NET/KSET EXAMINATION CELL

DEPARTMENT OF POST GRADUATE STUDIES IN COMMERCE

GFGC HEBRI
NET/KSET CELL
UNIT WISE APPEARED QUESTIONS
COMPILED BY
II MCOM STUDENTS 2019-20
COMMERCE: PAPER 2 Subject Code No.: 08
AS PER UNIVERSITY GRANTS COMMISSION NET BUREAU NET SYLLABUS
Team ASSIGNED AREA FOR QUESTION SELECTION Name of Team
code Members
01 Unit 1: Business Environment and International Business Ananya MR
Concepts and elements of business environment: Economic environment- Economic Nagaveni GC
systems, Economic policies(Monetary and fiscal policies); Political environment Role of Deeksha
government in business; Legal environment- Consumer Protection Act, FEMA; Socio-
cultural factors and their influence on business; Corporate Social Responsibility (CSR) 
Scope and importance of international business; Globalization and its drivers; Modes of
entry into international business  Theories of international trade; Government
intervention in international trade; Tariff and non-tariff barriers; India’s foreign trade
policy 2  Foreign direct investment (FDI) and Foreign portfolio investment (FPI); Types of
FDI, Costs and benefits of FDI to home and host countries; Trends in FDI; India’s FDI
policy  Balance of payments (BOP): Importance and components of BOP  Regional
Economic Integration: Levels of Regional Economic Integration; Trade creation and
diversion effects; Regional Trade Agreements: European Union (EU), ASEAN, SAARC,
NAFTA  International Economic institutions: IMF, World Bank, UNCTAD  World Trade
Organisation (WTO): Functions and objectives of WTO; Agriculture Agreement; GATS;
TRIPS; TRIMS

02 Unit 2: Accounting and Auditing Prasad

Basic accounting principles; concepts and postulates  Partnership Accounts: Admission, Thejaswini
Retirement, Death, Dissolution and Insolvency of partnership firms  Corporate
Accounting: Issue, forfeiture and reissue of shares; Liquidation of companies; Acquisition,
merger, amalgamation and reconstruction of companies  Holding company accounts 
Cost and Management Accounting: Marginal costing and Break-even analysis; Standard
costing; Budgetary control; Process costing; Activity Based Costing (ABC); Costing for
decision-making; Life cycle costing, Target costing, Kaizen costing and JIT  Financial
Statements Analysis: Ratio analysis; Funds flow Analysis; Cash flow analysis  Human
Resources Accounting; Inflation Accounting; Environmental Accounting  Indian
Accounting Standards and IFRS  Auditing: Independent financial audit; Vouching;
Verification ad valuation of assets and liabilities; Audit of financial statements and audit
report; Cost audit  Recent Trends in Auditing: Management audit; Energy audit;
 Environment audit; Systems audit; Safety audit

03 Unit 3: Business Economics Ashwini C

Meaning and scope of business economics  Objectives of business firms  Demand Sampada HP
analysis: Law of demand; Elasticity of demand and its measurement; Relationship shwetha
between AR and MR  Consumer behavior: Utility analysis; Indifference curve analysis 
Law of Variable Proportions: Law of Returns to Scale 3  Theory of cost: Short-run and
long-run cost curves  Price determination under different market forms: Perfect
competition; Monopolistic competition; Oligopoly- Price leadership model; Monopoly;
Price discrimination  Pricing strategies: Price skimming; Price penetration; Peak load
pricing

04 Unit 4: Business Finance Anusha SA

Nayana
Scope and sources of finance; Lease financing  Cost of capital and time value of money 
Capital structure  Capital budgeting decisions: Conventional and scientific techniques of
capital budgeting analysis  Working capital management; Dividend decision: Theories
and policies  Risk and return analysis; Asset securitization  International monetary
system  Foreign exchange market; Exchange rate risk and hedging techniques 
International financial markets and instruments: Euro currency; GDRs; ADRs 
International arbitrage; Multinational capital budgeting

