UGC NET Paper 2: Commerce 7th Jan 2025 Shift 1 | UGC NET Past Year Papers PDF Download

Q1: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - II, C - III, D - IV

(b) A - IV, B - III, C - I, D - II

(c) A - IV, B - III, C - II, D - I

(d) A - III, B - IV, C - II, D - I

Ans: c

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

• Direct material cost variance (A) matches with Standard cost for actual output - actual cost (IV).
  This variance measures the difference between the standard cost of the direct materials required for actual production and the actual cost incurred. It helps in identifying how well the cost control is being managed.
  Key Point: It indicates the overall cost efficiency concerning direct materials.
• Direct material price variance (B) matches with Actual Quantity x (standard price - actual price) (III)
  This variance focuses on the difference between the standard price and the actual price paid for the materials, multiplied by the actual quantity of materials purchased. It helps in assessing the impact of price changes on material costs.
  Key Point: It highlights price-related efficiencies or inefficiencies.
• Direct material usage variance (C) matches with Standard price x (Standard Quantity for actual output quantity - Actual Quantity) (II).
  This variance measures the difference between the standard quantity expected to be used for actual production and the actual quantity used, multiplied by the standard price. It helps in evaluating the efficiency of material usage.
  Key Point: It identifies wastage or savings in material usage.
• Direct material mix variance (D) matches with Standard price x (Revised standard quantity - Actual Quantity) (I).
  This variance assesses the impact of changing the mix of materials used from what was planned, by comparing the standard cost for the revised mix to the actual quantity used. It helps in understanding the cost implications of using different material combinations.
  Key Point: It analyzes the cost effects of changing material proportions.

Q2: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - IV, B - III, C - II, D - I

(b) A - I, B - II, C - III, D - IV

(c) A - II, B - III, C - I, D - IV

(d) A - III, B - IV, C - I, D - II

Ans: a

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

Conservatism (A) matches with Anticipate no profit, but provide for all possible losses (IV).

• Explanation: The conservatism principle in accounting advises that potential expenses and liabilities should be recognized as soon as possible, but revenues should only be recognized when they are assured. This approach ensures that financial statements are not overly optimistic.
• It helps in providing a buffer against future uncertainties and potential losses.

Dual aspect (B) matches with Every transaction has a two-fold effect (III).

• Explanation: The dual aspect concept is fundamental to accounting, stating that every financial transaction affects at least two accounts in the accounting records. This is the basis for the double-entry bookkeeping system, ensuring that the accounting equation (Assets = Liabilities + Equity) always remains balanced.
• For example, purchasing inventory for cash increases inventory (asset) and decreases cash (asset).

Separate Business Entity (C) matches with Enterprise is treated as separate from owner and other persons associated with it (II).

• Explanation: The separate business entity concept dictates that the business is a distinct entity from its owners and other entities. This means that the financial transactions of the business should be recorded separately from those of the owners or other businesses.
• This principle is crucial for accurate financial reporting and accountability.

Consistency (D) matches with Use of same accounting policies by a firm from period to period (I).

• Explanation: The consistency concept in accounting requires that companies use the same accounting methods and principles from period to period. This ensures comparability of financial statements over different periods, helping stakeholders make informed decisions.
• Any changes in accounting policies should be disclosed and justified to maintain transparency.

Q3: When all the factors of production are changed in same proportion, it is called as; 

A. Long run production function

B. Law of equal proportion

C. Law of return to scale

D. Law of return to a factor

E. Law of Variable proportion

Choose the correct answer from the options given below:

(a) A, B, C Only

(b) B, C, D Only

(c) C, D, E Only

(d) C Only

Ans: d

Sol: The correct answer is A, C, E Only.

The term "Law of Returns to Scale" describes the relationship between changes in all inputs (factors of production) proportionally and the resulting change in output. When all factors are changed simultaneously and in the same proportion, it represents the long-run production function. This is because the long run allows for adjustments to all factors of production. The "Law of Variable Proportion" deals with the short-run scenario where only one factor is variable while others remain fixed. Therefore, options A, C, and E are all related to the concept of how output changes when inputs are adjusted, particularly in different timeframes. 

Why other options are incorrect:

• A. Long run production function: While the long-run production function describes the relationship between output and all inputs when they can be adjusted simultaneously, it doesn't fully capture the concept of returns to scale. The law of returns to scale is a specific aspect of the long-run production function. It explains how output changes when all inputs are changed proportionally. 
• B. Law of equal proportion: This term isn't commonly used in economics. The concept of "returns to scale" is more accurate. 
• D. Law of return to a factor: This term refers to the change in output when only one factor of production is varied while others remain constant. It's a different concept from the law of returns to scale, which considers changes in all factors simultaneously. 
• E. Law of Variable Proportion: This describes the relationship between output and the quantity of a variable input when other inputs are held constant. It's a short-run concept, distinct from the long-run law of returns to scale.

Q4: Which of the following are the features of F.E.M.A? 

A. Central government can regulate payments to and from a person situated outside country.

B. Holding of immovable property outside India is restricted.

C. R.B.I can restrict the transaction from capital account even if it is done by authorized person.

D. All foreign financial transactions are to be done through F.E.M.A authorized person. E. F.E.M.A applies to Indian citizens living abroad.

Choose the correct answer from the options given below:

(a) A, B, C Only

(b) B, D, E Only

(c) A, B, E Only

(d) A, C, D Only

Ans: d

Sol: The correct answer is A, C, D Only.
Let's analyze each statement:

A. Central government can regulate payments to and from a person situated outside country.

• This is true under FEMA (Foreign Exchange Management Act), as the central government has the authority to regulate payments involving foreign exchange and transactions between residents and non-residents.

B. Holding of immovable property outside India is restricted.

• This statement is not entirely correct. FEMA does impose certain restrictions on the holding and acquisition of immovable property outside India, but it does allow certain transactions subject to specified conditions and permissions.

C. R.B.I can restrict the transaction from capital account even if it is done by authorized person.

• This is correct. Under FEMA, the Reserve Bank of India (RBI) has the authority to regulate and restrict capital account transactions, even if they are conducted by authorized persons.

D. All foreign financial transactions are to be done through F.E.M.A authorized person.

• This is true. FEMA mandates that all foreign exchange transactions must be carried out through authorized persons who are recognized by the act.

E. F.E.M.A applies to Indian citizens living abroad.

• This statement is not entirely correct. FEMA primarily applies to transactions conducted within India and by Indian residents. However, certain provisions can apply to Indian citizens living abroad in specific contexts.

Therefore, the statements that are strictly correct in the context of FEMA are A: Central government can regulate payments to and from a person situated outside country, C: R.B.I can restrict the transaction from capital account even if it is done by authorized person, and D: All foreign financial transactions are to be done through F.E.M.A authorized person. This makes option 4: "A, C, D Only" the correct choice.

Q5: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - II, C - III, D - IV

(b) A - III, B - IV, C - II, D - I

(c) A - I, B - III, C - IV, D - II

(d) A - I, B - II, C - IV, D - III

Ans: b

Sol: The correct answer is 'A-III, B-IV, C-II, D-I'.

UNCTAD (A) matches with 1964 (III).

• Explanation: The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 to promote the interests of developing countries in world trade.
• Its primary goal is to integrate developing countries into the world economy and support sustainable development.

WTO (B) matches with 1995 (IV).

• Explanation: The World Trade Organization (WTO) was established on January 1, 1995, succeeding the General Agreement on Tariffs and Trade (GATT).
• The WTO aims to regulate international trade and ensure that trade flows as smoothly, predictably, and freely as possible.

NAFTA (C) matches with 1994 (II).

• Explanation: The North American Free Trade Agreement (NAFTA) came into effect on January 1, 1994, creating a trilateral trade bloc in North America among the United States, Canada, and Mexico.
• NAFTA aimed to eliminate trade barriers and facilitate the cross-border movement of goods and services among the three countries.

ASEAN (D) matches with 1967 (I).

• Explanation: The Association of Southeast Asian Nations (ASEAN) was established on August 8, 1967, with the signing of the ASEAN Declaration (Bangkok Declaration) by Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
• ASEAN aims to promote political and economic cooperation and regional stability among its members.

Q6: Which of the following is not a monetary measure for correcting disequilibrium in Balance of Payment? 

(a) Monetary Contraction

(b) Devaluation

(c) Exchange Control

(d) Abolition of Export Duties

Ans: d

Sol: The correct answer is - Abolition of Export Duties

Abolition of Export Duties

• This measure is considered a trade policy rather than a monetary measure.
• It involves removing taxes or duties on goods that are exported to encourage exports and improve the trade balance.
• While it can help in correcting a trade deficit, it does not directly influence the monetary supply or monetary policy.

Other Related Points

Monetary Contraction

• This involves reducing the money supply in the economy to curb inflation and stabilize the currency.
• It is a monetary policy tool used by central banks to correct imbalances in the economy.

Devaluation

• This refers to the deliberate reduction of the value of a country's currency relative to other currencies.
• Devaluation makes a country's exports cheaper and imports more expensive, which can help reduce trade deficits.

Exchange Control

• This involves the government controlling the amount of foreign currency that can be bought or sold.
• It helps manage the country's foreign exchange reserves and stabilize the balance of payments.

Q7: Arrange the following management research questions in the ascending order. 

A. Management Question

B. Measurement Question

C. Management dilemma

D. Research Question

E. Investigative Question

Choose the correct answer from the options given below:

(a) C, A, B, D, E

(b) C, A, D, E, B

(c) A, C, D, E, B

(d) B, C, A, D, E

Ans: b

Sol: The correct answer is 'C, A, D, E, B'

Management Dilemma (C):

• This is the initial step where a problem or an opportunity is identified within the organization that requires management's attention.
• It serves as the foundational procedure, highlighting the issue that needs to be addressed and setting the stage for further inquiry.

Management Question (A):

• Following the identification of the management dilemma, the next step is to formulate precise management questions that narrow down the focus.
• These questions aim to understand the specifics of the dilemma and guide the direction of subsequent research.

Research Question (D):

• With the management questions defined, researchers then develop research questions to determine what information is needed.
• These questions are designed to investigate the problem deeply and gather relevant data to address the management dilemma.

Investigative Question (E):

• Once the research questions are in place, further detailed investigative questions are crafted to gather specific evidence.
• These questions help in breaking down the research problem into smaller components that can be analyzed individually.

Measurement Question (B):

• The final step involves developing measurement questions that set the criteria for data collection and analysis.
• These questions focus on how data will be measured, ensuring that the information collected is precise, reliable, and valid for making informed decisions.

Q8: Identify, which of the following statements are True. 

A. Commuted pension received by a government employee is fully exempted from Income Tax

B. Section 30 of the Income Tax Act 1961 discusses deduction in respect of rent, rates, taxes, repairs and insurance of building used by the assessee for the purpose of business

C. Section 33 of the Income Tax Act 1961, defines provision regarding depreciation of tangible assets

D. Capital gain arises from transfer of any assets

E. Short term Capital assets is defined under section 2(42 A) of the Income Tax Act 1961

Choose the correct answer from the options given below:

(a) A, B, and E Only

(b) C, D and E only

(c) A and B only

(d) C and D only

Ans: a

Sol: The correct answer is 1) A, B, and E Only.

Let's analyze each statement:

A. Commuted pension received by a government employee is fully exempted from Income Tax

• Commuted pension received by a government employee is indeed fully exempt from income tax under the Income Tax Act, 1961.
• Reason for inclusion: This statement is true as per the tax provisions.

B. Section 30 of the Income Tax Act 1961 discusses deduction in respect of rent, rates, taxes, repairs and insurance of building used by the assessee for the purpose of business

• Section 30 of the Income Tax Act, 1961, indeed provides for the deduction of expenses related to rent, rates, taxes, repairs, and insurance for buildings used for business purposes.
• Reason for inclusion: This statement is accurate according to the Income Tax Act.

C. Section 33 of the Income Tax Act 1961, defines provision regarding depreciation of tangible assets

• Section 32 (not Section 33) of the Income Tax Act, 1961, deals with the provisions regarding depreciation on tangible and intangible assets.
• Reason for exclusion: The statement is incorrect because it misidentifies the section number.

D. Capital gain arises from transfer of any assets

• Capital gain typically arises from the transfer of capital assets, not just any assets. The term "capital assets" has a specific definition under the Income Tax Act.
• Reason for exclusion: The statement is too broad as it should specify "capital assets".

E. Short term Capital assets is defined under section 2(42 A) of the Income Tax Act 1961

• Section 2(42A) of the Income Tax Act, 1961, indeed defines "short-term capital assets".
• Reason for inclusion: This statement is true and correctly identifies the section.

Therefore, the statements that are true are A: Commuted pension received by a government employee is fully exempted from Income Tax, B: Section 30 of the Income Tax Act 1961 discusses deduction in respect of rent, rates, taxes, repairs and insurance of building used by the assessee for the purpose of business, and E: Short term Capital assets is defined under section 2(42 A) of the Income Tax Act 1961. This makes option 1: "A, B, and E Only" the correct choice.

Q9: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - II, B - III, C - IV, D - I

(b) A - I, B - II, C - III, D - IV

(c) A - IV, B - III, C - II, D - I

(d) A - III, B - IV, C - I, D - II

Ans: a

Sol: The correct answer is 'A-II, B-III, C-IV, D-I'.

Indian Contract Act (A) matches with 1872 (II).

• Explanation: The Indian Contract Act, 1872 is the key legal document that governs the law of contracts in India. It specifies the various provisions related to the formation, performance, and enforceability of contracts.

Sales of Goods Act (B) matches with 1930 (III).

• Explanation: The Sale of Goods Act, 1930 governs the sale of goods in India. It lays down the essential elements for the sale of goods, the rights and obligations of the buyer and seller, and other aspects related to the sale of goods.

Negotiable Instruments Act (C) matches with 1881 (IV).

• Explanation: The Negotiable Instruments Act, 1881 provides the framework for the regulation of negotiable instruments such as promissory notes, bills of exchange, and cheques. It outlines the rights and responsibilities of the parties involved in negotiable instruments.

Companies Act (D) matches with 2013 (I).

• Explanation: The Companies Act, 2013 is the primary legislation that governs the incorporation, regulation, and dissolution of companies in India. It includes provisions for corporate governance, company management, and the rights of shareholders.

Q10: Arrange the following levels of economic integration in increasing order. 

A. Political Union

B. Free Trade Area

C. Customs Union

D. Common Market

E. Economic Union

Choose the correct answer from the options given below:

(a) B, C, D, E, A

(b) B, A, C, D, E

(c) B, A, D, C, E

(d) E, D, B, A, C

Ans: a

Sol: The correct answer is 'B, C, D, E, A'

Free Trade Area (B):

• This is the first level of economic integration, where member countries agree to reduce or eliminate tariffs and other trade barriers on most goods and services traded between them.
• However, each member country maintains its own external trade policies with non-member countries.

Customs Union (C):

• The second level, a customs union builds on a free trade area by additionally adopting a common external tariff on imports from non-member countries.
• This integration level ensures that all member countries have a unified trade policy towards the rest of the world.

Common Market (D):

• In this third level, the common market incorporates all the elements of a customs union but goes further by allowing free movement of capital and labor among member countries.
• This level aims to enable a higher degree of economic collaboration and integration among the member states.

Economic Union (E):

• The fourth level, an economic union, adds another layer of integration by harmonizing economic policies, including monetary and fiscal policies, across member countries.
• This level often involves the adoption of common currency and deeper economic policy coordination for seamless functioning.

Political Union (A):

• The final level of economic integration, a political union, represents the highest form of integration where member countries not only integrate economically but also politically.
• This level may include a central political apparatus that coordinates the economic, social, and foreign policies of member states.

Q11: Which of the following research designs is the most precise one? 

(a) Experimental

(b) Exploratory

(c) Diagnostic

(d) Descriptive

Ans: a

Sol: The correct answer is - Experimental

Experimental Research Design

• Involves manipulation of one or more independent variables to determine their effect on a dependent variable.
• Allows for control over extraneous variables, which enhances the precision and reliability of the results.
• Often considered the gold standard in research due to its ability to establish causal relationships.
• Random assignment of participants to different groups (control and experimental) ensures that the groups are comparable at the start of the experiment.

Other Related Points

Exploratory Research Design

• Primarily used to explore a research problem or issue when there are few or no earlier studies to refer to.
• Involves open-ended questions and a flexible approach to gather insights and understanding.
• Does not aim to provide conclusive answers but rather to identify key variables and new hypotheses.

Diagnostic Research Design

• Used to identify the causes of a problem or to diagnose conditions.
• Often involves detailed investigation and analysis of the symptoms or issues.
• Helps to provide solutions or recommendations based on the diagnosis.

Descriptive Research Design

• Used to describe characteristics of a population or phenomenon being studied.
• Involves systematically gathering information to present a clear picture of the current state of affairs.
• Does not focus on determining cause-and-effect relationships.

Q12: Arrange the prefatory information of report writing in a logical sequence. 

A. Executive Summary

B. Authorization Statement

C. Title Page

D. Letter of transmittal

E. Table of Contents

Choose the correct answer from the options given below:

(a) A, B, C, D, E

(b) C, D, E, B, A

(c) D, C, B, A, E

(d) D, B, C, E, A

Ans: c

Sol: The correct answer is 'D, C, B, A, E'

Letter of Transmittal (D):

• This is the first document in the prefatory section, providing an initial communication between the author and the recipient.
• It includes a brief overview of the subject matter, the purpose of the report, and any acknowledgments or special circumstances related to the report's creation.

Title Page (C):

• Following the letter of transmittal, the title page comes next, which presents the report's title, the author's name, the date of submission, and any other pertinent information such as the organization's name.
• This page serves as the formal introduction to the report, making it clear and identifiable.

Authorization Statement (B):

• This document provides necessary details about the authorization of the report.
• It might include the authority under which the report was prepared, the purpose, and any directives given.

Executive Summary (A):

• The executive summary comes next and offers a brief synopsis of the entire report.
• This section includes the main findings, conclusions, and recommendations, allowing readers to quickly grasp the key points without reading the full document.

Table of Contents (E):

• The table of contents follows the executive summary and lists all sections and subsections of the report, along with their page numbers.
• This helps readers navigate through the report quickly and locate specific sections with ease.

Q13: Arrange the following Institutions in ascending order of their year of establishment. 

A. SEBI

B. Reserve Bank of India

C. State Bank of India

D. SIDBI

E. NABARD

Choose the correct answer from the options given below:

(a) C, B, E, A, D

(b) B, C, E, D, A

(c) B, C, A, E, D

(d) E, B, C, D, A

Ans: b

Sol: The correct answer is 'B, C, E, D, A'

Reserve Bank of India (B):

• The Reserve Bank of India (RBI) was established in 1935. It serves as the central banking institution of India, which controls the issuance and supply of the Indian rupee and manages the country's main payment systems.

State Bank of India (C):

• The State Bank of India (SBI) traces its origins to the Bank of Calcutta in 1806, making it the oldest commercial bank in the Indian subcontinent. It was rebranded as the State Bank of India in 1955.

NABARD (E):

• The National Bank for Agriculture and Rural Development (NABARD) was established in 1982. It focuses on the development of agriculture and rural areas in India through credit support and other financial services.

SIDBI (D):

• The Small Industries Development Bank of India (SIDBI) was established in 1990. It primarily aims to aid the growth and development of micro, small, and medium enterprises (MSMEs) in India.

SEBI (A):

• The Securities and Exchange Board of India (SEBI) was established in 1992. It is the regulatory body for the securities and commodity market in India under the jurisdiction of the Ministry of Finance.

Other Related Points

• Each of these institutions plays a crucial role in the economic and financial architecture of India, contributing to various sectors such as banking, agriculture, rural development, MSME development, and capital markets.
• Understanding the establishment timeline of these institutions provides insights into the historical development of India's financial and regulatory framework.

Q14: Which of the following statements are true regarding the buying dynamics of individual consumers? 

A. To successfully compete in the market and create customer value, managers must fully understand the reality rather than theory of consumer behavior.

B. In marketing, perceptions are more important than reality because they affect consumers actual behavior.

C. People emerge with same perceptions of the same object.

D. Consumers are constructive decision makers and are subject to many contextual influences.

E. A consumer's buying behavior is influenced by cultural, social and personal factors. Of theses personal factors exert the broadest and deepest influence on people's perception and desires.

Choose the correct answer from the options given below:

(a) B, D Only

(b) A, B, D Only

(c) A, C, E Only

(d) B, C, D, E Only

Ans: b

Sol: The correct answer is A, B & D Only.

Q15: Which one of the following is the developmental role of RBI? 

(a) Formulates, implements and monitors the monetary policy

(b) Prescribes broad parameters of banking operations

(c) Issues, exchanges end destroys currency notes

(d) Performs a wide range of promotional functions to support national objectives

Ans: d

Sol: The correct answer is - Performs a wide range of promotional functions to support national objectives

Performs a wide range of promotional functions to support national objectives

• The Reserve Bank of India (RBI) undertakes various developmental and promotional functions to support national objectives and the broader economic environment.
• It plays a critical role in the development of financial markets, including money, government securities, and forex markets.
• The RBI promotes financial inclusion by facilitating the establishment of banking infrastructure in underbanked areas and promoting digital transactions.
• It supports small and medium-sized enterprises (SMEs) by providing guidelines and schemes that assist in their growth and development.
• The RBI also conducts research and provides critical data and policy inputs to the government for effective economic planning and policy formulation.

