UGC / NET

COMMERCE - PAPER II
Previous Question Papers

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[Link]
 COMMERCE
PAPER—II

Note : This paper contains fifty (50) multiple-choice questions, each question carrying
two (2) marks. Attempt all of them.

1. The annual GDP growth rate which was merely 3.6 percent during the first plan period has reached
during 2002 - 03 to :
(A) 7.5 percent (B) 8.0 percent (C) 6.0 percent (D) 9.5 percent

2. Liberalisation means :
(A) Reducing the number of reserved industries from 17 to 8
(B) Liberating the economy, trade and industry from unwanted restrictions
(C) Opening up of the economy to the world market by attaining international competitiveness
(D) Free determination of interest rates

3. Match the following :

(a) The Indian Contract Act (1) 1948
(b) The Indian Partnership Act (2) 1930
(c) The Sale of Goods Act (3) 1932
(d) The Indian Factories Act (4) 1872
(a) (b) (c) (d)
(A) 1 2 3 4
(B) 4 3 2 1
(C) 2 1 3 4
(D) 3 2 4 1

4. In which year has the Government of India introduced Export and Import Policy (EXIM policy) for
the first time ?
(A) 1977 (B) 1985 (C) 1988 (D) 1990

5. The popular route of privatisation of public enterprises in India has been :

(A) Disinvestment (B) Initial public offer
(C) Outright sale (D) Sale to strategic partner

6. If goodwill at its full value is raised in the books of a partnership firm at the time of retirement of a
partner is to be written off, then the capital accounts of the remaining partners are debited in :
(A) Gaining ratio (B) Old profit and loss sharing ratio
(C) New profit and loss sharing ratio (D) Capital ratio

7. Capital deficiency of an insolvent partner at the time of dissolutions is to be

distributed in :
(A) The ratio of capitals after adjusting accumulated profits and losses but before adjusting
realisation gains or losses
(B) The ratio of capitals after adjusting realisation gains or losses
(C) The ratio of fluctuating capitals before making any adjustments
(D) The profit sharing ratio unless there is an agreement to the contrary

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8. Amount spent on advertisement campaign the benefit of which is likely to last for 3 to 4 years is :
(A) Capital expenditure (B) Revenue expenditure
(C) Deferred revenue expenditure (D) Deferred capital expenditure

9. Cash flows arising from interest paid in the case of a financial enterprise is a cash flow from :
(A) Operating activities (B) Financing activities
(C) Both (A) and (B) (D) Investing activities

10. Share Premium money can be used for :

(A) Payment of Dividend (B) Writing off Goodwill
(C) Issue of fully paid bonus shares (D) None of the above

11. Statements :
(I) The Law of Demand always operates in the case of superior goods.
(II) The substitution effect is always positive
(A) Both correct (B) Both incorrect
(C) I correct, II wrong (D) I wrong, II correct

12. Which of the following firms witnesses kinked demand curve ?

(A) Monopoly firm (B) Oligopoly firm
(C) Perfectly competitive firm (D) Duopoly firm

13. Statements :
(I) Penetration price covers all costs
(II) The objective of skimming price policy is to penetrate the market with the lowest possible price
(A) Both correct (B) Both wrong
(C) I correct, II wrong (D) I wrong, II correct

14. Cobb - Douglas production - function in its initial form has the following properties :
(a) Power function (b) Constant returns to scale
(c) Elasticity of substitution as unity (d) Elasticity of substitution as constant and unity
(A) a, b, d (B) a, c, d (C) a, b, c, d (D) a, b, c

15. Which one of the following is not a common property of an indifference curve ?
(A) Downward sloping (B) Convex to the origin
(C) Two indifference curves can intersect each other (D) None of the above

16. If a sample is taken at random from a population, it is likely to possess almost the same characteristics
as that of the population. Which one of the following laws states the above theme ?
(A) Law of Inertia of Large numbers (B) Law of Statistical Regularity
(C) Law of persistance of Small Numbers (D) Law of Optimisation

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17. Which one of the following factors causes non - sampling errors ?
(A) Inappropriate statistical units (B) Inadequate sampling frame
(C) Faulty process of selection (D) All of the above

18. Statements :
(I) Non - sampling errors can occur in any survey, whether it be a complete enumeration or
sampling
(II) Sampling errors are present both in a census as well as a sample survey
(A) Both correct (B) Both wrong
(C) I correct, II wrong (D) I wrong, II correct

19. Karl Pearson’s coefficient of correlation between X and Y variables measures :

(A) Covariance between the two (B) Inverse of the products of their standard deviations
(C) Product of A and B (D) None of the above

20. E-Business means :

(A) Doing business through electronic media
(B) Ordering for goods through telephones
(C) Buying and selling of goods and services through electronic media
(D) None of the above

21. Statements :
(I) Hygeine factors are the intrinsic part of job carried out by an individual
(II) Theory ‘Y’ represents the optimistic view about the human nature
(A) Both correct (B) Both incorrect
(C) I correct, II incorrect (D) I incorrect, II correct

22. The term organisation is usually understood in terms of :

(A) Structure (B) Process
(C) Structure as well as process (D) Function

23. Match the items in List I with the items in List II.
List I List II
(a) Unity of command (1) F.W. Taylor
(b) Bureaucratic Theory of Management (2) Max Weber
(c) Scientific Management (3) Henry Fayol

(a) (b) (c)

(A) 1 2 3
(B) 2 1 3
(C) 3 2 1
(D) 2 3 1

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24. Match the items in List I with the items in List II.
List I List II
(a) Autocratic Leader (1) Makes and announces decisions
(b) Participative Leader (2) Seeks ideas before making decisions
(c) Democratic Leader (3) Decides with group on one and one basis
(a) (b) (c)
(A) 1 2 3
(B) 1 3 2
(C) 3 2 1
(D) 2 3 1

25. In vertical communication, the communication flows :

(A) Upward only (B) Downward only
(C) Upward as well as downwards (D) None of the above

26. The most important component of promotion mix to be used for industrial goods is :
(A) Personal selling (B) Advertisement
(C) Sales promotion (D) Publicity

27. The most appropriate concept to be adopted for physical distribution of goods is :
(A) Marketing concept (B) Total cost concept
(C) Selling concept (D) System concept

28. The process of dividing a potential market into distinct sub sets of consumers and selecting one or
more segments as a target to be reached with a distinct marketing mix is :
(A) Marketing (B) Positioning (C) Targeting (D) None of the above

29. In the line and staff form, the function of the marketing manager is to :
(A) Obey the line (B) Serve the line
(C) Inform the line (D) Advise the line

30. According to the marketing concept, the different functional areas of the firm should blend their
efforts in order to maximise :
(A) Profit (B) Sales (C) Market share (D) Customer satisfaction

31. Statements :
(I) The greater is the likely level of EBIT than the financial indifference point, the stronger is the
case for issuing levered financial plans to maximize the EPS.
(II) The financial break - even point is found at that level of EBIT where the EPS is zero for a
particular financial plan.
(A) Both correct (B) Both incorrect
(C) I correct, II incorrect (D) I incorrect, II correct

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32. Which of the following investment appraisal methods is not based on DCF approach ?
(A) NPV (B) IRR
(C) Pay Back Period (D) None of the above

33. The discount rate which equates the present value of the cash inflows that are incremental to the
taking of the financing opportunity with the present value of its incremental cash out flows defines
:
(A) Implicit cost of capital (B) Explicit cost of capital
(C) Incremental cost of capital (D) None of the above

34. The estimated requirement of total funds for working capital should be met from
long-run sources is known as :
(A) Matching approach (B) Aggressive approach
(C) Conservative approach (D) None of the above

35. Who has given the following formula for determining dividend policy :
r
D1 (E2D)
Ke
P5
K
(A) Modigliani Miller (B) James E. Walter
(C) Myron Gordon (D) David Durand

36. Which of the following techniques of performance appraisal is least succeptible to personal bias ?
(A) 360 Degree Appraisal system (B) Forced - choice method
(C) Ranking method (D) Check - list

37. In Job - evaluation, the key jobs are designated as ones :

(A) Which are more in number in the organisation
(B) Which are most important for the servival of the organisation
(C) Which are most secure
(D) Which represent different levels of each compensable factors

38. Statements :
(I) Employee development is more future oriented and more concerned with education than
employee training.
(II) Apprenticeship programme is one of the widely used off - the job training method.
(A) Both correct (B) Both incorrect
(C) I correct, II incorrect (D) I incorrect, II correct

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39. Match the items in List I with the items in List II.
List I List II
(a) Brain storming (1) A free wheeling group discussion
(b) Business game (2) A development activity in which one’s action
is guided by others
(c) Role playing (3) A technique in which one assumes different
identities
(a) (b) (c)
(A) 1 2 3
(B) 2 1 3
(C) 1 3 2
(D) 2 3 1

40. Statements :
(I) Fringe benefits, now-a-days are a significant component of compensation.
(II) Under piece-rate plan, employees are paid at a stipulated rate per hour of work done by the
employee
(A) Both correct (B) Both wrong
(C) I correct, II wrong (D) I wrong, II correct

41. Which one of the following is the apex institution in financial sector of India ?
(A) IDBI (B) NABARD (C) NHB (D) RBI

42. Chalapathi Rao Committee was meant for restructuring of :

(A) State financial corporations in India
(B) Commercial banks in India
(C) Co-operative banks in India
(D) Regional Rural Banks in India

43. Match the items in List I with the items in List II.
List I List II
(a) Khusro Committee (1) To look into customer services in banks in India
(b) Goporia Committee (2) To review the agriculture credit situation in India
(c) Ghosh Committee (3) To examine the adequacy of institutional credit
to SSI and other related aspects
(d) Nayak Committee (4) To enquire into the various aspects of frauds
and malpractices in the banks

(a) (b) (c) (d)

(A) 2 4 1 3
(B) 3 1 4 2
(C) 2 1 4 3
(D) 4 2 1 3

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44. State Bank of India is a :
(A) Public Sector Bank (B) Private Sector Bank
(C) Joint Sector Bank (D) Non - Nationalised Bank

45. On which of the following banks, the Reserve Bank of India depends largely for the success of its
monetary policy :
(A) Co-operative Banks (B) Regional Rural Banks
(C) Commercial Banks (D) Development Banks

46. Interest payments on loans borrowed abroad are recorded in :

(A) Capital Account (B) Current Account
(C) Errors and omission section (D) Official Reserve Account

47. The main objective of International Monetary Fund (IMF) was to :

(A) Promote international trade (B) Help economically backward countries
(C) Maintain stable exchange rates (D) Promote international liquidity

48. Which one of the following theories says that “to export was good and to be encouraged but to
import was bad and to be discouraged”.
(A) Comparative Cost Theory (B) The Theory of Absolute Advantage
(C) Factor Edowment Theory (D) Mercantilist Theory

49. NAFTA is an example of :

(A) Common Market (B) Customs Union
(C) Economic Community (D) Free Trade Area

50. Statements :
(I) No gain from trade is shared between countries in accordance with their relative strength of
demand.
(II) The terms of trade are against the primary producer unless it has a monopoly or the product
has an inelastic demand abroad.
(A) Both correct (B) Both incorrect
(C) I correct, II incorrect (D) I incorrect, II correct

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. __________ is a permanent inter-governmental body governing and regulating

international trade in goods and services.
(A) G.A.T.T. (B) EXIM Bank (C) W.T.O. (D) I.M.F.

2. Fiscal deficit in the Union Budget means :

(A) The sum of budgetary deficit and net increase in internal and external borrowings
(B) The difference between current expenditure and current revenue
(C) The sum of monetised deficit and budgetary deficit
(D) Net increase in Union Government borrowings from the Reserve Bank of India

3. The objective of __________ is to achieve “growth with equity”.

(A) The Ninth Plan (B) The Tenth Plan
(C) The Eighth Plan (D) The Seventh Plan

4. The significant development in the sphere of foreign exchange was the introduction of
__________ .
(A) Foreign Exchange Regulation Act (FERA)
(B) Foreign Exchange Management Act (FEMA)
(C) The Export-Import Policy, 2005-06
(D) EXIM Bank

5. The term ‘industrial policy’ refers to :

(A) the rules and regulations relating to the establishment of industrial undertakings
and their expansion
(B) remove the structural, financial, fiscal, administrative, infra structure related
impediments to the efficient functioning of a market oriented economy
(C) the culmination of liberalisation programme
(D) increase the efficiency of public sector undertakings

6. Who are the customers of cost and management accounting ?

(A) Managers (B) Creditors (C) Lenders (D) Consumers

7. Which of the following is an efficiency ratio ?

(A) Price-Earning Ratio (B) Debt-Equity Ratio
(C) Acid-Test Ratio (D) Average collection period

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8. What do you mean by ‘cash equivalents’ ?
(A) Bank balance (B) Short -term highly liquid securities
(C) Investments (D) Investment in debentures

9. The profits calculated by marginal costing and absorption costing are different because
of :
(A) Capital and revenue (B) Opening stock
(C) Valuation of stock (D) Closing stock

10. Match the items from List-I with the items in List-II :
List - I List - II
(a) Error of Principle (i) A purchase of Rs. 1000/- has not been recorded
(b) Error of Commission (ii) Treating repair charges as addition to assets
(c) Error of Omission (iii) A sale of Rs. 563 was posted as Rs. 653
(d) Compensatory error (iv) Sales book is undercast by Rs. 1000/- and
return inward book is overcast by Rs. 1000
(v) Return inward book is undercast by
Rs. 1000/- and purchase book is overcast by
Rs.1000/-
Codes : (a) (b) (c) (d)
(A) (ii) (iii) (i) (iv)
(B) (ii) (iii) (iv) (v)
(C) (iv) (ii) (i) (iii)
(D) (ii) (iii) (i) (v)

11. Which of the following is not the method of forecasting demand ?

(A) Collective opinion method (B) Total outlay method
(C) Expert opinion method (D) Controlled opinion method

12. When marginal utility is negative then total utility ?

(A) increases (B) decreases (C) is zero (D) is negative

13. Which of the following is a correct statement ?

(A) Decrease in input prices causes a leftward shift in the supply curve
(B) The desire for a commodity backed by ability and willingness to pay is demand
(C) When income increases, the demand for essential goods increases more than
proportionately
(D) The demand for a commodity is inversely related to the price of its substitutes

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14. When goods in the domestic market are sold at a high price and in the foreign market
at a low price, it is a situation of :
(A) Dumping (B) Perfect competition
(C) Oligopoly (D) Duopoly

15. Average revenue curve will not touch 0 - X axis because it cannot be :
(A) Positive (B) Zero
(C) Negative (D) None of the above

16. ‘Parameter’ refers to the characteristics of the :

(A) Population (B) Sample
(C) Mean (D) None of the above

17. The median of 10, 12, 14, 16, 18 will be :

(A) 12 (B) 16 (C) 15 (D) 14

18. Probability sampling and random sampling are :

(A) Anonymous (B) Different terms
(C) Synonymous (D) None of the above

19. ‘F’ ratio refers to :

(A) ratio between two means (B) ratio between two standard deviations
(C) ratio between two correlations (D) ratio between two variances

20. Match the items from List-I with the items in List-II.
List - I List - II
(a) t-test (i) secondary data
(b) Regression test (ii) systematic sampling
(c) Published sources (iii) hypothesis test
(d) Probability sampling (iv) quota sampling
(v) multi-variable analysis
Code : (a) (b) (c) (d)
(A) (v) (ii) (i) (iv)
(B) (v) (iii) (i) (iv)
(C) (iii) (v) (i) (ii)
(D) (v) (ii) (i) (iv)

21. The Plan for meeting the challenges of the competitors is called a :
(A) Programme (B) Mission
(C) Derivative Plan (D) Strategy

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22. The chief contribution of Henry Fayol to management is that he :
(A) provided a conceptual frame-work
(B) formulated the management process approach
(C) evolved two principles of management
(D) stressed the need for management education based on management

23. Which type of managerial decision correspond to “basic decisions” ?

(A) Mechanical decision and analytic decision
(B) Judicious decision and adoptive decision
(C) Judicious decision, adoptive decision and analytic decision
(D) All of the above

24. The process of combining the main industrial unit with all other related units is called :
(A) Divergent Lateral combination (B) Convergent Lateral combination
(C) Horizontal combination (D) Vertical combination

25. The lack of faith and confidence of managers in subordinates is an important barrier of :
(A) Effective leadership (B) Effective control
(C) Effective delegation (D) Effective direction

26. Post purchase dissatisfaction in marketing is known as :

(A) Caveat emptor (B) Cognitive dissonance
(C) Brand III loyalty (D) None of the above

27. Needs for goods and services are more homogenous in :

(A) Industrial market (B) Consumer market
(C) Domestic market (D) None of the above

28. Marketing concept means :

(A) Firms should produce only what their pre-determined consumers would be willing
to buy
(B) Firms should persuade customers to buy what they have produced
(C) The consumers will buy the products which offer them the highest quality
(D) All of the above

29. The process of dividing a potential market into distinct subsets of consumers and
selecting one or more segments as a target to be reached with a distinct marketing mix
means :
(A) Marketing (B) Positioning
(C) Targeting (D) None of the above

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30. What is the basis for segmenting vitamin market ?
(A) Age (B) Place of distribution
(C) Formulation (D) All of the above

31. Financial Risk means :

(A) Risk of Technical insolvency (B) Magnify the fluctuation in EBT
(C) Both (A) and (B) (D) None of the above

32. The financial management is concerned with the :

(A) Procurement of funds and their effective utilisation
(B) Raising of funds from the market
(C) Management of Working Funds only
(D) Investing funds in the most appropriate assets

33. M.M. Approach is similar to __________ approach.

(A) Net Income Approach (B) Net Operating Income Approach
(C) Both (A) and (B) (D) None of the above

34. If the sales are Rs. 6000, variable cost Rs. 3600 and fixed cost Rs. 2000, the Break-even
point will be :
(A) 5000 units (B) 5400 units (C) 6000 units (D) 4000 units