05 Unit 5: Business Statistics and Research Methods Kalpana

Measures of central tendency  Measures of dispersion  Measures of skewness  Chaitra Kumari
Correlation and regression of two variables  Probability: Approaches to probability; Supreetha
Bayes’ theorem  Probability distributions: Binomial, poisson and normal distributions 
Research: Concept and types; Research designs  Data: Collection and classification of
data  Sampling and estimation: Concepts; Methods of sampling - probability and
nonprobability methods; Sampling distribution; Central limit theorem; Standard error;
Statistical estimation  Hypothesis testing: z-test; t-test; ANOVA; Chi–square test; Mann-
Whitney test (Utest); Kruskal-Wallis test (H-test); Rank correlation test  Report writing

06 Unit 6: Business Management and Human Resource Management Shruthi

Principles and functions of management 4  Organization structure: Formal and informal Prarthana
organizations; Span of control  Responsibility and authority: Delegation of authority and Navya
decentralization  Motivation and leadership: Concept and theories  Corporate
governance and business ethics  Human resource management: Concept, role and
functions of HRM; Human resource planning; Recruitment and selection; Training and
development; Succession planning  Compensation management: Job evaluation;
Incentives and fringe benefits  Performance appraisal including 360 degree
performance appraisal  Collective bargaining and workers’ participation in management
 Personality: Perception; Attitudes; Emotions; Group dynamics; Power and politics;
Conflict and negotiation; Stress management  Organizational Culture: Organizational
development and organizational change
07 Unit 7: Banking and Financial Institutions Akshaya
Overview of Indian financial system  Types of banks: Commercial banks; Regional Rural Mamatha
Banks (RRBs); Foreign banks; Cooperative banks  Reserve Bank of India: Functions; Role Nikhitha
and monetary policy management  Banking sector reforms in India: Basel norms; Risk
management; NPA management  Financial markets: Money market; Capital market;
Government securities market  Financial Institutions: Development Finance Institutions
(DFIs); Non-Banking Financial Companies (NBFCs); Mutual Funds; Pension Funds 
Financial Regulators in India  Financial sector reforms including financial inclusion 
Digitisation of banking and other financial services: Internet banking; mobile banking;
Digital payments systems  Insurance: Types of insurance- Life and Non-life insurance;
Risk classification and management; Factors limiting the insurability of risk; Re-insurance;
Regulatory framework of insurance- IRDA and its role

08 Unit 8: Marketing Management Ashwija

Marketing: Concept and approaches; Marketing channels; Marketing mix; Strategic Chaitra Acharya
marketing planning; Market segmentation, targeting and positioning  Product decisions: Vijeetha
Concept; Product line; Product mix decisions; Product life cycle; New product
development  Pricing decisions: Factors affecting price determination; Pricing policies
and strategies 5  Promotion decisions: Role of promotion in marketing; Promotion
methods - Advertising; Personal selling; Publicity; Sales promotion tools and techniques;
Promotion mix  Distribution decisions: Channels of distribution; Channel management 
Consumer Behaviour; Consumer buying process; factors influencing consumer buying
decisions  Service marketing  Trends in marketing: Social marketing; Online marketing;
Green marketing; Direct marketing; Rural marketing; CRM  Logistics management