Other Related Points

Formulates, implements and monitors the monetary policy

• The RBI is responsible for formulating and implementing monetary policy to maintain price stability and ensure adequate flow of credit to productive sectors.
• This involves setting benchmark interest rates, managing liquidity in the economy, and controlling inflation.

Prescribes broad parameters of banking operations

• The RBI lays down broad guidelines for banking operations to ensure financial stability and consumer protection.
• It regulates and supervises the banking sector, ensuring that banks adhere to prudent practices and maintain adequate capital.

Issues, exchanges, and destroys currency notes

• The RBI is the sole issuer of currency notes in India, except for one-rupee notes and coins issued by the Ministry of Finance.
• It ensures the availability of clean and authentic currency to the public and manages the currency in circulation.
• The RBI also withdraws and destroys currency notes that are no longer fit for circulation.

Q16: Which one of the following consists of comparing entries in the books of account with documentary evidence in support thereof. 

(a) Internal check

(b) Internal control

(c) Vouching

(d) Verification

Ans: c

Sol: The correct answer is - Vouching

Vouching

• Vouching is the process of checking the entries in the books of account with the relevant documentary evidence to ensure their accuracy and authenticity.
• It involves verifying the validity of transactions recorded in the books by examining supporting documents such as invoices, receipts, vouchers, and other relevant records.
• This process helps in detecting errors, frauds, and ensuring that the transactions are recorded in the correct accounting period.
• Vouching is fundamental to auditing and helps in maintaining the integrity of financial records.

Other Related Points

Internal Check

• Internal check refers to the system of arranging the duties of staff members in such a way that the work performed by one person is automatically checked by another.
• This system helps in preventing and detecting errors and frauds in the course of business operations.
• It is an integral part of internal control but is more focused on the day-to-day operations and division of work.

Internal Control

• Internal control is a broader concept that includes all the policies and procedures adopted by the management to ensure the orderly and efficient conduct of business.
• It aims to safeguard assets, prevent fraud, ensure the accuracy and completeness of accounting records, and ensure compliance with applicable laws and regulations.
• Internal controls include internal checks, internal audits, and other control mechanisms.

Verification

• Verification is the process of confirming the existence, ownership, valuation, and presentation of assets and liabilities in the financial statements.
• It involves physical inspection of assets, reviewing documentation, and confirming balances with third parties.
• Verification ensures that the financial statements provide a true and fair view of the financial position of the entity.

Q17: Which of the following are the characteristics of a high customer centric Organization? 

A. Market driven

B. Process Oriented

C. Value Driven

D. Price Driven

E. Making competitor irrelevant

Choose the correct answer from the options given below:

(a) A, B, E Only

(b) A, C, E Only

(c) B, C, D Only

(d) C, D, E Only

Ans: b

Sol: The correct answer is 2) A, C, E Only.

Let's analyze each characteristic:

Market Driven

• Market-driven organizations focus on understanding and meeting the needs and preferences of their customers.
• Reason for inclusion: This characteristic aligns with being customer-centric as it involves responding to market demands and prioritizing customer needs.

Process Oriented

• Process-oriented organizations emphasize optimizing and following set processes to achieve efficiency and consistency.
• Reason for exclusion: While important for operational efficiency, being process-oriented does not directly address the focus on customer needs and preferences.

Value Driven

• Value-driven organizations prioritize delivering exceptional value to their customers, often through superior products, services, and customer experiences.
• Reason for inclusion: This characteristic is central to customer-centricity as it focuses on creating and delivering value to customers.

Price Driven

• Price-driven organizations compete primarily on the basis of price, often focusing on cost-cutting and offering lower prices than competitors.
• Reason for exclusion: While price is a factor in customer decisions, being price-driven does not necessarily equate to a customer-centric approach, which involves a broader focus on value and customer satisfaction.

Making competitor irrelevant

• Organizations that aim to make competitors irrelevant focus on creating unique value propositions that set them apart in ways that competitors cannot easily replicate.
• Reason for inclusion: This characteristic aligns with customer-centricity by emphasizing innovation and differentiation that meet unique customer needs and preferences, thus reducing the focus on direct competition.

Therefore, the characteristics that fit a high customer-centric organization in this context are A: Market Driven, C: Value Driven, and E: Making competitor irrelevant. This makes option 2: "A, C, E Only" the correct choice.

Q18: What is the value of Standard Deviation of first seven natural numbers? 

(a) √48

(b) 2

(c) √8

(d) 4

Ans: b

Sol: The correct answer is - 2

Calculating Standard Deviation of the first seven natural numbers:

The first seven natural numbers are 1, 2, 3, 4, 5, 6, and 7.

Calculate the mean (average) of these numbers:

• Mean = (1 + 2 + 3 + 4 + 5 + 6 + 7) / 7 = 28 / 7 = 4
• Calculate the variance:
  • Variance = [(1-4)² + (2-4)² + (3-4)² + (4-4)² + (5-4)² + (6-4)² + (7-4)²] / 7
  • Variance = [9 + 4 + 1 + 0 + 1 + 4 + 9] / 7
  • Variance = 28 / 7 = 4

Standard Deviation is the square root of the variance:

• Standard Deviation = √4 = 2

Other Related Points

Standard Deviation:

• Standard Deviation is a measure of the amount of variation or dispersion of a set of values.
• A low standard deviation indicates that the values tend to be close to the mean, while a high standard deviation indicates that the values are spread out over a wider range.

Q19: Which of the following statements are true regarding admission of a new partner? 

A. According to section 25 of the Indian Partnership Act, 1932, a person can be admitted as partner.

B. New Profit-sharing ratio is the ratio in which all partners, including new partners, will share future profits and losses of the firm.

C. New Profit Share = Profit Share Sacrificed - Old Profit Share

D. Sacrificing Ratio = Old Profit Share - New Profit Share

E. The Profit or loss which arises from Revaluation Account will be transferred to partner's capital account

Choose the correct answer from the options given below:

(a) B, D and E Only

(b) A, B and C Only

(c) B, C and D Only

(d) C, D and E Only

Ans: c

Sol: The correct answer is B, C, and D Only.

• C. New Profit Share = Profit Share Sacrificed - Old Profit Share:
• This is a key formula when calculating the new profit-sharing ratio after a new partner is admitted. The old partners have to "sacrifice" a portion of their profits to accommodate the new partner. 
• D. Sacrificing Ratio = Old Profit Share - New Profit Share:
• This directly follows from statement C. The difference between the old profit share and the new profit share of an existing partner represents the amount they are sacrificing. 
• E. The Profit or loss which arises from Revaluation Account will be transferred to partner's capital account:

When assets and liabilities are revalued upon the admission of a new partner, the resulting profit or loss is typically transferred to the capital accounts of the existing partners. 

Why the other options are incorrect:

• A. According to section 25 of the Indian Partnership Act, 1932, a person can be admitted as partner:
• While Section 25 of the Indian Partnership Act deals with the powers and liabilities of partners, it doesn't specifically state that a person can be admitted as a partner. The consent of all existing partners is required for admission, as stated in other sources. 
• B. New Profit-sharing ratio is the ratio in which all partners, including new partners, will share future profits and losses of the firm:
• While the new profit-sharing ratio will include the new partner, it doesn't necessarily mean all partners will share equally. The specific ratio is determined based on agreed-upon terms. 

Q20: The Securities Exchange Board of India (SEBI) regulates and supervises the securities through 

A. Regulations

B. Rules

C. Guidelines

D. Scheme

E. Orders

Choose the correct answer from the options given below:

(a) A, B, E Only

(b) B, C, D Only

(c) A, B, C, D, E

(d) A, C, D, E Only

Ans: c

Sol: The correct answer is A, B, C, D, E.

Let's analyze each factor:

Regulations

• Regulations are a key tool that SEBI uses to control and govern the securities market. They provide the framework within which securities must be issued, traded, and settled.
• Reason for inclusion: Regulations are fundamental to the functioning of SEBI and are explicitly mentioned as part of its mandate.

Rules

• Rules are detailed directives and guidelines that stem from the regulations. They provide specific instructions and standards for compliance.
• Reason for inclusion: Rules are an essential component of the regulatory framework that SEBI enforces.

Guidelines

• Guidelines are advisories issued by SEBI to ensure that market participants adhere to best practices. They often cover areas not explicitly detailed in regulations or rules.
• Reason for inclusion: Guidelines help in the smooth functioning and compliance of the securities market.

Scheme

• Schemes are structured plans or programs initiated by SEBI to achieve specific regulatory or developmental objectives within the securities market.
• Reason for inclusion: Schemes are part of SEBI's broader strategy to enhance market efficiency and protect investors.

Orders

• Orders are legally binding decisions and instructions issued by SEBI to enforce compliance and take corrective actions against violations.
• Reason for inclusion: Orders are critical enforcement tools that ensure adherence to SEBI’s regulations and rules.

Therefore, SEBI regulates and supervises the securities market through a combination of A: Regulations, B: Rules, C: Guidelines, D: Schemes, and E: Orders. This makes option 3: "A, B, C, D, E" the correct choice.

Q21: Which one of the following is value added service of EXIM Bank? 

(a) Export Facilitation

(b) Export product Development

(c) Workshops and Seminars

(d) Export Marketing

Ans: c

Sol: The correct answer is - Workshops and Seminars

Workshops and Seminars

• EXIM Bank organizes workshops and seminars as part of its value-added services to educate and support exporters.
• These events provide information on international trade, export financing, and global market trends.
• They serve as platforms for networking and knowledge sharing among exporters, industry experts, and policymakers.
• Through these initiatives, EXIM Bank aims to enhance the competitiveness of Indian exporters in the global market.

Other Related Points

Export Facilitation

• EXIM Bank offers various services to facilitate exports, such as providing export credit, insurance, and advisory services.
• However, this is a core service rather than a value-added service.

Export Product Development

• This involves developing new products for export markets, often supported by R&D activities.
• While EXIM Bank may support product development through financing, it is not classified as a value-added service.

Export Marketing

• Export marketing involves strategies to promote products in foreign markets.
• EXIM Bank assists in this area through financial products and services, but it is not specifically a value-added service.

Q22: Arrange the organizational aspect of employees need hierarchy in the increasing order. 

A. Cohesive and supportive co-workers

B. Work place conditions

C. Work safety

D. Responsibilities

E. Job Challenge

Choose the correct answer from the options given below:

(a) C, B, D, A, E

(b) B, C, A, D, E

(c) A, C, B, E, D

(d) B, A, C, D, E

Ans: b

Sol: The correct answer is 'B, C, A, D, E'

Work place conditions (B):

• This is the most basic and fundamental need for employees. It involves the physical conditions of the workplace such as cleanliness, lighting, and temperature.
• Ensuring good workplace conditions is essential for the basic comfort and health of employees, which is the foundation of their need hierarchy.

Work safety (C):

• After basic workplace conditions, the next priority is ensuring the safety of the employees.
• This includes measures to prevent accidents and injuries, providing a secure environment where employees feel protected.

Cohesive and supportive co-workers (A):

• Once safety is ensured, the focus shifts to social needs such as having supportive and friendly co-workers.
• This aspect is crucial for creating a positive and collaborative workplace culture, which enhances job satisfaction and team performance.

Responsibilities (D):

• As employees' basic and social needs are met, they start seeking higher-order needs such as responsibilities.
• Having clear and meaningful responsibilities gives employees a sense of purpose and importance within the organization.

Job Challenge (E):

• The highest level in the hierarchy involves the need for job challenge and personal growth.
• Employees seek roles that challenge their skills, provide opportunities for learning, and allow them to achieve their full potential.

Other Related Points

• Understanding the organizational aspect of employees' need hierarchy helps employers to create a better work environment that aligns with employees' needs and aspirations.
• By addressing these needs in the correct order, organizations can enhance employee satisfaction, motivation, and productivity.
• This hierarchical approach is inspired by Maslow's hierarchy of needs, which is widely used in organizational behavior and human resource management to understand and address employee motivation.

Q23: Arrange the following points step by step regarding computation of Gross Total Income 

A. Computation of Gross Total Income

B. Set off and carry forward of Losses

C. Clubbing of Income of spouse, minor child etc.

D. Computation of Income under each head of Income

E. Determination of Residential Status

Choose the correct answer from the options given below:

(a) E, D, C, B, A

(b) A, B, C, D, E

(c) C, D, E, A, B

(d) B, C, D, E, A

Ans: a

Sol: The correct answer is 'E, D, C, B, A'

Determination of Residential Status (E):

• This is the initial step in computing Gross Total Income as the individual's residential status determines their tax liability under the Income Tax Act.
• Residential status helps in deciding the scope of income that will be taxable in India. For instance, residents are taxed on their global income, while non-residents are taxed only on income received or accrued in India.

Computation of Income under each head of Income (D):

• After determining the residential status, the next step is to compute income under the different heads of income, which include salaries, house property, business/profession, capital gains, and other sources.
• This step involves calculating the income separately for each head, taking into account all eligible deductions and allowances.

Clubbing of Income of spouse, minor child etc. (C):

• In this step, the income of certain other persons such as the spouse or minor child is included in the taxpayer's income, based on specific provisions under the Income Tax Act.
• This is done to prevent tax evasion through the transfer of income to family members who are in lower tax brackets.

Set off and carry forward of Losses (B):

• After computing the income and clubbing provisions, losses if any, are set off against eligible income. This involves both intra-head and inter-head adjustments.
• If losses cannot be fully set off in the current year, they are carried forward to subsequent years for set off against future income, as per the rules specified under the Income Tax Act.

Computation of Gross Total Income (A):

• The final step is to aggregate the income computed under all heads, after considering clubbing provisions and set-off and carry forward of losses, to arrive at the Gross Total Income.
• This Gross Total Income is the sum total before any deductions under Chapter VI-A (like 80C, 80D, etc.) are applied to compute the taxable income.

Q24: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - IV, B - III, C - II, D - I

(b) A - III, B - IV, C - II, D - I

(c) A - IV, B - II, C - III, D - I

(d) A - II, B - IV, C - I, D - III

Ans: a

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

Social (A) matches with Teacher (IV).

• Explanation: Social personalities are typically outgoing, enjoy helping others, and are skilled at teaching and counseling. Therefore, they are well-suited for occupations like teaching, where they can engage with students and support their learning.
• These individuals often seek roles that involve interaction with people and providing service to the community.

Conventional (B) matches with Corporate Manager (III).

• Explanation: Conventional personalities are orderly, detail-oriented, and prefer structured tasks. Corporate Managers require these traits to manage operations, maintain order, and ensure organizational efficiency.
• Individuals with conventional personalities excel in roles that involve managing processes, adhering to rules, and maintaining order within an organization.

Investigative (C) matches with Mathematician (II).

• Explanation: Investigative personalities are curious, analytical, and enjoy solving complex problems. Mathematicians require these traits as they engage in research, analysis, and problem-solving in their field.
• These individuals thrive in roles that involve critical thinking, research, and the pursuit of knowledge.

Realistic (D) matches with Mechanic (I).

• Explanation: Realistic personalities are practical, hands-on, and enjoy working with tools and machinery. Mechanics need these traits to diagnose and repair mechanical issues effectively.
• Individuals with realistic personalities prefer roles that involve physical activity and tangible results.

Other Related Points

• Understanding personality types and their congruent occupations can help individuals choose careers that align with their strengths and preferences, leading to higher job satisfaction and success.
• Employers can use this information to assign roles that best match their employees’ personality traits, improving overall productivity and morale.

Q25: Arrange the following channels in the increasing order of value-addition of sales. 

A. Retail Store

B. Sales force

C. Internet

D. Value-added partners

E. Distributors

Choose the correct answer from the options given below:

(a) A, E, C, D, B

(b) C, A, E, B, D

(c) C, A, E, D, B

(d) B, C, A, E, D

Ans: c

Sol: The correct answer is 'C, A, E, D, B'

Internet (C):

• The Internet is generally the channel with the least value addition in terms of sales. This is because it usually involves direct transactions with minimal additional services or personal interaction.
• It primarily involves automated processes and self-service options for customers, making it the most cost-effective and least value-added channel.

Retail Store (A):

• Retail stores add more value compared to the internet because they offer a physical space where customers can interact with products and receive in-person assistance from sales staff.This channel allows for a better customer experience, which can lead to increased customer satisfaction and loyalty.

Distributors (E):

• Distributors add further value by providing logistics, warehousing, and distribution services. They serve as intermediaries between manufacturers and retailers or end customers, ensuring products are available in various locations.
• They also help in managing inventory and providing credit facilities to retailers, adding more value in the supply chain.

Value-added partners (D):

• Value-added partners contribute more significantly by offering specialized services or enhancements to the product that add value beyond the basic offering.
• These partners often provide integration, customization, or additional services that enhance the overall value proposition of the product.

Sales force (B):

• The sales force represents the highest level of value addition in sales channels. They provide personalized service, build strong customer relationships, and offer tailored solutions that meet specific customer needs.
• This channel involves a high level of engagement and support, often leading to higher customer satisfaction and retention rates.

Other Related Points

• Value addition in sales refers to the process by which different channels enhance the basic product or service offering, providing additional benefits to the customer.
• The hierarchy of value addition typically depends on the level of personal interaction, customization, and additional services provided through each channel.
• Understanding the value addition of various sales channels helps organizations optimize their sales strategies and choose the most effective channels for their target market.

Q26: Match the LIST-I with LIST-II 

Choose the correct answer from the options given below:

(a) A - IV, B - III, C - II, D - I

(b) A - I, B - II, C - III, D - IV

(c) A - I, B - III, C - II, D - IV

(d) A - III, B - IV, C - I, D - II

Ans: a

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

Section 194 of the Income Tax Act, 1961 (A) matches with Dividend (IV).

• Explanation: Section 194 of the Income Tax Act pertains to the deduction of tax at source on dividend payments made to shareholders.
• This section mandates companies to deduct TDS at the prescribed rate before distributing dividends to their shareholders.
• Key Point: It ensures that tax is collected at the time of payment itself, thus preventing evasion and ensuring timely collection of taxes.

Section 194C of the Income Tax Act, 1961 (B) matches with Payment to contractor and sub-contractor (III).

• Explanation: Section 194C deals with the deduction of TDS on payments made to contractors and sub-contractors.
• This section ensures that tax is deducted at source on payments made for carrying out any work, including supply of labor for carrying out any work.
• Key Point: This provision helps in bringing contractors and sub-contractors into the tax net and ensures tax compliance.

Section 194E of the Income Tax Act, 1961 (C) matches with Payment to the non-resident sportsman (II).

• Explanation: Section 194E pertains to the deduction of TDS on payments made to non-resident sportsmen, including athletes, sports associations, and institutions.
• This section ensures that tax is deducted at source on any income earned by non-resident sportsmen in India.
• Key Point: It helps in collecting tax on the earnings of non-resident sportsmen, ensuring they contribute to the Indian tax system.

Section 194F of the Income Tax Act, 1961 (D) matches with Payment on account of repurchase of units by mutual fund (I).

• Explanation: Section 194F deals with the deduction of TDS on payments made for the repurchase of units by mutual funds.
• This section mandates the deduction of tax at source on any amount distributed to investors upon repurchase of their units by mutual funds.
• Key Point: It ensures that tax is collected on the income received by investors from mutual funds, thereby preventing tax evasion.

Q27: Which of the following are the features of Treasury Bills? 

A. Negotiable Securities

B. Issued at par and are repaid at premium on maturity.

C. High liquidity on account of short tenure

D. Assured Yield

E. High transaction cost

Choose the correct answer from the options given below:

(a) A, B, E Only

(b) A, C, D Only

(c) B, C, D Only

(d) A, C, D, E Only

Ans: b

Sol: The correct answer is A, C, D Only.

ExplanationLet's analyze each feature:

Negotiable Securities

• Treasury Bills are indeed negotiable instruments, meaning they can be bought and sold in the secondary market before their maturity.
• Reason for inclusion: This characteristic allows for liquidity and flexibility in trading, making it a key feature of Treasury Bills.

Issued at par and are repaid at premium on maturity

• Treasury Bills are not issued at par; instead, they are issued at a discount to their face value and redeemed at par on maturity.
• Reason for exclusion: This statement is incorrect as it does not accurately describe the nature of Treasury Bills.

High liquidity on account of short tenure

• Due to their short maturity periods (typically 91 days, 182 days, or 364 days), Treasury Bills are highly liquid instruments.
• Reason for inclusion: The short tenure ensures that investors can quickly convert them to cash without significant price risk.

Assured Yield

• Treasury Bills provide a guaranteed return since they are backed by the government, making the yield predictable.
• Reason for inclusion: The risk-free nature of these securities ensures that investors receive the promised return upon maturity.

High transaction cost

• Treasury Bills generally have lower transaction costs compared to other financial instruments.
• Reason for exclusion: This feature is not characteristic of Treasury Bills as they are known for their cost-effectiveness.

Therefore, the features that correctly describe Treasury Bills are A: Negotiable Securities, C: High liquidity on account of short tenure, and D: Assured Yield. This makes option 2: "A, C, D Only" the correct choice.

