ASTRAL EDUCATION

COMMERCE (E.M.) BUSINESS ENVIRONMENT PYP (P-2)

June-2012 3) Environmental protection

4) Unemployment reduction
3. Which one is not an element of legal environment? 5. Which of the following are outside scope of the
1) Act of Parliamentarians in Lok Sabha Consumer Protection Act, 1986?
2) Indian Contract Act, 1872 1) Newspaper industry
3) Indian Partnership Act, 1932 2) Services provided under contract of personal
4) Negotiable instruments Act. 1881 service
DEC.-2012 3) Banking industry
3. Which one is not an element of internal 4) Both (A) and (B)
environment? June-2014
1) Marketing capability 1. There is acute shortage of electricity in some of the
2) Operational capability states in India. This reflects a problem in which
3) Money and Capital market. type of business environment?
4) Personnel capability 1) Economic
5. Environmental degradation does not consist of 2) Demographic
1) Land degradation and soil erosion 3) Politico-legal
2) Problem of overgrazing and ecological 4) Socio-cultural
degradation 2. Match the items given in List-I and List-II.
3) Floods List–I List-II
4) None of the above (i) Economic (a) IT- enabled
June-2013 liberalisation services
30. Consumer attitudes and beliefs about diet, health (ii) Out sourcing (b) SFIO
and nutrition are influenced by Corporate frauds
1) Economic environment (iii) Corporae frauds (c) Macro
2) Cultural environment Economic
3) Social environment stability
4) Natural environment. (iv) Second generation (d) Increased
reforms competition
DEC.-2013
Codes:
2. Match the items of List-I with the items of List-II (a) (b) (c) (d)
List–I List-II (1) (i) (ii) (iii) (iv)
i. National (a) Industrial (2) (i) (iii) (ii) (iv)
Manufacturing Licensing Policy (3) (ii) (iii) (iv) (i)
Competitive ness (4) (iv) (i) (ii) (iii)
Council (NMCC)
ii. National (b) Eleventh Five Year 3. Which of the following is true?
Investment Fund Plan 1) A consumer court setup under the consumer
(NIP) Protection Act, does not have the power to
iii. The Industries (c) The Competition punish for its contempt.
(Development Act, 2002 2) Professional services are outside the purview
and Regulation of the CPA.
Act (IDRA), 3) A consumer court cannot force a person
1951) indulging in misleading advertising to confess
iv. Increase in (d) Public Sector his quit.
Employment Undertakings 4) None of the above
Codes: 5. Which one among the following is not the salient
feature of industrial policy since 1991?
(a) (b) (c) (d)
1) Enormous expansion of the private sector.
(1) (iv) (i) (ii) (iii)
2) Redefining the role of public sector.
(2) (iii) (iv) (i) (ii)
3) Limited exposure of Indian industry to foreign
(3) (i) (ii) (iii) (iv)
competition.
(4) (iv) (iii) (ii) (i)
4) Pruning of the list of items reserved for SSI
3. Kyoto Protocol pertains to units.
1) Capital formulation
2) Globalisation
DEC.-2014 July-2016
1. For the following statements of Assertion (A) and
3. Which among the following is not a correct
Reasoning (R) indicate the correct code from the
sequential combination?
alternatives given:
1) Macro Environment  Economic
Assertion (A) : Liberalization means corporatisation
Environment  National Income  Pattern of
of departmental undertakings and public
Income Distribution
2) Business Environment  Internal undertakings.
Environment Business Ethics  Payment of Reason (R) : Freedom to public sector
Fair Wages undertakings to access capital market.
3) Business Environment  External Codes:
Environment  Micro Environment  1) Both (A) and (R) are true and (R) is correct
Suppliers explanation of (A).
4) Macro Environment  External Environment 2) Both (A) and (R) are true and (R) is not correct
 Customers Prospects of Business explanation of (A).
Development 3) (A) is true and (R) is false.
4. Which among the following is not a correct 4) (A) is false but (R) is true.
combination? 5. Which of the following is not a forum of Consumer
1) Industrial Policy – 1948 Dispute Redressal System?
2) Industrial Policy Statement – 1977 1) Local forum
3) Industrial Policy Statement – 1980 2) District forum
4) Industrial Policy Statement 1991 3) State forum (State Commission)
5. Statement – I : The industrial policy of the 4) National Commission
Government of India is aimed at increasing the
tempo of industrial development. Jan.-2017
Statement – II : After the New Industrial Policy – 1. Assertion (A): Corporate culture is generally
1991, the balance of Trade for India has always considered as either closed and threatening or as
been positive. open and participatory.
Codes : Reason (R): Corporate culture and style of
functioning of top managers is important factor
1) Statement (I) is correct, but (II) is incorrect.
for determining the internal environment of a
2) Statement (II) is correct, but (I) is incorrect.
company.
3) Both Statements (I) and (II) are correct.
Codes:
4) Both Statements (I) and (II) are incorrect.
1) (A) is correct, but (R) is incorrect.
46. Which of the following is not ensured to the
2) Both (A) and (R) are correct and (R) is the
consumer in the globalization?
correct explanation of (A).
1) Lower prices
3) Both (A) and (R) are correct, but (R) is not the
2) Better selection
correct explanation of (A).
3) Clear origin of goods and services
4) (R) is correct, but (A) is incorrect.
4) Improved services
2. Statement I : If the workers develop an attitude of
June-2015
non-cooperation with Management, a repressive
economic system may be needed to set right this
DEC.-2015
industrial disorder.
Statement II : By fulfilling social responsibility
1. Environmental degeneration does not consist of:
towards shareholders, employees, consumers,
1) Land degeneration and soil erosion
government and community, a business achieves
2) Problem of over grazing and ecological
economic growth and increases public image.
degeneration
Codes :
3) Floods
1) Statement I is correct, but II is incorrect.
4) None of the above
2) Both the statements I and II are correct.
3) Statement II is correct but I is incorrect.
3. Liberalization means:
4) Both the statements are incorrect.
1) Reducing number of reserved industries from 17
3. Match the items of List-I with List-II.
to 8
List-I List–II
2) Liberating the industry, trade and economy from
a. Planning Commission i. 1993
unwanted restriction
3) Opening up economy to the world by attaining b. Competition Act ii. 2002
international competitiveness c. Adrian Cadbury Committee iii. 1951
4) Free determination of interest rate Rangrajan Committee on iv. 1991
d.
 Disinvestment in PSEs Codes:
Codes :
a b c d (1) Statement (I) and (III)
(2) Statements (II) and (III)
(1) i ii iii iv
(3) Statements (I) and (II)
(2) iii i iv ii (4) Statements (I), (II) and (III)
(3) iii ii iv i 3. Match items List-I with List-II relating to macro
(4) iii ii i iv environment of business and indicate the code of
correct matching
4. From which Five Year Plan “Growth with Social
Justice” has received emphasis? List-I List-II
1) 5th (a) Economic (i) Ethical issues
2) 6th environment
3) 7th (b) Political and (ii) Trade and transport
4) 10th government policies
5. Which of the following is not the objective of the (c) Socio-cultural (iii) Economic
Competition Act, 2002? environment stratification of
1) Prohibition of Restrictive Trade Practices. population
2) Prohibition of Dominant Position. (d) Demographic (iv) Judiciary powers
3) Prohibition of Anti-competitive Agreements. environment
4) Regulation of Combinations. Code

A B C D
November-2017
1. From the following statement of Assertion (A) and (1) ii iv i iii
Reasoning (R), indicate the correct code: (2) i iii ii iv
Assertion (A): Industrial liberalisation became an (3) iv ii iii i
imperative condition for the (4) iii i iv ii
growth of forces of competition
4. For which one of the basic reasons, the "Structural
leading to high efficiency and Adjustment Programme" was undertaken in India in
productivity in Indian industries. 1991?
Reason (R) : Industrial development and (1) Curbing competition among private sector
curbing of poverty is only possible (2) Establishing predominant role of public sector
through government intervention. (3) Establishing a free market economy
(4) Regional balancing through planning and
Code:
licensing
(1) (A) and (R) both are not correct. 5. Match items List-I with List-II and indict the correct
(2) (A) is correct but (R) is not the correct code of matching:
explanation of (A).
List-I List-II
(3) (A) is correct and (R) is correct explanation of
(a) Micro external (i) Economic and
(A).
environment political factors
(4) (A) is not correct but (R) is correct
(b) Macro external (ii) Competition
2. Which of the following statements are not correct?
environment among diverse
Statement (I) : Sustainable development means
products targeting
an attempt to achieve the balance disposable income
between economic growth and of consumers
conservation / protection of (c) Non-price (iii) Input suppliers
environment. competition
Statement (II) : Sustainable development means (d) Desire competition (iv) Sponsoring of
meeting the needs of industries events like sports
Code
without compromising the needs
of import-export balancing A B C D
Statement (III) : Sustainable development means (1) iii i iv ii
creation of sufficient surplus
(2) ii iii iv i
budgets through stock of capital
(3) iv ii iii i
assets including land.
(4) iv i ii iii
July-2018 2) Both (A) and (R) are correct but (R) is not the
right explanation of (A).
1. The central bank significantly influence the savings,
3) (A) is correct but (R) is not correct.
investments and consumer spending in the economy
4) (R) is correct but (A) is not correct.
through which of the following policy?
6. Which of the following statements is not correct
1) Fiscal Policy
relating to consumerism?
2) Monetary Policy
1) Consumerism is a manifestation of the failure
3) Industrial Policy
of the business to guarantee and ensure
4) Foreign Exchange Policy
consumer legitimate rights.
2. Which one of the following is not the characteristic
2) The government does not have any role in
of capitalism ?
consumer protection as it is the part of business
(1) Individuals and associations behave with
organisations alone.
economic motive of maximising their profit
3) The consumers should accept consumerism as a
with least sacrifice or cost.
means of asserting and enjoying their rights.
(2) The country’s major means of production are
4) Consumerism evolution is not a set-back for
either owned by the Government or their use is
marketing but rather points to the next stage in
controlled by the Government.
the evolution of enlightened marketing.
(3) Producers, consumers and employees compete
7. Which one of the following is not covered in the
among themselves, as the resources and
approach adopted by “Niti Aayog” ?
opportunities are limited.
1) Five year planning approach
(4) Price, the invisible hand, plays a predominant
2) Three year action agenda
role in the flow of the factors of production and
3) Seven year strategy
consumption.
4) Fifteen year vision
3. Which of the following is not the salient feature of
the industrial policy developments since 1991 ?
1) The scope of the private sector has been
enormously expanded.
2) Public sector has been withdrawing partially or
fully from several of the enterprises by
divestment.
3) The Indian industry is increasingly exposed to
foreign competition.
4) Monopoly or dominant position for the public
sector in most of the industries and control of
the commanding heights of the economy by the
public sector.
4. Which of the following does not form the part of
the important information to be incorporated in the
Memorandum of Association as specified in the
Companies Act, 2013 ?
1) The name of the company and the state in
which it is situated.
2) The objects for which the company is proposed
to be incorporated.
3) The rules, regulations and bye-laws for the
internal management of the company.
4) The liability of the members of the company,
whether limited or unlimited.
5. Assertion (A) : The volume of imports tends to be
very high when there is a conjecture of high rate of
economic growth and a sharp fall in the relative
price of imports and vice versa.
Reason (R) : High rate of growth, ceteris paribus,
is associated with rise in imports and increase in the
imports, ceteris paribus, is associated with a fall in
the relative price of imports.
Code :
1) Both (A) and (R) are correct and (R) is the right
explanation of (A).
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS ENVIRONMENT PYP (P-2)

ANSWER KEYS
JUNE-2012
3 1

DEC.-2012
3 3 5 4

JUNE-2013
30 2

DEC.-2013
2 2 3 3 5 2

JUNE-2014
1 1 2 4 3 1 5 3

DEC.-2014
3 4 4 4 5 1 46 3

JUNE-2015

DEC.-2015
1 4 3 3

JULY-2016
1 1 5 1

JAN.-2017
1 2 2 2 3 3 4 1 5 1

NOV.-2017
1 2 2 2 3 1 4 3 5 1

JULY-2018
1 2 2 2 3 4 4 3 5 1 6 2 7 1
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS ENVIRONMENT PYP (P-3)

June-2012 2. Match the items of List-I with the items of List-II

and select the correct answer.
46. The concept of ‘Rolling plan’ in India was
List–I List-II
introduced by the
(i) Political and (A) Important for
1) BJP Government
Legal industries directly
2) Janta Government
Environment depending on
3) Congress Government
imports or exports.
4) All of the above
(ii) Demographic (B) Close relationship
47. Which one of the following is an obstacle to
Environment with the economic
globlisation?
system and
1) Wide base
economic
2) Niche markets
(iii) Economic (C) Related to natural
3) Obsolescence
Environment resources
4) Competition
Geo-graphical (D) Occupational and
and Ecological spatial motilities of
DEC.-2012 Environment population having
35. Match the items of List-I with the items of List-II implications for
List–I List-II business.
(A) FEMA 1. 1986 Codes:
(B) Indian Factories Act 2. 1999 (i) (ii) (iii) (iv)
(C) Industrial Dispute 3. 1948 1) (B) (D) (C) (A)
Act 2) (B) (D) (A) (C)
(D) Consumer Protection 4. 1947 3) (A) (B) (C) (D)
Act 4) (A) (B) (D) (C)
Codes:
3. Match the items of List-I with the items of List-II
(A) (B) (C) (D)
1) 4 2 3 1 and select the correct answer:
2) 3 1 2 4 List–I List-II
(i) SLR (A) Working in the field of
3) 2 3 4 1
consumer protection.
4) 1 4 3 2
(ii) SIDBI (B) Credit control.
47. Which one of the following is not a benefit of (iii) CUTS (C) Industrial policy
privatisation? (iv) ILPIC (D) Facilitating small Scale
1) Encourage entrepreneurship Industries.
2) Concentration of economic power.
3) Better management of enterprise. Codes:
4) Freedom from bureaucracy. (i) (ii) (iii) (iv)
51. Which one of the following is not an element of 1) (A) (C) (D) (B)
internal environment? 2) (B) (D) (A) (C)
1) Mission/Objectives 3) (A) (B) (C) (D)
2) Human Resources 4) (A) (C) (B) (D)
3) Customers
4) Shareholders’ values 6. Indicate ground on which a complaint under the
June-2013 Consumer complaint under the Consumer
Protection Act, 1986, shall be invalid.
1. Under the provisions of the Industries 1) A product having short weight.
(Development and Regulation) Act, 1951 a licence 2) A service provided short weight.
is necessary for 3) A misleading advertisement given in
1) Changing the location of an existing industrial newspaper.
undertaking 4) None of the above
2) Producing or manufacturing a ‘new article’ in 7. Out of the following, which are the four
an existing industrial undertaking. components of food security?
3) Establishing a new undertaking i. Food availability
4) All the above ii. Food market
iii. Food accessibility
 iv. Food utilization 4) (ii), (iii), (iv) and (v)
v. Food credit 4. The important responsibilities of a business to the
Code : customers are
(i) To ensure family welfare of the customers.
1) (iii), (iv) and (v) (ii) To understand customer needs and to take the
2) (i), (iii) and (iv) necessary measures to satisfy these needs.
3) (i), (ii) and (iii) (iii) To ensure health condition of the customers.
4) (i), (ii) and (iv) (iv) To ensure that the product supplied has no
adverse effect on the customer.
DEC.-2013 (v) To provide an opportunity for being heard and
to redress genuine grievances.
1. The present regime of subsidies can be improved by
Codes
focussing on
(i) Reducing the overall scale of subsidies 1) (i,) (ii), (ii), (iv) and (v)
(ii) Making subsidies as transparent as possible 2) (i), (ii), (iii) and (iv)
(iii) Giving a specific amount to the Member of 3) (ii), (iv) and (v)
Parliament for subsidies. 4) (ii), (iii), (iv) and (v)
(iv) Setting clear limits on duration of any new 5. The Rationale of expanding role of the public sector
subsidy scheme stems mainly from which of the following factors?
(v) Eliminating system of periodic review of (i) The failure of the private sector in certain
subsidies crucial areas
(vi) Using subsidies for well defined economic (ii) The exploitation of the society by the private
objectives sector
Codes: (iii) The revenue need of the Central Government
(iv) The demand of economic justice
1) (i), (ii), (iii) and (iv) (v) The need for accelerating the pace of
2) (ii), (iii), (iv) and (v) economic growth
3) (i), (iii), (iv) and (vi)
Codes
4) (i), (ii), (iv) and (vi)
2. Which of the following is not regulated by the 1) (i), (ii), (iii) and (iv)
Competition Act, 2002. 2) (ii), (iii), (iv) and (v)
1) Abuse of dominant position 3) (i), (iv) and (v)
2) Anti-competitive agreements 4) (i), (ii) and (iii)
3) Medical negligence 6. Which of the following factors may lead to a sick
4) Predatory pricing industrial unit?
3. The freedom of private enterprise is the greatest in (i) Shortage of funds and faulty financial
the free market economy. This is characterized by management.
which of the following assumptions? (ii) Investment by the FIIs in Indian industries.
(i) The factors of production (labour, land, (iii) Unauthorized FDI in Indian industries
capital) are privately owned and production (iv) Lack of experience on the part of promoters.
occurs at the initiative of the private (v) Technological factors including obsolete or
enterprise. improper technology.
(ii) Income is received in monetary form by the Codes :
sale of services of the factors of production
1) (i), (ii), (iii) and (iv)
and from the profits of the private enterprise.
2) (ii), (iii), (iv) and (v)
(iii) Members of the free market economy have
3) (i), (iv) and (v)
freedom of choice in so far a consumption.
4) (i), (ii) and (iii)
occupation, savings and investments are
7. Indicate what is not correct in respect of the
concerned.
consumer Protection Act, 1986
(iv) The free market economy is not planned.
1) No complaint can be entertained in respect of
controlled or regulated by the government or
a product purchased more than 2 years back.
regulated by the government.
2) A complaint against medical negligence can
(v) The free market economy is prone to corrupt
be filed by legal heir or representative of the
practices.
deceased.
Codes: 3) A complaint involving a claim of ` 15 lakhs is
to be filed before the State Commission.
1) (i), (ii) and (iii)
4) Both (1) and (3)
2) (i), (ii), (iii) and (iv)
3) (i), (iv), (iii), (iv) and (v)
39. Under which legislation, the manufacturers and 4) Exploratory research
distributors are required to declare Maximum Retail 32. Consumer attitudes and beliefs about diet, health and
Price (MRP) on packaged commodities? nutrition are influenced by
1) The Bureau of Indian Standard Act, 1986 1) Economies environment
2) The Consumer Protection Act, 1986 2) Cultural environment
3) The Standards of Weights and Measures Act, 3) Social environment
1976. 4) Natural environment.
4) The Essential commodities Act, 1955
June-2015
June-2014
DEC.-2015
1. The Competition Act, 2002, seeks to regulate 48. Identify the multinational corporations (MNCs) from
1) Anti-competitive agreements the following:
2) Mergers and amalgamation 1. IOCL
3) Unfair trade practices 2. GAIL
4) (1) and (2) above 3. SBI
2. Indicate the true statement: 4. SAIL
1) Large industrial houses are outside the purriew 5. Tata Steel
of the Competition Act, 2002 6. Bharat Petroleum
2) There is no provision for curbing frivolous Codes:
complaints under the CPA. 1) 1, 2, 3, 4
3) The Trade Marks Act, 1999 does not apply to 2) 2, 3, 4, 5
services. 3) 3, 4, 5, 6
4) All of the above are true. 4) 1, 3, 5, 6
3. The time limit for filing a complaints bef0re the 50. Which of the following is an example of an issue for
District forum under the Consumer Protection Act, which an agreement has not been made between two
1986 is or more countries?
1) One year 1) Restricting harmful emissions
2) Two years 2) Deep-sea mining in non-coastal areas of the
3) Three years oceans
4) There is no such time limit 3) Preserving endangered species
5. Which of the legislation (s) do (does) not form part 4) Banning the use of certain pesticides
of the legal environment of business in India?
1) The Drugs and Cosmetics Act, 1940. July-2016
2) The Prevention of Food Adulteration Act,
1954 Jan.-2017
3) The Monopolies and Restrictive Trade 1. Put the following steps of strategic Management
Practices Act, 1969 Process in correct sequence:
4) Both (2) and (3) above a. Scanning and Evaluation of Business
Environment
DEC.-2014 b. Formulating strategies
4. Internal environment of business includes: c. Implementation of Corporate Strategy
(i) Business ethics and moral standards d. Deciding about the Mission of the organization
(ii) Business and managerial policies e. Setting Corporate Level Objective
(iii) Prospects of business deelopment Codes :
(iv) Government rules and regulations
(v) Industrial relations 1) a, b, c, d and e
Codes: 2) d, a, b, c and e
3) d, a, e, c and b
1) (i), (ii), (iv) and (v) 4) d, a, e, b and c
2) (i), (iii), (iv), (iv) and (v) 18. Assertion (A) : The organization is a closed system
3) (i), (ii), (iii) and (iv) that operates within and interacts with the
4) (i), (ii), (iii) and (iv) external environment.
24. The transformation of raw data into a form that will Reasoning (R) : The system approach to
make them easy to understand and interpret, management includes the outputs from the
rearranging and manipulating data to generate external environment on the basis of interactions
information is called between management and employees.
1) Descriptive research Codes :
2) Descriptive analysis 1) (A) and (R) are correct and (R) is the correct
3) Causal research reasoning of (A).
 2) (A) and (R) are correct, but (R) is not the correct minimised and pain and unhappiness minimised
explanation of (A). more than any alternative.
3) (A) is incorrect while (R) is a correct statement. Statement-III: 'Deontological Ethics' is an ethical
4) Both (A) and (R) are incorrect. approach where rightness or wrongness of an action
of decision is not judged to be based exclusively on
November-2017 the consequences of that action or decision.
2. Which one of the following is the governing factor Code:
in deciding the type of redressal agency which will 1) (I), (II) and (III)
deal with the dispute of a consumer? 2) (I) and (II)
1) Area of sale of goods and services 3) (I) and (III)
2) Type of goods and services sold 4) (II) and (III)
3) The choice of the consumer 61. Which of the statements are not correct? Indicate
4) The value of goods and services sold the correct code:
3. Match List-I with List-II relating to the roles played Statement-I: Social assistance is financed by
by government in an economy and indicate the tripartite of bipartite contributions.
correct code of their matching. Statement-II: Social insurance ignores the income
List I List II and means of liable relation.
(Roles) (Examples)
Statement-III: Social assistance makes the
(A) Regulatory role (i) Deciding timing
beneficiary a first charge on the liable relations
and usage of
resources Statement-IV: Social assistance aims at the
(B) Promotional (ii) Capital intensive provide maximum subsistence to those who can not
role projects of public make it on their own.
sector Code:
(C) Entrepreneurial (iii) Imposing of high 1) (I) and (II)
role import duty 2) (II) and (III)
(D) Planning role (iv) Measures to control 3) (I) and (IV)
and cover risk in 4) (III) and (IV)
priority sectors
Codes
(A) (B) (C) (D)
1) (iv) (ii) (i) (iii)
2) (iii) (i) (iv) (ii)
3) (iii) (iv) (ii) (i)
4) (i) (iii) (iv) (ii)
4. Which one of the following statement is not correct
relating to Competition Policy and Law?
1) Collusion and dominance have potential for
unfair competition.
2) The appeal against decisions of Competition
Commission of India can be made to the
Competition Appellate Tribunal.
3) State monopolies, government’s business
policies and functioning of Regulatory
Authorities cannot be scrutinized under this
law.
4) Abuse of dominance rather than dominance
should be the key for Competition Policy/Law.
54. Which of the following statements are correct?
Indicate the correct?
Statement-I: Virtue ethics is a form of ethical
approach associated with Aristotle which stresses
the importance of developing virtuous principles,
'right' character and the pursuit of virtuous life
Statement-II: Utilitarianism is an ethical approach
where an action is right if, and only if, it conforms
to the principle of utility, whereby utility is
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS ENVIRONMENT PYP (P-3)

ANSWER KEYS
JUNE-2012
46 2 47 3

DEC.-2012
35 3 47 2 51 3

JUNE-2013
1 4 2 2 3 2 6 2 7 2

DEC.-2013
1 4 2 3 3 2 4 3 5 4 6 3 7 3 39 3

JUNE-2014
1 4 2 3 3 2 5 4

DEC.-2014
4 4 24 2 32 2

JUNE-2015

DEC.-2015
48 4 50 2

JULY-2016

JAN.-2017
1 4 18 4

NOV.-2017
2 4 3 3 4 3 54 3 61 3
 ASTRAL EDUCATION
COMMERCE (E.M.) FINANCIAL & MANAGEMENT ACCOUNTING PYP (P-2)

June-2012 4) ii, i, iv, iii

June-2013
8. Conversion cost is the sum of
1) Indirect wages and factory overhead 6. Insurance expenses paid to bring an equipment
2) Direct wages, direct expenses and factory from the place of purchase to the place of
overhead installation is a type of
3) Direct material cost and indirect wages 1) Revenue expenditure
2) Capital expenditure
4) Prime cost and selling & distribution overhead 3) Deferred revenge expenditure
DEC.-2012 4) Operating expense
6. Which one of the following concepts is used as 7. ABC Ltd was incorporated with an authorised
fund in the preparation of Funds Flow Statement? Share Capital of ` 1,00,000 equity share of `10
1) Current Assets each. The Board of Directors of the company
2) Working Capital Cash decided to allot 10,000 shares credited as fully paid
3) All Financial Resources to the promoters of the company for their services.
4) All Financial Resources Which account should be debited in the books of
7. Window dressing is prohibited due to ABC Ltd.
1) Conservative Convention 1) Promoter’s Account
2) Convention of Disclosure 2) Services Account
3) Convention of Materiality 3) Goodwill Account
4) Arrear of book accounts 4) Share Capital Account
8. Assertion (A) : Ratio analysis is one of the tools 8. In a reconstruction scheme the reduction of capital
employed to know the financial health of a concern. many take the form of
Reason (R) : Ratio analysis is not the only 1) Reducing the liability of the shareholders in
technique available to take investment decision. respect of any unpaid amount on the shares
held by them.
1) Both (A) and (R) are true and (R) is the correct
2) paying-off any paid-0up share capital which is
explanation of (A).
in excess of its requirement.
2) Both (A) and (R) are true, but (R) is incorrect
3) Cancelling any paid-up share capital which is
explanation of (A).
lost or unrepresented by available assets.
3) (A) is true, but (R) is false.
4) All of the above.
4) (A) is false, but (R) is true
9. While determining the normal rate of return for the
9. Which of the following relate to measure of non-
valuation o shares in Market Value Methods, which
financial performance of a concern?
of the following should be taken into consideration?
i. Customer satisfaction
1) The degree of risk involved.
ii. Business process improvement
2) The current rate of interest on gilt-edged
iii. Economic value added
securities.
iv. Learning organisation
3) Weighted average cost of capital
Choose the right combination. 4) All of the above
1) i, iii, ii, iv 10. Master budget is a
2) ii, iv, iii 1) Functional Budget
3) iv, i, iii 2) Operating Budget
4) i, ii, iv 3) Summary Budget
10. Consider the following parties: 4) Financial Budget
i. Secured creditors 34. The appropriate ratio for indicating liquidity crisis
ii. Unsecured creditors is
iii. Partners who have granted loans 1) Operating ratio
iv. Partners who have contributed over and above 2) Sales turnover ratio
profit sharing ratio. 3) Current ratio
Arrange them is in correct sequence in the event of 4) Acid test ratio
dissolution of a firm. DEC.-2013
6. Which of the following is ‘true’ regarding the
1) ii, ii, iii, iv Prudence Principle of Accounting?
2) i, ii, iii, iv 1) Taking care of the future losses
3) i, ii, iv, iii 2) Taking care of the future profits
 3) Taking care of bad debts 7. X, Y, Z are sharing profits in the ratio of 6 : 5 : 3. A
4) Taking care of inventory and depreciation is admitted into partnership for 1/8th share. The
7. Which of the following is a non-operating expense? sacrificing ratio of X, Y and Z is
1) Salary of Managing Director 1) Equal
2) Depreciation 2) 6 : 5 : 3
3) Advertisement expenditure 3) 5/14, 4/14, 5/14
4) Interest on loan 4) 4 : 5 : 5
8. A and B are partners sharing profits in the ratio of 3 8. Accounting information given by a company:
: 2. Their books showed goodwill at ` 3,000. C is Total Assets turnover 3 times
admitted with ℎ share of profits and brings `
10,000 as his capital. But he is not able to bring in Net profit margin 10%
cash for his share of goodwill ` 3,000. How will
you treat this? Total Assets ` 1,00,000
1) Goodwill is raised by ` 12,000
2) C will remain as debtor for ` 3,000 The net profit is
3) C’s A/c. is debited for ` 3,000
4) Goodwill is raised by ` 9,000 1) ` 10,000
9. If there is mutual indebtedness between the 2) ` 15,000
transferor company and the transferee company in 3) ` 25,000
business combination, which of the following is 4) ` 30,000
correct? 21. The structure of an organisation in which there is
1) No adjustment is required in the books of the separation of ownership and management is called
transferor company. 1) Sole proprietorship
2) Adjustment is required in the books of the 2) Partnership
transferor company. 3) Company
3) No adjustment is required in the books of the 4) Cooperative society
transferor company. 22. When a person transacts with a company on matters
4) None of the above which is beyond the power of the company, the
10. Improvement of profit-volume ratio can be done by person will be governed by the Doctrine of
1) Increasing selling price 1) Management by Exception
2) Altering sales mixture 2) Constructive Notice
3) Reducing variable cost 3) Indoor Management
4) All of the above 4) Self Management
June-2014 24. The appropriate sequence of the formation of a
company are in the following order:
6. A, a partner in a firm is drawing ` 500 regularly on 1) Promotion, commencement of business and
the 16th of every month. He will have to pay interest incorporation
at the given rate in a year on ` 6000 for the total 2) Promotion, incorporation, capital subscription
period of and commencement of business
1) 5 months 3) Capital subscription, promotion, incorporation
2) 6 months and commencement of business
3) 7 months 4) Incorporation, capital subscription,
4) 12 months commencement of business and promotion
7. Subsequent expenditures that extend the useful life, 34. Cash Flow Management involves:
improve the quality of output, or reduce operating I. Lock-box system
cost of an existing asset beyond their originally II. Marketable securities
estimated level are III. Playing the float
1) Capital expenditures IV. Concentration Bank Account
2) Revenue expenditure Codes:
3) Deferred Revenue expenditure
4) None of the above 1) I, II and III only
DEC.-2014 2) II, III and IV only
3) I, III and IV only
6. Current Ratio 2.5 Liquid Ratio 1.5 and working
4) I, II and IV only
Capital ` 60,000. What is Current Asserts?
1) ` 60,000
2) ` 80,000 June-2015
3) ` 1,00,000 7. A retiring partner continues to be liable for
4) ` 1,20,000 obligations incurred after his retirement:
 1) If unpaid amount is transferred to his loan Concept of an item or event
account. Codes
2) If he does not give public notice. A B C D
3) If he starts a similar business elsewhere. (1) iv ii iii i
4) In all the situations till he survives. (2) i ii iii iv
9. When opening stock is `50,000, closing stock is (3) ii iii iv i
`60,000 and the cost of goods sold is `2,20,000, the
(4) iv ii i iii
stock turnover ratio is:
1) 2 times 9. ‘X’ Ltd. has a liquid radio of 2 : 1. If its stock is
2) 3 times `40,000 and its current liabilities are of `1 Lac, its
3) 4 times current ratio will be:
4) 5 times 1) 1.4 times
10. If: Stock turnover ratio is = 6 times 2) 2.4 times
Average stock = `8,000 3) 1.2 times
Selling price = 25% above cost 4) 3.4 times
What is the amount of gross profit? 10. ‘Comparison of the financial statements of the
1) `2,000 current year with the performance of previous years
2) `4,000 of the same firm’, is known as:
3) `10,000 1) Trend Analysis
4) `12,000 2) Horizontal Analysis
25. Narayan Murthy Committee revised its 3) Intra-firm comparison
recommendations on Corporate Governance as on 4) All of the above
29th October 2004 which diluted the following areas:
A. Independence of Directors July-2016
B. Whistle Blower Policy 6. X Ltd. Purchased 70 percent of the shares of Y Ltd.
C. Performance evaluation of Non-Executive At a price of `1, 00,000. Share capital of Y Ltd. was
Directors of `70,000 and its accumulated profits amounted to
D. Mandatory training of Non-Executive Directors `90,000. What would be the amount of Minority
Codes: Interest in the consolidated Balance Sheet?
1) A, B and C only 1) `25,000
2) A and C only 2) `70,000
3) A, B and D only 3) `1,00,000
4) All A, B, C and D 4) `40,000
DEC.-2015 7. Match the items of List-I with List-II and indicate
6. Interest on loan taken for the purchase of fixed assets the correct code:
Column-I Column-II
is a:
A.Debt-Equity i. Net Pro it before interest and tax
1) Revenue Expenditure Ratio interest on long term loans
2) Capital Expenditure B. Proprietary ii. Equity share capital + Reserves
3) Deferred Revenue Expenditure Ratio Preference share capital + Interest bearing Finance
4) Capital Loss C. Interest iii. Long term debts
coverage Shareholder sFunds
7. Dual Aspect Concept results in the following Ratio
accounting equation: D.Capital iv. Sharehonder s Funds
1) Revenue = Expenses gearing ratio Total Assets
2) Capital + Profits = Assets + Expenses
3) Capital + Liabilities = Assets Codes:
A B C D
4) Capital + Drawings = Owner’s Equity
8. Match the items in Column-I with the items in (1) i ii iii iv
Column-II (2) iii iv i ii
Column-I Column-II (3) iii iv ii i
A. Materiality i. The same accounting (4) ii iii iv i
Concept method used by a firm 8. Ram and Shyam are partners in a firm with capital of
from one period to ` 4,80,000 and ` 3,10,000, respectively. They
another admitted Ganesh as a partner with th share of profit.
B. Going ii. An inappropriate Ganesh brings ` 3,00,000 as his capital. Ganesh’s
Concern assumption of a firm share of goodwill will be
Concept being bankrupt 1) ` 1,10,000
C. Historical iii. A normal basis used for 2) ` 27,500
Cost Concept accounting assets 3) ` 17,500
D. Consistency iv. Relates to the importance 4) ` 70,000
9. Which of the following is deferred revenue November-2017
expenditure? 6. Assertion (A): Debt-equity ratio indicates the
1) Legal expenses incurred on the purchase of land long term solvency of company.
2) Expenses on a mega advertisement compaign Reasoning (R) : It measures the ability of the
while launching a new product company to pay off its long term
3) Expenses incurred on installation of a new liabilities
machine
4) Wages paid for construction of an additional Code:
room in the building.
10. The amount of depreciation charged to Profit and 1) Both (A) and (R) are correct and (R) is the
Loss Account varies every year under: correct reason for (A)
1) Fixed installment method 2) Both (A) and (R) are correct but (R) does not
2) Annuity method explain (A) correctly
3) Diminishing balance method 3) (A) is correct but (R) is wrong.
4) Insurance policy method 4) (A) is wrong but (R) is correct.
Jan.-2017 7. The balance of property of cost has been `20,000 and
6. Consolidated financial statements are prepared on `17,000 in 2015 and 2016 respectively. The profit on
the principle. the sale of property of `2,000 is credited to Capital
1) In form the companies are one entity, in Reserve Account. New property costing `5,000 was
substance they are separate. bought in 2016. Determine the sale proceeds from
2) In form companies are separate, in substance property's
they are one. 1) `3,000
3) In form and substance the companies are one 2) `7,000
entity. 3) `10,000
4) In form and substance the companies are 4) `15,000
separate. 8. Goodwill of firm of X and Y is valued at `30,000. It
7. Match the items of List-I with those of List-II and is appearing the books at `12,000. Z is admitted for
indicate the correct code: 1/4 share. What amount he is supposed to bring, for
List-I List-II goodwill?
a. Acid Test Ratio i. Profitability analysis 1) `3,000
b. Debt Service ii. Activity analysis 2) `4,500
Coverage Ratio 3) `7,500
c. Debt Equity Ratio iii. Liquidity analysis 4) `10,500
d. Stock Turnover iv. Long-term solvency 9. A Ltd. issued a prospectus inviting applications for
Ratio analysis 2,000 shares. Applications were received for 3,000
Codes : shares and pro-rata allotment was made on the
a b c d applications of 2,400 shares. If A has been allotted
40 shares, how many shares he must have applied
(1) ii i iii iv
for?
(2) ii iii iv i 1) 40
(3) iii iv i ii 2) 44
(4) iii i iv ii 3) 48
4) 52
31. Which one of the following combination of rules 10. Which one of the following is of revenue nature?
stands true while preparing schedule of changes in 1) Amount realised from the sale of investments
working capital? 2) Dividend received on investment
A. An increase in current assets increases working
3) Amount borrowed from a bank
capital.
4) Compensation received from municipal
B. An increase in current assets decreases working corporation for the acquisition of land for the
capital. construction of road.
C. An increase in current liabilities decreases
working capital.
D. An increase in current liabilities increases July-2018
working capital. 8. Assertion (A) : Personal transactions of the owners
Codes : of the business are not recorded in the books.
1) A and D Reasoning (R) : According to the business entity
2) A and C concept, each business enterprise is considered as
3) B and C an accounting unit separate from owners.
4) C and D Code :
 1) Both (A) and (R) are correct and (R) is the
correct explanation of (A).
2) Both (A) and (R) are correct but (R) is not the
correct explanation of (A).
3) (A) is correct but (R) is not correct.
4) (A) is wrong but (R) is correct.
9. Which one of the following is not an example of
‘financing activities’ with reference to cash flow
statement ?
1) Repayment of bank loan
2) Interest on debentures/Dividend paid
3) Cash proceeds from public deposits
4) Sale of fixed assets
10. Which one of the following statements is true about
estimated costs and standard costs ?
1) Standard costs are based on scientific analysis
and engineering studies while estimated costs
are based on historical basis.
2) Standard cost emphasis is on “what cost will
be” while estimated cost emphasis is on “what
cost should be”.
3) Standard costs are more frequently revised
compared to estimated cost.
4) Estimated costs are more stable than standard
costs.
11. Which one of the following statements is not true ?
1) An expenditure intended to benefit current year
is revenue expenditure.
2) Amount paid for acquiring goodwill is capital
expenditure.
3) Wages paid for installation of a new machine is
usually debited to wages account.
4) Revenue expenditure is not intended to benefit
future period.
12. X Ltd. forfeited 20 shares of ` 10 each, ` 8 called
up, on which John had paid application and
allotment money of ` 5 per share, of these, 15
shares were reissued to Parker as fully paid up for `
6 per share. What is the balance in the share
Forfeiture Account after the relevant amount has
been transferred to Capital Reserve Account ?
1) NIL
2) ` 5
3) ` 25
4) ` 100
13. X and Y sharing profits in the ratio of 7 : 3, admit Z
for 3/7 share in the new firm in which he takes 2/7
from X and 1/7 from Y. The new ratio of X, Y and
Z will be :
1) 7 : 3 : 3
2) 4 : 2 : 3
3) 14 : 6 : 15
4) 29 : 11 : 30
14. Assertion (A) : A high operating ratio indicates a
favourable position.
Reasoning (R) : A high operating ratio leaves a
high margin to meet non operating expenses.
Code :
1) (A) and (R) both are correct and (R) correctly
explains (A).
2) Both (A) and (R) are correct but (R) does not
explain (A).
3) Both (A) and (R) are incorrect.
4) (A) is correct but (R) is incorrect.
15. The following are the two statements regarding
concept of profit. Indicate the correct code of the
statements being correct or incorrect.
Statement (I) : Accounting profit is a surplus of
total revenue over and above all paid-out costs,
including both manufacturing and overhead
expenses.
Statement (II) : Economic or pure profit is a
residual left after all contractual costs have been
met, including the transfer costs of management,
insurable risks, depreciation and payments to
shareholders sufficient to maintain investment at its
current level.
Code :
1) Both the statements are correct.
2) Both the statements are incorrect.
3) Statement (I) is correct while Statement (II) is
incorrect.
4) Statement (I) is incorrect while Statement (II) is
correct.
71. Total return on a security is equal to the following :
Periodic cash receipts  Capital gains
1)
Purchase Price of the security
Periodic cash receipts  Capital gains
2)
Current Market Price of the security
Periodic cash receipts ains
3)
Current Market Price of the security
Periodic cash receipts  Capital gains
4)
Purchase Price of the security
72. Risk of a portfolio can be minimised by which one
of the following ?
1) Combining two securities having perfect
positive correlation in their expected returns.
2) Combining two securities having perfect
negative correlation in their expected returns.
3) Combining two securities having partially
positive correlation in their expected returns.
4) Combining two securities having partially
negative correlation in their expected returns.
73. The certificate which evidences an unsecured
corporate debt of short-term maturity, is known as :
1) Certificate of Deposit
2) Short-term loan certificate
3) Treasury Bill
4) Commercial paper
74. Which of the following statements are false ?
Indicate the correct code.
1. Grey market is a market for dealing in listed
securities.
2. OTCEI is mainly intended for big investors.
 3. Insider Trading is legally permitted in the
capital market.
4. The device adopted to make profit out of the
differences in prices of a security in two
different markets is called ‘arbitrage’.
Code :
(1) (a), (b), (c)
(2) (a), (b), (d)
(3) (a), (b), (c), (d)
(4) (b), (c), (d)
75. Which of the following statements are false ?
Indicate the correct code.
1. Share capital issued by a company for the first
time is known as venture capital.
2. All Venture Capital Funds in India are
promoted by the Government.
3. In addition to capital, venture capitalists
provide managerial and technical support also
to the assisted firms.
4. Benefits from venture capital financing can be
realised in long run only.
Code :
(1) (a), (b) and (d)
(2) (a) and (b)
(3) (b), (c) and (d)
(4) (c) and (d)
76. Match the items of List - II with the items of List - I
and select the correct code:
List - I
1. Liquidity Risk
2. Business Risk
3. Financial Risk
4. Inflation Risk
List – II
(i) Risk related to purchasing power of Income.
(ii) Risk related to Firm’s capital structure.
(iii) Risk related to inability to pay its dues on time.
(iv) Risk related to fluctuation in profits.
Code :
(a) (b) (c) (d)
(1) (ii) (iii) (iv) (i)
(2) (i) (iv) (iii) (ii)
(3) (iii) (ii) (iv) (i)
(4) (iii) (iv) (ii) (i)
 ASTRAL EDUCATION
COMMERCE (EM) FINANCIAL & MANAGEMENT ACCOUNTING PYP (P-2)

ANSWER KEYS
JUNE-2012
8 2

DEC.-2012
6 2 7 2 8 1 9 4 10 2

JUNE-2013
6 2 7 3 8 4 9 4 10 3 34 4

DEC.-2013
6 1 7 4 8 * 9 1 10 4

JUNE-2014
6 2 7 1

DEC.-2014
6 3 7 2 8 4 21 3 22 2 24 2 34 3

JUNE-2015
7 2 9 3 10 4 25 4

DEC.-2015
6 2 7 3 8 1 9 2 10 4

JULY-2016
6 * 7 2 8 2 9 2 10 3

JAN.-2017
6 3 7 4 31 2

NOV.-2017
6 1 7 3 8 2 9 3 10 2

JULY-2018
8 1 9 4 10 1 71 1 72 2 73 4 74 1 75 2 76 4
 ASTRAL EDUCATION
COMMERCE (E.M.) FINANCE & MANAGEMENT ACCOUNTING PYP (P-3)