35. Which is an incorrect statement ?

(A) The issue of Bonus shares is subject to sanction from the SEBI
(B) The prior approval of capitalisation of reserves upto Rs. 1 crore is totally exempted
(C) Bonus issues beyond the ratio of 1:1 is not permitted
(D) Partly paid equity shares are issued as bonus shares

36. Job analysis provides information used for writing :

(A) Organisation chart (B) Policy
(C) Job Description (D) Procedure

37. Recruitment and selection involves the following except :

(A) Building a pool of candidates
(B) Completing application forms by applicants
(C) Reduction of the work force
(D) Employment planning and forecasting

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38. __________ is the process of deciding how to fill th company’s most important executive
positions.
(A) Succession Planning (B) Organisational Restructuring
(C) Self-directed Teams (D) Corporate Downsizing

39. Which of the following is not necessary for promotion from within ?
(A) Job posting (B) Advertisements
(C) Personnel Records (D) Performance Appraisal Form

40. Performance appraisal means evaluating an employee’s performance relative to :

(A) Established goods (B) Fellow employees
(C) Job description requirements (D) Performance standards

41. A __________ card is basically a payment mechanism which allows the holder of the
card to make purchases without any immediate cash payment.
(A) ATM (B) CREDIT (C) DEBIT (D) KISAN CREDIT

42. Which of the following is a measure of selective credit control ?

(A) Bank rate policy (B) Moral suasion
(C) Statutory cash reserve ratio (D) Open market operations

43. Which of the following sentence is false ?

(A) Nationalisation of commercial banks has achieved its objectives
(B) Prior to nationalisation, commercial banks in India were generally concerned
with profit maximisation only
(C) Nationalisation has enhanced the efficiency of commercial banks
(D) Bank nationalisation in India was prompted by the necessity of credit facilities
reaching the rural sector and weaker sections of the society

44. Which of the following statement is true ?

(A) The currency notes issued by RBI are legal tender throughout the world
(B) The treasury bills are sold by the RBI for raising its working capital
(C) All commercial banks, including those owned by Government, need a licence
from the RBI to do banking business.
(D) The RBI is a banker to both central and state governments

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45. M. Narasimham headed :
(A) The working group constituted by the Government of India in July 1975 for the
establishment of Regional Rural Banks
(B) The committee on the financial system, 1991
(C) The committee on Banking Sector Reforms, 1997
(D) All of the above

46. The gains from two nations depend on :

(A) Domestic barter rates
(B) Difference in the domestic barter rates of the two countries
(C) Terms of trade
(D) Degree of absolute advantage

47. The trade theory of comparative advantage was developed by :

(A) Haberler (B) Adam Smith
(C) Alfred Marshall (D) David Ricardo

48. Which items are included in the negative list of imports out of the combination given
below :
(1) Canalised items
(2) Banned items
(3) Restricted items
(4) Items of open General Licence
(A) 1, 3 and 4 (B) 2, 3 and 4
(C) 1, 2, 3 and 4 (D) 1, 2 and 3

49. If a country has deficit in balance of current account, balance of capital account will be :
(A) Zero (B) Surplus (C) Deficit (D) None of the above

50. When custom duty is levied according to weight of goods it is known as :

(A) Excise duty (B) Ad-valorem duty
(C) Revenue duty (D) Specific duty

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. What is the target of GDP growth rate envisaged in the 10th Five year plan ?
(A) 10% (B) 9% (C) 8% (D) 11%

2. Kyoto Protocol is relating to :

(A) Competition (B) Consumer Protection
(C) Environment Protection (D) Atomic Energy generation

3. Which of the following should be achieved by a business firm at the earliest ?

(A) Budgeted sales (B) Break-even Point
(C) ROI (D) Market share

4. What does the lower Debtor-Turnover Ratio indicate ?

(A) Quick recovery (B) Delay in recovery
(C) High Debtors (D) None of the above

5. Price discrimination policy helps in increasing profits in case of :

(A) Perfect competition (B) Monopolistic Competition
(C) Monopoly (D) Oligopoly

6. The nature of Cross-price elasticity of demand in case of complementary products will

be :
(A) Positive (B) Negative
(C) (A) and (B) both (D) Zero

7. Depiction of relationship present between two variables is called :

(A) Correlation (B) Regression
(C) Dispersion (D) Location

8. RAM stands for :

(A) Random Access Memory (B) Readable Access Memory
(C) Read A Machine (D) Read A memory

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9. According to David C. McClelland, an individual’s major motive to work include the
need for :
(A) Achievement (B) Affiliation
(C) Power (D) All of the above

10. In the line and staff form, the function of staff is to :

(A) Obey the line (B) Serve the line
(C) Inform the line (D) Advise the line

11. Branding decisions are based on :

(A) Market Research (B) Assessment of customer needs
(C) Cost of the product (D) (A) and (B) above

12. Which element of the promotion mix do wholesellers primarily rely on to achieve their
promotional objectives ?
(A) Advertising (B) Trade Promotion
(C) Personal Selling (D) Direct marketing

13. What are the Considerations in designing capital structure of a corporate ?

(A) Trading on Equity (B) Cost of Capital
(C) Profitability (D) All of the above

14. Which of the following methods of inventory valuation results in lower valuation of
inventory and low income when inflation is on the rise ?
(A) LIFO (B) FIFO
(C) Simple average method (D) Weighted average method

15. HRM is concerned with :

(A) Workers (B) Managers
(C) Field staff (D) All employees

16. The sum total of emotional and informational behaviour is called :

(A) Motivation (B) Talent (C) Intuition (D) Attitude

17. NABARD has been established on the recommendation of :

(A) Talwar Committee (B) Tandon Committee
(C) CRAFI CARD (D) James Raj Committee

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18. Reserve Bank of India is :
(A) an extension wing of Ministry of Finance, Government of India.
(B) a body Corporate, having perpetual succession and a Common Seal.
(C) an institution owned by Indian Banks Association.
(D) a Private Sector Company.

19. A Derivative is a :
(A) Derived asset (B) Derived financial asset
(C) Derived from net assets (D) None of the above

20. Intellectual Property Rights are pertaining to :

(A) Medicines already patented
(B) Matters published on or before 1990
(C) Import of goods and services
(D) None of the above

21. Which one of the following pairs is not correctly matched ?

(A) Capital Expenditure : Transportation costs of a machine
(B) Funds Flow Statement : Working Capital
(C) Reduction of Share Capital : Reconstruction
(D) Contribution : Sales — Cost

22. Consumer attains equilibrium when he maximises his utility, given his income and
market prices of two products of :
(I) Marginal rate of substitution be equal to the ratio of commodity prices i.e.
MU x Px
MRS xy = =
MU y Py .
(II) Indifference curve is convex to the origin.

(A) Only (I) is true

(B) Both (I) and (II) are true
(C) Only (II) is true
(D) Neither (I) nor (II) is true

23. Assertion (A) : Chi-Square test is used to measure the Association between two
attributes.
Reason (R) : We apply Non-parametric tests like Chi-Square test for data measured
on week scale like Nominal Scale or Ordinal Scale.
(A) (A) is true but (R) is wrong
(B) (A) is wrong but (R) is true
(C) Both (A) and (R) are wrong
(D) Both (A) and (R) are true

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24. Assertion (A) : A Manager delegates authority.
Reasoning (R) : Manager wants to shrink his responsibility.
(A) Both assertion and reasoning are correct.
(B) Assertion is wrong but reasoning is correct.
(C) Assertion is correct but reasoning is wrong.
(D) Both assertion and reasoning are wrong.

25. Arrange the following concepts/acts in the order in which they came into force :
(i) Competition Act.
(ii) Foreign Exchange Management Act.
(iii) Consumer Protection Act.
(iv) Securities and Exchange Board of India Act.
Code :
(A) (iii) (iv) (ii) (i)
(B) (iv) (iii) (i) (ii)
(C) (i) (ii) (iv) (iii)
(D) (ii) (i) (iii) (iv)

26. How are the following items arranged in the liability side of the Balance Sheet of a
Company ?
(i) Current Liability and Provisions
(ii) Secured Loans
(iii) Share Capital
(iv) Unsecured Loans
(v) Reserve and Surplus
Code :
(A) (i) (ii) (iii) (iv) (v)
(B) (iii) (i) (ii) (iv) (v)
(C) (iii) (v) (ii) (iv) (i)
(D) (iii) (v) (ii) (i) (iv)

27. Elasticity is commonly stated in the form of :

(A) 1% change (B) 5% change
(C) 5% (D) All of these

28. Which test we normally apply for Qualitative data ?

(A) ‘t’ test (B) ‘F’ test
(C) x2 chi-square test (D) ‘z’ test

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29. Consider the following steps of process of decision - making and select the correct
sequence :
(i) Defining the problem.
(ii) Selection of best alternatives and implementation.
(iii) Considering limiting factors.
(iv) Considering alternatives.
Code :
(A) (i) (ii) (iii) (iv)
(B) (iii) (i) (iv) (ii)
(C) (i) (iv) (iii) (ii)
(D) (i) (iii) (iv) (ii)

30. A marketing concern generally taps sources for financing its activities from :
(A) Owned Capital (B) Bank Credit
(C) Trade Credit (D) All of the above

31. Consider the following steps in the process of Capital Budgeting :

(i) Identification of investment proposals.
(ii) Fixing priorities.
(iii) Evaluation of various proposals.
(iv) Selection and preparation of Capital Budgets.
(v) Implementation.
(vi) Performance Review.
Which of the sequence of these steps is correct :
(A) (i) (ii) (iii) (iv) (v) (vi)
(B) (ii) (i) (iii) (iv) (v) (vi)
(C) (i) (iii) (ii) (iv) (v) (vi)
(D) (i) (iv) (iii) (ii) (v) (vi)

32. Arrange the following in the order in which they are practised :
(i) Promotion
(ii) Performance appraisal
(iii) Recruitment
(iv) Training and Development
Code :
(A) (iii) (ii) (iv) (i)
(B) (iii) (ii) (i) (iv)
(C) (iii) (i) (iv) (ii)
(D) (iii) (iv) (ii) (i)

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33. E-banking is synonymous with :
(A) Tele - Banking (B) Internet Banking
(C) Euro Banking (D) None of the above

34. Arrange the following in the order of their inception :

(i) WTO
(ii) World Bank
(iii) SAFTA
(iv) ADB
Code :
(A) (ii) (iv) (i) (iii)
(B) (iii) (i) (iv) (ii)
(C) (iv) (iii) (ii) (i)
(D) (i) (iv) (iii) (ii)

35. Match the following :

List - I List - II
(a) Capital Market (i) IRDA
(b) Monetary Policy (ii) SEBI
(c) Telecom (iii) RBI
(d) Insurance (iv) TRAI
Code :
(a) (b) (c) (d)
(A) (ii) (iii) (i) (iv)
(B) (ii) (iii) (iv) (i)
(C) (ii) (iv) (iii) (i)
(D) (ii) (i) (iv) (iii)

36. Match the following :

List - I List - II
(a) Matching Principle (i) Ignores future profit estimations
(b) Materiality Principle (ii) Normal basis for valuing assets
(c) Conservatism Principle (iii) Revenues and expenses of a particular period
(d) Cost Principle (iv) Relates to relative size or importance of item
or event
Code :
(a) (b) (c) (d)
(A) (i) (iv) (ii) (iii)
(B) (ii) (iii) (iv) (i)
(C) (iii) (iv) (i) (ii)
(D) (iv) (iii) (ii) (i)

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37. Match the following :
Group - I Group - II
(Products) (Market Structure)
(a) Food Grain (i) Monopoly
(b) Air-Lines (ii) Pure Competition
(c) Railway (iii) Monopolistic
(d) Cars (iv) Oligopoly
Code :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iv) (i) (iii)
(C) (iii) (i) (iv) (ii)
(D) (iv) (ii) (iii) (i)

38. Match the following :

Group - I Group - II
(a) Simple Random Sampling (i) Hetrogenous
(b) Stratified Random Sampling (ii) Homogenous
(c) Cluster Sampling (iii) Chronological list of units
(d) Systematic Sampling (iv) Forest Tree type units
Code :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (iii) (i) (iv) (ii)
(C) (ii) (i) (iv) (iii)
(D) (iv) (iii) (ii) (i)

39. Match List - I with List - II and select the correct answer using the codes given below
the lists :
List - I List - II
(Propounder’s Name) (Theories)
(a) Maslow (i) Hygene Theory
(b) Herzberg (ii) X and Y Theories
(c) L.G. Urwick (iii) Need Hierarchy
(d) Mc. Gregor (iv) Z Theory
Code :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (i) (iv) (iii)
(C) (iv) (iii) (ii) (i)
(D) (iii) (i) (iv) (ii)

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40. Match the following :
Part - A Part - B
(Market Segmentation) (Factors of Segmentation)
(a) Psychographic (i) Personality groups
(b) Demographic (ii) Occupation
(c) Behavioural (iii) Brand Loyalty
(d) Geographical (iv) Population Size
Code :

(a) (b) (c) (d)

(A) (i) (ii) (iv) (iii)
(B) (ii) (i) (iii) (iv)
(C) (i) (ii) (iii) (iv)

(D) (ii) (i) (iv) (iii)

41. Match the following :

Part - I Part - II

Total Debt
(a) Total Debt Ratio (i) Capital Employed

Total Debt
(b) Debt - Equity Ratio (ii)
Net Worth

Capital Employed
(c) Total Capital - Equity Ratio (iii)
Net Worth

EBIT
(d) Interest Coverage Ratio (iv)
Interest
Code :

(a) (b) (c) (d)

(A) (i) (ii) (iii) (iv)
(B) (ii) (i) (iii) (iv)
(C) (i) (ii) (iv) (iii)

(D) (i) (iii) (iv) (ii)

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42. Match Items from List - I with the Items in List - II :
List - I List - II
(a) Psychoanalytical Theory (i) Strong inter linkages
(b) Scientific Management Approach (ii) Personality
(c) Subsystems of HRM (iii) Task
(d) Basic elements of a Job (iv) F.W. Taylor
Code :
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (ii) (iii) (i) (iv)
(C) (i) (iii) (ii) (iv)
(D) (ii) (iv) (iii) (i)

43. Match the following :

List - I List - II
(Name of the Bank) (Year of Establishment)
(a) SBI (i) 1990
(b) SIDBI (ii) 1955
(c) NABARD (iii) 1981
(d) EXIM BANK (iv) 1982
Code :
(a) (b) (c) (d)
(A) (ii) (i) (iii) (iv)
(B) (i) (ii) (iv) (iii)
(C) (ii) (iii) (iv) (i)
(D) (ii) (i) (iv) (iii)

44. Match the following :

List - I List - II
(Export Processing Zones) (Location in City)
(a) Uttar Pradesh (i) Noida
(b) Tamil Nadu (ii) Chennai
(c) West Bengal (iii) Falta
(d) Andhra Pradesh (iv) Visakhapatanam
Code :
(a) (b) (c) (d)
(A) (iii) (ii) (iv) (i)
(B) (ii) (i) (iii) (iv)
(C) (i) (ii) (iii) (iv)
(D) (i) (ii) (iv) (iii)

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 Read the following passage and answer the questions from 45 to 50.
“Full Convertibility”

The Prime Minister feels that the rupee’s full Convertibility is an idea whose
time has come, and since these things are unstoppable, we might as well prepare
a road map for it. This is salutary. Of course, a road map to Convertibility is
quite different from Convertibility itself. A committee headed by Dr. C. Rangarajan
had prepared one such road map in 1997. The road map lost its way, thanks to
the Asian financial crisis that soon broke out. As India successfully warded off
the contagion, policy-makers thanked the absence of full convertibility. Things
have changed significantly since then. It’s not just that our forex reserves have
ballooned to a size that should reassure the most worry-prone of central bankers
on the count of perceived adequacy. India is now recognized by the World as an
economy that will sustain high growth. The combined fiscal deficit of the Centre
and the States is on the way down, along a path marked by milestones of deficit
reduction mandated by law. This grants the central bank the flexibility it needs
in monetary policy in a regime of uncontrolled cross - border capital movements.
Import duties have come down significantly, forcing companies to acquire genuine
international competitiveness, and domestic tax reform lends a hand to the process.
The rupee’s movement against major currencies is no longer steadfastly
downwards. A couple of scams and their backlash have greatly enhanced the
quality of capital market regulation. All these favour Convertibility. But that is
not enough. Since one economic agent’s external exposure impacts another’s,
the system must allow the consequences of such exposure to work its way through,
fast. Financial reporting must improve, the market for corporate control must
work and redeployment of the assets of failed firms via liquidation must happen
fast. Reconstructing bad assets cannot remain shuffling paper from one agency
to another. The RBI needn’t twiddle its thumbs while these needed changes get
instituted. Preparing for the prospect of any Tom, Dick or Hari buying stocks on
NSE means shedding its allergy to FII sub-accounts right now.

45. Why was the road map to Convertibility lost its way ?
(A) Low foreign exchange reserve
(B) Ineffective regulatory frame work
(C) High fiscal deficit
(D) Asian Financial Crisis

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46. Which of the following factors contribute to full Convertibility ?
(A) Economy is prepared to sustain high growth.
(B) Tax reforms and low fiscal deficit.
(C) Good Forex reserves and an efficient Central Bank.
(D) All of the above.