Q28: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - III, C - II, D - IV

(b) A - I, B - II, C - IV, D - III

(c) A - III, B - I, C - II, D - IV

(d) A - III, B - II, C - I, D - IV

Ans: c

Sol: The correct answer is 'A-III, B-I, C-II, D-IV'.

Adam Smith (A) matches with The Wealth of Nations (III).

• Explanation: Adam Smith is considered the father of modern economics. His seminal work, "The Wealth of Nations," laid the foundations for classical economics and introduced important concepts such as the invisible hand and the division of labor.
• Smith's ideas on free markets and competition remain influential to this day.

A. Marshall (B) matches with Principles of Economics (I).

• Explanation: Alfred Marshall was a key figure in the development of microeconomics. His book, "Principles of Economics," introduced concepts such as price elasticity of demand and consumer surplus, which are fundamental in economic theory.
• Marshall's work helped to formalize economic analysis and bridge classical and neoclassical economics.

J.R. Hicks (C) matches with Value and Capital (II).

• Explanation: John Richard Hicks made significant contributions to general equilibrium theory and welfare economics. His book, "Value and Capital," is a cornerstone in economic theory, addressing issues of value, capital, and interest rates.
• Hicks' work laid the groundwork for later developments in economic theory, including the IS-LM model.

Wassily Leontief (D) matches with Input Output Economics (IV).

• Explanation: Wassily Leontief developed the input-output model, which analyzes the relationships between different sectors of an economy. His work in "Input Output Economics" provides a method to study the flow of goods and services in an economy and has applications in economic planning and policy.
• Leontief's contributions have been used to understand economic structures and the impact of economic changes.

Q29: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - IV, B - III, C - II, D - I

(b) A - III, B - IV, C - II, D - I

(c) A - I, B - II, C - III, D - IV

(d) A - I, B - III, C - II, D - IV

Ans: a

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

Exchange Rate (A) matches with It is a price of one unit of a currency in terms of some units of another currency (IV).

• Explanation: The exchange rate is the rate at which one currency can be exchanged for another. It tells you how much of one currency you can get with a unit of another currency. For example, if the exchange rate between USD and EUR is 0.85, it means 1 USD can be exchanged for 0.85 EUR.
• Key Point: Exchange rates can be influenced by a variety of factors including interest rates, economic stability, and geopolitical events.

Forward market (B) matches with Where transactions are entered into for settlement on a future date (III).

• Explanation: The forward market is a financial market in which participants can enter into contracts to buy or sell assets at a specified future date for a price agreed upon today. It is commonly used for hedging risks and speculating.
• Key Point: Forward contracts are customizable and can be tailored to the needs of the parties involved, unlike futures contracts which are standardized.

Arbitrage (C) matches with It is the process of making risk less profits by exploiting price differences of assets in different market (II).

• Explanation: Arbitrage involves the simultaneous purchase and sale of an asset in different markets to profit from a difference in the asset's price. It is a strategy used by traders to exploit price discrepancies and make risk-free profits.
• Key Point: Arbitrage opportunities are usually short-lived as they get corrected quickly by market forces.

Direct Quotation (D) matches with It refers to the price of one unit of foreign currency in terms of some units of home currency (I).

• Explanation: In a direct quotation, the price of a unit of foreign currency is expressed in terms of the domestic currency. For example, if 1 EUR costs 1.12 USD, then the direct quotation for EUR/USD is 1.12.
• Key Point: Direct quotation is the most common method used in foreign exchange markets for quoting currency exchange rates.

Q30: Prepaid Insurance is which type of account? 

(a) Real Account

(b) Personal Account

(c) Nominal Account

(d) Real and Nominal Both

Ans: b

Sol: The correct answer is - Personal Account

Prepaid Insurance

• Prepaid Insurance is classified as a Personal Account in accounting.
• Personal Accounts represent accounts that relate to individuals, companies, firms, or associations.
• Prepaid Insurance is considered a Personal Account because it represents an amount paid in advance to a person or entity (the insurance company) for services to be received in the future.
• In accounting terms, Personal Accounts adhere to the Golden Rule: "Debit the receiver, credit the giver."

Other Related Points

Real Account

• Real Accounts relate to tangible and intangible assets owned by the company, such as land, buildings, machinery, patents, etc.
• The Golden Rule for Real Accounts is: "Debit what comes in, credit what goes out."

Nominal Account

• Nominal Accounts pertain to income, expenses, losses, and gains within a specific accounting period.
• These accounts are closed at the end of each accounting period by transferring their balances to the Profit and Loss Account.
• The Golden Rule for Nominal Accounts is: "Debit all expenses and losses, credit all incomes and gains."

Real and Nominal Both

• Accounts cannot be classified as both Real and Nominal as they serve different purposes in accounting.
• Real Accounts deal with assets, while Nominal Accounts deal with income and expenses.

Q31: Which of the following tool is used for projecting supply of personnel? 

(a) Trend Analysis

(b) Ratio Analysis

(c) Markov Analysis

(d) Managerial Judgement

Ans: c

Sol: The correct answer is - Markov Analysis

Markov Analysis

• Markov Analysis is a statistical technique used to predict the future behavior of a variable based on its past behavior.
• In the context of human resource planning, it is used to project the supply of personnel by analyzing the patterns of employee movement within an organization.
• This involves calculating the probabilities of employees moving from one state (e.g., job position, department) to another over a given period.
• It helps in understanding and predicting workforce trends, aiding in effective manpower planning.

Other Related Points

Trend Analysis

• Trend Analysis involves examining historical data to identify patterns or trends over time.In HR, it can be used to forecast future staffing needs based on past employment trends and business growth.
• However, it does not specifically project the supply of personnel but rather the demand.

Ratio Analysis

• Ratio Analysis involves using ratios to compare different financial metrics and make projections.
• In HR, it might be used to assess the ratio of employees to output or other performance metrics.
• It is more commonly used for financial analysis rather than projecting personnel supply.

Managerial Judgement

• Managerial Judgement relies on the intuition and experience of managers to make projections or decisions.
• While valuable, it is more subjective and less data-driven compared to techniques like Markov Analysis.

Q32: In which one of the following the effectiveness of brainstorming as group decision making technique is high? 

(a) Social Pressure

(b) Task Orientation

(c) Potential for interpersonal conflict

(d) Money Costs

Ans: b

Sol: The correct answer is - Task Orientation

Task Orientation

• Task orientation focuses on the completion of tasks and achieving specific goals during brainstorming sessions.
• Groups with high task orientation are better able to stay on topic and generate relevant ideas, improving the effectiveness of brainstorming.
• Effective brainstorming requires a clear objective and structured approach to ensure that all participants contribute useful and actionable ideas.
• When participants are task-oriented, they are more likely to collaborate efficiently and maintain focus, thereby enhancing the quality and quantity of ideas produced.

Other Related Points

Social Pressure

• Social pressure can negatively impact brainstorming as it may inhibit participants from sharing unconventional or creative ideas due to fear of judgment or rejection.
• High social pressure can lead to conformity, where individuals align their opinions with the majority, reducing the diversity of ideas.

Potential for Interpersonal Conflict

• Interpersonal conflict during brainstorming can create a hostile environment, making it difficult for participants to collaborate effectively.
• Conflicts can distract the group from the main task, reducing the overall productivity and quality of ideas.

Money Costs

• While financial resources are important for many organizational activities, the cost of conducting brainstorming sessions is generally low.
• Effectiveness of brainstorming is more influenced by group dynamics and facilitation than by monetary investment.

Q33: The Capital Adequacy Ratio (CAR) for Indian Public Sector banks set by RBI is : 

(a) 9%

(b) 10%

(c) 11%

(d) 12%

Ans: d

Sol: The correct answer is - 0.12

Capital Adequacy Ratio (CAR)

• The Capital Adequacy Ratio (CAR) is a measure of a bank's capital, ensuring that the bank can absorb a reasonable amount of loss and complies with statutory capital requirements.
• The Reserve Bank of India (RBI) has set the CAR for Indian Public Sector banks at 0.12 (12%). This requirement is aligned with international standards set by the Basel III guidelines.
• CAR is calculated as the ratio of a bank's capital to its risk-weighted assets.
• It serves as a key indicator of a bank's health and its ability to meet its obligations, protect depositors, and promote stability and efficiency of the financial system.

Other Related Points

Other Options:

0.09 (9%)

• This is below the minimum requirement set by the RBI and the Basel III norms.

0.1 (10%)

• This was a previous requirement but has been updated in line with international standards.

0.11 (11%)

• This figure also falls short of the current requirement by the RBI for public sector banks.

Basel III Norms

• Basel III is an international regulatory framework designed to improve the regulation, supervision, and risk management within the banking sector.The norms aim to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.
• The implementation of Basel III requires banks to hold a minimum CAR of 12%, ensuring better risk management and stability.

Q34: A proposal requires a cash outflow of Rs. 18,500 and is expected to generate cash inflows of Rs. 8,000, Rs. 6,000, Rs. 4,000, Rs. 2,000 and Rs. 2,000 over next 5 years respectively. The payback period is 

(a) 4 Years

(b) 3.25 Years

(c) 3.50 Years

(d) 4.25 Years

Ans: b

Sol: The correct answer is - 3.25 Years

Payback Period Calculation

• The payback period is the time it takes for a project to recover its initial investment from its net cash inflows.
• Initial cash outflow: Rs. 18,500

Annual cash inflows:

• Year 1: Rs. 8,000
• Year 2: Rs. 6,000
• Year 3: Rs. 4,000
• Year 4: Rs. 2,000
• Year 5: Rs. 2,000

Cumulative cash inflows:

• End of Year 1: Rs. 8,000
• End of Year 2: Rs. 14,000 (Rs. 8,000 + Rs. 6,000)
• End of Year 3: Rs. 18,000 (Rs. 14,000 + Rs. 4,000)
• End of Year 4: Rs. 20,000 (Rs. 18,000 + Rs. 2,000)
• The initial investment of Rs. 18,500 is recovered between Year 3 and Year 4.
• The remaining amount to be recovered at the end of Year 3 is Rs. 500 (Rs. 18,500 - Rs. 18,000).
• In Year 4, the cash inflow is Rs. 2,000.
• Time to recover remaining Rs. 500 in Year 4 = Rs. 500 / Rs. 2,000 = 0.25 years.
• Therefore, total payback period = 3 years + 0.25 years = 3.25 years.

Other Related Points

Other Options Overview

• 4 Years: This assumes the entire amount is recovered at the end of Year 4, which is incorrect as it is recovered earlier.
• 3.50 Years: This is a miscalculation as the remaining amount is recovered in 0.25 years, not 0.50 years.
• 4.25 Years: This is an overestimation since the payback period is reached before the end of Year 4.

Q35: Which of the following is a situation of adverse balance of trade? 

(a) Import more than exports

(b) Exports more than imports

(c) Exports equal to imports

(d) Export Surplus

Ans: a

Sol: The correct answer is - Import more than exports

Import more than exports

• An adverse balance of trade, also known as a trade deficit, occurs when a country's imports exceed its exports.
• This situation means the country is buying more from other countries than it is selling to them.
• A trade deficit can lead to a depletion of the country's foreign exchange reserves and may indicate economic issues such as lack of competitiveness in international markets.
• It may also result in the country accumulating debt to pay for the excess imports.

Other Related Points

Exports more than imports

• This situation is known as a trade surplus, where a country exports more than it imports.
• A trade surplus indicates a positive balance of trade, meaning the country is earning more from its exports than it is spending on imports.

Exports equal to imports

• This situation represents a balanced trade, where the value of exports is equal to the value of imports.
• A balanced trade indicates that a country is neither in a trade deficit nor a trade surplus.

Export Surplus

• Similar to "exports more than imports," it refers to a situation where the value of exports exceeds the value of imports.
• It signifies a favorable balance of trade and indicates the country is generating income from its international trade activities.

Q36: Which of the following are the disadvantages of Graphics rating scale as an appraisal tool? 

A. Standards may be unclear

B. Halo Effect

C. Time consuming

D. Difficult to develop

E. Leniency

Choose the correct answer from the options given below:

(a) A, B, E Only

(b) A, B, C Only

(c) B, C, E Only

(d) A, C, D, E Only

Ans: a

Sol: The correct answer is 1) A, B, E Only.

Let's analyze each factor:

Standards may be unclear

• In a graphics rating scale, the standards for evaluation might not be clearly defined, leading to varied interpretations.
• Reason for inclusion: This ambiguity can result in inconsistent appraisals.

Halo Effect

• This occurs when the evaluator's overall impression of the employee influences ratings across all areas.
• Reason for inclusion: This bias can distort the accuracy of the appraisal.

Time consuming

• While some appraisal methods can be time-consuming, the graphics rating scale is generally considered efficient.
• Reason for exclusion: The graphics rating scale is not typically noted for being time-consuming.

Difficult to develop

• Developing the graphics rating scale itself is not inherently difficult compared to other appraisal tools.
• Reason for exclusion: This is not a common disadvantage of the graphics rating scale.

Leniency

• Evaluators may give higher ratings than warranted to avoid conflict or make the employee feel good.
• Reason for inclusion: This leniency can affect the reliability of the appraisal results.

Therefore, the disadvantages of the graphics rating scale as an appraisal tool that are most commonly noted are A: Standards may be unclear, B: Halo Effect, and E: Leniency. This makes option 1: "A, B, E Only" the correct choice.

Q37: Which section of the Income Tax Act 1961 mentions unilateral relief? 

(a) 90

(b) 89

(c) 91

(d) 92

Ans: c

Sol: The correct answer is - 91

Section 91 of the Income Tax Act 1961

• Section 91 provides unilateral relief to taxpayers who have paid tax in a foreign country with which India does not have a double taxation avoidance agreement (DTAA).
• Unilateral relief is intended to avoid double taxation of the same income, ensuring that the income is not taxed twice, once in the foreign country and again in India.
• The relief is available if the taxpayer is a resident of India and has earned income from a foreign country.
• This section ensures that taxpayers can claim relief from the income tax paid in the foreign country by providing a credit against their Indian tax liability.

Other Related Points

Section 90 of the Income Tax Act 1961

• Section 90 deals with agreements with foreign countries or specified territories for the avoidance of double taxation of income and for the prevention of fiscal evasion.
• This section empowers the Indian government to enter into DTAA with other countries to provide relief from double taxation.
• The DTAA specifies the taxing rights of each country and helps in allocating the income between the countries.

Section 89 of the Income Tax Act 1961

• Section 89 provides relief to taxpayers who receive salary in arrears or in advance, which results in an increase in their taxable income and thereby a higher tax liability.
• This section allows for tax relief by spreading the income over the years to which it pertains, thereby reducing the tax burden on the taxpayer.

Section 92 of the Income Tax Act 1961

• Section 92 pertains to transfer pricing regulations and is aimed at ensuring that international transactions between associated enterprises are conducted at arm's length prices.
• The section ensures that the taxable income of entities involved in international transactions is computed based on fair market value to prevent profit shifting and tax evasion.

Q38: Which of the following refers to an attempt to avoid payment of taxes by using illegal means? 

(a) Tax Management

(b) Tax Planning

(c) Tax Avoidance

(d) Tax Evasion

Ans: d

Sol: The correct answer is - Tax Evasion

Tax Evasion

• Tax evasion refers to the illegal practice of not paying taxes by not reporting all taxable income or by taking unallowed deductions.
• This practice involves deliberate misrepresentation or concealment of information to the tax authorities to reduce tax liability.
• Common methods include underreporting income, inflating deductions, hiding money in offshore accounts, and not filing tax returns.
• Tax evasion is a criminal offense and can result in substantial penalties, fines, and imprisonment.

Other Related Points

Tax Management

• Tax management involves the efficient handling of tax matters within the legal framework.
• This includes timely filing of returns, maintaining proper records, and compliance with tax regulations.
• The goal is to minimize tax liability through proper planning and adherence to tax laws.

Tax Planning

• Tax planning refers to the process of analyzing one's financial situation to maximize tax benefits and minimize tax liabilities within legal boundaries.
• This involves the strategic use of tax deductions, credits, and exemptions to reduce the amount of taxes owed.
• Effective tax planning can lead to significant savings and ensure compliance with tax laws.

Tax Avoidance

• Tax avoidance involves using legal methods to minimize tax liability.
• This includes utilizing tax deductions, credits, and loopholes in the tax code to reduce the amount of taxes owed.
• While tax avoidance is legal, it differs from tax evasion, which is illegal.

Q39: Which of the following are true for Skewness 

A. It is a measure of symmetry of a frequency distribution.

B. For the right-skewed distribution, the mean is to be to the right of median.

C. For the right-skewed distribution, the mean is to be to the right of mode.

D. For the right-skewed distribution, the mean is to be to the left of median.

E. For the right-skewed distribution, the mean is to be to the left of mode.

Choose the correct answer from the options given below:

(a) A, B, C Only

(b) A, C, D Only

(c) A, D, E Only

(d) A, B, D Only

Ans: a

Sol: The correct answer is A, B, C Only.
Let's analyze each statement:

A. It is a measure of symmetry of a frequency distribution.

• Skewness is indeed a measure of the symmetry, or lack thereof, of a frequency distribution. A perfectly symmetrical distribution has a skewness of zero.
• Reason for inclusion: This statement correctly defines skewness as a measure of symmetry.

B. For the right-skewed distribution, the mean is to be to the right of median.

• In a right-skewed (positively skewed) distribution, the tail on the right side is longer or fatter, and the mean is greater than the median.
• Reason for inclusion: This statement correctly describes the relationship between the mean and the median in a right-skewed distribution.

C. For the right-skewed distribution, the mean is to be to the right of mode.

• In a right-skewed distribution, the mean is typically greater than the mode due to the long tail on the right side.
• Reason for inclusion: This statement correctly describes the relationship between the mean and the mode in a right-skewed distribution.

D. For the right-skewed distribution, the mean is to be to the left of median.

• This statement is incorrect because in a right-skewed distribution, the mean is actually to the right of the median, not to the left.
• Reason for exclusion: This statement incorrectly describes the relationship between the mean and the median in a right-skewed distribution.

E. For the right-skewed distribution, the mean is to be to the left of mode.

• This statement is incorrect because in a right-skewed distribution, the mean is to the right of the mode, not to the left.
• Reason for exclusion: This statement incorrectly describes the relationship between the mean and the mode in a right-skewed distribution.

Therefore, the statements that are true for skewness in the given context are A: It is a measure of symmetry of a frequency distribution, B: For the right-skewed distribution, the mean is to be to the right of median, and C: For the right-skewed distribution, the mean is to be to the right of mode. This makes option 1: "A, B, C Only" the correct choice.

Q40: _________ is the result of the Bretton Wood Conference of nations held in 1944. 

(a) WTO

(b) UNCTAD

(c) IBRD

(d) ADB

Ans: c

Sol: The correct answer is - IBRD (International Bank for Reconstruction and Development)
 Note:  In the above question, option - 2 has been replaced from IMF to UNCTAD because, as per the official answer key option 2 - IMF and option 3 - IBRD both were correct. 

• IBRD (International Bank for Reconstruction and Development)

The IBRD was established in 1944 during the Bretton Woods Conference.

• Its primary aim was to help Europe rebuild after World War II by providing financial and technical assistance for reconstruction and development projects.
• IBRD is one of the five member institutions that compose the World Bank Group.
• The institution now focuses on reducing poverty and supporting development by providing loans and grants to middle-income and creditworthy low-income countries.

Other Related Points

IMF (International Monetary Fund)

• The IMF was also established during the Bretton Woods Conference in 1944.
• It aims to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries to transact with each other.
• The IMF provides financial assistance and advice to member countries facing economic difficulties.

WTO (World Trade Organization)

• The WTO was established much later, in 1995, and is not a result of the Bretton Woods Conference.
• It deals with the global rules of trade between nations to ensure that trade flows as smoothly, predictably, and freely as possible.

ADB (Asian Development Bank)

• The ADB was established in 1966 to promote economic and social development in Asia and the Pacific.
• It provides loans, technical assistance, grants, and equity investments to promote social and economic development.

Q41: Which of the following are taxes (GST) applicable in the case of supply of goods 

I. From West Bengal to Chandigarh

II. From Puducherry to Chennai

Note: CGST : Central Goods and Services Tax

IGST : Integrated Goods and Services Tax

UTGST : Union territory Goods and Services Tax

SGST : State Goods and Services Tax

(a) I. CGST

II. IGST

(b) I. IGST

II. IGST

(c) I. UTGST

II. UTGST

(d) I. SGST

II. UTGST

Ans: b

Sol: The correct answer is Option 2.

From West Bengal to Chandigarh

• When goods are supplied from one state to another, the applicable tax is IGST (Integrated Goods and Services Tax).
• This is because it is an inter-state supply of goods, and IGST is levied on such transactions.
• In this case, the supply is from West Bengal (a state) to Chandigarh (a union territory), making it an inter-state supply.
• Therefore, IGST is applicable.

From Puducherry to Chennai

• When goods are supplied within the same state or union territory, the applicable taxes are CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) or UTGST (Union Territory Goods and Services Tax).
• Puducherry is a union territory, and Chennai is in Tamil Nadu.
• Since Puducherry and Chennai are not in the same state or union territory, the transaction is considered inter-state.
• Therefore, IGST is applicable for this supply as well.

