belief or stereotype about gender.
• This type of bias can have negative consequences, including limiting opportunities for women to excel in certain areas and perpetuating gender inequality.
• To overcome gender bias, it is important to challenge and question assumptions about gender, promote diversity and inclusion, and provide equal opportunities and resources for individuals of all genders to succeed.

Additional Information Halo Effect- The Halo Effect is a cognitive bias that occurs when our overall impression of a person, product, or company influences our judgment of their specific traits or characteristics. In other words, it is the tendency to let our positive or negative general impression of something or someone influence our evaluations or judgments of specific attributes or aspects.

Projection Effect- Projection effect is a cognitive bias that occurs when people unconsciously project their own personality traits, beliefs, or attitudes onto others. In other words, people may assume that others share their own values, beliefs, and attitudes, even when this is not the case.

Contrast effect- The Contrast Effect is a cognitive bias that occurs when the perception of an object or individual is influenced by the presence or characteristics of other objects or individuals encountered before it. In other words, our judgment of something can be distorted by the context in which it is presented.

Hence, the correct answer is Stereotyping.

The separate entity principle differentiates between owners and management. The separate entity concept is the basic accounting concept that we should always separately record the transactions of a business and its owners. Otherwise, there is a considerable risk that the transactions of the two will become intermingled.

The first Indian to suggest a model for human resource valuation and accounting is S. K. Chakraborty.

S. K. Chakraborty who was connected with the "Indian Institute of Management" in Calcutta was the first Indian to suggest a model for human resource valuation and accounting.

He believed that there are a number of factors to be considered for every employee in regards to their recruitment process.

It involved the cost of recruiting them, their selection, learning process, and training and developing them in the future. These evaluations of cost should be used as another form of income expenditure.

The correct answer is- Print.

Key Points

Print media:

This was once the only means of spreading information to the general people.

1. For a huge number of people, newspapers are an important source of information. 
2. Magazines are specialized advertising publications published weekly, monthly, quarterly, or annually. They provide educational information.
3. Print media is very effective at delivering messages to target audiences, as it allows for explanation in a way that most other media cannot.
4. They may be in the form of picture or photograph demonstrating how an offer should be used

 Additional Information​ 

   Other types of media:

  Broadcast Media:

• Traditional media such as television and radio are referred to as broadcast media.
• Television is one of the most important sources of information. It is one of the most authoritative and important forms of media because it has the ability to reach millions of people. 
• Radio broadcasts entertainment, information, and instructional programming to the general public via radio waves. Because of its large viewership, this medium is frequently utilized to market products and services.

  Digital  Media:

• Digital marketing, also known as online marketing, is the promotion of brands through the internet and other forms of digital communication in order to connect with potential customers. As a marketing channel, this includes not only email, social media, and web-based advertising, but also text and multimedia messages.

   Out of Home (OOH) Media: Outdoor advertising, often known as out-of-home (OOH) media, is advertising that appears outside your home.

• Mall advertising, fitness clubs, cinemas, gas stations/convenience stores, stores, trackside advertising, salon advertising, laundromat advertising, pizza boxes, coffee cups, pharmacy bags, and so on are examples of non-traditional OOH.
• Billboards, Posters, Buses, Commuter Rail & Subway, Transit Shelters & Street Furniture, Taxis, Airport Media

Hence, the correct answer is- Print is very effective at delivering messages to target audiences, as it allows for explanation in a way that most other media cannot.

Assertion (A): There is no difference between futures and forwards excepting that the former requires a margin.

Reason (R): Futures are standardized, marked to market, and traded in organized exchanges. Forwards are tailor-made instruments and traded on the OTC market.

Here (A) is incorrect, but (R) is correct. Hence Option1 is the correct answer.

Key Points

A forward contract is a private and customizable agreement that settles at the end of the agreement and is traded over-the-counter.

A futures contract has standardized terms and is traded on an exchange, where prices are settled on a daily basis until the end of the contract.

Additional Information

Forward Contracts

1. The forward contract is an agreement between a buyer and seller to trade an asset at a future date. The price of the asset is set when the contract is drawn up. Forward contracts have one settlement date—they all settle at the end of the contract.
2. These contracts are private agreements between two parties, so they do not trade on an exchange. Because of the nature of the contract, they are not as rigid in their terms and conditions.
3. Many hedgers use forward contracts to cut down on the volatility of an asset's price. Since the terms of the agreement are set when the contract is executed, a forward contract is not subject to price fluctuations.
4. Because of the nature of these contracts, forwards are not readily available to retail investors. The market for forward contracts is often hard to predict. That's because the agreements and their details are generally kept between the buyer and seller, and are not made public. Because they are private agreements, there is high counterparty risk. This means there may be a chance that one party will default.

Futures Contracts

1. Futures contracts involve the agreement to buy and sell an asset at a specific price at a future date. The futures contract, however, has some differences from the forward contract.
2. First, futures contracts are marked-to-market daily, which means that daily changes are settled day by day until the end of the contract. Furthermore, a settlement for futures contracts can occur over a range of dates.
3. Because they are traded on an exchange, they have clearing houses that guarantee the transactions. This drastically lowers the probability of default to almost never. Contracts are available on stock exchange indexes, commodities, and currencies. The market for futures contracts is highly liquid, giving investors the ability to enter and exit whenever they choose to do so.
4. These contracts are frequently used by speculators, who bet on the direction in which an asset's price will move, they are usually closed out prior to maturity and delivery usually never happens. In this case, a cash settlement usually takes place.