47. What we need for full Convertibility ?

(A) Political will
(B) A Committee of Experts
(C) More Institutional Strength
(D) Financial reforms

48. “Financial Reporting must improve”. It refers to :

(A) Indian Economy
(B) RBI
(C) FII
(D) Companies

49. Selling of doubtful debts to a third party for collection of the debts is called :
(A) Factoring Service
(B) N P A Service
(C) F I I Service
(D) Restructuring Service

50. Which of the following factors has enhanced the quality of SEBI regulations ?
(A) Financial Sector Reforms
(B) Tax Reforms
(C) Capital Market Scams
(D) Increasing Foreign Exchange Reserve

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. The objective of the 11th Five-year Plan approach paper is to achieve :

(A) Inclusive growth (B) Inclusive finance
(C) Growth with equity (D) Social justice

2. The sector owned by State or Central Government is called :

(A) Private sector (B) Public sector
(C) Joint sector (D) Co-operative sector

3. Balanced growth means :

(A) The state of an economy in which there is a constant relationship between the
components of aggregate national income.
(B) The effect upon the national income of equal changes in Government expenditure
and revenue.
(C) A situation in which the Government’s planned expenditure equals its expected
income.
(D) None of the above

4. The country that is not a developing country but has not yet achieved the status of the
advanced country is :
(A) Malaysia (B) South Korea
(C) Singapore (D) None of these

5. The draft Five-year Plan in India is approved by :

(A) National Development Council (B) Planning Commission
(C) Cabinet Committee (D) President of India

6. Which accounting principle differentiates between owners and management ?

(A) Going Concern (B) Dual Aspect
(C) Separate Entity (D) Conservatism

7. Reducing the capital of a company is called :

(A) Internal Reconstruction (B) External Reconstruction
(C) Consolidation (D) None of these

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8. P/V ratio shows :
(A) Profit and Volume (B) Profit Earning Capability
(C) Safety Margin (D) None of the above

9. The meaning of ‘cash’ as per AS - 3 (revised) is :

(A) Cash in hand
(B) Cash at Bank
(C) Cash in hand and demand deposits in banks
(D) None of the above

10. Match the items of List - I with the items in List -II :
List - I List - II
(a) Cash Equivalents (i) Efficiency of managing an asset
(b) Average Collection Period (ii) Controlling Government Expenditure
(c) Zero-Base Budgeting (iii) Liquid Securities
(d) Responsibility Centre (iv) Residual Income
Codes :
(a) (b) (c) (d)
(A) (iii) (i) (ii) (iv)
(B) (iv) (ii) (iii) (i)
(C) (i) (ii) (iii) (iv)
(D) (ii) (i) (iii) (iv)

11. In the short period, monopolist firm’s equilibrium is at :

(A) Break-even point (B) AR > AC
(C) AR < AC (D) All of these

12. Price-discrimination is profitable and possible if the two markets have :

(A) Equal Elasticity of Demand (B) Different Elasticity of Demand
(C) Inelastic Demand (D) Highly Elastic Demand

13. Laws of increasing and constant returns are temporary phases of :

(A) Law of Variable Proportion (B) Law of Diminishing Return
(C) Law of Proportionality (D) Law of Diminishing Utility

14. A firm producing a large number of products will follow the pricing strategy known
as :
(A) Cost-plus pricing (B) Differential pricing
(C) Product-line pricing (D) Price leadership

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15. Cartels under oligopoly do not survive for long because of :
(A) Inter-firm rivalry (B) Low profits
(C) High cost of marketing (D) Heavy losses

16. F-test is a :
(A) Probability test (B) Variance test
(C) Factor analysis (D) None of the above

17. Regression analysis is a measure of :

(A) Degree and direction of relationship
(B) Degree of association
(C) Cause and effect relationship
(D) None of the above

18. Schedules help us in collecting :

(A) Secondary Data (B) Qualitative Data
(C) Primary Data (D) None of the above

19. Match the items from List - I with the items in List -II :
List - I List - II
(a) Random sampling (i) Structured
(b) Hypothesis testing (ii) Parametric test
(c) Questionnaire (iii) Probability sampling
(d) t - test (iv) b - error
Codes :
(a) (b) (c) (d)
(A) (iv) (iii) (i) (ii)
(B) (iii) (iv) (ii) (i)
(C) (iii) (i) (iv) (ii)
(D) (iii) (iv) (i) (ii)

20. The process of arranging records within a file is called :

(A) Ordering (B) Arranging
(C) Sequencing (D) Sorting

21. Who is the father of Scientific Management ?

(A) Peter F. Drucker (B) Henry Fayol
(C) F.W. Taylor (D) Charles Babbage

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22. What are K.R. As. ?
(A) Key Result Areas
(B) Key Recruitment Agencies
(C) Key Real Assets
(D) Key Resourceful Areas

23. The modern organization structure usually recommended is :

(A) Tall (B) Flat
(C) Floating (D) Circular

24. Which of the following relates to interpersonal communication ?

(A) Johari Window (B) Formal
(C) Body language (D) All of the above

25. Who is an independent director ?

(A) Financial Institution (B) Shareholder of the Company
(C) Nominee of Outside Agency (D) None of the above

26. Who propounded Mega-marketing ?

(A) Mc Aurthy (B) Philip Kotler
(C) Sheth (D) Peter F. Drucker

27. On-line marketing is associated with :

(A) Segmentation (B) Product Life Cycle
(C) Distribution (D) Packing

28. Relationship marketing relates to :

(A) One-time purchase (B) Two-time purchase
(C) Repeat purchase (D) Continuous purchase

29. Modern marketing concept emphasizes on :

(A) Sales maximisation (B) Customer satisfaction
(C) Profit maximisation (D) Wealth maximisation

30. Penetration price is :

(A) Charging high price (B) Charging low price
(C) Charging competitive price (D) None of the above

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31. Right shares enjoy preferential rights as regards :
(A) Payment of retained earnings
(B) Payment of dividend
(C) Repayment of capital in the event of winding up of the company
(D) None of the above

32. Non-performing Advance means :

(A) Non-functional assets
(B) Obsolete assets
(C) Assets transferred to company liquidator
(D) Loans becoming overdue beyond 90 days

33. Match the items of List - I with the items in List -II :
List - I List - II
(a) Capital gearing ratio (i) Profitability
(b) Fixed assets turnover (ii) Short-term solvency
(c) Return on equity (iii) Activity
(d) Acid test (iv) Long-term solvency
Codes :
(a) (b) (c) (d)
(A) (iv) (iii) (i) (ii)
(B) (iv) (iii) (ii) (i)
(C) (iii) (iv) (i) (ii)
(D) (iv) (i) (iii) (ii)

34. Capital structure designing has nothing to do with :

(A) Profitability (B) Solvency
(C) Flexibility (D) Transferability

35. Which of the following is the source of short-term finance ?

(A) Trade Credit (B) Bank Credit
(C) Short-term Borrowings (D) All of the above

36. What is the operative function of Human Resource Management ?

(A) Controlling (B) Organizing
(C) Procurement (D) None of the above

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37. Selection means :
(A) Elimination (B) Testing
(C) Recruitment (D) None of the above

38. What is the method used to determine wage differentials ?

(A) Merit rating (B) Job design
(C) Job evaluation (D) None of the above

39. Social security benefit include :

(A) Annual bonus (B) Non-financial incentives
(C) Old age pension (D) None of the above

40. Performance appraisal relates to :

(A) 360 degrees appraisal (B) Open-door method
(C) Autocratic method (D) All of the above

41. In 2005 - 06, which of the following banks earned the highest return on assets ?
(A) Private Sector Banks (B) Foreign Banks
(C) Public Sector Banks (D) Scheduled Commercial Banks

42. Which of the following provides financial aid to the developing countries of Asia :
(A) Association of South East Asian Nations
(B) International Development Association
(C) Asian Development Bank
(D) None of the above

43. The merger of __________ and __________ was the first M and A activity after
liberalization.
(A) Times Bank and HDFC Bank
(B) New Bank of India and Punjab National Bank
(C) ICICI and ICICI Bank
(D) GTB and Oriental Bank of Commerce

44. The first Development Bank IFCI was established in :

(A) 1948 (B) 1947 (C) 1949 (D) 1950

45. The number of approved stock exchanges in India is :

(A) 24 (B) 21 (C) 18 (D) 15

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46. “Happiness Index” or “Happy Planet Index” has been evolved jointly by the “New
Economic Foundation” and “Friends of Earth”. Both are located in :
(A) U.K. (B) U.S.A. (C) Australia (D) Europe

47. The amount of gold, reserve currencies and special drawing rights available for the
finance of international trade is known as _________.
(A) International Liquidity (B) Special Drawing Rights
(C) International Monetary Fund (D) None of the above

48. The Double Taxation Avoidance Convention (DTAC) pact was signed between :
(A) India and China (B) India, Serbia and Montenegro
(C) Australia and China (D) None of the above

49. ‘International Trade Theory’ was the contribution of :

(A) Bertic Ohlin (B) Arthur Okun
(C) Adam Smith (D) None of the above

50. Which of the following is not matched against its name ?

(A) ASEAN : Economic co-operation amongst all Asian Countries
(B) IMF : To remove unfavourable balance of payment and to provide financial
assistance
(C) WTO : Does not allow quantitative restrictions on trade
(D) SAARC : Encourages trade between South Asian Countries

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. Job analysis provides information used for :

(A) Organisation chart (B) Policy
(C) Procedure (D) Promotion

2. In functional organisation :
(A) The organisation is divided according to the type of work involved.
(B) The authority flows from the man at the top to the lowest man vertically.
(C) Each worker serves only one supervisor
(D) The organisation is divided according to the skill required to perform a work.

3. Which of the following relates to training workers ?

(A) Job rotation (B) Induction
(C) Vestibule (D) Task

4. 360 degree method relates to :

(A) Performance appraisal
(B) Organisation climate
(C) Employees morale
(D) Retrenchment method

5. Human relations approach of management is associated with :

(A) Abraham Maslow (B) Peter F. Drucker
(C) Elton Mayo (D) Herzberg

6. Attrition is related to :
(A) Job description (B) Resignation/Termination
(C) Job evaluation (D) Merit rating

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7. The economic reforms have failed to :
(A) Keep fiscal deficits to the targeted levels.
(B) Fully implement industrial deregulation.
(C) Fully open the economy to trade.
(D) All of the above

8. Which of the following developments was not noticed during 1991 (economic reforms) ?
(A) National debt was nearly 60 percent of the GNP of India.
(B) Inflation crossed double digits.
(C) Foreign reserves were maintained at a very high level.
(D) None of the above.

9. Which of the following statement is incorrect ?

(A) Even monopolistic can earn losses.
(B) Firms in a perfectly competitive market are price takers.
(C) It is always beneficial for a firm in a perfectly competitive market to discriminate
prices.
(D) Kinked demand curve is related to an oligopolistic market.

10. Which of the following is the best general definition of the study of economics ?
(A) Inflation and unemployment in a growing economy.
(B) The best way to invest in the stock market.
(C) Business decision making under foreign competition.
(D) Individual and social choice in the face of scarcity.

11. Which of the following statements is correct ?

(A) Under zamindari system, farmers directly paid land revenue to the state.
(B) At present, income tax revenues from the agriculture sector are negligible.
(C) Commercial banks are providing loans to the agriculture sector at zero interest
rate.
(D) None of the above.

12. Which of the following statements is incorrect ?

(A) About 80 per cent of agricultural area has irrigation facilities.
(B) About two third area is rain-fed in India.
(C) Productivity per worker in agriculture is much lower than that in industry.
(D) Cropping pattern is quite skewed in India.

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13. Abolition of intermediaries and tenancy reforms area both parts of :
(A) Industrial reforms in India.
(B) External sector reforms in India.
(C) Land reforms in India.
(D) Banking reforms in India.

14. Which of the following is not a measure of dispersion ?

(A) Skewness
(B) Mean Deviation
(C) Standard Deviation
(D) Quartile Deviation

15. The immediate solvency ratio is :

(A) Current Ratio
(B) Quick Ratio
(C) Debtors Turnover Ratio
(D) Stock Turnover Ratio

16. The Foreign Exchange Management Act (FEMA) was implemented in the year :
(A) 1996 (B) 1997
(C) 1998 (D) 1999

17. SEZ Policy in India is motivated by the experience of :

(A) Japan (B) China
(C) USA (D) Germany

18. In order to control credit :

(A) CRR should be increased and Bank Rate should be decreased.
(B) CRR should be decreased and Bank Rate should be decreased.
(C) CRR should be increased and Bank Rate should be increased.
(D) CRR should be decreased and Bank Rate should be increased.

19. In order to control credit in the country, the RBI may :

(A) Buy Securities in the open market.
(B) Sell Securities in the open market.
(C) Reduce CRR.
(D) Reduce Bank Rate.

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20. Which bank is called the ‘Bank of Issue’ ?
(A) RBI (B) SBI
(C) IDBI (D) ICICI

21. In order to encourage investment in the country, the RBI may :

(A) Reduce CRR
(B) Increase CRR
(C) Sell Securities in the open market
(D) Increase Bank Rate

22. The term ‘funds’ as used in ‘funds flow statement’ means :

(A) Cash
(B) Current Assets
(C) Current Liabilities
(D) Current Assets minus Current Liabilities

23. What is the “Fundamental Premise of Economics” ?

(A) Individuals are capable of establishing goals and acting in a manner consistent
with achievement of those goals.
(B) Natural resources will always be scare.
(C) Individuals choose the alternative for which they believe the net gains to be the
greatest.
(D) No matter what the circumstances, individual choice always involve a trade-off.

24. The consumer is in equilibrium at a point where the budget line :

(A) Is below an indifference curve
(B) Is above an indifference curve
(C) Is tangent to an indifference curve
(D) Cuts an indifference curve

25. Which of the following statements is correct concerning the relationships among the
firm’s functions ?
(A) TC5TFC2TVC
(B) TVC5TFC2TC
(C) TFC5TC2TVC
(D) TC5TVC2TFC

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26. In perfect competition in the long run there will be no__________.
(A) Normal profits
(B) Supernormal profits
(C) Production
(D) Costs

27. An indifference curve slopes down towards right since more of one commodity and
less of another result in :
(A) Same satisfaction
(B) Greater satisfaction
(C) Maximum satisfaction
(D) Decreasing expenditure

28. Which of the following results in the flow of funds ?

(A) Creditors issued bills payable
(B) Loss on the sale of machinery
(C) Transfer to general reserve
(D) Building sold on credit

29. If net profit is Rs. 25,000/- after writing off preliminary expenses of Rs. 5000/- then the
funds from operation will be :
(A) Rs. 25,000/-
(B) Rs. 30,000/-
(C) Rs. 20,000/-
(D) Rs. 10,000/-

30. Which of the following is a non-current liability ?

(A) Bills payable
(B) Sundry creditors
(C) Bank overdraft
(D) Long term loans

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31. Match the followings :
List - I List - II
(a) Indira Awas Yojana (i) This programme was launched in 2001.
This programme aims at providing wage
employment in rural areas and food
security to the people.
(b) Sampoorna Grameen Yojana (ii) This is a major scheme for construction
of houses to be given to the poor, free of
cost.
(c) Pradhan Mantri Gram Sadak (iii) This was introduced in April 1999 as a
Yojana result of restructuring and combining the
Integrated Rural Development
Programme.
(d) Swaran Jayanti Gram Swarozgar (iv) This was introduced in December 2000
Yojana to provide road-connectivity through
good all weather roads to unconnected
villages.
Code :
(a) (b) (c) (d)
(A) (ii) (i) (iv) (iii)
(B) (i) (ii) (iv) (iii)
(C) (iii) (iv) (ii) (i)
(D) (iv) (iii) (ii) (i)

32. Match the following :

List - I List - II
(a) WTO (i) Provides loans to address short-term
balance of payments problems.
(b) RBI (ii) Multilateral trade negotiating body.
(c) IMF (iii) Facilitating lending and borrowing for
reconstruction and development.
(d) IBRD (iv) Central Bank of India.

Code :
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (iv) (iii) (ii) (i)
(C) (iii) (ii) (iv) (i)
(D) (i) (ii) (iii) (iv)

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33. Match the items in List - I with items in List - II :
List - I List - II
(a) Margin of Safety (i) Earning Power
(b) ROI (ii) Cash Flow statement
(c) Current Ratio (iii) Break Even analysis
(d) Cash Equivalents (iv) Solvency

Code :
(a) (b) (c) (d)
(A) (ii) (iii) (i) (iv)
(B) (iii) (i) (iv) (ii)
(C) (iv) (ii) (iii) (i)
(D) (i) (ii) (iii) (iv)

34. Match the items in List - I with items in List - II :

List - I List - II
(a) Theory X (i) Participative
(b) Theory Y (ii) Autocratic
(c) Theory Z (iii) Democratic

Codes :
(a) (b) (c)
(A) (i) (ii) (iii)
(B) (ii) (iii) (i)
(C) (iii) (i) (ii)
(D) (ii) (i) (iii)

35. Match the items in List - I with items in List - II :

List - I List - II
(a) Peter F. Drucker (i) Unity of command
(b) Henry Fayol (ii) Achievement Motivation
(c) McAurthy (iii) M.B.O.
(d) McLeland (iv) 4 Ps of marketing

Code :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (iv) (i)
(C) (iv) (i) (ii) (iii)
(D) (iii) (i) (iv) (ii)

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36. Match the following :
List - I List - II
(Decisions regarding branding) (Explanation)
(a) Diversification (i) Preservation of product
(b) Quality (ii) Production of one or more products
(c) Variety (iii) Finding of new products in same line
(d) Packing (iv) Various product

Code :
(a) (b) (c) (d)
(A) (ii) (iv) (i) (iii)
(B) (iii) (ii) (iv) (i)
(C) (iii) (i) (iv) (ii)
(D) (iv) (iii) (ii) (i)

37. Statements :
(i) Overcapitalisation is desirable
(ii) Undercapitalisation is more desirable
(A) Both are Correct
(B) Both are incorrect
(C) (i) is correct (ii) is incorrect
(D) (ii) is correct (i) is incorrect

38. Statements :
(i) High morale leads to high productivity
(ii) High morale need not necessarily lead to high productivity
(A) Both are correct
(B) Both are incorrect
(C) (i) is correct (ii) is incorrect
(D) (i) is incorrect (ii) is correct

39. Statements :
(i) Maslows theory conveys hygiene factors
(ii) Maslows theory conveys satisfied need is no more a motivator
(A) (i) is correct (ii) is incorrect
(B) (ii) is correct (i) is incorrect
(C) Both are correct
(D) Both are incorrect

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40. Statements :
(i) Agency theory relates to the relationship between management and
employees.
(ii) Agency theory relates to middlemen.
(A) Both are correct
(B) Both are incorrect
(C) (i) is correct (ii) is incorrect
(D) (ii) is correct (i) is incorrect

41. Statements :
Assertion - (A) : Demand for a commodity refers to quantity of the commodity
demanded at a certain price during any particular period of time.
Reason - (R) : Contraction of demand is the result of increase in the price of the
good concerned.