Thus, for both supplies, from West Bengal to Chandigarh and from Puducherry to Chennai, IGST is applicable. This makes Option 2 the correct choice.

Q42: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - IV, B - III, C - II, D - I

(b) A - III, B - IV, C - I, D - II

(c) A - II, B - I, C - III, D - IV

(d) A - I, B - II, C - III, D - IV

Ans: a

Sol: The correct answer is 'A-IV, B-III, C-II, D-I'.

Addressee (A) matches with Section 2(1)(f) of the Information Technology Act 2000 (IV).

• Explanation: An addressee is defined in Section 2(1)(f) of the Information Technology Act 2000 as the person who is intended by the originator to receive the electronic record, but does not include any intermediary.

Adjudicating Officer (B) matches with Section 2(1)(c) of the Information Technology Act 2000 (III).

• Explanation: An Adjudicating Officer is defined in Section 2(1)(c) of the Information Technology Act 2000 as the adjudicating officer appointed under sub-section (1) of Section 46.

Affixing Electronic Signature (C) matches with Section 2(1)(d) of the Information Technology Act 2000 (II).

• Explanation: Affixing electronic signature is defined in Section 2(1)(d) of the Information Technology Act 2000 as the adoption of any methodology or procedure by a person for the purpose of authenticating an electronic record by means of digital signature.

Asymmetric Crypto System (D) matches with Section 2(1)(b) of the Information Technology Act 2000 (I).

• Explanation: An asymmetric crypto system is defined in Section 2(1)(b) of the Information Technology Act 2000 as a system of a secure key pair consisting of a private key for creating a digital signature and a public key to verify the digital signature.

Other Related Points

• The Information Technology Act 2000 was enacted to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as "electronic commerce".
• The Act also aims to facilitate electronic filing of documents with the Government agencies and further to amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers' Books Evidence Act, 1891, and the Reserve Bank of India Act, 1934.

Q43: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - II, B - III, C - I, D - IV

(b) A - II, B - III, C - IV, D - I

(c) A - III, B - II, C - I, D - IV

(d) A - IV, B - III, C - II, D - I

Ans: a

Sol: The correct answer is 'A-II, B-III, C-I, D-IV'.

Theory of Comparative Cost Advantage (A) matches with David Ricardo (II).

• Explanation: David Ricardo formulated the Theory of Comparative Cost Advantage, which explains how countries benefit from specializing in and exporting goods for which they have a lower opportunity cost of production, and importing goods for which other countries have a comparative advantage.
• This theory highlights the benefits of trade and how it can increase overall economic efficiency and welfare.

Theory of Opportunity Cost (B) matches with Haberler (III).

• Explanation: Gottfried Haberler is known for his contributions to the Theory of Opportunity Cost, which refines and expands upon earlier theories of comparative advantage by emphasizing the cost of foregone alternatives when resources are allocated to a particular use.
• This theory provides a clearer understanding of the true costs of economic decisions.

Theory of Factor Endowment (C) matches with Heckscher & Ohlin (I).

• Explanation: The Heckscher-Ohlin model, developed by Eli Heckscher and Bertil Ohlin, proposes that countries export goods that utilize their abundant and cheap factors of production, and import goods that require factors that are scarce and expensive domestically.
• This theory helps explain patterns of international trade based on countries' resource endowments.

Theory of Absolute Advantage (D) matches with Adam Smith (IV).

• Explanation: Adam Smith introduced the Theory of Absolute Advantage, which suggests that a country should specialize in producing and exporting goods for which it is more efficient (i.e., it can produce at a lower cost) than other countries, and import goods where other countries are more efficient.
• This theory laid the foundation for modern trade theory by promoting the benefits of specialization and trade based on efficiency.

Q44: Quasi contracts are based on the doctrine of 

(a) Unjust Enrichment

(b) Just Enrichment

(c) Unjust Enrichment.

(d) Misrepresentation

Ans: a

Sol: The correct answer is - Unjust Enrichment

Unjust Enrichment

• Quasi contracts are legal constructs imposed by courts to prevent one party from being unjustly enriched at the expense of another.
• This doctrine ensures that a person who benefits from someone else's loss or expense must compensate the other party.
• It is applied in situations where there is no actual contract between the parties, but equity demands restitution.
• Examples include situations where one party mistakenly receives money or property that rightfully belongs to another.

Other Related Points

Just Enrichment

• This term suggests a fair or equitable gain, which is not applicable in the context of quasi contracts as they address unfair or unjust gains.

Unjust Enrichment

• This appears to be a typographical error and does not relate to the legal principle of quasi contracts.

Misrepresentation

• Misrepresentation involves providing false information to induce another party into a contract. It is a separate legal concept dealing with the validity of contracts, not with unjust Enrichment.

Q45: Which of the following points are considered as salient features of Limited Liability Partnership (LLP)? 

A. LLP is a body corporate

B. LLP is a legal entity separate from its partners

C. LLP does not enjoy a perpetual succession

D. Partners of LLP have unlimited liability

E. LLP is an artificial legal person

Choose the correct answer from the options given below:

(a) A, B and E Only

(b) B, C and D Only

(c) C, D and E Only

(d) C and D Only

Ans: a

Sol: The correct answer is A, B and E Only.

Let's analyze each factor:

LLP is a body corporate

• An LLP (Limited Liability Partnership) is considered a body corporate, meaning it is a separate legal entity created by law.
• Reason for inclusion: This is a defining characteristic of an LLP, distinguishing it from other forms of partnerships.

LLP is a legal entity separate from its partners

• An LLP has its own legal identity, separate from its partners, allowing it to own property, incur debts, sue, and be sued in its own name.
• Reason for inclusion: This separateness is a fundamental feature that provides limited liability protection to its partners.

LLP does not enjoy a perpetual succession

• Perpetual succession means the continuity of the entity despite any changes in its membership. LLPs do enjoy perpetual succession.
• Reason for exclusion: The statement is incorrect; therefore, it is not a salient feature of an LLP.

Partners of LLP have unlimited liability

• In an LLP, partners have limited liability, meaning they are not personally liable for the debts of the LLP beyond their contributions.
• Reason for exclusion: The statement is incorrect; hence, it cannot be considered a feature of LLPs.

LLP is an artificial legal person

• An LLP is recognized by law as an artificial legal person, which allows it to perform various legal activities.
• Reason for inclusion: This is a characteristic feature of an LLP, aligning it with other corporate entities.

Therefore, the salient features of an LLP include A: LLP is a body corporate, B: LLP is a legal entity separate from its partners, and E: LLP is an artificial legal person. This makes option 1: "A, B and E Only" the correct choice.

Q46: Standard Deviation of Sampling Distribution is called 

(a) Sampling Error

(b) Probable Error

(c) Standard Error

(d) Measurable Error

Ans: c

Sol: The correct answer is - Standard Error

Standard Error

• The Standard Error (SE) of a statistic (like the sample mean) is the standard deviation of its sampling distribution.
• It measures the variability of the sample statistic from the population parameter.
• SE decreases as the sample size increases, reflecting more precise estimates of the population parameter.
• It is crucial for constructing confidence intervals and conducting hypothesis tests.

Other Related Points

Sampling Error

• Sampling Error is the difference between the sample statistic and the actual population parameter.
• It arises due to the fact that a sample is a subset of the population and may not perfectly represent the population.

Probable Error

• Probable Error is a statistical measure that gives an estimate of the range within which the true value of a parameter lies with a certain probability.
• It is less commonly used in modern statistical analysis compared to standard error.

Measurable Error

• Measurable Error is not a standard statistical term. It generally refers to any error in measurement that can be quantified.
• In the context of sampling distribution, it is not a relevant term.

Q47: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - II, C - III, D - IV

(b) A - I, B - II, C - IV, D - III

(c) A - I, B - III, C - IV, D - II

(d) A - IV, B - II, C - III, D - I

Ans: b

Sol: The correct answer is 'A-I, B-II, C-IV, D-III'.

Higher Indifference Curve (A) matches with Higher Satisfaction (I).

• Explanation: A higher indifference curve represents a higher level of satisfaction because it shows combinations of goods that provide a consumer with more utility compared to a lower indifference curve.

Convex Indifference Curve (B) matches with Diminishing Marginal Rate of Substitution (II).

• Explanation: The concept of the diminishing marginal rate of substitution is observed along an indifference curve, where as one moves down the curve, the willingness to substitute one good for another decreases.

Price Line (C) matches with Constant Price Ratio (IV).

• Explanation: A price line (or budget line) represents the various combinations of two goods that a consumer can afford given their income and the prices of the goods, reflecting a constant price ratio between the two goods.

Indifference Curve (D) matches with Same satisfaction on the curve (III).

• Explanation: An indifference curve illustrates all combinations of two goods that provide the consumer with the same level of satisfaction or utility.

Q48: Which of the following are True for a random variables? 

A. A random variable is a certain quantity, whose value depends on chance.

B. A continuous random variable can assume at most two countable number of values.

C. A discrete random variable can assume at most a countable number of values.

D. A random variable is a function of the simple space.

E. A random variable is a uncertain quantity, whose value depends on chance.

Choose the correct answer from the options given below:

(a) A, B, D Only

(b) A, B, C Only

(c) B, C, D Only

(d) C, D, E Only

Ans: d

Sol: The correct answer is C, D, E Only.

Let's analyze each statement:

A. A random variable is a certain quantity, whose value depends on chance.

• This statement is incorrect. A random variable is not a certain quantity; it is an uncertain quantity whose value depends on chance.

B. A continuous random variable can assume at most two countable number of values.

• This statement is incorrect. A continuous random variable can assume an uncountable number of values, typically any value within a given range.

C. A discrete random variable can assume at most a countable number of values.

• This statement is correct. A discrete random variable can take on a countable number of distinct values.

D. A random variables is a function of the sample space.

• This statement is correct. A random variable is indeed a function that maps outcomes from the sample space to numerical values.

E. A random variables is a uncertain quantity, whose value depends on chance.

• This statement is correct. A random variable is an uncertain quantity, whose value depends on chance.

Therefore, the statements that are true for a random variable are C: A discrete random variable can assume at most a countable number of values, D: A random variables is a function of the sample space, and E: A random variables is a uncertain quantity, whose value depends on chance. This makes option 4: "C, D, E Only" the correct choice.

Q49: Total production is maximum when 

(a) Average production is maximum

(b) Marginal production is maximum

(c) Marginal production is zero

(d) Average production is zero

Ans: c

Sol: The correct answer is - Marginal production is zero

Marginal production is zero

• Marginal production refers to the additional output produced by adding one more unit of input.
• Total production is maximized when marginal production is zero because adding more inputs does not increase total production beyond this point.
• This occurs at the peak of the total production curve, where any further addition of inputs will either maintain or decrease total production.

Other Related Points

Average production

• Average production is the total production divided by the number of units of input used.
• It is a measure of productivity per unit of input but does not directly indicate the point of maximum total production.

Marginal production

• When marginal production is maximum, it indicates the point where the addition of one more unit of input increases total production at the highest rate.
• This is an important phase in production but does not signify the maximum total production.

Average production is zero

• If average production is zero, it means no output is being produced, which is not relevant for determining maximum total production.

Q50: Which one of the following is not a social network of social media platform? 

(a) Facebook

(b) Blogs

(c) Twitter

(d) YouTube

Ans: d

Sol: The correct answer is Blogs

Blogs:

• Blogs are typically considered a form of content platform rather than a social network. They allow users to publish articles, share information, and provide commentary on various topics.
• While blogs can have social features such as comments and sharing options, they primarily serve as a medium for individuals and organizations to disseminate information, rather than facilitating direct social interactions and networking.

Other Related Points
Facebook, Twitter, and YouTube: These platforms are designed to foster social interactions and networking among users. They provide features such as user profiles, friend or follower connections, messaging, and content sharing.

• Facebook is a comprehensive social networking site that allows users to connect, share content, and interact with each other through posts, comments, and messaging.
• Twitter is a microblogging platform where users can post short messages (tweets) and engage with others through retweets, likes, and replies, making it highly interactive and social.
• YouTube is a video-sharing platform that enables users to upload, share, and view videos. It also provides social features like comments, likes, and subscriptions, facilitating interaction between content creators and viewers.

Q51: Arrange the following Securities Exchange Board of India (SEBI) regulations in the ascending year of their enactment. 

A. ICDR regulations

B. Intermediaries regulations

C. Real estate investment Trusts regulations

D. Buy - Back of Securities by listed companies regulations

E. Listing Obligations and Disclosures Requirements Regulations

Choose the correct answer from the options given below:

(a) D, B, A, C, E

(b) D, A, E, C, B

(c) A, C, D, E, B

(d) B, A, E, D, C

Ans: a

Sol: The correct answer is 'D, B, A, C, E'

Buy-Back of Securities by Listed Companies Regulations (D):

• These regulations were introduced by SEBI in 1998 to provide a legal framework for companies to buy back their shares from the market, ensuring transparency and protecting investors' interests.
• The Buy-Back regulations help companies manage their capital structure effectively and return excess cash to shareholders.

Intermediaries Regulations (B):

• Enacted in 2008, these regulations govern the registration and functioning of various intermediaries in the securities market, such as brokers, merchant bankers, and registrars.
• The objective is to ensure fair dealings and protect the interests of investors by maintaining high standards of integrity and professionalism among market intermediaries.

ICDR Regulations (A):

• The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, set the guidelines for companies to raise capital through public issues, rights issues, and preferential issues.
• These regulations aim to ensure that companies provide accurate and adequate information to investors, facilitating informed investment decisions.

Real Estate Investment Trusts (REITs) Regulations (C):

• Introduced in 2014, these regulations provide a framework for the establishment and operation of REITs, which allow investors to pool their money to invest in income-generating real estate assets.
• REITs regulations help in the development of the real estate sector and provide investors with an additional investment avenue.

Listing Obligations and Disclosure Requirements (LODR) Regulations (E):

• Enacted in 2015, the LODR Regulations consolidate and streamline the listing obligations and disclosure requirements for listed entities.
• The aim is to enhance transparency, ensure timely and accurate disclosure of information, and protect investors' interests by providing a comprehensive regulatory framework.

Other Related Points

• SEBI: The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity markets in India under the jurisdiction of the Ministry of Finance, Government of India. It was established in 1988 and given statutory powers through the SEBI Act, 1992.
• Importance of SEBI Regulations: SEBI regulations are critical in ensuring the smooth functioning of the securities market, protecting investors' interests, and promoting the development of the market. These regulations help maintain market integrity and foster investor confidence.

Q52: Which one of the following refers to the composition of long term funds such as debentures, long term borrowing, preference shares, equity shares in the capitalization of a company? 

(a) Cost of capital

(b) Capital budgeting

(c) Working Capital

(d) Capital structure

Ans: d

Sol: The correct answer is - Capital structure

Capital Structure

• Capital structure refers to the mix of different forms of long-term financing used by a company, such as equity shares, preference shares, debentures, and long-term loans.
• The composition and proportion of these sources of funds can significantly impact the risk and return profile of a company.
• An optimal capital structure is one that balances the cost of capital and the financial risk to maximize the value of the firm.
• Determining the right mix involves strategic financial planning and analysis of market conditions, interest rates, and the company's operational performance.

Other Related Points

Cost of Capital

• The cost of capital represents the return that investors expect from investing in the company’s securities, including equity and debt.
• It is used by companies to evaluate new projects and investments, ensuring that the returns exceed the cost.

Capital Budgeting

• Capital budgeting is the process of planning and managing a company's long-term investments in projects and assets.It involves evaluating potential projects or investments to determine their feasibility and profitability.

Working Capital

• Working capital represents the difference between a company's current assets and current liabilities.
• It is a measure of a company's short-term liquidity and operational efficiency.

Q53: Which of the following curves cannot be U-shaped? 

(a) A.V.C Curve

(b) A.F.C Curve

(c) A.C. Curve

(d) M.C. Curve

Ans: b

Sol: The correct answer is - A.F.C Curve

A.F.C Curve

• A.F.C stands for Average Fixed Cost.
• The Average Fixed Cost (A.F.C) curve is not U-shaped; instead, it continuously declines as the output increases.
• This decline happens because fixed costs remain constant regardless of output level, so when output increases, the fixed cost per unit decreases.

Other Related Points

A.V.C Curve

• A.V.C stands for Average Variable Cost.
• The Average Variable Cost (A.V.C) curve is typically U-shaped due to the law of diminishing marginal returns.
• Initially, as production increases, A.V.C decreases, reaches a minimum point, and then starts increasing.

A.C. Curve

• A.C stands for Average Cost.
• The Average Cost (A.C) curve is also U-shaped, reflecting both fixed and variable costs.
• Initially, the A.C decreases due to spreading fixed costs over more units, but after a certain point, it increases due to rising variable costs.

M.C. Curve

• M.C stands for Marginal Cost.
• The Marginal Cost (M.C) curve is typically U-shaped due to the law of diminishing returns.
• Initially, M.C decreases, reaches a minimum point, and then starts increasing as additional units of output are produced.

Q54: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - II, C - III, D - IV

(b) A - III, B - I, C - IV, D - II

(c) A - II, B - III, C - I, D - IV

(d) A - IV, B - I, C - III, D - II

Ans: b

Sol: The correct answer is 'A - III, B - I, C - IV, D - II'.

Z - Test (A) matches with Tests the significance of the different between average of two large sized sample groups (Parametric data) (III).

• Explanation: The Z-Test is used to determine if there is a significant difference between the means of two large independent sample groups. It is applicable when the data follows a normal distribution and the sample size is large.
• The Z-Test is particularly useful for hypothesis testing in parametric data scenarios.
• Key Point: Z-Tests are commonly used in comparing sample means to a known population mean or comparing the means of two groups.

Chi - Square (B) matches with Tests the significance of the association between two attributes (I).

• Explanation: The Chi-Square test is used to determine if there is a significant association between two categorical variables. It assesses whether the observed frequencies in a contingency table differ from the expected frequencies.
• This test is widely used in hypothesis testing for categorical data to test relationships between variables.
• Key Point: Chi-Square tests are essential in fields like social sciences, marketing, and epidemiology to test for independence or goodness of fit.

ANOVA (C) matches with Compares the difference in the mean values of more than two sample groups (Parametric data) (IV).

• Explanation: Analysis of Variance (ANOVA) is used to compare the means of three or more independent groups to determine if at least one group mean is different from the others. It is a parametric test that assumes normal distribution and homogeneity of variances.
• ANOVA is crucial for experiments and studies involving multiple groups to test for significant differences in their means.
• Key Point: ANOVA helps in identifying factors that influence variations within data, making it vital for experimental design and analysis.

Mann-Whitney Test (U-test) (D) matches with Compares the difference in the mean values of two independent sample groups (non-parametric data) (II).

• Explanation: The Mann-Whitney U-test is a non-parametric test used to compare the differences between the medians of two independent groups. It is used when the data does not follow a normal distribution.
• This test is suitable for ordinal data or continuous data that does not meet parametric assumptions.
• Key Point: The Mann-Whitney U-test is useful in scenarios where data is skewed or has outliers, providing a robust alternative to parametric tests.

Q55: A contract of Indemnity is a : 

(a) Wagering Agreement

(b) Quasi Contract

(c) Void Contract

(d) Contingent Contract

Ans: d

Sol: The correct answer is - Contingent Contract

Contingent Contract

• A contract of indemnity is a type of contingent contract.
• A contingent contract is a contract to do or not to do something if some event, collateral to such contract, does or does not happen.
• In a contract of indemnity, the indemnifier promises to compensate the indemnified party for losses or damages upon the occurrence of a specific event.
• For example, insurance contracts are typically indemnity contracts where the insurer agrees to indemnify the insured for losses arising from certain specified events.

Other Related Points

Wagering Agreement

• A wagering agreement is a contract where two parties agree that a certain sum of money or other stake will be paid or received depending on the outcome of an uncertain event.
• Wagering agreements are generally considered void and unenforceable under the law because they are based on chance rather than any legal consideration.

Quasi Contract

• A quasi contract is not a contract but an obligation imposed by law to prevent unjust enrichment.
• It is created by courts where no actual contract exists, but one party is unjustly enriched at the expense of another.

Void Contract

• A void contract is an agreement that is not legally enforceable from the beginning.
• This can be due to factors like illegality, lack of capacity, or other reasons that make the contract invalid.

Q56: The Consumer Protection Act came into force first on 

(a) 14 June, 1986

(b) 20 January, 1987

(c) 24 December, 1986

(d) 13 July, 1987

Ans: c

Sol: The correct answer is - Wed Dec 24 1986 00:00:00 GMT+0530 (India Standard Time)

The Consumer Protection Act

• The Consumer Protection Act, 1986, is a significant legislation in India aimed at protecting consumer rights and ensuring fair trade practices.
• The Act provides for the establishment of consumer councils and other authorities for the settlement of consumer disputes and related matters.
• It was introduced to address the grievances of consumers and to promote and protect their rights.

Enforcement Date

• The correct enforcement date of the Consumer Protection Act, 1986, is December 24, 1986.
• On this date, the Act came into force, marking a significant step towards consumer rights protection in India.

