MH SET Paper 2 Mock Test - 4 (Commerce) - MAHA TET MCQ

The following is the explanation of the right answer.

Therefore, Option 1 is the correct answer.

The Correct answer is ‘Industrial recession’.

 Key PointsRisk:

• Risk is the process of identifying, assessing, and controlling uncertainty in an entity's capital and earnings is known as risk management. These dangers arise from a variety of sources, including financial uncertainty, legal liabilities, technological issues, strategic management errors, accidents, and natural disasters.

 Important PointsCompany strike: This option is incorrect because Company strike is a type of risk that can be certain. it can be avoided by taking corrective actions.

Bankruptcy of a major supplier: This option is incorrect because Bankruptcy of a major supplier will not impact the Business.

Death of a key company officer: This option is incorrect because Death of a key company officer will not impact because usually company make Key Managerial insurance to protect such loss

Industrial recession: This option is correct because Industrial recession because it is specific risk factor which cannot be avoided by diversifying the company’s portfolio.

As we know that,

Simple ranking: The Simple Ranking Method using Reference Profiles (or SRMP) is a Multi-Criteria Decision Aiding technique based on the outranking paradigm which allows to rank decision alternatives according to the preferences of a decision maker.

Paired comparison: Paired compariso is the rank comparison rating method is easy and understandable where ratings are to be used as criteria.

360-degree appraisal: Synergita’s holistic 360-degree feedback helps get performance & development feedback from peers, subordinates, superiors, cross-functional managers, customers and other internal & external stakeholders.

Graphic rating: Graphic rating evaluation lists the traits required for the job and asks the source to rate the individual on each attribute such as dependability and creativity. so used for Order of rating from best to worst.

Comparative Advantage theory states that each country should produce those goods in which it has a comparative/relative advantage because of the presence of opportunity costs which gives the country a relative advantage in the production of one good.

The correct answer is Financial & regulatory measures. 

Key Points

As per the passage, "Governments introduced emergency financial and regulatory measures to support national economies, impacting international business operations."

The correct answer is to Prioritize robust digital infrastructure. 

Key Points

As per the passage, "This accelerated the digital transformation amongst MNCs, prompting them to prioritize a robust digital infrastructure and online customer engagement strategies."

The correct answer is Dog.

BCG Matrix: 

• The BCG matrix is a growth-share matrix developed by the Boston Consultancy Group.
• The matrix was developed in the 1970s by Bruce D. Henderson the founder of the Boston Consulting Group.
• The BCG matrix enables companies to analyze their business units and broad product portfolio.
• Thus, giving the company a clear picture of whether to invest, hold or divest a business unit.

Key Points

Based on the two dimensions – relative market share and market growth rate, the company can plot its business units into four categories: Cash Cows, Dogs, Stars, and Question Marks.  

Dogs:

• Dogs operate in a low-growth market and have a low market share.
• Dogs are known to put a strain on company resources.
• They are typically in the decline stage of the product lifecycle.
• The lack of demand coupled with a slow market creates a major hurdle for Dogs to increase their market share.
• For an SBU in this position, the firm should decide to curtail losses by divesting. 

Additional Information

Stars: 

• Stars operate in high-growth markets and have a high market share. As the name goes they are at the top of the game in their industry.
• Apart from a high market share, Stars enjoy customer loyalty, goodwill among stakeholders, high brand value, brand recall, etc.
• Managing a star requires ongoing investment to fend off competition in the high-growth market.

Cash Cows: 

• Cash Cows operate in low-growth markets but maintain a high market share.
• Cash Cows dominate the market they operate in and ensure steady cash flow for the company.
• They typically fall into the maturity stage of the product cycle.
• Cash Cows require less investment and are milked by the company for extra cash flow.

Questions Marks:

• Questions Marks also known as Problem Child operates in a high-growth market but has a low market share.
• The rationale is that the business unit has just started operations.
• Question Marks require steady investment so that they gain market share and turn into Stars.

Hence, According to the BCG matrix, for Dog positions of SBU, the firm should decide to curtail losses by divesting.