June-2012 Reason (R) : Capital profit cannot be used for

distribution as dividend to the shareholders.
1. If opening Stock is `c10,000, Net purchase
In the context of the above two statements, which
`c70,000, Wages `c2,500, Carriage inward
`c15,000 what is the Manufacturing Cost? one of the following is correct?
1) ` 65,000
2) ` 83,000 Codes:
3) ` 68,000
1) (A) is correct, but (R) is wrong
4) ` 73,000
2) Both (A) and (R) are correct.
3. Which one of the following statements is true?
3) (A) is wrong, but (R) is correct.
1) Capital expenditure does not affect the
4) Both (A) and (R) are wrong.
profitability of a concern but revenue
8. Reconstruction of a company takes place when
expenditure does.
(i) The company is undercapitalised
2) Capital expenditure affects the profitability of
(ii) Company which must be written off
a concern directly but revenue expenditure
(iii) The company is overcapitalised
does not.
3) Capital expenditure affects the profitability of Which one of the following is correct?
a concern indirectly but revenue expenditure
affects directly. 1) (i) and (ii) only
4) Both capital expenditure and revenue 2) (i) and (iii) only
expenditure affect the profitability of a 3) (ii) and (iii) only
concern directly. 4) All the above
4. Identify the true statement of the following: 9. Match the items of List-I with the items of List-II
(i) Balance Sheet is always prepared from the and select the correct answer using the codes given
point of view of the business but not from that below the lists:
of the owners. List–I List-II
(ii) The financial relationship of the business to its (a) Leverage Ratio (i) Short-term
owners it shown in the balance Sheet. solvency
(iii) Balance Sheet is always related to a period of (b) Liquidity Ratio (ii) Earning capacity
time. (c) Turnover Ratio (iii) Relationship
between debt and
Code:
equity
(d) Profitability (iv) Efficiency of Asset
1) (i) and (ii)
Ratio Management
2) (ii) and (iii)
3) (i) and (iii) Codes:
4) (i), (ii) and (iii) (a) (b) (c) (d)
5. X and Y are partners in a firm sharing profits in the 1) (ii) (i) (iv) (iii)
ration of 2 : 1. Z is admitted with a 1/3 profit 2) (iii) (ii) (i) (iv)
sharing. What will be the new profit sharing ratio of 3) (iv) (iii) (i) (ii)
X. Y and Z? 4) (iii) (i) (iv) (ii)
1) 3 : 3 : 3 10. Given below are two statements, one labelled as
2) 4: 3 : 2 Assertion (A) and the other labelled as Reason (R):
3) 4 : 2 : 3 Assertion (A) : Sinking fund is a charge against
4) 2 : 3 : 4 Profit and Loss Account
6. Which one of the following will not affect the
Reason (R) : Sinking fund is created for
working capital?
1) Relisation of cash from debtors. repayment of a long term liability.
2) Sale of plant and machinery in cash. In the context of the above two statements, which
3) Issue of equity shares one of the following is correct?
4) Redemption of debentures
7. Given below are two statements, one labelled as Codes:
Assertion (A) and the other labelled as Reason (R)
Assertion (A) : When a company earns profit prior 1) (A) is correct, but (R) is wrong
to its incorporation, it is called capital profit. 2) Both (A) and (R) are correct.
3) (A) is wrong, but (R) is correct.
4) Both (A) and (R) are wrong.
12. In India, which of the following is prepared on the 5. Which of the following will result into sources of
guidelines of AS-3 (Accounting Standard–3) ? funds?
1) Balance Sheet of a Company i. Increase in current assets
2) Funds Flow Statement ii. Decrease in current assets
3) Cash Flow Statement iii. Increase in current liabilities
4) Consolidated Financial Statement iv. Decrease in current liabilities
13. What is the correct sequence of the following Codes:
actions required for the preparation of financial
accounts? 1) (i) and (iv)
(i) Trading accounts 2) (ii) and (iii)
(ii) making adjusting entries 3) (i) and (iii)
(iii) balance Sheet 4) (ii) and (iv)
(iv) Profit and Loss Account 7. The funds available with a company after paying all
Select the correct answer from the codes given claim including tax and dividend is called
below: 1) Net Profit
2) net Operating Profit
Codes: 3) Capital Profit.
4) Retained Earnings
1) (iv), (ii), (i), (iii) 8. Assertion (A) : Accounting information refers to
2) (ii), (iv), (iii), (i) only events which are concerned with business
3) (ii), (i), (iv), (iii) firm.
4) (iv), (ii), (iii), (i) Reason (R) : Accounting information is presented
14. The main effect of inflation on the financial in financial statements.
statements is 1) (A) is correct, but (R) is wrong
1) Profits are understated 2) Both (A) and (R) is correct.
2) Overstatement of Assets 3) (A) is wrong, but (R) is correct.
3) Adequacy of funds for replacement of assets 4) Both (A) and (R) are wrong
4) Erosion of capital 11. The main objective of Accounting Standards is
15. Present value of future earnings is a model of 1) To prepare the accounting reports which is
Human Resources Accounting suggested by easily understood by common man.
1) Brauch Lev & ABA Schwartz 2) To comply with the legal formalities
2) Jaggi & Lau 3) To harmonise the diversified accounting
3) S.K. Chakraborty practices.
4) Eric Flamhaltz 4) To employ with the requirement of the
International Accounting Standards (IAS).
DEC.-2012 12. Given below are two statements:
I. Activity ratios show where the company is
1. In accounting, profit prior to incorporation is
created as going.
1) Revenue Reserve II. Balance Sheet ratios show how the company
2) Secret Reserve stand
3) Capital Reserve Codes:
4) General Reserve
2. Receipts and Payments Account is prepared by 1) I is correct, but II is wrong
1) Manufacturing concerns 2) Both I and II are correct
2) Non-Trading concerns 3) I is wrong, but Ii is correct
3) Trading concerns 4) Both I and II are wrong.
4) Companies Act, 1956. 13. Income and Expenditure Account of non-profit
3. Owners equity stands for organisation is a
1) Fixed Assets minus Fixed Liabilities 1) Real Account
2) Fixed Assets minus Current Liabilities 2) Nominal Account
3) Fixed Assets minus Fixed Liabilities. 3) Personal Account
4) Total Assets minus Total outside Liabilities. 4) Representative personal Account
4. When the Debt Turnover Ratio is 4, what is the 14. Which of the following statements are correct?
average collection period? I. Inventory includes raw materials, finished
1) 5 months goods and work-in-progress.
2) 4 months II. Inventory is a part of the working capital
3) 3 months III. Inventory includes goods likely to be
4) 2 months purchased..
 Codes: 3) (C) (D) (A) (B)
4) (C) (D) (B) (A)
1) I, II and III
13. Given below are statement one labeled as Assertion
2) II and III
(A) and the other labelled as Reason (R).
3) I and III
Assertion (A) : Only the relevant costs should be
4) I and II
15. If the current ratio is 2 :1 and working capital is ` taken into consideration for decision-making
60,000, what is the value of the Current Assets? Reason (R) : All variable costs are relevant costs
1) ` 60,000 and all fixed costs are irrelevant costs.
2) ` 1,00,000
3) ` 1,20,000 In the above two statement, which one alternative of
4) ` 1,80,000 the following is correct?
June-2013
Codes:
8. Performance evaluation of a responsibility centre
can be done by 1) Both (A) and (R) are correct.
1) ROI 2) Only (R) is correct, but (R) is wrong.
2) Return on sales 3) Only (R) is correct, but (A) is wrong.
3) EVA 4) Both (A) and (R) are wrong
4) All of the above 14. Given below are two statements, one labelled as
9. Social Balance Sheet shows Assertion (A) and the other labelled as Reason (R):
1) Social costs Assertion (A) : Variance analysis is undertaken for
2) Social revenues planning and control of costs.
3) Value of employees of the organisation
Reason (R) : Future costs are taken into
4) All of the above
10. Which of the following comes under efficiency consideration in budgeting and standard costing.
rations? In the above two statements, which one alternative
1) Average collection period of the following is correct.
2) Inventory turnover ratio 1) Both (A) and (R) are correct and (R) is the
3) Fixed assets turnover ratio Reason for (A).
4) All of the above 2) Both (A) and (R) are correct and (R) is not the
11. Match the items of the following two lists: Reason for (A).
List–I List-II 3) (A) is correct, but (R) is wrong.
(i) Statement of (A) Cash Flow 4) (A) is wrong, but (R) is correct.
changes in Statement 45. Match the statements in List-I with the types of
Working Capital lease in the list-II as follow
(ii) Deferred Tax (B) Fixed List–I List-II
(iii) Three activities (C) Funds Flow I Lessor transfers all 1 Indirect lease
Statement risks and rewards of
(iv) Impairment Loss (D) Balance Sheet an asset to the
Codes: lessee.
(i) (ii) (iii) (iv) II Lessor transfers the 2. Operating lease
1) (A) (B) (C) (D) assets to the lessee
2) (C) (D) (B) (A) but bears the cost of
3) (C) (D) (A) (B) maintenance
4) (D) (C) (A) (B) III The owner of the 3. Finance lease
asset sells it to the
12. Match the items of the following two lists and
lessor who in turn
indicate the correct answer: leases it back to the
List–I List-II owner (now lessee)
(i) Earning ability of (A) Basis of
IV Dividend Payout is 4. Direct lease
firm Accounting irrelevant to the
(ii) Conservatism (B) P/V ratio value of the firm.
(iii) Cash profit (C) Cash flow
Codes:
statement
I II III IV
(iv) Cash and Accrual (D) Prudence
1) 2 3 4 1
Codes:
2) 1 4 2 3
(i) (ii) (iii) (iv) 3) 3 2 1 4
1) (B) (D) (C) (A) 4) 4 1 3 2
2) (B) (A) (D) (C)
58. Which among the following is not a category of 4) Budgets do not pinpoint the lack of efficiency
Non-Performing Assets? or the presence of it.
1) Substandard Assets 8. Profit volume ratio of an enterprise is 40%. To
2) Double Debts offset 10% decrease is selling price, how much
3) Loss Assets sales must be increased?
4) Devaluated Assets 1) 10%
59. When a loan will be NPA? 2) 20%
1) Interest and/or loan installments overdue for 3) 25%
more than 90 days. 4) 40%
2) Account is out of order for more than 90 days 9. If debt is ` 220, cash balance is ` 20 and equity is `
in case of overdraft/cash credit. 300, then the gearing ratio is
3) Bill remains overdue for more than 90 days 1) 20%
4) All of the above 2) 40%
DEC.-2013 3) 50%
4) 30%
8. If bonus shares are issued out of pre acquisition 10. Responsibility accounting aims to
profit, it will have 1) ensure that a manager is punished if things go
1) Direct effect on the Consolidated Balance wrong.
Sheet 2) Ensure that costs become the responsibility of
2) No effect on the Consolidated Balance Sheet a specific manager.
3) No effect on Net Profit 3) Allocate costs to all areas of a business.
4) None of the above 4) reduce the costs that a department incurs
14. Given below are two statements, one labelled as
11. Find the correct matching of the items of List-I with
Assertion (A) and other labelled as Reason (R):
Assertion (A) : Increasing the value of closing the items of List-II given below:
List–I List-II
inventory increases profit. .
(A) Normal Profit I. Excess of total revenue
Reason (R) : Increasing the value of closing over total explicit cost
inventory reduces cost of gods sold. (B) Economic II. Total revenue equals
In which the context of the above two statements, profit total economic cost
which of the following is correct. (C) Accounting III. Excess of total revenue
profit over total of explicit
1) Both (A) and (R) are correct. and implicit costs and
2) Only (A) is correct. a normal rate of return
3) Only (R) is correct. Codes:
4) Both (A) and (R) are wrong. (I) (II) (III)
43. Inability of the firm to meet its obligations results i 1) (C) (A) (B)
financial distress which may lead to bankruptcy 2) (B) (A) (C)
resulting into the following: 3) (A) (B) (C)
1. Distress sale of assets at lower price. 4) (A) (C) (B)
2. Legal and administrative costs for bankruptcy.
51. Which of the following items would be specifically
3. Dilution of stakeholders’ commitment to the
firm. included in the statement of cash flows constructed
4. Stretching of payments to suppliers and in compliance with AS-3 ?
creditors. 1) Conversion of debt to equity
2) Acquiring an asset through lease
The direct of payments to suppliers and creditors.
3) Operating and non-operating cash flow
1) 1 and 4 information
2) 2 and 3 4) Purchasing a building by giving a mortgage to
3) 1 and 2 the seller giving a mortgage to the seller.
4) 3 and 4 DEC.-2014
June-2014 6. A flexible budge require careful study and
classification of expenses into
7. Which is not the limitation of budgetary control? 1) Product expenses and period expenses
1) Budget are based and on forecasts which may 2) Past and current expenses
not be true. 3) Administrative, selling and factory expenses
2) Installation and operation of system of 4) Fixed, semi-variable and variable expenses
budgetary control is costly. 7. Responsibility accounting aim at collecting and
3) Budget is a tool of management and not a reporting costing information
substitute of management. 1) Department-wide
 2) Cost centre-wise 55. As per the Master Circular on "Prudential norms on
3) Function wise Capital Adequacy – Basel I Framework", elements
4) product-wise of Tier I capital include:
10. Pre-acquisition profit in subsidiary company is (i) MAuthorised Capital (Ordinary shares),
considered as statutory reserves, all other free reserves
1) Revenue profit (di9sclosed), if any.
2) Capital profit (ii) Paid-up capital (Preference shares).
3) Goodwill (iii) Perpetual Non-Cumulative Preference Shares
4) Minority interest (PNCPS).
11. Assertion (A) : The financial statement prepared on (iv) Innovative Perpetual Debt Instruments (IPDI)
historical cost bass result into an erosion of capital in Codes:
the long run
Reason (R) : Maintaining the books of accounts as 1) (i) and (ii) only
per Current Purchasing Power Technique only may 2) (ii) and (iii) only
contain the inflationary pressure 3) (i) and (iii) only
4) (iii) and (iv) only
1) Both (A) and (R) are true and (R) is the correct
explanation of (A)
2) Both (A) and (R) are true and (R) is the correct June-2015
explanation of (A) 8. Preparation of consolidated statement of accounts as
3) (A ) is true, but (R) is false per AS – 21 is:
4) (A) is false, but (R) is true. 1) Optional
41. The optimum capital structure of a company planned 2) Mandatory for Private Ltd. Companies
as per considerations of 3) Mandatory for Listed Companies
I. Profitability 4) Mandatory for all Companies
II. Solvency 9. Which one of the following is not true of cash
III. Marketability of shares Budget?
IV. Control 1) The shortage or excess of cash would appear in a
Codes: particular period.
1) I, II and IV only 2) All inflows would arise before outflows for
2) II, III and IV only those periods.
3) I and II only 3) Only revenue nature cash flows are shown.
4) III and IV only 4) Proceeds from issue of share capital is shown as
42. Assertion(A) : Investors in capital market seem to an inflow.
be inclined for fixed income securities 10. Study the following transactions:
Reason(R) : Debt instruments now have active 1. Raising of short term loans
secondary market. 2. Goods purchased for cash
1) Assertion (A and Reason (R) both are correct 3. Payment of bonus in the form of shares
and (R) is correct explanation of (A). 4. Issue of shares in lieu of raw materials
2) Assertion (A) and reason (R) both are correct, Flow of funds is:
but (R) is not correct explanation of (A). 1) 1, 2, 3 and 4
3) Assertion (A) is correct, but Reason (R) is 2) 2, 3 and 4
incorrect. 3) 3 and 4
4) Assertion (A) is not correct, but Reason (R) is 4) Only 4
correct. DEC.-2015
43. Insufficient working capital in any eEnterprise may 6. When a business is purchased, any amount paid in
also result into excess of the total of assets, minus the liabilities
I. Failure to adapt to changes taken, is called:
II. Overcapitalisation 1) Share Premium
III. Reduced availability of trade and cash 2) Goodwill
discounts 3) Capital Employed
IV. Reduced volume of production and sales. 4) Working Capital
Codes: 7. Indicate the correct code as regards the sources of
funds for a Funds Flow Statement from the
1) I, II and III Only
following:
2) I, II and IV only
1. Increase in working capital
3) II and III only
2. Decrease in working capital
4) I and IV only
3. Writing off the intangible/fictitious assets
4. Issuing equity shares for acquisition of a
building for office
 5. Charging depreciation on fixed assets 3) 4 1 2 3
Codes: 4) 4 2 1 3
1) 1, 3, 4
2) 2, 3, 5 53. For the discharge of its functions efficiently, SEBI
3) 1, 4, 5 has been vested with the following powers:
4) 2, 3, 4 1. to approve by-laws of stock exchanges
8. Which of the following statements are correct? 2. to direct the stock exchanges to amend their by-
1. Analysis and interpretation of financial laws
statements, is a function of accounting. 3. inspect the books of accounts and call for
2. Profit and Loss account is prepared for periodical returns from recognized stock
ascertaining financial position of a firm. exchanges
3. Goodwill is a wasting asset. 4. inspect the books of accounts of financial
4. Balance Sheet is prepared for ascertaining intermediaries
financial position of a firm. 5. compel certain companies to list their shares in
Select the correct answer using the codes given one or more stock exchanges
below: 6. registration of brokers
Codes: Codes:
1) 1 and 2 1) 1, 2, 3 and 6
2) 1 and 3 2) 1, 3, 4 and 6
3) 1 and 4 3) 2, 3, 4, 5 and 6
4) 2 and 2 4) 1, 2, 3, 4, 5 and 6
9. Match the items of List-I with those of the List-II
and indicate the correct code for the following: July-2016
List I List II 1. Read the following and select the right code:
A. Debtors Turnover 1. Solvency Ratio Statement-I : A custom to be valid should be
Ratio
proved to be immemorial but may not be ancient.
B. Proprietary Ratio 2. Liquidity Ratio
C. Operating Ratio 3. Activity Ratio Statement-II : The principle of judicial decision
D. Acid Test Ratio 4. Profitability Ratio which is only authoritative is known as ‘ratio
Codes decidendi’.
A B C D Codes:
1) 2 4 3 1 1) Both the statements are true.
2) 3 2 1 4 2) Both the statements are false.
3) 3 1 4 2 3) Statement-I is true but Statement-II is false.
4) 4 3 2 1 4) Statement-II is true but Statement-I is false.
2. To become a director in a company the person must
10. For the following two statements of Assertion (A)
obtain
and Reasoning (R), indicate the correct code:
1) Business Licence
Assertion (A): Cash Flow Statement as per the
2) Director’s Licence
financial statements as well is incapable in revealing
3) TIN
the overall financial position of a firm.
4) DIN
Reasoning (R): Cash is an important constituent of
3. Which of following is not a “Maharatna” industry in
the working capital based on the recorded facts only.
India?
Codes:
1) CIL
1) (A) and (R) both are correct and (R) is an
2) SAIL
explanation of (A).
3) OIL
2) (A) is correct but (R) is not correct.
4) GAIL
3) (A) is not correct but (R) is correct.
5. Match the items of List-I with those of List-II and
4) (A) and (R) both are incorrect
choose the correct code:
51. Match the items of List-I with List-II:
List-I List-II
List I List II
A. Provision for taxation 1. Current Assets
A. Intangible Assets 1. Ind AS 31
B. Live-stock 2. Unsecured loans
B. Impairment of Assets 2. Ind AS 34
C. Interim Financial Reporting 3. Ind AS 36 C. Sundry Debtors 3. Fixed Assets
D. Interests in Joint Ventures 4. Ind AS 38 D. Interest accrued on 4. Provisions
Codes unsecured loans
A B C D
1) 1 2 3 4 Codes:
2) 4 3 2 1 A B C D
 1) 4 3 1 2 2) Nationalised computerised networking
2) 4 3 2 1 3) Ringless trading system
3) 3 4 2 1 4) Fragmentation of regional stock exchanges
4) 2 1 3 4 58. Within how much period from the close of
6. A, B C are partners in a firm sharing profits and accounting year, bonus must be paid, if there is no
losses in the ratio of 4:3:2. They agreed to take D dispute about the payment of bonus?
into partnership and gave him share. What will be 1) Two months
2) Six months
their new profit sharing ratio? 3) Eight months
1) 4 : 3 : 2 : 1 4) Ten months
2) 28 : 21 : 14 : 9
3) 28 : 21 : 14 : 8 Jan.-2017
4) 4 : 1 : 2 : 1 2. Match the items of List-I with those of List-II and
7. From the following information, find out the number indicate the code of correct matching.
of units that must be sold by the firm to earn profit of List-I List-II
` 80,000 per year. Indian Railways i. Government
Sales price : ` 25 per unit a.
Company
Variable manufacturing costs-` 12 per unit Unit Trust of India ii. Department
b.
Variable selling cost-` 3 per unit Undertaking
Fixed factory overheads-` 5,00,000 c. Bharat Heavy iii. Statutory
Fixed selling costs-` 3,00,000 Electricals Limited Corporation
1) 60,000 units Codes :
2) 88,000 units a b c
1) i ii iii
3) 98,000 units
2) ii iii i
4) 1,00,000 units
8. Which of the following is not a cash inflow? 3) ii i iii
4) iii ii i
1) Decrease in creditors
2) Decrease in debtors 3. Identify the correct statement from the following:
3) Issue of shares 1) The liability of the Karta is limited.
4) Sale of fixed asset 2) A joint Hindu family business continues to exist
on the death of a co-partner.
41. Choose the code representing the correct sequence of
steps in a merging transaction: 3) A joint Hindu family business ceases to exist on
the death of the Karta.
1. Screening and investigation or merger proposal.
2. Approval of Central Government 4) A joint Hindu family business comes into
3. Approval of respective High Courts existence by Hindu law.
4. Negotiation Stage 5. Match the items of List-I with items of List-II and
indicate the code of correct matching.
5. Approval of proposal by Board of Directors,
List-I List-II
Shareholders and Creditors
a. Principle of i. Valuing Plant and
Codes:
Separate Entity Machinery at cost less
1) 1⟶ 5⟶ 4⟶ 3⟶ 2 depreciation
2) 1⟶ 4⟶ 5⟶ 3⟶ 2 Principle of ii. Recording punctuality
b.
3) 1⟶ 4⟶ 3⟶ 5⟶ 2 Conservatism and honesty of
4) 1⟶ 3⟶ 5⟶ 2⟶ 4 employees of an
organization.
43. Which of the following approaches is adopted for the c. Principle of iii. Capital contributed by
valuation of human resource according to economic Money proprietor is shown as
concept? Measurement liability in Balance
1) Replacement cost approach Sheet
2) Opportunity cost approach d. Historical cost iv. Valuing inventories at
3) Historical cost approach concept cost or market price
4) None of the above whichever is less
46. Accounting Standard-6 is meant for Codes :
1) Accounting for Fixed Assets a b c d
2) Accounting treatment for goodwill 1) iii ii i iv
3) Depreciation Accounting 2) iii iv ii i
4) Disclosure of Accounting policies 3) iv iii i ii
47. Which of the following is not a feature of OTCEI? 4) iii i ii iv
1) Quick transfer and disposal system 6. Which of the following is not true?
 1) When all the forfeited shares are not reissued, 5. Which one of the following is not correct with
the forfeited shares account will also shows as reference to standard costing?
credit balance equal to gain on forfeiture of 1) Standard costing is a system where pre
shares not yet reissued. determined costs are used for control of entire
2) Loss on reissue of shares cannot be more than organization
gain on forfeiture of those shares. 2) Standard may be expressed in quantitative and
3) At the time of forfeiture of shares, securities monetary measures
premium is debited along with share capital 3) Only adverse variances are investigated
when premium has not been received. intensively
4) When forfeited shares are issued at premium, the 4) Standard is determined for each element of cost
premium amount is credited to Capital Reserve 7. Schedule III Part II of the Companies Act, 2013
Account. deals with which one of the following?
7. Preparation of consolidate Balance Sheet of Holding 1) Format of Balance Sheet
Company and its subsidiary company is done as per: 2) Format of Profit and Loss Account
1) AS 11 3) Format of Trading Account
2) AS 21 4) Format of Cash Flow
3) AS 22 41. Match the items of List-I with those of List-II and
4) AS 23 indicate the correct code:
8. Amount due to outgoing partner is shown in the
balance sheet as his: List I List II
1) Liability (Accounting (Relationship)
2) Asset standard)
3) Capital (A) AS-6 (i) Accounting for
4) Loan Consolidated Financial
44. Lease which includes a third party (a lender) is Statements
known as: (B) AS-3 (ii) Accounting For Fixed
1) Direct lease Assets
2) Sales and lease-back (C) AS-10 (iii) Depreciation Accounting
3) Leveraged lease (D) AS-21 (iv) Accounting For Cash Flow
4) Inverse lease Statement
45. Which of the following activities should be shown Codes
separately in the cash flow statement prepared as per (A) (B) (C) (D)
Accounting Standard-3? 1) (ii) (iv) (iii) (i)
(A) Cash flow from borrowing activities. 2) (iii) (iv) (ii) (i)
(B) Cash flow from operating activities. 3) (iv) (iii) (i) (ii)
(C) Cash flow from financing activities.
(D) Cash flow from investing activities. 4) (i) (ii) (iii) (iv)
(E) Cash flow from miscellaneous activities.
Codes : 44. Which of the following are the benefits of
1) A, B, C responsibility accounting?
2) A, C, E (A) It facilitates the centralization of decision
3) B, C, D taking.
4) A, B, E (B) It provides a system of closer control
69. An equipment was acquired at a cost of Rs. 10 lacs (C) It measures the performance of individuals in
and was put to use in Scientific Research. After one an objective manner.
year of research the equipment was brought into (D) It develops a sense of cost consciousness
another business of the assessee. For charging among managers and their subordinates.
depreciation, Block of Assets shall be increased by. Code:
1) Rs. 10 lacs. 1) (A), (B) and (C)
2) Market value of the equipment on the date it was 2) (B), (C) and (D)
brought into another business. 3) (A), (B) and (D)
3) Cost or market value of the equipment, 4) (A), (C) and (D)
whichever is less. 45. Which of the following statements are True?
4) NIL. Indicate the correct code.
(a) Tax-shield on depreciation and interest is an
important variable both for lessor and lessee.
(b) A lessee may evaluate the lease options as
November-2017
against the buying option.
 (c) Sale and Lease-back, and leveraged lease are
typed of financial lease.
(d) Lease financing is a type of capital budgeting
decision from the point of view of the lessee.
Code:
1) (a), (b) and (d)
2) (b), (c) and (d)
3) (a), (c) and (d)
4) (a), (b) and (c)
46. Which one of the following methods of Inflation
Accounting has been proposed by Sandilands
Committee of U.K.?
1) General Price Level Method
2) Specific Price Level Method
3) Current Cost Accounting Method
4) Generally Accepted Accounting Principles
 ASTRAL EDUCATION
COMMERCE (EM) FINANCIAL & MANAGEMENT ACCOUNTING PYP (P-3)

ANSWER KEYS
JUNE-2012
1 3 3 3 4 1 5 3 6 1 7 2 8 3 9 4 10 3
12 3 13 3 14 4 15 1

DEC.-2012
1 3 2 2 3 4 4 3 5 2 7 4 8 2
11 3 12 2 13 2 14 4 15 3

JUNE-2013
8 4 9 3 10 4 11 3 12 1 13 2 14 2 45 3 58 4 59 4

DEC.-2013
8 2 14 1 43 3

JUNE-2014
7 4 8 2 9 2 10 2 11 1 51 3

DEC.-2014
6 4 7 2 10 2 11 2 43 2 55 4

JUNE-2015
8 3 9 3 10 4

DEC.-2015
6 2 7 2 8 3 9 3 10 1 51 2 53 4

JULY-2016
1 4 2 4 3 3 5 1 6 2 7 2 8 1 41 2 43 2 46 3 47 4 58 3

JAN.-2017
2 2 3 3 5 2 6 4 7 2 8 4 44 3 45 3 69 4

NOV.-2017
5 3 7 2 41 2 44 2 45 4 46 3
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS ECONOMICS PYP (P-2)

June-2012 (ii) Newman and Morgenstern Game Theory

model
1. Which of the following denote the structural
(iii) Cournal’s duopoly model
changes in Indian economy?
1) Primary sector contribution has gone down. (iv) Baumal’s sales maximisation model
2) Service sector contribution has gone up. Arrange them in correct sequence as per order of
3) Secondary sector has not changed much. evolution.
4) All of the above
11. Normally Demand curve slopes 1) (iv), (iii), (ii), (i)
1) Upward 2) (ii), (i), (iii), (iv)
2) Downward 3) (i) , (iii), (ii), (iv)
3) Horizontal 4) (i), (iii), (ii), (iv)
4) Vertical DEC.-2012
12. Which of the following refers to Perfect 1. GDP at factor cost is
Competition? 1) P(Q) + P (S)
(i) There are restriction on buyers and sellers. 2) GDP – IT – S
(ii) There are no restrictions on movement of 3) GDP + DT + S
goods. 4) GDP – DT + S
(iii) There are no restriction on factors of 2. Which one is not the main objective of fiscal policy
production in India?
Correct one is 1) To increase liquidity in the economy.
2) To promote price stability.
1) Only (i) and (ii) 3) To minimize the inequalities of income and
2) Only (ii) and (iii) wealth.
3) Only (i) and (iii) 4) To promote employment opportunities.
11. Which kind of economics explains the phenomenon
4) Only (i)
of cause and effect relationship?
13. Assertion (A) : Total utility will be maximum 1) Normative
when marginal utility to price of respective 2) Positive
products are equal 3) Micro
Reason (R) : Deviation from this situation leads to 4) Macro
reduction in maximum utility. 12. Assertion (A) : Marginal cost and differential cost
do not convey the same meaning in all the
1) (A) and (R) are not correct circumstances.
2) (A) is correct but (R) is not correct. Reason (R) : Differential cost increases or
3) (A) and (R) are correct decreases due to change in fixed cost.
4) (A) is incorrect, (R) is correct. Codes
14. Match List-I with List-II and select the correct 1) (A) is true but (R) is false.
answer. 2) (A) is false, but (R) is true.
List–I List-II 3) (A) and (R) are correct and (R) is correct
(i) Survival (a) Economic explanation of (A)
Objective 4) Both (A) and (R) are correct but (R) is not the
(ii) R.O.I. (b) Natural Urge correct explanation of (A).
(iii) Growth (c) Business Purpose 14. A Commodity is used for multiple purposes, then
(iv) Innovation (d) Primary Objective the demand for it known as
Codes: 1) Joint demand
(a) (b) (c) (d) 2) Composite Demand
(1) (ii) (iii) (iv) (i) 3) Direct Demand
(2) (ii) (i) (iii) (iv) 4) Autonomous Demand
(3) (i) (ii) (iii) (iv) 15. Match List-I with List-II and select the correct
(4) (iv) (iii) (ii) (i) answer
List–I List-II
15. Consider the oligopoly models: i. Administered (a) Landed cost of
(i) Sweezy’s kinked demand curve model price imports
 ii. Parity pricing (b) Liberalized (b) Demand Curve (ii) Oligopoly
economy (c) Perfect (iii) Convex to the
iii. Competitive price (c) Public enterprise Competition origin
iv. Discriminating (d) Fixed by (d) Price Leadership (iv) Convex to the
Government origin
Codes: Codes:
(a) (b) (c) (d) (a) (b) (c) (d)
(1) i ii iii iv (1) (ii) (iii) (iv) (i)
(2) ii iii iv i (2) (iii) (iv) (i) (ii)
(3) iii iv ii i (3) (iv) (i) (ii) (iii)
(4) iv ii i iii (4) (i) (ii) (iii) (iv)
15. Price, Marginal Revenue and Elasticity are related
June-2013 to each other.
11. Assertion (A) : Want-satisfying power of a When e = 1, then:
commodity is called its utility: 1) MR. > 0
Reason (R) : Utility may not have the characteristic 2) MR < 0
of morality. 3) MR = 0
Codes: 4) MR = 1
1) Both (A) and (R) are correct. 35. Who proposed a model to apply economic order
2) (A) is correct, but (R) is not correct. quantity concept of inventory management o
3) Both (A) and (R) are not correct. determine the optimum cash holding in a firm?
4) (R) is correct. but (A) is not correct 1) Keith V. Smith
12. Match the items of List-I with those in List-II and 2) Miller and Orr
select the correct code for the answer: 3) William J. Baumol
List–I List-II 4) J.M. Keynes
(i) Contraction of (a) Non-Price change DEC.-2013
Demand effect 11. Business Economic is a subject which
(ii) Decrease in (b) Demand curve 1) Studies economic relationships
Demand remains the same 2) Studies economic activities at the aggregate
(iii) Increase in (c) Price change effect level
Demand 3) Deals with the tools of economics used for
(iv) Expansion of (d) Shift the Demand decision making in business
demand curve 4) Studies optimum allocation of limited
Codes: resources.
(a) (b) (c) (d) 12. Match List-I with list-II and select the correct code
(1) (iii) (i) (iv) (ii) for the answer.
(2) (iv) (iii) (ii) (i) List–I List-II
(3) (i) (ii) (iii) (iv) (a) Cross elasticity (i) Price = AVC
(4) (ii) (iv) (i) (iii) is zero
13. Assertion (A) : As the proportion of one variable (b) Shut-down point (ii) Two Commodities
factor in a combination with fixed factor is are independent
increased, after a point the marginal product of the (c) Slutsky theorem (iii) Transformation
factor will diminish. line
Reason (R) : Beyond the level of optimum (d) Production (iv) Substitution effect
combination of inputs leads to this. Possibility Curve
Codes:
Codes :
(a) (b) (c) (d)
1) (R) is appropriate reason of (A). (1) (ii) (iv) (i) (iii)
2) (R) is not appropriate reason of (A) (2) (iii) (ii) (iv) (i)
3) (A) and (R) are not related with each other. (3) (i) (iii) (ii) (iv)
4) (A) is independent of (R). (4) (ii) (ii) (iv) (iii)
14. Match the items of Listed with the items of List-II
and select the correct the correct answer. 13. Assertion (A) : The demand curve inverse
List–I List-I I relationship between price and the quality
(a) Indifference (i) Slopes downward demanded.
Curve to the right Reason (R) : This applies only to demanded.
Codes:
1) Both (A) and (R) are true.
 2) (A) is true, but (R) is false 2) Positive
3) (A) is false, but (R) is true, 3) Zero
4) Both (A) and (R) are false. 4) Highly positive
14. The consumer is said to be in equilibrium when he 13. A rectangular hyperbola shaped demand curve on
plans his expenditure on x, y and z commodities in all its points has
such a way that he ultimately attains: 1) Equal slopes and equal point elasticities.
(A) = = 2) Unequal slopes and unequal point elasticities.
3) Unequal slopes and equal point elasticities.
(B) = = 4) Equal slopes and unequal point elasticities.
14. Assertion (A) : A perfectly competitive firm is not
(C) = = = a price maker but is price-taker
Reason (R) : The firm is interested in deciding the
(D) < < < level of output only
Codes:
15. Match the items in List-I with those in List-II and 1) Both (A) and (R) are true.
select the correct code for the answer: 2) Both (A) and (R) are false.
List–I List-II 3) (A) is false, while (R) is true.
(a) Monopoly (i) Price Taker 4) (A) is true, but (R) is not a correct explanation
(b) Monopolistic (ii) Homogeneous of (A).
competition product’s price 15. Match the items of List-I with the items of List-II.
maker List–I List-II
(c) Perfect (iii) Heterogeneous (i) A market having high (a) Skimming
competition product price elasticity. pricing
(d) Oligopoly (iv) Price Rigidity (ii) A market having high (b) Differential
Codes: price inelasticity pricing
(a) (b) (c) (d) (iii) A market having (c) Penetrating
(1) (ii) (iii) (i) (iv) several segments pricing
(2) (i) (ii) (iv) (iii) differing prominently
(3) (iii) (iv) (ii) (i) with regard to price
(4) (iv) (i) (iii) (ii) elasticities of their
demand.
47. Identify the one, from the following, which is not a Codes:
type of disequilibrium in the balance of payments
of a country: I II III
1) Cyclical Disequilibrium (1) (b) (c) (a)
2) Secular Disequilibrium (2) (a) (b) (c)
3) Structural Disequilibrium (3) (b) (a) (c)
4) Sectoral Disequilibrium (4) (a) (c) (b)
June-2014
DEC.-2014
8. Marginal-costing technique is useful for
1) Make or Buy decisions 11. The inverse relationship between variations in the
2) Profit planning price and quantity demanded is not due
3) Shut-down decisions 1) Income Effects
4) All of the above 2) Substitution Effects
11. Which one of the following does not explain the 3) Future Expectations
basic nature of Business economics? 4) Law of Diminishing Marginal Utility
1) Behaviour of firms in theory and practice. 12. Consumer is said to be in equilibrium, maximizing
2) Distribution theories like rent, wages and his total utility, when
interest along with the theory of profit. 1) The marginal utilities of the two goods
3) Use of the tools of economic analysis in consumed are equal.
clarifying problems in organising and 2) The proportions of the marginal utilities and
evaluating information and in comparing respective prices are equal.
alternative courses of action. 3) The consumer gets full satisfaction from the
4) Integration of economic theory with business consumption.
practices for the purpose of facilitating 4) The consumer feels satisfied with his
decision making. expenditure on the various goods.
12. At a point of satiety for a commodity the marginal 13. Match the items of List-I with List-II
utility is List–I List-II
1) Negative i. Zero Income (a) Substitute
 Elasticity goods 6. The basic difference between a static budget and
ii. Unit Cross Elasticity (b) Complementary flexible budget is that:
goods 1) A flexible budget considers only variable costs
iii. Positive Cross (c) Indifferent but a static budget considers all costs.
Elasticity goods 2) Flexible budgets allow management latitude in
iv. Negative Cross (d) Independent meeting goals, whereas static budget is based on
Elasticity goods fixed standards.
Codes: 3) A flexible budget is applicable for a single
(a) (b) (c) (d) department only but a static budget for entire
(1) iii ii i iv production facility.
(2) ii iii iv i 4) A flexible budget can be prepared for any
(3) iii iv i ii production level within a relevant range but a
(4) iv i ii iii static budget is based on one specific level of
production.
14. Statement (A) : The isoquant curves are drawn 11. A rectangular hyperbola shaped demand curve on all
convex to the origin due to diminishing technical its points has:
rate of substitution. 1) Equal slopes of the price demand curve
Statement (B) : The lesser the convexity of the 2) Price elasticity equal to unity
isoquant curve the greater the possibility of the 3) Varying price elasticity
complementarily of the two inputs. 4) Both slope and price elasticity equal
1) Statement (A) and (B) both are correct. 12. In case of short-run equilibrium, a perfectly
2) Statement (A) is correct but (B) in incorrect. competitive firm while earning abnormal profits
3) Statement (A) is incorrect but (B) is correct. operates at an output level where:
4) Statement (A) and (B) both are incorrect 1) Marginal cost is the minimum
15. Match items of the List – I with those of List-II and 2) Average cost is the minimum
suggest the correct code: 3) Both marginal cost and average cost are equal
List–I List-II 4) Marginal cost is higher than average cost
(a) Constant average (i) Economic 13. Which one of the following statements is false?
cost over a range of capacity 1) Normally, a price demand curve slopes
output downward from left to right.
(b) Average cost (ii) Reserve 2) Economies of scale and economies of scope are
becomes constant capacity the same.
momentarily 3) For optimization, equality between marginal cost
(c) Normal average cost (iii) Production and and marginal revenue is a necessary condition
is a U-shaped curve Managerials but it is not a sufficient one.
cost effects 4) Law of variable proportions denotes input-output
(d) Modern Long-run (iv) Economics and relationship during short-run.
average cost is L- Diseconomies 14. Match the items of List-I with the items of List-II:
shaped List I List II
Codes: A. Law of diminishing i. Cross
(a) (b) (c) (d) marginal utility demand
(1) i ii iii iv B. Relationship between price ii. Oligopoly
(2) ii iii iv i of one commodity and
(3) iii iv ii i demand for other
(4) ii i iv iii commodity
C. Skimming the cream policy iii. Cardinal
June-2015 approach
5. From the following, identify the tools of fiscal D. Price rigidity iv. Pioneer
policy: pricing
1. Public expenditure Codes
2. Open market operations A B C D
3. Deficit financing (a) i ii iii iv
4. Taxation (b) iii i ii iv
5. Reserve requirements (c) ii iv i iii
Codes: (d) iv iii ii i
1) 1, 3, 4 and 5
15. The following are the demand and supply equations
2) 1, 3, 4 and 5
in a perfectly competitive market:
3) 2 and 5
P = 12 + 0.3 Qs
4) 1, 3 and 4
P = 40 – 0.4 Qd
 The equilibrium market price would be: (4) i iii ii iv
1) 24
2) 10 14. For the following two statements of Assertion (A)
3) 40 and Reasoning (R) indicate the correct code:
4) 20 Assertion (A): All firms under perfect competition
35. What is Economic Order Quantity? in long run earn only normal profit.
1) Cost of an order Reasoning (R): All firms under perfect competition
2) Cost of stock in long run operate at the minimum average cost
3) Reorder level level.
4) Optimum order size Codes:
1) (A) and (R) both are correct
DEC.-2015 2) (A) is correct but (R) is not correct.
2. Which of the following is not the main objective of 3) (A) is not correct but (R) is correct
“Fiscal Policy of India”? 4) (A) and (R) both are incorrect.
1) To increase liquidity in economy 15. Match the items of List-I with those of List-II and
2) To promote price stability indicate the correct code:
3) To minimize the in-equality in income and List I List II
wealth A. Substitute Goods i. Negative Cross
4) To promote employment opportunities Elasticity
11. The Marshallian utility analysis is based on a less B. Complementary Goods ii. Low Price
valid assumption of: Elasticity
1) cardinal measurability of the utility C. Giffen Goods iii. Positive Cross
2) given marginal utility of money Elasticity
3) diminishing marginal utility of the goods D. High Income Group iv. Positive Price
4) additivity of the utility Consumption Goods Elasticity
12. Match the items of the List-I with those of the List-II Codes
and indicate the correct code: A B C D
List I List II (1) iii iv ii i
A. Convexity 1. Indifference curve analysis
(2) iii i iv ii
of the
indifferences (3) ii iii i iv
curve to (4) i ii iii iv
origin
B. Quantity of 2. Consumer’s equilibrium July-ii0i6
certain 2. Match the items of List-I with List-II and indicate
goods the correct code:
sacrificed List-I List-II
for a large A. Fiscal Policy i. Mitigantion of
quantity of National hazards
other goods B. Technology Policy ii. Balance of Payment
C. Equality of 3. Substitutability/complementarity C. Macro-Economic iii. Fiscal Federation
the ratio of of the two goods Policy
the marginal D. Monetary Policy iv. Inflation
utilities with
that of the
prices of the Codes:
two goods A B C D
D. Separation 4. Marginal rate substitution (1) i ii iii iv
of (2) iii i ii iv
substitution (3) iv iii i ii
and income (4) ii i iv iii
effects from 3. Which of the following factor is not directly
the total responsible for slowing down the growth of
price effect infrastructure?
Codes 1) High level of perceived political risk.
A B C D 2) High level of sunk cost.
(1) iv ii i iii 3) High probability of time and cost over-run.
(2) iii iv ii i 4) Introduction of competition in all sectors.
(3) iii i iv ii
4. Out of the following which is not a major component Assertion (A) : From the marginal costing approach
of Gross Domestic Product (GDP)? point of view, the marginal cost is compared with the
1) Personal Consumption Expenditure purchase price.
2) Gross Private Domestic Investment Reason (R) : If the marginal cost is less than the
3) Net Personal Income purchase price it should be purchased rather than
4) Net Exports manufactured.
11. Ordinal utility analysis of the consumer’s behaviour Codes :
is considered superior to the cardinal utility analysis 1) (A) and (R) both are correct.
mainly due to 2) (A) is correct, but (R) is not correct.
1) Assumption of the rationality of the consumer’s 3) (A) is not correct, but (R) is correct.
behaviour. 4) (A) and (R) both are incorrect.
2) Possibility of the deprivation of the consumer’s 11. Match the items of List-I with the items of List-II
demand. and denote the code of correct matching.
3) Bifurcation of price effects into income and List – I List – II
substitution effects. a. Hypothesis of i. W.J. Baumol
4) Consideration of the available limited resources Sales Revenue
for satisfying consumer’s demand. Maximization
12. For the following statements of Assertion (A) and b. Hypothesis of ii. Robin Marris
Reasoning (R) indicate the correct code: Maximization of
Assertion (A) : Price reduction normally leads to an Firm’s Growth
increase in the demand for a commodity. Rate
Reason (R) : Price reduction leads to the entry of c. Hypothesis of iii. O.E. Williamson
new buyers of the commodity in the market. Maximization of
Codes: Managerial
Utility Function
1) (A) is correct but (R) is not correct.
d. Hypothesis of iv. Cyert and March
2) (A) is not correct but (R) is correct. Satisfying
3) Both (A) and (R) are correct and (R) offers full Behaviour
explanation of (A).
4) Both (A) and (R) are correct but (R) does not Codes :
offer full explanation of (A). a b c d
13. The minimum Long Run Average Cost (LAC) can (1) ii i iii iv
be determined on a (2) ii iii i iv
(A) LAC curve for a normal production function (3) i ii iii iv
(B) LAC curve for a linear production function
(C) Planning curve (4) i iv ii iii
(D) Envelope curve 12. Which of the following is not a correct matching
Codes: with regard to price elasticity, change in price and
(1) A B C change in total revenue?
(2) B C D Price elasticity Change in Change in total
(3) A C D coefficient price revenue
(4) A B D (1) Zero Increase Increase
14. Monopoly is not considered desirable from the point Decrease Decrease
of view of the society mainly because the monopolist (2) Less than one Increase Decrease
endeavours to Decrease Increase
1) Earn net revenue on sale of all goods including (3) Equal to one Increase No change
those involving no cost of production. Decrease No change
2) Earn net revenue on sale of goods in short run as (4) More than one Increase Decrease
well as long run. Decrease Increase
3) Charge different prices for the same product 13. The short-run production function for a firm is as
from the different categories of buyers. follows:
4) Produce below economic capacity level when he Q = -L3 + 15L2 + 10L
exhibits satisfaction with normal profit only.
Where Q denotes total output in physical units and L
denotes units of labour which are homogeneous, but
Jan.-2017
are not perfectly divisible and change in labour does
8. From the following two statements of Assertion (A) not tend to become zero.
and Reason (R), indicate the correct code :
Statement I : In this production function, the
marginal product of 5th unit of labour is 85.
 Statement II : Similarly, in this production function, Code:
the average product of the 5th unit of labour is
60. 1) Both the statements are correct.
Codes : 2) Both the statements are incorrect.
3) Statement (I) is correct while statement (II) is
1) Both the Statements are true.
incorrect.
2) Both the Statements are false.
4) Statement (I) is incorrect while statement (II) is
3) Statement I is true, while Statement II is false.
correct.
4) Statement I is false, but Statement II is true.
15. Which one of the following is not the basic property
14. The Kinked demand curve model of oligopoly was
of indifference curves?
developed by
1) Negative slope
1) Augustin Cournot
2) Indifference curves of two imperfect substitutes
2) Stackelberg
are concave to the point of origin
3) Edgeworth
3) The indifference curves do not intersect nor are
4) Sweezy
they tangent to one another.
15. For the success of the penetration price policy,
4) Upper indifference curves indicate a higher
which one of the following is not desirable?
levels of satisfaction.
1) Short-run demand for the product to have
elasticity greater than unity.
July-2018
2) Availability of economies of large scale
production. 16. Which one of the following sets is incorrect to show
3) Product to have very low cross-elasticity of the inter-relationships among price elasticity
demand. coefficient, change in price and change in total
4) Easy acceptance a adoption of the product by the revenue ?
consumers. Price elasticity Change in Change in
coefficient price Total
November-2017 Revenue
12. Which one of the following statement is true? Zero Increase Increase
1) .
1) Pure profit is the return in excess of the Decrease Decrease
opportunity cost Less than 1 Increase Decrease
2)
2) Accounting profit is the excess of total revenue Decrease Increase
over and above the explicit and implicit cost. Equal to 1 Increase No change
3)
3) Profit maximization is the sole objective of the Decrease No change
modern firms. More than 1 Increase Decrease
4)
4) Profit is maximum when the difference between Decrease Increase
marginal revenue and marginal cost is maximum 17. Which one of the following is not the basic property
13. Which one of the following is not the assumption on of indifference curves ?
which on which the theory of consumer behavior is 1) Indifference curves have a negative slope.
based on the cardinal utility approach. 2) Indifference curves of imperfect substitutes are
1) Rationality concave to the origin.
2) Constant marginal utility from successive units 3) Indifference curves do not intersect nor are they
3) Constant marginal utility of money tangent to one another.
4) Utility is measurable 4) Upper indifference curves indicate higher level
of satisfaction.
18. When labour is plotted on X-axis and capital is
14. Statement (I): Point price elasticity demand in
plotted on Y-axis and an iso-quant is prepared, then
terms of marginal and average
which of the following statements is/are false ?
revenues can be measured with
(a) Marginal rate of technical substitution of labour
the following formula.
for capital is equal to the slope of the iso-quant.
(b) Marginal rate of technical substitution of labour
for capital is equal to change in the units of
− capital divided by the change in the units of
Statement (II) : The point price elasticity of labour.
demand is the product of the (c) Marginal rate of technical substitution of labour
slope of the demand function for capital is the ratio of marginal productivity
and the ratio between of capital to marginal productivity of labour.
corresponding price and Code :
quantity. 1) (a) and (b) statements
2) Only (c) statement
 3) Only (a) statement
4) Only (b) statement
19. Match the items of List - II with the items of List - I
and indicate the code of correct matching. The
items relate to economies of scale/scope.
List - I
(a) Economies of scale
(b) Internal economies
(c) External economies
(d) Economies of scope
List - II
i. arise with lower average costs of
manufacturing a product when two
complementary products are produced by a
single firm
ii. Mean lowering of costs of production by
producing in bulk
iii. Arise when cost per unit depends on size of the
firm
iv. Arise when cost per unit depends on the size of
the industry, not the firm
Code :
(a) (b) (c) (d)
1) (ii) (iv) (i) (iii)
2) (i) (ii) (iii) (iv)
3) (ii) (iii) (iv) (i)
4) (iv) (iii) (ii) (i)
20. A firm that produces highly substitute goods can
adopt which one of the following pricing strategies?
1) Transfer pricing
2) Going Rate pricing
3) Product bundling
4) Full cost pricing
21. In a perfectly competitive market, a firm in the long
run operates at the level of output where :
1) AC = MC when MC is lowest
2) MC = AR = MR when MC is lowest
3) MR = MC
4) AR = MR =AC = MC
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS ECONOMICS PYP (P-2)

ANSWER KEYS
JUNE-2012
1 4 11 2 12 2 13 3 14 1 15 3

DEC.-2012
1 2 2 1 11 2 12 3 14 2 15 2

JUNE-2013
11 1 12 1 13 1 14 3 15 3 35 3

DEC.-2013
11 3 12 4 13 2 14 3 15 1 47 4

JUNE-2014
8 4 11 2 12 3 13 3 14 4 15 1

DEC.-2014
11 3 12 2 13 3 14 2 15 4

JUNE-2015
5 4 6 4 11 2 12 4 13 2 14 * 15 1 35 4

DEC.-2015
2 1 11 2 12 2 14 1 15 2

JULY-2016
2 2 3 4 4 3 11 3 12 4 13 3 14 4

JAN.-2017
8 2 11 3 12 2 13 4 14 4 15 3

NOV.-2017
12 1 13 2 14 1 15 2

JULY-2018
16 2 17 2 18 2 19 3 20 2 21 4
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS ECONOMICS PYP (P-3)

June-2012 4) In case of inferior goods, the income effect is

positive although the substitution effect is
37. Assertion (A) : Business Economics is tool centrics negative.
facilitating decision making in business. 38. In perfect competition, the demand cure of a firm is
Reason (R) : It provides an analytical undertaking 1) Vertical
of economic activities. 2) Horizontal
Codes: 3) Positively sloped
1) Both (A) and (R) are not correct. 4) Negatively sloped
2) Both (A) and (R) are correct 46. Match the following:
3) (A) is true, but (R) is false. List–I List-II
4) (R) is true, but (A) is false (A) Trade policy 1. Economic
38. Demand has the following elements: conditions
1) Quantity (B) Trade flows 2. Economic policies
2) Price (C) Price trends 3. Globallinkages
3) Time (D) Internal Sectoral 4. Structure and
4) All the above linkages Nature of Economy
39. A perfectly competitive firm attains equilibrium Codes:
when (A) (B) (C) (D)
1) AC = AR 1) 3 1 2 4
2) MR = MC 2) 2 3 1 4
3) MC = AC 3) 1 2 3 4
4) TC = TR 4) 1 2 4 3

DEC.-2012 June-2013
6. In marginal costing, contribution is equal to 15. Assertion (A) : Mark-up pricing is a method of
1) Sales – Fixed cost determining price
2) Sales – Variable cost Reason (R) : P = ATC + (M × ATC) is the
3) Sales – Profit expression for that.
4) Sales – Variable Cost + Fixed Codes:
9. When average cost is declining 1) (A) is correct but (R) is not correct
1) Marginal cost must be declining 2) Both (A) and (R) are correct.
2) Marginal cost must be above average cost. 3) Both (A) and (R) are not correct.
3) Marginal cost must be below. 4) (R) is correct, but (A) is not correct.
4) Marginal cost must be rising 16. Match the items of List-I with the items of List-II
32. ‘Kinked’ demand curve is related with
and select the correct answer,.
1) Monopoly
List–I List-II
2) Discriminating monopoly
(A) Economic profit (i) Total Revenue
3) Oligopoly
Explicit cost
4) Perfect competition
(B) Accounting profit (ii) Buyers and Sellers
36. If price of any commodity decreases by 20% and
(C) Collusion/Cartel (iii) Total Revenue-
the demand for that commodity increase by 40%,
Total cost
then elasticity of demand would be
(D) Market (iv) Oligopoly
1) Perfectly elastic
Codes:
2) Perfectly inelastic
3) Unit elastic (A) (B) (C) (D)
4) Highly elastic 1) (iii) (i) (iv) (ii)
37. Which of the following statements is true? 2) (i) (ii) (iii) (iv)
1) In case of inferior goods, the income effect is 3) (iv) (iii) (ii) (i)
negative, although the substitution effect is 4) (ii) (iv) (i) (iii)
positive. 17. Which one is not the item economic cost to the
2) In inferior goods, the income and substitution business?
effects are positive. 1) Owner supplied resources.
3) In inferior gods, the income and substitution 2) Market supplied resources.
effects are negative 3) Implicit costs.
 4) Non-monetary opportunity costs of using (D) Multiple (iv) P = (1+M) ATC
owner supply resources. products
18. Demand must have the elements Codes:
1) Desire (A) (b) (c) (d)
2) Want 1) (iv) (ii) (i) (iii)
3) Quantity, Price and Time 2) (i) (iii) (iv) (iv)
4) All of the above 3) (ii) (i) (iii) (iv)
19. Match the items of List-I and item of List-II and 4) (iii) (iv) (ii) (i)
select the correct code for the answer. 16. A measure of the responsiveness of quantity
List–I List-II demanded to changes in the price of related good is
(A) Utilitarian (i) Marginal Rate of known as
Approach Substitution 1) Cross-Elasticity of Demand
(B) Ordinal (ii) Budget line & 2) Substitution Elasticity of Demand
Approach Indifference 3) Complementary Elasticity of Demand
(C) Price- (iii) U = f (x, y) 4) Price Elasticity of Demand
Consumption 17. If the total cost is ` 260 and the total variable cost is
Curve
` 60, what will be total fixed cost if output is (a)
(D) Consumer (iv) MRS = MRS 100 units and (b) 200 units?
Equilibrium
1) ` 200 and ` 200
Codes: 2) ` 100 and ` 200
(A) (b) (c) (d) 3) ` 260 and ` 100
1) (i) (iv) (iii) (ii) 4) ` 160 and ` 100
2) (ii) (iii) (iv) (i) 18. Optimal input combination to minimize the cost for
3) (iii) (i) (ii) (iv) a given output will be at the point where:
4) (iv) (ii) (i) (iii) (a) Isocost is tangent to Isoquant
20. The Learner Index measures (b) MRTS between inputs is equal
1) Market power (c) Any movement from optimum point will lead
2) Price to low level of output
3) Price-Marginal cost (d) All the above conditions are fulfilled.
4) None of the above 19. What kinds of actions can be taken to put the rivals
21. Match the items of List-I and items of List-II and at a disadvantageous position under oligopoly
select the correct answer. market?
List–I List-II 1) Commitments
(A) Perfect (i) Different prices for 2) Threats
competition the same product 3) Promises
(B) Monopolistic (ii) Dominant strategy 4) All the above
competition 20. There is no exceptions to the low of demand in the
(C) Oligopoly (iii) Product case of
differentiation 1) Giffen goods
(D) Discriminating (iv) Identical product 2) Normal goods
Monopoly 3) Articles of conspicuous consumption
Codes: 4) Ignorance of the buyer
21. What is the degree of elasticity of demand in case
(A) (B) (C) (D)
the demand is represented by a straight line parallel
1) (iv) (iii) (ii) (i)
to the x-axis?
2) (i) (ii) (iii) (iv)
1) e > 1
3) (ii) (iv) (i) (iii)
2) e = 0
4) (iii) (i) (iv) (iv)
3) e = 
4) e < 1
DEC.-2013 June-2014
15. Match the items of the following two lists: 12. Assertion (A) : A monopoly firm’s revenue curve is
List–I List-II downward sloping from left to right.
(A) Multiple plants (i) = Reason (R) : The monopoly firm does not
= = simultaneously enjoy the freedom to determine both
(B) Cost-Plus (ii) MRT = MC = price and quantity to be sold according to its whims
pricing = and fancy.
(C) Multiple (iii) MR = = 1) Both (A) and (R) are true
markets =
 2) Both (A) and (R) are false to attain the same level of satisfaction, the marginal
3) (A) is true, but (R) is false rate of substitution, will be calculated by:
4) (A) is false, but (R) is true 1) Change in X-Commodity divided by change in
13. The equilibrium level of output for a perfect Y-Commodity
competitive firm is given be the point where: 2) Change in X-Commodity divided by marginal
1) MR = MC utility of Y-Commodity
2) MR < MC 3) Change in Y-Commodity divided by change in
3) MR > MC X-Commodity
4) MR = MC, and MC starts rising. 4) Change in Y-Commodity divided by marginal
DEC.-2014 utility of X-Commodity
9. Margin of Safety is calculated by using 12. The following is the demand function in the small
1) market:
/ Q = 50 – 5P
Where ‘Q’ denotes quantity in physical units and ‘P’
2) denotes price of the commodity. At price `5, the
point price elasticity of demand would be:
3) 1) Zero
2) Equal to unity
4) 3) Highly elastic
15. Monopolists prefer to sell the products in the 4) Highly inelastic
markets with 13. Match the items of List-I with items of List-II and
1) Elastic demand choose the correct code:
2) Unitary elastic demand List I List II
3) Inelastic demand Production Name of the shapes of
4) Absence of elasticity of demand functions returns to scale
16. Assertion (A) : In long run under Perfect A. Q = 10.2 K0.19 1. Constant Returns to scale
Competition all firm invariably get only normal L0.88
profit. B. Q = 1.01 L0.75 2. Diminishing Returns to
Reason (R) : All firms incur minimum average cost K0.25 scale
C. Q = 0.84 L0.63 3. Increasing Returns to
and incur no selling cost due to absence of product K0.3 scale
differentiation. Codes
1) Assertion (A) and Reason (R) both are correct. A B C
2) Assertion (A) is correct, but Reason (R) is 1) 1 2 3
incorrect. 2) 2 1 3
3) Assertion (A) is incorrect, but Reason (R) is
3) 2 3 1
correct
4) Assertion (A) and Reason (R) both are 4) 1 3 2
incorrect. 14. In the short-run, when a simple monopoly firm
attains equilibrium and earns only normal profit, its
June-2015 level of output will correspond to:
1. GNP at market prices – Indirect taxes + subsidies is 1) Lowest average cost
referred to as: 2) Average cost above optimum level of output
1) GNP at factor cost 3) Average cost equals marginal cost
2) GDP at factor cost 4) Marginal cost much below average cost
3) NNP at factor cost 15. Which one of the following is a false statement?
4) NDP at factor cost 1) Ramsey pricing rates to the methodology of
7. Given: pricing to situations where firms are regulated
Margin of Safety `80,000 and the maximization of allocative efficiency is
Profit `20,000 the objective of pricing together with the
Sales `3,00,000 objective of profi-maximization.
What is the amount of Fixed Cost? 2) Peak-load pricing is a pricing practice where
1) `1,00,000 price varies with time of the day.
2) `75,000 3) Value-pricing is the practice of pricing where the
3) `55,000 price is set based on its value to the customer.
4) `20,000 4) Two-part tariff refers to a price structure which
11. When a consumer increases units of X-commodity has two parts- a lump sum charge and a variable
by giving up some units of Y-commodity and even charge.

DEC.-2015
11. For the following two statements of Assertion (A) 2) 3 4 1 2
and Reasoning (R), indicate the correct code: 3) 2 3 4 1
Assertion (A): The quantity of a commodity 4) 1 2 3 4
demanded invariably changes inversely to changes in
its price.
30. Match the strategies given in List-I with the
Reasoning (R): The price effect is the net result of
examples given in List-II:
the positive substitution effect and negative income
List I List II
effect.
(Strategies) (Examples)
Codes: A. Differential 1. Customer longues to
1) (A) and (R) both are correct.
Pricing sit in while waiting for
2) (A) is correct but (R) is incorrect.
a table at service
3) (A) is incorrect but (R) is correct.
centres, etc.
4) (A) and (R) both are incorrect.
B. Complimentary 2. Breakfast service by
12. Economic capacity of a plant represents its:
Service McDonald’s and mini
1) maximum physical output level
vacation and weekends
2) average output level over a period
by hotels
3) break-even output and sales level
C. Reservation 3. Low prices for early
4) output level that equates the average and the
System and evening movies,
marginal costs
weekend discounts for
13. Match the items of List-I with those of the List-II
car parking rentals
and indicate the correct code:
D. Non-peak 4. Airlines, Hotels and
List I List II Demand Physicians employe
A. Excess capacity of 1. Cost reduction with
Cultivation extensively
the plant output expansion
B. Resorting to New 2. Constant cost with
Codes
Technology output expansion
A B C D
C. Setting up of the 3. Internal economies
Training Institutions 1) 1 3 2 4
D. Reserve capacity of 4. External economies 2) 4 2 1 3
the plant 3) 2 1 4 3
Codes 4) 3 1 4 2
A B C D
1) 1 3 4 2 56. “Buyers are less price sensitive when they cannot
2) 3 1 4 2 easily compare the quality substitutes”. Which of the
3) 2 3 1 4 following factors of price sensitivity is reflected
4) 4 2 3 1 from this statement?
1) Substitute-awareness effect
14. In case the elasticity of demand on an average
2) Unique value effect
revenue curve is equal to unity, the marginal revenue
3) Price quality effect
will be:
4) None of the above
1) more than unity
2) equal to unity
July-2016
3) equal to a fraction of unity
4) equal to zero
9. Match the items of List-I with those List-II and
15. Match the items of the List-I with those of the List-II
indicate the correct code from the following:
and indicate the correct code:
List-I List-II
List I List II
A. Postage stamp 1. Equality of marginal
A. Trade Channel Discount 1. Oligopoly
pricing and average cost
Pricing
B. Loss leader 2. Constant average
B. Loss Leadership 2. Locational Price
and marginal cost
Differentials
C. Economic 3. Product line pricing
C. Pricing being non- 3. Differential
capacity
responsive to changes in Pricing
D. Reserve capacity 4. Differential pricing
the demand and the cost
D. Basing Point Pricing 4. Product-Line
Pricing Codes:
Codes A B C D
A B C D 1) 3 4 2 1
1) 4 3 2 1 2) 4 3 1 2
3) 2 1 3 4
 4) 1 2 4 3 Q = Physical units of the product of the firm
What would be the level of optimum output?
11. For the following statements of Assertion (A) and 1) 05
Reasoning (R) indicate the correct code: 2) 10
Assertion (A) : Gossen’s first law of consumption is
3) 12
invariably applicable in case of individuals’ 4) 15
consumption behaviour. 11. Short-run demand and total cost functions for a
Reason (R) : It serves as an important monopoly firm are as under:
determinant of demand for the goods and services in Demand : Q = 100 – 0.2 P
the market. function
Price function : P = 500 – 5 Q
Codes:
1) Assertion (A) and Reasoning (R) both are Cost function : TC = 50 + 20 Q + Q2
correct. Where Q = Total quantity of the product in
2) Assertion (A) and Reasoning (R) both are physical units.
incorrect. P = Price of the product per unit
3) Assertion (A) is correct but Reasoning (R) is TC = Total cost
incorrect.
1) 20
4) Assertion (A) is incorrect but Reasoning (R) is
2) 35
correct.
3) 40
12. Production function for a product is based on certain
assumptions. Indicate the correct code from the 4) 50
following: 12. In which one of the following market situations, the
1. Complementary pricing above the prevailing market price is used as a
more common practice?
2. Substitutability
3. Product elasticity 1) Markets where the selling firms face perfect
competitive situations.
4. Specificity
2) Markets where the selling firms want to gain
Codes:
1) 1 2 3 popularity of the products having high corss
elasticity of their demand.
2) 2 3 4
3) Markets where sellers rely on their customers’
3) 1 3 4
high propensity to consume a prestigious
4) 1 2 4
commodity.
4) Markets where the selling firms have entered
Jan.-2017 into the stages of maturity and saturation.
9. Match the items of List-I with items of List-II and
indicate the code of their correct matching.
List-I List-II November-2017
A. Non-price quantity i. Extension and 6. Which one of the following is not correct?
relationships of contraction of Profit
demand demand. 1) Margin of Safety =
Income effect of a ii. Ordinal utility P/V ratio
B.
price rise greater than approach. Change in Contributi on
its substitution effect. 2) P/V Ratio = 100
Change in Sales
C. Transitivity and iii. Increase and
3) Break-even point in units = Fixed cost
consistency of choices. decrease in
Contributi on per unit
demand.
4) Required sales to earn desired profits =
D. Price-quantity iv. Giffen goods.
relationships of Desired profit'
demand. P/V ratio
Codes :
9. Statement-I: The least-cost or optimal input
A B C D
combination of labour and capital requires that the
1) iv ii iii i
marginal revenue productivity ratio of the two
2) ii i iv iii
inputs should be equal to their price ratio.
3) iii iv ii i
Statement-II: In a hypothetical production
4) i ii iii iv
function of the following form
10. The short-run cost function of a firm is as follows:
Q = –L3 + 15 L2 + 10L
TC = 200 + 5Q + 2Q2 Where, Q = Quantity of the product and L = No. of
Where TC = Total Cost variable input (labour), the marginal physical
productivity of labour is –L2 + 15L + 10.
 Code:
1) Both the statements are true.
2) Both the statements are false.
3) Statement-I is true while statement-II is false.
4) Statement-I is false while statement-II is true.
10. Match the items of List-I with the items of List-II
and indicate the code of correct matching.
List I List II
(A) Technological (i) Managerial
advantages economies
(B) Large scale purchase (ii) Economies in
of material inputs transport and
storage
(C) Specialized (iii) Economies in
departments under marketing
Specialized
personnel
(D) Oil companies (iv) Economies in
having their own production
fleet of tankers

Codes
(A) (b) (c) (d)
1) (iv) (iii) (i) (ii)
2) (iii) (iv) (ii) (i)
3) (iii) (i) (ii) (iv)
4) (iv) (ii) (iii) (i)
62. According to which one of the following
differences in nominal interest rates will be
eliminated in the exchange rate?
1) Leontief Paradox Trade Theory
2) Fisher Effect Economic Theory
3) Purchasing Power parity Theory
4) Combined Equilibrium Theory
63. According to the Purchasing Power Parity Theory,
the level of foreign exchange rate is determined by
which of the following?
1) Domestic Price level (P) divided by foreign
level (P*)
2) P*–P
3) P–P*
4) P*/P
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS ECONOMICS PYP (P-3)

ANSWER KEYS
JUNE-2012
37 2 38 4 39 2

DEC.-2012
6 2 9 3 32 3 36 4 37 1 38 2 46 2

JUNE-2013
15 2 16 1 17 2 18 4 19 3 20 1 21 1

DEC.-2013
15 4 16 1 17 1 18 4 19 4 20 2 21 3

JUNE-2014
12 1 13 4

DEC.-2014
9 1 15 1 16 3

JUNE-2015
1 1 7 3 11 3 12 2 13 3 14 4 15 1

DEC.-2015
11 3 12 4 13 1 14 4 15 2 30 4 56 4

JULY-2016
9 2 11 4 12 4

JAN.-2017
9 3 10 2 11 3 12 3

NOV.-2017
6 4 9 3 10 2 62 2 63 1
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS STATISTICS & PROCESSING PYP (P-2)