Other Related Points

Importance of the Act

• The Consumer Protection Act provides consumers with a mechanism to address grievances and disputes related to defective goods, deficient services, and unfair trade practices.
• It ensures that consumers have access to a system that is both inexpensive and prompt in addressing their concerns.

Consumer Rights under the Act

• The Act enshrines several key rights for consumers, including the right to be informed, the right to safety, the right to choose, the right to be heard, the right to redress, and the right to consumer education.
• These rights empower consumers to make informed decisions and seek justice in case of exploitation or unfair practices.

Q57: Which one of the following sections of the Income Tax Act, 1961 defines method for computing Arm Length Price? 

(a) 90 C

(b) 91 C

(c) 92 C

(d) 93 C

Ans: c

Sol: The correct answer is - Section 92C

Section 92C of the Income Tax Act, 1961

• This section lays down the guidelines for determining the Arm's Length Price (ALP) in international transactions and specified domestic transactions.
• The ALP is crucial for ensuring that transactions between related parties are conducted as if they were between unrelated parties, thus preventing profit shifting and tax evasion.
• Various methods for computing ALP include Comparable Uncontrolled Price (CUP), Resale Price Method (RPM), Cost Plus Method (CPM), Profit Split Method (PSM), and Transactional Net Margin Method (TNMM).
• The selection of the most appropriate method depends on the nature of the transaction, availability of data, and other relevant factors.

Other Related Points

Section 90

• This section deals with agreements with foreign countries or specified territories for the relief of double taxation, exchange of information, and recovery of income tax.
• It does not pertain to the method for computing Arm's Length Price.

Section 91

• This section provides relief in respect of income-tax on income arising outside India in cases where no agreement under Section 90 exists.
• It addresses unilateral relief from double taxation, not the computation of Arm's Length Price.

Section 93

• This section deals with the avoidance of income by transfer of income to non-residents.
• It focuses on preventing tax avoidance through income transfers, not on the computation of Arm's Length Price.

Q58: Arrange the following stages of conflict process in the proper sequence. 

A. Outcomes

B. Potential opposition or incompatibility

C. Behaviour

D. Cognition and personalization

E. Intentions

Choose the correct answer from the options given below:

(a) D, B, E, C, A

(b) B, D, E, C, A

(c) A, B, E, D, C

(d) D, C, B, E, A

Ans: b

Sol: The correct answer is 'B, D, E, C, A'

Potential opposition or incompatibility (B):

• This is the initial stage of the conflict process where the potential for conflict arises. It involves identifying conditions that can create conflict such as communication issues, structural disagreements, or personal variables.
• These factors set the stage for conflict by introducing elements of opposition or incompatibility between parties.

Cognition and personalization (D):

• In this stage, the potential conflict is perceived and felt. Cognition involves the awareness of the conflict, while personalization involves the emotional involvement in the conflict.
• Parties involved start recognizing the conflict and its impact, leading to emotional responses such as frustration or tension.

Intentions (E):

• This stage involves the decision on how to act in response to the conflict. It includes intentions to either compete, collaborate, avoid, accommodate, or compromise.
• Intentions are the plans or strategies that individuals or groups develop to deal with the conflict.

Behaviour (C):

• This stage involves the actual behavior exhibited in the conflict. It includes the actions taken by the parties involved, which can range from open aggression to constructive problem-solving.
• It is the visible and tangible manifestation of the conflict.

Outcomes (A):

• The final stage involves the outcomes of the conflict, which can be either functional or dysfunctional. Functional outcomes can lead to improved performance and innovation, while dysfunctional outcomes can lead to reduced group cohesion and performance.
• Outcomes determine the end result of the conflict process and its impact on the organization or individuals involved.

Other Related Points

• The conflict process is crucial for understanding how conflicts develop and can be managed.
• By identifying and addressing each stage, organizations can better handle conflicts, leading to more effective and harmonious working environments.
• Proper conflict management can enhance team dynamics, improve problem-solving, and foster innovation.

Q59: Which one of the following is not a behavioral symptom of stress? 

(a) Lower Job Satisfaction

(b) Lower Job Performance

(c) Higher Absenteeism

(d) Higher Labour Turnover

Ans: a

Sol: The correct answer is - Lower Job Satisfaction

Lower Job Satisfaction

• Job satisfaction refers to the level of contentment employees feel about their work, which can affect their performance and overall well-being.
• While lower job satisfaction can be a result of stress, it is not a direct behavioral symptom of stress. It is more of an attitudinal or emotional response.
• Behavioral symptoms are direct actions or behaviors that can be observed, whereas job satisfaction is more about an internal feeling or attitude.

Other Related Points

Lower Job Performance

• This is a direct behavioral symptom of stress. When individuals are stressed, they may find it difficult to concentrate, make decisions, or complete tasks efficiently, leading to lower performance.
• Stress can impact cognitive functions and energy levels, causing a decline in productivity and effectiveness.

Higher Absenteeism

• Stress often leads to increased absenteeism as employees may take more sick days due to stress-related illnesses or burnout.
• Physical symptoms such as headaches, fatigue, and other stress-induced conditions can cause employees to miss work more frequently.

Higher Labour Turnover

• High levels of stress can lead to employees leaving their jobs, resulting in higher labor turnover. This is a behavioral response where employees seek to escape a stressful work environment.
• Retention rates drop when the workplace is perceived as highly stressful, leading to increased recruitment and training costs for the organization.

Q60: Which one of the following refers to the firms investment in the current assets? 

(a) Gross Working Capital

(b) Net Working Capital

(c) Gross Current liabilities

(d) Operating cycle

Ans: a

Sol: The correct answer is - Gross Working Capital

Gross Working Capital

• Gross working capital refers to the total investment a firm makes in its current assets.
• Current assets include cash, inventory, accounts receivable, and other assets that are expected to be converted to cash within a year.
• It is an important measure for assessing a company's short-term financial health and liquidity.
• Gross working capital is crucial for the day-to-day operations of a business as it ensures that the company has sufficient funds to meet its short-term obligations and operational needs.

Other Related Points

Net Working Capital

• Net working capital is calculated as current assets minus current liabilities.
• It indicates the short-term financial health and operational efficiency of a company.
• Positive net working capital means the company can cover its short-term liabilities with its short-term assets.

Gross Current Liabilities

• Gross current liabilities refer to the total of all short-term obligations a firm owes.
• This includes accounts payable, short-term debt, and other liabilities due within one year.

Operating Cycle

• The operating cycle measures the time it takes for a company to convert its inventory into cash through sales.
• It includes the time taken to purchase inventory, sell products, and collect receivables from customers.
• A shorter operating cycle indicates that the company can quickly turn over its inventory and collect cash from sales.

Q61: Which of the following is not the characteristics of theory of comparative cost advantage? 

A. There is full employment of the factors of production

B. There are two countries, two commodities and two factors of production

C. There are two countries, two commodities and one factor of production

D. There is absence of transportation cost

E. The countries are capital intensive only.

Choose the correct answer from the options given below:

(a) A, B, C Only

(b) B, C, D Only

(c) A, C, D Only

(d) A, B, E Only

Ans: c

Sol: The correct answer is 3) A, C, D Only.

Let's analyze each factor:

A. There is full employment of the factors of production (Included)

• The theory of comparative cost advantage assumes full employment of resources. This assumption is integral because it implies that all resources within an economy are being utilized efficiently, and the focus is on optimizing production and trade given these constraints.

B. There are two countries, two commodities and two factors of production (Excluded)

• The classical theory of comparative advantage, as formulated by David Ricardo, typically involves a simplified model with only one factor of production, usually labor. Including two factors of production (such as labor and capital) extends beyond the classical model and is part of more complex models like the Heckscher-Ohlin theory. Therefore, this is not a characteristic of Ricardo's classical theory.

C. There are two countries, two commodities and one factor of production (Included)

• Ricardo's model is based on the assumption of two countries and two commodities, with one factor of production, usually labor. This simplification helps to illustrate the principle of comparative advantage by focusing solely on labor productivity differences between the two countries.

D. There is an absence of transportation cost (Included)

• To simplify the analysis, the theory assumes there are no transportation costs. This assumption directs the emphasis on production efficiency and comparative advantages without the added complexity of shipping costs affecting trade patterns.

E. The countries are capital intensive only (Excluded)

• The theory of comparative cost advantage does not specify that countries are capital intensive. Ricardo's theory primarily focuses on labor as the factor of production, and it does not distinguish between labor and capital-intensive countries. This assumption is more relevant to later trade theories that consider multiple factors of production.

Therefore, the characteristics of the theory of comparative cost advantage that are included are A: There is full employment of the factors of production, C: There are two countries, two commodities, and one factor of production, and D: There is an absence of transportation cost. This makes option 3, "A, C, D Only," the correct choice.

Q62: If new contract is substituted in place of an existing contract, it is called 

(a) Waiver

(b) Remission

(c) Novation

(d) Alteration

Ans: c

Sol: The correct answer is - Novation

Novation

• Novation is the act of replacing an existing contract with a new one, with the consent of all parties involved.
• This typically involves substituting a new party for one of the original parties to the contract, relieving the original party of their obligations.
• Novation requires the agreement of all parties involved, as it entails creating a new contract and extinguishing the old one.
• It is commonly used in corporate finance, real estate transactions, and other business dealings where contractual obligations need to be transferred.

Other Related Points

Waiver

• A waiver is the voluntary relinquishment or surrender of some known right or privilege.
• In contract law, a waiver allows a party to choose to relinquish certain rights or claims without nullifying the entire contract.
• It does not create a new contract but rather modifies the terms of the existing one.

Remission

• Remission refers to the cancellation or reduction of a debt or obligation.
• It is often used in the context of forgiving debts or reducing the amount owed.
• Remission does not involve creating a new contract but rather altering the terms of the existing contract.

Alteration

• Alteration involves making changes to the terms and conditions of an existing contract.
• Unlike novation, alteration does not replace the original contract with a new one.
• It simply modifies specific terms while keeping the original contract intact.

Q63: Determine the P/V ratio from the following particulars. 

Total Fixed Cost Rs 12,000

Actual Sales Rs 48,000

Margin of Safety Rs 8,000

(a) 20%

(b) 25%

(c) 30%

(d) 40%

Ans: c

Sol: The correct answer is 30%

Determining the P/V ratio:

• Contribution Margin (C) is calculated as: Sales - Variable Costs. However, in the absence of variable costs, we can use the Margin of Safety (MOS) and Fixed Costs (F) to determine Contribution Margin.
• We know that Margin of Safety (MOS) = Actual Sales - Break-even Sales. Therefore, Break-even Sales = Actual Sales - Margin of Safety = Rs 48,000 - Rs 8,000 = Rs 40,000.
• The Contribution Margin (C) at Break-even Point (BEP) is equal to the Fixed Costs, which is Rs 12,000.
• The P/V ratio (Profit/Volume ratio) is given by the formula: P/V ratio = Contribution Margin / Sales. At BEP, this is: P/V ratio = Fixed Costs / Break-even Sales = Rs 12,000 / Rs 40,000 = 0.3 = 30%

Other Related Points

Importance of P/V ratio in Financial Analysis:

• The P/V ratio is a key indicator of the relationship between profit and sales volume. A higher P/V ratio indicates a higher profitability for each unit of sales.
• This ratio helps in determining the break-even point, making decisions about product pricing, and understanding the impact of changes in sales volume on profitability.
• Businesses use the P/V ratio to analyze the impact of variable costs and to ensure that they cover fixed costs and generate profit.

Q64: When price of a good X rises, the demand for substitute good Y will; 

(a) Rise

(b) Fall

(c) Remain unchanged

(d) Falls initially and then rises

Ans: a

Sol: The correct answer is - Rise

When price of a good X rises

• If the price of good X increases, consumers will look for alternative products that serve similar needs or purposes.
• Good Y is considered a substitute for good X, meaning it can replace good X in consumption.
• As the price of good X rises, consumers will shift their demand from good X to good Y to save money.
• This shift in demand leads to an increase in the demand for substitute good Y.

Other Related Points

• Fall
  • Incorrect because if the price of good X rises, consumers are less likely to buy good X and more likely to buy its substitute, good Y.
• Remain unchanged
  • Incorrect because the law of demand states that a rise in the price of a good typically leads to a decrease in its quantity demanded and an increase in the demand for its substitute.
• Falls initially and then rises
  • Incorrect because the demand for the substitute good Y will generally increase as soon as the price of good X rises, without any initial fall.

Q65: Arrange the following steps in the proper sequence to develop effective marketing communication. 

A. Design the communication

B. Select the communication channel

C. Identify the target audience

D. Choose the communication mix

E. Choose the communication objectives

Choose the correct answer from the options given below:

(a) E, A, C, B, D

(b) C, A, B, D, E

(c) E, B, C, A, D

(d) C, E, A, B, D

Ans: d

Sol: The correct answer is 'C, E, A, B, D'

Identify the target audience (C):

• The first step in developing effective marketing communication is to identify the target audience. This involves understanding who the potential customers are, their preferences, behaviors, and demographics.
• Knowing the target audience helps tailor the communication strategy to meet their specific needs and expectations, ensuring that the message resonates with them.

Choose the communication objectives (E):

• Once the target audience is identified, the next step is to define the communication objectives. These objectives could include creating brand awareness, generating leads, increasing sales, or enhancing customer loyalty.
• Setting clear and measurable objectives helps in evaluating the effectiveness of the marketing communication efforts.

Design the communication (A):

• With the objectives in place, the next step is to design the communication. This involves creating the message content, designing visuals, and selecting the tone and style that align with the brand and appeal to the target audience.
• The design should be compelling and engaging to capture the audience's attention and convey the intended message effectively.

Select the communication channel (B):

• After designing the communication, the next step is to select the appropriate communication channels. This could include digital platforms, social media, traditional media, or direct marketing, depending on where the target audience is most active.
• Choosing the right channels ensures that the message reaches the audience efficiently and effectively.

Choose the communication mix (D):

• The final step is to choose the communication mix, which involves integrating various communication tools and channels to create a cohesive strategy.
• This might include a combination of advertising, public relations, sales promotions, and personal selling to achieve the communication objectives and maximize the impact of the marketing efforts.

Q66: "To what degree will there be rules and regulations to direct employees and managers" is defined as 

(a) Departmentalization

(b) Centralization and decentralization

(c) Formalization

(d) Boundary Spanning

Ans: c

Sol: The correct answer is - Formalization

Formalization

• Formalization refers to the extent to which policies, procedures, job descriptions, and rules are written and explicitly articulated.
• It encompasses the degree to which organizations standardize behavior through rules and procedures.
• This concept ensures that employees and managers have clear guidelines and frameworks to follow, leading to consistent and predictable actions.
• A high degree of formalization can lead to a well-organized structure where all members know their roles and responsibilities.

Other Related Points

Departmentalization

• Refers to the process of dividing an organization into different departments, which perform specific tasks or functions.
• Common forms include functional, product, geographical, and customer departmentalization.
• It helps in organizing the workforce to enhance efficiency and effectiveness.

Centralization and Decentralization

• Centralization refers to the concentration of decision-making authority at the top levels of the organizational hierarchy.
• Decentralization, on the other hand, distributes decision-making power to lower levels.
• Both approaches have their advantages and disadvantages, depending on the organization’s needs and goals.

Boundary Spanning

• Involves activities that bridge the organizational boundary and link the organization to the external environment.
• Examples include customer service, sales, and partnerships.
• Effective boundary spanning helps organizations stay competitive and responsive to external changes and opportunities.

Q67: Identify which of the following statements are True 

A. Assessment Year means the period of 12 months commencing on the first day of April every year

B. Rounding off of total income is defined under section 288B of the Income Tax Act, 1961

C. Rounding off of tax is defined under section 288 A of the Income Tax Act, 1961

D. Assessee is always a person but a person may or may not be an assessed

E. A person may not have assessable income but may still be an assessed

Choose the correct answer from the options given below:

(a) B and C only

(b) A, D, E Only

(c) A, B, C Only

(d) B, C, D Only

Ans: C

Sol: The correct answer is 3) A, B, C Only.

Let's analyze each statement:

• A. Assessment Year means the period of 12 months commencing on the first day of April every year
  True – As per the Act, Assessment Year is from 1st April to 31st March. It's the year following the Previous Year in which income is assessed.
• B. Rounding off of total income is defined under section 288B of the Income Tax Act, 1961
  True – Section 288B deals with rounding off the total income and tax payable, to the nearest ten rupees.
• C. Rounding off of tax is defined under section 288A of the Income Tax Act, 1961
  True – Section 288A deals with rounding off the amount of total income before computing tax.
• (Note: While both 288A and 288B relate to rounding off, 288A pertains to total income, and 288B to tax, interest, penalties, etc.)
• D. Assessee is always a person but a person may or may not be an assessed
  False – This is reversed. A person is a general legal entity under the Act (individual, firm, HUF, etc.). An assessee is a person liable to pay tax or otherwise assessed under the Act. So, a person may or may not be an assessee, not the other way around.
• E. A person may not have assessable income but may still be an assessed
  True – A person might not have taxable income but could be assessed for other reasons (e.g., TDS refund, or penalty, etc.)

Correct Answer: (c) A, B, C Only

Q68: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - II, B - IV, C - I, D - III

(b) A - II, B - I, C - IV, D - III

(c) A - IV, B - I, C - III, D - II

(d) A - II, B - III, C - I, D - IV

Ans: a

Sol: The correct answer is 'A-II, B-IV, C-I, D-III'.

PM Jan Dhan (A) matches with 2014 (II).

• Explanation: The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched in 2014 to ensure access to financial services, such as banking/savings & deposit accounts, remittance, credit, insurance, and pension, in an affordable manner.
• This initiative aims at providing financial inclusion and banking services to all households in India.
• Key Point: PMJDY has been a significant step towards making financial services accessible to the unbanked population in India.

PM Mudra (B) matches with 2015 (IV).

• Explanation: The Pradhan Mantri Mudra Yojana (PMMY) was launched in 2015 to provide loans to small and micro enterprises. The scheme aims to support the development and refinancing of micro-enterprises by providing collateral-free loans.
• The loans under PMMY are provided by Commercial Banks, RRBs, Small Finance Banks, MFIs, and NBFCs.
• Key Point: PMMY facilitates access to finance for small businesses, promoting entrepreneurship and economic growth.

Stand Up India (C) matches with 2016 (I).

• Explanation: The Stand Up India scheme was launched in 2016 to promote entrepreneurship among women and SC/ST communities by facilitating bank loans between Rs. 10 lakh and Rs. 1 crore for setting up greenfield enterprises.
• The scheme aims to create an inclusive entrepreneurial ecosystem by providing financial support and guidance.
• Key Point: Stand Up India helps in fostering entrepreneurship among underrepresented groups, contributing to economic development.

Vaya Vandana (D) matches with 2017 (III).

• Explanation: The Pradhan Mantri Vaya Vandana Yojana (PMVVY) was launched in 2017 as a pension scheme for senior citizens, providing them with a guaranteed return on their investment and regular pension income.
• The scheme is managed by the Life Insurance Corporation of India (LIC) and aims to provide financial security to senior citizens.
• Key Point: PMVVY offers a secure investment option with assured returns for senior citizens, helping them to manage their post-retirement financial needs.

Q69: Which of the following points are considered as factors determining the working capital of a firm? 

A. Basic nature of Business

B. Business cycle fluctuations

C. Credit Policy of the firm

D. Long term source of finance

E. Employee Skills

Choose the correct answer from the options given below:

(a) A, B and D Only

(b) B, C and D Only

(c) A, B and C Only

(d) D and E Only

Ans: c

Sol: The correct answer is 3) A, B and C Only.

Let's analyze each factor:

Basic nature of Business

• The basic nature of the business significantly influences the working capital requirements. For instance, manufacturing businesses usually require more working capital compared to service-based businesses due to the need for inventory and production processes.
• Reason for inclusion: It directly impacts the amount of working capital needed to maintain smooth operations.

Business cycle fluctuations

• Fluctuations in the business cycle, such as periods of boom and recession, affect the demand for products and services, which in turn impacts the working capital requirements.
• Reason for inclusion: These fluctuations influence the level of inventory, receivables, and payables, thereby determining the working capital needs.

Credit Policy of the firm

• The credit policy of a firm, which includes the terms of credit extended to customers and received from suppliers, affects the working capital. More lenient credit terms to customers can increase the working capital requirement.
• Reason for inclusion: It directly impacts the cash flow and the cycle of receivables and payables.

Long term source of finance

• Long-term sources of finance refer to funds that are available for use over an extended period. These are typically used for capital expenditures rather than for working capital needs.
• Reason for exclusion: While it affects the overall financial health, it is not a direct determinant of working capital.

Employee Skills

• Employee skills can impact the efficiency and productivity of a firm, but they do not directly determine the working capital requirements.
• Reason for exclusion: While important for the firm's performance, employee skills do not have a direct and immediate impact on working capital.

Therefore, the factors that strictly determine the working capital of a firm in this context are A: Basic nature of Business, B: Business cycle fluctuations, and C: Credit Policy of the firm.