(A) Both (A) and (R) are correct

(B) Both (A) and (R) are incorrect
(C) (A) is correct but (R) is incorrect
(D) (A) is incorrect but (R) is correct

42. A leader uses the following methods :

(i) Uses criticism
(ii) Encourages growth
(iii) Sets objectives
(iv) Gives orders and directions
Which of these methods are used by a democratic leader ?
(A) (i) and (ii) (B) (iii) and (iv)
(C) (ii) and (iii) (D) (i), (ii) and (iv)

43. In the technique of MBO :

(i) Overall objectives are set at the top of the organisational hierarchy
(ii) Individual objectives coincide with objectives of the organisation
(iii) Performance should be evaluated periodically
(iv) Objectives are decided at the subordinate level
(A) (i) and (ii) (B) (i), (ii) and (iii)
(C) (i) and (iii) (D) (i), (ii), (iii) and (iv)

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44. Staffing includes :
(i) Training
(ii) Appraisal
(iii) Placement
(iv) Directing
(A) (i) and (iii) (B) (i), (ii) and (iii)
(C) (ii) and (iii) (D) (i), (ii), (iii) and (iv)

45. Working capital cycle involves the following :

(i) Acquisition of Raw material
(ii) Finished goods
(iii) Receivables
(iv) Cash
(v) Work in progress
Which of the sequence is correct ?
(A) (iv), (iii), (i), (v), (ii) (B) (i), (ii), (iii), (iv), (v)
(C) (i), (v), (ii), (iii), (iv) (D) (iv), (i), (ii), (iii), (v)

Read the following passage and answer the questions from 46 to 50 :

Accounting is the process of identifying, measuring and communicating economic
information to permit informed judgements and decisions by the users of the information.
It primarily focusses on measurement, analysis, interpretation and use of information.
As an information system, accounting links an information source, a channel of
communication and set of receivers. Accounting system should be designed to classify
financial information on a basis suitable for decision-making purposes and to process
the tremendous quantities of data efficiently and accurately. Financial accounting is
concerned with providing information to external users and it is oriented towards the
preparation of final statements which summarises the results of operations for selected
periods of time and show the financial position of business at particular date.
Management accounting is concerned with providing information to managers to carry
out their responsibilities and functions such as planning, execution, control and decision
- making. The end product of the financial accounting process is a set of reports called
financial statement, such as, profit and loss account, balance-sheet and statement of
changes in financial position. Profit & loss account shows the results of operations for
a period of time, balance-sheet shows finanical position on certain date and statement
of changes in financial position shows where the financial resources have come and
where they have gone.
46. A list of assets, liabilities and owner’s equity of a business enterprise as of a specific date
is :
(A) Income Statement (B) Cash Flow Statement
(C) Balance Sheet (D) Profit and Loss Account

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47. The balance-sheet is related to the income statement in the same way that :
(A) A point in time is related to a period of time
(B) A period of time is related to a point in time
(C) A point in time is related to another point in time
(D) A period of time is related to another period of time

48. The properties own by a business enterprise are called :

(A) Assets (B) Liabilities
(C) Capital (D) Owner’s Equity

49. Which of the following is an important reason for studying accounting ?

(A) The information provided by accounting is useful in making many economic
decisions.
(B) Accounting plays an important role in society
(C) The study of accounting could lead to a challenging career.
(D) All of the above.

50. Statement of changes in financial position shows :

(A) Sources and uses of funds (B) Assets and Liabilities
(C) Income and Expenses (D) Losses and Gains.

-oOo-

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 COMMERCE
Paper – II

Note : This paper contains fifty (50) objective type questions, each question carrying two (2)
marks. Attempt all the questions.

1. If the amount claimed by a consumer as compensation is Rs. 89 lacs, the case under
The Consumer Protection Act shall be filed with
(A) District Consumer Redressal Forum
(B) State Consumer Disputes Redressal Commission
(C) National Consumer Disputes Redressal Commission
(D) Supreme Court

2. Which of the following does not fall within the jurisdiction of MRTP Commission ?
(A) Prevention of Monopolistic Trade Practices.
(B) Prevention of Restrictive Trade Practices.
(C) Prohibition of Unfair Trade Practices.
(D) Regulation of Combinations.

3. Which of the following is not a part of the economic environment of business ?
(A) Competitive Environment (B) Economic System
(C) Changes in Patent Laws (D) None of these

4. Laissez faire policy is adopted in
(A) Socialistic economic system
(B) Capitalistic economic system
(C) Mixed economic system
(D) Communist economic system

5. Relaxing the restrictions and controls imposed on business and industry means
(A) Liberalisation (B) Privatisation
(C) Globalisation (D) None of these

6. A variable such as activity that causes cost over a given time is
(A) Cost Driver (B) Cost Behaviour
(C) Cost Centre (D) None of the above
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7. The concept of budget that requires all levels to work from scratch is
(A) Flexible Budget (B) Total Budget
(C) Master Budget (D) Zero Base Budget

8. Accounting Standard on the “Effect of Changes in Foreign Exchange Rates” is
(A) AS 11 (B) AS 13
(C) AS 18 (D) None of the above

9. Land is not depreciable asset because
(A) Its value always increases
(B) There is no maintenance required
(C) Life of land is unlimited
(D) None of the above

10. The sales at which a firm would earn profit after tax @ 8% of sales, if fixed cost is
Rs. 45,000 ; selling price Rs. 50 per unit, variable cost Rs. 30 per unit and tax rate
20% :
(A) Rs. 90,000 (B) Rs. 1,50,000
(C) Rs. 1,68,000 (D) None of the above

11. The elasticity of demand for luxury goods is
(A) Infinite (B) More than one
(C) Less than one (D) Equal to one

12. Profits are maximised at a point where
(A) MR = MC (B) MR < MC
(C) MR > MC (D) AC > MC

13. The concept of “consumer surplus” was introduced and developed by
(A) E.A.G. Robinson (B) J.M. Keynes
(C) Lionel Robbins (D) Alfred Marshall

14. In Law of Variable Proportions, initially when MP rises
(A) TP rises at a decreasing rate.
(B) TP rises at an increasing rate.
(C) AP rises less than proportionately.
(D) AP rises more than proportionately.
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15. Which one of the following statements is correct ?
(A) Monopolist charges the maximum possible price.
(B) Monopolist always makes (economic) profit.
(C) Monopolist operates on an inelastic demand curve.
(D) None of the above

16. The Central Processing Unit of a computer consists of
(A) Input, Output and Processing.
(B) Control Unit, Primary Storage and Secondary Storage.
(C) Control Unit, Arithmetic-logic Unit and Primary Storage.
(D) None of the above.

17. If the sample size increases, the sampling error
(A) Decreases (B) Increases
(C) Remains constant (D) None of the above

18. Goodness of fit of a distribution is tested by
(A) t-test (B) Chi-square test
(C) F-test (D) None of these

19. Probability of rejecting the null hypothesis when it is true, is called
(A) Type-II-error (B) Type-I-error
(C) Standard error (D) None of these

20. Standard error of mean is defined as
(A) standard deviation of the sampling distribution of mean.
(B) standard deviation of data.
(C) inter-quartile range of the data.
(D) none of these.

21. Who first propounded the principle of ‘unity of command’ ?
(A) F.W. Taylor (B) Elton Mayo
(C) Peter F. Drucker (D) Henry Fayol
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22. Which element is not necessary in each objective under MBO Approach ?
(A) Time element (B) Cost element
(C) Human Relation element (D) Measurable element

23. Techniques of managerial control are useful in
(A) selection of plant location.
(B) identifying appropriate technology
(C) profit planning
(D) conducting shareholders’ meeting

24. The function of attracting, acquiring, retaining and developing human resources in an
organisation is called
(A) recruitment (B) induction
(C) training and development (D) staffing

25. In terms of Blake-Mouton’s managerial grid approach, a production oriented leader
will be one who adopts
(A) 1.1 style (B) 9.1 style
(C) 9.9 style (D) 5.5 style

26. The strategy of introducing a product with high introductory price is called
(A) penetration strategy (B) skimming strategy
(C) pull strategy (D) push strategy

27. The concept of four P’s as elements of marketing mix was given by
(A) Philip Kotler (B) W.J. Stanton
(C) E.J. McCarthy (D) Bruce J. Walker

28. Which out of the following is not a type of non-store retailing ?
(A) Limited line stores (B) Automatic vending
(C) Direct selling (D) Telemarketing
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29. A product line strategy wherein a company adds a higher priced product to a line in
order to attract a broader market which helps the sale of its existing lower priced
products is called
(A) Trading up (B) Trading down
(C) Life cycle extension (D) Product line extension

30. Which of the following is not a tool of sales promotion ?
(A) Sales contests (B) Free gifts
(C) Point of purchase display (D) Public Relations

31. Use of fixed interest securities in the capital structure is called
(A) operating leverage (B) financial leverage
(C) overall leverage (D) none of the above

32. If NPV is positive, the IRR will be
(A) Positive (B) K=R
(C) K<R (D) None of the above

33. According to Walter, firm should pay 100% dividend if
(A) r>k (B) r=k
(C) r<k (D) none of the above

34. Sensitivity analysis is performed to
(A) Ascertain risk
(B) Determine profitability
(C) Build scenario for risk profile
(D) None of the above

35. Right shares enjoy preferential rights with regard to
(A) Payment of dividend (B) Payment of retained earnings
(C) Repayment of capital (D) None of the above

36. The Industrial Disputes Act, 1947 provides the following industrial relations
machinery for resolution of conflicts except
(A) Conciliation (B) Arbitration
(C) Negotiations (D) Adjudication

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37. Job evaluation is a technique which aims at
(A) Establishing fair and equitable pay structure.
(B) Analysing requirement of updating technology.
(C) Assessing safety requirement of jobs.
(D) Improving productivity.

38. Induction is an integral part of
(A) Training (B) Selection
(C) Recruitment (D) None of the above

39. PIP test seeks to measure
(A) IQ
(B) Personality, Interest and Preferences
(C) Quality of a product
(D) Preferred Investment Plans

40. The Government of India introduced “The Workers’ Participation in Management”
Bill in Parliament in
(A) 1983 (B) 1988
(C) 1990 (D) 1981

41. The features of the Commercial Paper are
(A) It is an unsecured money market instrument issued in the form of promissory
note.
(B) The highly rated corporate borrowers can raise short term funds through this
instrument.
(C) It is an additional instrument to the investing community.
(D) All of the above

42. Banking ombudsman may reject the complaint
(A) immediately after receipt. (B) after hearing both parties.
(C) at any stage. (D) none of the above

43. Which of the following entities provide “Take out Finance” to banks engaged in
financing of infrastructure projects ?
(A) ICICI (B) SIDBI
(C) IDFC (D) RBI
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44. Currency chest balance will be periodically verified by
(A) Bank’s own officials (B) RBI officials
(C) Both (A) and (B) (D) Officials of AG’s office

45. SEBI is
(A) Regulatory Authority (B) Statutory Authority
(C) Both (A) and (B) (D) None of these

46. The International Monetary Fund has estimated India’s contribution to World Gross
Domestic Product in Purchasing Power Parity (PPP) terms for 2007
(A) 4.6 percent (B) 6.4 percent
(C) 7.1 percent (D) 8.9 percent

47. The World Bank is known as
(A) IMF (B) IDA
(C) IFC (D) IBRD

48. “De-coupling” denotes
(A) Indian market may be cut off from global markets so that it may not be
affected by global volatility.
(B) separating the birds affected by bird-flu.
(C) that markets are independent.
(D) None of the above

49. Which of the country’s banking have been brought under “Sanctions by U.S.A.
recently” ?
(A) Iraq (B) North Korea
(C) Pakistan (D) Iran

50. How many member countries are there in the “World Customs Organisation” ?
(A) 160 (B) 162
(C) 172 (D) 180
______________
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 COMMERCE
Paper – II
Note : This paper contains fifty (50) objective type questions, each question carrying
two (2) marks. Attempt all the questions.
4. Match the following two lists of
1. India abolished the quantitative statements.
restrictions on imports of 1429 items List – I List – II
in 2000 and 2001 as per the I. Rate at which RBI 1. Bank
commitment to which of the gives loans to rate
Commercial Banks
following ?
by discounting bills
(A) South Asian Free Trade II. Rate at which RBI 2. Repo
Association (SAFTA) borrows from rate
Commercial Banks
(B) General Agreement on Tariffs 3. Prime
and Trade (GATT) lending
rate
(C) World Trade Organisation Codes :
(WTO) I II
(A) 3 1
(D) Non-Aligned Movement (B) 2 1
(C) 1 2
(D) 3 2
2. Globalization is a term used to 5. The MRTP Act, 1969 was abolished in
describe the process of removal of (A) 1991
restrictions on which of the (B) 2002
(C) 2006
following ? (D) None of the above
(A) Foreign Trade 6. Read the following statements :
(i) Financial statements are only
(B) Investment
interim reports.
(C) (A) and (B) above (ii) Financial statements are
prepared on the basis of
(D) None of the above realizable values.
(iii) The preparation of financial
statements is not an ultimate aim.
3. When a company takes over another (iv) Certain assumptions are
one and clearly becomes a new necessary to prepare financial
owner, the action is called statements.
Which of the following
(A) Merger combinations consists of all true
statements ?
(B) Acquisition (A) (i), (ii) and (iii)
(C) Strategic Alliance (B) (ii), (iii) and (iv)
(C) (i), (iii) and (iv)
(D) None of the above (D) (i), (ii) and (iv)
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7. Which of the following is not a 11. The various degrees of price
subsidiary book ? elasticity of demand can be shown
on a single demand curve as per
(A) Purchase Book
which one of the following ?
(B) Sales Book (A) Total outlay method
(C) Bills Receivables Book (B) Proportional method
(D) Assets Book (C) Arc method
(D) Geometrical method