 Proposal: 

• In the Indian Contract Act 1872, a proposal is defined as a suggestion or offer made by one person to another, with an intention to enter into a contract.
• It is also referred to as an offer.
• The proposal should be definite and certain, and should be communicated to the person to whom it is made.
• Once the proposal is accepted, it becomes a promise or an agreement, forming a binding contract between the parties.
• However, if the proposal is rejected, it comes to an end and cannot be revived.

Important Points Section 6 of Indian Contract Act 1872: 

Revocation how made —A proposal is revoked—

1. by the communication of notice of revocation by the proposer to the other party;
2. by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;
3. by the failure of the acceptor to fulfil a condition precedent to acceptance; or
4.  by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance. 

Hence the correct answer is A, B, C and D only.

Pharmaceutical does not ignore regulatory agencies. They usually spend much time effort trying to influence the decisions made by them e.g. to get approval for the use of their drugs. The firms also go in for lobbying and may, at times, use threats or promises to achieve their desired.

Refer to: ‘The context in which this new strategy was launched needs recalling. Unlike the period prior to the 1990s, the NPAs that accumulated in the books of banks in recent years were not equitably distributed across different categories of borrowers, big and small, priority and non-priority. Rather, because of a change in the lending strategy during the period of the credit boom after 2003, the NPAs are now concentrated in the hands of large borrowers, primarily corporate borrowers.’

I is opposite of what has been stated in the passage.

II is correct.

III has not been mentioned in the passage and is incorrect.

Surcharge is levied when the total income 1 Crore exceeds for domestic corporation.

A surcharge is an additional charge or tax to the tax being already levied. A surcharge of 10% on a tax rate of 30% effectively increases the combined tax rate to 33%. Marginal reliefs are also provided to individuals as sometimes an increase in tax liability after factoring surcharge becomes more than the increase in income above Rs 1 crore.

The correct match is given below:

Important PointsWork-study

Work study looks at how people work and identifies the variables that influence productivity.

It is a combination of method study and work measurement It aims to:

• To make the best use of resources like people, machines, and materials
• To standardize the process for completing a task
• To reduce the production unit cost,
• To find the average time needed to complete a task
• To reduce the amount of material transportation

Plant layout

• The arrangement of equipment, workspaces and service areas within a factory is known as the plant layout
• It includes making a process flow chart to make a plan of operations to be carried out
• and involves the development of physical relationships among buildings, tools, and operations.

Planning Horizon

• The principal plan that is employed to gauge the production of completed items is referred to as Master Production Schedule
• An MPS shows the various numbers of final goods that businesses must generate for each phase of business.
• The 'Master Production Program' is the name given to the process of developing the MPS, and this process is referred to as the 'planning horizon' which is typically 3 to 18 months long.

Job evaluation

• A job evaluation is a methodical strategy to assess a job's value or worth in comparison to other positions within an organization.
• The ranking method is one of the analytical methods of job evaluation in which each job is compared to others as a whole, and this job-by-job comparison continues until all the jobs have been assessed and ranked.

In Section 10 of Income Tax Act, exempted incomes have been mentioned.

As per Section 10 of the Income Tax Act, 1961, there are certain types of income that will be exempt subject to income tax within a financial year, provided they meet certain conditions and guidelines. 

Indirect taxes are basically taxes that can be passed on to another entity or individual. They are usually imposed on a manufacturer or supplier who then passes on the tax to the consumer. The most common example of an indirect tax is the excise tax on cigarettes and alcohol.

GST is an indirect tax levied on the supply of goods and services. GST is majorly divided into four types: Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), Integrated Goods and Services Tax (IGST) and Union Territory Goods and Services Tax (UGST).

Customs Duty is a type of Indirect Tax which is levied on goods which are imported into India. In some cases, it is also levied when the goods are exported from India.

The correct answer is Rs. 100 crores.
Key Points

• A life insurance company is a financial institution that provides life insurance policies to individuals and businesses.
• Life insurance is a contract between an insurance company and a policyholder, where the insurance company agrees to pay a sum of money to the policyholder's beneficiaries upon the policyholder's death.