Q70: Arrange the following points in their section-wise order (Section 23 to 27) as per the Income Tax Act, 1961 

A. Deemed ownership

B. Provision for arrears of rent and unrealized rent received subsequently

C. Determination of annual value

D. Treatment of income from co-owned property

E. Deduction from (Annual Value) Income from house property

Choose the correct answer from the options given below:

(a) A, C, B, D, E

(b) C, E, B, D, A

(c) A, B, C, D, E

(d) B, C, D, E, A

Ans: b

Sol: The correct answer is 'C, E, B, D, A'

Determination of annual value (C):

• This step involves calculating the annual value of the property, which is essential for computing the income from house property.
• The annual value is determined based on the fair rent, municipal valuation, and the rent received or receivable, whichever is higher.

Deduction from (Annual Value) Income from house property (E):

• After determining the annual value, certain deductions are allowed under Section 24 of the Income Tax Act, 1961.
• These deductions include standard deduction, interest on borrowed capital, and others as specified.

Provision for arrears of rent and unrealized rent received subsequently (B):

• This point addresses the treatment of arrears of rent and unrealized rent that are received in subsequent years.
• Such amounts are taxed in the year of receipt, subject to certain conditions and provisions.

Treatment of income from co-owned property (D):

• In cases where a property is co-owned, the income from such property is divided among the co-owners based on their share of ownership.
• Each co-owner is liable to pay tax on their respective share of the income from the property.

Deemed ownership (A):

• Deemed ownership provisions apply to individuals who are not the legal owners but are considered owners for tax purposes.
• This includes scenarios like property transferred to a spouse or minor child, property held by a member of a Hindu Undivided Family (HUF), and others as outlined in the Act.

Q71: Which of the following points are considered as essential characteristics of a Promissory Note? 

A. It must be in writing

B. It must not contain an undertaking or promise to pay

C. The promise to pay must be conditional

D. A promissory note must be signed by the maker.

E. Promise to pay money only

Choose the correct answer from the options given below:

(a) A, D and E Only

(b) A, B and E Only

(c) B, C and D Only

(d) B and D Only

Ans: a

Sol: The correct answer is A, D and E Only.

Let's analyze each factor:

A. It must be in writing

• A promissory note must be documented in a written format to be legally enforceable.
• Reason for inclusion: This is a fundamental requirement for a promissory note to ensure clarity and legal validity.

B. It must not contain an undertaking or promise to pay

• This statement is incorrect as a promissory note must contain a clear promise to pay a certain amount.
• Reason for exclusion: A promissory note without a promise to pay does not fulfill its primary purpose.

C. The promise to pay must be conditional

• This statement is incorrect as the promise to pay in a promissory note must be unconditional.
• Reason for exclusion: A conditional promise undermines the certainty required for a promissory note.

D. A promissory note must be signed by the maker

• The signature of the maker is essential to authenticate the document and confirm the promise to pay.
• Reason for inclusion: The signature provides legal acknowledgment and commitment from the maker.

E. Promise to pay money only

• A promissory note must involve a promise to pay a specific sum of money.
• Reason for inclusion: The note must be limited to a monetary obligation to meet the definition of a promissory note.

Therefore, the factors that are essential characteristics of a promissory note are A: It must be in writing, D: A promissory note must be signed by the maker, and E: Promise to pay money only.

Q72: Which of the following is a non-probability method of selecting sample from a population? 

(a) Simple Random Sampling

(b) Multi Stage Sampling

(c) Cluster Sampling

(d) Snow Ball Sampling

Ans: d

Sol: The correct answer is - Snow Ball Sampling

Snow Ball Sampling

• Snowball Sampling is a non-probability sampling technique where existing study subjects recruit future subjects from among their acquaintances.
• This method is often used in hidden populations or when it is difficult to access the population.
• It relies on the social networks of the initial subjects to grow the sample size, which can introduce bias but is useful for specific types of research.
• Commonly used in social sciences and medical research for studying populations like drug users or people with rare diseases.

Other Related Points

Simple Random Sampling

• Each member of the population has an equal chance of being selected.
• This method reduces bias and ensures that the sample represents the population well.

Multi Stage Sampling

• Involves selecting samples in multiple stages, often combining different sampling methods.
• Useful for large and geographically dispersed populations.

Cluster Sampling

• The population is divided into clusters, and a random sample of these clusters is selected.
• All members of the chosen clusters are included in the sample.
• Efficient when dealing with large populations spread over wide areas.

Q73: Arrange the following steps in logical sequence regarding how to compute Net Present Value (NPV). 

A. Calculate Net Present Value (NPV) i.e. Present Value of all cash inflows - present value of all cash outflows

B. Calculate all the cash outflows associated with the project

C. Calculate all the cash inflows associated with the project

D. Calculate the present value of all cash inflows associated with the project

E. Calculate the present value of all cash outflows associated with the project

Choose the correct answer from the options given below:

(a) A, B, C, E, D

(b) B, C, E, D, A

(c) A, C, B, E, D

(d) A, C, B, D, E

Ans: b

Sol: The correct answer is 'B, C, E, D, A'

Calculate all the cash outflows associated with the project (B):

• The initial step in computing NPV involves identifying and summing up all the cash outflows related to the project.
• This includes the initial investment and any subsequent expenses necessary for the project’s execution.

Calculate all the cash inflows associated with the project (C):

• Next, identify and sum up all the cash inflows that the project will generate over its lifetime.
• These inflows include revenues, savings, or any other financial benefits that the project is expected to yield.

Calculate the present value of all cash outflows associated with the project (E):

• After determining the cash flows, the next step is to discount these cash outflows to their present value.
• This is done using a discount rate which reflects the cost of capital or required rate of return.

Calculate the present value of all cash inflows associated with the project (D):

• Similarly, discount the cash inflows to their present value using the same discount rate.
• This step ensures that future cash inflows are accurately represented in today’s terms.

Calculate Net Present Value (NPV) i.e. Present Value of all cash inflows - present value of all cash outflows (A):

• The final step is to compute the NPV by subtracting the present value of cash outflows from the present value of cash inflows.
• A positive NPV indicates that the project is expected to generate more value than its cost, making it a financially viable option.

Other Related Points

Discount Rate:

• The discount rate plays a crucial role in NPV calculation as it reflects the opportunity cost of investing capital elsewhere.
• Choosing an appropriate discount rate is essential for accurate NPV computation.

Project Lifespan:

• The time horizon over which the cash flows are projected can significantly affect the NPV. Longer project durations can introduce more uncertainty and risk.
• It is important to use realistic and well-supported assumptions for the project lifespan.

Q74: Arrange the practical steps involved in the preparation of process account where there is work in progress. 

A. Prepare process account

B. Prepare statement of Evaluation

C. Prepare statement of cost per equivalent unit

D. Prepare statement of equivalent production

E. Determine and analyze the number of physical units in the form of inputs (transferred from previous process) and output

Choose the correct answer from the options given below:

(a) A, B, C, D, E

(b) E, D, C, B, A

(c) C, D, E, A, B

(d) B, C, D, A, E

Ans: b

Sol: The correct answer is 'E, D, C, B, A'

Determine and analyze the number of physical units in the form of inputs (transferred from previous process) and output (E):

• This initial step involves identifying and analyzing the physical units that are transferred from the previous process and those that are output at the end of the current process.
• This helps in understanding the flow of units and is essential for calculating the work-in-progress and the total units accounted for.

Prepare statement of equivalent production (D):

• The next step is to prepare a statement of equivalent production, which accounts for the work-in-progress by converting partially completed units into their equivalent full units.
• This ensures that the work-in-progress is accurately reflected in the process costing.

Prepare statement of cost per equivalent unit (C):

• After determining the equivalent units, the next step is to prepare a statement of cost per equivalent unit.
• This involves calculating the cost associated with each equivalent unit, which includes both direct and indirect costs.

Prepare statement of Evaluation (B):

• This step involves preparing a detailed statement of evaluation, where the costs are assigned to the units completed and transferred out as well as to the ending work-in-progress.
• This ensures that the costs are accurately distributed among the completed units and the units still in process.

Prepare process account (A):

• The final step is to prepare the process account, which summarizes all the cost allocations and unit movements.
• This account provides a clear and comprehensive view of the entire process, including the costs incurred and the output produced.

Q75: Bret Lee, an Australian cricket player visits India for 100 days in every financial year. This has been his practice for the past 10 financial Years. Find out his residential status for the assessment Year 2023-24. 

(a) Resident in India

(b) Resident and ordinarily resident in India

(c) Resident but not ordinarily resident in India

(d) Non-resident in India

Ans: c

Sol: The correct answer is - Resident but not ordinarily resident in India

Residential Status of Bret Lee

• According to the Income Tax Act in India, an individual is considered a resident if they stay in India for 182 days or more during a financial year, or if they stay in India for at least 60 days during a financial year and for at least 365 days during the preceding four years.
• Bret Lee visits India for 100 days each year, which means he does not meet the criteria to be classified as a resident under the first condition (182 days).
• However, if we look at the second condition, he visits India for 100 days every year, which totals to 1000 days over the past ten years. Thus, he meets the 365 days condition in the preceding four years.
• Even though he qualifies as a resident based on the second condition, he does not stay in India for 182 days or more in any year, which makes him a Resident but not ordinarily resident in India.

Other Related Points

Resident in India

• An individual is classified as a resident in India if they meet either of the two conditions: staying for 182 days or more in the financial year, or staying for at least 60 days in the financial year and 365 days in the preceding four years.
• Bret Lee does not qualify as a resident under the first condition (182 days).

Resident and ordinarily resident in India

• To be classified as a Resident and Ordinarily Resident (ROR), an individual must meet the resident criteria and should have been a resident in at least 2 out of the 10 preceding years and have stayed in India for 730 days or more in the preceding 7 years.
• Bret Lee does not fulfill the criteria of being a Resident and Ordinarily Resident.

Non-resident in India

• An individual is considered a non-resident if they do not meet any of the conditions to be classified as a resident.
• Bret Lee meets the 60 days and 365 days condition, so he cannot be classified as a non-resident.

Q76: Current assets are Rs 4,00,000 

Inventories are Rs 2,00,000

Working capital is Rs 2,40,000

Calculate Current Ratio.

(a) 2 ∶ 1

(b) 2.5 ∶ ​ 1

(c) 1.5 ∶ 1

(d) 1 ∶ 2

Ans: b

Sol: The correct answer is 2.5 : 1

The Current Ratio:

• The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.
• It is calculated using the formula: Current Ratio = Current Assets / Current Liabilities.
• Given that Current Assets are Rs 4,00,000 and Working Capital is Rs 2,40,000, we first calculate Current Liabilities as:
  Current Liabilities = Current Assets - Working Capital = 4,00,000 - 2,40,000 = Rs 1,60,000.
• Now, the Current Ratio is:
  4,00,000 / 1,60,000 = 2.5 : 1
• A Current Ratio of 2.5 : 1 indicates that the company has Rs 2.5 in current assets for every Rs 1 of current liabilities, showing strong liquidity and financial health.

Other Related Points

Importance of Current Ratio:

• A higher Current Ratio typically indicates that the company can easily meet its short-term obligations.
• However, an excessively high Current Ratio might suggest inefficiency in managing current assets.
• The ideal Current Ratio is usually between 1.5 and 2, depending on the industry.

Exclusion of Inventories:

• While inventories are part of current assets, they might not always be easily converted into cash, which is why other ratios like Quick Ratio exclude inventories.

Q77: Which one of the following conditions is not true as per IRDA Act, 1999, for entry of private players into the insurance market? 

(a) The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.

(b) ​The minimum paid up equity capital for life insurance or general insurance business is Rs. 100 crore.

(c) ​The minimum paid up capital for carrying reinsurance business is Rs. 300 crore.

(d) ​Insurance companies are required to invest not less than 15 percent of their funds in infrastructure and social sectors.

Ans: c

Sol: The correct answer is ​The minimum paid up capital for carrying reinsurance business is Rs. 300 crore.

Let's analyze each condition:

The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.

• This condition ensures that the company focusing solely on insurance business can channel all its resources and expertise to serve the insurance needs better without any distractions from other business activities. This is a requirement as per the IRDA Act, 1999, to maintain focus and integrity in the insurance sector.
• Conclusion: This condition is true as per the IRDA Act, 1999.

The minimum paid up equity capital for life insurance or general insurance business is Rs. 100 crore.

• The minimum paid-up equity capital requirement is to ensure that the insurance company has a sufficient financial base to cover the risks while providing stability and confidence to the policyholders. The IRDA Act, 1999, specifies this requirement to protect the interests of the policyholders and maintain market stability.
• Conclusion: This condition is true as per the IRDA Act, 1999.

The minimum paid up capital for carrying reinsurance business is Rs. 300 crore.

• Reinsurance companies provide insurance to insurance companies, which involves very high-value transactions. A substantial paid-up capital requirement ensures that the reinsurance company can meet its financial obligations. However, as per the IRDA Act, 1999, the actual minimum paid-up capital required for a reinsurance business is Rs. 200 crore. Therefore, stating Rs. 300 crore is incorrect.
• Conclusion: This condition is not true as per the IRDA Act, 1999.

Insurance companies are required to invest not less than 15 percent of their funds in infrastructure and social sectors.

• This condition ensures that insurance companies contribute to the development of the country's infrastructure and social welfare, promoting economic growth and stability. This investment mandate is intended to support long-term national interests and is specified in the IRDA guidelines.
• Conclusion: This condition is true as per the IRDA Act, 1999.

Q78: Arrange the following actions of a manager in the increasing degree of control. 

A. Manager defines limits and asks for group decisions

B. Manager offers tentative decisions to change

C. Manager sells decisions

D. Manager lets subordinates function within limits defined by him

E. Manager presents problems, invites suggestions and makes decisions

Choose the correct answer from the options given below:

(a) A, D, B, E, C

(b) C, B, E, A, D

(c) D, A, E, B, C

(d) D, A, B, E, C

Ans: c

Sol: The correct answer is 'D, A, E, B, C'

Manager lets subordinates function within limits defined by him (D):

• This action indicates the least degree of control as the manager sets the boundaries but allows subordinates to operate independently within those limits.
• It promotes autonomy and empowerment among team members, allowing them to make decisions and manage their tasks within the given framework.

Manager defines limits and asks for group decisions (A):

• This step involves the manager setting certain boundaries but encouraging the group to make decisions collectively.
• While the manager still maintains some level of control, the decision-making process is more collaborative, which can enhance team involvement and commitment.

Manager presents problems, invites suggestions and makes decisions (E):

• Here, the manager presents the issues at hand and seeks input from the team before making the final decision.
• This approach balances control and inclusivity, as the manager retains the ultimate decision-making authority but values the team's insights and suggestions.

Manager offers tentative decisions to change (B):

• In this scenario, the manager proposes initial decisions but remains open to feedback and modifications based on the team's input.
• It reflects a higher degree of control compared to the previous actions, as the manager takes a more proactive role in guiding the decisions while still considering the team's perspectives.

Manager sells decisions (C):

• This action represents the highest degree of control as the manager not only makes the decisions but also actively persuades the team to accept and support them.
• It indicates a more directive approach, where the manager seeks to ensure compliance and buy-in from the team for the decisions made.

Q79: Arrange the following point (Section wise from Section 14 to 18) of the Indian Contract Act 

A. Definition of free consent

B. Misrepresentation

C. Fraud

D. Undue influence

E. Coercion

Choose the correct answer from the options given below:

(a) E, D, C, B, A

(b) D, E, C, A, B

(c) B, D, E, A, C

(d) A, E, D, C, B

Ans: d

Sol: The correct answer is 'A, E, D, C, B'

Definition of free consent (A):

• This is defined under Section 14 of the Indian Contract Act. Free consent refers to an agreement made without any coercion, undue influence, fraud, misrepresentation, or mistake.
• It is a fundamental requirement for the validity of a contract, ensuring that all parties involved voluntarily agree to the terms and conditions.

Coercion (E):

• Defined under Section 15 of the Indian Contract Act, coercion refers to committing or threatening to commit any act forbidden by the Indian Penal Code or unlawful detainment of any property, with the intention of causing any person to enter into an agreement.
• Coercion undermines the free will of a party and affects the legitimacy of the contract.

Undue influence (D):

• Section 16 of the Indian Contract Act defines undue influence as an influence exerted by one party over another, where the influencing party is in a position to dominate the will of the other party and uses that position to obtain an unfair advantage.
• Contracts formed under undue influence can be deemed voidable.

Fraud (C):

• Under Section 17 of the Indian Contract Act, fraud includes any act committed by a party to a contract, or with his connivance, or by his agent, with the intent to deceive another party or to induce him to enter into the contract.
• Fraudulent activities invalidate the affected party's consent, making the contract voidable at their option.

Misrepresentation (B):

• Section 18 of the Indian Contract Act defines misrepresentation as a false statement made innocently, or a breach of duty which, without an intent to deceive, induces another party to enter into a contract.
• Like fraud, misrepresentation also affects the consent of the party and can make the contract voidable.

Other Related Points

• The Indian Contract Act, 1872, is a comprehensive statute that governs the law of contracts in India.
• The Act is divided into two parts: the first part deals with the general principles of law of contract and the second part contains special kinds of contracts such as Indemnity and Guarantee, Bailment and Pledge, and Agency.

Q80: Identify correct statements from the following regarding Time Value of money. 

A. The interest which may be earned/saved on the money held at present underlines the concept of time value of money.

B. The money which is receivable at present has less value than the money receivable in future.

C. The relationship that exists between the value of money receivable at present and the value of money receivable in future is referred as time value of the money.

D. Value of money receivable at present = value of money receivable in future - Time value of money

E. Future value of money is the value of money held presently at some given future time at a given rate of Interest.

Choose the correct answer from the options given below:

(a) B and D Only

(b) A, C and E Only

(c) B, C and D Only

(d) C, D and E Only

Ans: b

Sol: The correct answer is A, C and E Only.

Let's analyze each statement:

Statement A:

• The interest which may be earned/saved on the money held at present underlines the concept of time value of money.
• Explanation: This statement is correct as it encapsulates the core idea that money available today can be invested to earn interest, making it more valuable than the same amount in the future.

Statement B:

• The money which is receivable at present has less value than the money receivable in future.
• Explanation: This statement is incorrect as per the time value of money principle. Money receivable today is actually worth more than the same amount in the future due to its potential earning capacity.

Statement C:

• The relationship that exists between the value of money receivable at present and the value of money receivable in future is referred to as time value of the money.
• Explanation: This statement is correct as it accurately describes the concept of the time value of money, which examines how money values change over time.

Statement D:

• Value of money receivable at present = value of money receivable in future - Time value of money.
• Explanation: This statement is incorrect. The time value of money is typically added to the present value to find the future value, not subtracted.

Statement E:

• Future value of money is the value of money held presently at some given future time at a given rate of Interest.
• Explanation: This statement is correct as it defines the future value of money, which is the amount of money that an initial sum will grow to over a period of time at a specified interest rate.

Therefore, the correct statements regarding the time value of money are A, C, and E. This makes option 2: "A, C and E Only" the correct choice.

Q81: Which one of the following structure of the marketing department will be most suitable for the companies that produce many products for many markets? 

(a) Geographic Organization

(b) Product or Brand Organization

(c) Functional Organization

(d) Matrix Organization

Ans: d

Sol: The correct answer is - Matrix Organization

Matrix Organization

• A Matrix Organization structure is most suitable for companies that produce many products for many markets.
• This structure allows for efficient handling of diverse product lines and target markets by creating a flexible and dynamic framework.
• Employees in a Matrix Organization report to more than one manager, typically both a functional manager and a product or project manager, which enhances collaboration and resource allocation.
• It facilitates better communication and coordination across different departments and product lines, leading to more innovative and responsive strategies.

Other Related Points

Geographic Organization

• In a Geographic Organization, the company is structured based on different geographic areas.
• This structure is beneficial when the company’s markets are distinctly different in different regions.

Product or Brand Organization

• Product or Brand Organization structures the company around individual products or brands.
• This is effective for companies with a diverse product range, but may not handle multiple markets as efficiently as a Matrix Organization.

Functional Organization

• In a Functional Organization, the company is divided into departments based on functions such as marketing, finance, and production.
• This structure is best for companies with a limited product range and is less adaptable to multiple products for multiple markets.

Q82: Which of the following statements are correct: 

A. Call-in-advance is the amount paid by the shareholders in excess of amount due from them.

B. When the number of shares applied is more than the number of shares offered to the public for subscription, the issue is termed as under subscription.

C. Section 49 of the Companies Act prohibits the issue of shares other than sweat equity shares at discount.

D. Unless or until the forfeited shares are re-issued, the balance on the shares forfeited account will be deducted from the paid up capital.

E. The securities premium is an amount in excess of nominal value of face value of the securities.

Choose the correct answer from the options given below:

(a) A and E Only

(b) B, C and D Only

(c) A, B and C Only

(d) A, D and E Only

Ans: a

Sol: The correct answer is 1) A and E Only.

Let's analyze each statement:

A. Call-in-advance is the amount paid by the shareholders in excess of amount due from them.

• This statement is correct. A call-in-advance refers to the amount paid by shareholders before it is actually called by the company. It is an excess amount paid over and above the due amount.

B. When the number of shares applied is more than the number of shares offered to the public for subscription, the issue is termed as under subscription.

