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SEBI Grade A (General Stream) Mock Test - 5 - Bank Exams MCQ


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30 Questions MCQ Test - SEBI Grade A (General Stream) Mock Test - 5

SEBI Grade A (General Stream) Mock Test - 5 for Bank Exams 2024 is part of Bank Exams preparation. The SEBI Grade A (General Stream) Mock Test - 5 questions and answers have been prepared according to the Bank Exams exam syllabus.The SEBI Grade A (General Stream) Mock Test - 5 MCQs are made for Bank Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for SEBI Grade A (General Stream) Mock Test - 5 below.
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SEBI Grade A (General Stream) Mock Test - 5 - Question 1

Who was sworn in as Pakistan's 14th President in March 2024?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 1
The correct answer is ​Asif Ali Zardari. In News
  • Asif Ali Zardari was sworn in as Pakistan's 14th President.

Key Points
  • The oath-taking ceremony took place at Aiwan-e-Sadr, the Presidential Palace.
  • Chief Justice of Pakistan Qazi Faez Isa administered the oath to Zardari.
  • He secured 411 electoral votes with the backing of PML-N and MQM-P, becoming the joint candidate of the ruling alliance.
  • Zardari replaced Dr. Arif Alvi, who remained in office for five additional months.

Additional Information

  • The swearing-in ceremony was attended by Prime Minister Shehbaz Sharif, along with senior officials and diplomats.
  • Zardari, co-chairman of the Pakistan Peoples Party (PPP), previously served as the 11th president of Pakistan from 2008 to 2013.
  • He won the presidency for the second time, defeating PTI-backed candidate Mahmood Khan Achakzai.
  • Zardari has been a member of the National Assembly of Pakistan since August 2018.
  • Married to Benazir Bhutto, he was brought up and educated in Karachi.
SEBI Grade A (General Stream) Mock Test - 5 - Question 2

In April 2024, RuPay, in collaboration with the National Payments Corporation of India (NPCI), introduces which campaign during the Indian Premier League (IPL) 2024.

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 2

The correct answer is 'Link it, Forget it'.

In News

  • Link It, Forget It: RuPay's campaign on credit cards launched at IPL.

Key Points

  • The National Payments Corporation of India (NPCI) has a campaign, “Link it, Forget it”, to raise awareness about RuPay Credit cards, which can be seamlessly linked to a UPI ID, enabling secure and convenient payments.
  • The campaign was launched during the ongoing season of the Indian Premier League (IPL).
  • The campaign, designed by DDB Mudra Group, aims to promote the use of RuPay credit cards with UPI for a seamless and touch-free payment experience.
  • The campaign 'Link It, Forget It' with Shankar Mahadevan stresses on how unnecessary it is to carry your wallet when you have a RuPay Credit Card.
  • Currently, 16 banks are live to link RuPay Credit Card on UPI. These banks are Punjab National Bank, Union Bank, Indian bank, HDFC Bank, Canara Bank, Axis Bank, Kotak Mahindra Bank, BOB Financial Ltd, SBI Cards, ICIC Bank, AU Small Finance Bank, IDFC Bank, Federal Bank, Catholic Syrian Bank, IndusInd Bank, Yes Bank.

Additional Information

  • RuPay
    • ​Founded in - 2014
    • HQ - Mumbai
  • NPCI
    • Established in - 2008
    • HQ - Mumbai
    • CEO - Dilip Asbe
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SEBI Grade A (General Stream) Mock Test - 5 - Question 3

When it comes to money market instruments, which among the following is not true?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 3
  • Treasury bills, Term money, certificate of deposit & commercial paper are the instruments of money market whereas corporate securities are not the part of money market.
  • Corporate securities belong to capital market where it is termed in the forms of shares, debentures etc.
  • Money market is controlled by RBI whereas Capital market is controlled by SEBI.
SEBI Grade A (General Stream) Mock Test - 5 - Question 4

Which of the following is the most appropriate option to fill in the blank labelled as (3)?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 4

The correct answer is option 5.

Key Points

To answer this question, let's first understand the context of the sentence containing the blank labelled as (3):

Schools serve as primary interactions for children with society and the environment, ___(3)___ impacting young minds.