June-2012 18. If bxy = 0.25 and byx = 0.64, correlation coefficient

is
16. Which of the following is not a restricted random 1) 0.16
sampling technique? 2) 0.40
1) Stratified sampling 3) 0.89
2) Simple random sampling 4) 0.30
3) Systematic sampling 19. Sturge’s rule is used to find out directly
4) Multistage sampling 1) Number of classes in a continuous distribution
17. Classification ore respondents only on the basis of 2) Size of class limits
gender is an application of 3) Direction of the classification
1) Ordinal scale 4) None of the above
20. Which of the following software has applications in
2) Nominal scale
both Mathematics and Statistics?
3) Interval scale 1) SPSS
4) Ratio scale 2) SAS
18. Karl Person’s co-efficient of correlation between 3) R
two variables is 4) None of the above
1) The product of their standard deviations June-2013
2) The square root of the product of their
16. Consider the following statistical tests:
regression co-efficient
i. ‘F’ test
3) The co-variance between the variables ii. ‘t’ test
4) None of the above iii. ‘z’ test
19. Statistical software packages for research in social iv. ‘Chi’-square’ test
sciences include which these are parametric tests?
1) SPSS
2) STATA 1) (i), (ii) and (iv)
3) Mini Tab 2) (i), (iii) and (iv)
4) All of the above 3) (i), (ii) and (iii)
4) (ii), (ii) and (iv)
20. F-test is used to test the significance of the
17. The difference between sample statistic and its
difference between/among
corresponding population parameter is
1) Two sample mean
1) Sampling error
2) More than two samples mean 2) Measurement error
3) Variance of two samples 3) Coverage error4
4) (2) and (3) 4) Non-response error
DEC.-2012 18. Match the items in List-I with items in List-II
List–I List-II
16. Sample design involves the following: (i) Level of (a) Sample mean is
i. Sampling unit significance equal to population
ii. Size of samples mean
iii. Type of universe (ii) Standard (b) Parameters
iv. Source list deviation of
v. Sampling procedure sampling
Which one of the following sequence is correct? distribution
(iii) Numerical value (c) Type-I error
1) i, ii, iii, iv, v that describes the
2) iii, iv, i, ii, v characteristics of
3) iii, i, iv, ii, v the population
4) iii, v, i, iv, ii (iv) Normally- (d) Standard error
17. Which one of the following is not a measure of distributed
dispersion? population
1) Quartile Codes:
2) Range
(i) (ii) (iii) (iv)
3) Men Deviation
(1) (d) (c) (a) (b)
4) Standard Deviation
 (2) (c) (d) (b) (a) 4) Harmonic mean
(3) (c) (b) (d) (a) 20. “The life expectancy of people in Kerala is more
(4) (d) (b) (c) (a) than that of Tamil Nadu.” This statement is an
example of
19. Kendall’s co-efficient of concordance is used to
1) Descriptive Hypothesis
1) Test the difference among two or more sets of
2) Casual Hypothesis
data.
3) Correlational Hypothesis
2) Test the relationship between variables.
4) None of the above
3) Test the variations in the given data.
4) Test the randomness of samples. June-2014
20. Which of the following software’s are used for data 16. Which one of the following options deals with the
processing process of making estimates, predictions and
(i) Excell decision?
(ii) Access 1) Descriptive statistics
(iii) Spss 2) Inferential statistics
(iv) Star 3) Probability theory
(v) Pasw 4) None of the above
Codes: 17. A hypothesis test is being performed for a process
in which a Type-I error will be very costly, but a
1) (i), (ii), (iii), and (v) Type-II error will be relatively inexpensive and
2) (ii), (iii), (iv) and (v) unimportant. Which of the following would be the
3) (iii) and (iv)
best choice for alpha () in this test?
4) (i), (iii), and (iv)
1) 0.10
DEC.-2013 2) 0.05
16. Match the following items in List-I with most 3) 0.01
suitable options in List-II: 4) 0.50
List–I List-II 18. If the dependent variable increases as the
(a) Fisher (i) Inverse probability independent variable increases in an estimating
(b) Karl Pearson (ii) Normal equation, the coefficient of correlation will be in the
Distribution range
(c) Thomas Bay’s (iii) Correlation 1) 0 to (–) 1
Coefficient 2) 0 to (–) 0
(d) Karl Gauss (iv) Index Numbers 3) 0 to (–) 0.05
Codes: 4) 0 to 1
(a) (b) (c) (d) 19. Assertion (A) : When there is an evidence of a
(1) (iv) (iii) (ii) (i) linear relationship between two variables, it may
(2) (iv) (iii) (i) (ii) not always mean an independent–dependent
(3) (iv) (ii) (iii) (i) relationship between the two variables.
(4) (iv) (ii) (i) (iii) Reason (R) : The causal relationship between the
two variables may not imply a reasonable
17. The law of statistic, which says ‘Moderately large
theoretical relationship between the two.
number of items chosen at random from a larger
group possess random from a large group posses Codes:
the characteristics of the large group, is referred to 1) Both (A) and (R) are true and (R) is the correct
as: explanation.
1) The Central Limit Theorem 2) Both (A) and (R) are true, but (R) is not the
2) The Law of Statistical Regularity correct explanation
3) The Law of Inertia of Large Numbers 3) (A) is true, but (R) is false.
4) None of the above 4) (A) is false, but (R) is true.
18. A distribution, where the value of arithmetic mean 20. Assertion (A) : User interface is most critical task
is maximum as compared to median and mode, is in DSS design.
1) Normal distribution Reason (R) : DSS is used by outside Customers
2) Positively-skewed distribution frequently.
3) Negatively skewed distribution 1) (A) is correct, but (R) is wrong
4) None of the these 2) Both (A) and (R) are wrong
19. The most appropriate average to be used to 3) (A) is wrong, but (R) is correct
compute the average rate of growth in population is 4) Both (A) and (R) are correct.
1) Arithmetic mean
2) Median
3) Geometric mean DEC.-2014
16. Which one of the following is not probability 2) Quota sampling
sampling method? 3) Double sampling
1) Simple Random Sampling 4) Stratified sampling
2) Cluster Sampling 19. Which of the following relating to normal
3) Judgemental Sampling distribution are not correct?
4) Systematic Sampling 1. Co-efficient of skewness is three.
17. The research carried out to expand the knowledge 2. It is mesokurtic
of a particular field is known as 2
1) Applied research 3. Mean deviation for it is σ.
3
2) Qualitative research 4. μ ± 2σ covers 95.45% area.
3) Quantitative research 5. Mean, median and mode are equal.
4) Basic research 6. The standard normal variate z has mean one and
18. In univariate data analysis t-test is used when the
SD zero.
data are in the form of
Codes:
1) Metric data with one sample
1) 1, 3 and 6
2) Non-metric data 2) 3, 4 and 5
3) Non-metric data with independent variable 3) 1, 3 and 5
4) Metric data with independent two sample
4) 1, 3 and 4
19. To show the trend for a variable, which one of the 20. Which one of the following statements is false?
presentation method is used?
1) Both correlation and regression co-efficients
1) Histogram
have same sign.
2) Frequency polygon 2) Arithmetic mean of the regression co-efficients
3) Line graph is always more than the correlation co-efficient.
4) Scatter graph
3) Regression co-efficients are independent of both
20. Which one of the following objectives is not the
the origin and scale.
objective of secondary data collection? 4) Correlation co-efficient is the square root of two
1) Identify the problem
regression co-efficients.
2) Test the hypotheses of the relevant present
DEC.-2015
problem 16. Which one of the following is not a method of
3) Better define the problem studying association of attributes?
4) Interpret primary data more insightfully 1) Concurrent Deviation Method
2) Proportion Method
June-2015 3) Yule’s Method
4) Coefficient of Contingency
16. Which of the following is not an accounting software 17. Identify which of the following steps would be
package? included in hypothesis testing:
1) Quick Books A. State the null and alternative hypothesis.
2) Sage one B. Set the significance level before the research
3) Sage M study.
4) Sage 50 C. Eliminate all outliers.
17. Which one of the following formula is used to D. Obtain the probability value using a computer
calculate probable error of correlation-coefficient program such as SPSS.
between two variables of ‘n’ pairs of observations? E. Compare the probability value to the
1  r 2  significance level and make the statistical
1) 0.6745  decision.
 n  Codes:
1  r 2  1) A, C and D
2) 0.5758  2) C, D and E
 n  3) A, B, D and E
1  r 2  4) B, C, D and E
3) 0.675  18. Select the methods of finding out correlation from
 n  the following:
1  r 2  A. Karl Pearson’s Method
4) 0.5758  B. Spearman’s Rank Method
 n  C. Yule’s Method
18. If the population is heterogeneous, which one of the D. Coefficient of Contingency
following probability sampling methods is more E. Concurrent Deviation Method
appropriate?
1) Sequential sampling Codes:
 1) A, B, C Codes:
2) A, B, C, D A B C D
3) A, B, E (1) i ii iii iv
4) C, D, E (2) i iv ii iii
19. A set of data can be distinguished from other set of (3) iv iii ii i
data by means of: (4) iii ii iv i
1) Central value and dispersion 19. Statement-I : When the null hypothesis is true but
2) Central value, dispersion and skewness as per the hypothesis-testing, it is rejected, it is
3) Central value, dispersion, skewness and Kurtosis known as beta type error in hypothesis testing.
4) None of the above Statement-II : Chi-square test is exclusively a non-
20. The advent of computers in research has led to: parametric test.
1) Limitations of options in analysis
Codes:
2) Tremendous amount of flexibility with marginal
increase in cost 1) Both the statements are true.
3) Myopic exposure of statistics to the researcher 2) Both the statements are false.
4) None of the above 3) Statement-I is true while Statement-II is false.
24. Which of the following is a systematic interactive 4) Statement-I is false while Statement-II is true.
forecasting method that relies on a panel of experts? 20. Computers the recognize data as discrete signals are
1) Pay-off matrix called?
2) Game theory 1) Analog computers
3) Queing theory 2) Digital computers
4) Delphi technique 3) Hybrid computers
4) Super computers
July-2016

16. When the data are classified only on the basis of Jan.-2017
descriptive which cannot be quantified is known as 16. Statement I : The absolute value of the difference
1) Geographical classification between an unbiased estimate and the
2) Chronological classification corresponding population parameter is called
3) Qualitative classification sampling error.
4) Quantitative classification Statement II : Multi-stage sampling is a restricted
17. Which one of the following is a false description? non-probability based sampling technique.
1) In a moderately asymmetrical distribution, the Indicate the correct code :
empirical relationship between Mean, Mode and 1) Both the Statements are correct.
Median suggested by Karl Pearson is 2) Both the Statements are incorrect.
Mean-Mode=3 (Mean-Median) 3) Statement I is correct, while Statement II is
2) Coefficient of variation is an absolute measure incorrect.
of dispersion. 4) Statement I is incorrect, while Statement II is
3) Measure of skewness indicates the direction and correct.
extent of skewness in the distribution of 17. Match the following items of List-I and List-II with
numerical values in the data set. regard to hypothesis-testing and indicate the code of
4) Kurtosis refers to the degree of flatness or correct matching.
peakedness in the region around the mode of a List-I List-II
frequency curve. a. The ability of test to reject i. Level of
18. Match the items of List-I with List-II and indicate the null hypothesis when it significance
the correct code: is false
List-I List-II b. The probability of ii. Type I error
A. Coefficient of i. σ accepting a false null
γ hypothesis.
determination σ
c. The probability of iii. Type II error
B. Spearman’s Rank ii. 6∑d rejecting a true null
correlation 1−
n(n − 1) hypothesis due to
coefficient sampling error.
C. Regression iii. ∑ xy
coefficient of x on d. The probability of iv. Power of a
nσ σ rejecting a true null test
y variable hypothesis.
D. Karl Pearson’s iv. γ
Codes :
formula of
a b c d
calculating γ
(1) iv ii i iii
(2) iv iii i ii
 (3) i ii iii Iv 18. Which one of the following is not the characteristics
of normal distribution?
(4) ii iii i iv
1) Bell-shaped and symmetric
18. Which one of the following is a false statement? 2) Mean, Median and Mode of the distribution are
1) The signs of the regression coefficients are equal
always the same. 3) The total area under the curve for the normal
2) Correlation coefficient is the geometric mean of probability distribution is one
the two regression coefficients. 4) The two tails of the distribution in both the
3) The co-variance between two variables divided directions touches the horizontal axis.
by the product of their standard deviations 19. Assertion (A): A reasonably sized sample
produces the value of coefficient of correlation. drawn randomly from large
4) Coefficient of correlation is independent of sized population contains almost
origin but not of scale. all the characteristics which
19. If the two regression coefficients are 0.8 and 0.2, exist in the population.
then the value of coefficient of correlation is Reasoning (R) : The theory of sampling is based
1) -0.16 on the two important laws of
2) +0.50
3) +0.40 statistics, viz,, Law of statistical
4) -0.40 Regularity and law of inertia of
20. Process of arranging data into a new order is called. large numbers.
1) Manipulation of data
2) Standardization of data Code:
3) Sequencing of data
4) Standardized input. 1) Both (A) and (R) are correct and (R) is the
21. Developed by the Special Projects Office of the U.S. complete explanation of (A).
Navy; this technique was first formally applied to the 2) Both (A) and (R) are correct but (R) is not the
planning and control of the Polaris Weapon System complete explanation of (A).
in 1958 and worked well in expediting the 3) (A) is not correct while (R) is correct.
completion of that programme. The technique is 4) Both (A) and (R) are not correct.
known as 20. Statement (I): If the alternative hypothesis is as
1) Gantt Chart Ha : μ μ0; a researcher requires
2) PERT two tailed test in hypothesis –
3) CRM testing.
4) Milestone budgeting Statement (II) : The mean of the sampling
distribution of mean is not equal
November-2017 to the parametric value of mean.
16. The scale of measurement which has no order,
distance and unique origin is known as which one of Code:
the following?
1) Nominal scale 1) Both the statements are true.
2) Ordinal scale 2) Both the statements are false.
3) Interval scale 3) Statement (I) is true, while statement (II) is false.
4) Ratio scale 4) Statement (I) is false, while statement (II) is true.
17. The formula to determine the number of classes
given by Sturge's Rule is which one of the July-2018
following?
22. Assignment of numerals to the objects to represent
1) K = 1 + 3.322 (log N)
their attributes is known as :
2) K = (log N) 1.322 1) Nominal data
. 2) Ordinal data
3) K = 3) Interval data
( )
.
4) Ratio data
4) K = ( ) 23. A graph of a cumulative frequency distribution is
called :
Where : K = Number of classes 1) Frequency polygon
2) Frequency curve
N = Total number of observation 3) Ogive
4) Pie diagram
(log N) = Logarithm of the total number of
observations
24. In the case of classification of data, the class having when population standard deviation is not
its upper limit is treated as the lower limit of its available
next class is called : Code :
1) Open ended class (a) (b) (c) (d)
2) Close ended class
(1) (i) (ii) (iii) (iv)
3) Exclusive class
(2) (iv) (iii) (ii) (i)
4) Inclusive class
(3) (i) (ii) (iv) (iii)
25. For a standard normal probability distribution, the
(4) (ii) (i) (iii) (iv)
mean (μ) and the standard deviation (s) are :
1) μ=0, s= 1
2) μ=16, s=4
3) μ=25, s=5
4) μ=100, s=10
26. Match the items of List - II with the items of List - I
and select the code of correct matching.
List - I
1. Standard error of mean
2. Base of point estimate of the mean of the
population
3. Non-specific hypothesis
4. Parameter value of descriptive statistics
List – II
(i) Ha : μ1  μ2
(ii) Values based on all the observations of the
population
(iii) Mean of the sampling distribution of mean
(iv) Standard deviation of the sampling distribution
of mean
Code :
(a) (b) (c) (d)
(1) (iv) (iii) (i) (ii)
(2) (i) (ii) (iii) (iv)
(3) (iv) (iii) (ii) (i)
(4) (iii) (iv) (i) (ii)
27. There is a very high inverse relationship between
measures of ‘Overweight’ and ‘life expectancy’.
Which one of the following value of the coefficient
of correlation is consistent with the statement ?
1) 0.80
2) 0.20
3) −0.20
4) −0.80
28. Match the items of List - II with the items of List - I
and select the code of correct matching.
List – I
1. Chi-square Test
2. ANOVA (F-test)
3. Z - test
4. t - test
List - II
(i) Testing the significance of the differences of
the mean values among more than two sample
groups.
(ii) Testing the goodness of fit of a distribution
(iii) Testing the significance of the difference of the
mean values between two large sized samples
(iv) Testing the significance of the difference of the
mean values between two small sized samples
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS STATISTICS & DATA PROCESSING PYP (P-2)

ANSWER KEYS
JUNE-2012
16 2 17 2 18 2 19 4 20 4

DEC.-2012
16 3 17 1 18 2 19 1 20 4

JUNE-2013
16 3 17 1 18 2 19 2 20 1

DEC.-2013
16 2 17 2 18 2 19 3 20 1

JUNE-2014
16 2 17 3 18 4 19 1 20 1

DEC.-2014
16 3 17 4 18 4 19 3 20 2

JUNE-2015
16 3 17 1 18 4 19 1 20 3

DEC.-2015
16 1 17 3 18 3 19 3 20 2 24 4

JULY-2016
16 3 17 2 18 * 19 2 20 2

JAN.-2017
16 3 17 2 18 4 19 3 20 1 21 2

NOV.-2017
16 1 17 1 18 4 19 1 20 3

JULY-2018
22 1 23 3 24 3 25 1 26 1 27 4 28 4
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS STATISTICS & PROCESSING PYP (P-3)

June-2012 3) Both (1) and (2)

4) Neither (1) nor (2)
41. For testing of hypothesis H0 : M1 = M2 and H1 : M1 44. If the value of co-efficient of determination is 0.64,
< M2, the critical value of Z at 5% level of what is the value of coefficient of correlation?
significance when size of sample is more than 30 is 1) 0.40
1) 1.96 2) 0.80
2) 2.32 3) 0.08
3) 1.645 4) 0.04
4) 2.5758
June-2013
42. Which of the following is the non random method
of selecting samples from a population? 22. If there are 8 possible classes under consideration
1) Stratified Sampling for a goodness of-fit, number of degrees of freedom
2) Quota Sampling will be
3) Systematic Sampling 1) 8
4) Cluster Sampling 2) 7
43. If the two regression coefficients are 0.8 and 0.2, 3) 6
then the value of coefficient of correlation is 4) Cannot be determined from the given
1) + 0.16 information
2) –0.40 23. Identify from the following, the test statistic for
3) –0.16 which the value of numerator should always be
4) +0.40 greater than that of denominator.
44. Which one of the following is a relative measure of 1) ‘Chi-square’
dispersion? 2) ‘F’ value
1) Standard deviation 3) ‘Z’ value
2) Variance 4) ‘t’ value
3) Coefficient of variation 24. Which of the following tests can be applied to
4) None of the above ordinal scale data?
45. Assertion (A) : Internal factors of business (i) Chi-square test
environment are controllable factors. (ii) ‘Z’ test
Reason (R) : The company can alter or modify such (iii) Kruskal-Wallis test
factors to suit the environment. (iv) Wilcoxon Mann-Whitney test
Codes: Codes:
1) Both (A) and (R) are correct.
2) (A) is correct, but (R) is incorrect 1) (i), (ii) and (iii)
3) Both (A) and (R) are incorrect. 2) (ii), (iv) and (iii)
3) (i), (iii) and (iv)
4) (A) is incorrect.
4) (i), (ii) and (iv)
25. Which of the following tests can be based on the
DEC.-2012 normal distribution?
41. The term (1)-B is called 1) Difference between independent means
1) Level of the test 2) Difference between dependent means
2) Power of the test 3) Difference between proportions
3) Size of the test 4) All the above
4) None of the above 26. From the following identify one situation where ‘F’
42. The area under normal distribution covered within test cannot be used?
  3 limits is 1) To compare ore more than two population
1) 0.6827 means.
2) 0.9545 2) To test the hypothesis about a single
3) 0.9973 population variance
4) 1.0000 3) To test the hypothesis about two-population
43. Sampling distribution of mean is very close to the variance
standard normal distribution when 4) To study about randomized block design.
1) Population is normally distributed. 27. Which statistical test should be applied to test the
2) Population is not normally distributed, but effectiveness of ‘special coaching, on the marks
sample size is large scored by the students?
 1) Paired ‘t’ test 1) ‘t’ tet
2) ‘Chi-square’ test 2) ‘F’ test
3) ‘Z’ test 3) ‘Chi-square’ test
4) ‘F’ test 4) None of the above
28. In a linear equation, 28. A machine produced 20 defective articles in a batch
y = a + bx, ‘a’ of 400. After overhauling, it produced 10%
1) Slope defectives in a batch of 300. Which test of
2) Y-intercept hypothesis can be applied to the above situation to
3) Dependant variable examine whether the machine has improved?
4) Independent variable 1) Test of significance of a sample proportion
DEC.-2013 (two tail test)
2) Test of significance of a sample proportion
22. If a chi-square test is to be performed on a (one-tail test)
contingency table with 3 rows and 4 columns, how 3) Test of significance of difference between two
many degree of freedom should be used? sample proportion (two-tail test)
1) 6 4) Test of significance of difference between two
2) 12 sample proportion (one-tail test)
3) 8
4) 9 June-2014
23. Assertion (A) : If regression co-efficient of X on Y
is greater than one, regression co efficient of Y on 16. Assertion (A) : The expected values should be
X must be less than one. atleast 5 to apply the chi-square test.
Reason (R) : The geometric mean between two Reason (R) : The chi-square distribution provides
regression coefficients is the co-efficient of an adequate approximation of the sampling
correlation. distribution.
On the basis of the above, chose the appropriate Indicate the correct answer from the following:
answer: Codes:
1) Both (A) and (R) are true and (R) is the right
1) (A) and (R) are correct. explanation.
2) (A) is correct, but (R) is not correct. 2) Both (A) and (R) are true, but (R) is not the
3) (A) is not correct, but (R) is correct. correct explanation.
4) Both (A) and (R) are not correct. 3) (A) is true, but (R) is false
24. If the sum of squares of deviations within samples 4) (A) is false but (R) is true.
is 140 with 12 degrees of freedom and the sum of 17. In a decision problem having four possible
squares of deviati8ons between samples is 190 with alternative decisions and six possible states of
2 degrees of freedom, the test statistic will be nature, the pay-off table will include
1) 81.4 1) Four payoffs
2) 12.28 2) Six payoffs
3) 8.14 3) Twenty four payoff
4) 1.22 4) Ten payoff
25. The regression equation of profits (X) on sales (Y) 18. The mathematical formula for joint probabilities
of a firm is given as: 3Y – 5X + 110 = 0. If the sales (AB) = (A/B) × P(B), holds when
of the firm is ` 44,000, the profit will be 1) The events are statistically independent
1) ` 23,370 2) The events are statistically dependent
2) ` 26,422 3) The event is either independent or dependent.
3) ` 24,422 4) None of the above
4) ` 21,370 19. Which one of the following statements is the
26. Cricketer ‘A’ scores on an average 40 runs with a correct interpretation of P-value of less than 0.01 in
standard deviation of 5. Scores of players ‘B’ and hypothesis testing?
‘C’, on an average, are 75 and 90 with standard 1) There is overwhelming evidence to infer that
deviations 10 and 18 respectively. Arrange the the alternative hypothesis is true.
players in the descending order of consistency: 2) There is strong evidence to infer that the
1) A, B and C alternative hypothesis is true.
2) C, B and A 3) There is weak evidence to indicate that the
3) B, A and C alternative hypothesis is true.
4) C, A and B 4) There is no evidence to infer that the
27. Among the following, choose the most suitable alternative hypothesis is true.
‘test’ that can be applied to examine the influence 20. Two lists of items are given below:
of one factor on different groups: List–I List-II
 (i) Charles Babbage (A) Mossai June-2015
(ii) Herbert A. (B) HTMI. 16. All the properties of order, internal and zero origin
Simon are simultaneously possessed by:
(iii) Tim Berners Lee (C) Computer Design 1) Nominal Data
(iv) Maarc (D) Decision model 2) Interval Data
Andreessen 3) Ratio Data
Codes: 4) Ordinal Data
(i) (ii) (iii) (iv) 17. Under which of the following situations, chi-square
1) (C) (B) (A) (D) test is applicable?
2) (A) (C) (D) (B) 1. testing homogeneity
3) (B) (A) (C) (D) 2. testing goodness of fit
4) (C) (D) (B) (A) 3. testing equality of two sample means
4. testing equality of two sample proportions
54. Which of the following is true? 5. testing independence of attributes
1) Systematic risk is diversifiable but Codes:
unsystematic risk is non diversifiable. 1) Only 1, 2 and 3
2) Systematic risk is non diversifiable but 2) Only 1, 2 and 5
unsystematic risk is diversifiable. 3) Only 3, 4 and 5
3) Both Systematic and unsystematic risks are 4) Only 1, 3 and 5
diversifiable. 18. Which one of the following is not the correct
4) Both systematic and unsystematic risks are statement regarding sampling distribution of mean?
non-diversifiable. 1) Sampling distribution of mean is normally
distributed for large sized samples.
DEC.-2014 2) Sampling distribution of mean is normally
20. In the hypothesis testing procedure a researcher may distributed for small sized samples drawn from
type II error in which of the following is conditions? not normally distributed population.
1) When the true null hypothesis is rejected 3) ‘t’ distribution is not normally distributed.
2) When he alternative hypothesis is accepted. 4) Mean of the sampling distribution of mean is
3) When the false null hypothesis s accepted equal to the parametric value of mean.
4) When the true null hypothesis s accepted. 19. Consider the following statements and identify the
21. Which one of the following tenets is not correct in wrong statements:
the context of Central Limit Theorem? Statement I: Accepting null hypothesis, when it is
1) If a population from which a sample is drawn is false, is called a level of significance.
normally distributed the sampling distribution Statement II: 1 – α is called power of a test.
of mean (SDM) is the population mean. Statement III: Critical value of Z-static for two-
2) The mean of the SDM is the population mean. tailed test at 5% level of significance is 1.96.
3) If the population is not normal from which the Codes:
sample is drawn, the SDM is not normal for any 1) Statements I, II and III
sample size. 2) Statements I and III
4) If the population is not normal from which a 3) Statements II and III
sample is drawn, the SDM approaches 4) Statements I and II
normality as the sample size increases. 20. The process of thoroughly checking the collected
29. Assertion (A) : The risk condition exists when data to ensure optimal quality level is referred to as:
decision makers have absolutely no idea of what he 1) Validation
results of an implemented alternative would be 2) Editing
Reason (R) : When operating under complete 3) Classification
uncertainly condition, decision makers usually find 4) Entry
that sound decisions are a matter of chance. 23. Match the items of List-I with items of List-II and
choose the correct code:
In the context of the two statements, which one of
List I List II
the following is correct? A. Credit Mobilier 1. Charles Babbage
Codes: B. Charleton Twist 2. Henry Fayol
1) Both (A) and (R) are correct. Company
2) Both (A) and (R) are wrong. C. Difference Engine 3. Claud Henri Saint
3) (A) is correct, but (R) is wrong. Simon
4) (A) is wrong, but (R) is correct. D. Commentry Four 4. Robert Owen
Chambault
 Codes Codes
A B C D A B C D
1) 3 4 1 2 1) 1 2 3 4
2) 3 1 4 2 2) 2 4 3 1
3) 1 3 4 2 3) 3 4 2 1
4) 2 1 4 3 4) 3 4 1 2
20. Assertion (A): A reasonably large sized sample
DEC.-2015 drawn randomly from a given population contains
16. Statement I: When a null hypothesis gets rejected in almost all the characteristics of the population.
statistical hypothesis testing, it is, it is known as II Reason (R): As per the sampling theory, the
type-error in hypothesis testing. assertion is based only on the ‘Law of Inertia of
Statement II: When a sample is small sized and Large Numbers’.
parametric value of the standard deviation is not Codes:
known, z-test is the most appropriate test for 1) (A) is correct and (R) as per the sampling theory
hypothesis testing. is also fully correct.
Codes: 2) (A) is correct but the (R) as per the sampling
1) Both statements are correct theory is not fully correct.
2) Both statements are incorrect 3) Both (A) and (R) are incorrect.
3) Statement I is correct while statement II is 4) (A) is incorrect but the (R) is sufficient as per
incorrect the sampling theory
4) Statement I is incorrect while statement II is 60. A picture of two characters is presented, with one
correct making a statement. Respondents are asked to
17. The following are the estimated regression equations identify with the other and fill in the empty balloon.
for x and y variables: This description belongs to which one of the
x = 0.85y following projective techniques?
y = 0.89x 1) Thematic Apperception Test
With this information, the value of the coefficient f 2) Picture Completion Test
correlation would be: 3) Sentence Completion Test
1) 0.87 4) Story Completion Test
2) 0.86
3) 0.89 July-2016
4) 0.75 13. Which one of the following is not the characteristic
18. The power of the statistical hypothesis testing is of normal distribution?
denoted by: 1) Mean, median and mode for the normal
1) α (alpha) distribution are equal.
2) β (beta) 2) The two tails of the normal curve extend to
3) 1 – α infinity in both directions but never touch the
4) 1 – β horizontal axis.
19. Match the items of List-I and List-II and indicate the 3) For different values of standard deviation, the
code of correct matching of the items: height of the mean ordinate remains the same.
List I List II 4) The number of independent constraints of
A. z 2 .σ 2 1. Measurement for normal distribution are N, X and .
p
2
Kurtosis 14. Which one of the following formulae is used a
e calculate the standard error of coefficient of
B. X1  X 2 2. Calculated value of F correlation between 25 paired observations of a
ratio sample?
 1 1 
σ 2p    1)
√
 n1 n 2  ( )
C. μ4 3. Statistical approach to 2) ( )
find out the size of 1−r2
μ 22 sample 3) (0.6745)
√n
D. σ s21 4. Calculated z value of ( )
2
mean differences 4) ( )
σ s2
15. Read the following statements and choose the 15. Which one of the following is the formula to
correct code: calculate standard error of mean differences of two
Statement-I : Non-parametric test are based on sample groups?
some assumptions about the parent population from
1)
σ p
which the sample has been drawn.
Statement-II : The standard deviation of the
n
2 2
sampling distribution of mean is called standard
2)
σ σ 1 2
error of mean.
Codes:
n n 1 2
2
1) Both statements are true. σ when  2 2
2) Both statements are false. 3) 1
2 σ σ 1 2
3) Statement-I is true while Statement-II is false. σ2

4) Statement-I is false while Statement-II is true. pq p q

16. Match the items of List-I with the items of List-II 4)  1 1 2 2

and indicate the code of correct matching: n n 1 2

List-I List-II 16. A researcher wants to test the significance of the
A. Contingency coefficient 1. difference between the average performance of the
for any size of N−n
two small sized samples when the information of the
contingency table N−1 population standard deviation is not available, which
B. Statistical approach to 2. σ one of the following hypothesis-testing is suitably
decide size of a sample √n used?
C. Finite population 3. 1) Z-test
multiplier x2 2) Chi-square test
x2 + n 3) F-test
D. Standard error of mean 4. z . σ 4) T-test
43. You are given the following information:
e X- Market-
Security Security
Codes: Expected Return (%) 15 12
A B C D
Standard Deviation of 6 4
1) 1 2 3 4
the return (%)
2) 3 4 1 2
Coefficient of 0.4
3) 1 3 2 4
Correlation between
4) 3 2 4 1 the returns
What is the Beta-coefficient of security
Jan.-2017 X to measure its systematic risk?
13. Which one of the following statements is false Codes :
regarding normal distribution? 1) 1
1) Mean, Median and Mode always coincide. 2) 1.5
2) Within  1.96  limits from Mean value, the 3) 0.6
area under the distribution is 99 percent of the 4) 0.4
total area.
3) The area under the normal curve represents
probabilities for the normal random variable and November-2017
the total area for the normal probability 13. Which of the following statements are true? Select
distribution is one. the correct code.
4) For every pair of values of Mean and Standard 1) The coefficient of rank correlation has the same
deviation, the curve of the distribution is bell- limits as the Karl Pearson’s coefficient of
shaped and symmetric. correlation
14. If unexplained variation between variables X and Y 2) The coefficient of correlation is independent of
is 36%, what is the coefficient of correlation the change of origin but not of scale.
between the variables? 3) The covariance between X and Y is defined as
1) 0.36 Σxy
2) 0.64 where x = (X –X̅), y = (Y – Y̅) and n =
3) 0.60 n
4) 0.80 no. of paired observations.
4) bxy is called regression coefficient of X
variable on Y variable
 5) If bxy is 0.4 and byx is 1.6, coefficient of
determination would be 0.8.
Code:
1) (a), (b) and (c)
2) (a), (c) and (d)
3) (c), (d) and (e)
4) (b), (c) and (e)
14. The application of x2-test as parametric test will be
in which one of the following situations?
1) Test of independence of attributes
2) Test of goodness of fit of a specific type of
distribution
3) Test for population variance on the basis of
small sized sample variance
4) Test of homogeneity of several populations
with respect to some characteristic of interest
15. In which one of the following situations is the
application of t-test is most appropriate?
1) Testing the significance of coefficient of
correlation between paired observations of
small sized sample
2) Testing the significance of coefficient of
correlation between paired observations of
large sized sample
3) Comparing variances of two small sized
samples
4) Testing the significance of the difference
among mean values of more than two samples
groups
16. Which of the following is not a logical data
structure?
1) Chain
2) Stack
3) List
4) Tree
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS STATISTICS & DATA PROCESSING PYP (P-3)

ANSWER KEYS
JUNE-2012
41 3 42 2 43 4 44 3 45 1

DEC.-2012
41 2 42 3 43 3 44 2

JUNE-2013
22 4 23 2 24 3 25 4 26 2 27 1 28 2

DEC.-2013
22 1 23 1 24 3 25 2 26 1 27 2 28 4

JUNE-2014
16 1 17 1 18 4 19 4 20 2 54 2

DEC.-2014
20 3 21 3 29 4

JUNE-2015
16 3 17 2 18 2 19 4 20 1 23 1

DEC.-2015
16 2 17 2 18 4 19 4 20 2 60 2

JULY-2016
13 3 14 2 15 4 16 2

JAN.-2017
13 2 14 4 15 2 16 4 43 3

NOV.-2017
13 2 14 3 15 1 16 1
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS MANAGEMENT PYP (P-2)

June-2012 4) Only social needs

26. Howard-Such model of consumer behaviour is
21. Match List-I with List-II and select the correct
popularly known as
answer.
1) Machiine Model
List–I List-II
(i) The Practice of (a) Henry Fayol 2) Human Model
Management 3) Marketing Model
(ii) Philosophy of (b) F.W. Taylor 4) Purchase Model
Management DEC.-2012
(iii) Scientific (c) Oliver Sheldon
21. Match the following :
Management
(iv) General and (d) Peter F Drucker List–I List-II
Industrial i. Administered (a) Henry Fayol
price
Administration
ii. Philosophy of (b) F.W. Taylor
Codes:
Management
(i) (ii) (iii) (iv) iii. Scientific (c) Liver Sheldon
(1) (a) (b) (c) (d) Management
(2) (d) (c) (b) (a) iv. General and (d) Peter F. Drucker
(3) (d) (c) (a) (b) Industrial
(4) (c) (d) (b) (a) Administration
22. Identify the correct sequence of steps involved in Codes:
planning: (a) (b) (c) (d)
(i) Selecting the best course of action (1) i ii iii iv
(ii) Establishing the sequence of activities (2) iv iii ii i
(iii) Establishment of objectives (3) iv iii i ii
(iv) Evaluating alternative courses (4) iii iv ii i
(v) Determining alternative courses 22. Assertion (A) : All decisions taken through mental
1) (i), (ii), (iii), (iv) and (v) process are rational.
2) (iii), (v), (iv), (ii) and (i) Reason (R) : Decision making is a mental process.
3) (v), (iv), (iii), (ii) and (i) Codes:
4) (iii), (v), (iv), (i) and (ii) 1) (R) is correct, but (R) is not correct.
2) (A) is correct, but (R) is not correct
23. Assertion (A) : One can be sure about future course 3) Both (A) and (R) are correct.
of actins by making good plans. 4) Both (A) and (R) are not correct.
Reason (R) : Planning brings certainty in future 23. Who among the following developed the technique
course of actions of an organisation. of Management by Exception?
1) Joseph L. Massie
1) (R) is correct but (A) is not correct 2) Lester R. Bittel
2) (A) is correct but (R) is not correct 3) L.F. Urwick
3) Both (A) and (R) are correct. 4) Peter F. Drucker
4) Both (A) and (R) are not correct. 37. Match the following:
24. According to Kieth Devis, which one is not a List–I List-II
a. An ordinary i. Hierarchy
barrier of communication?
person does not
1) Physical Barriers
want to work on
2) Technological Barriers his own
3) Personal Barriers b. An individual is ii. Hygiene Theory
4) Linguistic Barriers willing to work
25. While establishing relation between Maslow’s and on his own
Herzberg’s theories, which Needs of Hierachy c. Motivational iii. X-Theory
Theory will fall under the Hygiene Factors? Factors
1) Self actualisation, esteem and social needs. d. Esteem Needs iv. Y-Theory
2) Esteem, social and safety needs Codes:
3) Social, safety and physiological needs (a) (b) (c) (d)
 (1) i ii iii iv event
(2) iii iv i ii (c) Objective of (iii) Thinking
(3) i iv ii iii organisational
(4) iii iv ii i communication
(d) Goals of (iv) Purpose
June-2013 organisational
communication
21. Match the items of List-I with the items of List-II
Codes:
and select the correct answer
List–I List-II (a) (b) (c) (d)
(i) Grapevine (a) Task group (1) (i) (ii) (iii) (iv)
(ii) Formal group (b) Field force theory (2) (iii) (iv) (ii) (i)
(iii) Informal Group (c) Gossip (3) (ii) (iii) (i) (iv)
(iv) Kurt Lewin (d) National group (4) (iv) (iii) (ii) (i)
Codes: 23. ‘No ideas are ever criticized’ and ‘the more radical
(i) (ii) (iii) (iv) the ideas are the better’ – are the rules of which
(1) (c) (a) (d) (b) decision making process?
(2) (d) (c) (b) (a) 1) Programmed decision-making
(3) (a) (b) (c) (d) 2) Non-programmed decision making
(4) (b) (a) (d) (c) 3) Brainstorming
4) Group discussion
22. Who has suggested that achievement motivation
24. According to McClelland’s Needs Theory, which of
among individuals and nations can be developed
the following is not a motivating need?
through training courses?
1) Need for Power
1) McClelland
2) Need for Security
2) Alderfer
3) Need for Achievement
3) Maslow
4) Need for Affiliation
4) Herzberg
36. Who propounded “Theory Z”?
23. Assertion (A) : When span of control is wide co-
1) William Ouchi
ordination and control becomes different.
2) Peter F. Drucker
Reason (R) : In a narrow span, levels of authority
3) Joseph H. Jurau
reduces. 4) Douglas McGregor
Codes: 37. Another name for MATRIX organisation is
1) Both (A) and (R) are true and (R) is the correct 1) Flexible organisation
explanation of (A) 2) Geographic organisation
2) Both (A) and (R) are true, but (R) is false. 3) Project organisation
3) (A) is true, but (R) is false. 4) None of the above
4) (A) is false, but (R) is true. June-2014
24. The general pattern of behaviour shared belief and
values the members have in common is known as 21. Which of the following is not true about Matrix
1) Organisation climate Organisation?
2) Organisation culture 1) It is relatively permanent.
3) Organisation effectiveness 2) Its project managers authority is distributed
4) Organiwsation matrix reasonability
25. Which of the following is into principle of 3) There is slow information processing
management according to Henri Fayol? 4) Its project heads have to share resources with
1) Subordination of individual interest over the functional heads.
organisation interest 22. Consider the following leadership styles.
2) Esprit de crops i. Telling
3) Unity of Managers ii. Autocratic
4) Unity of Direction iii. Selling
iv. Motivating
DEC.-2013
v. Participating
21. Match the items of List-I with the items of List-II vi. Delegating
and choose the correct answer: vii. Charismatic
List–I List-II Select the four styles of leadership explained by
(a) Intrapersonal (i) Information Hersey and Blauchard.
communication sharing
(b) Element of (ii) Development of 1) i, ii, vi and vii
communication ‘will’ to work 2) ii, iii, iv and v
 3) i, iii, v and vi 2) Larger organization
4) iv, v, vi and vii 3) Very big organization
23. Given below are two statements, one labelled as 4) It does not affect the size of the organization
Assertion (A), and the other labelled as Reason (R). 26. Managerial Grid suggests the following as the best
Assertion (A) : Classical organisations believed in leader behaviour:
the use of authority to achieve coordination. 1) High structure and high consideration
Reason (R) : Classical thinkers consider 2) Low structure and low consideration
3) High concern both for production and people
organisation is an open system.
4) Low concern both for production and people
1) (A) is correct, but (R) is incorrect. 40. The main characteristic of Weber's bureaucracy are:
2) Both (A) and (R) are correct. 1) Specialization
3) (A) is incorrect, but (R) is correct. 2) Hierarchy of authority
4) Both (A) and (R) are incorrect. 3) System of rules
24. Who has modified Maslow’s Hierarchical level 4) All of the above
ERG model?
1) Frederick Herzberg
June-2015
2) David C. McClelland 2. The Human Development Index (HDI) is introduced
3) Douglas McGregor by:
4) Clayton Alderfer 1) UNDP
25. Taylor’s Differential prices work plan provide that 2) UNICEF
1) All labourers should be assigned different 3) IMF
amount of work. 4) World Bank
2) All labourers should be put in different time- 21. Match the items of List-I with List-II:
period. List I List II
3) Those who produce above standard should A. “He who can manage, can 1. Henry
receive higher wages than those producing manage anything”. Fayol
below standard. B. “Due to these experiments, a 2. William B.
4) Payment should be the same on a fixed factory does not remain a Cornell
standard. factory, it is converted into a
37. Match the names of the Authors given below with laboratory”.
the motivational theories they are associated with C. “Management succeeds or 3. F.W.
List–I List-II fails as human relations in Taylor
(i) Herzberg (a) ERG Theory business are intelligently or
(ii) McGregor (b) Three-need theory unintelligently handled”.
(iii) Alderfer (c) Theory X and D. “A place for everything, and 4. Lawrance
Theory Y everything in its place”. A. Appley
(iv) David (d) Two-factor theory Codes
McClelland A B C D
Codes: (1) 1 2 3 4
(i) (ii) (iii) (iv) (2) 1 2 4 3
(1) a b c d
(3) 4 3 2 1
(2) d c b a
(3) b a d c (4) 3 2 1 4
(4) d c a b
23. Areas of establishing objectives under MBO are:
DEC.-2014 1. Market Standing
2. Innovation
23. Assertion (A) : MBO is effective way of planning 3. Industrial Relations
and organizing the work 4. Public Accountability
Reason (R) : Employees participate in setting the 5. Productivity
objectives. 6. Industrial Policy
Codes: Codes:
1) Both (A) and (R) are true 1) 3, 4, 5 and 6
2) Both (A) and (R) are false 2) 1, 2, 4 and 5
3) (A) is true, but (R) is false 3) 1, 2, 5 and 6
4) (A) is false, but (R) is correct 4) 2, 3, 4 and 5
25. Delegation of authority makes the size of the 24. Match the items of List-I with List-II:
organization. List I List II
1) Smaller organization A. Management of Tomorrow 1. Chris Argyris
B. Motivation and Personality 2. Fredrick
 Hergberg 2. Chain of communication cannot be broken under
C. The Motivation of Work 3. L.F. Urwick any circumstances.
D. Personality and 4. A.H. Maslow Codes:
Organisation
Codes 1) Only 1 is correct
A B C D 2) Only 2 is correct
(1) 1 4 2 3 3) Neither 1 nor 2 is correct
(2) 3 4 1 2 4) Both 1 and 2 are correct.
23. A mission statement should be
(3) 4 3 2 1
1. Self-explanatory
(4) 3 4 2 1 2. Elaborate
3. Distinctive
DEC.-2015 4. Feasible
21. Who among the following is not related to the Codes:
planning function given by Taylor?
1) Route clerk 1) 1 only
2) Time and cost clerk 2) 1 and 2
3) Inspector 3) 1, 2 and 3
4) Disciplinarian 4) 1, 3 and 4
23. The classical organisation theory treats organisation 24. Match List-I with List-II and indicate the correct
as a/an: code:
1) Open system List-I List-II
2) Closed system A. Equity 1. Motivation depends on
3) Technical system theory ratios of inputs and
4) Macro system outcomes of self and
25. According to Hersey and Blanchard’s situational others.
approach to leadership, the ‘participating style’ of B. Vroom’s 2. People are motivated to
leadership has: theory achieve a goal to the
1) High task and low relationship orientation extent that they expect that
2) High task and high relationship orientation certain action will help
3) Low task and high relationship orientation them to reach the goal.
4) Low task and low relationship orientation C. Porter and 3. There exists a complex
28. ________ is wielded by a manufacturer that Lawler relationship among
threatens to withdraw a resource or terminate a model motivation, performance
relationship if intermediaries fail to cooperate. and satisfaction.
1) Coercive Power D. Herzberg’s 4. A challenging job that has
2) Legitimate Power theory opportunities for
3) Expert Power achievement, recognition,
4) Reference Power responsibility and growth
will motivate employees.
July-2016

21. Herbert Simon’s concept of administrative man Codes:

assumes that
1. He has satisfying approach in decision making
rather than the maximising approach.
2. He can make decisions without determining all
possible alternatives.
3. He is completely rational is decision making.
Codes:
1) 1 only
2) 2 only
3) Both 1 and 2
4) 1, 2 and 3
22. Which of the following statement(s) is/are correct
about scalar chain principle as given by Fayol?
1. Each communication, going up or down, must
flow through each position in the lime authority.
A B C D
(1) 1 2 3 4
(2) 2 1 3 4
(3) 3 2 1 4
(4) 1 3 2 4
25. Assertion (A) : ‘Grapevine’ tends to be more active
during periods of change, excitement, anxiety and
sagging economic conditions.
Reason (R) : Employees use this communication
to fill in important information gaps and clarify
management decisions.
Codes:
1) (A) is right and (R) is wrong.
2) (A) is wrong and (R) right.
3) Both (A) and (R) are right and (R) explains (A)
 4) Both (A) and (R) are right but (R) does not always rational and real and are
explain (A) not counterproductive.

Jan.-2017 Code:
23. Assertion (A) : Sympathetic listening in upward
communication often leads to resentment in 1) Both the statements are correct.
communicator. 2) Both the statements are incorrect.
Reason (R) : Sympathetic listening and encouraging 3) Statement (I) is correct while statement (II) is
remarks often lead the communicator to believe incorrect.
that his proposal will receive not contemplated 4) Statement (I) is incorrect while statement (II) is
by superior (communicate). correct.
Codes : 21. Match the items of List-I with List-II; and choose the
1) (A) is correct and (R) is the right explanation to correct code of combination:
it. List-I List-II
2) (A) is correct, but (R) is not the right explanation (a) The Fundamentals (i) Peter F. Drucker
to it. of Top Management
3) (A) is not correct while (R) is a correct (b) Middle Management (ii) R.C. Davis
statement. (c) The Essence of (iii) E.L.F. Brech
4) Both (A) and (R) are incorrect. Management
24. Assertion (A) : Herzberg believes that today’s (d) Principles and (iv) Mary Caushing,
motivators are tomorrow’s hygiene factors. Practice of Nile
Reason (R) : Some job conditions operate primarily Management
to dissatisfy employees when they are absent, Code
but their presence does not motivate them in
strong way. A B C D
Codes : (1) ii iv iii i
1) (A) and (R) both are correct and (R) is the right (2) ii iv i iii
explanation of (A).
(3) ii iii i iv
2) (A) and (R) both are correct, but (R) is not the
right explanation of (A). (4) iii iv i ii
3) (A) is not correct while (R) is a correct. 22. Statement (I): Management is not just a
4) Both (A) and (R) are incorrect. creature of the economy; it is a
25. Which of the following statements relating to Henry creator as well.
Fayol are correct? Statement (II) : He who can manage, can
Statement I : Authority and responsibility are related manage anything.
and former arises from latter.
Statement II : Espirit de Corps is an extension of the Code:
principle of unity of command.
Statement III : Unity of command means only one 1) Statement (I) is correct but (II) is incorrect.
command at a time. 2) Statement (II) is correct but (I) is incorrect.
Statement IV : There are fourteen basic principles 3) Both the statements (I) and (II) are incorrect
identified by Henry Fayol. 4) Both the statements (I) and (II) are correct.
Codes : 23. Assertion (A): Due to these experiments (Time,
1) Statements I, II and IV Motion and Fatigue Studies) a
2) Statements II and III factory does not remain a
3) Statements I and IV factory, it is converted into a
4) Statements II and IV laboratory.
Reasoning (R) : Management succeeds or fails
November-2017 as human relations in business
11. Statement (I): Business decision makers deal are intelligently or
with the complex, rather unintelligently handled.
chaotic, business conditions of
the real world and have to find Code:
the way to their destination, i.e,
achieving the goal that they set 1) Both (A) and (R) are correct and (R) is the right
for themselves. explanation of (A).
Statement (II) : Even without application of 2) Both (A) and (R) are correct but (R) is not the
economic logic and tools of right explanation of (A).
analysis, business decisions are 3) (A) is correct but (R) is not correct.
 4) (R) is correct but (A) is not correct. 32. Match the items of List - II with List - I ; and
24. Who among the following is not associated with choose the correct code :
theories of motivation? List - I
1) A.H. Maslow (Critical Control Standards)
2) Cris Argyris (a) Physical standards
3) Frederick Herzberg (b) Cost standards
4) Peter F. Drucker (c) Revenue standards
25. As per the Herzberg's Hygiene Theory of motivation (d) Program standards
which among the following is not a motivational List - II
factor? (Critical Points)
1) Recognition (i) Material cost per unit
2) Working Conditions (ii) Labour hours per unit of output
3) Responsibility (iii) Timing of production
4) Achievements (iv) Average sales per customer
Code :
July-2018 (a) (b) (c) (d)

29. Match the items of List - II with List - I and choose 1) (ii) (i) (iv) (iii)
the correct code : 2) (ii) (i) (iii) (iv)
3) (i) (ii) (iv) (iii)
List - I
4) (iv) (i) (iii) (ii)
1. Sales Executive
33. Which among the following is not a correct
2. Branch Manager
statement with regard to Corporate Governance in
3. Foreman
India ?
4. Production Manager
1) Every company must appoint an individual or
List – II
firm as auditor.
(i) Top- middle Management
2) The independent directors must attend at least
(ii) Middle Management
three meetings a year.
(iii) Lower Management
3) One or more women directors are
(iv) Operating Force
recommended for certain classes of companies.
Code :
4) The maximum number of permissible directors
(a) (b) (c) (d)
cannot exceed 15 in a public limited company.
(1) (iv) (ii) (iii) (i) 34. The popular statement, - “if all you have is a
(2) (ii) (iii) (iv) (i) hammer, everything looks like a nail”, is given by :
(3) (iii) (iv) (ii) (i) 1) A.H. Maslow (Hierarchy of Needs)
(4) (i) (ii) (iii) (iv) 2) Henry Fayol (Industrial and General
30. Select the correct code of the statements being Administration)
correct or incorrect. 3) F.W. Taylor (Scientific Management)
Statement (I) : It is a significant feature of human 4) Fredrick Herzberg (Hygiene Theory)
that he plans. 35. Functional Leadership Theory is associated with :
Statement (II) : A plan is a trap to capture the 1) Hackman and Walton and McGrath
future. 2) Bernard and Ordway Tead
Code : 3) Koontz and O’Donnell
4) Alford and Beatty
1) Statement (I) is correct but (II) is incorrect. 50. Which one of the following statements defines the
2) Statement (II) is correct but (I) is incorrect. correct meaning of the term “boundary spanning”?
3) Both the statements (I) and (II) are correct. 1) It refers to an obligation of an individual, firm
4) Both the statements (I) and (II) are incorrect. or institution to account for its activities and
31. Assertion (A) : Management is a set of principles accept responsibility for them.
relating to its functions. 2) It refers to the process that helps the
Reasoning (R) : Management is essential to run all organization and its employees to link with
types of organizations. their external environment through specific
Code : activities/functions.
1) (A) and (R) both are correct ; and (R) is the 3) It refers to the science of morals, principles and
right explanation of (A). rules of conduct.
2) (A) and (R) both are correct ; but (R) is not the 4) It refers to multiculturism management.
right explanation (A).
3) Both (A) and (R) are incorrect.
4) (A) is correct ; but (R) is incorrect.
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS MANAGEMENT PYP (P-2)

ANSWER KEYS
JUNE-2012
21 2 22 4 23 1 24 2 25 3 26 1

DEC.-2012
21 2 22 1 23 * 37 4

JUNE-2013
21 1 22 * 23 3 24 2 25 3

DEC.-2013
21 2 23 3 24 2 36 1 37 3

JUNE-2014
21 3 22 3 23 1 24 4 25 1 37 4

DEC.-2014
23 1 25 2 26 3 40 4

JUNE-2015
2 1 21 3 23 2 24 4

DEC.-2015
21 3 23 2 25 3 28 1

JULY-2016
21 3 22 1 23 4 24 1 25 3

JAN.-2017
23 1 24 2 25 4

NOV.-2017
11 3 21 2 22 4 23 2 24 4 25 2

JULY-2018
29 1 30 3 31 2 32 1 33 2 34 1 35 1 50 2
 ASTRAL EDUCATION
COMMERCE (E.M.) BUSINESS MANAGEMENT PYP (P-3)

June-2012 2) Victor Vrooom

3) Douglas Mcgregor
17. Who has given ‘fourteen Principles of 4) A.H. Maslow
Management’? 30. Assertion (A) : Management is a continuous
1) Barnard process.:
2) Henry Fayol Reason (R) : Managers first plan, then organise and
3) F.W. Taylor
finally perform the function of controlling..
4) Flemming
18. What is M.B.O.? 1) Both (A) and (R) are correct and (R) is correct
1) Management by Objective explanation of (A)
2) Multiple Business Organisation 2) Both (A) and (R) are correct, but (R) is not a
3) Management by Organisation correct explanation of (A).
3) (A) is correct, but (R) is incorrect.
4) Multiplicity of Business Operations
4) (A) is incorrect, but (R) is correct
DEC.-2012 June-2013

18. Match the items of LIst-I with items of List-II 29. Which among the following is the most popular
List–I List-II approach for accomplishing the result?
(A) The silent mental (i) Encoding 1) Management by exception
repetition of 2) Reward system
information 3) Management by objectives
(B) The process by (ii) Rehearsal 4) Mentor system.
which we select a 30. The managerial function of organizing involves
word or visual image 1) Reviewing and adjusting plan in the light of
to represent a changing conditions.
perceived object 2) Establishing programme for the
(C) Where information (iii) Working accomplishment of objectives
is kept temporarily Memory 3) Creating structure of functions and duties to be
before further performed.
processing. 4) Getting things done through others.
(D) The stage of real (iv) Store house 31. A leader who identifies what subordinates need to
memory in which do to achieve objectives, clarity organizational roles
information is and tasks, set up an organization structure, reward
processed and held performance and provide for the social needs their
for just a brief period followers. is
1) A transformational leader
Codes:
2) A participative leader
(A) (B) (C) (D)
3) A transactional leader
1) 2 1 4 3 4) an autocratic leader.
2) 1 2 3 4 32. Which of the following is not an assumption of
3) 3 2 1 4
theory X?
4) 4 3 2 1
1) An average human being has an inherent
27. Find an incorrect statement. dislike of work and will avoid it if he can.
1) Consumer attitude can be summarized as 2) An average human being prefers to be
evaluation of an object. directed, seeks to avoid responsibility, has
2) Attitudes are learned relatively little ambition, and want security
3) Attitudes are synonymous with behaviour above all.
4) Attitudes have motivational qualities. 3) An average human being learns under proper
28. Who is considered Father of Scientific conditions, not only to accept responsibility
management? but also to seek it.
1) Petger Drucker 4) Most people must be coerced, controlled,
2) F.W.Taylor directed and threatened with punishment to get
3) Victor Vroom them put forth adequate effort.
4) Henry Fayol 33. If a network of interpersonal relationship that arise
29. Who did give the concept of hierarchy of needs? when people associate with each other is an
1) Fredrick Herzberg
 informal organization, then find out which of the 31. In the managerial grid, the managers who have little
following is not an informal organization? or no concern for production but are concerned only
1) The ‘machine shop” group for people are known as what type of managers?
2) Customers’ group 1) 1.1 Management
3) The “sixth floor” group 2) 5.5 Management
4) The “Friday evening bowling’ gang 3) 9.1 Management
34. Which of the following are sources of ethics? 4) 1.9 Management
i. Religion 33. Which of the following are major principles of
ii. Legal system leading?
iii. Economic system (i) Principle motivation
iv. Culture (ii) Principle of continuous development
v. Family system (iii) Principle f harmony of objectives
Select the correct answer from the codes given (iv) principle of open competition
below: (v) Principle of communication clarity
Select the correct answer from the codes given
1) (i), (ii), (iii), (v) below:
2) (i), (ii), (iv)
3) (i), (iv), (v) Codes:
4) (i), (ii), (iii), (iv), (v)
35. Which of the following has refined Maslow’s 1) (i), (ii), (iii), (v)
theory of motivation by proposing a hierarchy of 2) (i), (ii), (iii), (iv), (v)
three needs? 3) (i), (iii), (iv), (v)
1) MeClelland 4) (i), (iii), (v)
2) Aldorfer 34. The following are the steps of management control
3) Herzburg process
4) Vroom (i) Taking corrective action from standards
54. O C T A P A C stands for (ii) Establishing standards
(a) Order, Co-ordination, Trust, Authority, (iii) measuring actual performance
Personality and Co-operation. (iv) Comparing performance against standard
(b) Openness, Confrontation, Trust, Authenticity, Select the correct sequence of these steps from the
Pro-action and Collaboration. codes given below:
(c) Organisation, Conflict, Team, Authority,
People and Collaboration. Codes:
(d) Oneness, Compromise, Trees pass, Authority,
Protection and Combination. 1) (i), (ii), (iii), (iv)
55. Technique of ‘Transaction Analysis’ was developed 2) (ii), (iii), (iv), (i)
by 3) (iii), (iv), (i), (ii)
(a) Elton Mayo 4) (ii), (iv), (i), (iii)
(b) Peter Drucker 35. Consider the following:
(c) Eric Berne (i) Planning is today’s action for tomorrow’s
(d) Adam Smith decision
(ii) Planning is forward looking while controlling
DEC.-2013 is looking back.
(iii) Motivation is about getting voluntary
29. Strategies and policies
1) Are not closely related willingness of subordinates for action.
2) Give direction (iv) Line and staff organisation is the oldest form
3) Are the framework for performance appraisal of organisation.
4) both (1) and (2) Select the correct statements from the codes given
30. According to Vroom’s divided by expectancy below:
theory of Motivation
1) Force = valence divided by expectancy Codes:
2) Force = valence × expectancy
3) Force = strength of an individual preference 1) (ii) and (iii) are correct
for an outcome. 2) (i), (ii) and (iv) are correct.
4) Valence = probability that a particular action 3) (i), (iii) and (iv) are correct.
shall lead to a desired outcome. 4) All are correct
56. Match the items of List-I with the items of List-II 2) 2, 1, 3, 5, 4
and select the correct answer: 3) 2, 3, 1, 4, 5
List–I List-II 4) 5, 4, 3, 2, 1
(A) Abraham (i) Achievement 25. Match the following:
Maslow Motivation Theory List–I List-II
(B) Herzberg (ii) ERG Theory (A) Fayol 1. Economic and Society
(C) Alderfer (iii) Two Factor Theory (B) Taylor 2. General and Industrial
(D) McClelland (iv) Need Hierarchy Theory Administration
Codes: (C) Weber 3. Principles of
(i) (ii) (iii) (iv) Organization
1) (A) (B) (C) (D) (D) Money and 4. Shop Management
2) (D) (C) (B) (A) Reilly
3) (C) (B) (A) (D) Codes:
4) (D) (C) (A) (B) (A) (B) (C) (D)
1) (3) (4) (1) (2)
June-2014 2) (2) (4) (1) (3)
21. Which of the following statements are true about 3) (1) (3) (2) (4)
informal organization? 4) (4) (3) (2) (1)
(i) It arises spontaneously 40. Where does recognition of an Employee fall in
(ii) If reflects individual and group goals. Maslow’s hierarchy on needs theory?
(iii) It tends to be permanent and stable. 1) Self-actualisation
(iv) It tends to be small and manageable 2) Security needs
(v) Its basic purpose is to improve human 3) Social needs
relations. 4) Esteem needs
(vi) Its basic is to achieve organisation’s goals. 62. Which one of the following is not an example of
Codes: Herzberg’s hygiene factors?
1) Advancement
1) 1, 2, 3 and 5 2) Interpersonal relations
2) 1, 2, 4 and 6
3) 1, 2, 4 and 5 3) Job security
4) 2, 3, 5 and 6 4) Work condition
22. Which of the following is not true about an 64. Who observed that a worker’s behaviour and
employee centered leader as identified by Michigan sentiments are closely related?
researchers? 1) Peter Drucker
1) Treats subordinates as human beings. 2) Elton Mayo
2) Shows concerns for their well being. 3) F.W. Taylor
3) Focuses on work standards and close 4) Dale Yoder
supervision.
4) Encourages and involves them in goal setting.
DEC.-2014
23. According to Talcott Parson, organizations can be 23. Which one of the following is not the purpose of
classified primarily into four categories, based on
performance monitoring research?
functions. Which of the following is not an
1) To provide feedback for evaluation and control
organization in Parson’s scheme?
2) To indicate things that are not going as planned
1) Political organisations.
3) To help the organisation to plan various
2) Integrative organisations
activities
3) Pattern maintenance organisations. 4) It is required to explain why something went
4) Commercial organisations
wrong.
24. An MBO programme usually involves the
25. Assertion (A) : The span of management at the
following steps.
upper level is generally narrow while at the lower
1. Establishing unit’s objectives
level span is wide.
2. Establishing organisational goals
Reason (R) : The task allocated o subordinates at
3. Negotiating or agreeing
4. Reviewing the performance the lower level of management are more specific and
5. Creating acting plans. precise and thus making supervision easy and
Indicate the correct sequence of the above steps simple.
from the following codes Suggest correct codes:

1) 1, 2, 3, 4, 5 1) (A) is correct, but (R) is wrong.

