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Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer?.

Solutions for Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CAT. Download more important topics, notes, lectures and mock test series for CAT Exam by signing up for free.

Here you can find the meaning of Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Directions: Study the following information carefully and answer the question.The supply of venture capital is likely to continue growing. Within the past two years, numerous government-backed pension funds have invested in private equity for the first time. Many experienced investors have also decided to increase their allocations. This growth naturally begs the question of sustainability. Short-run shifts in the supply of or demand for venture capital investments have had dramatic effects. For instance, periods with a rapid increase in capital commitments have led to less restrictive partnership agreements, large investments in portfolio firms, and higher valuations. These patterns have led many practitioners to conclude that the industry is inherently cyclical, that the side effects associated with periods of rapid growth generate sufficient difficulties that periods of retrenchment are sure to follow.Neoclassical economics teaches us to examine not just the short-run supply and demand effects. Rather, it is also important to consider the nature of long-run supply and demand conditions. In the short run, intense competition between private-equity groups may lead to a willingness to pay a premium for certain types of firms. This is unlikely to be a sustainable strategy in the long run: firms that persist in such a strategy will eventually achieve low returns and be unable to raise follow-on funds. The types of factors that will determine the long-run, steady-state supply of venture capital in the economy are likely to be more fundamental. These most likely will include the magnitude of fundamental technological innovation in the economy, the presence of liquid and competitive markets for venture capitalists to sell their investments and the willingness of highly skilled managers and engineers to work in entrepreneurial environments.When one examines these more fundamental factors, there appears to have been quite substantial changes for the better over the past several decades. While the increase in innovative outputs can be seen through several measures, probably the clearest indication is in the extent of patenting. Patent applications by U.S. inventors have surged over the past decade to over 120 thousand per year. This does not appear to reflect the impact of changes in domestic patent policy or shifts in the success rate of applications. Rather, it appears to reflect a fundamental shift in the innovative fecundity in the domestic economy.A second change has been in the development of what economists term "agglomeration economies" in the regions with the greatest venture capital activity. The efficiency of the venture capital process itself has been greatly augmented by the emergence of other intermediaries familiar with the workings of the venture process. The presence of such expertise on the part of lawyers, accountants, and real estate brokers, among others, has substantially lowered the transaction costs associated with forming and financing new firms. In short, the increasing familiarity with the venture capital process has itself made the long-term prospects for venture investment more attractive than they have ever been before, in this country or abroad. Much is still not yet known about the venture capital industry. The extent to which the U.S. venture model will spread overseas and the degree to which the American model will — or can — be successfully adapted during this process are particularly interesting questions.The author will agree with each of the following statements, EXCEPT:a)Short term view may lead to more unintended consequences than long term view.b)The overall progress in venture capital has been quite inconsistent over the past half century.c)Private equity does not necessarily mean private investors or individuals.d)Greater funds obtained initially does not necessarily mean greater profits because of those funds.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CAT tests.