09 Unit 9: Legal Aspects of Business Gawthami

Indian Contract Act, 1872: Elements of a valid contract; Capacity of parties; Free consent; Nireeksha
Discharge of a contract; Breach of contract and remedies against breach; Quasi Vandana
contracts;  Special contracts: Contracts of indemnity and guarantee; contracts of
bailment and pledge; Contracts of agency  Sale of Goods Act, 1930: Sale and agreement
to sell; Doctrine of Caveat Emptor; Rights of unpaid seller and rights of buyer 
Negotiable Instruments Act, 1881: Types of negotiable instruments; Negotiation and
assignment; Dishonour and discharge of negotiable instruments  The Companies Act,
2013: Nature and kinds of companies; Company formation; Management, meetings and
winding up of a joint stock company  Limited Liability Partnership: Structure and
procedure of formation of LLP in India  The Competition Act, 2002: Objectives and main
provisions  The Information Technology Act, 2000: Objectives and main provisions;
Cyber crimes and penalties  The RTI Act, 2005: Objectives and main provisions 
Intellectual Property Rights (IPRs) : Patents, trademarks and copyrights; Emerging issues
in intellectual property  Goods and Services Tax (GST): Objectives and main provisions;
Benefits of GST; Implementation mechanism; Working of dual GST
10 Unit 10: Income-tax and Corporate Tax Planning Adarsha
Income-tax: Basic concepts; Residential status and tax incidence; Exempted incomes; Madan
Agricultural income; Computation of taxable income under various heads; Deductions Shashidhara
from Gross total income; Assessment of Individuals; Clubbing of incomes  International
Taxation: Double taxation and its avoidance mechanism; Transfer pricing 6  Corporate
Tax Planning: Concepts and significance of corporate tax planning; Tax avoidance versus
tax evasion; Techniques of corporate tax planning; Tax considerations in specific business
situations: Make or buy decisions; Own or lease an asset; Retain; Renewal or
replacement of asset; Shut down or continue operations  Deduction and collection of
tax at source; Advance payment of tax; E-filing of income-tax returns

Notes:
1. This is an initiation from NET/KSET Cell to facilitate the aspirants of National Eligibility Test Conducted
by National Testing Agency and KSET, conducted by University of Mysore.
2. Neither the college nor the students claim any originality or ownership of this study material. It is
purely an academic exercise and does not have any commercial intent.

NET/KSET EXAMINATION CELL

DEPARTMENT OF POST GRADUATION STUDIES IN COMMERCE
GFGC HEBRI

1. Business Environment and International Business

2011 June UGC - NET
1. Which of the following is used for International money transfer?
1. RTGS 2. NEFT
3. SWIFT 4. None of the above
Answer: 3

2. DFEC stands for

1. Direct Foreign Exchange Control
 2. Direct Finance Exchange Control
3. Duty Free Export Credit
4. Duty Free Exchange Credit
Answer: 3
3. In independent India, first major foreign exchange crisis occurred in the year ---------
1. 1955 2. 1956
3. 1969 4. 1991
Answer: 4
2011 December UGC - NET
4. By which Act, the government checks restrictive trade practices?
1. FEMA-1999
2. Consumer Protection Act 1986
3. Industrial Policy Act 1991
4. None of the above
Answer: 4
5. Factor Endowment Theory on international Trade was propounded by
1. David Ricard 2. Bertil – Ohilin
3. J.S. Mill 4. C. P. Kindleberger
Answer: 2
6. Which of the following is one of the example of agreement between oligopolists?
1.GATT 2. OPEC
3. WTO 4. UNIDO
Answer: 2

2012 June UGC - NET

7. Which of the following denote the structural changes in Indian economy ?
1. Primary sector contribution has gone down.
2. Service sector contribution has gone up.
3. Secondary sector has not changed much.
4. All of the above.
Answer : 4
8. Match the items of list -l with list-ll
List-l list-ll
(a)FEMA (1) 1986
(b)Indian Factories act (2) 1999
(c)Industrial dispute act (3) 1948
(d)Consumer Protection Act (4) 1947
Codes:
a b c d
1. 4 2 3 1
2. 3 1 2 4
3. 2 3 4 1
 4. 1 4 3 2
Answer : 3
9. Environmental degradation does not consists of
1. Land degradation and soil erosion
2. Problem of overgrazing and ecological degradation
3. Flood
4. None of the above
Answer : 4

2012 December UGC - NET

10. Which one is not the main objective of fiscal policy of India ?
1. To increase liquidity in the economy.
2. To promote price stability.
3. To minimize the inequalities of income and wealth.
4. To promote employment opportunities.
Answer : 1
11. Which one is not an element of internal environment ?
1. Marketing capability
2. Operational capability
3. Money and capital market
4. Personnel capability
Answer : 3
12. Out of the following which four benefits are available to host countries from MNC’s ?
1. Transfer of technology
2. Learning of business mannerism
3. Strategic information sharing
4. Creation of jobs
5. Entertainment
6. Better utilization of resources
7. Enhancing social contacts.
8. Improved competition in local economy.
Answer : 3
13. The component of W.T.O are —
1. Ministerial Conference
2. Dispute Settlement Body
3. Director General
4. All the above
Answer : 4