2) (A) is wrong, but (R) is correct.
 3) Both (A) and (R) are correct. 1. agreement on group goals
4) Both (A) and (R) are wrong. 2. high intra-group competition
3. frequent interaction of members
June-2015 4. personal attractiveness
21. Statement I: Management is the art of knowing Codes:
what you want to do and then seeing that it is done in 1) 1 and 2
the best and the cheapest way. 2) 1, 2 and 3
Statement II: Management is the process of 3) 1, 3 and 4
planning and regulating the activities of an 4) 1, 2 and 4
enterprise. 23. Assertion (A): ‘Uncertainty Avoidance’ is one of
1) Statement I is correct, but II is incorrect the dimensions of cultural differences, as identified
2) Statement II is correct, but I is incorrect by Geert Hofstede.
3) Both the statements I and II are incorrect Reasoning (R): ‘Uncertainty Avoidance’ is the
4) Both the statements I and II are correct extent to which people feel threatened by ambiguous
22. Assertion (A): No business runs itself, even on situations. To avoid such situations, organizations
momentum ….. every business needs repeated provide greater career stability, make more formal
stimulus. rules and reject deviant behaviours.
Reasoning (R): The management is the dynamic, Codes:
life giving element in every business, without its 1) (A) is wrong (R) is right
leadership, the resources of production remain as 2) Both (A) and (R) are wrong
resources and never become production. 3) Both (A) and (R) are right and (R) is the correct
1) (A) and (R) both are correct and (R) is the explanation of (A)
correct explanation of (A). 4) Both (A) and (R) are right but (R) is not the
2) (A) and (R) both are correct but (R) is not the correct explanation of (A)
correct explanation of (A). 24. Which of the following is the internal conflict or
3) (A) is correct, but (R) is incorrect. anxiety that occurs when people receive information
4) (R) is correct, but (A) is incorrect. incompatible with their value systems, prior
decisions and knowledge?
24. Find out the correct combination of statements with 1. Polarisation
regards to business ethics: 2. Cognitive dissonance
1. Business ethics is the behaviour that a business 3. Premature evaluation
adheres to in its daily dealings. 4. Projection
2. The ethics of a particular business can be Codes:
diverse. 1) 1 and 2
3. Business ethics has normative and descriptive 2) Only 2
dimensions. 3) Only 4
1) Only 1 and 2 4) 1, 2, 3 and 4
2) Only 1 and 3 25. Matrix organisation structure is essentially a
3) Only 2 and 3 violation of the principle of:
4) All 1, 2 and 3 1) Unity of Command
25. Which one of the following is not correct about 2) Scalar Chain
business ethics? 3) Unity of Direction
1) Business ethics reflects the philosophy of 4) Division of Labour
business. 26. Which of the following statements is not true?
2) Business ethics is a form of applied ethics. 1) One sided messages work best with audiences
3) Business ethics are governed by the Government those are initially predisposed to
Policies. communicator’s position.
4) Ethics are the standards which govern decisions 2) Two sided arguments work best with audiences
on daily basis. who are similar and not opposed.
3) Two sided messages tend to be more effective
DEC.-2015 with better educated audiences.
2. Which of the following is not a ‘force’ in the “Porter 4) Two sided messages tend to be more effective
Five Forces Model”? with audiences those are likely to be exposed to
1) Buyers counter propaganda.
2) Suppliers 27. In the course of converting to a marketing-oriented
3) Complementary produce company, a company may face which of the
4) Industry rivalry following hurdles?
22. Which of the following factors lead to group 1) Organised resistance
cohesiveness? 2) Slow learning
 3) Fast forgetting Statement I : Organization culture means the general
4) All of the above pattern of behaviour, belief and values that
28. A person’s distinguishing psychological organization members have in individuality.
characteristic that lead to relatively consistent and Statement II : As per contingency theory of
enduring responses to his or her environment is Leadership, people become leader only because
called: of the demand of group members.
1) Life style Statement III : The group judgement can only be
2) Self-concept obtained through the formal committees.
3) Personality Statement IV : Ombudsperson in communication
4) Attitude function is a person assigned to investigate
37. The committees which promote worker’s employee concerns and providing valuable
participation in management are usually established upward communication link.
only at the: Codes :
1) Corporate level 1) Statements I, II and IV
2) Plant level 2) Statements I, III and IV
3) Shop-floor level 3) Statements I , II and III
4) All of the above 4) Statements II, III and IV
19. Match List-I with List-II relating to corporate ethics
July-2016 and indicate the code of their correct matching.
List-I List-II
17. Which of the following is a deterioration of mental a. Utilitarian i. Behaviour guiding
efficiency, reality testing and moral judgement that theory statements.
results from in-group pressure? b. Code ii. Making public known about
1) Harassment unethical company
2) Group think practices.
3) Group burnout c. Whistle iii. Society with varied interest
4) Group control blowing grops.
18. According to Fiedler’s contingency model of d. Pluralistic iv. Evaluation of plans with its
leadership, favourableness of situation depends on society consequences.
which combination of the following? Codes :
1. Leader-member relationship a b c d
2. Member-member relationship 1) i iii iv ii
3. Leader’s position power 2) ii iii iv i
4. Degree of task structure 3) iii i ii iv
5. Degree of training 4) iv i ii iii
Codes: 20. Find out the correct sequence of planning function of
the following elements:
1) 1, 2 and 3 (a) Diagnosis of opportunity
2) 1, 3 and 4 (b) Establishing objectives.
3) 3, 4 and 5 (c) Indentifying and comparing alternatives.
4) 1, 2 and 5 (d) Choosing an alternative.
19. The apex body at the highest level of the Codes :
unit/division, which overseas the functioning of
1) a, c, b, e, d
quality circles, is called
2) b, e, a, c, d
1) Facilitator
3) a, b, c, e, d
2) Coordinator
4) a, b, c, d, e
3) Steering committee
4) Supervisory committee
20. Which of the following is related to the practical 22. For the following two statements of Assertion (A)
means of determining a moral course of action? and Reasoning (R) indicate the correct code:
1) Meta ethics Assertion (A) : The self image could be an
2) Virtue ethics individual’s own perceived image and actual
3) Normative ethics image based on how others perceive the
4) Applied ethics individual.
Reasoning (R) : Large number of products like credit
Jan.-2017 cards, automobiles, readymade garments,
17. Which of the following statements are not correct? designer ware, cosmetics and perfumes are
Indicate the correct code. bought due to self image and demographic
variables like income may not be important in
purchase decisions for these products.
 Codes : people contributing their D.Mooney
1) (A) and (R) both are not correct. efforts towards the
2) (A) is correct, but (R) is not correct. attainment of goals is
3) (A) is correct and (R) is correct explanation for called organization
(A). Codes
4) (A) is not correct, but (R) is correct. (A) (B) (C) (D)
53. A descriptive thought that a person holds about 1) (ii) (iv) (i) (iii)
something is called: 2) (iv) (ii) (iii) (i)
1) Belief 3) (iv) (iii) (i) (ii)
2) Learning
3) Attitude 4) (i) (ii) (iv) (iii)
4) Perception 18. Which among the following is not a physical
54. Deferment, Autonomy of object, use of the common barrier of communication?
place, involvement/detachment and use of metaphor 1) Poor vocabulary
are description of which of the following technique? 2) Noise
1) Brainstorming 3) Improper time
2) Synectics 4) Overload information
3) Forced Relationship 19. Statement-I: Management control seeks to compel
4) Attribute listing events to conform to plans.
55. Which of the following statements are correct? Statement-II: Controlling is determining what is
Indicate the correct combination: motivational to the employees of the organization.
a. A well motivated individual tends to experience Code:
a low degree of morale. 1) Statement-I is correct but II is incorrect.
b. A group characterized by a high state of morale 2) Statement-II is correct but I is incorrect.
may or may not have a high degree of 3) Both the statements I and II are correct.
motivation to perform. 4) Both the statements I and II are incorrect.
c. Morale can always be built up by a combination 20. Assertion (A): Sound planning is one of the
of rewards and penalties. essential elements for the success of corporate
d. Organizations, in general, devote more direct entities
attention towards motivational aspects of Reasoning (R): Planning is deciding in advance
people’s behaviour than the aspects of morale. what is to be done. It involves the selection of
Codes : objectives, policies, procedures and programmes
1) a, b and from among alternatives.
2) c and d only Code:
3) a, c and d 1) Both (A) and (R) are correct and (R) is the right
4) b and d only explanation of (A).
2) Both (A) and (R) are correct but (R) is not the
right explanation of (A).
November-2017 3) Both the statements (A) and (R) are incorrect.
17. Match the items of List-I with those of List-II and 4) (A) is correct but (R) is incorrect
choose the correct code of combination:
List I List II 21. Match the items of List-I with List-II and denote the
(A) A committee consist of a (i) C.I. code of correct matching:
group of people Barnard List I List II
specifically designated (A) Acceptability (i) Convenience Aspect
to perform some (B) Affordability (ii) Functional and
administrative work Psychological Aspects
(B) Staff service in (ii) W.H. (C) Accessibility (iii) Information and
organization means the Newman knowledge Aspects
service or advice or (D) Awareness (iv) Economic and
council, as distinguished Psychological Aspects
from the function of Codes
authority or command (A) (B) (C) (D)
(C) Organisation is informal (iii) McFarland 1) (i) (iii) (ii) (iv)
when the aggregate 2) (iii) (ii) (i) (iv)
interpersonal 3) (ii) (iv) (i) (iii)
relationships are without 4) (iv) (ii) (i) (iii)
conscious joint purpose
(D) An identifiable group of (iv) James
22. Match the items of List-I with the items of List-II
which are related to dimensions of brand
personality: Denote the code of correct matching.
List I List II
(A) Sincerity (i) Upper class,
Charming
(B) Excitement (ii) Reliable, Intelligent,
Successful
(C) Competence (iii) Down to earth,
Cheerful, Wholesome
(D) Sophistication (iv) Outdoors, Tough
(E) Ruggedness (v) Spirited, Imaginative,
Up-to-date
Codes
(A) (B) (C) (D) (E)
1) (v) (ii) (i) (iii) (iv)
2) (i) (iv) (iii) (ii) (v)
3) (iii) (v) (ii) (i) (iv)
4) (ii) (i) (iii) (v) (iv)
24. Statement-I: We are motivated to re-evaluate our
beliefs, attitudes, opinions or values occurred at two
different time.
Statement-II: The difference due to some
intervention occurred at either point of time
motivates us to search a newer option and thus
satisfies our mind/ anxiety.
Code:
1) Statement-I is correct, Statement-II is not
correct.
2) Statement-II is correct, Statement-I is not
correct.
3) Both statements are correct.
4) Both statements are incorrect.
50. Which of the statements are correct? Select correct
code:
Statement-I: Opinions can be described as the slow
responses we might give to opinion poll questions
about any issue.
Statement-II: Attitudes are held with a greater
degree of conviction, over loner duration and more
likely to influence behaviour.
Statement-III: Values are held more strongly than
attitudes and underpin our attitudinal behaviour

Code:
1) (I) and (II)
2) (II) and (III)
3) (I) and (III)
4) (I), (II) and (III)
 ASTRAL EDUCATION
COMMERCE (EM) BUSINESS MANAGEMENT PYP (P-3)

ANSWER KEYS
JUNE-2012
17 2 18 1

DEC.-2012
18 1 27 3 28 2 29 4 30 1

JUNE-2013
29 3 30 3 31 3 32 3 33 2 34 3 35 2 54 2 55 3

DEC.-2013
29 2 30 2 31 4 33 4 34 2 35 1 56 2

JUNE-2014
21 3 22 3 23 4 24 2 25 2 40 4 62 1 64 2

DEC.-2014
23 3 25 3

JUNE-2015
21 4 22 1 24 4 25 3

DEC.-2015
2 3 22 3 23 3 24 2 25 1 26 2 27 4 28 3 37 4

JULY-2016
17 2 18 2 19 3 20 3

JAN.-2017
17 3 19 4 20 3 22 3 53 1 54 2 55 4

NOV.-2017
17 1 18 1 19 1 20 1 21 3 22 3 24 1 50 2
 ASTRAL EDUCATION
COMMERCE (E.M.) MARKETING MANAGEMENT PYP (P-2)

June-2012 4) Product, Price, Positioning Promotion.

30. False and misleading claims and vulgarity in
27. To generate and facilitate any exchange intended to advertisements do not match with
satisfy human needs or wants such that the 1) Aggressive advertising
satisfaction of these wants occur with minimal 2) Ethics in advertising
impact on the natural environments is known as 3) Mass level of advertising
1) Aggressive marketing 4) Sales promotion
2) Operating marketing June-2013
3) Green marketing
26. Which of the following concepts in based on
4) All of the above
development. Design and implementation of
28. All the activities involved in selling goods or marketing programmes, processes and activities
services directly to final consumers for personal that recognise their breadth and interdependence?
non-business uses are done by 1) Product concept
1) Wholesalers 2) Sales concept
2) Retailers 3) Societal marketing concept
3) Mediators 4) Holistic marketing concept
4) Commission Agents 27. The concept of marketing-mix, consisting of the 4
29. To manage a business well is to manage its future P’s marketing, was developed by
and to manage the future is to manage information 1) E. Jerome McCarthy
is termed as 2) Peter F. Drucker
1) Management information system 3) Philip Kotler
4) William J. Stonton
2) Marketing information system
28. The selling concept is most likely to be used by
3) Future information system firms which sell
4) General information system. 1) Convenience goods
30. DAGMAR approach in marketing is used to 2) Shopping goods
measure 3) Specialty goods
1) Public relations 4) Unsought goods
2) Advertising results 29. Match the items of List-I with the items of List-II
3) Selling volume and select the code of correct matching:
4) Consumer satisfaction List–I List-II
(a) Everitt M. (i) Service Quality
DEC.-2012 Rogers Model
13. Consider the following: (b) J.D. Power (ii) Three types of
i. Pricing objectives marketing for
ii. Pricing methods services
iii. Pricing strategies (c) Parasurman, (iii) Quality rating of
iv. pricing decisions Zeithaml and automobiles
Arrange them in correct sequence: Berry
(d) Gronroos (iv) Diffusion Of
1) i, iii, ii, iv Innovation
2) i, iv, iii, ii Codes:
3) ii, i, iv, iii (i) (ii) (iii) (iv)
4) iv, ii, iii, i (1) (iii) (ii) (i) (iv)
27. Who plays their significant role in distribution of (2) (i) (ii) (iii) (iv)
goods when they do not sell to ultimate uses or (3) (ii) (i) (iv) (iii)
consumers? (4) (iv) (iii) (i) (ii)
1) Retailer
2) Whole seller DEC.-2013
3) Mediator
4) Commission agent 22. According to the Boston Consulting Group, a
28. In Marketing Mix, which four P’s and covered? business which has a high growth rate but a weak
1) Product, Price, Place, Promotion market share is referred to as a
2) Product, Price, Power, Promotion 1) Cash Cow
3) Product, Price, Penetration promotion 2) Dog
 3) Question Mark 29. Manufacturers of cars and motor cycles typically
4) Star seek _____ distribution.
25. In the managerial grid, developed by Blake and 1) Selective
Mouton, a manager who has high consideration for 2) Intensive
production but little concern for people is known as 3) Exclusive
1) 1.1 Management 4) Restrictive
2) 1.9 Management 30. Which method of setting advertising budget is mot
3) 9.1 Management scientific and logical?
4) 5.5 Management 1) All you can afford method
26. Which of the following is not the major component 2) Competitive parity method
of holistic marketing? 3) Objective and task method
1) Relationship marketing 4) Percentage of sales method
2) Integrated marketing DEC.-2014
3) Customer satisfaction
4) Socially-responsible marketing 27. Marketing strategy development is also known as
27. Which of the legislation listed below do not form 1) Marketing Control
part of the marketing environment of India? 2) Marketing Exercise
1) The Drugs and Cosmetics Act 1940. 3) marketing Planning
2) The Prevention of Food and Adulteration Act, 4) Situation Analysis
1954 28. For most people, the purchase of cheese for daily
3) The Monopolies and Restrictive Trade use can be described as a
Practices Act. 1969 1) Completely novel buy
4) Both (2) and (3) 2) Modified re-buy
28. The set of all actual and potential buyers of a 3) Routine re-buy
product is known as 4) High involvement product
1) Customer group
29. The promotion mix of a company consists of these–
2) Industry
3) Market 1) Marketing communication, promotion
4) None of the above decisions
29. In the model of consumer behaviour given by Philip 2) Personal selling, product objectives
Kotler, what constitutes the marketing stimuli? 3) Advertising, personal selling, sales promotion,
1) Marketing environment publicity and public relations
2) Four “’s of marketing 4) Consumer psychology, buyers motives, brand
3) Consumer needs and wants equity
4) None of the above 30. Rational buying motive that determine purchase
30. The factor that exerts the broadest and deepest decisions are mostly based on
influence on consume behaviour 1) Price factor
1) Culture 2) Psychological factors
2) Sub-culture 3) Quality of product
3) social class 4) Advertisement
4) Income June-2015
June-2014 26. The service marketing mix is an extended marketing
26. Which one of the following stages of the marketing mix and includes:
research process is most expensive? 1. People
1) Data analysis 2. Process
2) Data collection 3. Service
3) Developing the research plan 4. Physical evidence
4) Report writing Codes:
27. The people to adopt a new product first are called 1) 2, 3 and 4
1) Early adopters 2) 1, 2 and 3
2) First users 3) 1, 2 and 4
3) Initial adopters 4) 1, 3 and 4
4) Innovators 27. Black box model in marketing relates to:
28. A concept in retiling that helps explain the 1) Marketing planning
emergence of new retailers is called the ______ 2) Marketing mix
hypotheses 3) Marketing control
1) Product life cycle 4) Consumer behaviour
2) Service assortment 28. Items, considered part of the augmented product, do
3) Retail life cycle not include:
4) ‘Wheel-of-retailing’ 1) Guarantee
2) Warranty
 3) Complementary products (3) 4 2 1 3
4) Channels of distribution (4) 2 3 1 4
29. Which of the following is not a type of direct
marketing? July-2016
1) Direct mail marketing 15. Product-line pricing strategy includes which
2) Retail marketing combination of the following?
3) Telemarketing 1. Public utility pricing
4) Email direct marketing 2. Complementary goods pricing
30. ‘Press release’ is a part of: 3. Spare parts pricing
1) Public relations 4. Load factor pricing
2) Advertising Codes:
3) Sales promotion (1) 1 2 3
4) None of the above (2) 2 3 4
(3) 1 2 4
DEC.-2015 (4) 1 3 4
13. Firms producing and selling a large variety of goods
will generally follow:
26. Which type of differentiation is used to gain
1) Cost plus pricing
competitive advantage through the way a firm
2) Marginal pricing
designs its distribution coverage, expertise and
3) Skimming pricing
performance?
4) Product line pricing
1) Channel differentiation
26. Which of the following is not a reason for the failure
2) Services differentiation
of new products?
3) People differentiation
1) Good idea but overestimated market size.
4) Product differentiation
2) Correctly positioned new product, not promoted
27. Which one of the follwing is the most likely result of
effectively or overpriced.
a marketing strategy that attempts to serve all
3) Development costs are lower than or equal to
potential customers?
estimated or expected.
1) All customers will be delighted.
4) Competitors fight back harder than expected.
2) Customer-perceived value will be increased.
27. Which one of the following is true for the calculation
3) The company will need to follow up with a
of overall market share?
demarketing campaign.
1) (Customer penetration) × (Customer Loyalty) ×
4) Not all customers will be satisfied.
(Price selectivity)
28. Which of the following is not a primary activity in
2) (Customer Loyalty) × (Customer Selectivity) ×
Michael Porter’s value chain?
(Price selectivity)
1) Inbound logistics
3) (Customer Selectivity) × (Price selectivity) ×
2) Operations
(Customer penetration)
3) Outbound logistics
4) (Customer penetration) × (Customer Loyalty) ×
4) Procurement
(Customer Selectivity) × (Price selectivity)
29. Which of the following represents consistency of
29. When the consumers favour those products which
results when the test instrument is used repeatedly?
offer the most quality, performance or innovative
1) Validity
features, then it is called as:
2) Reliability
(a) Production concept
3) Relativity
(b) Product concept
4) Sensitivity
(c) Sales concept
30. Assertion (A) : Too many stimuli make a person
(d) Marketing concept
accommodated to those sensations. Sensory
30. Match the items of List-I with List-II where the PLC
adaptation is a problem that concerns many
curve patterns are given for different categories:
advertisers, which is why they try to change their
List I List II
advertising campaigns regularly.
A. Product 1. One of several variant
Reason (R) : To cut through advertising clutter
category shapes
B. Product forms 2. Longest PLC and to ensure that consumers perceive
C. Products 3. Standard PLC advertisement, marketers try to increase sensory
D. Branded 4. Short or long PLC input.
Products Codes:
Codes 1) (A) is right and (R) is wrong.
A B C D 2) (A) is wrong and (R) right.
(1) 3 4 2 1 3) Both (A) and (R) are right but (R) does not
(2) 1 2 4 3 explains (A).
 4) Both (A) and (R) are right and explains (A) 3) Product concept
4) Prototype
Jan.-2017
26. Match the following items of List-I (sources of November-2017
competition) with List-II (examples for these sources 26. When alt Disney world's Magic Kingdom lets
of competition) and indicate the code of correct customers visit fairy kingdom, a pirate ship, or a
matching. haunted house, then what is marketed in this
List-I List-II example.
Directly similar i. OLA Taxi and Metro 1) Service
a.
products Rail 2) Events
3) Experiences
b. Available ii. Mercedes and BMW
substitutes 4) Ideas
27. Which one of the following statements is true a
c. Unrelated products iii. PVR and
Amusement Park according to VALS framework of psychographic
segmentation?
Codes :
1) The consumers who are primarily motivated by
a b c
ideals are guided by knowledge and principles.
(1) iii ii i
2) The consumers who are motivated by self
(2) i iii ii
expression don't desire social or physical
(3) i ii iii
activity, variety, and risk.
(4) ii i iii
3) The consumers who are motivated by self
27. The marketing task which finds ways to alter the expression don't desire social or physical
time pattern of demand through flexible pricing, activity, variety, and risk.
promotion and other incentives is called. 4) The consumers who are motivated by
1) Demarketing achievement desire social or physical activity,
2) Synchromarketing variety, and risk.
3) Fleximarketing 28. From the following two statements of Assertion (A)
4) Gorilla Marketing and Reason (R), indicate the correct code:
28. Which of the following is not a reason for a firm to Assertion (A): A transformational appeal of
lose its market share to competitors?
communication elaborates on a
1) A product/model is perceived by the target
customer group as satisfying needs. non-product related benefit or
2) Customers not being covered by the company’s image.
sales force and distribution outlets. Reason (R) : Transformational appeals often do
3) Customers may have been lost to competitors not attempt to stir up emotions
due to poor service by the firm or its that will motivate purchase.
4) All the above are correct reasons for given Code:
condition.
1) Both (A) and (R) are correct.
29. Match the items of List-I with List-II and denote the
2) (A) is correct (R) is not correct
code of correct matching.
3) (A) is not correct (R) is correct
List-I List-II
4) (A) and (R) both both are incorrect.
a. Invest i. No receiving of new
29. Select the correct sequence of Hierarchy-of-effects
Strategy resources.
model related to marketing communication:
b. Protect ii. Well financed marketing
1) Awareness → Knowledge → Liking →
Strategy efforts.
Preference → Conviction → Purchase
c. Harvest iii. Selective resource
2) Knowledge → Awareness → Liking →
Strategy allocation
Conviction → Preference → Purchase
d. Divest iv. Not warranting substantial
3) Awareness → Liking → Knowledge →
Strategy new resources.
Conviction → Preference → Purchase
Codes : 4) Liking → Awareness → Knowledge →
a b c d preference → Conviction → Purchase
(1) ii iii iv i 30. Match the items of List-I with List-II; and denote the
(2) i iii ii iv code of correct matching:
(3) ii i iv iii List-I List-II
(4) iv iii ii i (a) Basic Product (i) Set of attributes and
30. An elaborated version of the idea expressed in conditions buyers
meaningful consumer term is called: normally expect
1) Product image (b) Expected (ii) Possible augmentation
2) Product idea product and transformation the
 product might undergo From the above statements indicate the correct code
in future of being statements correct or incorrect
(c) Augmented (iii) Exceed customer The statements relate to concepts of marketing.
Product expectations
1) Both the statements (I) and (II) are not correct.
(d) Potential (iv) Converting core benefit
2) Both the statements (I) and (II) are correct.
product into product
3) Statement (I) is correct but statement (II) is not
Code correct.
4) Statement (I) is not correct but statement (II) is
A B C D
correct.
(1) iii iv i ii 41. Match the items of List - II with List - I to identify
(2) i iii iv ii the correct code which are related to legal forces
(3) i iv iii ii affecting international marketers.
(4) iv i iii ii List - I
1. Tariff
2. Import Quota
July-2018 3. Local-content Law
36. When two separate companies or two divisions 4. Local-operating Law
within the same company agree to place both of 5. Standards and Certification
their respective brands on a particular product or 6. Boycott
enterprise, this arrangement is termed as : List – II
1) Differential Branding (i) A regulation specifying the proportion of a
2) Co-branding finished product’s components and labour that
3) Dual Branding must be provided by importing country.
4) Both Cobranding and Dual Branding (ii) Tax imposed on product entering a country and
37. The tangible goods for which a consumer wants to used to protect domestic producers and/or raise
compare quality, price and perhaps style in several revenue.
stores before making a purchase are called: (iii) A requirement that a product contain or
1) Convenience Goods exclude certain ingredients or that it be tested
2) Shopping Goods and certified as meeting certain restrictive
3) Specialty Goods standards.
4) Unsought Goods (iv) Limiting amount of a particular product that
38. When a company treats each single customer as a can be brought into a country, to protect
separate segment, this is called: domestic industry or broadening access to its
1) Niche Marketing markets.
2) Nano Marketing (v) A refusal to buy products from a particular
3) Single Marketing company or country.
4) Micro Marketing (vi) A constraint on how, when or where retailing
39. Under which of the following conditions, the level can be conducted.
of consumer’s involvement will not be high? Code :
1) The consumer considers the amount of money (a) (b) (c) (d) (e) (f)
involved to be large. (1) (iii) (iv) (ii) (i) (vi) (v)
2) The product is seen as having low potential for (2) (vi) (ii) (i) (iv) (iii) (v)
providing significant benefits. (3) (ii) (iv) (i) (vi) (iii) (v)
3) The consumer lacks information about (4) (iv) (vi) (i) (ii) (iii) (v)
alternatives for satisfying the need. 42. Match the items of List - II with List - I which are
4) The product has considerable social related to personal selling process and identify the
importance. correct code:
40. Statement (I) : The mindset which is commonly List - I
associated with a long - ago era when the demand 1. Prospecting
for goods generally exceeded the supply, and the 2. Preapproach
primary focus in business was to effectively 3. Presentation
produce medium quantities of products ; finding the 4. Post sales services
customers was viewed as a relatively major List – II
function. (i) Attention, Interest, Desire, Action
Statement (II) : The firms with product orientation (ii) Identifying Profiles, leads, Records and
typically focus on the quality and quantity of Qualifying capability and willingness
offerings while assuming that customers will seek (iii) Reduce Dissonance, Build goodwill
out and buy reasonably priced, well made products. (iv) Information, habits, preferences
 Code : 3) Late Majority
(a) (b) (c) (d) 4) Late Adopters
81. The G. E. Business Model is explained on which
(1) (i) (iii) (iv) (ii)
one of the following parameters?
(2) (iii) (iv) (ii) (i)
1) Market Attractiveness and Business Position.
(3) (ii) (iv) (i) (iii)
2) Business Attractiveness and Market Position.
(4) (iv) (iii) (ii) (i)
3) Industry Growth rate and Company’s Market
77. Statement (I) : Designing a distribution system for
share.
a service (for-profit or non-business context)
4) Company’s Growth rate and Industry’s
involves to select the parties only through which
Position.
ownership will pass.
82. A reduction from the list price that is offered by a
Statement (II) : The ownership channel for most of
seller to buyers in payment for marketing functions
the services is long and quite complex because of
the buyers will perform is known as:
inseparability characteristic.
1) Trade Discount
Statement (III) : Short channels usually mean
2) Functional Discount
more control on the part of the seller.
3) Cash Discount
Identify the correct code of being the statements
4) Both Trade and Functional Discount
correct or incorrect. These statements relate to
channel strategies of products/services.
1) Statements (I) and (II) are correct but (III) is
not correct.
2) Statements (I) and (III) are correct but (II) is
not correct.
3) Statements (I) and (II) are not correct but (III)
is correct.
4) Statements (I), (II) and (III) all are not correct.
78. An enormous collection of data on various topics
from a variety of internal and external sources,
compiled by a firm for its own use or for use by its
clients, is called:
1) Data-base
2) Data warehouse
3) Data mining
4) M.I.S.
79. Statement (I) : A form of non-store retailing that
uses advertising to contact consumers who, in turn,
purchase products without visiting a retail store is
called Direct selling.
Statement (II) : A form of non-store retailing in
which personal contact between a sales person and
a consumer occurs away from a retail store is called
Direct Marketing.
In the light of above statements, identify the correct
code of statements being correct or incorrect.
1) Statement (I) is correct but Statement (II) is not
correct.
2) Statement (I) is not correct but Statement (II) is
correct.
3) Both the statements are correct.
4) Both the statements are not correct.
80. 34% of the customers who fall in one of the
categories of diffusion process who are deliberate
customers to accept an innovation just before the
average adopter in a social system. Such customers
who are above average in social and economic
measures, rely quite a bit on advertisements and
salesmen are known as :
1) Early Adopters
2) Early Majority
 ASTRAL EDUCATION
COMMERCE (EM) MARKETING MANAGMENT PYP (P-2)

ANSWER KEYS
JUNE-2012
27 3 28 2 29 1 30 4

DEC.-2012
13 1 27 2 28 1 30 2

JUNE-2013
26 4 27 1 28 4 29 4

DEC.-2013
22 3 25 3 26 3 27 4 28 3 29 2 30 1

JUNE-2014
26 2 27 4 28 4 29 4 30 3

DEC.-2014
27 3 28 3 29 3 30 2

JUNE-2015
26 3 27 4 28 4 29 2 30 1

DEC.-2015
13 4 26 3 27 4 29 2 30 4

JULY-2016
15 2 26 1 27 4 28 4 29 2 30 4

JAN.-2017
26 4 27 2 28 1 29 1 30 3

NOV.-2017
26 3 27 1 28 2 29 1 30 4

JULY-2018
36 4 37 2 38 4 39 2 40 4 41 3 42 3 77 3 78 2 79 4
80 2 81 1 82 4
 ASTRAL EDUCATION
COMMERCE (E.M.) MARKETING MANAGEMENT PYP (P-3)

June-2012 3) Societal
4) Product
16. Which element of the promotion mix do wholesales 24. In broader sense, marketing communication
generally apply to obtain their promotional includes
objective? 1) Product
1) Advertising 2) Price
2) Personal Selling 3) Place
3) Trade Promotion 4) All
4) Direct Marketing 25. Physical distribution provides
19. Match items in List-II with items in List-II 1) Place utility
List–I List-II 2) Time utility
I. Mega Marketing 1. Advertising 3) Place and Time utility
II. Penetration Price 2. Kotler 4) Form utility
III. Promotion Mix 3. Low price 26. What is relevant to place variable of marketing
IV Customer 4. Post Purchase mix?
Satisfaction Behaviour 1) Branding
Codes: 2) Price penetration
1 2 3 4 3) Sales personnel motivation
1) I II III IV 4) None
2) III I II IV 27. Find incorrect statement:
3) IV III II II 1) Marketers arouse emotional motives
4) III IV I II 2) Marketers satisfy rational motives
20. Statement (A) : Sales promotion has a strong 3) Marketers formulate different sales
impact on consumer behaviour n rural India. promotions for different motives
Reason (R) : Rural people in India give utmost 4) None of the above
28. Non-store marketing includes
significance to sales promotion schemes.
1) Home selling
2) V.P.P.
Codes:
3) Vending Machines
1) Statement (A) is correct but Reason (R) is 4) All of the above
incorrect. 29. What is customer delight?
2) Statement (A) is incorrect, but Reason (R) is 1) Performance equal to expectation
correct. 2) performance less than expectation
3) Both Statement (A) and Reason (R) are 3) Performance more than expectation
correct. 4) Expectation more than performance
4) Both Statement (A) and Reason (R) are 30. Which terms are often used interchangeable in
incorrect. marketing literature?
21. Market sub-divided oF the basis of behavioural 1) Concept, method, philosophy
characteristics is called 2) Concept, approach technique
1) Segmentation 3) Orientation. concept, philosophy
2) Aggregation 4) Philosophy. system, concept
3) Precision DEC.-2012
4) None of the above 16. Which of the following steps of purchase decision
22. What is mass marketing? process is in sequence?
1) Offering the same products and marketing mix 1. Problem recognition
to all consumers 2. Search for alternatives
2) Offering variety of products to the entire 3. Evaluation of alternatives
market. 4. Purchase action
3) Offering differentiated products to all 5. Post purchase action
customers
Codes:
4) Following concentrated marketing strategy.
23. Which concept of marketing is based on the 1) 1, 3, 2, 4, 5
assumption that superior product sell themselves? 2) 1, 2, 4, 3, 5
1) Production 3) 2, 1, 3, 5, 4
2) Marketing
 4) 1, 2, 3, 4, 5 3) Industrial customers
17. What is customer value? 4) None of the above
1) Ratio between the customer’s perceived 25. There are impulses which persuade a customer to
benefits and the resources used to obtain these buy certain products without evaluating the positive
benefits. and negative values of the same.
2) Excess of satisfaction over expectation. 1) Emotional motives
3) Post purchase dissonance 2) Blind motives
4) None of the above 3) Egoistic motives
19. Match the items of LIst-I with items of List-II 4) All the above
List–I List-II 26. Which subject is relevant to the study of consumer
(A) Loyal customers 1. Less attention behaviour?
____ products. 1) Economics
(B) Loyal customers are 2. Cheaper 2) Psychology
____ sensitive 3) Sociology
(C) Loyal customers pay 3. Less price 4) All the above
_____ to June-2013
competitor’s
advertising. 36. Which segmentation approach is the most
(D) Serving existing 4. Buy more compatible with the spirit of the marketing concept?
customer is ____ 1) Benefit sought
Codes: 2) Income
3) Social class
(A) (B) (C) (D)
4) Family size
1) 3 1 2 4
37. The description of a products quality, features,
2) 4 3 1 2
style, brand name and packaging identifiers the
3) 2 1 3 4
1) Actual product
4) 4 3 2 1
2) Augmented product
20. Assertion (A) : High customer expectations lead to 3) Core product
dissatisfaction as product performance never 4) Tangible product
matches them. 38. Consider the following statements and find out the
Reason (R) : Product performance is always correct
customer specific. (i) A firm’s marketing information system is
Codes: component of its marketing research system.
1) Both (A) and (R) are correct. (ii) The most common forms of marketing
2) Both (A) and (R) are incorrect. researches conducted in most of the firms are
3) (A) is correct, but (R) is incorrect the measurement of market potential and the
4) (R) is correct, but (A) is incorrect. analysis of market share.
(iii) Survey research is seldom used for study in
21. Under which concept of marketing do you find
consumer perception and attitudes.
greater emphasis on techniques and technology of
production? (iv) The concept of cognitive dissonance is
1) Product relevant to study consumer’s post-purchase
2) Selling behaviour.
3) Marketing Codes:
4) None
22. Which is used for short-term sales achievement>? 1) All the statements are true.
1) Personal selling 2) All the statements are false.
2) Advertising 3) (i) is false and the rest are true.
3) Sales Promotion 4) (ii) and (iv) are true and the rest are false.
4) Public Relations 39. In India, which pricing practice is not permissible?
23. Public distribution system relates to 1) Penetrating pricing
1) Marketing system 2) Skimming pricing
2) Retailing system 3) Predatory pricing
3) Industrial system 4) None of the above
4) Selling system 40. Consider the following statement and find out the
24. Who do you more, complain less, spread positive correct alternative from the codes given below:
word of mouth, ensure a large customer base and (i) A good salesman is one who can sell
repeat business? refrigerator to an Eskimo.
1) Satisfied customers (ii) Salesmen are born, not made.
2) Delighted customers (iii) Physical distribution is an area where high
cost-savings is possible.
 Codes: 40. In modern marketing, which of the following
functions of a distribution middleman is gaining
1) (i) and (iii) are correct. maximum importance?
2) (i) and (ii) are correct 1) Making persuasive communication
3) (ii) and (iii) are correct 2) Price negotiation
4) All are correct. 3) keeping adequate inventory
41. Which form of retail outlet has the highest 4) Gathering market information
operating costs? 41. Which method of setting the advertising budget of a
1) Super market company is considered to be the most scientific?
2) Consumer co-operative store 1) All-you-can-afford method
3) Department store 2) Percentage of sales method
4) Retail chain store 3) Competitive-parity method
42. Consider the following statements and indicate the 4) Objectives and tasks method
correct alternative from the codes given below: 42. Match the items of List-I with those of List-II and
(i) The product management system often turns indicate the correct combination form the codes
out to be costly given below:
(ii) When customers belong to different user List–I List-II
groups with distinct buying preference and (A) AIDA Model (i) Consumer
practices, a market management organization behaviour
is not suitable. (B) Hierarchy of effect (ii) Marketing
(iii) Advertising department has the closest model communication
interface with the finance department of the (C) Howard and Sheth (iii) Consumer
company? model buying-
Codes: decision
process
1) (i) and (ii) are correct (D) Information search (iv) Advertising
2) (ii) and (iii) are correct effectiveness
3) Only (i) is correct Codes:
4) All are correct. (i) (ii) (iii) (iv)
1) (A) (B) (C) (D)
DEC.-2013 2) (B) (C) (D) (A)
3) (B) (D) (A) (C)
32. According to the Boston Consulting group, a 4) (D) (A) (C) (B)
business, which has a strong market share in a low
growth industry is referred to as a June-2014
1) Dog
2) Cash Cow 15. Penetrating pricing strategy is appropriate when
3) Star 1) Price elasticity of demand in the market is
4) Question mark highly inelastic
36. Which is not one of the stages in the consumer 2) Price elasticity of demand in the market is
buying-decision process? uncertain
1) Purchase decision 3) Price elasticity of demand in the market is
2) Post-purchase behaviour highly elastic
3) Problem recognition. 4) Income elasticity of demand in the market in
4) Cultural factors negatively elastic
37. At which stage of product-life-cycle are the pricing 26. A primary group influencing the buyer behaviour is
decisions most complex? a
1) Decline 1) Family
2) Growth 2) Professional association
3) Introduction 3) Religious group
4) Maturity 4) Trade Union
38. Which one is not an element of market logistics? 27. After conducting the business analysis for
1) Inventory developing a new product, a company must do
2) Order-processing 1) Idea generation
3) Warehousing 2) Product positioning
4) Supply chain management 3) Product development and testing
4) Test marketing
28. Match the items in List-
List–I List-II
(A) Post purchase (i) AIDA
 (B) Personal Selling (ii) ACMEE 3) Assertion (A) is incorrect, but Reasoning (R) is
(C) Everitt M. (iii) Diffusion of correct.
Rogers Innovation 4) Assertion (A) and Reasoning (R) both are
(D) Salesperson (iv) Cognitive incorrect.
training dissonance 18. Cost-plus pricing is considered appropriate for:
Indicate the correct matching: I. Product Tailoring
Codes: II. Public Utility Pricing
(A) (B) (C) (D) III. Refusal Pricing
1) (i) (ii) (iii) (iv) IV. Monopoly Pricing
2) (iv) (ii) (iii) (i) 1) I and II only
3) (iii) (ii) (i) (iv) 2) I, II and II only
4) (iv) (i) (iii) (ii) 3) II, III and IV only
4) III and IV only
19. For promoting sales advertising endeavours may be
56. Which one is not a major component of holistic made as per
marketing? I. Competitive parity
1) Relationship marketing II. Objective and task
2) Integrated marketing III. Tied sales
3) Internal marketing IV. All-one-can-afford
4) Socially responsible marketing Codes:
57. The final step in target marketing is
1) I and II only
1) Market Analysis
2) II, III and IV only
2) Market Positioning 3) I, II and IV only
3) Market Segmentation 4) III and IV only
4) Market Targeting 30. Assertion (A) : In product concept, focus is on
58. The most recent consideration in product packaging innovating and improving products.
is Reason (R) : In selling concept, consumers are
1) Cost effectiveness persuaded to buy products.
2) Product protection 1) Both (A) and (R) are true.
3) Product promotion 2) (A) is true, but (R) is false
4) Economy 3) (A) is false, but (R) is true.
59. Distribution logistics (also termed as ‘market 4) Both (A) and (R) are false
logistics’) does not include 31. Which of the following is not method of segmenting
a market?
1) Distribution channel
1) Behavioural Segmentation
2) Inventory
2) Psychographic segmentation
3) Transportation 3) Benefits segmentation
4) Warehouses 4) Customer segmentation
60. Most of the money spent in measuring the 33. Select the phases of Product Life Cycle:
effectiveness of advertising is spent on 1. Initiation
1) Communication-response research 2. Decline
2) Pre-testing the advertisements 3. Boom
3) Post-testing the advertisements 4. Introduction
4) Sales-response research 5. Maturity
6. Growth
DEC.-2014
17. Assertion (A) : Differential pricing structure is Codes:
designed to accommodate the various categories of 1) 1, 2, 3, 5, 6
buyers. 2) 1, 2, 3, 4
Reason (R) : It aims at increasing sales and revenue 3) 4, 6, 5, 2
4) 2, 3, 5, 6
and driving the competitions out from the market.
Codes:
34. Which of the following is not product-mix strategy?
1) Assertion (A) and Reasoning (R) both re 1) Trading up
correct 2) Alteration
2) Assertion (A) is correct, but Reasoning (R) is
3) Simplification
incorrect. 4) Value addition
35. Which of the following is not a product-mix 1) The tasks to devise marketing activities.
strategy? 2) The tasks of hiring, training and motivating
1) Relation between buyer and seller employees.
2) Relation between sales person 3) The activities that help in designing and
3) Relation between company and consumers implementing the marketing programmes.
4) All of the above 4) The company and its supporting stakeholders
36. "Relationship" in marketing means with whom it has built mutually profitable
List-I List-II business relationships.
(Company Name) (Brand) 27. Target marketing involves which of the following
(A) HUL (i) Cerelac activities?
(B) ITC (ii) Eclares 1. Market positioning
(C) Nestle (iii) Vivel 2. Market targeting
(D) Cadbury (iv) Sunsilk 3. Market behaviour
Codes : 4. Market segmentation
(A) (B) (C) (D) Codes:
1) iv iii i ii 1) 1 and 2
2) i ii iii iv 2) 2 and 4
3) iv ii iii i 3) 1, 2 and 4
4) iv iii ii i 4) 2, 3 and 4
37. The following are the steps in designing the market 28. The pricing strategy which adjusts the basic price to
driven distribution. accommodate differences in customers, products and
1. Know what customers want locations is called:
2. Determine the costs 1) Differentiated pricing
3. Review assumptions 2) Promotional pricing
4. Decide on the outlet 3) Geographical pricing
5. Compare alternatives 4) Price discounts and allowances
6. Implement changes 29. Horizontal marketing system comprises of:
Select the right sequence of the steps from the codes 1) the producer, wholesaler and retailer acting in a
given below: unified system
2) multichannel marketing
1) 1, 4, 2, 5, 3, 6 3) two or more marketing channels to reach one or
2) 1, 2, 3, 5, 4, 6 more customer segments
3) 1, 3, 4, 5, 2, 6 4) two or more unrelated companies put together
4) 1, 2, 3, 5, 4, 5 resources to exploit an emerging market
38. Which of the following are consumption value that 30. Match the items of List-I with items of List-II and
customers look for in any product or service in a choose the correct code:
security? List I List II
1. Functional value A. Face-to-face interaction 1. Sales
2. Social value with one or more promotion
3. Money value prospective purchasers
4. Emotional value B. Any paid from of 2. Public
5. Maximum value nonpersonal promotion relations
Codes: C. Short-term incentives to 3. Personal
encourage purchase selling
1) 1, 2, 3, 5
D. Programmes to promote 4. Advertising
2) 1, 3, 4, 5
company’s image
3) 5, 4, 3, 2, 1
Codes
4) 1, 2 and 4
A B C D
39. Franchising is a practice of :
1) Leasing for a prescribed period of time, the 1) 3 4 2 1
right to use firm's successful business model 2) 3 4 1 2
and brand. 3) 2 1 3 4
2) Selling out a successful business model and 4) 2 3 1 4
brand
3) Hiring a firm's successful business model and 56. Which of the following can be used by a company as
brand. communication mix to reach the target customers?
4) None of the above 1. Advertising
2. Sales promotion
June-2015 3. Events and experiences
26. A marketing network consists of: 4. Public relations
 5. Direct marketing 57. The model of decision support where there is
6. Personal selling recommendation of the type of advertisement with
Codes: humourous and ‘slice of life’ kinds of appeals to use
1) 1, 2, 4 and 5 for given marketing goals and characteristics of
2) 1, 2, 5 and 6 products, target markets and competitive situations is
3) 1, 2, 4, 5 and 6 known as:
4) 1, 2, 3, 4, 5 and 6 1) MEDIAC
57. In addition to motivation, learning and memory, 2) PROMOTOR
which one of the following is included in the main 3) ADCAD
psychological processes affecting consumer 4) COVERSTORY
behaviour? 58. Which of the following statements is not true?
1) Perception 1) Marketing profitability analysis measures the
2) Life cycle profitability of different marketing activities.
3) Life style 2) Marketing efficiency studies try to determine
4) Social class how various marketing activities could be
58. Match the items of List-I with items of List-II and carried out more efficiently.
choose the correct code: 3) Each company needs to reassess periodically its
List I List II marketing effectiveness through a control
A. Geographic 1. Gender, income, instrument called marketing audit.
Segmentation religion 4) All the above are true
B. Demographic 2. Knowledge, attitude,
Segmentation response July-2016
C. Psychographic 3. Regions, cities, 10. For the following statements of Assertion (A) and
Segmentation neighbourhoods Reasoning (R) indicate the correct code:
D. Behavioural 4. Lifestyle, personality Assertion (A) : Low initial pricing for new products
Segmentation traits, values is regarded as the principal instrument for entering
Codes into mass markets.
A B C D
Reason (R) : Firms generally go for production of
1) 2 4 3 1
new products with excess capacity initially.
2) 2 4 1 3
Codes:
3) 4 2 1 3
1) Assertion (A) and Reasoning (R) both are
4) 4 1 2 3 correct but (R) does not offer full explanation for
59. Which one of the following is not a stage in the (A).
product life cycle? 2) Assertion (A) and Reasoning (R) both are
1) Introduction wrong.
2) Growth 3) Assertion (A) is correct but Reasoning (R) is
3) Equilibrium wrong.
4) Decline 4) Assertion (A) and Reasoning (R) both the
60. Which one of the following is correct statement in correct and (R) offers full explanation for (A).
respect of co-branding?
1) Co-branding is an umbrella branding of goods of 21. Match List-I with List-II and indicate the correct
a company. code:
2) In co-branding, two or more well-known List-I List-II
existing brands are combined into a joint A. Convenience 1. Consumer purchases
product. goods them frequently,
3) Co-branding is the process of combining two immediately and with
brands for promoting brand equity minimum effort.
4) All of the above B. Shopping 2. Consumer compares
goods them on the basis of
DEC.-2015 suitability, quality, price
29. When electronic markets permit prices to change and style.
faster even daily as a function of demand and supply C. Speciality 3. These are goods with
then this practice is called: goods unique characteristics of
1) competitive pricing brand identification.
2) e-marketing pricing D. Unsought 4. Consumers are not aware
3) yield management pricing goods of them and normally do
4) None of the above not think of buying them.
 Codes: 1) (A) is right and (R) is wrong.
A B C D 2) (A) is wrong and (R) is right.
1) 1 4 2 3 3) Both (A) and (R) are right.
2) 1 2 3 4 4) Both (A) and (R) are wrong.
3) 4 3 2 1 53. Name the process in which a buyer posts its interest
4) 2 1 3 4 in buying a certain quantity of item and sellers
22. Which of the following marketing strategies is/are compete for the business by submitting lower bid
not used in ‘growth stage’ of the product life cycle? until there is only one seller left.
1) Improving quality and adding new features. 1) Internet
2) Adding new models of product. 2) Reverse auction
3) Entering new market segments. 3) B2B market place
4) Using awareness and trial communications. 4) B2C market place
23. Who among the following take (s) both title to and 54. Advertising method in which an advertisement is
possession of goods from the preceding member(s) broadcasted simultaneously on several radio stations
and channelize them to the subsequent members? and/or television channels is known as
1. Agent intermediaries 1) Black-out
2. Merchant intermediaries 2) Consolidation
1) 1 only 3) Road-block
2) 2 only 4) Cornering
3) Both 1 and 2 55. Which of the following is the mental condition or
4) Neither 1 nor 2 attitude of individuals and groups which determines
24. Which of the following is not a determinant of their willingness to cooperate?
service quality? 1) Motivation
1) Reliability 2) Morale
2) Responsiveness 3) Excitement
3) Sensitivity 4) Delight
4) Assurance
49. Which of the following passes through the four Jan.-2017
stages of distinctiveness, emulation, mass fashion 21. Creating the capability of making purchases directly
and decline? from a firm’s website is known as
1) Style 1) Electronic Networking
2) Fashion 2) Electronic Transactions
3) Fad 3) Electronic Data Interchange
4) Style and Fashion 4) Electronic Information Transfer
50. Which of the following positioning strategies is 23. Match the media factors given in List-I with
adopted by marketers to position their product in two examples given in List-II and indicate the code of
categories simultaneously? current matching.
1) Point of Difference List-I List-II
2) Point of Parity a. Media class i. Prime time at 9:00 PM,
3) Straddle Positioning full page ad of Honda
4) Emotional Positioning City
51. Statement-I : Marketing is the process by which a b. Media ii. Magazine, T.V., Radio
firm profitably translates customer needs into vehicles
revenue. c. Media option iii. Flighting, Pulsing
Statement-II : Marketing is the messages and/or d. Scheduling & iv. Times of India, T.V.
actions that causes messages and/or actions. timing serial Bhabhi Ji Ghar Pe
Codes: Hain
1) (I) is correct but (II) is not correct. Codes :
2) (II) is correct but (I) is not correct. a b c d
3) (I) and (II) both are correct. 1) ii iv i iii
4) (I) and (II) both are incorrect. 2) iii i iv ii
52. Assertion (A) : Odd pricing aims at maximising 3) i ii iv iii
profit by making micro-adjustments in pricing 4) iv ii iii i
structure. 48. The concept of achieving maximum profits through
Reason (R) : Odd pricing refers to a price ending increased consumer satisfaction for raised market
share focuses on:
in 1, 3, 5, 7 or 9. When examining a price, the first
1) Product
digits carry more weight than the last ones. 2) Selling
Codes: 3) Customer
 4) Production 2) Perfect competition
49. Which of the following is not a measure for quality 3) Monopoly
of service of consumer? 4) Oligopoly
1) Responsiveness 12. Statement-I: Pricing at par with the market price
2) Competition of the existing brands is considered to be the most
3) Empathy reasonable pricing strategy for a product which is
4) tangibility being sold in a strongly competitive market.
50. Which of the following is not a targeting strategy? Statement-II: Pricing below the market price has
1) Standardization been found to be more successful when a seller
2) Differentiation intends to achieve a prestigious position among the
3) Focus sellers in the locality for selling prestigious goods
4) All of the above of much superior quality.
51. Match the items of List-I with items of List-II and Code:
indicate the code of correct matching. 1) Both the statements are correct.
List-I List-II 2) Both the statements are incorrect.
a. Real i. Expecting good service from 3) Statement-I is correct while statement-II is
Needs car dealer incorrect.
b. Unstated ii. Customer expects to be seen 4) Statement-I is incorrect while statement-II is
Needs by his friends as value- correct.
oriented savvy consumer 23. One of the techniques of stimulating creativity for
c. Delight iii. Customer wants car at low developing new product where you start with n idea
Needs operational cost and not initial then thinking of the next idea and link, then think of
cost. the next association and do this with all association
d. Secret iv. Customer receives free that come up with each new idea, is known as:
Needs insurance on purchase of car 1) Attribute Listing
Codes : 2) Forced Relationship
a b c d 3) New Contexts
1) iii i iv ii 4) Mind Mapping
2) i iii ii iv 48. A research technique used particularly in retailing
3) ii iv i iii (online and offline), in which consumers are
4) iv ii i iii recruited by researchers to act as anonymous buyers
52. Statement I : The firm should “stick to its niching” in order to evaluate customer satisfaction, service
but not necessarily to its niche. quality and customer’s own evaluation of their
Statement II : Multiple niching is not preferable to experiences, is known as:
single niching. 1) Consumer Jury
Codes : 2) Projective Technique
1) Both the Statements are true. 3) Mystery Shopping
2) Both the Statements are false. 4) Semiotic Research
3) Statement I is true, but Statement II is false. 49. Match the items of List-I with those of List-II and
4) Statement II is true, but Statement I is false. select the correct code of matching:
List I List II
(a) Market (i) Avoid hostile attacks
November-2017
Leader on rivals
1. Assertion (A): Buyers, for several industries, are (b) Market (ii) Attack the market
potential competitors- they may integrate Challenger leader
backwards. (c) Market (iii) Provide high level of
Reasoning (R): They have different degrees of Follower specialisation
bargaining power. (d) Market (iv) Attack the market
Code: Nicher
1) (A) and (R) are correct and (R) is the correct Codes
reasoning of (A). (a) (b) (c) (d)
2) (A) and (R) are correct but (R) is not the correct 1) (iv) (ii) (i) (iii)
reasoning of (A). 2) (ii) (iv) (iii) (i)
3) (A) is incorrect while (R) is a correct statement.
3) (iii) (i) (iv) (ii)
4) Both (A) and (R) are incorrect.
11. Manufacturing of T.V. sets and refrigerators and 4) (i) (iii) (iv) (ii)
their pricing in India belong to which one of the 51. Which of the following is not major aspect of
following market structures? digital marketing?
1) Monopolistic competition 1) Jurisdiction
 2) Ownership
3) Security
4) Entertainment
52. Which of the following statements are correct?
Select the correct code:
Statement-I: Horizontal conflict between channel
members is caused due to channel members
impinge on the market territory of other
intermediaries at different level.
Statement-II: Vertical conflict is caused due to
intense price competition, disagreement about
promotional activities, attempts to bypass
intermediary and distribute direct differing
expectations as to channel or intermediary
performance.
Statement III: Hybrid channel conflict arises due
to to grey marketing.
Cods:
1) (I) and (III)
2) (I) and (II)
3) (II) and (III)
4) (I), (II) and (III)
53. Which of the following statement are incorrect?
Indicate the correct code
Statement-I: As consumer's income increases, the
percentage of income spent for food items
decreases, for rent, fuel and light remains the same,
for clothing remains the same and for sundries
increase
Statement-II: Societal marketing period was from
1960 onwards.
Statement: Our debt to social anthropology
decreases more and more as we use qualitative
market research approaches.
Statement IV: The economic concepts of perfect
competition and matching of supply and demand
underlie the marketing concept, particularly in
relation to the concepts of the price at which are
sold and quantity distributed.
Code:
1) (I) and (II)
2) (II) and (III)
3) (II) and (IV)
4) (I) and (IV)
 ASTRAL EDUCATION
COMMERCE (EM) MARKETING MANAGMENT PYP (P-3)