  • This sentence emphasizes the significant impact of schools on children, stating that they are the primary interfaces with society and the environment, profoundly influencing young minds.
  • Blank (3) should be filled with a word conveying a deep and lasting impact, aligning with the idea that schools greatly influence young minds.
  • Now, let's understand the meanings of the given words as options:
  • Extraneously - in a manner unrelated or irrelevant to the current topic or situation (बाह्यतः)
    • For Example:
    • The speaker's extraneous comments during the presentation distracted the audience from the main points.
  • Superficially - on the surface or in appearance only; not thoroughly or deeply (सतही)
    • For Example:
    • She seemed confident superficially, but she was struggling with self-doubt beneath the surface.
  • Remotely - to a small degree; slightly; from a distance (दूरस्थ)
    • For Example:
    • The possibility of success seemed only remotely achievable given the challenging circumstances.
  • Inadvertently - without intention; accidentally or unintentionally (अनजाने में)
    • For Example:
    • He inadvertently offended his friend by making a thoughtless remark.
  • Profoundly - to a profound extent; deeply or intensely (गहिराई से)
    • For Example:
    • The loss of a loved one can profoundly impact a person's emotional well-being.
  • So, given the context and the meanings of the words, the most appropriate option to fill in the blank labelled as (3) is "profoundly." It aligns with the idea that schools serve as primary interactions for children with society and the environment, profoundly impacting young minds. The word "profoundly" emphasizes a deep and lasting influence, which is suitable in this context.
  • Therefore, the correct answer is "profoundly."
  • The complete sentence would be: "Schools serve as primary interactions for children with society and the environment, profoundly impacting young minds."
SEBI Grade A (General Stream) Mock Test - 5 - Question 5

Directions: Read the sentence given below to find out if it contains an error. The error, if any, will be in one part of the sentence. If the sentence is error-free, select No error or option 5. Ignore errors of punctuation if any.

There are still thousands (A)/ of pieces of furnitures (B)/ in the (C)/ second-hand market. (D)/ No error (E)

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 5

The correct answer is 'B' i.e. this part of the sentence has an error.

Key Points

  • In the second part of the given sentence, the use of the plural form of the noun 'furnitures' is incorrect.
  • The noun 'furniture' is an uncountable noun i.e. we cannot count it.
  • Uncountable nouns usually do not have a plural form and are used with a singular verb.
  • We commonly use ''piece of furniture'' to refer to one or more items or to refer to different kinds of furniture.
  • For Example:
    • ​The chair, a bed, and a small table were the only pieces of furnitures she had in her hut.
    • The chair, a bed, and a small table were the only pieces of furniture she had in her hut.
  • Therefore, the noun 'furniture' should be used in place of the noun 'furnitures'.

Hence, the correct answer is option 2.

Correct sentence: There are still thousands of pieces of furniture in the second-hand market.

Additional Information

  • The nouns given below seem plural in form but in actuality are singular:
    • News, billiards, summons, physics, measles, innings, etc.
  • For Example:
    • ​Physics is an interesting subject.
SEBI Grade A (General Stream) Mock Test - 5 - Question 6

In the following question, two columns are given containing three phrases each. In the first column, phrases are A, B, and C, and in the second column, the phrases are D, E and F. A phrase from the first column may or may not connect with a phrase from the second column to make a grammatically and contextually correct sentence. There are five options, four of which display the sequence(s) in which the phrases can be joined to form a grammatically and contextually correct sentence. If, none of the options given forms a correct sentence after combination, select ‘None of these’ as your answer.

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 6

The correct answer is option 4) i.e. A-E, B-F and C-D.
Explanation

We need to join the sentence segments in column 1 with those in column 2 to create sentences that are conceptually and grammatically correct. Let us see how the sentence parts can join.

  • Part A talks about how reading certain books have an ennobling influence. 'Ennobling' means 'acquiring greater dignity or nobility of character'. So contextually, it should be joined with part E as it points out what all are influenced by the reading of such books. So, A-E.
  • Part B talks about trash. So, contextually, it should be joined with part F which talks about recycle and reuse. So, B-F.
  • Part C talks about the personalities of detection dogs and so should be joined with part D that talks about how this personality trait can affect their suitability as pets. So, C-D.

In the given options, the correct answers A-E, B-F and C-D are reflected in option 4, making it the correct answer.