2013 June UGC - NET

14. The United Nations Conference on Trade and Development ( UNCTAD ) was set up in
1. 1944
2. 1954
3. 1960
 4. 1964
Answer : 4
15. Indicate the ground on which a complaint under the Consumer Protection Act,1986, shall be invalid
1. A product having short weight.
2. A service provided free of cost.
3. A misleading advertisement given in newspaper.
4. None of the above
Answer : 2

2013 September UGC - NET

16. Which type of the complaints are not to be entertained by Consumer Forums under the Consumer
Protection Act, 1986 ?
1. A defective product purchased 1½ years back.
2. Misleading advertisement in a newspaper.
3. Service provided free of cost.
4. Tie in sales.
Answer : 3
17. Which of the following is a WTO procedure to promote globalization ?
1. Promotion of free trade.
2. Reduction of budgetary subsidies.
3. Reduction in shipping costs.
4. Promotion of foreign portfolio investment.
Answer : 1
18. Which of the following is not included in the Consumer Rights as per the Consumer Protection Act, 1986 ?
1. Right to be protected against marketing or hazardous goods and services.
2. Right to be heard.
3. Right to a physical environment that will protect and enhance quality of life.
4. Right to seek redressal of legitimate complaints.
Answer : 3
19. A consumer can file a complaint under the Consumer Protection Act, 1986 , on any of the following
grounds except:
1. Sale of defective goods.
2.Provision of deficient service.
3. Charging very high price.
4. Unfair trade practice.
Answer : 3

20. Which of the following is not regulated by the Competition Act, 2002 ?
1. Abuse of dominant position
2. Anti-competitive agreement
3. Medical negligence
4. Predatory pricing
Answer : 3

2013 December UGC - NET

21. Uruguay Round Pertaints to
1. WTO
2. IMF
3. GATT
4. World Bank
Answer : 3
22. Which of the following are outside the scope of the Consumer Protection Act, 1986 ?
1. Newspaper industry
2. Services provided under contract of personal service
3. Banking industry
4. Both (A) and (B)
Answer : 2

23. Which is the fiscal agent and advisor to government in monetary and financial matters?
1. NABARD
2. SBI
3. RBI
4. None of the above
Answer : 3
24. Out of the following, which are the important objectives of IMF ?
(A) To promote exchange rate stability
(B) To create standby reserves.
(C) To print International currency notes.
(D) To establish a multilateral system of payments.
(E) To maintain orderly exchange rate stability.
(F) To create employment.
Codes:
1. B,D, E, F
2. C, E, F
3. A, B, D, E
4. A, B, E, F
Answer : 3

2014 June UGC - NET

25. The competition act, 2002, seeks to regulate
1. Anti-competitive agreement
2. Mergers and amalgamation
3. Unfair trade practices
4. (A) and (B) above
Answer : 4
26. The time limit for filing a complaints before the district forum under the consumer protection act, 1986 is
1. One year
2. Two year
3. Three year
 4. There is no such time limit
Answer : 2
27. There is acute shortage of electricity in some of the states in India. This reflects a problem in which type of
business environment?
1. Economic
2. Demographic
3. Politico-legal
4. Socio-cultural
Answer : 1
28. Match the items given in List-l with List-ll
List-l List-ll
(a)Economic liberalisation (i) IT- enabled Services
(b)Out Sourcing (ii) SFIO
(c)Corporate fraud (iii)Macro Economic Stability
(d)second generation (iv) Increased
Reforms competition
Codes :
a b c d
1. i iii iii iv
2. i iii ii iv
3. ii iii iv i
4. iv i ii iii
Answer : 4
29. Which of the following is true ?
1. A Consumer court setup under the consumer protection act, does not have the power to
punish for its contempt
2. Professional services are outside the purview of the CPA
3. A consumer court cannot force a person indulging in misleading advertising to confess his
quit.
4. None of the above
Answer :1
30. Which one among the following is not the salient feature of industrial policy since 1991 ?
1. Enormous expansion of the public sector.
2. Redefining the role of public sector.
3. Limited exposure of Indian industry to foreign competition.
4. Pruning of the list of items reserved for SSI units.
Answer : 3