ANSWER KEYS
JUNE-2012
16 3 19 2 20 1 21 1 22 1 23 4 24 4 25 3 26 3 27 4
28 4 29 3 30 3

DEC.-2012
16 4 17 1 19 2 20 2 21 * 22 3 23 2 24 2 25 4 26 4

JUNE-2013
36 1 37 1 38 4 39 3 40 1 41 3 42 3

DEC.-2013
32 2 36 4 37 4 38 4 40 4 41 4 42 3

JUNE-2014
15 3 26 1 27 3 28 4 56 3 57 2 58 3 59 1 60 2

DEC.-2014
17 2 18 2 19 3 30 1 31 4 33 3 34 4 35 3 36 1 37 1 38 4 39 1

JUNE-2015
26 4 27 3 28 1 29 4 30 2 56 4 57 1 58 * 59 3 60 2

DEC.-2015
29 3 57 3 58 4

JULY-2016
10 1 21 2 22 4 23 2 24 3 49 2 50 3 51 3 52 3 53 2 54 3 55 2

JAN.-2017
21 2 23 1 48 3 49 2 50 * 51 1 52 3

NOV.-2017
1 1 11 1 12 3 23 4 48 3 49 1 51 4 52 3 53 2
 ASTRAL EDUCATION
COMMERCE (E.M) FINANCIAL MANAGEMENT PYP (P-2)

June-2012 (ii) Current ratio

(iii) Superquick ratio
5. Public Enterprise is defined as (iv) Quick ratio
1) An organisation run by joint efforts of Centre Arrange these ratios in sequence to reflect the
and State Governments.
liquidity in descending order.
2) An organisation which caters to the needs
1) (ii), (iv), (iii) and (i)
relating to public utilities.
3) An organisation in which capital is invested by 2) (i), (ii), (iv) and (iii)
public. 3) (iv), (ii), (iii) and (i)
4) An organisation owned and managed by 4) (iii), (iv), (i) and (ii)
public authorities for definite set of public 31. Which one is not an important objective of
purposes. Financial Management?
6. Match the items of List-I with the items of List-II 1) Profit Maximisation
and select the code of correct matching: 2) Wealth Maximisation
List–I List-II 3) Value Maximisation
(i) Measurement (a) Accrues to the
4) Maximisation of social benefits
of income equity of owners
(ii) Recognition (b) Recognition of 32. Which one refers to cash inflow under payback
of expense revenue period method?
(iii) Basis of (c) Matching revenue 1) Cash flow before depreciation and taxes
realization with expenses 2) Cash flow after depreciation and taxes
(iv) Identification (d) Accounting period 3) Cash flow after depreciation but before taxes
of revenue 4) Cash flow before depreciations and after taxes
Codes: 33. The concept of present value is based on the:
(i) (ii) (iii) (iv) 1) Principle of compounding
(1) (a) (b) (c) (d) 2) Principle of discounting
(2) (b) (a) (c) (d)
3) (1) and (2)
(3) (c) (d) (a) (b)
(4) (c) (d) (b) (a) 4) None of the above
34. Cost of capital from all the sources of funds is
7. Consider the following items: called
(i) Debentures 1) Specific cost
(ii) Prepaid rent
2) Composite cost
(iii) Interest accrued
(iv) Bank overdraft 3) Implicit cost
Which of them are current liabilities? 4) Simple Average cost
35. Match the following with most suitable option:
1) (i), (ii), (iii) and (iv) List–I List-II
2) iv (a) Modigiliani- (i) Commercial papers
Miller
3) (ii), (iii) and (iv)
(b) Net Operating (ii) Working Capital
4) (i), (ii) and (iii) Income Management
9. (A) Assertion : Premium received on issues of Approach
shares is credited to share premium account but not (c) Short term (iii) Capital Structure
to Profit and Loss account. Money Market
(R) Reasoning : Since share premium is not a Instrument
trading profit, it is not distributed to shareholders. (d) Factoring (iv) Arbitrage
1) Both (A) and (R) are true but (R) is not correct Codes:
explanation to (A). (a) (b) (c) (d)
2) (A) is false but (R) is correct (1) (iv) (iii) (i) (ii)
3) Both (A) and (R) are true and (R) is correct (2) (iii) (iv) (i) (ii)
explanation of (A). (3) (iii) (ii) (i) (iv)
4) (A) is correct but (R) is false. (4) (iii) (ii) (iv) (i)
10. Consider the following:
(i) Basic defensive and interval ratio
DEC.-2012 ownership and
Free Enterprise.
31. Arrange the following steps involved in capital
(ii) Government (b) Capitalism
budgeting in order of their occurrence:
ownership and
i. Project selection
Central
ii. Project appraisal Authority.
iii. Project generation (iii) The market for (c) primary Market
iv. Follow up the sale and
v. Project execution purchase of
1) ii, iii, i, v, iv previously issued
2) iii, ii, i, v, iv securities
3) i, iii, ii, v, iv (iv) The Market for (d) Socialism
4) i, ii, iii, v, iv new long term
32. Which method does not consider he time value of capital.
money? Codes:
1) Net Present Value (i) (ii) (iii) (iv)
2) Internal Rate of Return (1) (b) (d) (a) (c)
3) Average Rate of Return (2) (a) (b) (c) (d)
4) Profitability Index (3) (b) (d) (c) (a)
33. Which formula is used to measure the degree of (4) (a) (c) (b) (d)
Operating leverage? 31. Positive NPV in project appraised by a firm may
1) not occur an account of
1) Economics of scale
2) 2) Market reach
3) Product differentiation
3) 4) Intangible benefits
32. In case the projects are divisible under capital
4) rationing an appropriate project appraisal methods
is
34. Which one is more appropriate for cost of retained 1) Net Present Value Method
earnings? 2) Profitability Index Method
1) Weighted Average Cost of Capital. 3) Internal Rate of Return Method
2) Opportunity cost to the firm. 4) Payback Period Method
3) Expected rate of return by the investor. 33. Permanent working capital is generally financed
4) None of the above through
35. Match the following which the most suitable 1) Long term Capital Funds
option 2) Government Assistance
List–I List-II 3) Internal Financing
a. Modigliani- 1. Commercial paper 4) Short term loans from Banks
Miller approach 49. If the spot price is higher than the strike price in a
b. Net Operating 2. Working capital call option, it is referred to as
income approach 1) At-the money
c. Short term 3. Capital structure 2) In-the money
money market 3) Out-of-the money
instrument 4) Premium
d. Factoring 4. Arbitrage DEC.-2013
Codes:
31. Which one of the following is not among the
(a) (b) (c) (d) assumptions of the Modigliani Miller model?
(1) 4 3 1 2 1) Perfect capital market
(2) 3 4 1 2 2) Equivalent risk classes
(3) 3 2 1 4 3) Unity for dividend payout ratio
(4) 4 2 3 1 4) Absence of taxes
32. The most suitable coverage ratio for deciding the
June-2013
debt capacity of a firm is
3. Match the items of List-I with the items of List-II 1) Interest Coverage Ratio
and select the correct answer: 2) Cash Flow Coverage Ratio
List–I List-II 3) Debt Service Coverage Ratio
(i) Private (a) Secondary Market 4) Fixed Assets Coverage Ratio
33. Which one of the following is the most popular 31. Assertion (A) : Weighted average cost of capital
method for estimating the cost of equity? should be used as a hurdle rate for accepting or
1) Capital asset pricing model rejecting capital budgeting proposal
2) Dividend yield method Reason (R) : It is because by financing in the
3) Gordon’s dividend discount model proportions specified and accepting the project,
4) Earnings yield method yielding more than the weighted average required
34. Which one of the following is not the internal factor
return, the firm is able to increase the market price
affecting the weighted average cost of capital of a
firm? of its stock.
1) Investment policy of the firm 1) Both (A) and (R) are false.
2) Capital structure of the firm 2) Both (A) and (R) are true.
3) Dividend policy followed 3) (A) is true, while (R) is false
4) market risk premium for the firm 4) (A) is false, while (R) is true.
35. Most common approach for analysing the capital 32. A firm wants to know the Degree operating
structure of a firm is Leverage (DOL) with the following information:
1) Ratio Analysis Current level of sales : 6000 units
2) Cash Flow Analysis Break-even point sales : 4000 units
3) Comparative Analysis What would be the DOL?
4) Leverage Analysis 1) 1.50
48. The participants who take advantage of different 2) 0.67
exchange rates in different market are 3) 3.00
1) Speculators 4) None of the above
2) Arbitrageurs 33. Assertion (A) : When two or more investment
3) Hedgers
proposals are mutually exclusive, ranking the
4) Investors
proposals on the basis of IRR, NPV and PI method
49. Assertion (A): The liability of the option buyer is
limited in the currency options market. may give contradictory results.
Reason (R) : Option buyer need not exercise the Reason (R) : The contradictory results in the
option if the exchange rate is not favourable for ranking are due to differing dimensions relating to
him. the scale of investment, cash flow patterns and
Codes: project lives.
1) (R) is correct and (A) is wrong
Indicate the correct answer:
2) (A) is correct and (R) is wrong
3) Both (A) and (R) are correct. 1) Both (A) and (R) are true.
4) Both (A) and (R) are wrong. 2) Both (A) and (R) is a necessary condition, but
June-2014 not a sufficient condition.
3) Both (A) and (R) are false.
9. Which one is not a feature of budgetary control? 4) Both (A) and (R) are rue and (R) explains the
1) A tool for management control reason sufficiently.
2) An instrument in delegation and authority 34. Which one of the following assumptions is not
3) An instrument for evaluating the overall covered in the Walter’s Model of the dividend
performance. policy?
4) A statement of budget and forecasts. 1) All financing s done through retained
10. The Debt-Equity Ratio of a company is 2 : 1. In this earnings.
relation, match the following: 2) Firms business risk does not change due to
List–I List-II additional investments
(a) Issue of equit6y 1. No change on the 3) The firm has an infinite life.
shares ratio 4) They key variables like EPS and DPS keep on
(b) Cash received 2. Reduce the ratio changing.
from debtors 35. Which one of the following emphasizes the
(c) Redemption of 3. No change on the qualitative aspects of working capital management?
debentures ratio 1) Gross working capital
(d) Purchased goods 4. Reduce the ratio 2) Quick working capital
on credit 3) Net working capital
Codes: 4) None of the above
(a) (b) (c) (d)
(1) 1 2 3 4 DEC.-2014
(2) 2 3 4 1
(3) 1 3 4 2 9. “Make sufficient provisions for future losses, but do
(4) 2 4 1 3 not anticipate future profits” This statement is in
accordance to the concept of:
 1) Matching (3) iii iv ii i
2) Objectivity (4) ii i iv iii
3) Conservation
4) Materiality 35. Dividend capitalisation model was developed by
10. When a firm is dissolved, profit or loss on 1) Ezra Solomon
realisation is shared by the partners 2) Myron J. Gordon
1) Equal 3) Jame E. Walter
2) In the ratio of their capital balances 4) Merton H. Miller and Franco Modigliani
3) In the profit sharing ratio June-2015
4) In the ratio laid down in Garner Vs. Murray 1. The world’s first electronic stock market is:
31. Statement – I : Capital structure refers to 1) KOSPI
composition of long term funds. 2) Nikkie
Statement – II : These include equity share capital, 3) NASDAQ
preference share capital, debentures, all debts and 4) Dow Jones
all reserves. 3. Examine the following statements and choose the
1) Both Statements I and II are correct. correct code:
Assertion (A): American style option, compared to
2) Statement I is correct but Statement II is
European style, provides more freedom to option
incorrect.
holders in exercising the option.
3) Statement I is incorrect but Statement II is
Reason (R): American style option can be exercised
correct
only at a specified date which is generally the
4) Both statements are incorrect
32. Match the items of the following two lists and expiration date.
suggest the correct code: Codes:
1) Both (A) and (R) are correct.
List–I List-II
2) Both (A) and (R) are wrong.
(a) Pay-back Rate (i) Discounted Cash
3) (A) is correct, but (R) is wrong.
of Return Flow Technique
4) (A) is not correct, but (R) is correct.
(b) Internal Rate of (ii) Compounded values
4. From the statements given below, identify the
Return of investments and
returns correct code:
Statement I: The key strategy behind acquiring a
(c) Benefit Cost (iii) Crude method for
company is to create share holder’s value.
Ratio project evaluation
Statement II: Conglomeration is a merger between
(d) Net Terminal (iv) Varying sized
two companies that have common business areas.
Value Method projects evaluation
Statement III: MRTP Act got replaced by the
Codes:
Competition Act, 2002 in India.
(a) (b) (c) (d) Codes:
(1) ii iii i iv 1) All the three statements are correct.
(2) iii i iv ii 2) Statements I and II only are correct.
(3) i iv ii iii 3) Statements I and III only are correct.
(4) iv ii iii i 4) Statement II only is correct.
33. Match the items of the following two lists and 22. Assertion (A): Management is mainly associated
suggest the correct code: with economic affairs.
List–I List-II Reasoning (R): Big business houses are the result of
(a) Constant average (i) Economic effective financial management.
cost over a range of capacity Codes:
output 1) (A) is correct and (R) is the right explanation of
(b) Average cost (ii) Reserve (A).
becomes constant capacity 2) Both (A) and (R) are correct but (R) is not the
momentarily right explanation of (A).
(c) Normal average cost (iii) Production and 3) (A) is incorrect but (R) is correct in isolation.
is a U-shaped curve Managerial 4) Both (A) and (R) are incorrect.
cost effects
(d) Modern Long-run (iv) Economics and 31. In capital budgeting, the term capital rationing
average cost is L- Diseconomies implies:
shaped 1) that no retained earnings are available
Codes: 2) that limited funds are available for investment
(a) (b) (c) (d) 3) that no external funds can be raised
(1) i ii iii iv 4) that no fresh investment is required in current
(2) ii iii iv i year
32. In certainty equivalent approach, adjusted cash flows 1) It is simply a method of cost recovery and not of
are discounted at: profitability.
1) Accounting Rate of Return 2) It does not consider the time value of money.
2) Internal Rate of Return 3) It does not consider the risk associated with the
3) Hurdle Rate projects.
4) Risk Free Rate 4) It is very difficult to calculate.
33. Combined leverage is calculated as: 32. Which of the following is not a source of credit
1) Operating Leverage + Financial Leverage information of prospective customers?
2) Operating Leverage – Financial Leverage 1) Letter of credit
3) Operating Leverage × Financial Leverage 2) Bank Reference
4) Operating Leverage ÷ Financial Leverage 3) Trade Enquiry
34. Which of the following is not true with reference to 4) Credit Bureau
capital budgeting? 33. The portion of earnings which is distributed among
1) Capital budgeting is related to asset replacement shareholders in the form of dividend is called
decisions. 1) Proprietary Ratio
2) Cost of capital is equal to minimum required 2) Earnings-yield Ratio
return. 3) Payout Ratio
3) Existing investment in a project is not treated as 4) Retention Ratio
sunk cost. 34. Select the correct code regarding motives for holding
4) Timing of cash flows is relevant. inventories by firms:
1. Transaction motive
DEC.-2015 2. Environmental motive
3. Precautionary motive
31. The term ‘capital structure’ implies: 4. Speculative motive
1) Share Capital + Reserves + Long-Term Debts 5. Competitive motive
2) Share Capital + Long and Short-Term Debts Codes:
3) Share Capital + Long-Term Debts
4) Equity and Preference Share Capital 1) 1, 2, 3, 4
32. A company has issued 10 percent perpetual debt of 2) 1, 2, 4, 5
`1 lac at 5 percent premium. If tax rate is 30 percent, 3) 1, 4, 5
then the cost of debt will be: 4) 1, 3, 4
1) 10 percent 35. Which of the following formulae is related to
2) 15 percent operating leverage?
3) 6.66 percent 1)
4) 8.21 percent
33. “Dividend is no relevant in determining the valueof 2)
the company”. Who among the following held this
3)
opinion?
1) J.E. Walter 4) All of the above
2) Ezra Soloman 39. Match the items of List-I with List-II and select the
3) Modigliani-Miller correct code:
4) M.J. Gordon List-I List-II
A. Golden 1. The right to purchase a
35. Financial Leverage is measured by: parachutes stated number of shares of
EBIT a company stock at
1) today’s price at some time
EAT
in the future.
EBIT B. Gain sharing 2. An incentive plan that
2)
EBT engages employees in a
EAIT common effort to achieve
3) productivity objectives
EBT
and share the gains.
C
4) C. Stock-option 3. Payments companies
EBIT make in connection with a
July-2016 change in ownership or
control of a company
31. Which of the following is not a feature of payback D. Annual 4. Plans designed to motivate
period method? bonus short term performance of
managers and are tried to
 company profitability. 1) Capital budgeting is related to asset replacement
decisions.
2) Cost of capital is equal to minimum required rate
Codes: of return.
A B C D 3) Timing of cash flows is relevant.
(1) 3 1 2 4 4) Existing investment in a project is not treated as
(2) 1 2 3 4 sunk cost.
(3) 2 3 1 4 35. Which of the following statements is not correct?
(4) 3 2 1 4 1) The cost of capital is required rate of return to
ascertain the value of the firm.
44. Match the items of Column-I with the items in 2) Different sources of funds have a specific cost of
Column-II and suggest the correct code: capital related to that source only.
Column-I Column-II 3) Cost of capital does not comprise any risk
A. Interbank call market 1. Money market premium.
B. Commercial Bills 2. Promissory note 4) Cost of capital is basic data for NPV technique.
C. Commercial paper 3. Short-term
market maturity November-2017
D. Treasury bills 4. Government 31. Which of the following statements is false?
papers 1) The opportunity cost of an input is considered in
capital budgeting
2) Capital budgeting decisions are reversible in
Codes: nature.
A B C D 3) Cash flows and accounting profit different
(1) 1 2 4 3 4) An expansion decision is capital budgeting
(2) 3 1 2 4 decision
(3) 1 3 4 2 32. Match the items of List-I with List-II and indicate the
(4) 4 3 2 1 correct code:
List-I List-II
Jan.-2017 (a) ABC Analysis (i) Dividend Decision
10. Under the yield method of valuation of equity share (b) Walter Model (ii) Capital Budgeting
capital, if for an equity share of Rs. 50, the normal Decision
(c) Capital Rationing (iii) Capital Structure
rate of return is 10% and expected rate of return is
Decision
5%, then the value of an equity share will be.
1) Rs. 25 (d) Net Operating (iv) Working Capital
2) Rs. 40 Income Approach Management
3) Rs. 50 Decision
4) Rs. 100 Code
32. Assertion (A) : The primary motive of a company in
A B C D
using financial leverage is to magnify
shareholder’s return under favourable economic (1) i iii ii iv
conditions. (2) ii i iii iv
Reason (R) : To magnify shareholder’s return fixed (3) iv i ii iii
charges funds can be obtained at a cost higher
(4) iii i ii iv
than the firm’s rate of return on net assets.
Codes : 33. Main objective of employing Financial leverage is
1) (A) is correct and (R) is the correct explanation to:
of (A). 1) Reduce the risk associated with profits
2) (A) is correct, but (R) is wrong. 2) Maintain the stability in profits
3) (R) is correct, but (A) is wrong. 3) Decrease the cost of debt capital
4) Both (A) and (B) are wrong. 4) Magnify the return on equity share capital
33. Debt financing is a cheaper source of finance 34. Which one of the following is not a method of
because of: calculating cost of equity capital?
(1) Time value of money 1) Dividend yield method
(2) Rate of interest 2) Dividend yield plus growth method
(3) Tax deductibility of interest 3) Yield to maturity method
(4) Dividends are not payable to lenders 4) Earnings yield method
34. Which of the following is not true with reference to 35. Which one of the following equates the present value
capital budgeting? of each out flows and the present value of expected
cash inflows from a project.
 1) Net Present value 4) ‘Bird-in-the-hand theory’ in reference to
2) Internal Rate of Return dividend decision has been developed by
3) Payback period Myron Gordon.
4) Accounting Rate of Return

July-2018
43. Which of the following is not an approach to the
Capital Structure ?
1) Gross Profit Approach
2) Net Operating Income Approach
3) Net Income Approach
4) Modigliani and Miller Approach
44. Which one of the following methods of Capital
Budgeting assumes that cash-inflows are reinvested
at the project’s rate of return?
1) Net Present Value
2) Accounting Rate of Return
3) Internal Rate of Return
4) Discounted Pay Back Period
45. Cost of Equity Share Capital is more than cost of
Debt because:
1) Equity shares are not easily saleable.
2) Equity shares do not provide the fixed dividend
rate.
3) Generally the face value of equity shares is less
than the face value of debentures.
4) Equity shares have high risk than debts.
46. Negative Net Working Capital implies that :
1) Long-term funds have been used for fixed
assets.
2) Short-term funds have been used for fixed
assets.
3) Long-term funds have been used for current
assets.
4) Short-term funds have been used for current
assets.
47. Which of the following is an implicit cost of
increasing proportion of debt of a company?
1) P.E. Ratio of the company would increase.
2) Rate of return of the company would decrease.
3) Tax-shield would not be available on new
debts.
4) Equity shareholders would demand higher
return.
48. Profitability Index of a Project is the ratio of present
value of cash inflows to:
1) Total cash inflows
2) Total cash outflows
3) Present value of cash outflows
4) Initial cost minus Depreciation
49. Which one of the following statements is false?
1) Effective dividend policy is an important tool to
achieve the goal of wealth maximisation.
2) According to Walter, the optimal payout ratio
for a growth firm is 100%.
3) MM model asserts that the value of the firm is
not affected whether the firm pays dividend or
not.
 ASTRAL EDUCATION
COMMERCE (EM) FINANCIAL MANAGMENT PYP (P-2)

ANSWER KEYS
JUNE-2012
5 4 6 4 7 2 9 3 10 1 31 4 32 4 33 2 34 2 35 1

DEC.-2012
31 2 32 3 33 2 34 2 35 1

JUNE-2013
3 1 31 4 32 2 33 1 49 2

DEC.-2013
31 3 32 2 33 1 34 4 35 3 48 2 49 3

JUNE-2014
9 4 10 2 31 2 32 3 33 2 34 4 35 3

DEC.-2014
9 3 10 3 31 2 32 2 33 3 35 2

JUNE-2015
1 3 3 3 4 3 22 3 31 2 32 4 33 3 34 3

DEC.-2015
31 1 32 3 33 3 35 2

JULY-2016
31 4 32 1 33 3 34 4 35 4 39 4 44 2

JAN.-2017
10 1 32 2 33 3 34 4 35 3

NOV.-2017
31 2 32 3 33 4 34 3 35 2

JULY-2018
43 1 44 3 45 4 46 2 47 4 48 3 49 2
 ASTRAL EDUCATION
COMMERCE (E.M) FINANCIAL MANAGEMENT PYP (P-3)

June-2012 55. Match the following :

2. What does a high payout ratio indicate? List–I List-II
1) A High Earning Per Share (EPS) (i) Factoring (A) Cash Management
2) The management is not ploughing back services
enough profit. (ii) Economic Order (B) Receivable
3) The management is ploughing back profit. Quantity
4) The company is earning high profit. (iii) Commercial (C) Inventory
11. Match the of List-I with List-II and select the paper management
correct answer using the codes given below the (D) Working Capital
lists: Financing
List–I List-II Codes:
(A) Goodwill of a (i) Current liability (i) (ii) (iii)
company 1) (A) (C) (B)
(B) Overdraft (ii) Fixed Assets 2) (C) (B) (A)
(C) Preliminary (iii) Reserves and 3) (B) (C) (D)
Expenses Surplus 4) (B) (A) (C)
(D) Premium on (iv) Fictitious Assets 65. Assertion (A) : The Treasury Manager uses the
Issue of Shares derivatives in the Bond market as well as in Forex
Codes: market.
(A) (B) (C) (D) Reason (R) : It helps risk coverage.
1) (ii) (i) (iv) (iii) 1) Both (A) and (R) are false.
2) (i) (ii) (iv) (iii) 2) Both (A) and (R) is false.
3) (i) (ii) (iv) (iii) 3) (A) is true, but (R) is false.
4) (ii) (i) (iv) (iii) 4) (R) is true, but (A) is false.
51. The conflicts in project ranking in capital budgeting 66. Factoring and forfeiting have not taken off in the
as per NPV and IRR may arise because of Indian economy due to lack of expertise and
1) Size disparity experience. One is not included in the factoring
2) Time disparity services rendered.
3) Life disparity 1) Purchase of book debts and receivables.
4) All the above 2) Prepayment of debts partially or fully
52. The degree of financial leverage reflects the 3) Giving advice
responsiveness of 4) Covering the credit risk of the suppliers.
1) Operating income to changes in total revenue DEC.-2012
2) EPS to changes in EBIT
45. Which one of the following is not a source of
3) EPS to changes in total revenue
conflict in project ranking in capital budgeting
4) None of the above
decision as per NPV and IRR?
53. The overall capitalisation rate and the cost of debt 1) Independent Investment Project
remain constant for all degrees of financial leverage 2) No Capital Budget Constraints
is advocated by 3) No time disparity
1) Traditional Approach 4) None of the above
2) Net Income Approach 52. The presence of fixed costs in the total cost
3) Net Operating Income Approach structure of a firm results into
4) M-M-Approach 1) Financial leverage
54. Which of the following is not included in the 2) Operating leverage
3) Super leverage
assumptions on which Myron Gordon proposed a
4) None of the above
model on stock valuation? 53. “The cost of capital declines when the degree of
1) Retained earnings, the only source of financial leverage increase.” Who advocated it?
financing 1) Net operating income approach
2) Finite life of the firm 2) net income approach
3) Taxes do not exist 3) Modigliani-Miller approach
4) Constant rate of return on firm’s investment. 4) Traditional approach
54. A view that the dividend policy of a firm has a 48. The transfer by a company of one or more of its
bearing o share valuation advocated by James E. business divisions to another newly set up company
Walter is based on which one of the following called
assumptions? 1) Demerger
1) Retained earnings is only source of financing. 2) Merger
2) Cost of capital does not remain constant. 3) Equity Carve-out
3) Return on investment fluctuates. 4) Disinvestment
4) All the above 49. What combination of the following factors in
55. Match the following: fluencies the working capital requirement?
List–I List-II I. Market Conditions
(A) Matching approach 1. Dividend Policy II. Production Policy
(B) Structural ratios 2. Inventory III. Firm’s goodwill
Management IV. Supply conditions
(C) Ordering quantity 3. Financing Codes:
Working Capital
(D) Bonus shares 4. Capital Structure 1) I, II and III
Codes: 2) II, III and IV
(A) (B) (C) (D) 3) I, III and IV
1) 1 2 3 4 4) I, II and IV
2) 3 4 1 2
3) 3 4 2 1 DEC.-2013
4) 2 1 3 4
12. Match the items of the following two lists:
June-2013 List–I List-II
(A) Zero-base Budgeting (i) Internal
43. Match the statements in List-I with dividend models Reconstruction
in List-II as follows: (B) Goodwill or Capital (ii) Earnings Per
List–I List-II Reserve Share
I Dividend 1 Traditional (C) Reduction of Capital (iii) Control of
Capitalisation Model Expenditure
Approach. (D) Basic & Diluted (iv) Business
II Dividend Policy 2 Gardon Model Combination
has a bearing on Codes:
the share valuation. (i) (ii) (iii) (iv)
III Stock Market 3 Walter Model 1) (C) (D) (B) (A)
places more weight 2) (D) (C) (A) (B)
on dividends than 3) (D) (A) (C) (B)
on retain earnings. 4) (C) (D) (A) (B)
IV Dividend Payout is 4 Modigliani and
13. Assertion (A) : Dividend paid out of pre-
irrelevant to the Miller Model
acquisition profit by the subsidiary company to the
value of the firm.
holding company is deducted from the cost of
Codes:
investment.
I II III IV Reason (R) : Dividend paid out of pre-acquisition
1) 2 3 1 4
profit by the subsidiary company should be treated
2) 1 2 4 3
3) 4 1 3 2 as a return of capital to the holding company.
4) 3 4 2 1 Which one of the following is correct?
44. Venture capital financing at starting stage is 1) Both (A) and (R) are correct.
generally not done through 2) (A) is correct, but (R) is wrong.
1) Debt instruments 3) (A) is wrong but (R) is correct
2) Deep discount bounds 4) Both (A) and (R) are wrong.
3) Equity shares 44. Mutually exclusive projects can be more accurately
4) Conditional loans ranked as per
47. The degree to which the returns of the two 1) Internal rate of return method
securities change together, is reflected by 2) Net Present Value Method
1) Correlation 3) Modified Internal Rate of Returns Method
2) Leverage 4) Accounting or Average Rate of Return
3) Covariance Method
4) Beta
45. Which one of the following does not constitute accelerating the financing
Standalone Risk Analysis? collection from the
1) Simulation Analysis customers
2) Break-even Analysis (D) Seeking financial (iv) Lock box system
3) Corporate Risk Analysis service to finance
4) Scenario Analysis on its debtors
46. Financial leverage in a firm is positively affected by balances
1) Intensity of tangible assets Codes:
2) Operating leverage (A) (B) (C) (D)
3) Profitability 1) (iv) (iii) (ii) (i)
4) Tax Rate 2) (iii) (ii) (iv) (i)
47. Which combination of the following two statement 3) (ii) (iv) (i) (iii)
(A) and (R) is correct. 4) (i) (ii) (iii) (iv)
Assertion (A) : The IRR of a project is the discount
32. Indicate the cost of equity capital, based on capital
rate which reduces its NPV to zero. asset pricing model, with the following information:
Beta coefficient – 1.40
Reason (R) : A project is worth accepting if the
Risk – free rate of interest – 9%
IRR exceeds the cost of capital
Expected Rate of Return on equity in the
Codes: market – 16%
1) 9.8%
1) (A) is right, but (R) is wrong. 2) 18%
2) Both (A) and (R) is correct 3) 18.8%
3) (A) is wrong, but (R) is correct. 4) 16%
4) Both (A) and (R) are wrong 33. The degree of super leverage would be calculated
48. Assertion (A) : A company should pay minimum by:
dividend to its shareholders. 1) Adding DOL (Degree of Operating Leverage)
Reason (R) : Dividends are heavily taxed than and DFL (Degree of Financial Leverage)
capital gains: 2) Dividing DOL with DFL
3) Multiplying DOL and DFL
Codes: 4) Subtracting DOL from DFL
34. Interim cash inflows are reinvested at a rate of
1) Both (A) and (R) are correct return equal to the internal rate of return is the built-
2) Both (A) and (R) are incorrect. in mechanism for
3) (A) is not correct, but (R) is correct. 1) Net Present Value Method
4) (A) is correct but (R) is wrong. 2) Internal Rate of Return Method
49. Dividend irrelevance hypothesis is implied in the 3) Profitability Index Method
1) Traditional Model 4) None of the above
2) Walter Model 35. Who formulated the following model for estimating
3) Gordon Model the market price of equity share?
4) M.M. Model
R
D+ (E − D)
June-2014 R
=
R
6. What is the underlying concept that support the
Where, = Market price of equity share
immediate recognition of an estimated loss?
1) Substance over form D = DPS
2) Consistency E = EPS
3) Matching E – D = Retained earnings per share
4) Prudence R = Internal rate of return on investment
31. Match the items of List-I with the items of List-II R = Cost of capital
List–I List-II 1) Modigliani- Miller
(A) Trade credit and (i) Maturity 2) Myron – Gordon
other payables that Financing 3) James E Walter
arise in the firm’s 4) Clarkson and Elliot
day today
53. Which of the following refers to a situation in
(B) Financing and asset (ii) Factoring
which the merger of companies results in over 25%
needs over time
of the market in the hands of the merged
(C) A tool for (iii) Spontaneous
companies?
 1) ‘Gateway’ condition June-2015
2) Restrictive practice 3. Following statements are related to futures contracts.
3) ‘Share of supply’ test Choose the statements that are not true:
4) ‘Asset’ test 1. Purchase of a futures contract is called short
69. Which one of the following is an internal hedging position.
technique? 2. Currency futures are traded on an exchange in
standardized from and in fixed quantity.
1) Leading
3. Default risk in futures contract is high compared
2) Netting
to forward contract.
3) Both (A) and (B) above Codes:
4) Swap 1) Only 1 and 2
2) Only 1 and 3
DEC.-2014 3) 1, 2 and 3
8. Return on Investment (RoI) is computed as 4) Only 2
1) Net Profit Ratio × Capital Turnover Ratio 31. Which of the following techniques for appraisal of
2) Operation Net Profit Ratio Shareholders Fund investment proposals are based on time value of
3) Net Profit / Sales money?
4) Cost of Sales / Capital Employed 1. Accounting Rate of Return
12. Secondary market intermediaries for corporate 2. Internal Rate of Return
securities in India are: 3. Profitability Index Method
I. Investors 4. Earnings Per Share
II. Jobbers Codes:
III. Brokers and Sub-brokers 1) 1 and 2
IV. Portfolio consultants 2) 2 and 3
Codes: 3) 1 and 4
4) 1, 2 and 4
1) I, II and III only 32. On the basis of the following information, what will
2) II, II and IV only be EBIT corresponding to financial indifference
3) II and III only point?
4) III and IV only Total capital outlay `60,00,000
13. The type o lease requiring an agreement between the Financing Plans
financier and lessor is known as 1. 100% Equity @ `10/- per share
1) Financial lease 2. Debt – equity ratio 2 : 1
2) Sale and lease back Rate of interest 18% p.a., corporate tax rate 40%
3) Leveraged lease 1) `10,00,000
4) Operating lease 2) `12,00,000
40. Underwriters of the security issues are required to 3) `10,80,000
1) Purchase the securities underwritten 4) `12,80,000
2) Work as agent of the company for marketing 33. Which one of the following assumptions is not
the securities included in the James E. Walter Valuation model?
3) Manage the issue of the securities 1) All financing by retained earnings only
4) Take up securities not subscribed y investors 2) No change in the key variables such as EPS and
44. Assertion (A) : Arbitrage keeps the cost of capital DPS
constant despite change in the capital structure: 3) The firm has finite life
Reason (R) : It ensure compensating inverse change 4) All earnings are either distributed as dividends
in cost of equity capital with a change in the cost of or invested internally immediately
debt capital. 34. Match the items of List-I with items of List-II and
Codes: choose the correct code:
1) Assertion (A) and Reason (R) both are correct List I List II
and (R) is correct explanation of (A). (Formulae) (Type of
2) Assertion (A) and Reason (R) are correct, but leverages)
(R) is not correct explanation of (A). A. Contributi on 1. Financial
3) Assertion (A) is correct, but Reason (R) is leverage
EBIT
incorrect. B. EBIT 2. Super-
4) Assertion (A) is not correct, but Reason (R) is leverage
Earnings before Tax (EBT)
correct.
C. Contributi on 3. Operation
leverage
EBT
 Codes 35. A firm with high operating leverage has:
A B C 1) Low fixed cost in its production process
1) 2 3 1 2) High variable cost in its production process
2) 1 2 3 3) High fixed cost in its production process
3) 3 2 1 4) Low variable cost in its production process
54. Consider the following characteristics:
4) 2 1 3 1. High risk high return opportunity
35. Statement I: Working capital leverage measures the 2. Small and medium size enterprise
responsiveness of Return on Equity for changes in 3. Private equity stakes in start-ups
current Assets. 4. Investment fund
Statement II: When the annual demand for an item The above attributes are found in:
is 3200 units, unit cost `6, inventory carrying 1) Mutual Funds
charges 25% p.a. and cost of one procurement `150, 2) Venture Capital Funds
the economic ordering quantity would be 700 units. 3) Qualified Institutional Buyers
Codes: 4) Domestic Institutional Investors
1) Both statements are correct 59. Industry boundaries are blurring at an incredible rate
2) Both statements are incorrect as companies are recognizing that the new
3) Statement I is correct and Statement II is opportunities lie at the intersection of two or more
incorrect industries, it is called:
4) Statement I is incorrect and Statement II is (a) Globalization
correct (b) Customization
52. X Ltd. goes into liquidation and a new company Z (c) Industry convergence
Ltd. purchases the business of X Ltd. It is a case of: (d) Acquisition
1) Amalgamation
2) Absorption July-2016
3) Internal reconstruction
4) External reconstruction 25. Sales of a firm are ` 74 lakh, variable cost ` 40 lakh,
54. In India, NIFTY and SENSEX are calculated on the fixed costs ` 8 lakh. Operating leverage of the firm
basis of: will be
1) Market capitalization 1) 1.48
2) Paid up capital 2) 1.78
3) Free-float market capitalization 3) 1.31
4) Authorized share capital 4) 2.42
55. Financial Instruments which are issued with 26. From the following techniques of capital budgeting
detachable warrants and are redeemable after certain decision, indicate the correct combination of
period is known as: discounting techniques:
1) Deep Discount Bonds 1. Profitability index
2) Secured Premium Notes 2. Net present value
3) Bunny Bonds 3. Accounting rate of return
4) Junk Bonds 4. Internal rate of return
Codes:
DEC.-2015 1) 1 2 3
31. From investor’s point of view, the cost of capital is: 2) 2 3 4
1) Interest Rate 3) 1 2 4
2) Market Value 4) 1 3 4
3) Yield of Capital Sacrifice 27. Insufficient working capital may result into which
4) Stock Exchange Value combination of the following?
32. Formula for net cash inflow of a project is: 1. Failures to adapt to changes.
1) Sales – Operating Expenses – Interest – Tax 2. Enhancement in credit-worthiness of the firm.
2) Sales – Operating Expenses 3. Reduced availability of trade and cash discounts.
3) Net Profit after tax + Depreciation 4. Reduced volume of sales.
4) Gross Profit + Depreciation Codes:
34. In case, cost of capital is 10%, EPS `10, IRR 8% and 1) 1 2 3 4
Retention Ratio is 60%, then the value of equity 2) 1 3 4
share as per Gordon’s Model will be: 3) 1 2 4
1) `100 4) 1 2 3
2) `87
28. Which combination of the following represents the
3) `90
assumptions of the Walter’s dividend model?
4) `77
1. The company has a very long or perpetual life.
 2. All earnings are either reinvested internally or Jan.-2017
distributed as dividend. 25. Assertion (A) : The important aspect of dividend
3. There is no floatation cost for the company. policy is to determine the amount of earnings to
4. Cost of capital of the company is constant. be distributed to shareholders and the amount to
Codes: be retained in the firm.
1) 1 2 3 Reasoning (R) : Dividend policy of the firm has its
2) 2 3 4 effect on both the long term financing and the
3) 1 2 4 wealth of shareholders.
4) 1 3 4 Codes :
1) (A) and (R) both the correct and (R) is the
42. Which of the following are the important features of correct explanation of (A).
option contracts? 2) (A) and (R) both are correct, but (R) is not the
1. Buyers of option have limited liability. correct explanation of (A).
2. Options have high degree of risk to option- 3) (A) is correct, but (R) is wrong.
writers. 4) (R) is correct, but (A) is wrong.
3. Options are exercisable only by buyers of 26. Match the items in List-I with items in List-II and
option. indicate the code of correct matching:
4. Buyers of option have all rights which are List-I List-II
available to equity shareholders of the concerned A. ABC Inventory i. Developing ancillary
companies. Control System units around the
Codes: manufacturing sites
and supplying parts to
1) 1, 2, 3 manufacturing units.
2) 1, 2, 3, 4 B. Just-in-time ii. Enables a company to
3) 1, 2, 4 (JIT) System easily track large items
4) 1, 3, 4 of inventory.
C. Out sourcing iii. It eliminates the
44. Match the items of List-I with those of List-II and System necessity of carrying
select the correct code: large inventories and
List-I List-II saves carrying cost.
A. High levered fund 1. Market risk D. Computerized iv. Tends to measure the
B. Increase in bank 2. Purchasing power Inventory significance of each
rate risk Control System item of inventories in
C. Inflation 3. Financial risk terms of its value.
D. Political instability 4. Interest rate risk Codes :
A B C D
1) ii iii i iv
Codes:
2) iv ii iii i
A B C D
3) iv iii i ii
1) 3 1 2 4
4) iii i ii iv
2) 1 3 4 2
27. In certainty-equivalent approach, risk adjusted cash
3) 3 4 2 1
flows are discounted at:
4) 2 3 1 4 1) Accounting Rate of Return
45. Which of the following are the instruments of money 2) Internal Rate of Return
market? 3) Hurdle Rate
1. Call money market 4) Risk-free Rate
2. Commercial bill market 28. ‘That personal leverage can replace corporate
3. Industrial securities market leverage’ is assumed by:
4. Short-term loans market 1) Traditional Approach
5. Treasury bill market 2) M M Model
Codes: 3) Net Income Approach
4) Net Operating Income Approach
1) 1, 2, 4, 5
41. Which of the following correctly depicts differences
2) 1, 2, 5 between a merger and an acquisition of stock?
3) 1, 2, 3, 4, 5 1) An acquisition of stock results in the total
4) 1, 2, 3, 4 absorption of a firm whereas a merger does not.
2) In case of a merger, the firm can deal directly
with the shareholders of the acquired firm but
not in the case of acquisition of stock.
 3) Shareholders of the acquired or target firm vote Index
by their response to a tender offer in an (C)Concentration (iii) Capital Structure
acquisition of stock but cast a formal vote in a Banking Planning
merger situation. (D) Lower Rate of (iv) Capital Budgeting
4) A formal vote by the acquire firm’s shareholders Return Decision
is required for an acquisition of stock but not for Codes
a merger. (A) (B) (C) (D)
46. Which of the following statement is correct? 1) (iii) (iv) (i) (ii)
1) The oldest stock exchange of India is OTCEI. 2) (iii) (iv) (ii) (i)
2) Sensex is an index number of 30 scrips. 3) (iv) (ii) (iii) (i)
3) In book-building process, the price of the
security is announced by the company. 4) (ii) (iii) (i) (iv)
4) Futures and options in shares are traded at all 27. Statement-I: In payback period method, the risk of
stock exchanges of India. the project is adjusted by lessening the target
47. Match the items of List-I (Developers) with the payback period.
items of List-II (Methods of measuring human Statement-II: Sensitivity Analysis helps in
assets) and indicate the correct code: calculation of net present value of the proposal.
List-I List-II Code:
A. Hekimian and i. Stochastic Rewards 1) Statement-I is correct, but statement-II is wrong
Zones Valuation Model 2) Statement-I is wrong, but statement-II is correct
B. Hermanson ii. Competence Bidding 3) Statement-I and statement-II, both are correct
Method 4) Statement-I and statement-II, both are wrong
C. R. Likert iii. Adjusted Discounted 28. Dividend irrelevance argument of MM Model is
Future Wages Model based on:
D. Flamholtz iv. Behavioural Variables 1) Hedging
Model 2) Issue of Debentures
Codes : 3) Liquidity
A B C D 4) Arbitrage
1) i ii iii iv 47. Which of the following are the motives of mergers?
2) ii iii iv i Indicate the correct code.
3) iv iii i ii (a) To gain the economies of scale.
4) iii iv ii i (b) To utilize under-utilised resources.
(c) To break the monopoly.
November-2017 (d) To reduce the tax liability.
8. Which one of the following statements is not true? Code:
1) (a), (c) and (d)
1) When there is one liquidation and one
2) (a), (b) and (d)
formation it is known as external construction
3) (b), (c) and (d)
2) Goodwill or Capital reserve arises only when
4) (a), (b) and (c)
the amalgamation is in the nature of merger
68. Identify the incorrect statements from the
3) Under the pooling of interest method, the
following:
transferee company incorporates the assets and
1) Broken-date contact is a full- month forward
liabilities of the transferor company at book
contract.
value
2) Currency arbitrage refers to making profit by
4) The vendor company transfers preliminary
buying, a currency cheap in one market and
expenses (at the time of absorption) to equity
selling it dear in the other market at a particular
shareholders’ account
point of time.
25. Operating Leverage and Financial Leverage of a
3) Currency Futures Market refers to organised
firm are 3 and 2, respectively. If sales increase by
foreign exchange market where a fixed amount
6%, then earnings before tax will rise by:
of currency is exchanged on a fixed maturity
1) 18%
date in the pit.
2) 12%
4) Currency Options Market refers to market for
3) 36%
the exchange of currency where the option
4) 30%
buyer enjoys the privilege of not exercising the
26. Match the items of List-I with those of List-II and
indicate the correct code: option if the rate is not favourable.
List I List II
(A) Net Income (i) Working Capital
Approach Management
(B) Profitability (ii) Over-capitalisation
 ASTRAL EDUCATION
COMMERCE (EM) FINANCIAL MANAGMENT PYP (P-3)

ANSWER KEYS
JUNE-2012
2 2 11 1 51 4 52 2 53 3 54 2 55 3 65 2 66 3

DEC.-2012
45 4 52 2 53 2 54 1 55 3

JUNE-2013
43 1 44 2 47 3 48 1 49 4

DEC.-2013
12 4 13 1 44 2 45 3 46 1 47 2 48 1 49 4

JUNE-2014
6 4 31 3 32 3 33 3 34 2 35 3 53 3 69 3

DEC.-2014
8 1 12 2 13 3 40 4 44 1

JUNE-2015
3 2 31 2 32 3 33 3 34 * 35 2 52 4 54 3 55 2

DEC.-2015
31 3 32 3 34 4 35 3 54 2 59 3

JULY-2016
25 3 26 3 27 2 28 3 42 1 44 3 45 1

JAN.-2017
25 1 26 3 27 4 28 2 41 3 46 2 47 2

NOV.-2017
8 2 25 3 26 1 27 1 28 4 47 2 68 1
 ASTRAL EDUCATION
COMMERCE (E.M.) HUMAN RESOURCES MANAGEMENT PYP (P-2)