• This statement is incorrect. When the number of shares applied for is more than the number of shares offered, the issue is termed as over subscription, not under subscription.

C. Section 49 of the Companies Act prohibits the issue of shares other than sweat equity shares at discount.

• This statement is incorrect. Section 53 of the Companies Act, 2013 prohibits the issue of shares at a discount, except for sweat equity shares.

D. Unless or until the forfeited shares are re-issued, the balance on the shares forfeited account will be deducted from the paid-up capital.

• This statement is incorrect. The balance on the forfeited shares account is not deducted from the paid-up capital. It is shown as a separate reserve in the balance sheet until the shares are re-issued.

E. The securities premium is an amount in excess of nominal value of face value of the securities.

• This statement is correct. Securities premium refers to the amount received by a company over and above the face value of its shares.

Therefore, the statements that are correct are A: Call-in-advance is the amount paid by the shareholders in excess of amount due from them and E: The securities premium is an amount in excess of nominal value of face value of the securities. This makes option 1: "A and E Only" the correct choice.

Q83: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - III, B - II, C - IV, D - I

(b) A - III, B - II, C - I, D - IV

(c) A - II, B - III, C - IV, D - I

(d) A - IV, B - III, C - I, D - II

Ans: c

Sol: The correct answer is 'A - II, B - III, C - IV, D - I'.

Introduction (A) matches with Build Selective distribution (II).

• Explanation: During the introduction stage of the Product Life Cycle (PLC), the goal is to build awareness and establish the product in the market. Selective distribution helps manage the limited supply and ensures the product is available in key outlets where target customers are likely to shop.
• Selective distribution involves choosing specific locations or retailers that can best represent and sell the product, focusing on quality over quantity.

Growth (B) matches with Build intensive distribution (III).

• Explanation: The growth stage is characterized by increasing market acceptance and rising sales. Building intensive distribution is crucial at this stage to maximize product availability and capitalize on the growing demand by ensuring the product is accessible in as many locations as possible.
• This strategy helps in capturing a larger market share by reaching a broader audience.

Maturity (C) matches with Build more intensive distribution (IV).

• Explanation: In the maturity stage, market saturation occurs, and competition is intense. To maintain market share, businesses need to further intensify their distribution efforts, ensuring the product is available in even more locations and is easily accessible to customers.
• This can involve expanding into new channels or optimizing existing ones to boost product visibility and convenience for consumers.

Decline (D) matches with Phase out unprofitable outlets (I).

• Explanation: The decline stage sees a decrease in sales and market interest. Companies need to minimize costs and manage resources efficiently. Phasing out unprofitable outlets helps in reducing distribution costs and focusing on the most profitable or strategic locations.
• This strategy involves scaling back distribution efforts and possibly discontinuing the product if it is no longer viable.

Other Related Points

• The Product Life Cycle (PLC) is a framework that describes the stages a product goes through from introduction to decline.
• Understanding the PLC helps businesses to adopt appropriate marketing, distribution, and production strategies at each stage to optimize performance and profitability.
• Effective distribution strategies are crucial for ensuring product availability and meeting customer demand throughout the PLC.

Q84: Beta Company Ltd issued 10% perpetual debt of Rs. 1,00,000. The company's tax rate is 50%. Determine the cost of capital (before tax as well as after tax) assuming the debt is issued at 10 percent premium. 

(a) Before tax cost = 9.09% and after tax cost = 4.54%

(b) Before tax cost = 4.54% and after tax cost = 9%

(c) Before tax cost = 9.90% and after tax cost = 4.45%

(d) Before tax cost = 10.09% and after tax cost = 5.54%

Ans: a

Sol: The correct answer is - Before tax cost = 9.09% and after tax cost = 4.54%

Calculation of Cost of Capital

• Perpetual Debt: This means the debt does not have a maturity date and the company pays interest indefinitely.
• Issued at 10% Premium: The debt is issued at 10% above its face value. Hence, the issue price = Rs. 1,00,000 + 10% of Rs. 1,00,000 = Rs. 1,10,000.
• Interest Payment: The annual interest payment = 10% of Rs. 1,00,000 = Rs. 10,000.
• Before Tax Cost of Debt: This is the interest payment divided by the issue price. Therefore, before tax cost = (Rs. 10,000 / Rs. 1,10,000) * 100 = 9.09%.
• After Tax Cost of Debt: This is the before tax cost multiplied by (1 - tax rate). Therefore, after tax cost = 9.09% * (1 - 0.50) = 4.545%, which can be approximated to 4.54%.

Other Related Points

Key Concepts:

• Cost of Debt: This is the effective rate that a company pays on its borrowed funds. It is calculated before and after taxes because interest expenses are tax-deductible.
• Perpetual Debt: Debt that has no maturity date. The company pays interest indefinitely.
• Tax Shield: The reduction in income taxes that results from taking an allowable deduction from taxable income. Interest expense on debt is a common tax shield.

Explanation of Other Options:

• Other percentages are incorrect due to incorrect calculations or misunderstandings of tax impacts and issue price adjustments.
• It is crucial to understand the correct application of the interest rate, issue price, and tax adjustments to determine the accurate cost of capital.

Q85: Which one of the following conditions is not true in case of marketing skimming as the pricing objective? 

(a) The market is highly price sensitive

(b) A sufficient number of buyers signal a high demand

(c) The high initial price does not attract more competitors to the market

(d) The high price communicates the image of a superior product

Ans: a

Sol: The correct answer is - The market is highly price sensitive

The market is highly price sensitive

• Marketing skimming involves setting a high initial price for a product, which is gradually lowered over time.
• This strategy is used when the market is not highly price sensitive, allowing the company to maximize profits from early adopters willing to pay a premium.
• In a highly price-sensitive market, consumers would be less likely to purchase the product at a high initial price, making this strategy ineffective.

Other Related Points

A sufficient number of buyers signal a high demand

• This condition supports marketing skimming as there are enough customers willing to pay the high initial price.
• High demand at the initial stages ensures that the company can recover its costs and make substantial profits before lowering the price.

The high initial price does not attract more competitors to the market

• In marketing skimming, the high initial price should not attract new competitors, allowing the company to maintain a competitive edge.
• Fewer competitors mean the company can maximize its profits for a longer period before prices are driven down by market competition.

The high price communicates the image of a superior product

• A high initial price can create a perception of higher quality or exclusivity, attracting status-conscious customers.
• This perception helps justify the premium price and can establish a strong brand image in the market.

Q86: Which one of the following is not the behavioral factor of the customer profile involved in tactical targeting? 

(a) Purchase Frequency

(b) Income

(c) Purchase Quantity

(d) Price Sensitivity

Ans: b

Sol: The correct answer is - Income

Income

• Income refers to the financial earnings of a customer.
• It is a demographic factor rather than a behavioral factor.
• Demographic factors include aspects such as age, gender, income, education, and occupation.
• Income helps businesses to segment markets and target specific income groups with tailored products and services.

Other Related Points

Purchase Frequency

• Purchase frequency refers to how often a customer buys a product or service.It is a behavioral factor because it reflects the buying habits and patterns of customers.
• Understanding purchase frequency helps businesses in planning inventory and managing customer relationships.

Purchase Quantity

• Purchase quantity indicates the amount of product a customer buys in a single transaction.
• It is a behavioral factor because it shows customer preferences and consumption levels.
• Analyzing purchase quantity can help businesses optimize pricing and packaging strategies.

Price Sensitivity

• Price sensitivity measures how changes in price affect the purchasing decisions of customers.
• It is a behavioral factor because it influences how customers respond to pricing strategies.
• Understanding price sensitivity helps businesses in setting competitive prices and designing promotions.

Q87: Which of the following is correct? 

(a) A firm under perfect competition is in equilibrium where AR = MR

(b) A firm under monopoly is in equilibrium where TR = MR

(c) A firm under monopolistic competition is in equilibrium where AC = MC

(d) A firm under oligopoly is in equilibrium where MR = MC

Ans: d

Sol: The correct answer is - A firm under oligopoly is in equilibrium where MR = MC

A firm under oligopoly is in equilibrium where MR = MC

• Oligopoly is a market structure characterized by a small number of firms that dominate the market.
• In oligopoly, firms are interdependent, meaning the actions of one firm can influence the actions of others.
• The equilibrium condition for an oligopoly is where marginal revenue (MR) equals marginal cost (MC).
• This is because firms in oligopoly maximize their profits by producing at the level of output where MR equals MC.

Other Related Points

Perfect Competition

• A firm under perfect competition is in equilibrium where marginal cost (MC) equals marginal revenue (MR) and also equals average revenue (AR).
• Since price equals AR in perfect competition, the condition MC = MR = AR holds true.

Monopoly

• A firm under monopoly is in equilibrium where marginal revenue (MR) equals marginal cost (MC).
• Unlike perfect competition, a monopolist can influence market prices and thus, MR does not equal AR.

Monopolistic Competition

• A firm under monopolistic competition is in equilibrium where marginal cost (MC) equals marginal revenue (MR).
• In the long run, a firm in monopolistic competition produces at a level where price equals average cost (AC), but not at the point where AC equals MC.

Q88: Match the LIST-I with LIST-II 

 Choose the correct answer from the options given below:

(a) A - I, B - IV, C - II, D - III

(b) A - IV, B - I, C - II, D - III

(c) A - IV, B - I, C - III, D - II

(d) A - IV, B - II, C - I, D - III

Ans: c

Sol: The correct answer is 'A-IV, B-I, C-II, D-III'.

Competing (A) matches with A desire to satisfy one's interests regardless of the impact on the other party to the conflict (IV).

• Explanation: Competing involves pursuing one's own concerns at the expense of others, often leading to a win-lose situation where the competing party seeks to achieve their goals without regard to the other party's needs or interests.
• In such scenarios, the focus is on asserting one's position and achieving desired outcomes, even if it results in conflict or dissatisfaction for the other party.
• Key Point: This approach can be effective in situations where quick, decisive action is required or when an unpopular decision needs to be made.

Collaborating (B) matches with A situation in which each party in a conflict desires to satisfy fully the concerns of all parties (I).

• Explanation: Collaborating involves working together with the other party to find a solution that fully satisfies the concerns of everyone involved. This approach aims for a win-win outcome, where both parties benefit from the resolution.
• It emphasizes open communication, mutual respect, and a cooperative attitude to explore creative solutions that address the interests of all parties.
• Key Point: Collaborating is particularly useful in complex situations where the stakes are high, and maintaining positive relationships is important.

Accommodating (C) matches with The willingness of one party in a conflict to place the negotiating partner's interest above their own (II).

• Explanation: Accommodating involves putting the other party's interests above one's own, often leading to a win-lose situation where one party yields to the other's demands.
• This approach is characterized by a high level of cooperativeness and a low level of assertiveness, focusing on preserving the relationship rather than achieving personal goals.
• Key Point: Accommodating can be effective when the issue is more important to the other party or when one wants to build goodwill for future negotiations.

Compromising (D) matches with A situation in which each party to a conflict is willing to give up something to resolve the conflict (III).

• Explanation: Compromising involves finding a middle ground where both parties are willing to give up something to reach a mutually acceptable solution. This approach balances assertiveness and cooperativeness, aiming for a partial win-win outcome.
• It is often used when the parties have equally important interests and need to reach a timely resolution.
• Key Point: Compromising is useful in situations where a temporary or expedient solution is needed, or when both parties have equally important goals that cannot be fully achieved.

Q89: According to Job characteristics model, the psychological state of an experienced meaningfulness of the work is due to the following core job dimensions - 

A. Autonomy

B. Skill Variety

C. Task Identity

D. Feedback

E. Task Significance

Choose the correct answer from the options given below:

(a) A, B, D Only

(b) B, C, E Only

(c) A, C, E Only

(d) A, B, D, E Only

Ans: b

Sol: The correct answer is B, C, E Only.

Let's analyze each factor:

Autonomy

• Autonomy refers to the degree to which a job provides an employee with substantial freedom, independence, and discretion in scheduling the work and determining the procedures to be used in carrying it out.
• Reason for exclusion: Autonomy is more related to the psychological state of experienced responsibility for outcomes of the work, rather than experienced meaningfulness of the work.

Skill Variety

• Skill Variety refers to the extent to which a job requires a variety of different activities, thus involving the use of a number of different skills and talents of the employee.
• Reason for inclusion: Skill variety contributes to the experienced meaningfulness of the work because it makes the job more interesting and challenging, which can make the work feel more significant and worthwhile.

Task Identity

• Task Identity refers to the degree to which a job requires completion of a whole and identifiable piece of work – that is, doing a job from beginning to end with a visible outcome.
• Reason for inclusion: Task identity contributes to the experienced meaningfulness of the work because it allows employees to see the end results of their efforts, which can enhance their sense of accomplishment and significance.

Feedback

• Feedback refers to the degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of their performance.
• Reason for exclusion: Feedback is more related to the psychological state of knowledge of the actual results of the work activities, rather than experienced meaningfulness of the work.

Task Significance

• Task Significance refers to the degree to which a job has a substantial impact on the lives or work of other people, whether in the immediate organization or in the external environment.
• Reason for inclusion: Task significance contributes to the experienced meaningfulness of the work because it allows employees to feel that their work has a significant impact on others, which can enhance their sense of purpose and value in their job.

Therefore, the factors that fit strictly as contributors to the psychological state of an experienced meaningfulness of the work are B: Skill Variety, C: Task Identity, and E: Task Significance. This makes option 2: "B, C, E Only" the correct choice.

Q90: Which of the following are the assumptions of the oligopoly? 

A. One seller and large number of buyers

B. A few sellers and large number of buyers

C. Large number of sellers and large number of buyer

D. Entry of new seller is restricted

E. Firms Interdependence

Choose the correct answer from the options given below:

(a) C, D, E Only

(b) A, B, C Only

(c) B, D, C Only

(d) B, D, E Only

Ans: d

Sol: The correct answer is B, D, E Only.

Let's analyze each factor:

One seller and large number of buyers

• This assumption pertains to a monopoly market structure, where a single seller dominates the market.
• Reason for exclusion: Oligopoly involves a few sellers, not just one.

A few sellers and large number of buyers

• This is a key characteristic of an oligopoly, where the market is dominated by a small number of firms.
• Reason for inclusion: This fits the definition of an oligopoly.

Large number of sellers and large number of buyers

• This describes a perfect competition market structure, where numerous sellers and buyers exist.
• Reason for exclusion: Oligopoly involves few sellers, not many.

Entry of new seller is restricted

• In oligopolistic markets, barriers to entry are high, preventing many new firms from entering the market.
• Reason for inclusion: This is a common characteristic of oligopolies.

Firms Interdependence

• Oligopolistic firms are highly interdependent, with each firm's actions affecting the others.
• Reason for inclusion: This interdependence is a defining feature of oligopoly markets.

Therefore, the assumptions that fit strictly as characteristics of oligopoly markets are B: A few sellers and large number of buyers, D: Entry of new seller is restricted, and E: Firms Interdependence. This makes option 4: "B, D, E Only" the correct choice.

Q91: The first phase of modern banking in India began after independence in 1947, when the government nationalized the major banks and introduced various reforms to promote financial inclusion and social welfare. The second phase started in the 1990s, when the liberalization of the economy and the advent of technology enabled the emergence of new private and foreign banks, offering competitive and innovative products and services to the customers. In the 2000s, the third phase commenced when the Internet and mobile penetration increased, leading to the rise of online and mobile banking, as well as the entry of Non-Banking Financial Companies (NBFCs) and fintech startups, offering digital solutions to cater to the unbanked and underbanked segments of the population. The fourth and current phase of banking in India is characterized by the emergence of neo banks, which are digital-only banks that operate without physical branches and offer a range of banking and financial services through mobile apps and web platforms. Neo banks often function by partnering with licensed banks to provide their services to customer. While the digital banking landscape in India is evolving rapidly, there are still many challenges and gaps that need to be addressed. One of the major challenges is the lack of standardization and interoperability among the various players, platforms, and systems in the ecosystem. For instance, there are multiple payment methods, such as UPI, IMPS, NEFT, RTGS, cards, wallets and QR codes, each with its own features, limitations and charges. This creates confusion and inconvenience for customers, who have to switch between different apps and interfaces to make payments and access their accounts. 

Artificial Intelligence (AI) is a potent technology that can help digital banks to overcome the challenges and gaps mentioned above, and add value to their customers and stakeholders. AI can enable digital banks to leverage data and analytics, machine learning, natural language processing, computer vision, and other advanced techniques to automate and enhance various banking processes, such as customer identification and verification, customer service and support, product recommendation and cross-selling, fraud detection and risk management, credit scoring and underwriting, and regulatory compliance and reporting.

 What is the primary focus of neo banks in India? 

(a) Offering physical branch services

(b) Catering to the unbanked and underbanked segments

(c) Providing traditional banking services

(d) Emphasizing paper-based transaction

Ans: b

Sol: The correct answer is Catering to the unbanked and underbanked segments.

Catering to the unbanked and underbanked segments:

• Neo banks focus on providing digital-only banking services, utilizing mobile apps and web platforms to reach a broader audience.
• They aim to offer financial services to those who currently lack access to traditional banking, including the unbanked and underbanked populations.
• This objective aligns with the goal of financial inclusion by leveraging technology to provide easily accessible banking and financial solutions.
• Through partnerships with licensed banks, neo banks can offer a diverse range of financial products and services, often with lower costs and greater convenience.

Other Related Points

Offering physical branch services:

• This statement is incorrect. Neo banks primarily operate without physical branches, relying on digital platforms for delivering their services.

Providing traditional banking services:

• While neo banks do offer banking services, they differentiate themselves through digital innovation and convenience rather than traditional branch-based services.

Emphasizing paper-based transactions:

• This is false. Neo banks emphasize digital transactions and solutions, moving away from paper-based processes to enhance efficiency and customer experience.

Q92: The first phase of modern banking in India began after independence in 1947, when the government nationalized the major banks and introduced various reforms to promote financial inclusion and social welfare. The second phase started in the 1990s, when the liberalization of the economy and the advent of technology enabled the emergence of new private and foreign banks, offering competitive and innovative products and services to the customers. In the 2000s, the third phase commenced when the Internet and mobile penetration increased, leading to the rise of online and mobile banking, as well as the entry of Non-Banking Financial Companies (NBFCs) and fintech startups, offering digital solutions to cater to the unbanked and underbanked segments of the population. The fourth and current phase of banking in India is characterized by the emergence of neo banks, which are digital-only banks that operate without physical branches and offer a range of banking and financial services through mobile apps and web platforms. Neo banks often function by partnering with licensed banks to provide their services to customer. While the digital banking landscape in India is evolving rapidly, there are still many challenges and gaps that need to be addressed. One of the major challenges is the lack of standardization and interoperability among the various players, platforms, and systems in the ecosystem. For instance, there are multiple payment methods, such as UPI, IMPS, NEFT, RTGS, cards, wallets and QR codes, each with its own features, limitations and charges. This creates confusion and inconvenience for customers, who have to switch between different apps and interfaces to make payments and access their accounts. 

Artificial Intelligence (AI) is a potent technology that can help digital banks to overcome the challenges and gaps mentioned above, and add value to their customers and stakeholders. AI can enable digital banks to leverage data and analytics, machine learning, natural language processing, computer vision, and other advanced techniques to automate and enhance various banking processes, such as customer identification and verification, customer service and support, product recommendation and cross-selling, fraud detection and risk management, credit scoring and underwriting, and regulatory compliance and reporting.

 What is consequence of the lack of standardization and interoperability in the digital banking ecosystem? 

(a) Convenience for customers

(b) Increased trust in digital banking

(c) Confusing and inconvenience for customers

(d) Reduction in transaction costs

Ans: c

Sol: The correct answer is Confusing and inconvenience for customers.

Confusing and inconvenience for customers:

• The passage highlights that the lack of standardization and interoperability among various players, platforms, and systems in the digital banking ecosystem leads to confusion and inconvenience for customers.
• Customers have to deal with multiple payment methods such as UPI, IMPS, NEFT, RTGS, cards, wallets, and QR codes, each possessing its own features, limitations, and charges.
• Switching between different apps and interfaces to make payments and access their accounts creates a disjointed and inconvenient user experience.

Other Related Points

Convenience for customers:

• This statement is incorrect. The passage clearly indicates that the current digital banking ecosystem creates confusion and inconvenience, not convenience, due to the lack of standardization and interoperability.

Increased trust in digital banking:

• This is false. The passage does not mention increased trust in digital banking as a result of the lack of standardization and interoperability. Instead, such fragmentation may erode customer trust.

Reduction in transaction costs:

• Incorrect, as the passage does not suggest that the lack of standardization and interoperability leads to a reduction in transaction costs. It focuses on the confusion and inconvenience faced by customers.