 Important Points

• The minimum capital requirement for a life insurance company in India is Rs. 100 crores, as per the Insurance Regulatory and Development Authority of India (IRDAI).
• This requirement is specified in the Insurance Act, 1938.
• The purpose of the minimum capital requirement is to ensure that life insurance companies are financially sound and able to meet their obligations to their policyholders.
• The requirement also helps to protect the interests of policyholders in the event of a company's insolvency.
• The minimum capital requirement is one of several factors that IRDAI considers when evaluating applications for new life insurance licenses.
• Other factors include the promoters' experience and track record, the company's business plan, and its management team.
• IRDAI has also specified minimum capital requirements for other types of insurance companies, such as general insurance companies and health insurance companies.
• The minimum capital requirement for general insurance companies is Rs. 500 crores, and the minimum capital requirement for health insurance companies is Rs. 100 crores.

'Monopoly' is a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. Characteristics associated with a monopoly market make the single seller the market controller as well as the price maker. He enjoys the power of setting the price for his goods. The term monopolistic competition represents the combination of monopoly and perfect competition. Monopolistic competition refers to a market situation in which there are a large number of buyers and sellers of products. However, the product of each seller is different in one aspect or the other. The perfect competition is characterized by the presence of many firms. They all sell identical products. The seller is a price taker, not a price maker. The term oligopoly has been derived from two Greek words, oligo means few and poly means control. Therefore, oligopoly refers to a market form in which there are few sellers dealing either in homogenous or differentiated products.

Commercialization is the last stage in the new product development process that involves the launching of the product on a full scale.

At this stage, new product developments have gone mainstream, consumers are purchasing the good or service, and technical support is consistently monitoring progress.

• (1) all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies;
• (2) all costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene the orders of the promiser, and acted as it would have been prudent for him to act in the absence of any contract of indemnity, or if the promiser authorized him to bring or defend the suit;
• (3) all sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promiser, and was one which it would have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promiser authorized him to compromise the suit.

However, As per Section 124 of the Indian Contract Act, a contract of indemnity is a contract by which one party promises to save the other party from loss caused to him.

There are generally two parties in indemnity contracts:

• The Indemnity holder is the one who is protected from any liability.
• The Indemnifier is the one who promises to reimburse the Indemnitee for any claims.

Key Points

Marketing Communications:

• Enterprises must comprehend the operation of marketing communications in order to develop and implement the marketing strategy effectively.
• Electronic and non-electronic mediums or channels are used in marketing communications to deliver a message to a market, which might include consumers, prospects, stakeholders, and leads for a company. ​

Important PointsSteps involved in Effective Marketing Communication

1. Understand And Know Your Target Audience: The first step in establishing the best marketing communications system for your business is to know your target audience intimately. This step includes analyzing buyer personas, past sales, and marketing data (conversion rates, churn rates, etc.), along with analyzing benchmark data, and the overall scope of target lead/customer demographics.​
2. Establish a budget plan: Financial considerations must be taken into consideration at every stage of the process involved in developing a marketing strategy/marketing communication plan, at the end. To achieve this, the marketing communication plan must be in line with the company budget, which will include input from the CFO of the business.
3. Decide on Your Unique Selling Proposition: To stand out among other businesses, you must adopt and use strategic differentiators. A business can extend operations and reach a wider audience when it determines its unique selling proposition (USP). They can then attract more motivated customers, boost conversion rates, and boost the company's top line.
4. Establish Your Marketing Communication Techniques: Choosing the methods that will comprise the plan, such as platforms, style, etc., is one of the most crucial steps in developing and putting into practice a strong marketing communications strategy. However, the first step in this process is for a company to specify the precise marketing objectives/goals required to enhance its marketing system.
5. Keep a constant brand element: Even though it might not appear as crucial as the other elements involved in developing an efficient marketing strategy, how your business upholds its brand and brand voice is crucial. Throughout all stages of marketing communications and on all platforms, channels, and media, make sure your branding element is upheld. The fundamental identity of your business is your brand. In order to create a favourable perception of your business in the eyes of prospects, leads, clients, and customers, consistency is essential.
6. List the main performance metrics: A collection of success measures that can be tracked, examined, and used to develop future optimization plans are necessary for evaluating the effectiveness of your marketing communications endeavour. For instance, a variety of indicators can be used to assess the effectiveness of your communications system, letting you know what is and isn't working.
7. Implement, Test, and Repeat: Once your marketing strategy is complete, you can start implementing the tactics, achieving the success metrics, and making any necessary changes to the strategy. It is best to keep an open mind and employ flexible strategies that can be improved upon as you go. Plans for marketing communications should be flexible and allow for optimization rather than being rigid.