June-2012 39. On which of the following at the initial state, the

Indian IT companies relaying more for getting good
4. Out of the following, which are four dimensions of IT professionals?
Human Development Index? 1) Job Portals
(i) Life Expectancy
2) Placement Agencies
(ii) Literacy Level
(iii) Success Rate of Marriages 3) Campus Placement
(iv) Standard of Living 4) All of the above
(v) Crime Rate 40. Statement (i) : Labour always get a major share of
(vi) Corruption Level productivity gains.
(vii) Economic Entitlement Statement (ii) : Partial stoppage of work by
(viii) Foreign Visits workers amounts to strike.
Codes: 1) Statement (i) is true but (ii) is false.
1) (i), (ii), (vi) and (viii) 2) Statement (ii) is true but (i) is false
2) (i), (ii), (iv) and (vii)
3) (ii), (iii), (vi) and (vii) 3) Both statements are true.
4) (iii), (v), (vii) and (viii) 4) Both statements are false.
36. Which four are the factors influencing the Human DEC.-2012
Resource Management of an organization? 24. Which among the following are parts of job
(i) Size of workforce description?
(ii) Employee-Expectations i. Duties performed
(iii) Composition of workforce ii. Job summary
(iv) Political influence iii. Job identification
(v) Change in technology. iv. Supervision given
v. Delegation of authority
1) (i), (ii), (iii) and (iv)
1) i, ii, iii and iv
2) (i), (ii), (iii) and (v) 2) ii, iii, iv and v
3) (i), (ii), (iv) and (v) 3) i, iii, iv and v
4) (i), (iii), (iv) and (v) 4) i, ii, iii and v
37. Assertion (A) : One can not be sure about the 29. Which research includes all type researches into
quality of appraisal on the basis of length of human motives when it refers to qualitative
service. research designed to uncover the consumer’s
Reason (R) : Initial appraisal and promotional subconciousness or hidden motivations?
appraisal are done separately and differently since 1) Motivational Research
2) Marketing Research
the length of service is different.
3) Managerial Research
4) Price Research
1) (R) is correct but (A) is not correct
36. During which plan was the National Apprenticeship
2) (A) is correct but (R) is not correct Training Scheme introduced?
3) (A) and (R) both are correct 1) 1st Five Year Plan
4) (A) and (R) both are not correct 2) 2nd Five Year Plan
38. Which of the following are covered under the scope 3) 4th Five Year Plan
of Human Resource Management? 4) Annual Plans
(i) Forecasting Human Resource Needs 38. Arrange the following staffing
(ii) Replacement Planning i. Determining sources of Personnel supply.
(iii) Human Resource Dynamics ii. Preparing personnel specifications.
iii. Selection of personnel specifications.
(iv) Human Resource Development Planning
iv. Determining personnel characteristics.
(v) Human Resource Audit 39. Which among the following is not a voluntary
1) (i), (iii), (v) method for prevention and settlement of disputes?
2) (i), (ii), (iii), (iv) 1) Collective bargaining
3) (iii), (v) 2) Standing orders
4) (iii), (ii), (iii), (iv), (v) 3) Joint Consultation.
4) Works Committee
40. Statement – I : It is no better to pay employees for (i) Coaching
little than to pay too-much. (ii) Vestibule training
Statement – II : Competent employees will remain (iii) Demonstration
competent forever. (iv) Role-playing
1) Statement I is true, but II is false (v) Apprenticeship training
2) Statement II is true, but I is false Select the right answer from the following codes:
3) Both Statements I and II are true 1) (i), (ii), (iii), (iv)
4) Both Statement I and II are false 2) (i), (iii), (iv)
June-2013 3) (ii), (iii), (iv)
36. Which of the following is not included in the model 4) (i), (ii), (iii), (iv), (v)
39. The idea that manager tends to be promoted to the
of the systems approach to Human Resource
level of his incompetence is referred to as
Management?
1) The advancement principle
1) Human Resource Planning 2) The Parkinson’s law
2) Recruitment and Selection 3) The Peter principle
3) Performance appraisal 4) The job design principle
4) Departmentation 40. Assertion (A) : The emphasis in industrial
37. It is generally easy to measure the performance of psychology has shifted from the studies of the
the isolated individual and the physical environment to
1) Industrial Relations Manager the consideration of motivation and morale
2) Research and Development Manager Reason (R) A motivated employee with a high
3) Sales person morale will always give high productivity
4) All of the above 1) Both (A) and (R) are correct, and (R) is the
38. Which one of the following is not a monitory right explanation of (A)
incentive to sales people? 2) (A) is the correct, but (R) is not correct.
1) Bonus 3) Both (A) and (R) are incorrect.
2) Staff meeting 4) Both (A) and (R) are correct, but (R) is not the
3) Travelling allowance right explanation of (A)
4) Both (2) and (3) June-2014
39. Statement (I) : Sound industrial relations are
36. Which of the following training methods exposes
essential to achieve individual, team goals and
the newly recruited employee to the various
organizational goals.
business functions, divisions and departments?
Statement (ii) : Congenial labour management
1) Orientation
relations create an atmosphere of harmony and low 2) Vestibule Training
rate of absenteeism. 3) Transition Analysis
1) Statement (i) is true, but (ii) is false 4) Role playing
2) Statement (ii) is true, but (i) is false 38. Which was closely associated with industrial
3) Both statements are true. relations in India?
4) Both statements are false. 1) B. Kurien
40. Out of the following, which are the schemes of 2) Gadgil
Social Security? 3) V.V. Giri
(i) Provident Fund Scheme 4) Vinoba Bhave
(ii) Health Insurance Scheme 39. Under the Trade Union Act 1926, how many
(iii) Job Guarantee Scheme minimum number of members are required for a
(iv) maternity Benefit Scheme trade union to be registered?
(v) Merit Promotion Scheme 1) 5
(vi) Compulsory and Voluntary Social Insurance 2) 7
Scheme 3) 9
(vii) Child Insurance Scheme 4) 11
Codes: 40. The idea that a manager tends to be promoted to a
level of his incompetence is referred to as
1) (i), (ii), (iv) and (vi) 1) The advancement principle
2) (ii), (i), (v) and (vii) 2) The Paul principle
3) (iii), (v), (iv) and (vi)
3) The Peter principle
4) (iv), (vii), (iii) and (iii)
4) The job design Principle
DEC.-2013
DEC.-2014
38. Which of the following are methods of on-the job
1. The responsibility of the organization to the
training?
workers includes:
 (i) The payment of fair wages Codes :
(ii) Arrangement of proper training and education (a) (b) (c) (d)
of the workers (1) i ii iii iv
(iii) The installment of an efficient grievance (2) iii iv ii i
handling system (3) iii iv i ii
(iv) Welfare of family members (4) iv iii ii i
(v) The provision of the best possible working 39. Match the items of the following tow list and suggest
conditions . the correct code:
identify the correct combination: List-I List-II
(a) AITUC (i) Indian National congress
1) (i), (ii), (iii) and (v) (b) BMS (ii) Socialists
2) (ii), (iii), (iv) and (v) (c) INTUC (iii) Rashtriya Swayamsevak
3) (i), (ii), (iii) and (iv) Sangh
4) (i), (iii), (iv) and (v) (d) CITU (iv) Communist Part of India
2. Match the items of List-I with List-II Codes :
List–I List-II (a) (b) (c) (d)
1. Industries Development (a) 1974 (1) iv iii ii i
Regulation Act (2) iv i ii iii
2. Import and Export Control (b) 1948 (3) iv iii i ii
Act (4) iv i iii ii
3. Foreign Exchange (c) 1951
Management Act
June-2015
4. Factories Act (d) 1999
36. Which of the following is not a basic objective of
Codes:
HRM?
(a) (b) (c) (d) 1) To attract HR into the organisation
(1) i iii iv ii 2) To develop and motivate HR for better
(2) iii i ii iv performance
(3) iii i iv ii 3) To have the reward and punishment system for
(4) iii iv ii i HR
4) To integrate and maintain HR in the organisation
36. The process of narrowing a large number of 37. What is ‘gate hiring’?
candidates to a smaller field is called 1) To select people who approach on their own for
1) Rushing employment in the organisation.
2) Recruitment 2) To select people who are recommended by the
3) Selection employees.
4) Enrollment 3) To select people from public employment
37. According to which theory, people are motivated to exchanges.
the extent to which they expect that their actions will 4) To select people supplied by labour contractors.
help in achievement of goal? 38. Matching essential managers and essential positions
1) Vroom's Vector Valence Theory is a step in the process of:
2) Need Theory 1) Career Cycle
3) Z Theory 2) Succession Planning
4) X Theory 3) Career Planning
38. Match the items of the following tow list and suggest 4) Career Stages
the correct code: 39. The barriers to effective performance appraisal are:
List-I List-II 1. Psychological blocks of managers
(a) Getting (i) Dale yoder 2. Faulty assumptions of the parties concerned
Effective 3. Technical pitfalls
Leadership in 4. Faulty written communications
the Industrial Codes:
organization 1) All are correct.
(b) The nature of (ii) Alford and Beatty 2) Only 2 and 3 are correct.
Leadership, 3) Only 1 and 2 are correct.
organization and 4) Only 1, 2 and 3 are correct.
management 40. Who has developed the ‘Systems Approach’ of
(c) Industrial (iii) Dougla McGregor industrial relations?
management 1) John Dunlop
(d) Personnel (iv) Chester I. Bernare 2) Garry S. Becker
Management 3) Michael J. Jucius
 4) Edwin B. Flippo 38. Examine the following statements and choose the
DEC.-2015 correct code:
36. Which of the following a key role of HR Manager as Assertion (A) : Human Resource planning must
defined by Ulrich et al (2009)? always be seen within the strategy making context.
1) Personnel Aministrator Reason (R) : Human Resource planning process
2) Business Ally
removed from the realities of the business will be a
3) Payroll Advisor
4) Organisational Geographer waste of time.
39. The internal factors affecting the wage mix include: Codes:
A. Relative worth of the job 1) Both (A) and (R) are correct.
B. Area wage rates 2) Both (A) and (R) are wrong.
C. Employer’s ability to pay 3) (A) is correct, but (R) is wrong.
D. Manpower market conditions 4) (A) is not correct, but (R) is correct
Codes: Jan.-2017
1) A, B and C 28. Consider the following statements relating to
2) A and C planning and find out which of the following are
3) B, C and D correct :
4) All of the above Statement I : The operating personnel should not be
40. Match the items of List-I with the items of List-II: associated with the preparation of the budget.
List I List II Statement II : A programme indicates the principal
A. Giri 1. The utility of non-violence operations to be carried out to accomplish a work.
Approach as the means of conflict Statement III : Under MBO technique, the Managers
resolution. should be provided with a freehand to laydown the
B. Industrial 2. Organizations are made up objectives.
Sociology of people and the success of Codes :
Approach management lies in its 1) Only Statement I is correct
dealing with these people. 2) Only Statement II is correct
C. Gandhian 3. Voluntary negotiations 3) Only Statement III is correct
Approach between employers and 4) Only Statement I and III are correct.
employees are a means of 36. Which of the following is not the quality of human
settling disputes. resources in any organization?
D. Human 4. Investigating the underlying 1) Their behaviour to stimuli is often inconsistent
Relations trends and patterns in the and unpredictable.
Approach cause and effect of 2) They depreciate with passage of time in terms of
industrial disputes. skills.
Codes 3) They are heterogeneous.
A B C D 4) Retaining qualified human resources is a
(1) 2 3 1 4 challenge for managers.
(2) 3 4 1 2 37. Human Resource Planning benefits to an
(3) 1 3 2 4 organization are reflected in which of the
combination of the following?
(4) 1 2 4 3
a. Balance between demand and supply of human
resources.
July-2016 b. Non-compulsion on management to assess
36. Which of the following is not true in case of HRM? critically and continuously the employees and
1) Employees are seen as an investment to be personnel policies.
nurtured as well as a cost to be controlled. c. Duplication of efforts and conflicts are avoided.
2) Conflicts are dealt with by team members within d. Minimizing the future returns on investment in
their teams. human resources.
3) Preference is for collective bargaining of pay
and working conditions. Codes :
4) Emphasis is on competitive pay and conditions 1) a and b
to stay ahead of competitors. 2) a and c
37. Which one of the following is an advantage of 3) a, b and c
Magazines as a source of recruitment? 4) a, c and d
1) Less expensive 38. A statement containing items such as job title,
2) Long lead time for advertisement placement location, summary, duties, materials used, working
3) Reach a diverse audience conditions etc., is called.
4) Many unmotivated applicants 1) Job specification
2) Job evaluation
 3) Job description 37. The pluralistic approach of industrial conflict is
4) Job analysis based on which one of the following basic
39. Match List-I with List-II relating to theory of wages. assumption/premise?
List-I List-II 1) That conflict occurs when the tendency of
(Wage Theory) (Propounder) industrial society is to treat worker as an isolated
a. Wage Fund Theory i. John Davidson individual and deprive him of all control over his
environment.
b. Subsistence Theory ii. David
Recardo 2) That an enterprise contain people with coalition
Residual Claimant iii. Adam Smith of different interests.
c.
Theory 3) That industrial conflict is a part of the broader
social conflict between classes.
d. Bargaining Theory of iv. Francis
Wages Walker 4) That no consensus is possible, in case of
conflicts, because people are with different
Codes :
socio-cultural backgrounds.
a b c d
38. The Job Description Index (JDI) Technique is used
(1) ii iv i iii
for measuring, which one of the following?
(2) iii ii iv i
1) Job attitudes
(3) iv i iii ii
2) Job descriptions/ definitions
(4) ii iii iv i
3) Job analysis records
40. Which organizational analysis method is used, 4) Job skill requirements
among the following, to develop various efficiency 39. From the following two statements of Assertion (A)
indices relating to contribution of human capital in and Reasoning (R) indicate the correct code.
meeting the organizational goals? Assertion (A): Development in HRM is a short-
1) Objectives analysis
term educational process with
2) Resource utilization analysis
3) Task analysis temporary intervention.
4) Organizational climate analysis Reason (R) : It is a educational process utilizing
41. Match the items of List-I with the items of List-II systematic and organized
regarding evaluation of project application and procedure for development of
suggest the correct code. operative employees performance
List-I List-II in current jobs.
a. Managerial i. Analysis of working
Code:
Appraisal results.
1) (A) correct and (R) is correct explanation of (A).
b. Economic ii. Disposal of factory
2) (A) is correct, but (R) is not correct explanation
Appraisal effluents
of (A).
c. Financial iii. Analysis about traits of
3) (A) is not correct, but (R) is correct.
Appraisal an entrepreneur
4) (A) and (R) both are not correct.
d. Technical iv. Analysis on employment
40. Match the items of List-I with List-II Relating to
Appraisal potential
methods of performance appraisal and indicate the
Codes : correct code of matching.
a b c d
List-I List-II
(1) i ii iv iii
(a) Paired (i) Reviewing employee
(2) ii i iii iv
comparison records and holding
(3) iii iv i ii
method interview of definite
(4) iv iii ii i
test questions.
(b) Forced choice (ii) Set of pair phrases of
November-2017 description descriptive statements
36. Which one the following is not true?
method
1) Material resources are subject to laws of
(c) Critical (iii) Differentiating between
mechanics and they cannot have an output
Incidents effective and non
greater than the input.
method effective performance
2) Human resources are capable of exponential
on basis of
growth and development
achievements.
3) Human resources cannot yield an output that
(d) Field review (iv) Relative ranking
may be far greater than what the value of their
method method
input warrants.
4) In current scenario, gradually, the emphasis has
shifted from muscle power to use of mind power.
Code
 A B C D 3) (iv) (ii) (i) (iii)
(1) iv ii iii i 4) (iii) (i) (ii) (iv)
54. Assertion (A) : Compensation has two vital
(2) ii iii iv i
domains economic concept and psychological
(3) iii i iv ii concept.
(4) ii iv i iii Reasoning (R) : Compensation basically represents
an employment contract.
Code :
July-2018
1) (A) is correct and (R) is right explanation of
51. The VRIO framework, used in HR function in (A).
today’s era, refers to four criteria. Identify the 2) (A) is correct but (R) is not the right
correct code which stands as correct explanation to explanation of (A).
VRIO as proposed by Barney. 3) (A) is correct but (R) is incorrect.
1) Valence - Recruiting - Industrial relations - 4) (A) is incorrect but (R) is correct.
Opportunities 55. Which of the following is not the primary objective
2) Vision - Rewards - Improvements - Options of industrial relations and labour laws?
3) Value - Rarity - Imitability - Organization 1) Maintaining social equity
4) Versatile - Resource - Information - 2) Providing credit facilities to industries
Outsourcing 3) International uniformity
52. Assertion (A) : Induction is an informal 4) Promoting economic growth
information sharing session on miscellaneous issues 56. Assertion (A) : In real terms, workers’
in an organization. participation in management has failed in India.
Reasoning (R) : The rationale of induction is to Reasoning (R) : There is lack of attitudinal change,
ensure effective integration of staff into or across multiplicity of unions and absence of a procedure to
the organization for their mutual benefit. determine a sole bargaining agent in an
Code : organization.
1) Assertion (A) and Reasoning (R) both are Code :
correct and (R) is correct explanation of (A). 1) (A) is correct and (R) is correct explanation of
2) Assertion (A) and Reasoning (R) both are (A).
correct but (R) is not the correct explanation of 2) (A) is correct but (R) is not the correct
(A). explanation of (A).
3) Assertion (A) is correct statement but 3) (A) is correct but (R) is incorrect.
Reasoning (R) is an incorrect statement. 4) (A) is incorrect but (R) is correct.
4) Assertion (A) is an incorrect statement but
Reasoning (R) is a correct statement.
53. Match the items of List - II with the items of List - I 83. Match the items of List - II with the items of List - I
pertaining to the ranking methods used in relating to Personnel Management (PM) and
performance management systems ; and select the Human Resource Management (HRM) ; and select
code of correct matching. the code of correct matching.
List - I List - I
(Ranking methods) 1. Focus of PM
(a) Simple ranking 2. Focus of HRM
(b) Alternation ranking 3. Philosophy of PM
(c) Paired comparison 4. Philosophy of HRM
(d) Forced distribution List - II
List – II (i) Development attitude by making people
(Methodology) contribute their best
(i) Based on overall performance. (ii) Exercising it as a functional area of
(ii) Ends up with predetermined number of people in management.
each group. (iii) Exercising it as humane management.
(iii) Based on particular trait only for quantity/quality (iv) Profit maximization by controlling people.
of work. Code :
(iv) Based on a trait or a set of trait and avoids (a) (b) (c) (d)
central tendency.
(1) (ii) (iii) (iv) (i)
Code : (2) (iii) (ii) (i) (iv)
(a) (b) (c) (d)
(3) (iv) (i) (ii) (iii)
1) (ii) (iii) (iv) (i) (4) (i) (iii) (iv) (ii)
2) (i) (iv) (iii) (ii)
84. Select the correct code of the following statements 88. Match the items of List - II with the items of List - I
being correct or incorrect. relating to industrial relations and select the code of
Statement I: Strategic HRM focuses on specific correct matching.
organizational intentions about what needs to be List - I
done while HR strategies focus on long-term issues 1. Healthy labour–management relations
only. 2. Industrial Peace Law
Statement II: Strategic HRM focuses on macro 3. Industrial Democracy
concerns such as structure and culture while HR 4. National Commission on Labour, 1969
strategy focuses on specific issues assigned. List - II
Statement III: Human Resource strategy decisions (i) Industrial Disputes Act
are derived from strategic HRM. (ii) Guiding principles for a grievance procedure
Code : (iii) Workers’ participation in management
(iv) Voluntary arbitration and responsible trade
1) Statements I and II are correct while III is union
incorrect. Code :
2) Statements II and III are correct while I is (a) (b) (c) (d)
incorrect.
3) Statements I and III are correct while II is (1) (iv) (i) (iii) (ii)
incorrect. (2) (ii) (iii) (iv) (i)
4) All the statements are correct. (3) (iii) (i) (iv) (ii)
85. Which of the following code represents the full (4) (ii) (iv) (i) (iii)
form of the term “BARS” in performance
management systems ?
1) Business Appraisal and Rating Systems.
2) Balanced Assessment Reviewing Scorecard.
3) Behaviourally Anchored Rating Scale.
4) Benchmarking Appraisal Reviewing Strategy.
86. Match the items of List - II with the items of List - I
relating to training, and select the code of correct
matching.
List - I
1. Andragogy
2. Pedagogy
3. Terminal behaviour
4. Training impediments
List - II
(i) Strategies or styles of instructions
(ii) Ultimate knowledge level with which trainee
leaves the training sessions
(iii) Lack of commitment of management and
scarcity of resources in training
(iv) Art and Science of training the adults
Code :
(a) (b) (c) (d)
(1) (i) (iv) (iii) (ii)
(2) (ii) (iii) (i) (iv)
(3) (iv) (i) (ii) (iii)
(4) (iii) (ii) (iv) (i)
87. Which of the following statements does not stand as
a principle of compensation administration ?
1) An enterprise should have a clear -cut plan to
determine differential pay level in terms of
divergent job requirements.
2) People and jobs should never be mingled.
3) The compensation system should be designed
with subjectivity with respect to individual skill
sets exercised from time to time.
4) There should be established wage grievance
handling procedures.
 ASTRAL EDUCATION
COMMERCE (EM) HUMAN RESOURCES MANAGEMENT PYP (P-2)

ANSWER KEYS
JUNE-2012
4 2 36 3 37 4 38 4 39 3 40 2

DEC.-2012
24 1 29 1 36 2 38 1 39 4 40 1

JUNE-2013
36 4 37 3 38 4 39 3 40 1

DEC.-2013
38 2 39 3 40 2

JUNE-2014
36 1 38 3 39 2 40 3

DEC.-2014
1 1 2 3 36 3 37 1 38 2 39 3

JUNE-2015
36 3 37 1 38 2 39 4 40 1

DEC.-2015
36 2 39 2 40 2

JULY-2016
36 3 37 3 38 1

JAN.-2017
28 1 36 2 37 2 38 3 39 2 40 2 41 3

NOV.-2017
36 3 37 2 38 1 39 4 40 1

JULY-2018
51 3 52 4 53 2 54 2 55 2 56 1 83 3 84 2 85 3 86 3
87 3 88 1
 ASTRAL EDUCATION
COMMERCE (E.M.) HUMAN RESOURCES MANAGEMENT PYP (P-3)

June-2012 DEC.-2012
21. Which one of the following is not the operative 31. Induction of employees relates to
function of HRM? 1) Organisational awareness
1) Development 2) Training programme
2) Controlling 3) Introduction
3) Compensation 4) Assignment of duties
4) Integration 33. Who is not associated with HRM?
22. Which one of the following is not in sequence of 1) Michael J Jucius
personnel training procedure? 2) Dale Yodar
1. Instructor Preparation 3) Edvoin B. Flippo
2. Present the task 4) K.K. Devit
3. Try out performance 34. Merit rating is not known as
4. Training preparation 1) Efficiency Rating
5. Follow up 2) Service Rating
1) 1, 2, 3, 4, 5 3) Job Rating
2) 2, 1, 4, 3, 5 4) Experience Rating
3) 1, 4, 2, 3, 5 39. Which one is not non-financial incentive?
4) 3, 1, 2, 5, 4 1) Additional bonus on minimum wasteful
23. Under which method of performance appraisal one expenditure
person is compared with all others for the purpose 2) Permanent job
of placing them in a simple order of work? 3) Participatory decision making
1) Grading 4) Recognition of individuality
2) Person to Person comparison 40. HRM does not include
3) Ranking 1) Job evaluation
4) None of the above 2) Performance appraisal
24. Which one of the following is not the fundamental 3) Sales promotion
procedure that should be considered for the 4) Job enrichment
collective bargaining? June-2013
1) Prenegotiation phase 50. Which of the following are modern method of
2) Selection of Negotiators performance appraisal?
3) Tactic and Strategy of Bargaining (i) 360 degree performance appraisal.
4) None of the above (ii) Graphic rating scale
25. Assertion (A) : Inevitably the firm must go to the (iii) Management By Objectives (MBO).
external sources for lower entry jobs (iv) Forced distribution method.
Reason (R) : For positions where required (v) Behaviourally anchored Rating Scales
qualification/experience are not met. (BARS).
Codes: Select the correct answer from the codes given
1) Both (A) and (R) are not correct. below:
2) (A) is true, but (R) is false.
3) (R) is true, but (A) is false 1) (i), (ii), (iii)
4) Both (A) and (R) are correct 2) (ii), (iv), (v)
40. The purpose of job evaluation is 3) (i), (iii), (v)
1) Fixation of Responsibility 4) (iv), (ii), (i)
2) Promotion 51. Which of the following principle serves as a
3) Wage Determination warning to organisations not to take the selection
4) Transfer to a better job and promotion process lightly?
50. The flagship project of Government of India 1) Promotion Principle
launched for generating guaranteed employment in 2) Drucker Principle
rural areas is known as 3) Validity Principle
1) PMRY 4) Peter Principle
2) MNREGA 52. According to D. Katz morale has four dimensions:
3) JRY (i) Jobs satisfaction
4) NREP (ii) Satisfaction with wages and promotional
opportunities.
 (iii) Identification with company. List–I List-II
(iv) Pride in the work group. (A) Job Rotation (i) Involves conscious
(v) Top Management Support. efforts, to organise
Select the correct combination. tasks, duties and
responsibilities into a
1) (i), (ii), (iii) and (iv) unit of work to achieve
2) (i), (ii), (iii) and (v) certain objectives
3) (i), (ii), (iv) and (v) (B) Job Design (ii) Involves movement of
4) (i), (iii), (iv) and (v) employees from job to
53. HRM is viewed as a management process, job
consisting of four functional activities: (C) Job (iii) Seeks to improve both
i. Acquisition Evaluation task efficiency and
ii. Motivation human satisfaction and
iii. Development more opportunity for
iv. Resolution of industrial disputes individual growth
v. Maintenance (D) Job (iv) The formal process by
Select the correct combination Enrichment which the relative
worth of various jobs in
1) (i), (ii), (iii) and (iv) the organisation is
2) (i), (ii), (iii) and (v) determined for pay
3) (i), (ii), (iv) and (v) purpose
4) (i), (iii), (iv) and (v) Codes:
56. Which one of the following methods is not a (i) (ii) (iii) (iv)
demand forecasting method of Human Resource 1) (A) (B) (C) (D)
Planning? 2) (D) (C) (B) (A)
1) Managerial judgment 3) (C) (D) (B) (A)
2) Managerial grid 4) (B) (A) (D) (C)
3) Work study techniques
53. Assertion (A) : Merit rating of an employee is the
4) Statistical techniques. process of evaluating the employees performance
DEC.-2013 on the job in terms of the requirements of the job.
9. The present value of the future contributions of Reason (R) : Employees merit rating is a technique
employees is one of the methods of for fair and systematic evaluation of an employee’s
1) HR Accounting capacities and abilities and performance on the
2) Inflation Accounting specific job.
3) Social Accounting Codes:
4) Responsibility Accounting
1) Both (A) and (R) are correct and (R) is the
50. Which one of the following does not serve the main
right explanation of (A).
objective of performance appraisal?
2) Both (A) and (R) are correct, but (R) is not the
1) Developmental uses
right explanation of (A)
2) Administrative uses
3) Both (A) and (R) are incorrect
3) Ethical and moral values
4) (R) is correct, but (A) is incorrect.
4) Organisational objectives
54. The major provisions for employees health and
51. Statement (I) : Job evaluation is a technique of
safety are contained in
assessing the worth of each job in comparison with
1) The Industrial Disputes Act, 1947
others throughout an organization.
2) The Factories Act, 1948
Statement (II) : Job evaluation and job rating are
3) The Industrial Employment (Standing Orders)
one and the same for employees’ appraisal Act, 1946
purposes. 4) The Employees Compensation Act, 1923
Codes: 55. Indicate your choice through the codes given
below:
1) Statement (I) is correct, but Statement (II) is 1. A club is an industry under the Industrial
incorrect. Disputes Act, 1947
2) Statement (II) is correct, but Statement (I) is 2. Factory as defined under the Factories Act,
incorrect. 1948 includes a mine
3) Both the Statements (I) and (II) are correct. 3. For purpose of the payment of bonus to
4) Bothe the Statements (I) and (II) are incorrect. employees, the gross profits earned by a bank
52. Match the items of List-I with the items of List – II is to be calculated in the manner specified in
and select the correct answer:
 Schedule – 1 of the Payment of the Bonus Act, 3) Performance Appraisal
1965 4) Promotion
4. Various labolur laws do not apply to public 63. Which of the following two forms of collective
sector undertaking. bargaining were identified by Chamberlain and
Codes: Kuhn
1) Integrative bargaining and Distribute
1) While 1 and 2 are correct, others are not
2) All the statements are correct. Bargaining
3) Only 1 is correct, others are incorrect 2) Conjunctive Bargaining and Cooperative
4) Only 1 is incorrect, all others are correct. Bargaining
3) Integrative Bargaining and Cooperative
June-2014 Bargaining and Conjunctive Bargaining and
Conjunctive Bargaining.
36. Indicate the quantitative methods of job evaluation
1) Ranking methods and Job comparison method 4) Distributive Bargaining and Conjunctive
2) Point rating method and Factor comparison Bargaining.
method 65. What is not an operative function of HRM?
3) Grading method and Job classification method 1) Procurement
4) Factor comparison method and Ranking 2) Development
method. 3) Organising
37. Match the items of List-I with those List-II 4) Integration
List–I List-II DEC.-2014
1. Career goals (A) The process where in 26. Match the following:
an executive serves as a List-I List-II
guide (A) To check the (i) Speed loss
2. Career path (B) The future positions quality of work
one strives to reach as (B) To see that work is (ii) Inspector
part of career completed in time
3. Career (C) The sequential pattern (C) To check (iii) Instruction and
counseling of jobs that form a absenteeism of check
career workers
4. Mentoring (D) Guiding people on their (D) To issue (iv) Shop discipline
possible career path instructions
Codes: regarding methods
(1) (2) (3) (4) of work
1) (B) (C) (D) (A) Codes :
2) (A) (B) (C) (D) (A) (B) (C) (D)
3) (D) (C) (B) (A) 1) iii ii i iv
4) (C) (B) (A) (D) 2) ii i iv iii
38. The process of receiving and welcoming an 3) ii i iii iv
employee when he first joins a company and giving 4) iv iii i ii
him the basic information he needs to settle down
quickly and happily and starts working, is referred 27. F.W. Taylor called "The Military type of Foreman"
to as to
1) Placement 1) Unity of Command
2) Orientation 2) Span of Control
3) Job Rotation 3) Delegated Legislature
4) Counseling. 4) Department
39. Which is not relevant of succession planning? 28. Match the items of List-I with List-II
1) Analysis of the demand for managers List-I List-II
2) Review of existing executives (A) Commentary (i) F.W. Taylor
3) Planning individuals career paths Four Chambault
4) Recruitment to meet immediate (B) Midvale Steel (ii) Claud Henry Saint
61. Which of the following is not included in the model Works Simon
of the systems approach to human resource (C) Charleton Twist (iii) Henry Fayol
management? Company
1) Departmentation (D) Credit Mobilier (iv) Robert Owen
2) Recruitment
 Codes : Codes:
(A) (B) (C) (D) 1) Both (A) and (R) are true.
1) iii ii iv i 2) (A) is true, but (R) is false
2) i ii iii iv 3) (A) is false, but (R) is true
3) iii i ii iv 4) Both (A) and (R) are false
4) iii i iv ii 52. HRD as a total system includes the following major
45. Assertion (A) : High morale and high productivity sub-systems:
go hand-in-hand. 1. Performance Appraised
Reason (R) : Workers do not have their own ways 2. Career Planning
for relief from fatigue and monotony. 3. role Analysis
4. ABC Analysis
Codes:
5. Rewards
1) Both (A) and (R) are true Select the correct answer from the codes:
2) (A) is true, but (R) is false
3) (A) is false, but (R) is true. Codes
4) Both (A) and (R) are false
1) 1, 2, 3, 4
46. Relationship at work is the source of
2) 1, 2, 3, 5
1) Status anxiety
3) 2, 3, 4, 5
2) Managerial stress
4) 1, 3, 4, 5
3) Legitimate power
53. Which of the following is not true about employee
4) Expert power
grievances:
47. Match the group of words in List-I with the group of
1) Grievance is a sign of employee' discontent
words in List-II
with job or its nature:
List-I List-II
2) Grievance provides a downward channel of
(A) Grievances (i) Profit sharing
communication.
(B) Impact of (ii) Effective planning
3) Grievance arises only when an employee feels
technology
that injustice has been done to him.
(C) Adjustment to (iii) Index of low
4) Grievance can be real or imaginary.
technology morale
54. Which of the following is not a component of Job
(D) Morale (iv) Changes in
Analysis?
improvement occupation
1) Job Description
Codes :
2) Role Analysis
(A) (B) (C) (D) 3) Job Summary
1) i ii iii iv 4) Job Specification
2) iv iii ii i
3) iii ii iv i June-2015
4) iii iv ii i 6. Labour Rate of Pay Variance can be calculated by
48. Assertion (A) : Functional conflict is a type of which one of the following equations?
institutionalised conflict. 1) Budgeted Labour Costs – Actual Labour Costs
Reason (R) : Politics is a kind of emergent conflict. 2) (Standard Hours – Actual Hours) × Actual Wage
1) Both (A) and (R) are true Rate
2) (A) is true, but (R) is false. 3) (Standard Wage Rate – Actual Wage Rate) ×
3) (A) is false, but (R) is true. Actual Hours Worked
4) Both (A) and (R) are false. 4) (Standard Wage Rate – Actual Wage Rate) ×
49. Goal Conflict is a kind of Standard Hours Worked
1) Goal Conflict 36. Match the items of List-I with items of List-II and
2) Organisational conflict choose the correct code:
3) Role Conflict List I List II
4) Emergent Conflict Conventional HRM Strategic HRM
50. One of the objectives of organisational change is A. Staff specialists 1. Fast and proactive
1) Increased motivation B. Slow and reactive 2. People and
2) Greater innovation knowledge
3) Soling inter-group problems C. Capital and 3. Line managers
4) Changes in an organisation's level of adaptation products
to its environment. D. Cost centre 4. Investment centre
51. Assertion (A) : Job design relates to the manner in Codes
which task are put together to form complete job. A B C D
Reason (R) : The matrix organisation is a project 1) 2 1 3 4
organisation plus a functional organisation 2) 2 3 1 4
 3) 3 2 1 4 Codes:
4) 1 2 3 4 1) 1, 2 and 3
37. Which one of the following is a traditional method 2) 1, 3 and 4
for selection of personnel? 3) 2, 3 and 4
1) Interview 4) 1, 2 and 4
2) Selection Test 64. Which among the following are not part of staffing
3) Phrenology process?
4) Aptitude Test 1. Human Resource Planning
38. The method of training in crafts, trades and technical 2. Recruitment
areas is known as: 3. Selection
1) Vestibule training 4. Induction and Orientation
2) Coaching 5. Training and Development
3) Mentoring 6. Performance Appraisal
4) Apprenticeship 7. Transfers
39. Behaviourally Anchored Rating Scale is a technique 8. Separations
used for: Codes:
1) Selection 1) 5, 6, 7 and 8
2) Succession Planning 2) 7 and 8
3) Performance appraisal 3) 6 and 8
4) Recruitment 4) None of the above
40. Which one of the following is not a mechanism of 65. Match the items of List-I with items of List-II and
managing stress? choose the correct code:
1) Rust out List I List II
2) Cognitive therapy A. INTUC 1. 1920
3) Job enrichment B. AITUC 2. 1947
4) Networking C. CITU 3. 1955
53. When the cost incurred on recruiting, training and D. BMS 4. 1970
developing the employees is considered for Codes
determining the value of employees, it is called: A B C D
(a) The replacement cost approach 1) 1 2 3 4
(b) The historical cost approach 2) 2 1 4 3
(c) The opportunity cost approach 3) 2 1 3 4
(d) None of the above 4) 3 1 4 2
61. Which one of the following is not a major
punishment? DEC.-2015
1) Withholding of increments 38. Choose the correct code for the statements given
2) Demotion below:
3) Transfer Statement I: T-group and sensitivity training are not
4) Suspension the same.
62. Assertion (A): Job evaluation is essentially a job Statement II: T-group participants belong to a
rating process, not unlike the rating of employees. diverse groups and may not be familiar with each
Reasoning (R): Job evaluation is a practice which other.
seeks to provide a degree of objectivity in measuring Statement III: T-group training sessions are well
the comparative value of jobs within an organisation structured.
and among similar organizations.
Codes:
1) Both (A) and (R) are correct 1) Statements I and II only are correct
2) Both (A) and (R) are incorrect 2) Only II and III statements are correct
3) (A) is correct, but (R) is incorrect 3) All the three statements are correct
4) (R) is correct, but (A) is incorrect 4) Only statement II is correct
63. Identify the correct combinations from the 39. A review is heavily influenced only by any one
following: characteristic of the employee whose performance is
Skills Training and Target being reviewed is known as:
Development Method Trainees 1) Recency of Events Error
1. Knowledge Deliberation/Lecture Managerial 2) Central Tendency
2. Multi-skills Vestibule training Operative 3) Logical Error
3. Decision- Management game Managerial 4) Halo Effect
making skills 52. Assertion (A): Human Resource Accounting is the
4. Behavioural Sensitivity training Supervisory measurement of the cost and value of people to the
skills organization.
 Reasoning (R): Human Resource Accounting 1) 1 2 3 4
involves measuring costs incurred by the 2) 3 1 2 4
organizations to recruit, select, hire, train and 3) 3 2 1 4
develop employees and judge their economic value
4) 1 4 2 3
to the organization.
Codes:
1) (A) and (R) are correct and (R) is the right July-2016
explanation of (A)
2) (A) and (R) are correct but (R) is not the right 29. Match List-I with List-II and indicate the correct
explanation of (A) code:
3) (A) is correct but (R) is incorrect List-I List-II
4) Both (A) and (R) are incorrect A. Job 1. The procedure for
61. Match the items of List-I with the items of List-II specifications determining the duties
List I List II and skill requirements of
(Job Analysis) (Examples) a job and the kind of
A. Task 1. Payroll processing person who should be
B. Element 2. Compensation policy hired for it.
administrator B. Job 2. A list of human
C. Duty 3. Compensation design description requirements
manager C. Job analysis 3. A list of job’s duties,
D. Position 4. Compensation specialist responsibilities, reporting
E. Job 5. Preparing forms relationships, working
F. Occupation 6. Signing pay-cheques conditions and
Codes supervisory
A B C D E F responsibilities.
1) 1 2 3 4 5 6
2) 5 6 1 2 3 4 Codes:
3) 6 5 4 2 3 1 A B C
1) 1 2 3
4) 6 1 2 3 4 5
2) 2 3 1
62. In which of the following types of collective 3) 3 2 1
bargaining, one party gains at the expense of the 4) 2 1 3
other?
30. A training technique is which trainees are first
1) Distributive bargaining
shown good management techniques in a film, are
2) Integrative bargaining
asked to play roles in a simulated situation, and are
3) Centralized bargaining
the given feedback and praise by their supervisor is
4) None of the above
known as.
63. Which one of the following dispute settlers cannot
1) Behaviour medelling
make a binding decision?
2) Role playing
1) Arbitrator
3) In-house development center
2) Adjudicator
4) Management game
3) Conciliator
31. Which combination of the following statements is
4) Industrial tribunal member
correct about the code of discipline in industry?
64. Ensuring the safety, health and welfare of the
1. It aims at preventing disputes by providing for
employee is the primary purpose of which one of the outside agency or adjudication.
following Acts?
2. It is a government imposed involuntary principle
1) The Factories Act, 1948
of discipline.
2) The Payment of Wages Act, 1936
3. It restrains the parties from unilateral action.
3) The Equal Remuneration Act, 1976
Codes:
4) The Industrial Disputes Act, 1947
65. Match the items of List-I with the items of List-II 1) 1, 2 and 3
and select the correct code: 2) 2 and 3
List I List II 3) 1 only
A. Pension scheme 1. Health care for family 4) 3 only
B. Personal security 2. Severance Pay 32. A conciliation proceeding is deemed to be pending
C. Financial assistance 3. Provident Fund until any combination of the following conditions is
D. Allowance 4. Transport Allowance fulfilled:
Codes 1. A settlement is arrived at a memorandum of
A B C D settlement is signed by parties to the dispute.
 2. No settlement is arrived at, the report of 61. Who gave the systems approach to industrial
conciliation officer is received by the relations?
appropriate government. 1) Beatrice Webb
3. A reference is made to the court of Inquiry, 2) John Dunlop
Labour Court, Tribunal or National Tribunal 3) Eric Trist
during the pendency of conciliation proceedings. 4) Henry Fayol
Codes:
Jan.-2017
1) Only 1 is correct 4. Statement I : “Working in harmony with the
2) Only 2 is correct community and environment around us and not
3) 1 and 3 are correct cheating our customers and workers we might
4) 1, 2 and 3 are correct not gain anything in the short run but in the long
56. Which of the following is not provided under the term it means greater profits and shareholders’
Factories Act, 1948? value”.
1) The certificate of fitness is granted by a Statement II : According to Mahatma Gandhi,
certifying surgeon on the application of any capitalist class owns wealth or capital as trustees
young person or a parent or a guardian. of the society.
2) An adolescent who has not been granted a Codes :
certificate of fitness shall be deemed to be a 1) Statement I is correct, but II is incorrect.
child for the purpose of the act. 2) Statement II is correct, but I is incorrect.
3) The certificate of fitness granted or renewed 3) Both the statements I and II are incorrect.
remains valid for a period of six months from the 4) Both the statements I and II are correct.
date of issue. 24. In integrating specialist functions of product
4) Any fee payable for the certificate of fitness management with line function of sales as major
shall be paid by occupier and not by the young challenge to top management can be achieved by
person or his parent or guardian. which type of marketing organization?
57. Arrange the following steps of developing 1) Functional organization
Behaviourally Anchored Rating Scales (BARS) in 2) Territorial organization
the right sequence: 3) Matrix organization
1. Developing performance dimensions 4) None of the above
2. Generate critical incidents 29. Match the List-I with List-II relating to Human
3. Scale the incidents Resource Planning activities and indicate the code of
4. Reallocate the incidents correct matching.
5. Develop the final instrument List-I List-II
Codes: A. Forecasting i. Optimal employment.
1) 1 2 3 4 5 B. Inventorying ii. Development
2) 2 1 4 3 5 activities.
3) 1 2 4 3 5 C. Anticipating iii. Mathematical
4) 1 3 2 4 5 manpower projections of
problems industrial trends.
59. Which of the following statements is correct about
Wage Boards in India? D. Planning iv. Projecting present
programs resources into future.
1. A Wage Board is a tripartite body. Codes :
2. Labour and management representatives on a A B C D
Wage Board can be selected from industries 1) ii i iv iii
other than the one which is investigated. 2) i iv iii ii
3. Wage Boards are always statutory in nature. 3) iv ii i iii
4. Wage Boards work on the principle of living
4) iii i iv ii
wage. 30. Which council was established in India by
Codes: Government of India in the year 1966 to promote
safety consciousness among workers in industries?
1) 1 only
1) Factory Advise Council
2) 2 and 3
2) National Safety Council
3) 3 and 4
3) National Industrial Council
4) 1, 2, 3 and 4
4) Safety Regulations Council
60. Who gave the surplus value theory of wage?
31. Assertion (A) : Recruitment is positive while
1) David Ricardo
selection is negative in its application.
2) Karl Marx
3) Adam Smith
4) F.A. Walker
 Reasoning (R) : Recruitment aims at increasing the (Common (Description)
job seekers while selection rejects a large Rating
number of unqualified applicants. Errors)
Codes : A. Leniency i. Subjective assessment
1) (A) is correct, but (R) is not correct.
B. Halo error ii. One aspect of individual’s
2) (A) and (R) both are correct, but (R) is not the performance influences his
right explanation of (A). entire performance
3) (A) and (R) both are correct and (R) is the right Spillover iii. Past performance appraisal
C.
explanation of (A). effect ratings unjustifiably
4) (A) and (R) both are incorrect. influencing current ratings
32. Match the List-I with List-II relating to Social
D. Rater effect iv. Favoritism and
Security measures in India and indicate the code of stereotyping
correct matching: Codes :
List-I List-II A B C D
A. Social i. Payable to workers in 1) i ii iii iv
Assistance accidents & injuries 2) ii iii iv i
during employment. 3) iii iv ii i
B. Social Insurance ii. Covers individual risks 4) iv iii ii i
primarily. 59. Which one of the following industrial relations
C. Commercial iii. Maternity benefits. approach believes in state interventions via
Insurance legislation and creation of industrial tribunals as
D. Workmen’s iv. Provident Funds. supporting management’s interest rather than
Compensation ensuring a balance between the competing groups?
Codes : 1) Unitary approach
A B C D 2) Pluralistic approach
1) iii iv ii i 3) Marxist approach
2) iv iii ii i 4) Judiciary approach
3) iv iii i ii 60. What is the term coined for the system of
4) ii i iii iv communication and consultation, either formal or
56. Assertion (A) : Organizations are increasingly informal, by which workers of an organization are
getting de-jobbed. kept informed, as and when required, about the
Reasoning (R) : Jobs are becoming more amorphous affairs of the undertaking and through which they
and more difficult to defince. express their opinion and contribute to decision-
Codes : making process of management?
1) (A) and (R) both are correct but (R) is not right 1) Collective Bargaining
explanation of (A). 2) Empowerment
2) (A) and (R) both are not correct. 3) Workers’ participation in management
3) (A) is correct, but (R) is incorrect. 4) Welfare state
4) (A) is correct and (R) is right explanation of (A). 61. Match the items of List-I with those of List-II with
57. Which of the following statements relating to regard to operative functions of HRM and indicate
incentive payments is correct? the code of correct matching.
1) In Halsey incentive plan, bonus paid to a worker List-I List-II
is equal to 50 percent of time saved divided by Procurement i. Performance appraisal
A.
rate per hour.
2) In Rowan incentive plan, bonus paid to B. Development ii. Discipline
employee is equal to the proportion of the time C. Integration iii. Induction
saved to the standard time. D. Maintenance iv. Personnel research
3) In Taylor’s differential piece rate system, a Codes :
worker whose output exceeds standard output is A B C D
said 100 percent of piece rate and a worker 1) ii i iv iii
whose output falls short of standard is paid only 2) i iv iii ii
50 percent of piece rate. 3) iii i ii iv
4) The Rowan incentive plan is the base of all other 4) ii iii i iv
incentive, payment plans.
58. Match the most common rating errors made during
November-2017
performance appraisal with their right explanations.
Indicate the code of correct matching. 29. Match the items of List-I with List-II and indicate
the correct code of their matching relating to human
resource management philosophy:
List-I List-II
 List I List II 55. Assertion (A): The matter of succession planning is
(A) Rational System (i) F.W. Taylor often deferred.
Approach Reasoning (B): The succession charts need utmost
(B) The Ahmedabad (ii) Max Weber’s confidentiality.
Experiments to theory of Code:
improve bureaucracy
productivity 1) (A) is correct and (R) is right reasoning of it.
(C) Social System (iii) A.K. Rice 2) (A) is correct but (R) is not the correct
Approach reasoning of it.
(D) Functional (iv) Hawthorne 3) (A) is correct but (R) is not correct statement.
organization studies 4) (A) is not correct while (R) is correct
concept statements.
Codes 56. Bethel Maine of USA was the pioneer of which of
(A) (B) (C) (D) the following Laboratory training methods of
1) (ii) (iv) (iii) (i) employee training?
1) Transactional Analysis
2) (iii) (ii) (iv) (i)
2) Business Games
3) (iv) (iii) (i) (ii) 3) Critical Incident Technique
4) (iii) (i) (ii) (iv) 4) T-group
57. Which of the following statements relating to
30. Which one of the following is not a method of
appraisal methods are not correct? Indicate the
deciding acceptable level of reliability or
consistency of measurement in selection methods? correct code.
1) Regiocentric approach Statement-I: The MBO program is built on the
2) Split half method assumption that individuals always need not be
3) Test related method responsible and self-direct and thus need to
4) Expectancy diagrams motivated to work towards objectives.
31. Put following steps of discrete selection process in Statement-II: Forced distribution method was
correct sequence and select the correct code: developed by Karl Marx.
(A) Preliminary interview Statement-III: Peer evaluation and self- appraisal
(B) Completion of application blank need to be done on well – defined parameters in
(C) Background investigation check– list methods.
(D) Physical examination Statement-IV: Forced choice method consists of
(E) Employment tests seven main factors on three point rating scale.
(F) Comprehensive interview Code:
(G) Final employment decision
Code: 1) Statement (I) and (II)
1) (B), (A), (C), (D), (E), (F), (G) 2) Statements (III) and (IV)
2) (B), (A), (E), (F), (C), (D), (G) 3) Statements (I), (II) and (III)
3) (A), (B), (E), (F), (C), (D), (G) 4) Statements (I), (II), (III) and (IV)
4) (A), (B), (D), (C), (E), (F), (G) 58. Match the main concerns of HRD sub-system given
32. Match List-I with List-II relating to wage theories in List-I with List-II and choose the correct code of
and its propounders and indicate the code matching:
representing correct matching: List I List II
List I List II (HRD sub-systems) (Main concerns)
(Theory) (Propounder) (A) Individuals (i) Competence
(A) Subsistence Theory (i) Karl Marx careers
(B) Surplus Value Theory (ii) Francis (B) Development of (ii) Power
Walker teams
(C) Wage Fund Theory (iii) David (C) Socialisation of (iii) Commitment and
Richardo organisation integration
(D) Residual Claimant (iv) Adam Smith (D) Management of (iv) Value
Theory organization
Codes Codes
(A) (B) (C) (D) (A) (B) (C) (D)
1) (ii) (iv) (i) (iii) 1) (ii) (iv) (i) (iii)
2) (iv) (i) (ii) (iii) 2) (iv) (ii) (iii) (i)
3) (iii) (i) (iv) (ii) 3) (iii) (i) (iv) (ii)
4) (iv) (ii) (iii) (i) 4) (ii) (iii) (i) (iv)
59. Match the items of List-I with List-II and indicate
the correct code of matching:
List I List II
(Wage Theory) (Basis of determining
wage)
(A) Subsistence (i) Capitalist first set
theory aside predetermined
surplus income and
then decide the wages
(B) Surplus value (ii) Growth the
theory of population brings
wages down to leave of
subsistence.
(C) Wage Fund (iii) Balance claimed
theory upon the output of
industry
(D) Residual (iv) Natural price for
Claimant labour
theory
Codes
(A) (B) (C) (D)
1) (iv) (ii) (i) (iii)
2) (ii) (iv) (i) (iii)
3) (iii) (i) (ii) (iv)
4) (i) (iii) (iv) (ii)
60. Statement (I): Selection of wrong criteria during
performance appraisal can result in serious
dysfunctional consequences.
Statement (II): Generally the evaluator becomes
more critical about performance evaluation
technique rather than which criteria need to be
evaluated.
Code:
1) Both the statements are correct.
2) Both the statements are incorrect.
3) Statement – I is correct while statement – II is
incorrect.
4) Statement-I is incorrect while statement-II is
correct
 ASTRAL EDUCATION
COMMERCE (EM) HUMAN RESOURCES MANAGEMENT PYP (P-3)

ANSWER KEYS
JUNE-2012
21 a 22 a 23 d 24 d 25 c 40 c 50 b

DEC.-2012
31 c 33 d 34 c 39 a 40 c

JUNE-2013
50 c 51 d 52 a 53 b 56 b

DEC.-2013
9 a 50 c 51 a 52 d 53 b 54 b 55 a

JUNE-2014
36 b 37 a 38 b 39 d 61 a 63 b 65 c

DEC.-2014
26 b 27 a 28 d 45 d 46 b 47 d 48 a 49 b 50 d 51 a
52 b 53 b 54 c

JUNE-2015
6 c 36 * 37 c 38 d 39 c 40 a 53 b 61 c 62 a 63 b
64 d 65 b

DEC.-2015
38 a 39 d 52 a 61 b 62 a 63 c 64 a 65 b

JULY-2016
29 b 30 a 31 d 32 d 56 c 57 b 59 a 60 b 61 b

JAN.-2017
4 d 24 c 29 d 30 b 31 c 32 a 56 d 57 b 58 a 59 c
60 c 61 c

NOV.-2017
29 a 30 a 31 c 32 c 55 b 56 d 57 d 58 c 59 a 60 a
 ASTRAL EDUCATION
COMMERCE (E.M.) BANKING AND FINANCIAL INSTRUCTION PYP (P-2)

June-2012 DEC.-2012
2. Broad Money has to be sensitized through: 41. Match the following:
1) CRR List–I List-II
2) SLR a. Credit Control 1. MCA
3) Repo Rate b. Corporate 2. SEBI
4) All of the above Control
41. Imperial Bank was established on January 27, 1921 c. IPO Control 3. IRDA
on the advise of d. ULIP Control 4. RBI
1) J.M. Keynes Codes:
2) Lord Illingworth (a) (b) (c) (d)
3) King George V (1) 4 2 3 1
(2) 4 1 2 3
4) Winston Churchill (3) 2 3 4 1
42. Read the following events: (4) 4 1 3 2
(i) Allowing convertibility of rupee at the market
rate in the current account 42. Which one among the following has not started
(ii) Nationalisation of general insurance business Commercial Banking?
1) SIDBI
(iii) Establishment of IDBI
2) IDBI
(iv) National of life insurance business 3) ICICI
(v) Capital adequacy norms for commercial banks 4) UTI
Arrange the events in the ascending order of their 43. What is OTP is credit card transactions?
occurrence: 1) Odd Transaction Password
2) Owner’s Trading Passcode
1) (iv), (iii), (ii), (i), (v) 3) Once Time Password
2) (v), (iv), (iii), (ii), (i) 4) One Time Pin code
3) (i), (ii), (iii), (v), (iv) 44. The powers of Controller of Capital Issues of India
4) (i), (v), (ii), (iv), (iii) is now shifted to
43. In India, the Commercial Banks are given license of 1) Ministry of Finance
operation by 2) SEBI
1) The Government of India 3) AMFI
4) Ministry of Corporate Affairs
2) The Ministry of Finance
45. The success of E-banking depends upon:
3) Reserve Bank of India
i. Multi-layer Security System
4) Banking Companies Regulation Act, 1949 ii. Risk and Surveillance Management
44. The provisions of General Reserve in Banking iii. Updated Flawless Software’s
Companies are made keeping in view the provisions iv. Stringent Legal Frame-work
of 1) i and ii
1) Indian Companies Act, 1956 2) i, ii and iii
2) Banking Companies Act, 1949 3) ii, iii and iv
3) SEBI Act, 1992 4) i, ii, iii and iv
4) Statutory Auditor June-2013
45. Which among the following is not true with regard 1. Direct supervision over depositories and mutual
to merchant banker? fund is undertaken by
(i) It can accept deposits. 1) NBFCs
(ii) It can advance loans 2) RBI
(iii) It can do other banking activities 3) SEBI
(iv) It can be manager to a public issue. 4) All the above
1) (i), (ii) and (iii) 2. In the call/notice money market, which of the
following participants is allowed to trade?
2) (ii), (iii) and (iv)
1) All Banks, Primary Dealers and Mutual Funds
3) (i), (iii) and (iv) 2) All Corporates
4) (ii) and (iv) 3) Only Commercial Banks
4) All of the above
41. RBI ensures that banks operate within the set norms 42. Which of the following are included under
by conducting ______ inspections and _____ representation function of a bank?
monitoring. (i) Payment of cheques and bills
1) On site, off site (ii) Providing remittance facilities
2) Off site, on site (iii) Underwriting of securities
3) On site, field (iv) Advancing clean credit
4) Field, on site (v) Allowing coverdrafts on current account
42. Under Section 37 of the Banking (Regulation) Act, (vi) Purchase and sale of securities
a moratorium order can be issued y the High Court Codes:
for a maximum total period of
1) (i), (ii), (iii, (iv))
1) One month 2) (iii), (iv), (v) and (vi)
2) Six months 3) (i), (ii), (iii) and (vi)
3) One year 4) (ii), (iii), (v) and (vi)
4) One and a half year 43. Call money rate is applicable for a very short period
43. Bonds or debentures issued by Securitization to
company should bear interest not less than 1) Interbank advance
1) Bank Rate 2) Bank to Reserve Bank Advances
2) Prime Lending Rate 3) Reserve Bank to Bank advances
3) 1.5% over the Bank Rate 4) Commercial Banks to Industrial Banks
4) 1.5% over the Saving Rate advances
44. Section 131 of the Negotiable Instruments Act 44. Match the following List – I with List-II:
extends protection to the _______ List–I List-II
1) Collecting Banker (Name of (Type of
2) Paying Banker Securities) Securities)
3) Advising Banker (a) Bonds of Land (i) Semi Government
4) Confirming Banker Development Securities
45. When a customer by a letter has advised the bank Banks
(b) Treasury Bills (ii) First order
not to honour/pay a particular cheque, such letter is
Securities
called_______ (c) Shares of a (iii) Personal Securities
1) Cacnellation letter Public Ltd. Co.
2) Garnishee letter Codes:
3) Mandate (a) (b) (c)
4) None of the above (1) (i) (ii) (iii)
(2) (ii) (i) (iii)
DEC.-2013 (3) (iii) (ii) (i)
1. Who is the fiscal agent and advisor to Government (4) (i) (iii) (ii)
in monetary and financial matter. 45. Reserve Bank of India controls the activities of
1) NABARD some of the following banks in India:
2) SBI (i) Commercial Banks
3) RBI (ii) Cooperative Banks
4) None of the above (iii) Foreign Banks
41. Match the following items of List-I and List-II in (iv) Rural Banks
terms of functions of commercial banks: Codes:
List–I List-II
(a) Letter of (i) Advancing loans 1) (i), (ii) and (iii)
reference 2) (i), (iii) and (iv)
3) (ii), (iii) and (iv)
(b) Sale of gold (ii) Receiving deposits
4) (i), (ii), (iii) and (iv)
coins
(c) Recurring (iii) Non-Banking
Account function June-2014
(d) Overdrafts (iv) Agency function 41. Which of the following committees is intended to
Codes: review the working of the monetary system in
(a) (b) (c) (d) India?
(1) (i) (ii) (iii) (iv) 1) Narasimham Committee
(2) (iv) (iii) (ii) (i) 2) Tandon Committee
(3) (iv) (ii) (iii) (i) 3) Sukhamoy Chakravarty Committee
(4) (i) (iii) (ii) (iv) 4) Deheja Committee
42. Match the items of List-I with those in List-II and 2) 20% in Nationalised Banks and 49% in Private
select the correct answer. Sector Banks.
List–I List-II 3) 16% in Nationalised Banks and 74% in Private
(i) Bank Rate Policy (a) Involving the Sector Banks.
shortening of the 4) 49% in Nationalised Banks and 51% in Private
currency of bills Sector Banks.
eligible for 45. According to the recent guidelines (2013) of the
rediscount. Reserve Bank of India the Private Sector Banks are
(ii) Credit Rationing (b) Involving the required to have a minimum paid up equity capital
purchase and sale of
of securities in the 1) ` 300 crores
open market. 2) ` 200 crores
(iii) Variable Reserve (c) Involving the 3) ` 400 crores
System alternation of 4) ` 500 crores
discount rate
(iv) Open Market (d) Involving the DEC.-2014
Operations variation of the 41. Match the items of List-I with List-II:
minimum reserves List-I List-II
Codes: (a) RBI Nationalization (i) 1964
(a) (b) (c) (d) (b) Imperial bank (ii) 1949
(1) 1 4 2 3 Nationalization
(2) 2 1 3 4 (c) Nationalization of (iii) 1955
(3) 4 2 1 3 Commercial Banks
(4) 3 1 4 2 (d) Establishment of (iv) 1969
IDBI
43. Match the items of List-I with the items of List-II Codes :
and select the correct answer using the codes given
(a) (b) (c) (d)
below the list.
(1) i ii iii iv
List–I List-II (2) ii iii i iv
(i) Rural Industries (a) Meant for various
(3) iii ii iv i
Programe target groups like
(4) ii iii iv i
Rural youth, Ex-
42. As per the RBI Act. 1934 the following functions are
serviceman, women described as the functions of a Central Bank:
and Scheduled (i) Banking functions
Castes/Tribes (ii) Advisory functions
(ii) Mahila Vikas (b) Aim at ensuring flow (iii) Supervisory functions
Nidhi Scheme of credit to the (iv) Promotional functions
disadvantaged Identify the correct combination
sections of the
society. 1) (i), (iii) and (iv)
(iii) Entre- (c) Commercial 2) (i), (ii) and (iv)
preneurship De exploitation of local 3) (ii), (iii) and (iv)
Development resources. 4) Only (i) and (iii)
Programme 43. Phishing is an attempt to acquire:
(iv) Micro Credit (d) Provides assistance 1) Loan from unauthorized firms
Scheme to voluntary 2) Sensitive information such as username,
organizations for the password, etc.
benefit of women. 3) Personal information from banks
Codes: 4) None of the above
(a) (b) (c) (d) 44. What is Call Money?
(1) (i) (iii) (ii) (iv) 1) Money borrowed or lent for a day or overnight.
(2) (ii) (iv) (i) (iii) 2) Money borrowed by for more than one day but
(3) (iv) (ii) (iii) (i) upto 3 days
(4) (iii) (iv) (i) (ii) 3) Money borrowed for more than one day but
upto 7 days.
44. According to the FDI Policy of the Government of 4) Money borrowed for more than one day but
India (2012), the FDI in banks is limited to upto 14 days.
1) 20% in Nationalised Banks and 74% in Private 45. The Regulatory Authority of Regional Rural Banks
Sector Banks. is
 1) NABARD 1) Identifying fraudsters copying vital information
2) Central Government from credit cards
3) State Government 2) Multiple transactions by one credit card
4) Sponsor Bank 3) Conversion of a debit card into credit card
4) None of the above
June-2015 43. Match the items of List-I with List-II in terms of
functions of a bank:
41. In 1992, the banking sector reforms were introduced List I List II
as per: (Activities) (Functions)
1) C. Rangarajan Committee Report A. Underwriting 1. Primary Functions
2) M. Narasimham Committee Report B. Transfer of funds 2. Granting Advances
3) Suresh Tandulkar Committee Report C. Overdraft 3. Utility Functions
4) Sukhamoy Chakrabarty Committee Report D. Recurring Deposits 4. Agency Functions
42. For the purpose of extending rural banking and agro Codes
finance, the NABARD: A B C D
1) Directly lends and monitors the rural borrowers (1) 1 2 4 3
2) Refinances the banks extending rural finance (2) 4 3 2 1
3) Refinances the rural borrowers obtaining credit (3) 3 4 2 1
from banks
4) Directly finances the rural borrowers and gets (4) 2 4 3 1
refinance from government 44. Which among the following is not a subsidiary of
43. When RBI grants loan to commercial banks and Reserve Bank of India?
charges interest on it, it is called: 1. Deposit Insurance and Credit Guarantee
1) Rapo rate Corporation of India.
2) Reverse Rapo rate 2. Bhartiya Reserve Bank Note Mudran Private
3) Sweep stack rate, basic rate Limited.
4) Bank rate Codes:
44. E-banking business is essentially regulated by the 1) Only 1
Information Technology Act, 2000, under which 2) Only 2
personal signature is replaced by: 3) Both 1 and 2
1) Encrypted signature 4) Neither 1 nor 2
2) Image signature 45. Which among the following is not associated with
3) Digital signature NABARD?
4) Online signature 1. NIEAF
45. In order to control inflation and ensure stability in 2. BIRD
money market: 3. RIDF
1) The RBI works under the direction of ministry 4. SHPI
of finance, government of India. Codes:
2) The RBI acts independently and can refuse the 1) 1 only
government directive. 2) 2 only
3) The RBI acts under the board of directors. 3) 2 and 3 only
4) The RBI’s board of governors shall abide by the 4) None of the above
government directive. July-2016
41. Assertion (A) : “Banks globally are facing more
DEC.-2015 challenges now, and Macro sustainability is a
41. Assertion (A): Taking of deposits and granting of necessity but not sufficient for sustainable economic
loans single out banks. growth.”
Reasoning (R): Banks act as intermediaries when Reason (R) : “Putting regulations in place is only
they mobilize savings from surplus units to shortage one part and their implementation is equally
units in order to finance productive activities. important for achieving growth and sustainability.”
Codes: Codes:
1) (A) is correct and (R) is the correct explanation 1) Both (A) and (R) are true and (R) is correct
of (A). explanation of (A).
2) Both (A) and (R) are correct but (R) is not the 2) Both (A) and (R) are true and (R) is not correct
correct explanation of (A). explanation of (A).
3) (A) is correct but (R) is incorrect. 3) (A) is true and (R) is false.
4) (R) is correct but (A) is incorrect. 4) (A) is false but (R) is true.
42. “Skimming” in e-banking refers to: 42. Banking on telephone service includes:
1. Automatic balance voice out
 2. Inquiry all term deposit account 2) Assets of a bank
3. Direct cash withdrawal 3) Foreign exchange items of a bank
4. Utility bill payment 4) Off-balance sheet items of a bank
5. Voice out last five transactions
Codes: November-2017
41. Match the items of List-I with List-II and indicate the
1) 1, 2, 3 and 5 code of correct matching:
2) 1, 2, 4 and 5 List-I List-II
3) 2, 3, 4 and 5 (Name of (Year of
4) All 1, 2, 3, 4 and 5 organisation) establishment)
43. Which one of the following banks currently ranks (a) IDBI (i) 1956
number one in India in terms of market (b) ICICI (ii) 1955
capitalization? (c) LIC of India (iii) 1990
1) State Bank of India (d) SIDBI (iv) 1964
2) I.C.I.C.I. Bank Code
3) U.T.I. Bank
4) I.D.B.I. Bank A B C D
(1) iii i ii iv
Jan.-2017
(2) iii i iv ii
42. Match the items of Column-I with the items of
Column-II and suggest the correct code. (3) iv ii i iii
Column-I Column-II (4) i ii iii iv
a. Relationship i. Dealing in hundis and 42. Statement (I): Capital adequacy norms help
Banking acceptance of deposits. banks in strengthening their
b. Merchant ii. Widening the capital base.
Banking entrepreneurial base and Statement (II) : Capital adequacy norms help
assist in a rapid rate of banks in sanctioning more loans.
industrial growth.
c. Indigenous iii. Engaged in the business Code:
Banking of Issue Management
d. Development iv. Creating, maintaining and 1) Both the statements (I) and (II) are correct
Banking enhancing strong 2) Both the statements (I) and (II) are incorrect.
relationship with 3) Statement (I) is correct but (II) is incorrect.
customers. 4) Statement (I) is incorrect but (II) is correct.
Codes : 43. What is Hawala?
a b c d 1) Tax evasion
(1) iv ii i iii 2) Illegal trading in stock exchanges
(2) ii iv iii i 3) Bank robbery
(3) iv iii i ii 4) Illegal transactions of foreign exchange
(4) ii i iv iii 44. Read the following events:
43. In which year, IFCI Act was amended in order to (i) Capital adequacy norms for commercial banks
make it possible to provide assistance, inter alia, for (ii) Establishment of IDBI
medical, health or other allied services? (iii) Allowing convertibility of rupee at the market
1) 1960 rate in the current account.
2) 1970 (iv) Nationalisation of general insurance business.
3) 1973 Arrange the events in the ascending order of their
4) 1986 occurrence:
44. SIDBI was set up as a subsidiary of IDBI to
1) Take over the functions of small business 1) (i), (ii), (iii), (iv)
financing of IDBI. 2) (iv), (iii), (ii), (i)
2) Take over the venture capital operations of 3) (iv), (ii), (i), (iii)
ICICI. 4) (i), (ii), (iv), (iii)
3) Reconstruct and rehabilitate the sick and closed 45. Assertion (A): The future will see mostly the
industrial units financed by IDBI. electronic money clearance
4) Facilitate, finance and promote India’s Foreign through satellite networking
trade. Reasoning (R) : RBI is encouraging e-banking.
45. Letters of credit, Guarantees, Forward Contracts etc.,
come under which one of the following?
1) Liabilities of a bank
 Code: 2) To channelise the pooled savings into
productive outlets.
1) (A) is true but (R) is false. 3) To provide finance under hire purchase finance
2) (A) is false but (R) is true. and housing finance to its members.
3) Both (A) and (R) are true and (R) is the correct 4) To give everyone a chance to indirectly own
explanation of (A). shares and securities in a large number of select
4) Both (A) and (R) are true but (R) does not companies.
support (A). 62. Which one of the following is the main objective of
IFCI?
July-2018 1) To offer both small and large investors the
means of acquiring shares in the widening
57. Which one of the following is not the function of prosperity resulting from the steady industrial
NABARD? growth of the country.
1) To provide refinance assistance by way of short 2) To upgrade technology, modernization and to
term credit to state cooperative banks and promote marketing of products of small scale
sectoral rural banks, etc., approved by the RBI sector.
for some specific purposes. 3) To serve as the apex institution for term finance
2) To undertake inspection of cooperative for industry with coordination, regulation and
societies other than primary cooperative supervision of the working of other financial
societies and RRBs. institution.
3) To promote research in various aspects of the 4) To provide medium and long term financial
problems of urban development. assistance to industrial undertakings,
4) To subscribe to share capital or invest in particularly in those circumstances in which
securities of any institution concerned with banking accommodation is in appropriate or
agricultural and rural development. resource to capital market is impracticable.
58. Which one of the following financial institutions 63. Match the items of List - II with the items of List - I
co-ordinates the functions and operations of all the and indicate the correct code:
financial institutions into a single integrated
List - I
financial structure so that each may contribute to
1. Term finance
the growth of the economy ?
2. Refinance
1) IFCI
3. Financial inclusion
2) UTI
4. Venture capital
3) IDBI
List - II
4) SIDBI
(i) Providing finance to new or existing industrial
59. Assertion (A) : The Reserve Bank of India is
units for encouraging commercial application
entrusted with the management of the public debt
of technology/ expansion.
and issue of new loans and treasury bills on behalf
(ii) Delivering of banking services at affordable
of the central and state Governments.
cost to the vast sections of disadvantaged and
Reasoning (R) : The Governor and the Deputy
low income groups.
Governors of Reserve Bank of India are appointed
(iii) Providing replenishment finance to eligible
by the Central Government.
institutions for their loans to industrial
Code :
concerns.
1) (A) is correct but (R) is not correct. (iv) Providing finance to the borrowers for
2) (A) and (R) both are correct but (R) is not the expansion and modernization of plant and
right explanation of (A). equipment.
3) (A) and (R) both are correct and (R) is the right Code :
explanation of (A). (a) (b) (c) (d)
4) (A) and (R) both are not correct.
(1) (i) (ii) (iii) (iv)
60. __________ refers to the process of removing or
(2) (i) (ii) (iv) (iii)
stripping the legal status of a currency.
(3) (iv) (iii) (ii) (i)
1) Digitisation
(4) (iv) (iii) (i) (ii)
2) Financial Inclusion
3) Demonetisation
4) Micro finance
61. Which one of the following is not the objective of
UTI?
1) To mobilise savings of the community by
offering savers the triple benefits of safety,
liquidity and profitability of Investments.
 ASTRAL EDUCATION
COMMERCE (EM) BANKING AND FINANCIAL INSTRUCTION PYP (P-2)