Upward communication means the flow of information from the lower levels of the organization to higher levels of authority. Examples of upward communication are:

(i) Reports (ii) Meetings (iii) Interviews (iv) Conferences (v) Letters (vi) Complaints (vii) Suggestions (viii) Surveys (ix) Union publication and (x) Grapevine etc. Circulars are not the example of upward communication as it is an example of downward communication that flows from a superior to a subordinate.

The correct answer is Static Marginal Utility. 

Key Points

•  An indifference curve is a downward-sloping convex line connecting the quantity of one good consumed with the amount of another good consumed.
• Irish-born British economist Francis Ysidro Edgeworth first proposed this two-dimensional graph, also known as the iso-utility curve.
• While each axis denotes a different form of consumer goods, the curve features unique combinations or consumption bundles for any two commodities in points.
• These combinations provide the same level of satisfaction and utility to the consumer.
• Since the consumer gets an equal preference for all bundles of goods, they are indifferent about any two combinations on the curve.

Important Points Indifference Curve Assumptions:

• The consumer is rational to maximize satisfaction and makes a transitive or consistent choice.
• The consumer is expected to buy any of the two commodities in combination.
• Consumers can rank a combination of commodities based on their satisfaction levels. Usually, a combination with a higher satisfaction level is preferred.
• Consumer behavior remains constant in the analysis.
• The utility is expressed in terms of ordinal numbers. 
• Assumes marginal rate of substitution to diminish.

The consumer is Rational, Two commodities, and Transitivity in making choice are assumptions of Indifference curve analysis. 

Hence, Static Marginal Utility is not an assumption of Indifference Curve Analysis.

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

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

Non-Banking Financial Companies (NBFCs) are the Financial Intermediaries engaged primarily in the business of accepting Deposits, Lending loans and advances, Leasing, and Hire purchasing.

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of the immovable property.

The main objective of the International Monetary Fund (IMF) is to promote international trade.

The International Monetary Fund (IMF) is an organisation set up to promote international coope­ration and trade, to facilitate the expansion and balanced growth of international trade, to promote exchange stability and to assist in the establishment of a multi­lateral system of payments.

Dividend - A dividend is a payment made by a corporation out of profits to its shareholders that is decided by the board of directors.

Dividend Distribution Tax (DDT) - The tax imposed on the dividend that a business distributes to its shareholders from its profits is known as the dividend distribution tax.

Important Points

• Currently, up to AY 2020–2021, a shareholder who receives a dividend from a domestic firm is not required to pay taxes on such payout since it is free from taxes under section 10(34) of the Act.
• However, under section 115-O @ 20.36%, the domestic firm is required to pay a Dividend Distribution Tax (DDT) in such circumstances.
• The DDT was eliminated by the Finance Act of 2020, and investors are now responsible for paying taxes.
• If the dividend is distributed on or after 01-04-2020, the provisions of Section 115-O shall not apply.

Thus, the Dividend received from an Indian company that has suffered dividend distribution tax is exempt.

​Additional Information

When Dividend Distribution Tax (DDT) is to be paid -

• DDT must be paid within 14 days of the earliest of the following events: declaration, distribution, or dividend payment.
• If the corporation does not make the payment within 14 days, interest will be charged at the rate of 1% of the DDT from the day after the day the DDT became due until it is actually paid to the government.
• Section 115P contains the provisions mentioned above.

The Correct Answer is 26

Key PointsSteps to calculate missing frequency 

• Step 1 - Determine class in which mode lies - As mode given in the question is 48.6, the class in which mode lies is 40-55.
• Step 2 - Find the value of Z,l,h,f₀,f₁,f₂  -
• Z is the value of mode i.e. 48.6
• l is the lower class limit of modal class 40-55 i.e. 40
• h is the class interval of modal class. Class interval = Upper class limit - Lower class limit i.e. 55-40 = 15
• f₀ is the frequency preceding the modal class i.e. 20
• f₁ is the frequency of the modal class i.e. 44
• f2 is the frequency succeeding the modal class i.e. x.
• Step 3 - Put the data of step 2 in the formula of mode -
• Formula of Mode

Z =  

Important Points

Solution:

Z =  ​ 

48.6 = 

48.6 - 40 = 

8.6(68 - ) = 15 x 24

584.8 - 8.6 = 360

8.6 = 224.8

= 26.1

So the value of missing frequency f₂ is 26 (approx.)

The explicit cost is the discount rate, which equates the present value of cash inflows with the present value of cash outflows.

Cost of Capital refers to required returns mandatory to make a capital budgeting project. It is a minimum rate of return that an organization must earn before generating value.

There are 5 types of Cost of Capital:

1. Explicit Cost of Capital
2. Implicit Cost of Capital
3. Specific Cost of Capital
4. Weighted Average Cost of Capital
5. Marginal Cost of Capital

Hence, the correct option (B).

The mode is the maximum not unusual place range in an information series. The mode is the most usually going on range withinside the information.