8. Which of the following are the

application of funds ? 12. Which one of the following is not
correct about the price
(i) Redemption of Preference discrimination by a monopolist, who
share capital. intends to
(ii) Payment of Dividend. (A) maximise the sales/profit
(iii) Increase in working capital. (B) share the consumer’s surplus
(C) increase the welfare of masses
(A) only (i) and (ii)
(D) reduce the welfare of masses
(B) only (ii) and (iii)
(C) only (i) and (iii) 13. Returns to scale involve variations in
(D) (i), (ii) and (iii) the quantities of the various factors
of production
(1) Simultaneously, and/or
9. Accounting concepts are based on
(2) Proportionately
(A) Certain assumptions (A) Both (1) and (2) are correct
(B) Certain facts and figures (B) (1) is correct and (2) is
(C) Certain accounting records incorrect
(C) (1) is incorrect and (2) is
(D) Government guidelines correct
(D) Both (1) and (2) are incorrect.
10. The main purpose of Cost Accounting
is to 14. The firm under perfect competition
(A) assist management in decision will be in short-run equilibrium
making. when
(A) Rising marginal cost is equal
(B) maximise profits and minimise
to the minimum average cost
losses.
(B) Marginal revenue is equal to
(C) comply norms issued by the rising marginal cost.
Government of India from (C) Average revenue is equal to
time to time. average cost
(D) prepare cost accounts in line (D) Marginal revenue is equal to
with the accounting standards. the falling marginal cost.
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15. Match the following : 18. Co-variance between two variables
List – I List – II is
(i) Law of demand (1) Giffen (A) The average of the product of
is fully goods deviations taken from their
applicable averages.
(ii) Law of demand (2) Veblon (B) A is further divided by the
is not goods product of their standard
applicable at deviations.
all (C) A is further divided by the
(iii)Law of demand (3) Normal product of their arithmetic
is partly goods averages.
applicable (D) None of the above
Codes :
(i) (ii) (iii) 19. Statement – A : Standard error of
the mean is the
(A) 1 2 3
standard deviation
(B) 2 3 1 of the sampling
(C) 3 1 2 distribution of
(D) 2 1 3 mean.
Statement – B : Simple random
16. Statement – I : The heading for sampling is non-
columns and rows probability
are called caption sampling method.
and stub Which of the following combination
respectively. is correct ?
Statement – II : Sturge’s Rule is
(A) Both A and B are true.
used to decide the
nature of (B) Both A and B are false
manifold (C) A is true and B is false.
classification (D) A is false and B is true.
Which of the following is correct ?
(A) Both I and II are false. 20. Which of the following has RDBMS ?
(B) Both I and II are true. (i) Access
(C) I is true and II is false. (ii) Excel
(D) I is false and II is true. (A) (i) and (ii)
17. F-test is used to test the significance (B) only (i)
of the differences between (C) only (ii)
(A) Co-efficient of correlation (D) None of the above
between two sample groups.
(B) Co-efficient of correlation 21. In which type of organization is
among more than two sample ‘grapewine’ communication used ?
groups.
(A) Informal organization
(C) Averages between two sample
groups. (B) Formal organization
(D) Averages of more than two (C) Departmental organization
sample groups. (D) Matrix organization
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22. In management science “Grid” refers to 27. Trade Mark is :
(A) Diverse managerial styles (A) a name, term, symbol or
(B) Co-ordination design which is intended to
(C) Communication identify the goods and services
(D) Motivation of a seller.
(B) a brand that has been given
23. “SWOT” is used for legal protection.
(A) Planning (B) Organising (C) giving protection to the
(C) Motivating (D) Controlling product and adding to it’s
aesthetics and sales appeal.
24. Which of the following pairs is not (D) providing written information
matched ?
about the product.
List – I List – II
(A) Frederick – Scientific
Herzburg Management 28. Which of the following is not a part
(B) Henry Fayol – Modern of strategic planning ?
Management
(A) Purposes and mission
(C) Max Weber – Bureaucracy
(B) Objectives
(D) Philip Kotlar – Marketing
(C) Choice of businesses
25. Which one of the following is not (D) Social responsibility
covered under corporate governance ?
(A) Corporate social responsibility
(B) Business ethics 29. Attitude means
(C) Role of independent directors (A) Impulses, desires and
(D) Government monitoring considerations of the buyer,
which induces him to purchase
a product
26. Market gridding means
(A) establishing and running a web (B) A sum total of the individuals’
marketing facility faith and feelings towards a
(B) a method of survey of expert’s product.
opinion.
(C) The customer turning to his
(C) managing brands and
environment/world of
developing brand equity
information around him.
(D) an analytical technique which
facilitates dividing a market (D) Creating some relentness in the
into segments. mind of an individual.
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30. Match the following : 32. Which one of the following is not
List – I List – II matched ?
(a) Supply chain (i) putting the List – I List – II
management product in the
mind of the (a) Interest is a (i) Cost of
prospective deductible debt
buyer expense capital
(b) Product (ii) the process of
positioning gathering, (b) Realised- (ii) Cost of
filtering and yield equity
analysing approach capital
information
relating to the (c) Extended (iii) Retained
marketing yield earnings
environment. approach
(c) Marketing (iii) improving the
(d) Dividend (iv) Cost of
environment performance of
analysis dealers capitalization preference
through approach share
sharpening of capital
their sales
Codes :
skills and
product (A) (a) and (i)
knowledge (B) (b) and (ii)
(d) Dealer (iv) larger in scope
(C) (c) and (iii)
training than both
physical and (D) (d) and (iv)
marketing
logistics
33. The rate of discount at which NPV
Codes :
of a project becomes zero is also
(a) (b) (c) (d) known as
(A) (i) (ii) (iii) (iv)
(A) Average Rate of Return
(B) (iv) (i) (ii) (iii)
(B) Internal Rate of Return
(C) (ii) (iv) (iii) (i)
(C) Alternate Rate of Return
(D) (iii) (iv) (i) (ii)
(D) None of the above
31. Over capitalization may not be as a
result of which one of the following ? 34. The dividend irrelevance theorem to
(A) Promotion of a company with share valuation was propounded by
inflated assets
(A) James E. Walter
(B) Application of low
capitalization rate (B) Myron Gordon
(C) Shortage of capital (C) Modigliani and Miller
(D) Liberal dividend policy (D) None of the above
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35. Assertion (A) : Management of 39. Assertions :
working capital refers to the (i) High morale leads to high
management of current assets productivity.
and current liabilities. (ii) High morale need not
Reason (R) : But the major thrust necessarily lead to high
of course, is on the productivity.
management of current assets ; (A) Both (i) and (ii) are correct.
because current liabilities arise (B) Both (i) and (ii) are incorrect.
in the context of current assets. (C) (i) is correct and (ii) is
Codes : incorrect.
(A) Both (A) and (R) are incorrect. (D) (i) is incorrect and (ii) is
(B) (A) is correct and (R) is correct.
incorrect.
40. Statements :
(C) Both (A) and (R) are correct. (i) Fringe benefits, now-a-days,
(D) (A) is incorrect, but (R) is are a significant component of
correct. “compensation”.
(ii) Under Piece-rate plan,
36. Business plans designed to achieve employees are paid at a
the organizational objectives is stipulated rate per hour of
called work done by them
(A) Human Resource Planning (A) Both (i) and (ii) are correct.
(B) Human Resource Forecasting (B) Both (i) and (ii) are incorrect.
(C) Strategic Plan (C) (i) is incorrect and (ii) is
(D) Corporate Development Plan correct.
(D) (i) is correct and (ii) is
37. “360” degree method relates to incorrect.
(A) Performance appraisal
(B) Organization climate 41. Which one of the following is not an
(C) Employees morale instrument of credit control in the
(D) Retrenchment banking system ?
(A) Open market operations
38. Match the following : (B) Moral suasion
List – I List – II (C) Cash Reserve Ratio
(a) Adam (i) Subsistence (D) Tax rates
Smith Theory
(b) Karl (ii) Wages Fund 42. Match the following with their year
Marx Theory of establishment :
(c) John (iii) The Surplus (a) IDBI (i) 1982
Davidson Value Theory (b) IFCI (ii) 1964
(d) David (iv) Bargaining (c) NABARD (iii) 1948
Ricardo Theory (d) ICICI (iv) 1955
Codes : Codes :
(a) (b) (c) (d) (a) (b) (c) (d)
(A) (ii) (iii) (iv) (i) (A) (iii) (i) (iv) (ii)
(B) (i) (ii) (iii) (iv) (B) (iv) (ii) (i) (iii)
(C) (iv) (i) (ii) (iii) (C) (ii) (iii) (i) (iv)
(D) (iii) (iv) (i) (ii) (D) (i) (iii) (iv) (ii)
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43. Which of the following is not a 48. The following table shows cost per
function of a Rural Bank ? unit of production of two goods,
(A) To accept deposits wheat and cloth in two countries X
and Y with no transportation cost
(B) To waive loans
and free trade :
(C) To grant advances X Y
(D) To supply inputs to farmers Rs. Rs.
Wheat 50 350
44. From which date have all Banks Cloth 100 500
started sharing their ATM free of Which one of the following will take
cost for transactions ? place ?
(A) No trade will take place.
(A) January 1, 2009
(B) X will export wheat and
(B) April 1, 2009 import cloth.
(C) July 1, 2009 (C) X will export cloth and import
(D) September 1, 2009 wheat.
(D) There is no enough
information to comment.
45. Which of the following is not the
fund based business of commercial
49. A debit balance of payments occurs
banks ?
due to
(A) D.P. Operations (i) Low imports and high exports
(B) Loans (ii) High imports and low exports.
(C) Deposits (A) Both (i) and (ii) are correct.
(D) Discounting of Bills (B) Both (i) and (ii) are incorrect.
(C) Only (i) is correct.
(D) Only (ii) is correct.
46. Foreign Exchange and foreign
currencies in India are governed by 50. Match the following economic
(A) SCRA Act institutions with the year of their
(B) Banking Regulation Act establishment :
(C) FEMA Act (a) World Bank (i) 1946
(b) International (ii) 1956
(D) SEBI Act
Finance
Corporation
47. The balance of payments of a (c) International (iii) 1960
country on Current Account is equal Development
to Agency
(A) Balance of trade plus short (d) Asian Development (iv) 1966
term capital flows. Bank
(B) Balance of trade plus net Codes :
invisible exports. (a) (b) (c) (d)
(C) Balance of payments minus (A) (i) (ii) (iii) (iv)
capital flows. (B) (i) (iii) (iv) (ii)
(D) Balance of invisible trade plus (C) (ii) (i) (iv) (iii)
imports. (D) (iii) (i) (ii) (iv)

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective type questions, each question carrying
two (2) marks. Attempt all of them.

1. In Budget estimates 2005-06 which sector has been given maximum amount of plan
outlay :
(A) Energy (B) Social Services
(C) Rural Development (D) Transport

2. The Twelfth Finance Commission was appointed by :

(A) President of India (B) Prime Minister of India
(C) Parliament (D) Council of Ministers

3. VAT is a modern, simple and transparent tax system that will replace the existing :
(A) Corporate Tax (B) Exise Duty
(C) Sales Tax (D) Service Tax

4. Consider the following :

1. Irrigation 2. Roads 3. Water supply
4. Housing 5. Rural Electrification 6. Rural Telecom connectivity
Which of these are components of ‘Bharat-Nirman’ ?
(A) 1-2-3-4-5 (B) 1-2-3-4-6
(C) 2-3-4-5-6 (D) 1-2-3-4-5-6

5. A Task Force has recommended the creation of a National Fund for Strategic Agriculture.
Who headed this Task Force ?
(A) M.S. Swaminathan (B) Sharad Pawar
(C) P. Chidambaram (D) None of the above

6. Transportation expenses incurred to bring a machine from the place of purchase to the
place of installation is :
(A) a revenue expenditure (B) a capital expenditure
(C) deferred revenue expenditure (D) none of the above

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7. Match the items from List-I with the items in List-II :
List-I List-II
(a) Working-capital ratio (i) Cash Flow Statement
(b) Cash equivalents (ii) Break-even Analysis
(c) Margin of safety (iii) Liquidity
(d) R O I (iv) Solvency
(v) Responsibility centres
Codes : (a) (b) (c) (d)
(A) (iii) (iv) (ii) (v)
(B) (ii) (iii) (v) (iv)
(C) (iii) (i) (ii) (v)
(D) (iii) (i) (ii) (iv)

8. Bottom-line growth referes to growth in :

(A) Sales (B) Turnover (C) Assets (D) Profit

9. If total assets5Rs. 12,00,000, sales5Rs. 24,00,000, total expenses5Rs. 21,40,000, and

normal rate of return512%, find out residual income :
(A) Rs. 1,44,000 (B) Rs. 2,60,000 (C) Rs. 1,16,000 (D) 2,16,000

10. X, Y and Z are three partners sharing profits and losses in the ratio, 10 : 6 : 2. A was
admitted for 1/10th share. The new profit sharing ratio will be :
(A) 10 : 6 : 2 : 1 (B) 5 : 3 : 2 : 1 (C) 5 : 3 : 1 : 1 (D) 10 : 6 : 2 : 4

11. Which of the following is correct statement ?

(A) Under perfect competition, a firm determines its price where AR5MR
(B) In perfect competitive industry, a firm is in equilibrium in the short run only
when its AC5AR5MR5MC
(C) The short-run supply curve has a negative slope
(D) A firm is price-taken under perfect competition

12. A consumer attains equilibrium at a point on the indifference curve where :

(A) (B)
Px Px
MRS xy5 MRS xy >
Py Py

(C) (D)
Px
MRS xy < MRS xy5 Px Py
Py

13. In Oligopoly market kinked demand curve explains :

(A) Collusion among rival firms (B) Average variable cost curves
(C) Short run average cost curve (D) Long run average cost curve

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14. Opportunity cost means :
(A) Cost of a Homogeneous product (B) Cost of the last unit
(C) Cost of next best alternative (D) Cost of all units produced

15. A normal profit :

(A) is part of economic cost
(B) has to be above economic cost inorder to encourage output
(C) is not a part of the economic costs that a firm incurs
(D) is irrelevant to the production division of a firm

16. Chi-square test is a :

(A) Parametric Test (B) Non-parametric Test
(C) Small Sample Test (D) None of the above

17. b-error in hypothesis testing refers to :

(A) Type-I error (B) Type-II error
(C) Both Type-I and II errors (D) None of the above

18. Convenience sampling is a :

(A) Probability sampling (B) Non-probability sampling
(C) Random sampling (D) None of the above

19. We can measure the cause and effect relationship by the help of :
(A) Time series analysis (B) Cross-sectional analysis
(C) Correlational analysis (D) Regression analysis

20. Match the items from List-I with the items in List-II :
List-I List-II
(a) Indirect oral interview (i) Non-probability sampling
(b) Bi-variate Analysis (ii) Variance test
(c) F-ratio (iii) Primary data
(d) Quota sampling (iv) Factor Analysis
(v) Correlation
Code : (a) (b) (c) (d)
(A) (iii) (v) (ii) (i)
(B) (iii) (v) (ii) (iv)
(C) (i) (v) (ii) (iii)
(D) (iii) (ii) (iv) (i)

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21. Which is the oldest type of organisation ?
(A) Line (B) Line and Staff (C) Functional (D) Matrix

22. Managerial decisions which increase the importance of subordinates are linked with :
(A) Centralised authority (B) Decentralised authority
(C) Both (A) and (B) (D) None of the above

23. Which of the following is not the example of only upward Communication ?
(A) Reports (B) Interviews (C) Grapevine (D) Circulars

24. The main purpose of the Control function is to :

(A) Oversee work (B) Take remedial action
(C) Punish defaulters (D) Meet targets

25. In a formal organisational structure authority flows :

(A) Upward (B) Downward
(C) Horizontal (D) None of the above

26. Which of the following is not a case of related diversification ?

(A) A refrigerator manufacturer started manufacturing air conditioners
(B) A washing powder manufacturer started manufacturing washing machines
(C) A bath soap trader enters washing soap market
(D) A Television manufacturer started manufacturing VCRs.

27. Life style is one of the major __________ basis of segmenting a market.
(A) Socio-economic (B) Demographic
(C) Psychographic (D) None of the above

28. What stage of the product Life-cycle are pricing decisions most complex ?
(A) Introductory (B) Growth (C) Maturity (D) Decline

29. A company is planning to develop a new packaging for its consumer product. In order
to ensure that the packaging is attractive and easy to handle, the company must conduct
__________ test.
(A) Association (B) Engineering (C) Dealer (D) Inquiry

30. The most important component of promotion mix to be used for industrial goods is :
(A) Personal Selling (B) Advertisement
(C) Sales promotion (D) Publicity

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31. A Firm produces 1,00,000 units and sells at Rs. 10 per unit. The cost of manufacturing
is Rs. 6,00,000 per annum and depreciation is Rs. 1,00,000 per annum. The depreciation
tax shield will be __________ if the rate of corporate taxation is 30%.
(A) Rs. 20,000 (B) Rs. 25,000
(C) Rs. 30,000 (D) Rs. 1,60,000

32. In capital budgeting, the main aim is to find the project whose __________ of future
cash flows is greater than the cost of the project.
(A) Terminal value (B) Present value
(C) Cumulative value (D) None of the above

33. Financial risk is connected with :

(A) Debt capital (B) Nature of Investment
(C) Type of employees (D) Location of factory

34. The Balance sheet of a business reveals __________ .

(A) Financial position of a business on a particular day
(B) Financial position of the business for a particular period
(C) Both of the above
(D) None of the above

35. The shares issued to existing shareholders when reserves are capitalised are :
(A) Right Issue (B) Bonus shares
(C) Preference shares (D) All the above

36. Safety and accident prevention should concern managers for all the following reasons
except :
(A) Criminal Liability
(B) Human suffering of the injured workers
(C) Retaliatory actions by workers
(D) Work-related accident figures are staggering

37. During the formulation of plans, HR can :

(A) provide details regarding competitors’ incentive plans
(B) provide moral support
(C) provide information on competitor’s diversity
(D) provide empowerment strategies

38. Providing employees with basic background information about the firm is :
(A) Education (B) Employee orientation
(C) Colleges and Universities (D) Required by Law

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39. An enterprise gets more output and mutual cooperation from its subordiante staff by
adopting :
(A) motivation by leadership (B) motivation by participation
(C) motivation by goals (D) motivation by challenge

40. The concept of Human Relations was developed by :

(A) Robert Owen (B) V.V. Giri
(C) Elton Maya (D) Edwin B. Filippo

41. Match the following :

I-Name of the Mergin Entity II-Name of the Merged entity
(a) 20th Century Finance Company (i) ICICI Bank
(b) Bareilly Corporation Bank (ii) Centurian Bank
(c) Sikkim Bank (iii) HDFC Bank
(d) Times Bank (iv) Bank of Baroda
(e) Bank of Madura (v) Union Bank of India
Codes : (a) (b) (c) (d) (e)
(A) (ii) (iv) (v) (iii) (i)
(B) (iii) (iv) (i) (iii) (v)
(C) (v) (iv) (iii) (ii) (i)
(D) (v) (ii) (i) (iii) (iv)

42. Inter-institutional group comprises of :

(A) IDBI, IDFC, ICICI Bank
(B) SBI, LIC
(C) Bank of Baroda and Punjab National Bank
(D) All of the above

43. With reference to the Micro Finance Institutions consider the following statements :
1. At present Micro Finance Institutions (MFIs) obtain finance from banks according
to RBI guidelines
2. MFIs provide small scale credit to low income households and small informal
businesses.
Which of these statements is/are correct ?
(A) Only 1 (B) Only 2 (C) Both 1 and 2 (D) Neither 1 nor 2

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44. Which one is not the part of, Migration to new capital adequacy framework based on
the three pillar approach, namely :
(A) Minimum capital requirements (B) Supervisory review
(C) Market Discipline (D) Book keeping

45. In India the basic objectives of Monetary Policy is/are :

(A) Price stability and Adquate credit flow
(B) Price control and command on Economy
(C) Price Reduction and Credit Reduction
(D) All of the above

46. The trade theory of absolute advantage was developed by :

(A) Haberler (B) David Ricardo
(C) Adam Smith (D) Alfred Marshall

47. Which of the following is not matched against its name :

(A) WTO : Generally refuses quantitative restrictions on Trade
(B) IMF : To remove unfavourable Balance of Payment and provides
Financial assistance
(C) SAARC : Encourages Trade between South Asian Countries
(D) ASEAN : Economic Organisation of all Asian Countries

48. Physical delivery of foreign exchange has to take place in case of :

(A) Forward Market (B) Spot Market
(C) Futures Market (D) Options Market

49. A letter of credit means :

(A) A bank agreeing to accept and pay on due date
(B) A letter containing conditions of credit purchase or sale
(C) A letter sent by exporter to importer sanctioning credit deal
(D) A letter sent by importer to exporter sanctioning credit deal

50. Which of the following is a document of the title of sale of goods ?

(A) Certificate of Origin (B) Letter of Credit
(C) Bill of Lading (D) Bill of Entry

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. No planning can start without setting :

(A) Budget (B) Objectives
(C) Powers (D) None of the above

2. Forms of mixed Economy consists of

(A) Public Sector (B) Private Sector
(C) Co-operative Sector (D) None of the above

3. According to which of the following accounting principles, the owners of the business
are considered as creditors ?
(A) Money Measurement (B) Cost
(C) Dual Aspect (D) Separate Entity

4. Under how many headings, the cash flow statement shows the flow of cash & cash
equivalents ?
(A) 1 (B) 2 (C) 3 (D) 4

5. All the following curves are U-shaped : except

(A) AVC Curve (B) AFC Curve
(C) AC Curve (D) MC Curve

6. The Cobb-Douglas production function Q=4 K0.6 L0.3 Exhibits.

(A) Constant returns to scale (B) Increasing returns to scale
(C) Decreasing returns to scale (D) None of the above

7. Multistage stratified random sampling is :

(A) Probability Sampling (B) Selective Sampling
(C) Non-Probability Sampling (D) None of the above

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8. Which of the following are considered output units of a computer ?
(A) Floppy Disk, Dat, CD Etc (B) Printers
(C) Video Display Unit (D) Micro-film

9. Process of delegation of authority involves

(A) Transfer of authority
(B) Transfer of responsibility
(C) Transfer of authority and responsibility
(D) Transfer of key management functions