SEBI Grade A (General Stream) Mock Test - 5 - Question 7

Directions: Given below is a word, followed by three sentences which consist of that word. Identify the sentence(s) that don't/doesn't express the meaning of the word.

PARODY
A. It also includes some brilliant parodies.
B. He had become a grotesque parody of himself and the gallery, at last, began to avert its eyes.
C. There is a twist to his parody tale.

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 7

The correct answer is 'Only C'.

Key Points

  • Parody means- a piece of writing, speech, or music that copies the style of somebody/something in a funny way.
  • In Sentence A, the meaning of parody is understandable. "It includes some brilliant parodies."
  • In Sentence B, the meaning of parody is understandable here too. "He had become a grotesque parody of himself and the gallery, at last, began to avert its eyes"
  • In Sentence C, the meaning of parody is not being portrayed properly. Here, it is giving another meaning to the sentence.
  • Hence, the correct answer is option 3.
SEBI Grade A (General Stream) Mock Test - 5 - Question 8

In the following question two equations are given. You have to solve the equations and mark the answer accordingly.

l. x2 – 29x + 204 = 0

ll. 2y2 – 43y + 176 = 0

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 8

Calculation:

x2 – 29x + 204 = 0

⇒ x2 – 17x – 12x + 204 = 0

⇒ x (x - 17) – 12(x - 17) = 0

⇒ (x - 17) (x - 12) = 0

⇒ x = 17, 12

2y2 – 43y + 176 = 0

⇒ 2y2 – 32y – 11y + 176 = 0

⇒ 2y ( y - 16) – 11 ( y - 16) = 0

⇒ (2y - 11) (y - 16) = 0

⇒ y = 11/2, 16

Comparison between x and y (via Tabulation):

∴ The relation between x and y cannot determined.

SEBI Grade A (General Stream) Mock Test - 5 - Question 9

In the given question, two equations numbered l and II are given. Solve both the equations and mark the appropriate answer.

I. 4x2 – 17x + 15 = 0

II. 3y2 + 13y - 38 = 0

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 9

Given:

I. 4x2 – 17x + 15 = 0

II. 3y2 + 13y - 38 = 0

Calculation:

From I,

4x2 – 17x + 15 = 0

⇒ 4x2 – 12x - 5x + 15 = 0

⇒ 4x(x - 3) - 5(x - 3) = 0

⇒ (x - 3)(4x - 5) = 0

Taking,

⇒ (x - 3) = 0 or (4x - 5) = 0

⇒ x = 3 or (5/4)

From II,

3y2 + 13y - 38 = 0

⇒ 3y2 + 19y - 6y - 38 = 0

⇒ y(3y + 19) - 2(3y + 19) = 0

⇒ (y - 2)(3y + 19) = 0

Taking,

⇒ (y - 2) = 0 or (3y + 19) = 0

⇒ y = 2 or (-19/3)

Comparison between x and y (via Tabulation):

∴ x = y or relation between x and y can not be established.

SEBI Grade A (General Stream) Mock Test - 5 - Question 10

If in 2021,the number of appeared candidates is 125% of the number of qualified candidate in 2018 then find the number of unqualified woman in 2021 if the ratio of number of unqualified men and number of unqualified women candidates is 7 : 3. Number of appeared candidate who qualified in 2021 at 376 less than the number of appeared candidate who qualified in 2020.

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 10

No. of appeared candidate in 2021

No. of appeared candidate who qualified in 2021

= 576 – 376 = 200

No. of unqualified woman in 2021

SEBI Grade A (General Stream) Mock Test - 5 - Question 11

In 2017, number of men who qualified were 50% of the number of men who qualified in 2020. Find the number of appeared candidate in 2017 if respective ratio of number of qualified men and woman candidates in 2020 is 13 : 11.

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 11

No. of men candidates who qualified in 2020

No. of man who qualified in 2017

Total no. of appeared candidates who qualified in 2017

Total no. of appeared candidates in 2017

SEBI Grade A (General Stream) Mock Test - 5 - Question 12
Motu, Patlu and chotu decide to start the consultancy agency. They invested their sum in the ratio of 25 ∶ 15 ∶ 29 respectively. They earned Rs. 22,977 as a profit at the end of the year, then what is the difference between share of Motu and Patlu?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 12

Given

Ratio of invested sum = 25 ∶ 15 ∶ 29

Total profit at the end of the year = Rs. 22,977

X = 22977/69 = Rs. 333

∴ Required difference = Rs. (25x – 15x) = Rs. 10x → Rs. 10 × 333 = Rs. 3330

Hence, the difference between share of Motu and Patlu is Rs. 3330.
SEBI Grade A (General Stream) Mock Test - 5 - Question 13

Which of the following is true about the box which contains 6 chocolates?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 13

Seven boxes : P, Q, R, S, T, U, and V.