2014 December UGC - NET

31. Match the items of List-l with List-ll
List-l List-ll
(International economic Groups) ( year of establishment)
(a) European Union(EU) (i) 1973
(b) European Free Trade (ii) 1992
Association (EFTA)
 (c) Caribbean community (iii) 1985
( CARICOM )
(d) South Asian Association (iv) 1960
For Regional cooperation( SAARC )
Codes:
a b c d
1. ii iv iii i
2. ii iv iii
3. iv ii i iii
4. iii i ii iv
Answer : 2
32. The important objective of the WTO are:
(ii) To improve the quality of technology in the member countries.
(iii) To improve the standard of living of people in the member countries.
(iv) To ensure full employment and broad increase in effective demand.
(iv) To enlarge production and trade of goods.
(v) To increase trade of services.
Codes:
1. (i), (ii), (iii), (iv)
2. (ii),(iii), (iv), (v)
3. (i), (ii), (iii), (v)
4. (i), (iii), (iv), (v)
Answer: 2
33. Assertion (A) : The industrial growth in India has been hampered by the burden of many controls and
regulations.
Reason (R) :The new industrial policy seeks to liberate the industry from the shackles of licensing
system.
Codes:
1. Assertion (A) is correct, but Reason (R) is not correct.
2. Assertion (A) is correct and Reason (R) is right explanation of (A).
3. Both Assertion (A) and Reason (R) is correct.
4. Both Assertion (A) and Reason (R) is incorrect.
Answer : 1
34. Internal environment of a business includes:
i. Business Ethics and moral standard.
ii. Business and managerial policies.
iii. Prospects of business development.
iv. Government rules and regulations.
v. Industrial relations.
Codes:
1. i. ii. iv.v.
2. ii. iii. Iv. V.
3. i. ii. iii. iv.
4. i. ii. Iii. v.
 Answer : 4
35. Match the items of List-l with List-ll
List-l List-ll
(a)Industries (i) 1947
Development
Regulation Act
(b) Import and Export (ii) 1948
Control Act
(c) Foreign Exchange (iii) 1951
management Act
(d) Factories Act (iv) 1999
Identify the correct combination
Codes :
a b c d
1. i iii iv ii
2. iii i ii iv
3. iii i iv ii
4. iii iv ii i
Answer : 3
36. Which among the following is not a sequential combination?
1. Macro environment —economic environment— national income—pattern of income distribution.
2. Business environment —internal environment —business ethics—payment of fair wages.
3. Business environment —external environment —micro environment —suppliers.
4. Macro environment —external environment —customers —prospects of business development.
Answer : 4

June 2015 UGC-NET :-

37. The world’s first electronic stock market is :
(1) KOSPI (2) Nikkie (3) NASDAQ (4) Dow Jones
Answer : NASDAQ
38. The Human Development Index (HDI) is introduced by :
(1) UNDP (2) UNICEF (3) IMF (4) World bank
Answer : UNDP
39. Examine the following statements and choose the correct code :
Assertion (A) : American style option, compared to European style, provides more freedom to option
holders in exercising the option.
Reason (R) : American style option can be exercised only at a specified date which is generally the expiration
date.
Codes :
(1) Both (A) and (R) are correct. (2) Both (A) and (R) are wrong.
3) (A) is correct , but (R) is wrong. (4) (A) is not correct, but (R) is correct