ANSWER KEYS
JUNE-2012
2 4 41 1 42 1 43 3 44 2 45 1

DEC.-2012
41 2 42 1 43 3 44 2 45 2

JUNE-2013
1 3 2 3 41 1 42 2 43 3 44 1 45 4

DEC.-2013
1 3 41 2 42 3 43 1 44 1 45 4

JUNE-2014
41 3 42 4 43 4 44 1 45 4

DEC.-2014
41 4 42 1 43 2 44 1 45 1

JUNE-2015
41 2 42 2 43 4 44 3 45 2

DEC.-2015
41 1 42 1 43 3 44 4 45 4

JULY-2016
41 1 42 2 43 1

JAN.-2017
42 3 43 4 44 1 45 4

NOV.-2017
41 3 42 3 43 4 44 * 45 3

JULY-2018
57 3 58 3 59 2 60 3 61 3 62 4 63 3
 ASTRAL EDUCATION
COMMERCE (E.M.) BANKING AND FINANCIAL INSTRUCTION PYP (P-3)

June-2012 2) Bombay Stock Exchange

3) Over the Counter Exchange of India
48. ‘VSAT’ technology is first followed for on-line 4) Multi Commodity Stock Exchange
trading by 49. Which one of the following is not a money market
1) BSE instrument?
2) OTCEI 1) Commercial paper
3) NSE 2) Participatory certificates
4) ISE 3) Warrants
49. Match the following: 4) Treasury Bills
List–I List-II 50. Which one is related with micro-financing?
Years Act 1) SHG
(A) 1956 (i) Consumer Protection Act 2) Anganwadi workers
(B) 1986 (ii) Indian Companies Act 3) Women Entrepreneurs
(C) 1972 (iii) Securities and Exchange 4) None of the above
Board of India 66. Match the following:
(D) 2002 (iv) Securitisation Act List–I List-II
Codes: (A) Selective credit 1. Consumer Credit
(A) (B) (C) (D) control Regulation
1) (ii) (i) (iii) (iv) (B) Encourage credit for 2. Cash Reserve
2) (i) (ii) (iii) (iv) desirable use Ratio
3) (ii) (iii) (i) (iv) (C) Quantitative credit 3. Variation in
4) (i) (iv) (iii) (ii) control Margin
62. The commercial banks do not perform one function (D) Bank Rate 4. Re-discounting
out of the followings: Rate
1) Mobilisation of savings Codes:
2) Giving Loans and Advances (A) (B) (C) (D)
3) Issuing Currency Notes 1) 4 2 3 1
4) Financing Priority Sectors. 2) 3 1 2 4
63. There are two lists of items, match the items of 3) 1 3 2 4
List-I with items of List-II: 4) 2 1 3 4
List–I List-II 67. Assertion (A) : Use of paper money is replaced by
I. Reserve Bank of 1. NPA plastic money. The future will see the electronic
India money clearance through satellite networking.
II. EXIM Bank 2. Facilitating Small Reason (R) : RBI is encouraging e-banking
Scale Industries
Codes:
III. SIDBI 3. Credit Control
IV. Capital Adequacy 4. Export/Import 1) (A) is false, but (R) is true.
Financing 2) (A) is true, but (R) is false.
3) Both (A) and (R) are false.
Codes:
4) Both (A) and (R) are true.
I II III IV
68. Which one is not Finance Company?
1) 1 2 3 4
1) Hire-Purchase Finance Company
2) 4 3 2 1
2) IRDA
3) 2 3 4 1 3) Mutual Benefit Finance Companies
4) 3 4 2 1 4) Loan companies
64. One of the items is not related with e-banking: 69. The Securities and Exchange Board of India was
1) Demand Draft not entrusted with the function of
2) SPNS 1) Investor Protection.
3) ECS 2) Ensuring Fair practices by companies.
4) ATM 3) Promotion of efficient services by brokers
4) Improving the earnings of equity holders.
DEC.-2012 70. Which one is not Non-Marketable securities.
1) Hire-Purchase Finance Company
48. ‘BOLT’ system in the Indian Securities market is 2) Bank Deposits
related to 3) Deposits with Companies
1) National Stock Exchange
 4) Office Certificates and Deposits. 63. Assertion (A) : Most of the development bank in
India have setup private commercial banks after the
June-2013 introduction of capital adequacy norms.
Reason (R) : Development banks in India have not
46. Full details for the issue of ADRs y a company
adhered to the basic objectives.
must be furnished within 30 days from the date of
its closure to Codes:
1) Securities and Exchange Commission (SEO) 1) Both (A) and (R) are correct and (R) is the
2) Reserve bank of India (RBI) explanation of (A).
3) Securities and Exchange Board of India 2) (A) and (R) both are correct, but (R) is not the
(SEBI) correct explanation of (A).
4) Company Law board (CLUB) 3) (A) is correct, but (R) is incorrect
57. Transaction of Internet Banking excludes. 4) (R) is correct, but (A) is incorrect.
1) Withdrawal of cash anywhere in India. DEC.-2013
2) Statement of account for a specific period.
10. A standard which can be attained under the most
3) Transfer of funds from one account to another
favourable working conditions is called
account. 1) Attainable Standard
4) Balance enquiry. 2) Basic Standard
60. Assertion (A) : “The problem of rural credit is not
3) Current Standard
primarily one of rural credit, it may be said to be
4) Ideal Standard
one of rural minded credit.” 11. Which of the following ratios are taken into
Reason (R) : The Indian economy has yet to come
consideration by a banker before sanctioning the
out of rural mentality. loan?
Codes: 1) Proprietary Ratio
1) Both (A) and (R) are correct. 2) Stock-Turnover Ratio
2) Both (A) and (R) are incorrect. 3) Debt-Equity Ratio
3) (A) is correct, but (R) is incorrect. 4) All of the above
4) (R) is correct, but (A) is incorrect. 57. Assertion (A) : The Central Bank of the country is
61. Match the items of List-I with the items of List-II responsible to maintain stability of the monetary
and select the correct answer: standard which involves currency circulation.
List–I List-II Reason (R) : The Central Bank is the only
(i) Debit card (A) Several Storage authorized entity to do so.
(ii) Credit card (B) Online Codes:
recovery of 1) (A) and (R) both are correct
amount 2) (A) and (R) both are incorrect.
(iii) Electronic purse (C) Image 3) (A) is correct, but (R) is incorrect
processing use 4) (R) is incorrect, but (A) is incorrect.
(iv) Cheque function (D) Revolving 58. Identify the quantitative credit control methods
Credit among the following:
Codes: (i) Bank Rate
(i) (ii) (iii) (iv) (ii) Credit Rationing
1) (C) (A) (D) (B) (iii) Open Market Operations
2) (A) (B) (D) (C) (iv) Variable Reserve Ratio
3) (D) (C) (A) (B) (v) Selective Credit Control
4) (D) (C) (B) (A) (vi) Liquidity Ratio
62. Assertion (A) : The Indian economy could survive Codes:
in the recent global recession due to its strong
banking system. 1) (i), (ii), (iii) and (iv)
Reason (R) : The India economy contains a large 2) (ii), (iii), (iv) and (v)
3) (i), (iii), (iv) and (vi)
amount of black money.
4) (i), (iii), (iv) and (vi)
Codes: 59. The following activities are mainly related to which
1) Both (A) and (R) are correct and (R) is the organization?
explanation of (A). (i) Micro Finance
2) Both (A) and (R) are correct, but (R) is not the (ii) Rural finance
correct explanation of (A). (iii) Self Help Groups
3) (R) is correct, but (A) is not the appropriate (iv) Cooperative Banks Finance
assertion of (R)
1) Industrial Finance Corporation of India
4) Both (A) and (R) are incorrect.
 2) Ministry of Finance Committee malpractices in banks
3) Reserve Bank of India 3. Ghosh (C) Securities operation of
4) National Bank for Agriculture and Rural Committee banks and financial
Development institutions
60. PIN in banking transaction is known as 4. Jankiraman (D) Financial system in
1) Postal Index Number Committee India
2) Permanent Identification Number Codes:
3) Personal Identification Number (A) (B) (C) (D)
4) Public Interlocking Numeric 1) 3 4 2 1
61. Reserve Bank of India was nationalized on 2) 2 3 4 1
1) January 26, 1948 3) 4 2 3 1
2) January 01, 1949 4) 3 4 1 2
3) January 26, 1950
4) January 01, 1956 43. Which of the following financial institutions is not
62. When a banking company is placed under within the supervisory Purview of Reserve Bank of
moratorium under Section 45 of the banking India?
(Regulation) Act 1949, the RBI must prepare a 1) Foreign Commercial Banks Operating in India
scheme of 2) Regional Rural Banks
1) VRS for staff 3) Mutual Funds
2) Capital Buy-Back 4) State Co-operative banks
3) Reconstruction of the company or 44. The repo and Reserve Repo rates are resorted to by
amalgamation with any other bank the RBI as a tool of
4) IPO of the bank 1) Credit Control
63. Match the following items of List-I with List-II: 2) Settlement Systems
List–I List-II 3) Currency Management
(A) SWIFT (i) 1996 4) Liquidity Control
(B) NEFT (ii) 1988 45. Which one of the following institutions in promoted
(C) BASEL I Accord (iii) 1973 by the IFCI:
(D) BASEI. II Accord (iv) 2004 1) Credit Analysis and Research Ltd. (CARE)
Codes: 2) Rashtriya Gramin Vikas Nidhi (RGVN)
3) Clearing Corporation of India Ltd. (CCIL)
(i) (ii) (iii) (iv)
4) Small Industries Development Bank of India
1) (A) (B) (C) (D)
(SIDBI)
2) (B) (C) (A) (D)
3) (D) (C) (B) (A)
4) (C) (A) (D) (B) DEC.-2014
5. Identify the incorrect combination from the following:
Finance Constituted Report Chairman
June-2014 Commission (Year) Submitted
41. The profitability of public-sector banks is low due (Year)
1) 1st 1951 1953 K.C. Neogi
to
2) 7th 1977 1978 J.M. Shelat
(i) Over-cautions approach to lending
3) 11th 1998 2000 N.K.P.
(ii) Reserve bank Policies Salve
(iii) High Overhead Costs 4) 13th
2007 2009 V.L. Kelkar
(iv) Social – sector leading
14. Match the various stock exchanges in List-I with the
Identify the correct codes: years of heir establishment in List-II as follows and
suggest the correct codes:
Codes: List-I List-II
(A) National Stock Exchange (i) 1875
1) (i) and (ii)
(NSE)
2) (i) and (iv)
(B) MCX Stock Exchange (ii) 1992
3) (i), (iii) and (iv)
(MCX-SX)
4) (ii) and (iii)
(C) Bombay Stock Exchange (iii) 2000
42. Match the items of list – I wit those II an select (BSE)
correct answer: (D) Interconnected Stock (iv) 2008
List–I List-II Exchange of India (ISEI)
1. Narasimham (A) Lending under Codes :
Committee consortium (A) (B) (C) (D)
arrangement 1) ii iv i iii
2. Shetty (B) Frauds and
2) ii iii iv i
 3) i iii ii iv a whole and it is through the liquidity in the market
4) iii ii iv i that influence the cost and availability of credit.
56. What is true about the Basel Committee on Banking Reasoning (R): A well organised money market is
Supervision (BCBS)? an essential condition for the successful operation of
(i) BCBS is an Indian national Committee of the Central Banking policies, and for holding the
Banking supervisory authority. conditions of liquidity within the bounds of what the
(ii) BCBS was established by a group of 19 monetary authorities consider desirable.
nationalized commercial banks. 1) (A) is true but (R) is false
(iii) BCBS was established in 1996 2) (R) is true but (A) is false
(iv) It provides a forum for regular cooperation on 3) (A) is true and (R) offers correct explanation to
banking supervisory matters. (A)
Codes : 4) Both (A) and (R) are false
1) (i) and (ii) only 44. The operations of banks and financial institutions are
2) (ii) and (iii) only regulated by:
3) (iii) and (iv) only 1) The RBI Act 1934 only
4) (iv) only 2) The Banking Regulation Act 1949 only
57. Under the Cooperative Bank structure, the apex 3) Information Technology Act 2000 only
institution is 4) All of the above
1) National Cooperative Bank 45. To operationalise online, internet, mobile banking,
2) State Cooperative Bank debit card and credit card tools, some of the essential
3) District Cooperative Bank ingredients are:
4) IDBI Bank 1) Compliance with the Information Technology
58. What is SLR ratio of a bank? Act 2000
1) Ratio of total deposits against total investments. 2) Satellite connection
2) Amount deposited by the bank with the Central 3) Selection of a portal and server
Bank in the form of cash, gold and securities. 4) All of the above
3) Amount that commercial banks are required to 51. Match the items of List-I with items of List-II and
maintain before providing credit to customers. choose the correct code:
4) Amount that commercial banks deposit with the List I List II
foreign banks. A. SEBI 1. Exchange for small companies
B. RBI 2. Secondary market in treasury bills
June-2015 C. STCI 3. Regulation of secondary market
41. Interest earned by a depositor against a deposit with D. OTCEI 4. Ad-hoc treasury bills
a commercial bank for custodial service: Codes
1) is a fund based income A B C D
2) is a fee based income 1) 4 2 3 1
3) is a combination of fund and fee based gain 2) 3 4 2 1
4) is a commitment based gain 3) 3 1 2 4
42. Match the items of List-I with items of List-II and 4) 2 3 1 4
choose the correct code:
List I List II
A. ATM card 1. NPA DEC.-2015
3. LIBOR term is used for:
B. Debts due for more 2. John Shephard
than 30 days Barron 1) Deposit rate in European market
C. Micro finance 3. State Finance 2) Interest rate in Euro currency market
Corporations Act 3) Deposit rate applicable to interbank loads in
London
D. State level finance 4. NABARD
corporations 4) Interest rate in Euro bond market
4. Which of the following characterizes the early stage
Codes
financial crises?
A B C D
1) Falling the price of residential properties
1) 1 3 2 4
2) Excessive euphoria about the future price of
2) 2 1 4 3 certain assets
3) 4 3 2 1 3) Excessive pessimism about future assets price
4) 2 1 3 4 4) Stragnating share price
43. Assertion (A): A well developed money market is 33. Concentration Banking is a method of:
the basis for an effective monetary policy. It is in the 1) Decentralised collection
money market that the Central Bank comes into 2) Centralised collection
contact with the financial sectors of the economy as 3) Direct collection
4) Payment only through cheques
41. Select the major principles which banks strive to 4. Money market mutual funds invest money in
incorporate in their working from the following: specifically, high-quality and very short
1. Profitability maturity-based money market instruments.
2. Labour welfare Codes:
3. Social welfare 1) 1 and 3
4. Safety 2) 2 only
5. HRD 3) 4 only
6. Liquidity 4) None of the above
Codes: 66. Examine the following statements and choose the
1) 1, 2, 4, 5 correct answer:
2) 1, 3, 4, 6 Statement I: FIIs do not invest in unlisted securities.
3) 3, 4, 5, 6 They participate only through Stock Exchanges.
4) 1, 2, 3, 4 Statement II: FIIs cannot invest at the time of initial
42. Identify the years in which different phases of Bank allotment.
Nationalisation took place in India: Codes:
1. 1950 1) Both the statements are wrong
2. 1955 2) Both the statements are correct
3. 1969 3) Statement I is correct but the statement II is
4. 1949 wrong
5. 1980 4) Statement I is wrong but the statement II is
Codes: correct
1) 1, 2, 3, 4
2) 2, 3, 5 July-2016
3) 2, 4, 5 33. Identify the correct combination of statements with
4) 3, 4, 5 regard to banking in India.
43. ‘SWIFT’ stands for 1. For many years the presidency bank had acted as
1) Society for Worldwide Inter-bank Fund Transfer quasi-central banks.
2) Society for Worldwide Inter-bank Fast 2. The Bank of Hindustan was liquidated during
Transmission 1829-32.
3) Society for Worldwide Inter-bank Financial 3. General Bank of India was an unsuccessful bank
Telecommunications and was dissolved in 1791.
4) None of the above Codes:
44. Select the techniques of monetary control adopted by
RBI from the following: 1) 1, 2 and 3
1. Cash Reserve Ratio 2) 2, 3 and 4
2. Statutory Liquidity Ratio 3) 1, 2 and 4
3. Bank Rate 4) 1, 2, 3 and 4
4. Currency Rate 34. Which combination of the following methods
Codes: indicates quantitative methods of control of credit
1) 1, 2, 3, 4 creation practiced by the Reserve Bank of India?
2) 2, 3, 4 1. Bank Rate
3) 1, 3, 4 2. Open Market Operations
4) 1, 2, 3 3. Variable Reserve Ratios
45. Which of the following is not a development 4. Credit Rationing
banking institution? Codes:
1) IDBI
2) IFCI 1) 1, 2 and 3
3) EXIM Bank 2) 1, 2 and 4
4) ICICI 3) 2, 3 and 4
55. Identify the incorrect statement(s), regarding money 4) 1, 3 and d
market, among the following: 35. Which one of the following development financial
1. The call money market deals in short term institutions in India has started the special refinance
finance repayable on demand, with a maturity scheme for the resettlement and rehabilitation of
period varying from one day to 14 days. voluntary retired workers of the National Textile
2. Treasury bills are instruments of short-term Corporation of India?
borrowing by the Government of India, issued as 1) IDBI
promissory notes under discount. 2) SIDBI
3. A reduction in the repo rate helps banks to get 3) ICICI
money at a cheaper rate. 4) None of the above
36. Read the following statements and choose the industrial concern at the same cost, subject, however,
correct code: to any liability arising out of taxes and other levis,
Statement-I : Small Industry Development Bank being put to the account of the actual user industrial
of India (SIDBI) was set up as a wholly owned concern?
subsidiary of RBI. 1) Equipment Credit Scheme
2) Equipment Procurement Scheme
Statement-II : SIDBI has taken over the
3) Equipment Finance Scheme
responsibility of administering small industry 4) Scheme of Equipment Leasing
development fund managed by IDBI. 37. Match the items of List-I with List-II and denote the
Codes: code of correct matching.
1) Only (I) is correct List-I List-
2) Only (II) is correct II
3) Both (I) and (II) are correct A. International Bank for i. 1945
4) Both (I) and (II) are wrong. Reconstruction and Development
B. International Finance Corporation ii. 1956
Jan.-2017 C. Asian Development Bank iii. 1966
33. Match the following items of List-I with the items of Export-Import Bank of India iv. 1981
List-II and indicate the code of correct matching. D.
List – I List – II Codes :
(Name of Bank) (Year of establishment) A B C D
1) i ii iii iv
A. IFCI i. 1981
2) iv iii ii i
B. SIDBI ii. 1982 3) i iii ii iv
C. NABARD iii. 1948 4) ii i iv iii
D. EXIM Bank iv. 1990
Codes : November-2017
A B C D 33. When was paper currency first started in India?
1) iii i ii iv 1) 1542
2) iv ii iii i 2) 1611
3) iv iii ii i 3) 1705
4) iii iv ii i 4) 1801
34. With a view to encourage newer classes of 34. ‘RWA’ with regard to capital adequacy stands for
entrepreneurs and bringing about wider dispersal of which one of the following?
ownership and control of industrial undertakings, 1) Risk Withdrawal Adjustments
IDBI operates a special scheme for supplementing 2) Risk Withdrawal Arrangements
the equity contribution to projects made by small and 3) Risk Weighted Assets
new entrepreneurs. This scheme is known as 4) Risk-free Weighted Assets
1) Bridge Loan Scheme 35. Match the items of List-I with List-II and denote the
2) Soft Loan Scheme for Modernization code of correct matching:
3) Technical Development Fund Scheme List I List II
4) Seed Capital Assistance Scheme (A) Future (i) Consists of purchase or sale
35. Which one of the following is not the objective of of commodities in two
UTI? different markets with the
1) To give everyone a chance to indirectly own expectations that a future
shares and securities in a large number of select change in price in one
companies. market will be off set by an
2) To maximize mobilization of people’s savings opposite change in the
by making insurance linked savings adequately other market
attractive. (B) Swap (ii) A contract in which a seller
3) To channelize the pooled savings into productive agrees to deliver an asset to
outlets. a buyer at a predetermined
4) To mobilize savings of the community by price at some future date as
offering savers the triple benefits of safety, privately negotiated
liquidity and profitability of investments. (C) Hedging (iii) A contractual agreement for
36. Under which of the following schemes, the IFCI exchanging a steam of
procures equipment for an actual-user industrial payments with opposite and
concern by making payment to the matching needs, to reap the
machinery/equipment supplier, and then benefit arising due to
resells/transfers the equipment to the actual-user- market discrepancies
 (D) Forward (iv) A contract covering the
purchase and sale of
physical commodities or
financial instruments for
future delivery on a future
exchange floor
Codes
(A) (B) (C) (D)
1) (iv) (iii) (ii) (i)
2) (i) (ii) (iii) (iv)
3) (ii) (i) (iii) (iv)
4) (iv) (iii) (i) (ii)
36. Which of the following are the forms of e-banking?
Select the correct code.
(A) Internet Banking
(B) Telephone Banking
(C) Electronic Cheque Conversion
(D) Electronic Bill Payment
(E) Direct Fund Transfer Through RTGS
Code:
1) (A), (C) and (D)
2) (A), (B), (C) and (D)
3) (B), (C) and (D)
4) (A), (B), (C), (D) and (E)
42. Which of the following statements are False?
Indicate the correct code.
(a) RBI has prescribed guidelines for the
operations of credit rating agencies in India.
(b) All venture capital funds in India have been
promoted by Government.
(c) A mutual fund can operate as venture capital
fund.
(d) Credit rating is an authoritative guarantee
regarding the credit position of a person.
Code:
1) (A), (B), (C) and (D)
2) (A), (B) and (D)
3) (A), (B) and (C)
4) (A) and (C)
43. Which of the following are the examples of
systematic risk? Indicate the correct code.
(a) Elimination of Government Subsidy
(b) Increase in Bank Rate
(c) Labour Problem
(d) High Levered Fund
Code:
1) (A), (B) and (C)
2) (A), (B) and (D)
3) (A) and (B)
4) (A) and (D)
 ASTRAL EDUCATION
COMMERCE (EM) BANKING AND FINANCIAL INSTRUCTION PYP (P-3)

ANSWER KEYS
JUNE-2012
48 3 49 1 62 3 63 4 64 1

DEC.-2012
48 2 49 3 50 1 66 2 67 4 68 2 69 4 70 1

JUNE-2013
46 2 57 1 60 3 61 2 62 2 63 3

DEC.-2013
10 4 11 3 57 3 58 4 59 4 60 3 61 2 62 3 63 2

JUNE-2014
41 3 42 2 43 3 44 4 45 2

DEC.-2014
5 3 14 1 56 4 57 2 58 3

JUNE-2015
41 1 42 2 43 3 44 4 45 4 51 2

DEC.-2015
3 3 4 2 33 1 41 2 42 2 43 3 44 4 45 3 55 4 66 1

JULY-2016
33 1 34 1 35 1 36 2

JAN.-2017
33 4 34 4 35 2 36 2 37 1

NOV.-2017
33 * 34 3 35 4 36 4 42 2 43 3
 ASTRAL EDUCATION
COMMERCE (E.M.) INTERNATIONAL BUSINESS PYP (P-2)

June-2012 46. International liquidity comprises which four of the

following?
46. Balance of Payment can be made favourable it i. Gold held by Central Banks.
1) Exports are increased
ii. Gold held by families
2) Imports are increased iii. Forex Reserve held by Commercial Banks.
3) Devaluation of money iv. Mineral wealth
4) (1) and (3) v. SDRs
47. Which one is not an objective of IMF? vi. Borrowing facilities.
1) To promote international monetary co- vii. NRIs FDRs
operation viii. Credit facilities available under SWAP
2) To ensure balanced international trade 1) i, ii, iii, iv
3) To finance productive efforts according to 2) ii, iii, iv, viii
peace-time requirement 3) i, iii, v, viii
4) To ensure exchange rate stability 4) iii, iv, vii, viii
48. EPCG denotes 47. Which among the following are important bodies of
1) Export Potential and Credit Guarantee WTO?
2) Earning Promotion and Credit Guarantee i. Dispute settlement Body.
3) Export Promotion and Credit Guarantee ii. NAFTA
4) Export Potential and Credit Goods. iii. Trade Policy Review Body
49. Which one of the following matches correspond to iv. ASEAN
the Member and Observer countries of The v. Council for Trade in Goods
SAARC? vi. IBRD
(i) India, Pakistan, Bangladesh, Bhutan, Nepal, vii. Council for Trade related aspects of
Sri Lanka, Afghanistan, Maddive Intellectual Property Rights.
(ii) Iran, China, Japan, USA, South Korea, viii. GATT
European Union An appropriate combination is
(iii) Pakistan, Nepal, India, Bangladesh, Iran
(iv) U.K. USA. North Korea South Africa 1) i, ii, iii, iv
2) ii, iii, iv, v
1) (iii) and (iv)
3) i, iii, v, vii
2) (ii) and (iv)
4) iv, v, vi, viii
3) (i) and (ii) 48. Which one if not the source of External Finance?
4) (ii) and (iii) 1) WTO Funds
50. Which one is not an international organisation? 2) World Bank Group
1) SAARC 3) Export Credit
2) ASEM 4) Foreign Direct Investment
3) ASEAN 49. Which one is called Bretton-Wood Twins?
4) CBDT 1) IBRD and IDA
DEC.-2012 2) IMF and IFC
3) IMF and IBRD
4. Out of the following, which four benefits are
4) IDA and IFC
available to host countries from MNCs?
50. UNCTAD stands for
i. Transfer of technology
ii. Learning of business mannerism 1) United Nations Committee on Tariff and
iii. Strategic information sharing Development.
iv. Creation of jobs 2) United Nations Conference on Trade and
v. Entertainment Deficit.
vi. Better utilisation of resources 3) United Nations Conference on Trade and
vii. Enhancing social contacts Development.
viii. Improved competition in local economy 4) Union of Nations Cause for Trade and
1) i, iii, v, vii Development.
2) ii, iv, vi, viii
3) i, iv, vi, viii
4) iii, vi, vii, viii
June-2013 June-2014
46. Flow of foreign loans and investment affect 46. International trade theory which provides that
1) Trade balance capital intensive country should export labour
2) Current Account balance intensive goods and import capital goods is referred
3) Capital Account balance to as
4) None of the above 1) Leontief Paradox
47. Concessions mainly multinational in character 2) Hecksher-Ohlin Theory
come under the principle of 3) Mercantilism Theory
1) Non-discrimination 4) Theory of Comparative Advantage
2) Reciprocity 47. Which of the following is not a form of economic
3) Market Access integration in the context of intra-regional trade?
4) Fair Competition 1) Customs Union
48. From the following identify the one which is not a 2) European Union
commercial counter trade? 3) Economic Union
1) Classical barter 4) African Union
2) Counter purchase 48. ‘Crawling Peg System’ means
3) Pre-compensation 1) Fixed Exchange Rate System.
4) Buy-back agreement 2) Floating Exchange Rate system
50. Identity the item which does not include under 3) Hybrid of Fixed and Floating Exchange
Current Account transaction. System
1) Service 4) None of the above
2) Non-monetary movement of gold 49. From the following modes of international
3) Unilateral transfer business, identify the mode which involves strategic
4) Investment income alliance
DEC.-2013 1) Franchising
2) Leasing
4. Uruguay Round pertains to 3) Turkey Project
1) WTO 4) Joint venue
2) IMP 50. Which of the following expressions amount to the
3) GATT import restriction measures?
4) World Bank (i) Currency control
46. Match the following List-I with List-II and select (ii) Establishment of EPZs
the correct answer.
(iii) Tariff cuts
List–I List-II
(iv) Imposition of Tariffs
(a) Comparative Cost (i) Gottfried
Theory of Haberler (v) Imposition of non-tariff barriers
International Trade Codes:
(b) International Trade (ii) J.S. Mill
Theory of 1) (i), (ii) and (iii)
Opportunity Cost 2) (i), (iv), and (v)
(c) Factor Endowment (iii) David Ricardo 3) (iii), (iv), and (v)
Theory of 4) (ii), (iii) and (v)
International Trade DEC.-2014
(d) Doctrine of (iv) Hecksher-Ohlin 47. In international trade which of the following is non-
Reciprocal tariff trade barrier?
Demand 1) Quotas
Codes: 2) Import bans
(a) (b) (c) (d)
3) Export controls
(1) (iii) (ii) (iv) (i)
(2) (i) (iii) (ii) (iv) 4) Anti dumping laws
(3) (iii) (i) (iv) (ii) 48. Match the item of List-I with items in List-II and
(4) (ii) (i) (iv) (iii) select a correct code:
List-I List-II
50. An MNC that maintains a balance between the (a) Current Account (i) Official Capital
home market and host market oriented policies is (b) Capital Account (ii) Reserves from
1) Ethnocentric firm foreign countries
2) Polycentric firm (c) Unilateral (iii) Reparations
3) Geocentric firm
Payments
4) None of the above
(d) Official (iv) Visible Exports
Statement and Imports
Account
 Codes : 48. Assertion (A): The member nations, consistently
(a) (b) (c) (d) finding balance of payments crisis, may approach the
(1) i iii ii iv World Bank seeking financial accommodation to
(2) iv i ii iii mitigate the crisis.
(3) iv i iii ii Reasoning (R): The member nations facing balance
(4) iii ii i iv of payments crisis can approach the IMF seeking
49. Match the items of List-with items in List-II and redressal of the BOP crisis.
select a correct code: Codes:
List-I List-II 1) (A) is correct and (R) is correct explanation of
(a) Vishesh Krishi (i) Scheme intended to (A).
Upaj Yojana reduce difficulties of 2) (A) is correct but (R) is wrong.
exporters 3) (R) is correct and (A) is wrong.
(b) EPCG (ii) Duty Entitlement 4) Both (A) and (R) are wrong.
Pass Book 49. In computation of balance of payments, overall
(c) DFRC (iii) To boost exports of balance of payments =
fruits, vegetables, 1) Balance of current account + Balance of capital
flowers, minor forest account + Statistical discrepancy
produce etc. 2) Export of goods and invisible – Import of goods
(d) DEPB (iv) Relating to import of 3) Foreign exchange inflow – Foreign exchange
duty free fuel outflow
Codes : 4) Export of goods and invisible + Import of goods
(a) (b) (c) (d) and invisibles
(1) iv i ii iii 50. The instrument chosen for enhancement of
international liquidity is:
(2) iv iii i ii
1) Society for World-wide Inter-bank Financial
(3) iii iv ii i
Telecommunications (SWIFT)
(4) iii i iv ii
2) Special Drawing Rights (SDRs)
50. Which of the following is not the not the agency of
3) Multilateral Netting
World Bank?
4) Netting of Payments
1) MIGA
2) ICSID
DEC.-2015
3) ADB 4. Assertion (A): Industrialization of an economy is
4) IDA
considered synonymous with growth.
Reasoning (R): The transfer of resources from
agrarian to industrial may be capital or labour or
June-2015 both.
46. In respect of international business, a project is
Codes:
called a turnkey project because: 1) Both (A) an (R) are true and (R) is correct
1) The licensee agrees to construct an entire plant
explanation of (A).
in his home county and hands over the key.
2) Both (A) an (R) are true but (R) is not the correct
2) The licensor starts the operation and hands over
explanation of (A).
the key of the operating plant to the licensee.
3) (A) is true but (R) is false.
3) The licensor starts the operation and then invites
4) (A) is false but (R) is true.
the licensee and hands over the key to complete 5. Globalization is the term used to describe process of
the remaining work.
removal of restriction on which one of the
4) The licensor and the licensee jointly carry out
following?
the project and agree to share profit equally.
1) Foreign trade
47. Match the items in List-I with the items in List-II:
2) Investment
List I List II 3) Both (a) and (b)
A. Bretton woods conference 1. WTO 4) None of the above
B. Soft loan window 2. World Bank
46. Examine the following statements and choose the
C. Geneva 3. IFC
correct code:
D. Loan to private sector 4. IDA
Statement I: Companies with Low cash reserves
Codes normally prefer Licensing mode rather than Foreign
A B C D Direct Investment.
(1) 1 3 2 4 Statement II: Cash rich firms normally prefer
(2) 4 3 2 1 Foreign Direct Investment.
(3) 2 4 1 3 Codes:
(4) 4 2 3 1 1) Both I and II are correct
 2) Both I and II are wrong (3) 3 2 4 1
3) I is correct but II is wrong (4) 4 3 2 1
4) I is not correct but II is correct 48. Which among the following is closely associated
47. Which one of the following is not a feature of with intellectual property rights?
Business Process Outsourcing (BPO)? 1) GATS
1) It enables executives to concentrate on strategy 2) TRIMS
2) It improves process and saves money 3) TRIPS
3) It decreases organizational capabilities 4) MFN
4) None of the above 49. What is not correct about International Development
48. The major outcome of the Bretton Woods Association (IDA)?
Conference was: 1. Following earthquake in 2015, IDA has helped
1) Establishment of IMF and IFC Nepal rebuild and recover.
2) Establishment of IBRD and IFC 2. IDA ranks as the highest performing multilateral
3) Establishment of IBRD and ADB development bank in 2016.
4) Establishment of IMF and IBRD 3. IDA is a subsidiary bank of IBRD.
49. Which one of the following is an important activity 4. India has procured highest amount of
of the World Bank borrowings? international loan from IDA.
1) It borrows in the international capital market Codes:
2) It borrows on currency on swap agreements
3) It borrows under the discount net programme 1) 1 and 2
4) All of the above 2) Only 3
50. Which one of the following statements is false? 3) Only 4
1) IFC was established in July 1956 4) 1 and 3
2) IFC encourages the growth and development of 50. As per the Foreign Trade Policy 2015-2020, a three
Public Sector Enterprises in member countries star export house should have:
3) IFC is an affiliate of the World Bank 1) Export performance (FOB/FOR) of US $ 100
4) IFC encourages the growth of productive private million during current and previous two years.
enterprises in member countries 2) Export performance (FOB/FOR) of US $ 500
million during current and previous two years.
July-2016 3) Export performance (FOB/FOR) of US $ 1000
46. Assertion (A) : Comparative cost theory is static in million during current and previous two years.
character. 4) Export performance (FOB/FOR) of US $ 2000
Reason (R) : Comparative cost theory is based on million during current and previous two years.
fixed supplies of factors of product. Jan.-2017
Codes: 47. Match the items of List-I with List-II and indicate
1) (A) is correct, but (R) is incorrect. the correct code.
2) (A) is correct, but (R) is incorrect. List-I List-II
3) Both (A) and (R) are correct, but (R) is not
a. Absolute Cost i. The empirical evidence
correct explanation of (A). Advantage based on US export of
4) Both (A) and (R) are correct and (R) is correct Theory labour intensive goods
explanation of (A). challenging the factor
47. Match the items of List-I with List-II with regard to endowment theory.
Balance of Payments equilibrium:
b. Comparative ii. A country having a direct
List-I List-II Cost cost advantage in the
A. Exchange control 1. Exporters surrender Advantage production of a product
foreign exchange to Theory on account of greater
the central bank. efficiency.
B. Trade policy 2. Bank rate raised by c. Factor iii. A country should
Measure the central bank Endowment produce and export a
C. Expenditure 3. Reduction in foreign Theory commodity that primarily
reducing policy exchange rate involves a factor of
D. Expenditure 4. Enhancing exports by production abundantly
switching policy granting subsidies available within the
country.
d. Leontief iv. A country should
Codes: Paradox specialize in the
A B C D production and export of
(1) 1 4 2 3 a commodity in which it
(2) 1 2 3 4 possesses greatest
 relative advantage. 1) (A) and (R) both are correct, but (R) is not the
Codes : correct explanation of (A).
a b c d 2) (A) is correct, but (R) is not correct.
(1) ii iv iii i 3) (A) and (R) both are correct and (R) is the
(2) ii iv i iii correct explanation of (A).
(3) ii i iii iv 4) (A) and (R) both are incorrect.
(4) i iv iii ii
48. Match the items of List-I with List-II and indicate November-2017
the code of correct matching: 46. Statement (I): Developing countries can
List-I List-II borrow more than their quota
a. Accommodating i. Creation of under Extended fund Facility
capital flow international reserve (EFF) of IMF.
assets by the IMF and Statement (II) : The Extended Fund Facility
their allocation among (EFF) was created in 1984 to
member countries in help the developing countries
order to improve
over longer period upto 3 years.
international liquidity.
b. Autonomous ii. Estimate of foreign
Code:
capital flow exchange flow on
account of either 1) Statement (I) is correct but (II) is not correct
variations in the 2) Statement (II) is correct but (I) is not correct.
collection of related 3) Both the statements (I) and (II) are correct
figures or unrecorded 4) Both the statements (I) and (II) are not correct.
illegal transactions of 47. Match the items of List-I with List-II and choose the
foreign exchange. correct code of combination:
c. SDR Allocation iii. Inflow of foreign List-I List-II
exchange to meet the (a) Poverty Reduction and (i) 1997
balance of payments Growth Facility
deficit, normally from (PRGF)
the IMF. (b) Supplemental Reserve (ii) 1974
d. Statistical iv. Flow of Facility (SRF)
discrepancy loans/investments in (c) Extended Fund (iii) 1999
normal course of Facility (EFF)
business.
Codes :
a b c d Code
(1) i ii iv iii
(2) iii iv i ii A B C
(3) iii iv ii i (1) iii i ii
(4) iii i ii iv
(2) iii ii i
49. Statement I : TRIMS agreement refers to conditions
(3) ii i iii
or restrictions imposed on foreign investors.
Statement II : TRIMS agreement specifically forbids (4) i iii ii
imposing restrictions on operations of an 48. Who among the following has given Absolute
enterprise which result in protecting domestic Advantage Model of international Trade?
products and making imports disadvantageous. 1) Adam Smith
Codes : 2) David Recardo
1) Statement I is correct, but II is incorrect. 3) Hackscher Ohlin
2) Statement II is correct, but I is incorrect. 4) William Petty
3) Both the statements I and II are correct. 49. Which among the following is not an international
4) Both the statements I and II are incorrect. economic institution?
50. Assertion (A) : Revenue from indirect taxes was the 1) IMF
major source of tax revenue till tax reforms were 2) IBRD
taken during nineties. 3) ADB
Reason (R) : Traditionally India’s tax regime relied 4) IFRS
heavily on indirect taxes including customs and 50. Assertion (A): The fall in aggregate
excise. expenditure or aggregate
Codes : demand in the economy works
 to reduce imports and help in 66. Match the items of List - II and with the items of
solving the balance of payment List - I relating to WTO impact :
problems. List - I
Reasoning (R) : The important any to reduce 1. NAMA
imports and thereby reduce 2. GATTS
deficit in balance of payments is 3. TRIMs
the adopt monetary and fiscal 4. TRIPs
policies that aims at reducing, List - II
(i) Liberalisation of international investments.
aggregate expenditure in the (ii) Includes industrial goods, textile, jewellery,
economy. fish and fisheries product manufacturing
industries.
Code: (iii) Liberalisation of trade in goods and services.
(iv) Provides monopoly power to owners of
1) (A) and (R) both are correct and (R) supports intellectual property.
(A). Code :
2) (A) and (R) both are correct but (R) does not (a) (b) (c) (d)
support (A).
3) (A) is correct but (R) is incorrect. (1) (ii) (i) (iv) (iii)
4) (R) is correct but (A) is incorrect. (2) (iv) (ii) (iii) (i)
(3) (ii) (iii) (i) (iv)
(4) (iii) (ii) (iv) (i)
July-2018
67. Indicate the correct code of the following
64. Assertion (A) : An export processing zone is statements being correct or incorrect. The
different from free trade zone as it promotes units statements relate to the type of transactions
primarily devoted to exports. recorded in the current/capital accounts of the
Reasoning (R) : Goods imported to a free trade Balance of Payments.
zone may be re-exported without any processing, in Statement (I) : The capital account consists of
the same form. But, goods exported by units in an long-term capital transactions only.
EPZ are expected to have undergone some value Statement (II) : The current account includes all
addition by manufacturing/ processing. transactions which give rise to or use up national
Code : income.
1) (A) is correct and (R) is correct explanation of Code :
(A). 1) Both the statements are correct.
2) (A) is correct but (R) is not the correct 2) Both the statements are incorrect.
explanation of (A). 3) Statement (I) is correct while Statement (II) is
3) (A) is correct but (R) is incorrect. incorrect.
4) (A) is incorrect but (R) is correct. 4) Statement (I) is incorrect while Statement (II) is
65. Match the items of List - II with the items of List - I correct.
relating to liberalisation of agricultural trade. 68. Select the correct code of the following statements
List - I being correct or incorrect.
1. Tariffication Statement (I) : International liquidity encompasses
2. Prohibited subsidies the international reserves only.
3. Actionable subsidies Statement (II) : International liquidity covers only
4. Non-actionable subsidies official holdings of gold, foreign exchange, SDRs
List – II and reserve position in the IMF available for the
(i) They have demonstrably adverse effects on settlement of the international transactions.
other member countries. Code :
(ii) They act on goods which are contingent upon
export performance. 1) Both the statements are correct.
(iii) Replacement of existing non-tariff restrictions. 2) Both the statements are incorrect.
(iv) For industrial research in disadvantaged 3) Statement (I) is correct while Statement (II) is
regions. incorrect.
4) Statement (I) is incorrect while Statement (II) is
Code :
(a) (b) (c) (d) correct.
69. Match the items of List - II with the items of List - I
(1) (ii) (iii) (i) (iv) and select the code of correct matching.
(2) (iv) (i) (ii) (iii) The items relate to International Trade Theories.
(3) (iii) (ii) (i) (iv) List - I
(4) (ii) (iv) (iii) (i) (a) Comparative Cost Theory
 (b) Opportunity Cost Theory 2) Statements (I) and (II) are correct but (III) is
(c) Factor Endowment Theory incorrect.
(d) Absolute Cost Theory 3) Statements (I) and (III) are correct but (II) is
List - II incorrect.
(i) Adam Smith 4) Statements (II) and (III) are correct but (I) is
(ii) Gottfried Haberler incorrect.
(iii) David Ricardo 92. In December 1999, European commission members
(iv) Eli Heckscher and Bertil Ohlin signed a treaty that committed them to adopting a
Code : common currency known as Euro. This is better
(a) (b) (c) (d) known as:
1) Treaty of Rome
1) (i) (ii) (iii) (iv)
2) Treaty of Maastricht
2) (iii) (ii) (iv) (i)
3) Treaty of Lisbon
3) (iv) (iii) (ii) (i)
4) Treaty of London
4) (i) (iv) (iii) (ii)
93. Select the correct code of the following statements
70. Which one of the following is not the guiding
being correct or incorrect.
principle of the World Bank regarding it’s lending
Statement (I) : The ‘law of one price’ states that in
operations ?
competitive markets free of transportation costs and
1) Proper assessment of the repayment prospects
barriers to trade, identical products sold in different
of loans.
countries must sell for the same price when their
2) Lending should be only for specific projects
price is expressed in terms of the same currency.
which are economically and technically sound
Statement (II) : An ‘Efficient market’ has no
and of a high priority nature.
impediments to the free flow of goods and services,
3) The lending should be to enable a country to
such as trade barriers.
meet foreign exchange content of the project
Code :
cost.
4) The bank does expect the borrowing country to 1) Statement (I) is correct but (II) is incorrect.
spend the loan in a particular country. 2) Statement (II) is correct but (I) is incorrect.
89. In recent years which among the following 3) Both statements (I) and (II) are correct.
countries has been the largest source of foreign 4) Both statements (I) and (II) are incorrect.
investment in India? 94. Which among the following is not a correct
1) Australia statement regarding patent?
2) Japan 1) A patent is a legal protection granted for an
3) China invention that is new, non-obvious and useful.
4) Mauritius 2) The patent grants the patent holder the
90. Assertion (A) : The Government of India has been exclusive right to make use or sell the patented
opening up domestic market to foreign players in products or process.
baby steps. 3) The exclusive purpose of the patent system is to
Reasoning (R) : Allowing foreign firms free play benefit the patent holder.
in India’s retail sector has always been a political 4) The Indian Patent Act, 1970, was amended and
hot potato. made effective from January 1, 2005.
Code :
1) (A) and (R) both are correct ; and (R) is the
right explanation of (A).
2) (A) and (R) both are correct ; but (R) is not the
right explanation of (A).
3) (A) and (R) both are incorrect.
4) (A) is correct ; but (R) is incorrect.
91. Select the correct code of the following statements
being correct or incorrect.
Statement (I) : A Global Depositary Receipt
(GDR) is a bank certificate issued in more than one
country for shares in a foreign company.
Statement (II) : A GDR is very similar to
American Depositary Receipt (ADR)
Statement (III) : GDRs are called EDRs when
private markets are attempting to obtain Euros.
Code :
1) Statements (I), (II) and (III) are correct.
 ASTRAL EDUCATION
COMMERCE (EM) INTERNATIONAL BUSINESS PYP (P-2)

ANSWER KEYS
JUNE-2012
46 4 47 3 48 3 49 3 50 4

DEC.-2012
4 3 46 3 47 3 48 1 49 3 50 3

JUNE-2013
46 3 47 2 48 4 49 2 50 2

DEC.-2013
4 3 46 3 50 3

JUNE-2014
46 1 47 4 48 3 49 4 50 2

DEC.-2014
47 2 48 3 49 4 50 3

JUNE-2015
46 2 47 3 48 3 49 1 50 2

DEC.-2015
4 2 5 3 46 1 47 3 48 4 49 4 50 2

JULY-2016
46 4 47 1 48 3 49 3 50 1

JAN.-2017
47 1 48 2 49 3 50 3

NOV.-2017
46 1 47 1 48 1 49 4 50 1

JULY-2018
64 1 65 3 66 3 67 4 68 4 69 2 70 4 89 4 90 2 91 1
92 * 93 3 94 3
 ASTRAL EDUCATION
COMMERCE (E.M.) INTERNATIONAL BUSINESS PYP (P-3)