The correct answer is 'option 2'

• In 1944 at Bretton Woods, as a result of the collective conventional wisdom of the time, representatives from all the leading allied nations collectively favored a regulated system of fixed exchange rates, indirectly disciplined by a US dollar tied to gold.
• This was a system that relied on a regulated market economy with tight controls on the values of currencies.
• Flows of speculative international finance were curtailed by shunting them through and limiting them via central banks. This meant that international flows of investment went into foreign direct investment (FDI)—i.e., construction of factories overseas, rather than international currency manipulation or bond markets.

Therefore the correct answer is 'Gold Exchange Rate System'

Additional Information

• The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement.
• The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states.
• The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained its external exchange rates within 1 percent by tying its currency to gold and the ability of the International Monetary Fund (IMF) to bridge temporary imbalances of payments.

The decision regarding demonetization is taken on the recommendation of Reserve Bank of India. Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change in national currency. The old unit of currency must be retired and replaced with a new currency unit. The opposite of demonetization is remonetization where a form of payment is restored as legal tender. There are multiple reasons why nations demonetize their local units of currency. Some reasons include to combat inflation, to combat corruption, and to discourage a cash system. The process of demonetization involves either introducing new notes or coins of the same currency or completely replacing the old currency with new currency. In 2016, the government decided to demonetize the 500 and 1000- rupee notes, the two biggest denomination notes. These notes accounted for 86% of the country's cash supply. The government's goal was to eradicate counterfeit currency, fight tax evasion, eliminate black money gotten from money laundering and terrorist financing activities, and promote a cashless economy.

Reasoning (R): While the main focus of the Government is on growth, the RBI always focuses on inflation.

The correct answer is International Development Association.

• The International Development Association (IDA) provides interest-free loans known as credits poorest countries.
• IDA also provides grants to governments of the poorest countries.
• IDA aims to reduce poverty by providing zero to low-interest loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
• IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD).
• IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.
• IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
• IDA's work covers primary education, basic health services, clean water and sanitation, agriculture, business climate improvements, infrastructure, and institutional reforms.

About the World Bank:

World Bank composed of 5 institutions:​​

• World Bank is headquartered at Washington.
• The president of the World Bank Group is David Malpass.
• There are 189 members of the world bank.

The correct answer is National Securities Depositories Limited ​.

 Important Points

• National Securities Depositories Limited (NSDL) is the first and largest depository presently operational in India.
• The enactment of the Depositories Act in August 1996 paved the way for the establishment of NSDL.
• It was established in August 1996 
• It was promoted as a joint venture of the IDBI, UTI, and the National Stock Exchange.
•  Its tag line −Technology, Trust and Reach.
• It is a state-of-the-art infrastructure that handles most of the securities held and settled in dematerialized form in the Indian capital market.
• The Central Depository Services Limited (CDSL) is the second depository to commence operations and was promoted by the Bombay Stock Exchange and the Bank of India.
• Both these national-level depositories operate through intermediaries who are electronically connected to the depository and serve as contact points with the investors and are called depository participants.
• Mr G. V. Nageswara Rao is Managing Director & CEO of National Securities Depository Limited

Chi-square test:

• A chi-square test, also written as χ2 test, is a statistical hypothesis test that is valid to perform when the test statistic is chi-square distributed under the null hypothesis, specifically Pearson's chi-square test and variants thereof.
• Pearson's chi-square test is used to determine whether there is a statistically significant difference between the expected frequencies and the observed frequencies in one or more categories of a contingency table.
• In the standard applications of this test, the observations are classified into mutually exclusive classes.
• If the null hypothesis (that in the population there is no difference between the classes) is true, the test statistic computed from the observations follows a χ2 frequency distribution.
• The purpose of the test is to evaluate how likely the observed frequencies would be assuming the null hypothesis is true.
• Test statistics that follow a χ2 distribution occur when the observations are independent and normally distributed, which assumptions are often justified under the central limit theorem.
• There are also χ2 tests for testing the null hypothesis of independence of a pair of random variables based on observations of the pairs.
• Chi-square tests often refer to tests for which the distribution of the test statistic approaches the χ2 distribution asymptotically, meaning that the sampling distribution (if the null hypothesis is true) of the test statistic approximates a χ2 distribution more and more closely as sample sizes increase

where:

Oi = an observed count for bin i

Ei = an expected count for bin i, asserted by the null hypothesis.

• Chi-square goodness of fit test determines if a sample data matches a population.

Important Points

Goodness of fit:

• The goodness of fit of a statistical model describes how well it fits a set of observations.
• Measures of goodness of fit typically summarize the discrepancy between observed values and the values expected under the model in question

Use of Chi-square test:

• The chi-squared distribution has many uses in statistics, including:
  • Confidence interval estimation for a population standard deviation of a normal distribution from a sample standard deviation.
  • Independence of two criteria of classification of qualitative variables.
  • Relationships between categorical variables (contingency tables).
  • Sample variance study when the underlying distribution is normal.
  • Tests of deviations of differences between expected and observed frequencies (one-way tables).
  • The chi-square test (goodness of fit test).

The correct answer is (d) All of the above.

Various organizations play a crucial role in providing support and guidance to Self-Help Groups (SHGs), helping them to establish, operate effectively, and achieve their objectives. These include:

• Non-governmental organizations (NGOs): NGOs provide technical assistance, training, and capacity-building support to SHGs, helping them to develop their organizational skills, financial management practices, and income-generating activities. They also advocate for SHGs and facilitate their access to resources and opportunities.
• Government agencies: Government agencies at the central, state, and local levels provide financial support, policy guidelines, and regulatory frameworks for SHGs. They also offer training programs, skill development initiatives, and market linkages to support SHGs' economic activities.
• Banks: Banks play a significant role in providing micro-credit facilities to SHGs, enabling them to access financial resources for their micro-enterprises and income-generating activities. They also offer financial literacy programs and support SHGs in developing their financial management skills.
• Community-based organizations (CBOs): CBOs, rooted in the local communities, provide grassroots support to SHGs, understanding their unique needs and challenges. They offer guidance on local market conditions, facilitate networking opportunities, and connect SHGs to relevant resources and services

The correct answer is Shop disciplinarian.

Key Points

Shop disciplinarian

• In a functional organization, the shop disciplinarian is responsible for handling cases of breach of discipline and absenteeism.
• This role is typically assigned to an individual who ensures that employees adhere to the organization's rules and regulations, maintains discipline in the workplace, and takes appropriate action in case of misconduct or absenteeism.
• The shop disciplinarian may investigate complaints, issue warnings or disciplinary actions, and work closely with supervisors and managers to maintain a harmonious and productive work environment.
• Their primary focus is to enforce discipline and address any behavioural or performance issues within the organization.
• A shop disciplinarian typically falls under the category of front-line or first-line management.
• Front-line managers are responsible for overseeing the day-to-day operations of a specific work unit or department within an organization. They directly supervise and manage the employees who carry out the operational tasks, ensuring that work is performed efficiently, productivity targets are met, and discipline is maintained.
  

Additional Information

Instruction card clerk:

• The instruction card clerk is responsible for maintaining and organizing the instruction cards or job orders in a functional organization.
• They ensure that the required instructions or procedures for different tasks are documented accurately and are readily available to the employees.

Time and Cost clerk:

• The time and cost clerk is responsible for tracking and recording the time spent by employees on various tasks or projects, as well as calculating the associated costs.
• They play a role in monitoring productivity and cost control.
• While they may be involved in gathering data related to attendance and working hours, their primary focus is on time and cost management rather than dealing with disciplinary issues.

Route Clerk:

• The route clerk is responsible for planning and organizing the routes for deliveries or transportation in a functional organization.
• They ensure that goods or services are efficiently routed to their intended destinations.

SDR’s are popularly known as Paper Gold.

Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency per se.