Number of chocolates: 2, 6, 9, 12, 16, 17, and 19.

1). There are two boxes between S and the box in which there is 12 chocolates.

2). S is above the box which has 12 chocolates.

3). S is placed below P.

4). P doesn't have 16 chocolates.

5). There are two boxes between the box having 6 and 16 chocolates.

6). Two boxes are placed between P and the box in which there are 9 chocolates.

7). U is immediately below the box which has 16 chocolates.

8). There are only three boxes between T and the box which has 9 chocolates.

After combining all, we have

Case 1:

Case 2:

Case 3:

Case 4:

9). The difference between the number of chocolates in box S and the box just above S is 13. ( Here we see only numbers 6 and 19, where the difference is 13 possible. so, either S is 6/19 or the box just above S is 19/6 has the number of chocolates).

From here Case 1, Case 2, and Case 4 get eliminated. ( as the number of 6 chocolates is in it but it is not just above S.)

From Case 3, we can say that S has 19 chocolates, as 6 is just above it.

Case 3

10). Only one box is between Q and V.

11). Q doesn't have 6 chocolates.

12). The number of chocolates in the box which is just above V is less than the number of chocolates in V.

13). As Only R and 17 chocolates are left, it occupies the left position i.e. R has 16 chocolates and T has 17 chocolates.

The final arrangements:

Hence, Box contains 6 chocolates is immediately above Box S.

SEBI Grade A (General Stream) Mock Test - 5 - Question 14

Direction: In the following questions assuming the given statements to be true, find which of the conclusion(s) among the given conclusions is/ are definitely true and then give your answers accordingly.

Statements: X ≥ Q < Y ≥ R; Z = S ≤ T ≤ Q 

Conclusions:

I. Y > Z

II. X ≥ S

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 14

Given statements:  X ≥ Q < Y ≥ R;  Z = S ≤ T ≤ Q 

Conclusions:

I. Y > Z  → True (Given X ≥ Q < Y ≥ R and Z = S ≤ T ≤ Q  so by combining Z = S ≤ T ≤ Q < Y ≥ R thus Y > Z is true)

II. X ≥ S → True (Given X ≥ Q < Y ≥ R and Z = S ≤ T ≤ Q  so by combining Z = S ≤ T ≤ Q ≤ X thus X ≥ S is true)

Hence, Both conclusion I and II are true.

SEBI Grade A (General Stream) Mock Test - 5 - Question 15

Who among the following joined the company on the 12th of November?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 15

Given: Eight persons join a company on two particular dates of four different months in the same year.

Combining the given conditions, we get the following possibilities as follows-

1. Only two persons joined the company before Jos. Jonny joined the company on the 21st of the month which has 31 days. This gives rise to the following cases-

2. Charles didn’t join the company in the month of April or July. No one joined the company after Marcus. Adding these two conditions to the above two cases we get-

3. Jonny didn’t join the company in the months of July and November. Only two persons join the company in between Jos and Carlos. Charles and Marcus, who are twin brothers, joined the company in the same month. Combining these conditions, we see that Case 2 and Case 3 from the above are eliminated. Hence, we get-

4. Xander and Carlos joined the company in the same month. Patrick joined the company immediately before Xander. Combining these two conditions, we get the final table as follows-

From the above final table, we see that Charles joined the company on the 12th of November.

Hence, Charles joined on the 12th of November.

SEBI Grade A (General Stream) Mock Test - 5 - Question 16

Who joined the company on the 21st of July?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 16

Given: Eight persons join a company on two particular dates of four different months in the same year.