Q93: The first phase of modern banking in India began after independence in 1947, when the government nationalized the major banks and introduced various reforms to promote financial inclusion and social welfare. The second phase started in the 1990s, when the liberalization of the economy and the advent of technology enabled the emergence of new private and foreign banks, offering competitive and innovative products and services to the customers. In the 2000s, the third phase commenced when the Internet and mobile penetration increased, leading to the rise of online and mobile banking, as well as the entry of Non-Banking Financial Companies (NBFCs) and fintech startups, offering digital solutions to cater to the unbanked and underbanked segments of the population. The fourth and current phase of banking in India is characterized by the emergence of neo banks, which are digital-only banks that operate without physical branches and offer a range of banking and financial services through mobile apps and web platforms. Neo banks often function by partnering with licensed banks to provide their services to customer. While the digital banking landscape in India is evolving rapidly, there are still many challenges and gaps that need to be addressed. One of the major challenges is the lack of standardization and interoperability among the various players, platforms, and systems in the ecosystem. For instance, there are multiple payment methods, such as UPI, IMPS, NEFT, RTGS, cards, wallets and QR codes, each with its own features, limitations and charges. This creates confusion and inconvenience for customers, who have to switch between different apps and interfaces to make payments and access their accounts. 

Artificial Intelligence (AI) is a potent technology that can help digital banks to overcome the challenges and gaps mentioned above, and add value to their customers and stakeholders. AI can enable digital banks to leverage data and analytics, machine learning, natural language processing, computer vision, and other advanced techniques to automate and enhance various banking processes, such as customer identification and verification, customer service and support, product recommendation and cross-selling, fraud detection and risk management, credit scoring and underwriting, and regulatory compliance and reporting.

 What is one of the major challenges in the digital banking landscape in India? 

(a) Lack of internet penetration

(b) Overabundance of physical branches

(c) Lack of standardization and interoperability

(d) Over regulation by the government

Ans: c

Sol: The correct answer is Lack of standardization and interoperability.

Lack of standardization and interoperability:

• The passage clearly identifies the lack of standardization and interoperability among various players, platforms, and systems in the digital banking ecosystem as a major challenge.
• This issue contributes to confusion and inconvenience for customers, who have to navigate multiple payment methods and interfaces, each with different features, limitations, and charges.
• Addressing this challenge is crucial for creating a seamless and user-friendly digital banking experience.

Other Related Points

Lack of internet penetration:

• This statement is incorrect. The passage does not mention the lack of internet penetration as a major challenge. It focuses on issues related to standardization and interoperability in the digital banking ecosystem.

Overabundance of physical branches:

• Incorrect, as the passage highlights the transition to digital banking and the rise of neo banks, which often operate without physical branches.

Over regulation by the government:

• This is false. The passage does not discuss government overregulation as a major challenge. It specifically addresses the technical and operational challenges related to standardization and interoperability in digital banking.

Q94: The first phase of modern banking in India began after independence in 1947, when the government nationalized the major banks and introduced various reforms to promote financial inclusion and social welfare. The second phase started in the 1990s, when the liberalization of the economy and the advent of technology enabled the emergence of new private and foreign banks, offering competitive and innovative products and services to the customers. In the 2000s, the third phase commenced when the Internet and mobile penetration increased, leading to the rise of online and mobile banking, as well as the entry of Non-Banking Financial Companies (NBFCs) and fintech startups, offering digital solutions to cater to the unbanked and underbanked segments of the population. The fourth and current phase of banking in India is characterized by the emergence of neo banks, which are digital-only banks that operate without physical branches and offer a range of banking and financial services through mobile apps and web platforms. Neo banks often function by partnering with licensed banks to provide their services to customer. While the digital banking landscape in India is evolving rapidly, there are still many challenges and gaps that need to be addressed. One of the major challenges is the lack of standardization and interoperability among the various players, platforms, and systems in the ecosystem. For instance, there are multiple payment methods, such as UPI, IMPS, NEFT, RTGS, cards, wallets and QR codes, each with its own features, limitations and charges. This creates confusion and inconvenience for customers, who have to switch between different apps and interfaces to make payments and access their accounts. 

Artificial Intelligence (AI) is a potent technology that can help digital banks to overcome the challenges and gaps mentioned above, and add value to their customers and stakeholders. AI can enable digital banks to leverage data and analytics, machine learning, natural language processing, computer vision, and other advanced techniques to automate and enhance various banking processes, such as customer identification and verification, customer service and support, product recommendation and cross-selling, fraud detection and risk management, credit scoring and underwriting, and regulatory compliance and reporting.

 What marked the beginning of the second phase of modern banking in India? 

(a) Nationalization of major banks

(b) Liberalization of the economy

(c) Emergence of fintech startup

(d) Introduction of Internet banking

Ans: b

Sol: The correct answer is Liberalization of the economy.

Liberalization of the economy:

• The passage indicates that the second phase of modern banking in India began in the 1990s, marked by the liberalization of the economy. This deregulated the banking sector, allowing new private and foreign banks to emerge.
• This phase introduced competitive and innovative products and services, driven by advancements in technology.
• Liberalization played a significant role in transforming the banking landscape, bringing more options and better financial services to customers.

Other Related Points

Nationalization of major banks:

• This statement is incorrect. Nationalization of major banks occurred in the first phase of modern banking in India, post-independence in 1947, and not during the second phase.

Emergence of fintech startups:

• Incorrect, as the emergence of fintech startups marked the third phase of modern banking in India during the 2000s, leveraging Internet and mobile penetration to offer digital solutions.

Introduction of Internet banking:

• This is false. The introduction and rise of Internet banking began in the third phase, not the second. The third phase was driven by increased Internet and mobile penetration.

Q95: The first phase of modern banking in India began after independence in 1947, when the government nationalized the major banks and introduced various reforms to promote financial inclusion and social welfare. The second phase started in the 1990s, when the liberalization of the economy and the advent of technology enabled the emergence of new private and foreign banks, offering competitive and innovative products and services to the customers. In the 2000s, the third phase commenced when the Internet and mobile penetration increased, leading to the rise of online and mobile banking, as well as the entry of Non-Banking Financial Companies (NBFCs) and fintech startups, offering digital solutions to cater to the unbanked and underbanked segments of the population. The fourth and current phase of banking in India is characterized by the emergence of neo banks, which are digital-only banks that operate without physical branches and offer a range of banking and financial services through mobile apps and web platforms. Neo banks often function by partnering with licensed banks to provide their services to customer. While the digital banking landscape in India is evolving rapidly, there are still many challenges and gaps that need to be addressed. One of the major challenges is the lack of standardization and interoperability among the various players, platforms, and systems in the ecosystem. For instance, there are multiple payment methods, such as UPI, IMPS, NEFT, RTGS, cards, wallets and QR codes, each with its own features, limitations and charges. This creates confusion and inconvenience for customers, who have to switch between different apps and interfaces to make payments and access their accounts. 

Artificial Intelligence (AI) is a potent technology that can help digital banks to overcome the challenges and gaps mentioned above, and add value to their customers and stakeholders. AI can enable digital banks to leverage data and analytics, machine learning, natural language processing, computer vision, and other advanced techniques to automate and enhance various banking processes, such as customer identification and verification, customer service and support, product recommendation and cross-selling, fraud detection and risk management, credit scoring and underwriting, and regulatory compliance and reporting.

 How can artificial intelligence (AI) help digital banks to overcome challenges? 

(a) By reducing Internet penetration

(b) By increasing physical branches

(c) By providing advanced analytics

(d) By reducing customer base

Ans: c

Sol: The correct answer is By providing advanced analytics.

By providing advanced analytics:

• AI can help digital banks overcome challenges by leveraging advanced analytics to process vast amounts of data and extract valuable insights.
• This technology can facilitate customer identification and verification, enhance customer service and support, and make personalized product recommendations.
• AI analytics can also detect fraud, manage risks, score credit, and ensure regulatory compliance, thereby improving overall banking efficiency and security.

Other Related Points

By reducing Internet penetration:

• This statement is incorrect. Reducing Internet penetration would negatively impact digital banking, which relies on online and mobile access to bank services.

By increasing physical branches:

• Incorrect, as the current phase of modern banking in India is characterized by neo banks that operate without physical branches. Increasing physical branches contradicts the digital-only model of neo banks.

By reducing customer base:

• This is false. Reducing the customer base would not help overcome challenges. Instead, the goal is to enhance service and reach more customers efficiently through digital means.

Q96: The major source for the revenue for the government is indirect tax. The Central Board of Indirect Taxes and Customs (CBIC) (erstwhile Central Board of Excise and Customs) is the apex regulatory body that supervises the levy and administration of Indirect Taxes in India. CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matter relating to customs, Central Excise, Central Goods & Services Tax (CGST), IGST and narcotics to the extent under CBIC's purview. The board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenue Control Laboratory. In recent years, the Indian government has undertaken significant reforms under the indirect taxation system. This includes the implementation of Goods and Services Tax (GST). Goods and Services Tax (GST) is an indirect tax has replaced many indirect taxes in India. The Goods and Services Tax Act was passed in the Parliament on March 29, 2017. This Act came into effect on July 01, 2017. GST is a destination based tax on consumption with credit of taxes paid at previous stages available as set-off. In a nutshell. Only value addition will be taxed and the burden of tax is to be borne by the final consumer. 

Destination based tax on consumption means the tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. GST has removed the cascading effect of taxes. This cascading effect implies charging tax on tax. In other words, at the time of levy of tax, the total value is considered which is inclusive of all taxes paid up to the points. In this manner, if the tax is always charged on the selling price of the products, the burden of tax keeps on increasing at each point of sales. In this process, the effect of taxation magnifies as at each level tax is calculated on value, which includes taxes already levied and paid. The charging of tax on tax is called the 'Cascading Effect of Tax'.

 What is the significance of the term "destination - based tax" in the context of GST? 

(a) Tax is based on the destination of goods only

(b) Tax is levied based on the origin of goods

(c) Tax is collected at the point of sale.

(d) Tax accrues to the taxing authority at the place of consumption.

Ans: d

Sol: The correct answer is Tax accrues to the taxing authority at the place of consumption.

Tax accrues to the taxing authority at the place of consumption:

• This means that the tax generated from the sales of goods or services is collected by the tax authority in the location where the goods/services are consumed, rather than where they are produced.
• This system is designed to ensure that the revenue benefits the jurisdiction where the consumption occurs, which aligns with the utilization of local resources and infrastructure.
• For financial enterprises, this implies that taxes are remitted to the authorities where their products or services are ultimately consumed, potentially simplifying compliance in comparison to a system where multiple points (origin, various transit points) might be involved in tax collection.

Other Related Points

Tax is based on the destination of goods only:

• This option is incorrect because it suggests that the tax system solely considers the physical end point of the goods, which is too narrow. GST encompasses both goods and services and where they are ultimately used or consumed.

Tax is levied based on the origin of goods:

• This statement is false because GST is designed to be a destination-based tax system, meaning it is collected at the point of consumption, not at the point of origin where goods are produced.

Tax is collected at the point of sale:

• This does not fully capture the essence of a destination-based tax. While the tax might be collected at the point of sale, the crucial aspect is that it is credited to the jurisdiction where the goods or services are actually consumed.

Q97: The major source for the revenue for the government is indirect tax. The Central Board of Indirect Taxes and Customs (CBIC) (erstwhile Central Board of Excise and Customs) is the apex regulatory body that supervises the levy and administration of Indirect Taxes in India. CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matter relating to customs, Central Excise, Central Goods & Services Tax (CGST), IGST and narcotics to the extent under CBIC's purview. The board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenue Control Laboratory. In recent years, the Indian government has undertaken significant reforms under the indirect taxation system. This includes the implementation of Goods and Services Tax (GST). Goods and Services Tax (GST) is an indirect tax has replaced many indirect taxes in India. The Goods and Services Tax Act was passed in the Parliament on March 29, 2017. This Act came into effect on July 01, 2017. GST is a destination based tax on consumption with credit of taxes paid at previous stages available as set-off. In a nutshell. Only value addition will be taxed and the burden of tax is to be borne by the final consumer. 

Destination based tax on consumption means the tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. GST has removed the cascading effect of taxes. This cascading effect implies charging tax on tax. In other words, at the time of levy of tax, the total value is considered which is inclusive of all taxes paid up to the points. In this manner, if the tax is always charged on the selling price of the products, the burden of tax keeps on increasing at each point of sales. In this process, the effect of taxation magnifies as at each level tax is calculated on value, which includes taxes already levied and paid. The charging of tax on tax is called the 'Cascading Effect of Tax'.

 What does the term "cascading effect of taxes" refer to? 

(a) Tax evasion

(b) Tax avoiding

(c) Charging tax on tax

(d) Tax exemption

Ans: c

Sol: The correct answer is Charging tax on tax.

Charging tax on tax:

• The cascading effect of taxes refers to the process where a tax is levied on a product at every stage of the production process, where taxes are also levied on the value which includes previous tax. This can lead to an increase in the final price of the product.
• For financial enterprises, it means that at each stage when a product is sold, the tax levied is on the total cost, which includes taxes paid previously. This makes the products or services more expensive for the end consumer.
• GST, by allowing credit for taxes paid at previous stages, helps in mitigating this cascading effect, thereby reducing the overall tax burden on goods and services.

Other Related Points

Tax evasion:

• This option is incorrect because tax evasion refers to illegal practices to avoid paying taxes owed, such as underreporting income, rather than the effect of charging tax on top of tax.

Tax avoiding:

• This statement is inaccurate. Tax avoidance is the use of legal methods to minimize the amount of tax owed, which differs from the cascading effect of taxing the same product multiple times at different stages.

Tax exemption:

• This is incorrect as tax exemption refers to a monetary exemption that reduces taxable income, whereas the cascading effect deals with the tax being levied on already taxed goods/services, thus increasing the tax burden.

Q98: The major source for the revenue for the government is indirect tax. The Central Board of Indirect Taxes and Customs (CBIC) (erstwhile Central Board of Excise and Customs) is the apex regulatory body that supervises the levy and administration of Indirect Taxes in India. CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matter relating to customs, Central Excise, Central Goods & Services Tax (CGST), IGST and narcotics to the extent under CBIC's purview. The board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenue Control Laboratory. In recent years, the Indian government has undertaken significant reforms under the indirect taxation system. This includes the implementation of Goods and Services Tax (GST). Goods and Services Tax (GST) is an indirect tax has replaced many indirect taxes in India. The Goods and Services Tax Act was passed in the Parliament on March 29, 2017. This Act came into effect on July 01, 2017. GST is a destination based tax on consumption with credit of taxes paid at previous stages available as set-off. In a nutshell. Only value addition will be taxed and the burden of tax is to be borne by the final consumer. 

Destination based tax on consumption means the tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. GST has removed the cascading effect of taxes. This cascading effect implies charging tax on tax. In other words, at the time of levy of tax, the total value is considered which is inclusive of all taxes paid up to the points. In this manner, if the tax is always charged on the selling price of the products, the burden of tax keeps on increasing at each point of sales. In this process, the effect of taxation magnifies as at each level tax is calculated on value, which includes taxes already levied and paid. The charging of tax on tax is called the 'Cascading Effect of Tax'.

 How does GST eliminate the cascading effect of taxes? 

(a) By increasing tax rates

(b) By reducing the number of tax types

(c) By allowing tax credit on previous stages

(d) By exempting certain product from tax

Ans: c

Sol: The correct answer is By allowing tax credit on previous stages.

By allowing tax credit on previous stages:

• GST eliminates the cascading effect of taxes by allowing businesses to claim credit for taxes paid on inputs at previous stages in the supply chain. This method ensures that tax is only paid on the value addition at each stage.
• For financial enterprises, it simplifies compliance and reduces the tax burden, as they do not have to pay tax on the tax that has already been paid in earlier transactions. This leads to lower costs for businesses and reduced prices for consumers.
• This system promotes transparency and efficiency in the tax administration, improving overall business ease.

Other Related Points

By increasing tax rates:

• This option is incorrect as increasing tax rates does not address the issue of the cascading effect. In fact, it may exacerbate the problem by increasing the total tax burden on goods and services.

By reducing the number of tax types:

• This statement is inaccurate. While reducing the number of tax types can simplify the tax system, it does not inherently eliminate the cascading effect of taxes. The core issue is addressed through the provision of tax credits.

By exempting certain products from tax:

• This is incorrect because exempting certain products from tax does not solve the problem of cascading taxes on other non-exempt products or services. The impact is limited only to those specific exempt items.

Q99: The major source for the revenue for the government is indirect tax. The Central Board of Indirect Taxes and Customs (CBIC) (erstwhile Central Board of Excise and Customs) is the apex regulatory body that supervises the levy and administration of Indirect Taxes in India. CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matter relating to customs, Central Excise, Central Goods & Services Tax (CGST), IGST and narcotics to the extent under CBIC's purview. The board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenue Control Laboratory. In recent years, the Indian government has undertaken significant reforms under the indirect taxation system. This includes the implementation of Goods and Services Tax (GST). Goods and Services Tax (GST) is an indirect tax has replaced many indirect taxes in India. The Goods and Services Tax Act was passed in the Parliament on March 29, 2017. This Act came into effect on July 01, 2017. GST is a destination based tax on consumption with credit of taxes paid at previous stages available as set-off. In a nutshell. Only value addition will be taxed and the burden of tax is to be borne by the final consumer. 

Destination based tax on consumption means the tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. GST has removed the cascading effect of taxes. This cascading effect implies charging tax on tax. In other words, at the time of levy of tax, the total value is considered which is inclusive of all taxes paid up to the points. In this manner, if the tax is always charged on the selling price of the products, the burden of tax keeps on increasing at each point of sales. In this process, the effect of taxation magnifies as at each level tax is calculated on value, which includes taxes already levied and paid. The charging of tax on tax is called the 'Cascading Effect of Tax'.

 Who bears the burden of tax in the GST system? 

(a) Manufacturers

(b) Retailers

(c) Final Consumer

(d) Government

Ans: c

Sol: The correct answer is Final Consumer.

Final Consumer:

• In the GST system, the burden of the tax is ultimately borne by the final consumer. This is because GST is a consumption tax, meaning it is levied on the value addition at each stage of production and distribution, but the final tax is paid by the consumer when they purchase the goods or services.
• For financial enterprises, this method ensures that the tax is only levied on the value they add to the product or service, with the tax paid on inputs being credited. This avoids the cascading effect of taxes, where end consumers would otherwise bear the compounded tax costs.

Other Related Points

Manufacturers:

• This option is incorrect because while manufacturers do collect and remit GST on their supplies, they do not bear the final burden of the tax. They can claim input tax credits on the GST paid on their purchases.

Retailers:

• This statement is inaccurate. Retailers collect GST from consumers and remit it to the government, but they can also claim input tax credits for the GST paid on their purchases, which means they do not bear the final tax burden.

Government:

• This is incorrect because the government is the taxing authority that collects the GST, not the entity bearing the tax burden. The ultimate tax burden falls on the consumers who pay the GST on their purchases.

Q100: The major source for the revenue for the government is indirect tax. The Central Board of Indirect Taxes and Customs (CBIC) (erstwhile Central Board of Excise and Customs) is the apex regulatory body that supervises the levy and administration of Indirect Taxes in India. CBIC is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matter relating to customs, Central Excise, Central Goods & Services Tax (CGST), IGST and narcotics to the extent under CBIC's purview. The board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenue Control Laboratory. In recent years, the Indian government has undertaken significant reforms under the indirect taxation system. This includes the implementation of Goods and Services Tax (GST). Goods and Services Tax (GST) is an indirect tax has replaced many indirect taxes in India. The Goods and Services Tax Act was passed in the Parliament on March 29, 2017. This Act came into effect on July 01, 2017. GST is a destination based tax on consumption with credit of taxes paid at previous stages available as set-off. In a nutshell. Only value addition will be taxed and the burden of tax is to be borne by the final consumer. 

Destination based tax on consumption means the tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. GST has removed the cascading effect of taxes. This cascading effect implies charging tax on tax. In other words, at the time of levy of tax, the total value is considered which is inclusive of all taxes paid up to the points. In this manner, if the tax is always charged on the selling price of the products, the burden of tax keeps on increasing at each point of sales. In this process, the effect of taxation magnifies as at each level tax is calculated on value, which includes taxes already levied and paid. The charging of tax on tax is called the 'Cascading Effect of Tax'.

 Which department oversees the administration of matters related to custom, central excise, Central Goods & Services Tax (CGST), (IGST), and narcotics under the Indian government? 

(a) Ministry of Finance

(b) Central Board of Direct Taxes

(c) Central Board of Indirect Taxes and Customs (CBIC)

(d) Department of Revenue

Ans: d

Sol: The correct answer is Department of Revenue.

Department of Revenue:

• Under the Ministry of Finance, the Department of Revenue oversees the administration of matters related to customs, central excise, Central Goods & Services Tax (CGST), Integrated Goods & Services Tax (IGST), and narcotics in India. This includes the formulation of policies for the levy and collection of these taxes.
• In the context of financial enterprises, the Department of Revenue simplifies the tax processes and ensures compliance with indirect tax laws, contributing to efficient tax administration and revenue generation for the government.

Other Related Points

Ministry of Finance:

• This option is not entirely correct. While the Ministry of Finance is the parent organization, it is the Department of Revenue within the ministry that deals specifically with indirect taxes.

Central Board of Direct Taxes:

• This statement is inaccurate. The Central Board of Direct Taxes (CBDT) handles direct taxes, like income tax, not indirect taxes like GST and customs duties.

Central Board of Indirect Taxes and Customs (CBIC):

• This is incorrect as CBIC, while overseeing the administration of indirect taxes, operates under the Department of Revenue. It plays a significant role in the implementation and administration but does not oversee the department itself.