10. SWOT Analysis is used in which of the following managerial function ?

(A) Organising (B) Decision Making
(C) Motivating (D) Directing and Controlling

11. Which of the following is the function of distribution channel ?

(A) Fixing prices (B) Communication of decisions
(C) Promotional activities (D) All of the above

12. Product Lines Cover :

(A) General retailer (B) One price retailer
(C) Departmental Stores (D) All of the above

13. Which one of the following is not a leverage ratio ?

(A) Total debt ratio (B) Debt-Equity ratio
(C) Interest Coverage ratio (D) Quick ratio

14. Pay-back period method is also called as :

(A) Pay-out method (B) Pay-off method
(C) Pay-back method (D) All of these

15. Human relations approach of Management is associated with :

(A) Abraham Maslow (B) Elton Mayo
(C) Peter Drucker (D) Frederick Herzberg

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16. Attrition is related to :

(A) Job description (B) Job Evaluation

(C) Resignation/ Termination (D) Promotion

17. The nationalised New Bank of India was later merged with :

(A) Central Bank of India (B) Bank of Baroda

(C) Punjab National Bank (D) Canara Bank

18. The first Financial Institution set up in India :

(A) IDBI (B) ICICI

(C) IRBI (D) IFCI

19. Which section is not of balance of payment ?

(A) Current Account (B) Capital Account

(C) Official Reserve Account (D) Loss Accounts

20. Which conference had given birth to International Monetary Fund ?

(A) Uruguay Round Conference (B) Round Table Conference

(C) Brettonwoods Conference (D) Simla Conference

21. Which one of the following pairs is not correctly matched ?

(A) Installation of a Machine : Installation Cost A/c

(B) Relevant Cost : Decision Making

(C) Valuation of Share : Purchase of a company

(D) Break-even Analysis : Margin of Safety

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22. Which of the following is not a form of organisation ?
(i) Line Organisation (ii) Staff Organisation
(iii) Functional Organisation (iv) Committee Organisation
Code :
(A) (i), (ii), (iii) and (iv) (B) (i), (ii) and (iv)
(C) (i), (iii) and (iv) (D) Only (ii)

23. For profit maximization of a firm we must have

(i) MC=MR
(ii) Marginal Cost Curve cuts the average cost curve from below
(A) only (i) is true (B) Only (ii) is true
(C) Both (i) and (ii) are wrong (D) Both (i) and (ii) are true

24. Analysis of variance technique is normally used when

(i) Number of samples are more than two
(ii) All the samples follow Independent normal distribution with equal variance
(A) only (i) is true (B) only (ii) is true
(C) Both (i) and (ii) are true (D) Neither (i) nor (ii) is true

25. Which of the following Economic Systems occured first

(A) Laises - Fare System (B) Socialism
(C) Communism (D) Capitalism

26. Arrange the following events in the order of their occurance :

(i) Companies Act
(ii) Partnership Act
(iii) Formation of ICAI
(iv) Accounting Standard 3 (revised)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (iv) (i)
(C) (iii) (ii) (i) (iv)
(D) (ii) (iii) (i) (iv)

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27. National Income may be determined through :
(A) Income Approach (B) Expenditure Approach
(C) Productivity Approach (D) All of the above

28. Standard Error of Mean is defined as,

(A) Standard deviation of the sampling distribution of Mean
(B) Average of sampling distribution of Mean
(C) Inter-Quartile range of sampling distribution of mean
(D) Correlation co-efficient between the sampling distribution of mean and population
mean

29. Which one of the following is not involved in the characterstics of Business Ethics ?
(A) Business ethics is a dynamic philosophy
(B) Business ethics is based on moral value
(C) Business ethics influenced by Socio-Cultural value
(D) Business ethics is not inspired by Social Welfare

30. Management of Sales force involves :

(A) Selection of Salesman (B) Remuneration to sales man
(C) Training of Salesman (D) All of the above

31. Working Capital cycle involves the following

(i) Acquisition of raw materials
(ii) Finished goods
(iii) Receivables
(iv) Cash
(v) Work-in-progress
Which of the sequence is correct ?
(A) (iv) (iii) (i) (v) (ii)
(B) (i) (ii) (iii) (iv) (v)
(C) (i) (v) (ii) (iii) (iv)
(D) (iv) (i) (ii) (iii) (v)

32. Which of the following needs comes last in the Maslow’s need hierarchy theory ?
(A) Safety needs
(B) Self Actualisation
(C) Belongingness & Love needs
(D) Self-esteem needs

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33. Arrange the following banks in order in which they were established
(i) IDBI (ii) IFCI
(iii) SIDBI (iv) IIBI
(A) (ii) (i) (iii) (iv)
(B) (ii) (i) (iv) (iii)
(C) (i) (ii) (iii) (iv)
(D) (i) (ii) (iv) (iii)

34. Arrange the following Acts in the order in which they came into force :
(i) The Monopolies & Restrictive Trade Practices Act
(ii) Indian Contract Act
(iii) The Sale of Goods Act
(iv) The Foreign Exchange Management Act
Code :
(A) (ii) (iii) (i) (iv)
(B) (iii) (i) (iv) (ii)
(C) (i) (ii) (iii) (iv)
(D) (iv) (iii) (ii) (i)

35. Match the following

List-I List-II
(Industry) (Investment limit)
(a) Small Scale Enterprise (i) Rs. 25 Lakhs
(b) Tiny Enterprise (ii) Rs. 10 crores
(c) SME Sector Enterprise (iii) Rs. 5 crores
(d) Export Oriented Small Scale Enterprise (iv) Rs. 1 crore
Code :
(a) (b) (c) (d)
(A) (iv) (i) (iii) (ii)
(B) (iv) (i) (ii) (iii)
(C) (iv) (ii) (i) (iii)
(D) (iv) (ii) (iii) (i)

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36. Match the following
List-I List-II
(a) Fixed Capital A/c (i) Residual Income
(b) Deferred Revenue Expenditure (ii) Amalgamation
(c) Responsibility Centre (iii) Current A/c
(d) Combination Movement (iv) Advertisement for a new product
Code:
(a) (b) (c) (d)
(A) (iv) (iii) (i) (ii)
(B) (iii) (iv) (i) (ii)
(C) (iii) (iv) (ii) (i)
(D) (iii) (i) (iv) (ii)

37. Match the following

List-I List-II
(a) Average Total Cost (i) Variable Cost 4Quantity of Output
(b) Average fixed Cost (ii) Total Cost 4Quantity of Output
(c) Average Variable Cost (iii) Fixed Cost 4Quantity of Output
(d) Marginal Cost (iv) The increase in total cost that arises from
extra unit of production
Code:
(a) (b) (c) (d)
(A) (iii) (i) (ii) (iv)
(B) (i) (ii) (iii) (iv)
(C) (ii) (iii) (i) (iv)
(D) (iii) (iv) (ii) (i)

38. Match the following

List-I List-II
(a) Veriable (i) A quantitative characterstic of an elementry
unit measured on atleast an interval scale
and has value with in fixed finite interval
(b) Discrete variable (ii) Any portion drawn from a population
(c) Continuous Variable (iii) A quantitative characterstic of an elementry
unit that may vary from unit to unit
(d) Sample (iv) A variable whose values are restricted to
integer values only
Code:
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (iv) (iii) (ii) (i)
(C) (i) (iii) (iv) (ii)
(D) (iii) (iv) (i) (ii)

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39. Match the following List I with List -II
List-I List-II
(Management Thinker) (Books)
(a) Schneidher, Arnold E (i) Organisational Communication
(b) Koehter J. W. (ii) Organisational Communication
Behavioural Perspective
(c) Bassett, Glenn A (iii) The New Face of Communication
(d) Berlo David K. (iv) The Process of Communication
Code:
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (i) (iii) (ii) (iv)
(C) (iv) (iii) (i) (ii)
(D) (ii) (iii) (i) (iv)

40. Match the following List I with List -II

List-I List-II
(a) Purchase (i) Purchasing Criteria
(b) Situational (ii) New Markets
(c) Personal (iii) Risk Factor
(d) Physical (iv) Location
Code :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (i) (iv)
(C) (iii) (i) (ii) (iv)
(D) (iv) (ii) (iii) (i)

41. Match the following

List-I List-II
(a) ARR (i) Present value of Cash inflow
2Present value of cash outflow
(b) Pay-back method (ii) Yield on investment
Average Income
(c) NPV (iii) Average Investment

Investment
(d) IRR (iv)
Annual Cash Flow
Code:
(a) (b) (c) (d)
(A) (iii) (iv) (ii) (i)
(B) (iii) (iv) (i) (ii)
(C) (iv) (iii) (ii) (i)
(D) (iv) (iii) (i) (ii)

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42. Match the following
List-I List-II
(a) Personality Test (i) Skill Test
(b) Achievement Test (ii) Job knowledge test
(c) Aptitude Test (iii) Group Discussion
(d) Situational Test (iv) Projective test
Code:
(a) (b) (c) (d)
(A) (iv) (ii) (i) (iii)
(B) (iv) (ii) (iii) (i)
(C) (ii) (iv) (i) (iii)
(D) (i) (iii) (iv) (ii)

43. Match the following

List-I List-II
(Financial Institutions) (Nature of activity)
(a) ECGC (i) Re-insurance
(b) GIC (ii) Housing Development
(c) HUDCO (iii) A private bank
(d) ICICI Bank (iv) Trade
Code:
(a) (b) (c) (d)
(A) (iv) (i) (iii) (ii)
(B) (iv) (ii) (i) (iii)
(C) (i) (iv) (ii) (iii)
(D) (iv) (i) (ii) (iii)

44. Match the following

List-I List-II
(a) IBRD (i) Uruguay Round
(b) WTO (ii) ECAFE
(c) ADB (iii) Bretton Wood
(d) IDA (iv) Established by World Bank
Code:
(a) (b) (c) (d)
(A) (iii) (i) (ii) (iv)
(B) (iii) (i) (iv) (ii)
(C) (i) (iii) (ii) (iv)
(D) (i) (ii) (iii) (iv)

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 AGRICULTURAL INSURANCE SCHEME

More than half a dozen farm insurance schemes have been tried out in the past
two and a half decades, but no one has worked. Successive insurance models proved
unsustainable because they were neither economically viable, nor suited to cover the
varied risks that beset crop farming. The implementing insurance companies have
invariably ended up paying compensation several times the premium collected. The
existing National Agricultural Insurance Scheme (NAIS), which is now sought to be
replaced with its fresh avatar, has had to cope with claims of over Rs. 5,730 crore, more
than three times the premium income of Rs. 1,700 crore. The parallel farm “income
insurance’ scheme, aimed at covering risks ranging from a drop in yield to poor prices,
tried out on a pilot basis in the last few crop seasons, has also not worked.

What needs to be realised is that agricultural insurance is an inherently complicated

business because of the many risks involved in farming. The formidable functional and
practical problems that ensue relate to the extent of area that should constitute the unit
for assessing damage, and the bench-mark for assessing the loss incurred, on the basis
of the income that might have accrued to the farmer in the absence of yield-reducing
factors like adverse weather, pest, disease, or natural disasters

45. Which scheme is going to be replaced by the new insurance scheme ?

(A) Crop insurance scheme

(B) Agricultural insurance scheme

(C) NAIS

(D) None of the above

46. How many times of the premium income was paid as insurance claims by the existing
NAIS Scheme ?

(A) 1 (B) 2 (C) 3 (D) 4

47. Farm Income Insurance Scheme is aimed at covering the risk of

(A) Natural Calamities

(B) Drop in yield and poor prices

(C) Seed failure

(D) None of the above

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48. Which of the following factor(s), is/are a yield reducing factor ?

(A) Adverse weather

(B) Natural disaster

(C) Pest and disease

(D) All of the above

49. Why the Farm Insurance Schemes are unsustainable ?

(A) Not covering the varied risks

(B) Farmers not paying premium

(C) No support from Government

(D) None of the above

50. Which of the following is the criteria for bench marking the Agricultural Insurance
Scheme ?

(A) Area

(B) Out put

(C) Yield per acre

(D) Normal Income

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. Small and Medium Enterprise is one which has investment in plant and machinery not
exceeding :
(A) Rs. 10 crore (B) Rs. 1 crore
(C) Rs. 50 lakhs (D) Rs. 5 crore

2. FEMA signifies :
(A) Free Export Management Act
(B) Foreign Exchange Management Act
(C) Foreign Exchange Monitoring Act
(D) Free Export Marketing Act

3. Planning commission proposed to target ______ percent yearly growth rate during the
11th Five-year plan.
(A) 8 percent (B) 9 percent (C) 10 percent (D) 8.5 percent

4. The market for long-term loanable funds is a :

(A) Money Market (B) Capital Market
(C) Bond Market (D) None of the above

5. The pre-liberalisation era of Indian economy was under the grip of :

(A) Unemployment
(B) Under-employment
(C) Fiscal Deficit
(D) Unfavourable and alarming balance of payments

6. Insurance expense paid to bring the machine from the place of purchase to the place of
installation is :
(A) Capital Expenditure (B) Revenue Expenditure
(C) Deferred Revenue Expenditure (D) None of the above

7. Which financial statement can be compared with a still photograph ?

(A) Income statement (B) Balance sheet
(C) Cash - Flow statement (D) Funds - Flow statement

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8. The working capital ratio is :

Working Capital Working Capital

(A) (B)
Sales Total Assets

Current Assets Current Assets

(C) (D)
Sales Current Liabilities

9. An investment centre can be evaluated by :

(A) Profit (B) Return on sales
(C) ROI (D) None of the above

10. Which cost is taken into consideration for ‘make or buy’ decisions ?
(A) Prime cost (B) Total cost
(C) Cost of production (D) Relevant cost

11. Which of the following is not the feature of monopolistic competition ?

(A) Fairly large number of firms
(B) Co-existence of efficient and inefficient firms
(C) Product homogeneity
(D) Independent price-output policy

12. Which of the following is not a condition for successful price-discrimination ?

(A) Different elasticity of demand for different consumers
(B) Seller should be an MNC
(C) Location of markets at distant places
(D) Consumers ignorance and prejudices

13. Which of the following does not influence the individual demand for a product ?
(A) Price of product
(B) Price of close substitute
(C) State of production technology
(D) Change in climatic conditions

14. What is the nature of Elasticity of Demand for luxury items like high-class furnitures ?
(A) Unit elastic (B) Highly elastic
(C) Fairly elastic (D) Zero elastic

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15. The % change in demand for a product A divided by the % change in price of product
B indicates the degree of :
(A) Price Elasticity of Demand
(B) Cross Elasticity of Demand
(C) Income Elasticity of Demand
(D) Advertising Elasticity of Demand

16. t-test is a :
(A) Parametric Test (B) Non - parametric Test
(C) Large sample test (D) None of the above

17. The causal relationship is indicated by :

(A) Correlation (B) Regression
(C) Association (D) None of the above

18. Systematic sampling belongs to :

(A) Quota sampling (B) Non-probability sampling
(C) Probability sampling (D) None of the above

19. Match the items from List - I with the items in List - II :
List - I List - II
(a) Chi-square test (i) Secondary data
(b) Annual Reports of companies (ii) Information system
(c) Multi-variate (iii) Hypothesis testing
(d) Data processing (iv) Factor analysis
Codes :
(a) (b) (c) (d)
(A) (iv) (ii) (i) (iii)
(B) (iii) (i) (iv) (ii)
(C) (iii) (iv) (i) (ii)
(D) (iv) (i) (iii) (ii)

20. E - Commerce relates to :

(A) B - to - B (B) C - to - C
(C) B - to - C (D) All of the above

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21. Who is the father of principles of management ?
(A) Fleming (B) Bavnard
(C) F.W. Taylor (D) Henry Fayol

22. What is M.B.O. ?

(A) Management by Organization (B) Multiple Business Organization
(C) Management by Objectives (D) Multiplicity of Business Operations

23. The tool adopted to change corporate culture is :

(A) Managerial Grid (B) Hierarchy
(C) Span of Control (D) Seven ‘s’ Framework

24. What does Maslow Theory of Motivation convey to management ?

(A) Satisfied need is a motivator
(B) Satisfied need is no more a motivator
(C) Needs are not motivators
(D) Needs need not be considered

25. Ethics is derived from :

(A) Bible (B) Bhagabat Geetha
(C) Quoran (D) From all of the above

26. Who propounded 4Ps of marketing ?

(A) Philip Kotler (B) Kelker
(C) McAurthy (D) Peter F. Drucker

27. What is cognitive dissonance ?

(A) Buying Behaviour (B) Pre-purchase Behaviour
(C) Post-purchase Behaviour (D) Buying indifference

28. Product(s) which defied PLC concept :

(A) Amrutanjan (B) Horlicks
(C) Hairpins (D) All of the above

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29. Skimming price relates to :
(A) Charging competitive price (B) Charging high initial price
(C) Charging low initial price (D) None of the above

30. Promotion-mix includes :

(A) Advertising and personal selling (B) Personal promotion
(C) Product improvement (D) None of the above

31. Cost of capital does not mean :

(A) Cut off rate decided by management
(B) Rate of interest
(C) Expectations of investors for dividend
(D) Money paid to SEBI for permission to acquire capital

32. Financial Leverage is intended to :

(A) Increase return on capital employed
(B) Increase net equity return
(C) Decrease volatility in return
(D) Increase return on capital employed and net equity

33. Budget which is directed towards long-term strategic goals is known as :

(A) Zero - base Budget (B) Capital Budget
(C) Rolling Budget (D) Master Budget

34. Which of the following is not very much relevant in dividend decision ?
(A) Availability of disposable profit
(B) Investors’ expectations for dividend
(C) Capital market conditions
(D) Industry practice

35. Which of the following is not an application of working capital ?

(A) Day - to - day expenditure of business
(B) Current obligations for payment
(C) Expenditure in the usual course of business
(D) Expenditure to acquire capital

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36. Human Resource Management emphasises :
(A) Development of people (B) Punishment of people
(C) Adoption of people (D) None of the above