Combining the given conditions, we get the following possibilities as follows-

1. Only two persons joined the company before Jos. Jonny joined the company on the 21st of the month which has 31 days. This gives rise to the following cases-

2. Charles didn’t join the company in the month of April or July. No one joined the company after Marcus. Adding these two conditions to the above two cases we get-

3. Jonny didn’t join the company in the months of July and November. Only two persons join the company in between Jos and Carlos. Charles and Marcus, who are twin brothers, joined the company in the same month. Combining these conditions, we see that Case 2 and Case 3 from the above are eliminated. Hence, we get-

4. Xander and Carlos joined the company in the same month. Patrick joined the company immediately before Xander. Combining these two conditions, we get the final table as follows-

From the above final table, we see that Patrick joined on the 21st of April and Xander joined on the 12th of Juy.

Hence, CARLOS is the correct answer.

SEBI Grade A (General Stream) Mock Test - 5 - Question 17

How many items were purchased between Watch and Racquet?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 17

Given:-

Nine items - Perfume, Watch, Raincoat, Coffee, Charger, Purse, Notebook, Racquet, and Knife

Let the first item purchased be numbered 1 and the last item purchased be numbered 9.

Now,

1) The number of items purchased before the Purse is less than the number of items purchased after the Purse. It means at least 5 items were purchased after Purse. So Purse can be numbered 1, 2, 3, or 4.

2) More than three items were purchased after Raincoat. It means Raincoat cannot be numbered 6, 7, 8, and 9.

3) Only two items were purchased between Raincoat and Purse.

So the possibilities are -

4) The Perfume was purchased before Raincoat. So, Raincoat was not the first item to be purchased. We cannot place Perfume yet.

The possible cases are -

5) More than one item was purchased between the Purse and Charger. It means Charger was purchased after Rainbow in both cases.

6) The Perfume was purchased before Charger but not immediately before. So, Perfume was purchased before Raincoat and Charger.

We can place Perfume as follows:

7) Charger was purchased before Racquet.

8) The Knife was purchased before Notebook but after Racquet.

So, the sequence will be Raincoat > Charger > Racquet > Knife > Notebook.

8) Coffee was purchased immediately before Watch. This is possible only in Case II (a).

So, the final arrangement is:

Two items were purchased between Watch and Racquet.

Hence, the correct answer is Two.

SEBI Grade A (General Stream) Mock Test - 5 - Question 18
Under which of the following rates can scheduled commercial banks borrow funds overnight from the Reserve Bank of India?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 18

The correct answer is Marginal Standing Facility (MSF).

Key Points

  • Marginal Standing Facility (MSF):
    • A facility under which scheduled commercial banks can borrow an additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest.
    • This provides a safety valve against unanticipated liquidity shocks to the banking system.

Additional Information

  • Repo Rate:
    • The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
  • Cash Reserve Ratio (CRR):
    • The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such percentage of its Net demand and time liabilities (NDTL).
  • Bank Rate :
    • It is the rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers.
    • This rate has been aligned to the MSF rate and, therefore, changes automatically as and when the MSF rate changes alongside policy repo rate changes.
SEBI Grade A (General Stream) Mock Test - 5 - Question 19
Which of the following best describes the concept of "Multiplier" in macroeconomics?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 19

The correct answer is The change in equilibrium GDP resulting from a change in autonomous spending.

Key Points

  • The multiplier effect describes how an initial change in autonomous spending (such as investment, government spending, or exports) leads to a larger change in overall economic output.
  • The size of the multiplier depends on the marginal propensity to consume (MPC) and the marginal propensity to save (MPS).
  • A higher MPC leads to a larger multiplier effect, as more of the initial spending is re-spent in the economy.
  • The formula for the simple multiplier is 1 / (1 - MPC).

Additional Information

  • Multiplier Effect
    • Explains how an initial change in autonomous spending leads to a larger change in equilibrium GDP.
  • Marginal Propensity to Consume (MPC)
    • The fraction of additional income that households spend on consumption.
SEBI Grade A (General Stream) Mock Test - 5 - Question 20
In Marginal Costing, the term __________ refers to the difference between sales revenue and variable costs of production.
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 20

The correct answer is Contribution margin.