June-2012 Reason (R) : To promote international monetary

cooperation through a permanent institution which
56. Assertion (A) : International business focuses on
global resources, opportunities to buy/sell provides machinery for consultation and
worldwide. collaboration on international monetary problems.
Reason (R) : The efforts of IMP, World Bank and Codes:
WTO to liberalise their economies led to 1) Both (A) and (R) are false.
globalisation. 2) Both (A) and (R) are true.
1) Both (A) and (R) are true. 3) (A) is true, but (R) is false.
2) Both (A) and (R) are false. 4) (R) is true, but (A) is false.
3) (A) is true, but (R) is false. 67. Which one is not the form of FDI?
4) (A) is false, but (R) is true. 1) Purchase of existing assets in foreign currency
57. Match items in List-II with items in List-II 2) New Investment in property, plant, equipment.
List–I List-II 3) Making investment in the mutual funds
(i) Wider Market 1. Modes of Entry 4) Transfer of many types of assets.
(ii) Turn key Projects 2. Goal of 68. Match the items of List-I with items of List-II:
International List–I List-II
Business 1. Measures I. Globalisation
(iii) Epanding the 3. Advantages of towards
production International globalization
capacities Business 2. Off-shoring II. FEMA
(iv) Geocentric 4. Stage of 3. FERA III. Liberalise the
approach Globalisation inflow of FDI
4. Mr. Aruthur IV Uruguay Round
Codes:
Dunkel
(i) (ii) (iii) (iv)
Codes:
1) 4 2 3 1
2) 3 1 2 4 1 2 3 4
3) 1 2 3 4 1) III I II IV
4) 4 3 2 1 2) II I III IV
3) IV II I III
58. BRICS includes 4) I II IV III
1) Bhutan, Romania, Indonesia, Chile and South
Korea 69. Which one of the following is not the advantage of
2) Brazil, Russia, Indonesia, Chile and Sudan MNC’s to the host country?
3) Brazil, Russia, India, China and South Africa 1) Increase in social activity
4) Britain, Russia, India, Czechoslovakia, Sri 2) Increase in economic activity
Lanka 3) Utilisation of natural resources
59. Out of the following, one is not related with WTO: 4) R & D efforts enhanced
1) TRIPS 70. India suffered from deficit balance both in trade
2) Ministerial Conference balance and net invisibles, hence, took up a number
3) TRIMS of steps to manage this problem. Which one is not
4) TRAI appropriate for this?
60. Balance of Payment includes components 1) Export control
1) Current Account, Capital account, Unilateral 2) Current Account Convertibility
Payments account, Official Settlement 3) Liberalised Export Policy
Account 4) Unified Exchange Rate
2) Revenue Account, P & L Account, Capital
Account, Official Account DEC.-2012
3) Trade Account, Activity Account, Revenue 56. Assertion (A) : Operating style of the international
Account, Currency Account business can be spread to the entire globe.
4) Forex Account, Trade Account, Funds Reason (R) The style is limited to the internal
Account economy only.
61. Assertion (A) : International Monetary Fund was
set up on 1944 Codes:
1) Both (A) and (R) are true.
2) (A) is true, but (R) is false.
 3) (A) is false, but (R) is true. 4) Letter of credit does not indicated that the
4) Michael E. Porter bank will pay the value of imports to the
57. The Comparative Cost Advantage Theory was exporter.
given by June-2013
1) David Ricardo
2) Adam Smith 5. The United Nations Conference on Trade and
3) Raymond Vermon Development (UNCTAD) was set up in
4) Michael E. Porter 1) 1944
58. The companies globalise their operations through 2) 1954
different means: 3) 1960
1) Exporting directly 4) 1964
2) Licensing/Franchising 64. Match the following items of List-I with List-II
3) Joint ventures List–I List-II
4) All the above (A) Brettonwoods conference (i) 1947
59. The components of W.T.O. are (B) General Agreement on Trade (ii) 1964
1) Ministerial Conference and Tariffs
2) Disputes Settlements Body (C) ACCRA conference (iii) 1944
3) Director General (D) United Nations Conference (iv) 2008
4) All the above on Trade and Development
60. India is not associated with Codes:
1) SAARC (i) (ii) (iii) (iv)
2) NAFTA 1) (b) (d) (a) (c)
3) BRICS 2) (b) (d) (c) (a)
4) None of the above 3) (b) (d) (c) (a)
61. Which one of the following is true statement? 4) (c) (a) (b) (d)
1) A balance of trade deals with export and 65. The force that lend momentum to the process of
import of invisible items only. globalization have been identified by Michael
2) A balance of payment deals with both visible Porter included the following:
and invisible items. (i) Fluid global market.
3) The current account is not a component of (ii) Technological restructuring.
balance of payment. (iii) Decreasing religious command
4) All the above (iv) Ethnic decontrol.
62. SDRs are popularly known as (v) New-global competitors.
1) Currency Notes (vi) End of the ‘cold war’ in 1990’s
2) Paper Gold
Codes:
3) Silver Coin
4) Gold coin
1) (vi), (v), (iv) and (iii)
63. Which one is not international institution?
2) (vi), (iii), (ii) and (i)
1) IMF
3) (vi), (v), (ii) and (i)
2) IDA
4) (iv), (iii), (ii) and (i)
3) IBRD
66. Statement (I) : Green Box subsidies include
4) TRAI
amount spent on Government services such as
64. Assertion (A) : Indent may be open or closed.
research, disease control, infrastructure and food
Open indent does not specify the price and other
security.
details of the goods. The closed indent specifies the
Statement (II) : Blue Box subsidies are certain
brand. Price, number, packing, shipping mode,
insurance, etc. direct payments made to farmers, to limit
Reason (R) : This is required as a part of export production, and are certain government assistance
procedures. programmes to encourage agriculture and rural
1) Both (A) and (R) are correct. development.
2) Both (A) and (R) are not correct. Codes :
3) (A) is true, but (R) is false. 1) Statement (I) is correct, but (II) is not correct.
4) (R) is true, but (A) is false. 2) Statement (II) is correct, but (I) is not correct.
65. Which one of the statements is not true? 3) Both statement (I) and (II) are correct.
1) Institutional infrastructure facilitates market 4) Both statement (I) and II are incorrect.
intelligence. 67. Assertion (A) : The major economic powers have
2) STC is the chief canalizing agent for export succeeded in creating a new international regime
and import of agricultural products. where the profits and the dominance of their
3) IIPO organizes trade fairs and exhibitions.
 transnational corporation will be the decisive 2) (ii), (iii) and (iv)
consideration. 3) (iii) and (iv)
Reason (R) : This regime will legitimise the 4) Only (iv)
process of progressive erosion of the sovereign
economic space of the third world countries. DEC.-2013
Codes : 64. The main features of TRIMS are:
1) Both (A) and (R) are correct, and (R) is the (i) All restrictions on foreign capital are imposed.
right explanation of (A). (ii) No restriction is imposed on any area of
2) Both (A) and (R) are correct, but (R) is not the investment.
right explanation of (A). (iii) Restrictions on repatriation of dividend is
3) Both (A) and (R) are correct. eliminated.
4) Both (A) and (R) are incorrect (iv) No limit on the extent of foreign investment.
68. Assertion (A) : The ‘Balance of Payment’s Indicate the correct combination
presents a classified record of all receipts on
account of goods exported. services rendered and 1) (i), (ii), (iii) and (v)
capital received by ‘residents’ and payments made 2) (ii), (iii), (iv) and (v)
by them on account of goods imported and services 3) (iii), (iv) and (v)
received from capital transferred to ‘non-resident’s 4) (iv) and (v)
or ‘foreigners”. 65. Assertion (A) : TRIPS requires a understanding
Reason (R) : The ‘Balance of Payment’s of a about the scope of the new patent regime.
country is a systematic record of all economic Reason (R) : Patent protection will be extended to
transactions between the ‘resident’s of a country micro organisms, non-biological and micro-
and the rest of the world. biological processes and plant varieties.
Codes : Codes:
1) Both (A) and (R) are correct and (R) is the
right explanation of (A). 1) (A) and (R) are not related with each other.
2) Both (A) and (R) are correct. but (R) is not the 2) (R) is related with (A)
right explanation of (A) 3) (A) is independent of (R).
3) (R) is correct, but (A) is not correct. 4) While (R) is related with TRIMS, (A) is
4) Both (A) and (R) are incorrect. related with TRIPS.
69. Which among the following is not rightly 66. Possible impact of WTO on various aspects of the
explained? Indian economy:
(i) M1 = Currency with the public + demand (i) Quantitative restriction will be allowed.
deposits of the public. (ii) Second hand cars will be imported.
(ii) M2 = M1 + Post Office Savings Deposits (iii) There will be dumping of Chinese goods.
(iii) M3 = M1 + Time Deposits of the public with (iv) Increase in population.
Banks. (v) Child labour exploitation
(iv) M4, M3 + Total post Office Deposits. (vi) Unemployment will increase
(v) M1 = Narrow money Which combination is appropriate?
(vi) M3 = Broad money
1) (i), (ii), (iii)
1) Only (v) and (vi)
2) (iii), (iv), (v)
2) Only (i) and (iii) 3) (ii), (iii) and (vi)
3) Only (vi) 4) (iv), (v) & (vi)
4) None of the above 67. Assertion (A) : Economic integration abolishes
70. Which of the following are not effect of dumping cross-national economic discrimination.
on importing country? Reason (R) : Geographical proximity is an
(i) Domestic industry might be affected adversely important reason for economic integration.
by a decline in sales and profits. Codes:
(ii) If dumping is continued for a longer period
survival of the domestic industry may be 1) (R) does explain (A).
threatened. 2) Both (A) and (R) are correct.
(iii) Dumping may create BOP problems for the 3) Both (A) and (R) are not correct.
country. 4) (A) is correct. but (R) is not correct.
(iv) It finds market for its surplus production. 68. Match the items of List-I and items of List-II and
Codes: select the correct answer:
List–I List-II
1) (i), (ii), (iii) and (iv) (A) Free Trade Area (i) MERCOSUR
 (B) Customs Union (ii) European 2) Reserve Position in IMF
Union 3) Monetary Gold
(C) OEEC (iii) EFTA 4) Money Market Instruments
(D) Common Market (iv) Marshall Plan 48. Match the items given in List – I with the most
Codes: appropriate items in List-II
(i) (ii) (iii) (iv) List–I List-II
1) (A) (B) (C) (D) (A) UNCTAD (i) Foreign investment
2) (B) (D) (A) (C) (B) WTO (ii) Developing Countries
3) (C) (A) (D) (B) (C) TRIMS (iii) UNDP
4) (D) (C) (B) (A) (D) ITC (iv) General Council
69. Assertion (A) : A futures contract specifies in Codes:
advance the exchange rate to be used, but it is not (A) (B) (C) (D)
as flexible as a forward contract. 1) (i) (iv) (i) (iii)
Reason (R) : A futures contract is for specific 2) (iii) (iv) (i) (ii)
currency amount and a specific maturity date. 3) (iv) (ii) (i) (iii)
4) (iii) (ii) (i) (iv)
Codes:
49. Duty levied on the value of goods imported is
1) (R) is a correct explanation of (A). referred to as
2) (R) is not a correct explanation of (A). 1) Ad valorem Duty
3) (A) and (R) are not related with each other. 2) Compound Duty
4) (R) is irrelevant for (A). 3) Specific Duty
70. Out of the following, which are the important 4) Import Duty
objectives of IMF? 50. Which of the following can be included in the
(i) To promote exchange rate stability current account of the balance of payments?
(ii) To create standby reserves (i) Purchase of goods from abroad
(iii) To print International currency notes (ii) Sale of services abroad
(iv) To establish a multilateral system of (iii) Worker’s remittances from abroad
payments. (iv) Sales of copyright to foreigners
(v) To maintain orderly exchange rate stability
(v) Direct investment in equity capital
(vi) To create employment.
Codes:
Codes
1) (i), (ii) and (iii)
1) (ii), (iv), (v), (vi) 2) (i), (ii) and (iv)
2) (iii), (v), (vi) 3) (i), (ii), (iii) and (iv)
3) (i), (ii), (iv), (v) 4) (i), (ii), (iii) and (iv)
4) (i), (ii), (v), (vi)
66. The total number of Special economic Zones
June-2014 notified by the Government of India till March
4. The Foreign Investment Promotion Board (FIPB) 2011 under the SEZ Act, 2005 is
revamps the rules and regulations pertaining to 1) 154
1) Accounting of Foreign Investment 2) 184
2) Investment by NRIs 3) 286
3) Foreign investments
4) 386
4) All of the above
46. Indicate the right sequence of the stages of 67. The different form of IMF assistance are given
internationalization: below. Identify the one which is mainly meant for
(i) Multinational Company Less Developed Countries (LDCs)
(ii) Global Company 1) Credit Tranche Drawing
(iii) Transnational Company 2) Extended Fund Facility
(iv) International Company 3) Compensatory Financing Facility
Codes: 4) Structural Adjustment Facility
1) (i) (iv) (ii) (iii) 68. In the context globalization, ‘Levitt Thesis’ means
2) (iv) (i) (iii) (ii) 1) Standardisation strategy to respond to the
3) (i) (iv) (iii) (ii)
worldwide homogenised market and expand
4) (iv) (i) (ii) (iii)
the market through aggressive low pricing
47. Which of the following is not one of the 2) Customise products to regional markets
components of ‘International Reserve’? 3) Customise products to meet the national
1) Special Drawing Rights market
 4) None of the above 4) Both Assertion (A) and Reason (R) are
70. Business conglomerates have different names in incorrect.
different countries. Which country’s conglomerate 59. Assertion (A) : The USA remains the world's largest
are called ‘Chaebols’? FDI recipient country.
Reason (R) : The global economic crisis of 2009,
1) Japan
causes a reduction of global FDI flows took place to
2) South Korea
USA.
3) Germany
4) China 1) Both (A) and USA are correct and (R) is the
correct explanation of (A).
DEC.-2014 2) (A) is correct, but (R) is not correct.
1. Match the items of List-I with List-II 3) Both (A) and (R) are incorrect
List-I List-II 4) Both (A) and (R) are correct, but (R) is not
International (Year of correct explanation of (A)
Economic Establishment) 60. As per the south Asia Free Trade Agreement, 1993
(Groups) of SAARC, the member countries have to bring their
(A) European Union (i) 1973 duties down to
(EU) 1) 25 Percent by 2006
(B) European Free (ii) 1992
2) 15 percent by 2006
Trade Association
3) 10 percent by 2007
(FFTA)
4) 20 percent by 2007
(C) Caribbean (iii) 1985
61. Which of the following is the correct combination?
Community (i) A GSA allows an MNE to enter into activities
(CARICOM) that might too costly and risky to pursue on its
(D) South Asian (iv) 1960
own.
Association for
(ii) A GSA does not allow a firm to enhance
Regional
economics of scale.
Cooperation
(iii) A GSA does not allow a form to bypass entry
(SAARC) harriers into a target foreign county.
Codes : (iv) A GSA allow a firm to acquire partner
(A) (B) (C) (D) knowledge.
1) ii iv iii i Codes:
2) ii iv i iii 1) (i), (iv) are correct
3) iv ii i iii 2) (i), (ii) are correct
2. The important objectives of WTO are: 3) (i), (ii), (iii) and (iv) are correct
(i) To improve the quality of technology in the 4) (i) and (iii) are correct
member countries. 62. Which of the following are the outcomes of the Sixth
(ii) To improve the standard living of people in the Ministerial Conference of WTO which was held at
member countries Hong Kong in December 2005?
(iii) To ensure full employment and broad increase Select the correct combination
in effective demand.
i. Resolve to complete the Doha Work
(iv) To enlarge production and trade of goods
Programme fully and to conclude negotiations
(v) To increase trade of services
in 2006
Codes:
ii. Amendments to TRIPS agreement reaffirmed to
1) (i), (ii), (iii) and (iv) address public health concerns of developing
countries
2) (ii), (iii), (iv) and (v)
3) (i), (ii), (iii) and (v) iii. To Continue export subsidies in agriculture
upto 2018.
4) (i), (iii), (iv) and (v)
iv. Duty free, quota free market access for all LDC'
3. Assertion (a) : The industrial growth in India has
products to all developed countries
been hampered by the burden of many control and
regulations. Codes:
Reason (R) : The new Industrial Policy seeks to
1) (i), (ii) and (iv)
liberate the industry from the shackles of Licensing 2) (i), (ii), (iii) (iv)
System 3) (i), and (iii) only
1) Assertion (A) is correct, but Reason (R) is not 4) (ii) and (iv) and only
correct. 63. Which of the following is not a function of Foreign
2) Assertion (A) is correct and Reason (R) i right Exchange Market?
explanation of (A) 1) Stablization function
3) Both Assertion (A) and Reason (R) are correct. 2) Hedging function
 3) Credit function 2. North American Free Trade Agreements
4) Transfer function 3. South Asian Association of Regional Co-
64. Assertion (A) : The impact of depreciating Indian operation
Rupee leads to less competition for Indian firms 4. Central American Common Market
from imports. 5. Central African Customs Union
Reason (R) : The depreciating Indian Rupee results Codes:
in downward pressure on inflation. 1) 1, 2 and 3
Select the correct code: 2) 1, 2, 3 and 4
3) 1, 2, 3, 4 and 5
Codes :
4) 1, 2 and 5
1) Both (A) and (R) are correct 5. Match the items of List-I with items of List-II and
2) (A) is false, but (R) is correct. choose the correct code:
3) Both (A) and (R) are false List I List II
4) (A) is true, but (R) is false A. Carroll Model 1. International trade
65. In which of the following Stock Exchanges the B. Corlett – Hague 2. Interest rate
GDR's are listed? Rule
(i) London, Stock Exchange C. Hecksher Ohlin 3. Principles of taxation
(ii) New-York Stock Exchange Theorem
(iii) Luxembourg Stock Exchange D. Knut Wick sell’s 4. Social responsibility of
(iv) Bombay Stock Exchange Theory business
(v) Singapore Stock Exchange
Codes
(vi) Hong Kong Exchange A B C D
Identify the correct combination: 1) 4 3 1 2
2) 3 2 1 4
Codes:
3) 3 1 2 4
1) (i), (ii) and (iii)
2) (i), (iv), (v) and (vi) 4) 2 3 1 4
3) (iii), (iv), (v) and (vi)
4) (i), (iii), (v) and (vi) 46. Any country consistently facing balance of payment
66. Statement I : FIIs do not invest in unlisted entities. deficiency can approach:
They participate only through stock exchanges, 1) The World Bank
Statement II : FIIs cannot invest at the time of initial 2) The Smithsonian Institute
allotment.. 3) IMF
4) The IMF and the IBRD
1) Statement I and II are correct
47. Counter-trade means:
2) Statement I is true and II is false
1) A sort of bilateral trade where one set of goods
3) Statement I is false and II is correct
is exchanged for another set of goods and a
4) Statements I and II are false
seller provides a buyer with deliveries.
67. ADRs' and DGRs' are an excellent mean of
2) A company takes full responsibility for making
investment to invest in India for
its goods available in the target market by selling
1) NRIs'
directly to the end-users.
2) Foreign nationals
3) The companies in two separate sovereigns agree
3) Both (1) and (2)
to exchange one set of goods for another set of
4) None of the above
goods.
68. Which of the following is not provided by EXIM
4) A set of multilateral trade where one of goods
Bank, for financing overseas investments?
and services may be exchanged for another set
1) Tem loan to Indian Companies upto 80% of
of goods and services among the trading
their equity investment in overseas JV/WOS
partners.
2) Term loans to Indian Companies towards up to
48. The floating rate system is chaacterised by:
100% of loan extended by them to the overseas
1) the market forces that determine the exchange
JV/WOS.
rate between two currencies
3) Term loan to overseas JV/WOS towards par
2) the central banking authorities of the two
financing.
countries mutually agree upon the rate
4) Guarantee facility to the overseas JV/WOS for
3) help realigning the par value of major currencies
raising term loan/working capital
4) the rate of exchange mutually agreed upon
between IMF and its member nations
June-2015
49. A practice of selling a commodity in a foreign
4. From the following, identify the trading blocks in the
market at a price lower than the domestic price; and
world and choose the correct code:
even at equal to the cost of production to capture
1. European Union
foreign market is known as:
 1) Gouging 4) the European Economic Community (EEC)
2) Forging DEC.-2015
3) Dumping 1. The method being used for Transferring Complex
4) Forfeiting Technology is known as:
50. The highest percentage of export from India went to 1) Licensing Agreement
which of the following regions in 2013-14? 2) Transfer of Technology
1) OECD countries 3) Turnkey Contract
2) USA 4) None of the above
3) SAARC 5. Assertion (A): In 1991 Government decided to
4) Latin America allow all foreign investments to any industry without
66. Assertion (A): Amended Patent Act, in compliance any restrictions.
with WTO, provides for grant of product patent as Reason (R): Government has enhanced the
well as a process patent for a period of 20 years from investment limit of small scale industrial units.
the date of application. Codes:
Reasoning (R): Under the Act, patent may be 1) Both (A) and (R) are true and (R) is the correct
granted to an invention which means a new product explanation of (A).
or process involving an inventive step and capable of 2) Both (A) and (R) are true but (R) is not the
industrial application, a technical advance over correct explanation of (A)
existing knowledge. 3) (A) is true but (R) is false
Codes: 4) (A) is false but (R) is true.
1) Both (A) and (R) are true but (R) is not correct 46. Which of the following is not a characteristic of
explanation to (A). bartering internationally?
2) (A) is false but (R) is correct. 1) Bartering can be time – consuming.
3) Both (A) and (R) are true and (R) is correct 2) Bartering can be expensive.
explanation to (A). 3) Bartering is a type of service export and import.
4) (A) is correct but (R) is false. 4) Bartering can be risky.
67. Which of the following have been recognized under 47. Assertion (A): International business has grown in
the intellectual property eligible for creation of rights more recent years at a faster pace than global
as per WTO mandate? production.
1. Computer software, music disc, performing art Reason (R): Growth through trade has increased,
2. Geographical indicator but growth through foreign direct investment has
3. Global positioning system not.
4. Journals, books, seeds, design, brand Codes:
Codes: 1) Both (A) and (R) are correct
1) 1, 2 and 3 2) (A) is correct but (R) is incorrect
2) 4, 3 and 1 3) (A) is incorrect but (R) is correct
3) 1, 2 and 4 4) Both (A) and (R) are incorrect
4) 3, 1 and 2 49. Statement I: Legal agreements between two
68. NAFTA came into force from January, 1994 countries govern how both the countries tax
embracing: earnings.
1) The USA, Canada, Cuba, Trinidad and Tobago Statement II: International Law may determine how
2) The USA, Canada, Mexico and whether companies can operate in a certain
3) Cuba, Mexico, USA, Havana locale.
4) Trinidad, The USA, Mexico Codes:
69. A common market is one where: 1) Both the statements are true
1) all the trading nations agree commonly to levy a 2) Both the statements are false
common and uniform tariff rate for all goods 3) Statement I is true but Statement II is false
2) all the trading nations agree commonly to 4) Statement I is false but Statement II is true
rationalize tariff and non-tariff barriers mutually 67. Which one of the following is not a member country
to promote intra-region trade in the Association of South-East Asian Nations
3) there is a customs union along with free intra- (ASEAN)?
union movement of factors of production 1) Singapore
4) there is an economic union along with free intra- 2) Malaysia
union movement of residents 3) Thailand
70. The Maastricht Treaty of February, 1992 renamed 4) Vietnam
the European Community (EC) as: 68. Match the items of List-I with the items of List-II
1) the European Union (EU) and select the correct answer with the codes given
2) the European Economic Union (EEU) below:
3) the European Monetary Union (EMU)
 List I List II 2) (A) and (R) both are correct but (R) is not the
A. SAARC 1. Philippines right explanation of (A).
B. ASEAN 2. Canada 3) (A) and (R) both are correct but (R) is the right
C. EU 3. Afghanistan explanation of (A).
D. NAFTA 4. Hungary 4) (A) and (R) both are incorrect.
Codes 39. Match the items of List-I with those of List-II with
A B C D regard to international monetary fund’s various
1) 2 4 1 3 schemes:
2) 4 2 1 3 List-I List-II
3) 3 1 4 2 A. Extended Fund 1. Repayment period
Facility (EFF) 4 to 10 years
4) 3 4 2 1 B. Stan 2. Repayment period
69. Which among the following are criticisms given Arrangements 3 to 5 years
against World Trade Organization (WTO)? C. Supplemented 3. Repayment period
1. It is not a democratic and transparent institution. Reserve Fund 2 to 5 years
2. It has domination of international trade by rich (SRF)
countries for the benefit of their individual D. Poverty Reduction 4. Repayment period
interests. and Growth 10 years
3. It encourages a ‘race to the bottom’ in wages by Facility (PRGF)
pitting workers against each other rather than
promoting internationally recognized labor
standards. Codes:
4. It is seeking to privatize essential public A B C D
services. 1) 1 2 3 4
Codes: 2) 4 3 2 1
1) 2, 3 and 4 3) 4 2 3 1
2) 1, 2 and 3 4) 1 4 2 3
3) 1, 2 and 4 40. Which combination of the following is correct with
4) 1, 2, 3 and 4 regard to World Trade Organization (WTO):
70. Domestic Currency tends to depreciate owing to: 1. WTO initiates peace process among the member
1) Constant inflation rate countries to enhance international trade.
2) Lowering of inflation rate 2. WTO avoids the task of “Settlement of
3) High inflation rate Disputes” among the member countries.
4) All of the above 3. WTO administers the “Trade Review
Mechanism”.
July-2016 4. WTO cooperates in in an appropriate manner
37. Under the Foreign Trade Policy 2015-2020, with the IMF and the World Bank.
following additional ports are allowed for export and Codes:
import:
1. Calicut Airport, Kerala 1) 2, 3 and 4
2. Rajkot Airport, Gujarat 2) 1 and 3
3. Arakonam ICD, Tamil Nadu 3) 3 and 4
4. Ludhiana Airport, Punjab 4) 1, 2 and 4
Codes:
62. Which among the following are multinational
1) 1 and 3 corporations?
2) 1 and 4 1. A multinational, decentralized corporation with
3) 2 and 4 strong home country presence.
4) 3 and 4 2. A global, centralized corporation that acquires
38. Assertion (A) : Under FEMA, the receiver of cost advantage through centralized production
laundered money is to be made culpable, instead of when cheaper resources are available.
sender/distributor. 3. An international company that builds on the
Reason (R) : FEMA differs from the earlier parent corporation’s technology and R&D.
exchange regulation Act FERA with regard to 4. A transnational enterprise that combines the 1, 2
and 3.
penalties and punishment in case of violation of the
Codes:
Act.
Codes: 1) 1 and 2
1) (A) is correct but (R) is not correct. 2) 2 and 3
3) 1, 2 and 3
 4) 1, 2, 3 and 4
63. Which among the following are full member
countries of ASEAN?
1. Brunei Darussalam
2. Cambodia
3. Vietnam
4. Myanmar
5. Sri Lanka
Codes:
1) 1, 2 and 5
2) 1, 2, 3 and 5
3) 2, 3, 4 and 5
4) 1, 2, 3 and 4
64. Assertion (A) : Capital Account convertibility is
introduced only sometime after the introduction of
convertibility on current account when exchange rate
of currency of a country is relatively stable.
Reason (R) : Capital Account convertibility is
necessary for faster growth and development of
economy and it makes foreign exchange rate more
stable.
Codes:
1) (A) is correct but (R) is not correct.
2) (A) and (R) both are correct and (R) is the right
explanation of (A).
3) (A) and (R) both are correct and (R) is not the
right explanation of (A).
4) Both (A) and (R) are incorrect.
65. Statement-I : WTO is only international
organization which deals with the rules of trade
between organizations.
Statement-II : The limit of holding by individual
foreign institutional investors in a company has been
raised from 5 to 10% of company’s share while the
aggregate limit has been increased from 24 to 34%.
Codes:
1) Statement (I) is correct but Statement (II) is
false.
2) Statement (II) is correct but Statement (I) is
false.
3) Statements (I) and (II) both are correct.
4) Statements (I) and (II) both are false.
66. In case a farmer in India buys a wheat option on
future:
1. The farmer must accept a wheat futures contract
and not take physical possession of wheat.
2. The farmer must accept delivery of the wheat at
a higher price.
3. The farmer has the right to deliver the wheat and
will do so only if the price is favourable.
4. The farmer must deliver the wheat at market
price.
Codes:
1) 1 and 4
2) 4 only
3) 3 only
4) 2 and 3
67. Sector specific policy of government of India in case
of B2B is when
1) FDI is upto 100%
2) FDI is upto 49%
3) FDI is upto 100% subject to condition that the
investment in favour of Indian public to the
turne of 20% within 5 years to be done.
4) FDI is upto 100% subject to condition that the
investment in favour of Indian public to the tune
of 26% within 10 years to be done.
Jan.-2017
38. Assertion (A) : International Finance Corporation
(IFC) contributes to increase sustainable
agriculture opportunities, improve health and
education and increase access to financing for
micro finance and business client.
Reasoning (R) : The IFC has focused on a set of
development goals to ensure that its projects are
expected to achieve the target.
Codes :
1) Both (A) and (R) are correct, but (R) is not the
correct explanation of (A).
2) Both (A) and (R) are correct and (R) is the
correct explanation of (A).
3) (A) is correct but (R) is incorrect.
4) Both (A) and (R) are incorrect.
39. Under TRIPS Agreement, patent is granted subject
to which of the following?
a. The product or the process is new one.
b. It contains an inventive step.
c. It is capable of industrial application for 15 years
from the grant of the patent.
d. It is capable of industrial application for 20 years
from the grant of the patent.
Codes :
1) Only a and b
2) Only a, b and c
3) Only a, b and d
4) Only a and d
40. Statement I : During the period of prosperity, prices
of goods fall and income of people go down.
These changes in incomes of the people and
prices of goods affect exports and imports of
goods and thereby influence the balance of
payments.
Statement II : Secular disequilibrium in balance of
payments occur because of short-run changes in
an economy.
Codes :
1) Statement I is correct, but II is incorrect.
2) Statement II is correct, but I is incorrect.
3) Both the statements I and II are correct.
4) Both the statements I and II are incorrect.
63. What is the term used popularly for the situation
when a speculator, being dominant in the market,
expects a drop in the value of a particular currency
and he begins selling it forward?
 1) International Fisher Effect 3) It reduces financial risk through greater
2) Bandwagon Effect diversification.
3) Interest Rate Parity Effect 4) It creates harmonious political relations.
4) Relative Version Effect 68. Match List-I with List-II regarding the grouping of
64. Identify the correct statement. Multi-national Corporations and identify the code
1) The Maastricht Treaty signed in February 1992 representing correct matching.
renamed European Community (EC) as List-I List-II
European Economic Community (EEC). A. Ethnocentric i. Maintain a balance in
2) The main objective of the formation of ASEAN firms home and host market
Free Trade Area in 1993 was to soften the oriented policy.
restrictions on the movement of professionals in B. Polycentric ii. Seldom distinguish
the region and helping poorer countries. firms between domestic &
3) The SAARC is a regional grouping scheme global operation policies
among Six South Asian Countries. C. Geo-centric iii. i. policies.
4) The European Union, including European firms Follow a host market
Monetary Union, was the biggest and most policy
important regional integrative scheme. Codes :
65. Match List-I with List-II relating to benefits and cost A B C
of economic integration and identify the code 1) iii i ii
representing correct matching. 2) iii ii i
List-I List-II 3) ii iii i
A. Trade i. Movement of production 4) ii i iii
creation and resources in opposite
directions. November-2017
B. Trade ii. Become active when a
diversion member country does not 37. Which one among the following has the largest
augment export but simply share of exports from India?
shifts its imports from low 1) Agriculture and Allied Commodity
cost source to high cost 2) Gems and Jewellery
source. 3) Handicrafts
4) Electronic Goods
C. Trade iii. Shifting the locus of
deflection production from high cost 38. Which one among the following is not a part of
to low cost centre within TRIPS agreement?
the union. 1) Industrial Design
2) Geographical Indications
D. Polarization iv. Goods produced in a third
forces country entering a free 3) Interior Design
trade area through a 4) Layout Designs of Integrated Circuits
member country having 39. Which one among the following is not correct?
lower tariff. 1) IMF’s headquarters is in Washington, D.C.
Codes : 2) IMF has 198 countries as its members.
A B C D 3) IMF is an outcome of the Bretton Woods
1) ii iii iv i Conference.
2) ii iv i iii 4) IMF was found on July 7, 1944.
3) iii i iv ii 40. Statement-I: Served From India Scheme (SFIS)
4) iii ii i iv has been replaced with Service Exports from India
66. What is the situation referred to as, amongst the Scheme (SEIS).
following, when intra-region trade is duty free but Statement-II: The rate of reward under SEIS
there is variation in tariff structure for import from a would be based on net foreign exchange earned.
third country? Code:
1) Customs Union 1) Statement-I is correct but statement-II is
2) Common Market incorrect
3) Free Trade Area 2) Statement-II is correct but statement-I is
4) Economic Union incorrect
67. Which of the following statement is not correct 3) Both the statements-I and II are incorrect.
relating to comparison of FDI with trade? 4) Both the statements-I and II are correct.
1) Only one market can better be served with 64. Match the items of List-I with List-II and choose
differentiated products. the correct code of combination:
2) FDI overcomes tariff and transport cost involved List I List II
in trade. (A) It abolishes all (i) Common Market
restrictions on trade
 among the members 67. Which among the following is not correct
(B) It not only (ii) Economic Union statement?
eliminates all 1) Designated bank refers to any bank in India,
restrictions o trade which has been authorised by the RBI to act as
among members but banker to FII.
also adopts a 2) Domestic custodian includes any person
uniform commercial carrying o the activities of providing custodial
policy against the services in respect of securities.
non-members 3) Sub-account includes those institution,
(C) It allows free (iii) Free Trade Area established or incorporated in India, whether
movement of labour incorporated or not, on whose behalf
and capital within investment are proposed to be made in India by
the common market. FIIs.
(D) It achieves some (iv) Customs Union 4) A domestic portfolio manager or domestic asset
degree of management company shall also be eligible to
harmonization of be registered as FII to manage the funds of sub-
national economic accounts.
policies, through a
common central
bank, unified
monetary and fiscal
policy, etc.
Codes
(A) (B) (C) (D)
1) (iv) (ii) (i) (iii)
2) (iv) (iii) (i) (ii)
3) (iii) (iv) (i) (ii)
4) (ii) (i) (iv) (iii)
65. Assertion (A): Indian companies have established
subsidiaries and joint venture in a number of
countries in different manufacturing industries and
services sectors.
Reasoning (R): By restricting the areas of
operations and growth, the government policy
seriously constrained the potential of Indian
companies to make a foray into the foreign
countries.
Code:
1) Both (A) and (R) are correct and (R) is the right
explanation of (A)
2) Both (A) and (R) are correct but (R) is not the
right explanation of (A)
3) Both (A) and (R) are incorrect.
4) (A) is correct but (R) is incorrect.
66. Statement (I): Automatic variations in the
exchange rates, in accordance with the variations in
the balance of payments position, tend to
automatically restore the balance of payments
equilibrium.
Statement (II): A deficiency in the balance of
payment increases the exchange rates.
Code:
1) Statement (I) is correct but (II) is incorrect
2) Statement (II) correct but (I) is incorrect
3) Both the statements (I) and (II) are incorrect.
4) Both the statements (I) and (II) are correct.
 ASTRAL EDUCATION
COMMERCE (EM) INTERNATIONAL BUSINESS PYP (P-3)

ANSWER KEYS
JUNE-2012
56 1 57 2 58 3 59 4 60 1 61 2 67 3 68 1 69 1 70 1

DEC.-2012
56 2 57 1 58 4 59 4 60 2 61 2 62 2 63 4 64 3 65 *

JUNE-2013
5 4 64 1 65 3 66 3 67 2 68 1 69 4 70 4

DEC.-2013
64 2 65 1 66 3 67 2 68 3 69 1 70 2

JUNE-2014
4 3 46 4 47 4 48 1 49 1 50 1 66 4 67 3 68 1 69 3
70 2

DEC.-2014
1 2 2 2 3 1 59 1 60 4 61 1 62 1 63 1 64 4 65 4
66 4 67 3 68 2

JUNE-2015
4 3 5 1 46 3 47 1 48 1 49 3 50 1 66 3 67 3 68 2
69 3 70 1

DEC.-2015
1 3 5 4 46 3 47 2 48 4 49 1 67 * 68 3 69 4 70 3

JULY-2016
37 1 38 3 39 1 40 3 62 4 63 4 64 1 65 3 66 3 67 3

JAN.-2017
38 2 39 3 40 1 63 2 64 4 65 3 66 3 67 1 68 3

NOV.-2017
37 2 38 3 39 2 40 4 64 3 65 2 66 1 67 3
 ASTRAL EDUCATION
COMMERCE (E.M.) INCOME TAX PYP (P-2)

July-2018 3) Legal expenses paid to protect the building of

the business
95. Which one of the following is agricultural income 4) Cost of installing a new telephone
under the Income Tax Act, 1961?
1) Interest on arrears of rent in respect of
agricultural land.
2) Interest received by a money-lender in the form
of agricultural produce.
3) Income from sale of trees of forest which are of
spontaneous growth and in relation to which
forestry operations alone are performed.
4) Interest on capital received by a partner from
the firm engaged in agricultural operations.
96. Under the Income Tax Act, 1961 “block of assets”
for the purpose of charging depreciation means :
1) Value of all the assets after depreciation
2) Value of all tangible assets after charging
depreciation
3) Value of all those assets to which one rate of
depreciation is applicable
4) Gross value of machinery and plant less
accumulated depreciation
97. The maximum amount of exemption of
compensation received at the time of voluntary
retirement U/S 10(10C) of the Income Tax Act,
1961, is:
1) ` 1,00,000
2) ` 2,50,000
3) ` 5,00,000
4) ` 10,00,000
98. Which one of the following statements is not
correct with reference to the assessment of firms?
1) All partnership firms formed under the Indian
Partnership Act, 1932, are assessed as firms
under the Income Tax Act, 1961.
2) Income of a firm is taxable at a flat rate of 30%
without any exemption.
3) Partners’ share in the income of a firm is not
chargeable to tax in the hands of partners.
4) Remuneration paid to partners of a firm
(assessed as such) is allowed as deduction
subject to statutory limit.
99. The due date of first installment of advance tax by
assesses other than companies is:
1) 15th April
2) 15th June
3) 15th September
4) 15th December
100. Which one of the following items is not allowed as
deduction while computing income from business
and profession?
1) Fees paid to the lawyer for drafting partnership
deed
2) Loss due to embezzlement by an employee
 ASTRAL EDUCATION
COMMERCE (EM) INCOME TAX PYP (P-2)

ANSWER KEYS
JULY-2018
95 4 96 3 97 3 98 1 99 2 100 1
 ASTRAL EDUCATION
COMMERCE (E.M.) INCOME TAX PYP (P-3)

June-2012 1) Partnership firm

2) Association of persons
71. Mr. James a citizen of U.S. arrived in India for the 3) Certain companies
first time on 1st July. 2010 and left for Nepal on 15th 4) All types of companies
December 2010. He arrived to India again on 1st 71. For the Assessment Year 2011-12. deduction under
January 2011 and stayed till the end of the financial sec. 80g is available without under Sec. 80G is
year 2010-11. Hs residential status for the available without any limit but at the rate of 50%
assessment year 2011-12 is on.
1) Resident (Ordinarily resident) 1) Prime Minister National Relief Fund
2) Not ordinarily resident 2) National Foundation for communal Harmany
3) Non-resident 3) Jawahar Lal Nehru memorial Fund.
4) None of the above 4) Chief Minister Relief Fund.
72. The value of free accommodation in Delhi provided 72. Interest on capital by a firm to its partners, under
by employer in the private sector is the Income Tax Act, 1961, is allowed.
1) 10% of salary 1) 6%
2) 15% of salary 2) 12%
3) 20% of salary 3) 15%
4) 25% of salary 4) 18%
73. Which of the following is not a capital asset under 73. Under capital gains head of the Income Tax Act,
capital gains head of income? the income from sale of Household Furniture is
1) Stock in trade 1) Taxable Income
2) Goodwill of business 2) Capital Gain
3) Agricultural Land in Delhi 3) Revenue Gain
4) Jewellery 4) Exempted Income
74. Match the items of list – I with List- II: 74. Under Section 80E of the Income Tax Act, 1961
List–I List-II deduction in respect of payment of interest on loan
1. Tax Planning I. Making suitable taken for higher education shall be allowed up to
arrangement of 1) `10,000
TDS 2) `15,000
2. Tax Avoidance II. Understatement of 3) `20,000
Income 4) Without any limit
3. Tax Evasion III. Availing deduction
under Section 10A
June-2013
of IT Act.
4. Tax IV Misinterpreting the 71. Donation to National Children Funds will come in
Administration provisions of the IT which of the following deduction under Sec. 80G of
Act Income Tax Act, 1961.
Codes: 1) 100 percent deduction without any qualifying
I II III IV limit.
1) 2 1 4 3 2) 50 percent deduction without any qualifying
2) 1 4 3 2 limit.
3) 3 4 2 1 3) 100 percent deduction subject to qualifying
4) 4 1 3 2 limit.
4) 50 percent deduction subject qualifying limit.
75. Under the Income Tax Act, 1961 unabsorbed 72. If the taxable income of a domestic company for the
depreciation can be carried forward for set-off Assessment year 2011-12 is `9,00,000, its tax
purpose: liability will be
1) For 4 years 1) ` 2,76,800
2) For 5 years 2) ` 2,78,100
3) For 8 years 3) ` 3,70,800
4) For unspecified period 4) ` 3,70,880
73. Unabsorbed depreciation which could not be set off
DEC.-2012 in the same assessment year, can be carried forward
70. Minimum Alternative Tax (MAT) under Sec. 115 upto
JB of the Income Tax Act is applicable on 1) 4 years
 2) 8 years 4) Deduction for repayment of any installment of
3) 10 years principal amount borrowed for the purchase
4) Indefinite period. construction of house property
74. If the book profits of a partnership firm is ` 74. X purchased a land in the P.Y. 1997-98 for `
1,10,000, the remuneration admissible to working 50,000. This land was sold by him during the P.Y.
partners under Sec. 40(b) of the income Tax Act. 2009-10 for ` 8,00,000. The fair market value of
1961 is this land on 1-4-81 was ` 1,20,000. If the cost
1) ` 1,10,000 Inflation Index for the A.Y. 2010-11 is 632,. his
2) ` 1,50,000 capital gain for the A.Y. 2010-11 will be.
3) ` 99, 000 1) ` 4,84,000
4) None of the above 2) ` 7,50,000
75. Which of the following expenses is inadmissible 3) ` 6,80,000
while computing income from other sources? 4) ` 41,600
1) Interest paid on amounts borrowed to meet tax 75. Any amount of money received in excess of `
liabilities. 50,000 without consideration is fully taxable in the
2) Collection charges paid to the banker or any hands of
other person to collect interest/dividend, 1) Individuals
3) Interest on loan taken to invest in securities. 2) Individuals and HUF
4) Depreciation on let-out machinery and plant 3) Individuals, HUF and Company
DEC.-2013 4) All assessees
71. Given that: June-2014
Fair rent of a let out house property is ` 75,000. Its 71. Mr. X, a non-resident, earned ` 36,000 as interest
municipal value is ` 60,000, standard rent is ` on German Development Bonds. Of this, he
72,000 and actual rent received is ` 63,000. What is received one-sixth in India. The amount to be
the Gross Annual Value of this house property? included as interest for the computation of his
1) ` 60,000 Gross Total Income is
2) ` 63,000 1) ` 36,000
3) ` 72,000 2) ` 30,000
4) ` 75,000 3) ` 6,000
72. Match the items of List-I with items of List-II 4) Nil
List–I List-II 72. Consider the following problem relating to a let-out
(i) Amount deposited in PPF (A) 80-IA
house property:
(ii) Profits and gains from (B) 80 G
undertakings engaged in Municipal value – ` 60,000
infrastructure development Fair rent – ` 68,000
(iii) Contribution to National (C) 80-IAB Standard rent under the Rent Control – ` 62,000
Defence Fund Annual rent received – ` 65,000
(iv) Profits and gains by an (D) 80-C The Gross Annual Value of the property will be
undertaking engaged in the 1) ` 68,000
development of Special 2) ` 62,000
Economic Zone 3) ` 65,000
Codes:
4) ` 60,000
(i) (ii) (iii) (iv) 73. From the following, identify by the web-based
1) (D) (C) (B) (A)
2) (D) (A) (B) (C) financial software:
1) Private Equity software
3) (D) (A) (C) (B)
2) Share Accounting Software
4) (B) (A) (C) (D)
3) Wealth management Software
73. Which of the following deductions will not comes 4) WINGS 2013
under Sec. 80 o the Income Tax Act? 74. Which of the following are true in tax planning
1) Deduction in the case of a person with (i) It is futuristic in its approach
disability (ii) It has limited scope compared to tax
2) Deduction for interest paid on loan taken for management.
pursuing higher education (iii) The benefit arising from it are limited
3) Deduction for interest on loan taken for the particularly in the short run.
construction purchase of house property. (iv) Its main objective is to reduce the tax liability.
 Codes: 1) A person in employment
1) (i), (ii) and (iii) 2) A person engaged in illegal business
2) (i) and (ii) 3) Person who is running charitable business
3) (i) and (iv) 4) A person leaving India permanently.
4) (ii), (iii) and (iv) 72. Long term capital loss can be set off from which of
75. The benefits of debt financing over equity financing the following?
are likely to be highest in which of the following 1) Short term capital gin only
situations? 2) Long term capital gains only
1) High marginal tax rates and low non-interest 3) Income from business and profession
tax benefits 4) Capital gain head of income
2) Low marginal tax rate and low non-interest tax 73. In which of the following long term assets, cost
benefits indexation benefit is allowed?
3) High marginal tax rates and high non-interest 1) Debentures issued by a company
tax benefits 2) Self generated goodwill of a business
4) Low marginal tax rates and high non-interest 3) Bonus shares allotted on 1-4-2000
tax benefits 4) Jewellery
DEC.-2014 74. Calculate the Gross Annual Value from the
22. Which one of the following is not an example of tax following details:
evasion? Municipal Value – ` 45,000
1) Submitting misleading documents. Fair Rental Value – ` 50,000
2) Not maintaining proper accounts of income Standard Rent – ` 48,000
earned Actual Rent – ` 42,000
3) Suppression of facts. 75. Minimum Alternate Tax (MAT) is imposed on
4) Interpreting the tax law in ones own way to 1) All companies
minimise tax liability. 2) Public Limited Companies only
69. Under Section 271 C of the Income Tax Act, 1961 3) Private Limited Companies only
the amount of penalty for failure to deduct tax at 4) Partnership Firms and Companies
source is
1) 10% of tax which is otherwise deductible under June-2015
Section 194 . 71. In which of the following cases, Assessing officer
2) 100% of tax which is otherwise deductible has the discretion to assess the income of the
under section 194 C. previous year in the previous year or in the
3) 200% of tax which is otherwise deductible subsequent assessment year?
under section 194 C. 1) Shipping business of non-residents
4) 300% of tax which is otherwise deductible 2) Association of Persons (AOP) or Body of
under section 194 C. Individuals (BOI) formed for a particular event
70. Match the following terms of List-I and List-II and or purpose
select the correct answer from the codes given 3) Assessment of persons likely to transfer property
below: to avoid tax
List-I List-II 4) Discontinued business
(Sections) (Minimum 72. Rental income received by a foreign individual, from
Deduction) another foreign individual, in respect of the property
(A) Section 80C of (i) ` 10,000 situated in Delhi is taxable in the hands of:
I.T. Act 1) Resident and Ordinarily Resident (OR) only
(B) Section 80D of (ii) ` 40,000 2) Ordinarily Resident (OR) and Not Ordinarily
I.T. Act Resident (NOR) only
(C) Section 80 DDB (iii) ` 1,00,000 3) None Resident (NR) only
of I.T. Act 4) Ordinarily Resident (OR), Not Ordinarily
(D) Section 80 TTA (iv) ` 15,000 Resident (NOR) and Non Resident (NR)
of I.T. Act 73. Which of the following income is not chargeable
Codes : under the head ‘income from business and
(A) (B) (C) (D) profession’?
1) iii i iv ii 1) Profits and Gains carried on by an assessee
2) iii iv ii i during the previous year.
3) iv iii ii i 2) Income derived by a trade professional or similar
4) ii iii i iv association from specific services performed for
71. In which of the following cases, income of previous its members.
year is assessable in the previous year is assessable n 3) Income from the activity of owning or owning
the previous year itself? and maintaining race horses.
 4) Salary received by a partner of a firm from the or is deemed to be in default in 271 (1)
same firm. making payment of tax, (c)
74. Mr. A earned a capital gain of `100 lakhs on 31-2- including the tax deducted at
2014 from the sale of a long term capital asset (land) source
within the limits of Jaipur corporation. If he invests B. Failure to pay the advance tax 2. Section
`60 lakhs, out of `100 lakhs, in Rural Electricity as directed by the Assessing 273 (1)
Corporation Bonds approved under Sec. 54 EC in Officer
20-2-2014, what is the amount of exemption he can C. Concealment of particulars of 3. Section
claim under Sec. 54 EC of Income Tax Act for the income or furnishing of 201 (1)
AY 2014-15? inaccurate particulars of income
1) `60 lakhs Codes
2) `50 lakhs A B C
3) `100 lakhs 1) 1 2 3
4) `30 lakhs 2) 3 2 1
75. Under which of the following situations, the 3) 3 1 2
Appellate Tribunal can rectify the mistake in the
4) 2 1 3
order passed by it under Sec 254 (2) of Income Tax
Act? 74. Assertion (A): Tax evasion is undertaken by
1. If subsequent decision of the Supreme employing unfair means.
Court/High Court is available on the subject Reasoning (R): Payment of tax is avoided through
after the Appellate Tribunal’s order illegal means r fraud for tax evasion.
2. If an assessee apply for rectification of the Codes:
Tribunal’s order by raising fresh grounds before 1) (A) is correct and (R) is the right explanation of
the Tribunal (A).
3. If the omission or mistake is on the part of 2) (A) is correct but (R) is not the right explanation
Appellate Tribunal of (A).
4. If the order is passed by the Appellate Tribunal 3) Both Assertion (A) and (R) are correct
under an erroneous impression of fact or law independently and (R) may be considered as an
Codes: explanation of (A).
1) 1, 2 and 3 4) Both (A) and (R) incorrect.
2) 2, 3 and 4 75. Which among the following are necessary
3) 1, 3 and 4 documents to file Income Tax Return for an
4) Only 3 and 4 employed person in India?
1. Adhar Card
DEC.-2015 2. PAN Card
71. Consider the following conditions: 3. Form No. 16 issued by employer
1. An individual is in India for a period of 182 days Codes:
in the financial year in which he is getting his 1) 1 only
salary income. 2) 1 and 2
2. An individual is in India for a period of 60 days 3) 1, 2 and 3
or more during financial year in which he gets 4) 2 and 3
his salary and 365 days or more during 4 years
immediately preceding to that financial year. July-2016
If one of the following conditions is satisfied, as per 69. As per the Income Tax Act, 1961 for the assessment
the provisions of Income Tax Act, 1961, he is: year 2015-16, a deduction u/s 80 QQB for authors of
1) Resident but not ordinarily resident of India books of literacy, artistic or scientific nature is
2) Non-resident citizen of India allowed upto
3) Resident and categorized citizen of India U/S 29 1) `1,00,000
4) Ordinary resident of India 2) `2,00,000
72. Agriculture income is exempted from income tax 3) `2,40,000
under the following section of Income Tax Act, 4) `3,00,000
1961: 70. Gratuity received by a government employee is
1) 2 (1A) 1) Exempted upto `3,50,000
2) 10 (1) 2) Exempted upto `10,00,000
3) 10 (2) 3) Fully exempted
4) 10 (4) 4) Fully taxable
73. Match the items of List-I with List-II: 71. Match the items of the List-I with those of the List-II
List I List II and indicate the correct code:
A. When the assessee is in default 1. Section List-I List-II
 A. Residential status 1. Section 10 (13A) 2. ITR-2
of an individual 3. ITR-2B
B. Agricultural 2. Section 10 (10) 4. ITR-3
income Codes:
C. House rent 3. Section 6
allowance 1) 1, 2 and 3
D. Gratuity 4. Section 10 (1) 2) 2, 3 and 4
3) 1, 2 and 4
4) 1, 3 and 4
Codes:
A B C D
1) 1 3 2 4 Jan.-2017
70. If a assessee is engaged in the business of growing
2) 3 4 1 2
and manufacturing tea in India, the portion of
3) 2 1 3 4
agricultural income in that case shall be.
4) 4 2 1 3
1) 100%
72. Match the items of the List-I List-II and indicate the 2) 60%
correct code: 3) 50%
List-I List-II 4) 40%
A. House rent 1. A deduction from 71. Which of the following statements is not correct?
allowance income 1) X is an individual assessee. He pays a monthly
B. Casual income 2. A step taken by tax rent of Rs. 10,000 pm. He cannot deduct tax at
authorities source.
C. Collection charges 3. Taxable income 2) On salaries, tax is deducted at source according
of interest on to provisions of Sec. 192.
securities 3) No tax is deducted at source in respect of interest
D. Best judgement 4. Partly taxable on securities issued by a domestic company.
assessment allowance 4) Bank will deduct tax at source @10% if bank
fixed deposit’s interest credit is more than RS
Codes: 10,000 in a year.
A B C D 72. X donated Rs. 20,000 to a charitable institution,
1) 4 3 2 1 which is eligible for deduction u/s 80G, during the
2) 4 3 1 2 financial year 2015-16. His total income during the
3) 3 4 1 2 period was Rs. 1,50,000. How much deduction he
4) 2 4 1 3 can claims u/s 80G?
73. The statutory limit for deduction u/s 80 GG of 1) Rs. 7,500
Income tax Act, 1961, for the assessment year 2015- 2) Rs. 10,000
16 is 3) Rs. 15,000
1) `2,000 per month 4) Rs 20,000
2) `3,000 per month 73. X is employed in a private company at a salary of
3) `2,500 per month Rs. 70,000 per month and Rs. 10,000 per month as
4) `5,000 per month dearness pay. He received Rs. 2,000 per month as
74. For the purpose of assessment under Income Tax house rent allowance. He paid Rs. 2,500 per month
Act, 1961, which combinations of the following as house rent. What is the exempted portion of house
represent income? rent allowance?
1. Tax-free salary from the private sector employer. 1) Rs. 2,500
2. Pin money received by a family member. 2) Rs. 2,000
3. Awards received by the sports persons. 3) Rs. 1,000
4. Loss incurred by the assessee. 4) NIL
5. Perquisites received by employees. 74. Surcharge is payable by an individual where the total
Codes: income exceeds.
1) Rs. 10 lacs
1) 1, 2, 3, 4 2) Rs 25 lacs
2) 2, 3, 4, 5 3) Rs. 50 lacs
3) 1, 3, 4, 5 4) Rs. 1 crore
4) 1, 2, 4, 5 75. Which one of the following statement is not correct?
75. Indicate the correct code for forms for filing income 1) A person may not have assessable income but
tax return from the following Income Tax Return still be an assessee.
Forms: 2) In some cases, the assessment year and the
1. ITR-4S previous year can be same.
 3) An Indian company is always resident assessee. Codes
4) Surcharge is additional tax calculated on total 1) (a) and (b)
income. 2) (b) and (c)
3) (a) and (d)
4) (c) and (d)
November-2017
72. Assertion (A): If the interest is payable outside
69. Dividends declared by Unit Trust of India or by India, tax must be deducted at source.
mutual funds is: Reason (R): If tax has not been deducted at source,
1) Fully exempt in the hands of unit holders the amount paid as interest will not be allowed as a
2) fully taxable in the hands of unit holders deduction in computing business income.
3) Fully exempt in the hands of individual unit Select the correct answer from the code given
holders and fully taxable in the hands of below:
institutional unit holders
4) Included in the gross total income but a
deduction is allowed under section 80L. Code:
70. Match the items of List-I with the items of List-II 1) Both (A) and (R) are correct and (R) is the
and choose the correct answer from the code given correct explanation of (A).
below: 2) (A) and (R) both are correct but (R) is not the
List I List II correct explanation of (A).
(Types of Income) (Heads of Income) 3) (A) is correct but (R) is wrong.
(a) Salary, bonus, (i) Income from other 4) (A) is wrong but (R) is correct.
commission, etc. Sources 73. Under the Income Tax Act, 1961 the education cess
received by a of (2% + 1%) is calculate on the amount of:
working partner 1) Income Tax
from the firm 2) Income Tax Plus surcharge (if any)
(b) pension received by (ii) Income from (short 3) Gross total Income
the widow of a term) Capital Gains 4) Taxable Income
government 74. Exemption, under Sec. 54F of the income Tax Act,
employee 1961, shall not be allowed if the assessee on the
(c) profits on the sale of (iii) Income from Capital date of transfer owns:
machinery used in Gains 1) Any residential house
business 2) A residential house which is let out
(d) Compensation (iv) Income from 3) A house which is self occupied
received from the Business and 4) More than one residential house.
government on Profession 75. The income from the sale of machinery used in
compulsory business is treaded as
acquisition 1) Income from business and profession
(v) Income from Salaries 2) Short-term capital gain
Codes 3) Long-term capital gain
(a) (b) (c) (d) 4) Income from other sources.
1) (v) (ii) (i) (iii)
2) (iv) (ii) (iii) (v)
3) (v) (iv) (iii) (ii)
4) (iv) (i) (ii) (iii)
71. Which of the following will be considered as tax
planning effort?
1) Mr. A purchased a house for self residence of
`80 lacs by taking a loan of `60 lacs from SBI
at 10% interest, instead of using his own funds.
2) Mr. A made investment in purchasing 12%
redeemable debentures of TISCO worth `1.50
lac.
3) Mr. A purchased 100 gram gold biscuits of `2.5
Lac from SBI on the occasion of Diwali
4) Mr. A invested `1 crore in purchasing 5 acres
of agricultural land in his native village in
Gaya.
 ASTRAL EDUCATION
COMMERCE (EM) INCOME TAX PYP (P-3)

ANSWER KEYS
JUNE-2012
71 2 72 2 73 1 74 3 75 4

DEC.-2012
70 1 71 3 72 3 73 2 74 4

JUNE-2013
71 2 72 2 73 4 74 2 75 1

DEC.-2013
71 3 72 2 73 3 74 4 75 2

JUNE-2014
71 3 72 3 73 4 74 3 75 1

DEC.-2014
22 4 69 2 70 2 71 4 72 2 73 4 74 2 75 1

JUNE-2015
71 4 72 4 73 3 74 * 75 3

DEC.-2015
71 4 72 2 73 2 74 1 75 4

JULY-2016
69 4 70 3 71 2 72 2 73 1 74 3 75 3

JAN.-2017
70 2 71 3 72 1 73 4 74 4 75 4

NOV.-2017
69 1 70 4 71 3 72 1 73 2 74 4 75 2