37. Induction means :

(A) Training (B) Promotion
(C) Incentives (D) Introduction

38. Workers participation in management in any organization is :

(A) Voluntary (B) Institutional
(C) Democratic (D) All of the above

39. Employee morale relates to :

(A) Productivity (B) Attitude (C) Empathy (D) Skills

40. Glass ceiling relates to :

(A) Ergonomics (B) Gender Bias
(C) Recruitment (D) Promotion

41. Which bank was incorporated as one of the public sector banks in India during
2004 - 05.
(A) ICICI Bank Ltd (B) Yes Bank Ltd
(C) IDBI Bank Ltd (D) UTI Bank Ltd

42. The short-term money market comprises :

(A) The call money market
(B) The inter-bank deposit market
(C) The bills re-discounting market
(D) All of the above

43. Annual Report on Currency and Finance is published by :

(A) SIDBI (B) RBI
(C) Ministry of Finance (D) None of the above

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44. Bank deposit refers to :
(A) The amount of money standing to the credit of a customer of a bank
(B) A term used by the Federal Reserve to refer to the total deposits of member banks
(C) The amount of money standing to the debit of a customer of a bank
(D) All of the above

45. Which of the following is the latest buzzword among bankers ?

(A) Social Banking (B) Financial inclusion
(C) Mass Banking (D) None of the above

46. The balance of payments account is conventionally divided into :

(A) Current Account and Capital Account
(B) Visible Account and Invisible Account
(C) Long-term Capital Account and Short-term Capital Account
(D) None of the above

47. What is Euro - III ?

(A) European Currency (B) Group of European Countries
(C) European Film Festival (D) Pollution Control Scale

48. The Comparative Cost Theory of International Trade was developed by :

(A) David Ricardo (B) Haberlar
(C) Adam Smith (D) Alfred Marshal

49. Which institution is known as the ‘soft loan window’ of World Bank ?
(A) IMF (B) IFC
(C) IDA (D) None of the above

50. The 21st member to join the G - 20 is :

(A) Sri Lanka (B) Uzbekistan
(C) Myanmar (D) Uruguay

-oOo-

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. The choice of distribution channel is affected by :

(A) Market consideration (B) Product consideration
(C) Middle man consideration (D) All of the above

2. Who is the custodian of monetary reserves in India ?

(A) SBI (B) SIDBI (C) NABARD (D) RBI

3. Who is the fiscal agent and advisor to government in monetary and financial matters
in India ?
(A) SBI (B) IDBI (C) ICICI (D) RBI

4. During the depression, it is advisable to :

(A) Lower Bank Rate and purchase securities in the market
(B) Increase Bank Rate and purchase securities in the open market
(C) Decrease Bank Rate and sell securities in the open market
(D) Increase Bank Rate and sell securities in the open market

5. Nationalization of banks aimed at all of the following except :

(A) Removal of control by a few
(B) Provision of control by a few
(C) Provision of adequate credit for agriculture, small industry and export units
(D) Encouragement of a new class of entrepreneur

6. The portion of total deposits of a commercial bank which it has to keep with RBI in the
form of cash reserves is termed as :
(A) CRR (B) SLR
(C) Bank Rate (D) Repo Rate

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7. The emphasis of Human Resource Management is :
(A) Development (B) Punishment
(C) Promotion (D) Demotion

8. The purpose of Job evaluation is :

(A) Training (B) Promotion
(C) Wage fixation (D) Transfer

9. Induction means :
(A) Training (B) Orientation
(C) Introducing the employee (D) Certification

10. Labour productivity means :

(A) output is greater than input
(B) output is less than input
(C) output is equal to input
(D) output is negative

11. Which of the following relates to performance appraisal ?

(A) Task method (B) Price method
(C) M.B.O. (D) Link method

12. Capital structure represents :

(A) Ratio between different forms of capital
(B) All liabilities
(C) All assets
(D) Assets and liabilities

13. The item, closing inventory, is shown in the balance-sheet under :

(A) Fixed Assets (B) Current Assets
(C) Current Liabilities (D) Miscellaneous Expenditure

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14. Trading on Equity means :
(A) Trading on arrears funds (B) Trading on borrowed funds
(C) Trading on family funds (D) Trading on friends funds

15. Marketing process involves :

(A) Time utility (B) Place utility
(C) Right utility (D) All of the above

16. Which of the following activities are covered under physical distribution ?
(A) Inventory (B) Packaging
(C) Transportation (D) All of the above

17. Which of the following step comes first in the selection process ?
(A) Test (B) Application blank
(C) Screening (D) Medical examination

18. M - M Theory in perfect market suggests that dividend payment :

(A) has a positive impact on the value of a firm
(B) has no impact on the value of a firm
(C) has a negative impact on the value of a firm
(D) has negligible impact on the firm

19. To manage “ is the forecast and plan, to organise, to command, to co-ordinate and to
control”. These are the words of :
(A) Koontz and O’Donnel (B) Henry Fayol
(C) F.W. Taylor (D) Peter F. Drucker

20. Chunk sampling is known as :

(A) Quota sampling (B) Convenience sampling
(C) Judgement sampling (D) Cluster sampling

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21. The first electronic computer system was developed in :
(A) 1920 (B) 1930 (C) 1935 (D) 1940

22. When management pays attention to more important areas looked after by lower level
of management, this is known as :
(A) MBO (B) Management by exception
(C) Unity of command (D) Critical path method

23. Policy making is an important part of the process of :

(A) Planning (B) Coordinating
(C) Organising (D) Motivating

24. Which of the management functions are closely related ?

(A) Planning and organization (B) Staffing and control
(C) Planning and control (D) Planning and staffing

25. “Grapevine” is a term used in relation to :

(A) formal
(B) informal communication
(C) both formal and informal communication
(D) this term is not used in relation to communication

26. The function of “staff” in an organisation is :

(A) take advice from the line
(B) advice the line
(C) hold authority and responsibility
(D) fix responsibility for performance of tasks in a definite manner upon certain
individuals

27. Break-Even analysis deals with :

(A) relationship between cost and cost mix
(B) relationship between cost, output and profits
(C) relationship between cost and sales
(D) relationship between profit and sales

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28. Dissolution of firm takes place :

(A) By the death or insolvency of any one partner

(B) The retirement of any one partner

(C) By the expiry of term

(D) By the insolvency of all but one partner

29. X Ltd. purchased land and building worth Rs. 28,80,000 and in lieu issued debentures
of Rs. 100 each at a discount of 4%. What are the number of debentures issued ?

(A) 28,800 (B) 30,000 (C) 32,000 (D) 34,000

30. X, Y and Z are partners in the ratio of what will be new ratio of the remaining
1 2 1
: :
2 5 10
partners if X retires :

(A) 2:1 (B) 4:1 (C) 5:1 (D) 3:1

31. Match items in List-I with items in List-II.

List-I List-II

(a) Mega Marketing (i) Advertising

(b) Skimming Price (ii) Post Purchase Behaviour

(c) Promotion mix (iii) High Price

(d) Customer dissonance (iv) Philip Kotler

Codes :

(a) (b) (c) (d)

(A) (iv) (iii) (i) (ii)

(B) (i) (ii) (iii) (iv)

(C) (iii) (i) (iv) (ii)

(D) (ii) (iv) (iii) (i)

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32. Match the following :

List-I List-II

(a) Merchandise exports (i) Purchase of foreign goods

(b) Merchandise imports (ii) Sales of goods abroad

(c) Investment Income (iii) Largely caused by excess of imports over

exports in merchandise

(d) Balance of Payments Deficits (iv) Dividends, interest etc. received from
abroad

Codes :

(a) (b) (c) (d)

(A) (i) (ii) (iii) (iv)

(B) (ii) (iii) (iv) (i)

(C) (ii) (i) (iv) (iii)

(D) (iii) (iv) (ii) (i)

33. Match items in List-I with items in List-II :

List-I List-II

(a) ABC analysis (i) Profitability

(b) ROI (ii) Inventory control

(c) Contribution Margin (iii) Project evaluation

(d) NPV (iv) B/E analysis

Codes :

(a) (b) (c) (d)

(A) (iii) (ii) (i) (iv)

(B) (ii) (i) (iv) (iii)

(C) (iv) (ii) (i) (iii)

(D) (i) (iii) (ii) (iv)

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34. Match the following :

List-I List-II

(a) Going Concern Concept (i) The same accounting method used by a
firm from one period to another

(b) Consistency (ii) Relates to the relative size or importance

of an item or event

(c) Cost principle (iii) An inappropriate assumption for a firm

undergoing bankruptcy

(d) Materiality (iv) The normal basis used to account for

assets

Codes :

(a) (b) (c) (d)

(A) (i) (ii) (iii) (iv)

(B) (iv) (iii) (ii) (i)

(C) (iii) (ii) (iv) (i)

(D) (iii) (i) (iv) (ii)

35. Match the following :

List-I List-II

(a) Smoothed Frequency Curve (i) To determine and portray the number of
proportions of cases

(b) Histogram (ii) It is one dimensional

(c) Bar diagram (iii) It is two dimensional

(d) Ogives (iv) Can be drawn through various points of

polygon

Codes :

(a) (b) (c) (d)

(A) (i) (ii) (iii) (iv)

(B) (ii) (iii) (iv) (i)

(C) (iii) (iv) (ii) (i)

(D) (iv) (iii) (ii) (i)

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36. Match the following :
List-I List-II
(a) Merchandise Inventory (i) Prevents arbitrary changes from one
accounting or measurement approach
from one period to another
(b) Comparability Quality (ii) Inventory of a retailer of wholesaler
(c) Net Realisable Value (iii) Item acquired by purchase, growth or
extraction of natural sources for further
processing
(d) Raw Materials Inventory (iv) Estimated selling price of product in the
ordinary course of business
Codes :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (i) (iv) (iii)
(C) (iii) (ii) (i) (iv)
(D) (iv) (i) (ii) (iii)

37. Match the following :

List-I List-II
(a) Maxi-min principle (i) take minimum pay-off of each action and
whichever is minimum is best action
(b) Mini-max principle (ii) take maximum pay-off of each action and
whichever is maximum is best action
(c) Max-max principle (iii) take maximum pay-off of each action and
whichever is minimum is best action
(d) Min-min principle (iv) take minimum pay-off of each action and
whichever is maximum is best action
Codes :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (iv) (i)
(C) (iii) (iv) (i) (ii)
(D) (iv) (iii) (ii) (i)

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38. The hypothesis testing consists of following steps :
(i) Establish a level of significance, prior to sampling
(ii) Defining the rejection or critical regions
(iii) State the hypothesis
(iv) Determination of a suitable test statistic
Which of the sequence is correct ?
(A) (ii), (iii), (iv), (i) (B) (iii), (i), (iv), (ii)
(C) (iii), (ii), (iv), (i) (D) (iv), (iii), (ii), (i)

39. Which of the following liabilities are taken into account for acid test ratio ?
(i) Trade Creditors
(ii) Bank Overdraft
(iii) Bills Payable
(iv) Outstanding Expenses
(v) Redeemable debentures
(A) (i), (ii), (iii), (iv) and (v) (B) (i), (ii), (iii) and (iv)
(C) (i) and (ii) only (D) (i), (iii) and (iv)

40. Statements :
(i) Employee development is more future oriented and more concerned with education
than employee training.
(ii) Apprenticeship programme is one which is widely used off the job training.
(A) Both correct (B) Both incorrect
(C) (i) correct, (ii) incorrect (D) (i) incorrect, (ii) correct

41. For profit maximization of a firm we must have :

(i) MC5MR
(ii) Marginal cost curve cuts the average cost curve from below.
(A) Only (i) is correct (B) Only (ii) is correct
(C) Both incorrect (D) Both correct

42. Statements :
(i) Fringe benefits, now-a-days are a significant component of ‘compensation.’
(ii) Under piece-rate plan, employees are paid at a stipulated rate per hour of work
done by the employee.
(A) Both are correct (B) Both are incorrect
(C) (i) incorrect, (ii) correct (D) (i) correct, (ii) incorrect

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43. Statements :
(i) The objective of Finance function is Wealth maximisation.
(ii) The objective of Finance function is Profit maximisation
(A) Both correct (B) Both incorrect
(C) (i) correct, (ii) incorrect (D) (i) incorrect, (ii) correct

44. Statements :
(i) Dividends can be paid only when there are profits.
(ii) Dividends can be paid when there are losses
(A) Both are correct (B) Both are incorrect
(C) (i) is incorrect, (ii) is correct (D) (i) is correct, (ii) is incorrect

45. Statements :
(i) The greater a firms degree of operating leverage, the more its EBIT will vary with
respect to fluctuations in sales.
(ii) The greater a firms degree of operating leverage, the less its EBIT will vary with
fluctuations in sales.
(A) Both correct (B) Both incorrect
(C) (i) correct, (ii) incorrect (D) (i) incorrect, (ii) correct

The Indian insurance industry has come a long way. From being providers of tax
planning instruments to introducing concepts of retirement planning, wealth creation
etc., customers are strengthening their ties with this industry every passing day. Today
life insurance is among the fastest growing industries in India. Inspired by tremendous
growth in the life insurance sector, many comparisons - product features, charge
structures, returns etc - have been drawn between life insurance and other financial
services, mostly mutual funds. These comparisons resulted in emergence of ULIPs as a
preferred product and in fact they display some similarities with MFs.
The individual policy holders or retail customers by the product when he or she
wants systematically provide towards a specific important goal. They take money
regularly out of their monthly or annual income to make contribution for their
goal5children education, health etc. Thus investment policies of life insurance
companies are designed to enable policy holders meet their respective financial goals,
while ensuring that the government is adequately funded for long term projects

46. Which of the following products are provided by Indian insurance industry ?
(A) Tax Planning (B) Wealth-Creation
(C) Retirement Planning (D) All of the above

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47. Who is the majority investor in insurance companies ?
(A) Individual Policy-Holder or Retail Customer
(B) Corporate Sector
(C) Government Sector
(D) Semi-Government Sector

48. Which of the following is the primary objective of insurance companies to invest savings
of customers ?
(A) Steady increments (B) Risky investments
(C) Short-term investments (D) Medium-term investments

49. Which type of customer-behaviour is observed for making investment in insurance

companies ?
(A) One-time savings (B) Regular small-savings
(C) Savings on sudden-gain (D) Retirement-savings only

50. Insurance Companies and Mutual Funds both provides to customers :

(A) Insurance Policies only (B) ULIPs
(C) Bonds (D) Loans

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 COMMERCE
PAPER—II

Note : This paper contains fifty (50) objective-type questions, each question carrying
two (2) marks. Attempt all of them.

1. Which of the following is not an objective of competition Act 2002 ?

(A) Prohibition of abuse of dominant position
(B) Prohibition of Restrictive Trade Practices
(C) Prohibition of Anti Competitive Agreements
(D) Regulation of combinations

2. Consumers have the right :

(i) to be protected against goods and services that are hazardous to life and property.
(ii) to assured , wherever possible, access to a variety of goods and services at notional
prices.
Code :
(A) Both (i) and (ii) are correct
(B) Both (i) and (ii) are wrong
(C) Only (i) is correct
(D) Only (ii) is correct

3. Which of the following is not an element of the micro environment of business ?

(A) Suppliers (B) Competitors
(C) Trade Policy (D) Publics

4. Match the following legislations with the year of their enactment :

(a) Industries (Development and Regulation ) Act (i) 1969
(b) Foreign Exchange Management Act (ii) 1951
(c) Securities Exchange Board of India Act (iii) 1999
(d) Monopolies and Restrictive Trade Practices Act (iv) 1992
Codes :
(a) (b) (c) (d)
(A) (i) (iii) (iv) (ii)
(B) (i) (iv) (iii) (ii)
(C) (ii) (iii) (iv) (i)
(D) (ii) (iii) (i) (iv)

5. Which of the following is not an instrument of monetary policy ?

(A) Deficit financing (B) Statutory Liquidity Ratio
(C) Cash Reserve Ratio (D) Open Market Operations

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6. A and B are partners sharing profits in the ratio of 2:3. They admit C for 1/4th share in
the business. The sacrificing ratio of A and B is :
(A) 3:1 (B) 1:4 (C) 2:3 (D) 1:1

7. Premium on redemption of debenture is :

(A) Personal Account (B) Real Account
(C) Nominal Account (D) None of the above

8. If profit and fixed cost are Rs. 80,000 and Rs 2,80,000 respectively, the total variable
cost and break-even sales are :
(A) Rs. 5,40,000 and Rs. 9,00,000 (B) Rs. 5,40,000 and Rs. 7,00,000
(C) Rs. 4,20,000 and Rs. 7,00,000 (D) Rs. 4,20,000 and Rs. 9,00,000

9. The extent to which an organization uses fixed cost in its cost structure is called :
(A) Overall leverage (B) Fixed leverage
(C) Financial leverage (D) Operating leverage

10. Direct costs are :

(A) Traceable to the cost object (B) Allocated to cost object
(C) Total cost of the cost object (D) None of the above

11. In a typical demand schedule, quantity demanded :

(A) Varies directly with price (B) Varies proportionately with price
(C) Varies inversely with price (D) Is independent of price

12. Opportunity cost is a term which describes :

(A) A bargain price for a factor of production
(B) Cost related to an optimum level of production
(C) Average variable cost
(D) None of the above

13. The principle which states that an input must be so allocated between various uses that
the value added by the last unit of input is the same in all its uses is called :
(A) Marginal Principle (B) Incremental Principle
(C) Equal–marginal Principle (D) Discounting Principle

14. An example of derived demand is :

(A) Money (B) Car
(C) Cigarette (D) Mobile phone

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15. “Kinked Demand curve approach “ is concerned with :
(A) Price Discrimination (B) Price Flexibility
(C) Price Rigidity (D) Dual Pricing

16. Karl Pearson’s coefficient of correlation between two variables X and Y is equal to :
(A) the covariance between two variables
(B) the product of their standard deviations
(C) the square root of product of two regression coefficients.
(D) None of the above

17. “Parameter “ refers to the characteristic of the :

(A) Population (B) Sample
(C) Both (D) None of these

18. If the probability of inclusion of every unit of the population in the sample is equal, it is
called :
(A) Simple Random Sampling (B) Stratified Random Sampling
(C) Systematic Sampling (D) None of these