Key Points

  • The contribution margin is used to cover fixed costs and contribute to profits.
    • It refers to the difference between sales revenue and variable costs of production.
  • Gross profit is the difference between sales revenue and the cost of goods sold, including both variable and fixed costs.
  • Net profit is the profit after all expenses, including fixed and variable costs, have been deducted from total revenue.
  • Operating income is the profit from core business operations, excluding non-operating income and expenses.
  • Fixed cost refers to costs that do not vary with the level of production or sales.
SEBI Grade A (General Stream) Mock Test - 5 - Question 21
Which of the following statements is true regarding the registration of charges under Chapter VIII of the Companies Act, 2013?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 21

The correct answer is The company must register the charge within 30 days of creation with the Registrar of Companies.

Key Points

  • Section 77 of the Companies Act, 2013 mandates that charges created by a company on its assets must be registered within 30 days.
  • The registration of charges ensures transparency and protects the interests of creditors by making the charge details publicly available.
  • Charges can include both tangible and intangible assets, and it is compulsory for all companies, including private companies, to register them.
  • Charges can be modified or satisfied, and such changes must also be registered with the Registrar of Companies.

Additional Information

  • Registration of Charges
    • Ensures that details of charges are made public and provides protection to creditors by securing their interests.
  • Consequences of Non-Compliance
    • Failure to register charges can result in penalties and the charge being considered void against the liquidator and any creditor of the company.
SEBI Grade A (General Stream) Mock Test - 5 - Question 22
To which of the following does 'Disinflation' refers to
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 22
  • Disinflation is a temporary slowing of the pace of price inflation. It is used to describe instances when the inflation rate has reduced marginally over the short term.
  • Disinflation is commonly used by the Federal Reserve to describe a period of slowing inflation.
  • Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation.
  • Disinflation is not considered problematic because prices do not actually drop, and disinflation does not usually signal the onset of a slowing economy.
  • A healthy amount of disinflation is necessary because it represents economic contraction and prevents the economy from overheating.
SEBI Grade A (General Stream) Mock Test - 5 - Question 23
Which of the following theories of leadership suggests that there is no single best style of leadership and that effective leadership depends on the situation at hand?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 23

The correct answer is Contingency Theory

Key Points

  • Contingency Theory
    • Proposes that the effectiveness of a leader is contingent upon how well the leader's style matches the specific context.
  • Trait Theory
    • Suggests that certain inherent traits or characteristics make a good leader.
  • Behavioral Theory
    • Focuses on the behaviors and actions of leaders rather than their traits.
  • Transformational Theory
    • Emphasizes inspiring and motivating followers to achieve higher levels of performance.
  • Servant Leadership Theory
    • Prioritizes the needs and development of followers, viewing leadership as a service.
SEBI Grade A (General Stream) Mock Test - 5 - Question 24
Which of the following is not a characteristic of a "private company" as defined under Chapter I of the Companies Act, 2013?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 24

The correct answer is Requires a minimum paid-up share capital of one lakh rupees

Key Points

  • Section 2(68) of the Companies Act, 2013 defines a private company as one that restricts the right to transfer its shares, limits the number of its members to 200, and prohibits any invitation to the public to subscribe for any securities.
  • The requirement for a minimum paid-up share capital has been omitted by the Companies (Amendment) Act, 2015.
  • A private company must have at least two directors, and the maximum number of directors is fifteen unless a special resolution is passed.
  • Private companies enjoy certain exemptions and privileges compared to public companies under the Act.

Additional Information

  • Private Company
    • A company that restricts the right to transfer its shares, limits the number of its members to 200, and prohibits any invitation to the public to subscribe for any securities.
  • Companies (Amendment) Act, 2015
    • Removed the requirement for a minimum paid-up share capital for private companies.
SEBI Grade A (General Stream) Mock Test - 5 - Question 25
Which of the following is an example of a non-monetary item under accounting standards?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 25

The correct answer is Inventory

Key Points

  • Non-Monetary Items
    • Include assets that do not have a fixed or determinable amount of money, such as inventory, fixed assets, and intangible assets.
  • Monetary Items
    • Include cash and items that will be settled in cash, such as accounts receivable, accounts payable, and bank overdrafts.
  • Inventory
    • It is classified as a non-monetary item because its value can fluctuate based on market conditions and it is not a fixed amount of money.
  • Cash and Cash Equivalents
    • They are always considered monetary items as they have a fixed or determinable amount of money.
SEBI Grade A (General Stream) Mock Test - 5 - Question 26
The IS-LM model represents the equilibrium in __________.
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 26

The correct answer is Goods and money markets.