Answer :3
40. From the statements given below, identify the correct code :
Statement I : The key strategy behind acquiring a company is to create share holder’s value.
 Statement II : Conglomeration is a merger between two companies that have common business areas.
Statement III : MRTP Act got replaced by the Competition Act 2002 in India.
Codes :
(1) All the three statements are correct.
(2) Statements I and III only are correct.
(3) Statements I and III only are correct.
(4) Statements II only is correct.
Answer:3
December 2015 UGC-NET :-
41. Environmental degeneration does not consist of :
(1) Land degeneration and soil erosion.
(2) Problem of over grazing and ecological degeneration
(3) Floods
(4) None of the above
Answer : 4
42. Which of the following is not the main objective of “Fiscal Policy of India “ ?
(1) To increase liquidity in economy
(2) To promote price stability
(3) To minimize the in – equality in income and wealth
(4) To promote employment opportunities
Answer : 1
43. Liberalization means :
(1) Reducing number of reserved industries from 17 to 8
(2) Liberating the industry, trade and economy from unwanted restriction
(3) Opening up economy to the world by attaining international competitiveness
(4) Free determination of interest rate
Answer :2
44. Assertion (A) : Industrializationof an economy is considered synonymous with growth.
Reasoning (R) : The transfer of resources from agrarian to industrial may be capital or labour or both.
Codes :
(1) Both (A) and (R) are true and (R) is correct explanation of (A).
(2) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(3) (A) is true but (r) is false
(4) (A) is false but (R) is true.
Answer : 2
45. Globalization is the term used to describe process of removal of restriction on which one of the following?
(1) Foreign trade (2) Investment
(3) Both (1) and (2) (4) None of the above
Answer : 3
December 2015 UGC-NET :-
46. Assertion (A) : International business has grown in more recent years at a faster pace than global
production.
Reason (R) : Growth through trade has increased ,but growth through foreign direct investment has not.
Codes :
(1) Both (A) and (R) are correct (2) (A) is correct but (R) is incorrect
(3) (A) is incorrect but (R) is correct (4) Both (A) and (R) are incorrect
 Answer : 2
47. Identify the multinational corporations (MNC’s) from the following :
(a) IOCL (b) GAIL (c) SBI
(d) SAIL (e) Tata Steel (f) Bharat Petroleum
Codes :
(1) a, b, c, d (2) b, c, d, e
(3) c, d, e, f (4) a, c, e, f
Answer :2
48. Statement- I : Legal agreements between two countries govern how both the countries tax earnings.
Statement –Ii : International law may determine how and whether companies can operate in a certain locale.
Codes :
(1) Both the statements are true
(2) Both the statements are false
(3) Statement –I is true but Statement –II is false
(4) Statement –I is false but Statements –II is true
Answer : 1
49. Which of the following is an example of an issue for which an agreement has not been made between two or
more countries?
(1) Restricting harmful emissions
(2) Deep –sea mining in non –coastal areas of the oceans
(3) Preserving endangered species.
(4) Banning the use of certain pesticides
Answer : 2

July 2016 UGC-NET

50. For the following statements of Assertion (A) and Reasoning (R) indicate the correct code from the
alternatives given
Assertion (A) : Liberalization means corporatives of departmental undertakings and public undertakings.
Reasoning (R) : Freedom to public sector undertakings to access capital market.Codes :
Codes :
(1) Both A and R are true and R is correct explanation of A.
(2) Both A and R are true but R is not a correct explanation of A.
(3) A is true but R is false.
(4) A is false but R is true.
Answer :1
51. Match the items of List –I with List –II and indicate the correct code :
List –I List - II
a. Fiscal policy i. Mitigation of National hazards.
b. Technology policy ii. Balance of payment.
c. Macro – economic policy iii. Fiscal federalism.
d. Monetary policy iv. Inflation.

Codes :
(1) i,ii,iii,iv.
(2) Iii,I,ii,iv.
 (3) iv,iii,I,ii.
(4) ii, I,iv,iii.
Answer :2
52. Which of the following factor is not directly responsible for slowing down the growth of infrastructure ?
(1) High level of perceived political risk.
(2) High level of sunk cost.
(3) High probability of time and cost over – run.
(4) Introduction of competition in all sectors.
Answer :4
53. Out of the following which is not a major component of Gross Domestic Product (GDP) ?
(1) Personal Consumption Expenditure.
(2) Gross Private Domestic Investment.
(3) Net Personal Income.
(4) Net Exports.
Answer :3
54. Which of the following is not a forum of Consumer Dispute Redressal System ?
(1) Local forum (2) District forum.
(3) State forum (4) National Commission.
Answer : 1