19. For 332 contingency table, the degrees of freedom for testing the hypothesis is :
(A) 6 (B) 2 (C) 3 (D) 4

20. The “word length” of a computer is measured in :

(A) Bytes (B) Millimeters (C) Meters (D) Bits

21. ‘Motivation Hygiene Theory ‘ was propounded by :

(A) Herzberg (B) Maslow
(C) Mc Gregor (D) Peter F Drucker

22. ‘Grapevine’ communication is a type of :

(A) Formal communication (B) Informal communication
(C) Written communication (D) Vertical communication

23. ‘Span of control’ refers to :

(A) Controlling technique
(B) Number of units under a company
(C) Number of subordinates under a manager
(D) Supply area of a company

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24. A written statement of main duties and responsibilities which a particular job entails is
called :
(A) Job evaluation (B) Job analysis
(C) Job description (D) None of the above

25. Elton Mayo is main contributor to :

(A) Classical approach (B) Bureaucracy
(C) Modern Theory of Management (D) Human relations approach

26. Which one of the following is an example of non–store retailing ?

(A) Limited Line Stores (B) Discount Stores
(C) Tele Marketing (D) Super Markets

27. Promotional efforts directed primarily at end users so that they will ask middle men for
the product, is called :
(A) Pull strategy (B) Push strategy
(C) Single segment strategy (D) Penetration strategy

28. A product line strategy where in a company adds a lower priced products to a line to
reach a market that cannot afford higher priced items, is called :
(A) Trading up (B) Trading down
(C) Product Line Extension (D) Life cycle extension

29. Which is the step following the ‘test marketing’ in the process of new product
development ?
(A) Idea Screening (B) Prototype Development
(C) Business Analysis (D) Commercialisation

30. Which of the following is not a demographic basis of market segmentation ?

(A) Income (B) Life Style
(C) Occupation (D) Family Life Cycle

31. Taffler’s (1995) Z score does not include :

(A) Current ratio (B) Acid test ratio
(C) Stock turnover (D) None of the above

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32. Approximately, IRR is inverse of :
(A) Pay back period
(B) NPV
(C) Adjusted Accounting Rate of Return
(D) None of the above

33. Auction pricing is a superior method of price discovery because :

(A) All can participate (B) None can participate
(C) It Leads to speculation (D) None of the above

34. Cost of leasing is lower than :

(A) Cash credit (B) Hire purchase
(C) Bank Loan (D) None of the above

35. Market Efficiency is dependent on :

(A) Information (B) Accounts
(C) Technology (D) Management

36. The process of integrating the employees’ needs and aspirations with organisational
needs is called :
(A) Organisational Planning (B) Human Resource Planning
(C) Career Planning (D) Succession Planning

37. Productivity means :

(A) An act of increasing the knowledge and skills of an employee for doing a particular job
(B) Using the minimum amount of resources needed to produce goods and services
(C) One’s skills, abilities in meeting the needs of the job which one is holding currently
(D) The ratio of an organisation’s output to its inputs

38. Human Resource Department is :

(A) Line Department (B) Functional Department
(C) Authority Department (D) Service Department

39. Business Plans designed to achieve the organisation’s objectives is called :

(A) Human Resource Planning (B) Human Resources forecasts
(C) Strategic Plan (D) Corporate Development Plan

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40. A performance Appraisal System can be used for the following except :
(A) Human Resource Planning
(B) Tone up performance
(C) Identify individuals with high potential
(D) Discipline employees

41. Banking in India has its origin as early as __________ period.

(A) Vedic (B) Moughal
(C) British (D) None of the above

42. The maturity period of Treasury Bill is :

(A) 91 days (B) 364 days
(C) (A) and (B) both (D) None of the above

43. “ Blue Card” denotes :

(A) A Credit Card
(B) A Debit Card
(C) A Proposition by EU to attract highly qualified professionals from other countries
(D) None of the above

44. “Repo Rate” refers to the rate at which :

(A) RBI borrows short term money from the market
(B) Banks keeps the money with RBI
(C) Bills are discounted by RBI
(D) Forex is purchased by RBI

45. ‘Retail Banking’ means :

(A) Credit facilities extended to retail traders
(B) Providing personal banking services directly to the consumers
(C) Collection of large number of dividend/interest warrants
(D) Providing services to the employees of large organisations

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46. NOSTRO Account :
(A) Refers to a current account denominated in a foreign currency maintained by a
bank in the currency of home country
(B) Carries no interest
(C) Provides for nominal interest on over night investments
(D) All of the above

47. Which of the following is not a mode of foreign capital inflow to India ?
(A) FDI (B) FII
(C) NRI Accounts (D) None of the above

48. IMF has raised the quota and voting share of India which places India at the __________
place among 184 members of the organisation.
(A) 10 th (B) 11 th (C) 12 th (D) 13 th

49. Foreign Trade Policy 2008–09 forecasts the share of India’s trade in World Trade at :
(A) 1.2 % (B) 1.3 % (C) 1.4 % (D) 1.5 %

50. On the basis of the size and composition of external debt, World Bank has classified
India as a :
(A) heavily indebted country
(B) moderately indebted country
(C) less indebted country
(D) severely indebted country

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 COMMERCE
Paper – II
Note : This paper contains fifty (50) objective type questions, each question carrying
two (2) marks. Attempt all the questions.
1. The concept of Small Scale 4. Match the following two lists of
Industries (SSIs) was brought to fore
statements.
by the
(A) Industrial Policy Resolution, List – I List – II
1948 I. When one 1. Conglom-
(B) Industrial Policy Resolution, company eration
1956 purchases merger
(C) Industrial Policy Statement, another one.
1977
II. Merger 2. Consolida-
(D) None of the above
between two tion merger
companies
2. Which combination of the following having no
factors has driven globalisation in common
the recent past ?
business
I. Growth of multinational areas.
corporations.
II. Internationalisation of finance. III. Merger 3. Purchase
III. Increased international trade. between two merger
companies
(A) I and II (B) I and III
that sell the
(C) II and III (D) I, II and III
same
3. Assertion (A) : Privatisation products in
process leads to change in different
management with change in markets.
ownership. IV. Two 4. Market
Reason (R) : Change in companies extension
management is not a necessary are bought merger
condition for the process of and
privatisation. combined
Which one of the following is under new
correct combination ? entity.
Codes :
Codes :
(A) Both (A) and (R) are correct.
(B) (A) is correct, but (R) is I II III IV
incorrect. (A) 1 2 3 4
(C) (A) is incorrect, but (R) is (B) 2 3 1 4
correct.
(C) 3 1 4 2
(D) Both (A) and (R) are incorrect.
(D) 3 4 1 2
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5. In which of the industrial policies 9. In the context of Standard Costing;
were the following major changes Basic Standard is established for
introduced ? (A) short period
– Liberalisation of licensed (B) current period
capacity. (C) indefinite period
– Relaxation of industrial (D) pre-defined period
licensing.
– Industrialisation of backward 10. Read the following statements :
areas. (i) Marginal costing and
Absorption costing are the
(A) Industrial Policy Resolution,
same.
1956.
(ii) For decision making,
(B) Industrial Policy Statement, absorption costing is more
1977. suitable than marginal costing.
(C) Industrial Policy of 1980. (iii) Cost-volume-profit relationships
(D) Industrial Policy of 1991. also denote break-even point.
(iv) Marginal costing is based on
the distinction between fixed
6. Which of the following is not an and variable costs.
Accounting concept ? Which of the following
(A) Matching concept combinations gives true statements
(B) Dual Aspect concept with regard to above ?
(A) (i) & (ii) (B) (ii) & (iii)
(C) True and Fair concept
(C) (iii) & (iv) (D) (iv) & (ii)
(D) Going concern concept
11. A consumer consuming two goods
7. Deficiency/Surplus Account in will be in equilibrium, when the
liquidation of a company is called marginal utilities from both goods
are
(A) List – C (B) List – D
(A) maximum possible positive
(C) List – G (D) List – H (B) minimum possible positive
(C) equal
8. Which of the following statement is (D) zero
not correct ?
(A) P/V ratio can be improved by 12. Total production will be maximum
reducing fixed cost. when
(B) Contribution is also known as (A) Marginal production is
Gross margin. maximum.
(C) P/V ratio can be improved by (B) Average production is
increasing the selling price. maximum.
(C) Marginal production is zero.
(D) Margin of safety can be
improved by reducing fixed (D) Average production is equal to
the marginal production.
cost.
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13. Which one of the following is not 15. Under kinked demand model, the
matched properly ? demand curve for the firm’s product
is drawn on the assumption that
List – I List – II
(A) All rivals charge the same
I. High initial 1. Product price which is charged by the
price to be line pricing oligopolist.
lowered later (B) All rivals charge a price
independent of the price
II. Prices to be 2. Differential
charged by the oligopolist.
proportional to pricing
(C) All rivals follow the
cost
oligopolist upto certain price
III. Prices to be 3. Pioneer but beyond that they do not.
increased for pricing (D) All oligopolists charge the
providing price as independent sellers.
profit
16. A graph of a cumulative frequency
IV. Prices to be 4. Incremental distribution is called
different in pricing (A) Ogive
different
(B) Frequency polygon
markets
(C) Pie diagram
(A) I and 3 (B) II and 1
(D) Histogram
(C) III and 4 (D) IV and 2
17. Which of the following tests is used
to test the significance of the co-
14. As per indifference curve and price efficient of association ?
line, a consumer will not be in (A) Z-test (B) t-test
equilibrium when (C) χ2-test (D) F-test
(A) Ratios of marginal utilities and
prices of the respective goods 18. The total area of a normal
are equal. distribution between average value
± 1.96 of standard deviation is
(B) Ratio of marginal utilities of
(A) 95.45 % (B) 95 %
the two goods is equal to the
(C) 99 % (D) 68.34 %
ratio of their respective prices.
(C) The marginal rate of 19. Which of the following is a relative
substitution is equal to the measure of dispersion ?
ratio of prices of the two (A) Standard deviation
goods. (B) Variance
(D) The marginal rate of (C) Co-efficient of variation
substitution is decreasing. (D) None of the above

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20. ERP includes (i) SAP, and/or 24. Staffing includes
(ii) Resource Planning. (i) Training (ii) Appraisal
(A) Both (i) and (ii)
(iii) Placement (iv) Directing
(B) Only (i)
(C) Only (ii) Which of the following is correct ?
(D) None of the above (A) (i) and (iii)
(B) (i), (ii) and (iii)
21. Which one of the following was not (C) (ii) and (iii)
main contribution of F.W. Tailor ? (D) (i), (ii), (iii) and (iv)
(A) Scientific management
(B) Time and motion studies
(C) Differential wage plan 25. Assertion (A) : Management is a
(D) Modern management continuous process involving
the integration of all functions.
22. Match the items of List-I with items Reason (R) : Managers first plan,
of List-II. then organise and finally
List – I List – II perform the function of
I. Hygiene 1. Abraham H. controlling.
theory Maslow Read the above statements and select
II. Theory of 2. Victor the correct answer from the code
‘X’ and ‘Y’ Vroom below :
III. Expectancy 3. Fredrick Codes :
Theory Herzberg
(A) Both (A) and (R) are correct;
4. Doughlas and (R) is correct explanation
Mcgregor of (A).
Codes :
(B) Both (A) and (R) are correct,
I II III
but (R) is not a correct
(A) 3 4 2
explanation of (A).
(B) 1 4 2
(C) (A) is correct, but (R) is
(C) 3 2 4
incorrect.
(D) 1 2 4
(D) (A) is incorrect, but (R) is
23. Which of the following correct.
combinations consists of correct
statements ? 26. Exchange concept of marketing
(i) Control and planning are deals with
interlinked. (A) Exchange of products between
(ii) Control is not meant for men, sellers and buyers covering
but for activities. distribution and price aspects.
(iii) Control is a circular
(B) Mere appendage to production.
movement.
(A) (i) and (ii) (C) Achieving marketing success
(B) (i) and (iii) through product attributes.
(C) (ii) and (iii) (D) Aggressively promote and
(D) (i), (ii) and (iii) push the products.

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27. Who coined the expression 30. Which of the following buying
“Marketing Mix” ? process sequence is correct ?
(A) Henry Fayol 1. Adoption 2. Legitimization
(B) James Culliton
3. Attitude 4. Awareness
(C) Peter Drucker
(D) Abraham Maslow (A) 4, 3, 2, 1
(B) 2, 3, 4, 1
28. Road blocking advertisement refers
to (C) 1, 2, 3, 4
(A) Advertising a product by (D) 3, 4, 2, 1
blocking the road.
(B) Creating big blocks for
31. Discounted cash flow criteria for
advertising a product.
investment appraisal does not
(C) Advertising a product on include
multiple TV channels at the
same time. (A) Net present value
(D) None of the above. (B) Benefit-cost ratio
(C) Accounting rate of return
29. Match the following :
List – I List – II (D) Internal rate of return
1. Market i. Pricing high of
segmentation a new product 32. Working capital represents the
initially. portion of current assets financed
2. Skimming ii. Process of through long term funds. This
price disaggregating indicates (1) net working capital
a market into a and/or (2) gross working capital.
number of sub-
markets. (A) (1) is correct
3. Multilevel iii. Translation of (B) (2) is correct
marketing the marketing
(C) Both (1) and (2) are correct
plan into
marketing (D) Neither of the two is correct
performance.
4. Sales iv. Modified 33. Dividend policy of a company mainly
management version of concerns with
direct
marketing. (i) dividend payout and/or
Codes : (ii) stability of dividend.
1 2 3 4
(A) Only (i) is correct.
(A) ii i iv iii
(B) iii i ii iv (B) Only (ii) is correct.
(C) i ii iii iv (C) Both (i) and (ii) are correct.
(D) iv ii iii i (D) Both (i) and (ii) are incorrect.

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34. Match the following : 38. Which one of the following purposes
List – I List – II is not served by performance
I. The presence of 1. Super- evaluation ?
fixed cost in the leverage (A) Decisions about promotions,
cost structure transfers and terminations.
of a firm. (B) Centralisation and
II. The presence of 2. Operating decentralisation of decision
fixed return leverage making authority.
funds in the (C) Identification of training and
capital structure development needs.
of a firm. (D) Criterion against which
III. Impact of 3. Financial selection and development
changes in sales leverage programmes are validated.
on the earnings
available to 39. Who has introduced the “Seven
shareholders. Point Plan” for taking the best
Codes : interview method ?
I II III (A) Milton L. Blum
(A) 1 2 3 (B) F. E. Burt
(B) 2 3 1 (C) Prof. A. Rozar
(C) 3 2 1 (D) Filippo
(D) 1 3 2
40. The last stage in a grievance
redressal procedure is handled by
35. Which one of the following is not
(A) Union
used to estimate cost of equity
capital ? (B) Voluntary Arbitrator
(A) External yield criterion (C) H.R. Department
(B) Dividend plus growth rate (D) Grievance Committee
(C) Equity capitalisation approach
(D) Capital asset pricing model 41. The Commercial Banks in India are
governed by
36. Which of the following is not a (A) Reserve Bank of India Act,
Central Trade Union in India ? 1934
(A) B.M.S. (B) I.L.O. (B) Indian Companie’s Act, 1956
(C) INTUC (D) AITUC (C) Indian Banking Regulation
Act, 1949
37. Sequence the following in which (D) Securities and Exchange Board
they are practised : of India Act, 1992
(i) Promotion
(ii) Performance appraisal 42. Which of the following limits the
(iii) Recruitment power of credit creation by
(iv) Training and Development Commercial Banks ?
(A) (iii), (ii), (iv) (i) (A) Fiscal Policy
(B) (iii), (ii), (i), (iv) (B) Banking Laws
(C) (iii), (i), (iv), (ii) (C) Business Pessimism
(D) (iii), (iv), (ii), (i) (D) None of the above
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43. Match the following with the years 47. Which of the following is not an
of establishment/nationalisation. International Financial Institution ?
List – I List – II (A) I.C.I.C.I. (B) I.M.F.
(a) Reserve Bank of i. 1975 (C) I.D.A. (D) World Bank
India
(b) Nationalisation ii. 1935
of 14 Major 48. In balance of payment accounts, all
Commercial goods exported and imported are
Banks recorded in ________.
(c) Nationalisation iii. 1969 (A) Capital Account
of 6 Commercial (B) Visible Account
Banks (C) Invisible Account
(d) Regional Rural iv. 1980
Banks (D) Merchandise Account
Codes :
(a) (b) (c) (d) 49. The devaluation of currency of a
(A) i iii ii iv country is done when ________.
(B) iii ii iv i (i) It has adverse balance of
(C) iv iii i ii payments.
(D) ii iii iv i (ii) It has favourable balance of
44. Capital adequacy norm helps to payments.
Banks (A) Both (i) and (ii) are correct.
(i) For strengthening capital base (B) Both (i) and (ii) are incorrect.
of Banks. (C) Only (i) is correct.
(ii) For sanctioning more loans. (D) Only (ii) is correct.
(A) Both (i) and (ii) are correct.
(B) Both (i) and (ii) are incorrect.
(C) (i) is correct, but (ii) is 50. Match the following with the year of
incorrect. establishment :
(D) (i) is incorrect, but (ii) is List – I List – II
correct. (a) World Trade i. 1993
Organisation
45. Which one of the following is the
main objective of Unit Trust of India ? (b) Uruguay Round ii. 1995
(A) To mobilize the savings of Negotiation
high income groups. (c) W.T.O. – Trade iii. 1997
(B) To mobilize the savings of low Policy Review
and high income groups. Body
(C) To mobilize the savings of (d) The Patents iv. 1999
corporates. (Amendment)
(D) To mobilize the savings of low Act.
and middle income groups. Codes :
46. Which of the following is the basic (a) (b) (c) (d)
objective of the World Bank ? (A) i iii iv ii
(A) To provide social services (B) i iv iii ii
(B) To provide financial assistance
(C) To promote economic growth (C) ii i iii iv
(D) To eradicate poverty (D) iv ii i iii

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