Key Points

  • The IS-LM model combines the equilibrium conditions in the goods market (represented by the IS curve) and the money market (represented by the LM curve).
  • The IS curve shows combinations of interest rates and output where the goods market is in equilibrium (investment equals savings).
  • The LM curve shows combinations of interest rates and output where the money market is in equilibrium (money demand equals money supply).
  • The intersection of the IS and LM curves represents the simultaneous equilibrium in both markets.
  • The model is used to analyze the effects of fiscal and monetary policy on aggregate demand and output.
SEBI Grade A (General Stream) Mock Test - 5 - Question 27

Suppose that a firm has 20% debts and 80% equity in its capital structure. The cost of debts and cost of equity are assumed to be 10% and 15% respectively, What is the overall cost of capital?

Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 27

A firm’s Weighted Average Cost of Capital (WACC) represents its blended cost of capital across all sources, including common shares, preferred shares, and debt.

Key Points

The cost of each type of capital is weighted by its percentage of total capital, and they are added together.

WACC = (10 x 0.20) + (15 x 0.80)

∴ WACC = 2 + 12

∴WACC = 14%

The overall cost of capital is 14%.

Thus, option 4 is the correct answer.

SEBI Grade A (General Stream) Mock Test - 5 - Question 28
Which of the following accurately describes the concept of "Natural Rate of Unemployment"?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 28

The correct answer is Unemployment rate that occurs when the economy is at full employment.

Key Points

  • The natural rate of unemployment includes frictional and structural unemployment but excludes cyclical unemployment.
  • It is the level of unemployment consistent with a stable rate of inflation.
  • When the economy is at the natural rate of unemployment, it is considered to be operating at full employment.
  • Policies aiming to reduce unemployment below the natural rate can lead to accelerating inflation in the long run.

Additional Information

  • Natural Rate of Unemployment
    • The level of unemployment that persists in the long run even when the economy is at full employment.
  • Cyclical Unemployment
    • Unemployment that results from economic recessions and fluctuations in the business cycle.
SEBI Grade A (General Stream) Mock Test - 5 - Question 29
Global depository receipt is mentioned in which of the following sections of Companies Act, 2013?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 29

The correct answer is Section 41

Key Points Global Depository Receipt (GDR):

  • Global Depository Receipt (GDR) is an instrument in which a company located in a domestic country issues one or more of its shares or convertibles bonds outside the domestic country.
  • According to Section 41 of Companies Act 2013, a company may, after passing a special resolution in its general meeting, issue depository receipts in any foreign country in such manner, and subject to such conditions, as may be prescribed.

Important Points Advantages of using GDRs:

  • GDR provides access to foreign capital markets.
  • GDR can be freely transferred.
  • GDR increases the shareholders base of the company.

Disadvantages of Using GDRs:

  • Violating any regulation can lead to serious consequences of the company.
  • Dividends are paid in the domestic country's currency, which is subject to volatility in the forex market.
  • GDR is one of the expensive sources of finance.
SEBI Grade A (General Stream) Mock Test - 5 - Question 30
Which of the following is NOT included in the Cash Flow Statement under the indirect method of cash flow reporting?
Detailed Solution for SEBI Grade A (General Stream) Mock Test - 5 - Question 30

The correct answer is Direct operating expenses

Key Points

  • The indirect method adjusts net income for changes in working capital, non-cash expenses, and gains or losses on the sale of fixed assets.
  • Depreciation and amortization are non-cash expenses added back to net income.
  • Gains or losses on the sale of fixed assets are adjusted as they do not represent operating cash flows.
  • Interest paid and received are included in the cash flow statement under financing and investing activities respectively.

Additional Information

  • Indirect Method of Cash Flow Reporting
    • Starts with net income and adjusts for changes in working capital and non-cash expenses to derive cash flow from operating activities.
  • Direct Operating Expenses
    • Reported on the income statement, not adjusted in the cash flow statement under the indirect method.
  • Non-Cash Expenses
    • Includes depreciation and amortization, added back to net income in the indirect method.
  • Gains or Losses on Sale of Fixed Assets
    • Adjusted in the cash flow statement as they do not represent cash flows from operating activities.
  • Interest Paid and Received
    • Included in financing and investing activities respectively in the cash flow statement.
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