July 2016 NET - NET

55. Which among the following are multinational corporations ?
(a) A multinational , decentralized corporation with strong home country presence.
(b) A global , centralized corporations that acquires cost advantage through centralized production when
cheaper resources are available.
(c) An international company that builds on the parent corporations technology and R &D .
(d) A transnational enterprise that combines the a, b, and c.
Codes :
(1) a and b (2) b and c
(3) a, b, and c. (4) a, b, c and d.
Answer :4
56. Which among the following are full member countries of ASEAN?
(A) Brunei Darussalam (B) Cambodia
(c) Vietnam (D)Myanmar (E) Srilanka
Codes :
(1) a,band e.
(2) a,b,c and e.
(3) b,c,dande,
(4) a,b,c and d.
Answer : 4

August 2016 UGC - NET

57. Assertion (A) : Industrialization is the sine – qua – non of economic progress.
Reasoning (R) : Government is committed to rapid and balanced industrialization of the country with a view
to benefiting common man.
(1) Both A and R are true and R is correct explanation of A.
 (2) Both A and R are true but R is not correct explanation of A.
(3) A is true but R is false.
(4) A is false but R is true.
Answer :1
58. Match the items in column – I to the items in Column – II :
Column – I Column – II
a. Fiscal deficit i. Market Securities
b. SEBI ii. Government expenditure
c. RBI iii. Economic growth
d. National Income iv. Monetary policy
Codes :
(1) ii, iv, iii, i.
(2) iii, i, iv, ii.
(3) i, ii, iii, iv.
(4) i, iv, ii, iii.
Answer :2
59. Withdrawal of government from a sector partially or fully is known as
(1) Modernization (2) Liberalization
(3) Privatization (4) Globalization
Answer :3
60. In case the amount claimed by the consumer is Rs 89 lakhs , then which of the following will handle the
case ?
(1) District consumer redressal forum
(2) State consumer dispute redressal commission
(3) National consumer dispute redressal commission
(4) Supreme Court of India
Answer :2
61. India relaxed quantitative restrictions on imports of 1429 items in 2000 and 2001 as per the commitment to
which of the following ?
(1) GATT (2) SAFTA
(3) NAM (4) WTO
Answer :4
January 2017 UGC - NET
62. Assertion (A) : Corporate culture is generally considered as either closed and threatening or as open and
participatory.
Reason (R) : Corporate culture and style of functioning of top managers is important factor for determining
the internal environment of a company.
Codes :
(1) A is correct , but R is correct.
(2) Both A and R are correct and R is the correct explanation of A.
(3) Both A and R are correct, but R is not the correct explanation of A.
(4) R is correct, but A is incorrect.
Answer : 2
63. Statement I : If the workers develop an attitude of non – cooperation with management, a repressive
economic system may be needed to set right this industrial disorder.
 Statement II : By fulfilling social responsibility towards shareholders, employers, consumers, government
and community, a business achieves economic growth and increases public image.
Codes :
(1) Statement I is correct, but II is incorrect.
(2) Both the statements I and II are correct.
(3) Statement II is correct but I is incorrect.
(4) Both the statements are incorrect.
Answer : 2
64. Match the items of List – I with List – II.
List – I List – II
a. Planning Commission i. 1993
b. Competition Act ii. 2002
c. Adrian Cadbury Committee iii. 1951
d. Rangrajan Committee on Disinvestment in PSEs. iv. 1991
Codes :
(1) i,ii,iii,iv.
(2) iii,i,iv,ii.
(3) iii,ii,iv,i.
(4) iii,ii,i,iv.
Answer : 3
65. From which Five Year Plan “Growth with Social Justice “ has received emphasis ?
(1) 5th (2) 6th
(3) 7 th
(4) 10th
Answer : 1
66. Which among the following is not a member country of NAFTA ?
(1) U.S.A. (2) Panama
(3) Mexico (4) Canada
Answer : 2
67. As per WTO guidelines Agreement on AOA ia not considering which of following ?
(1) R and D and any other indirect support and assistance to farmers by the government.
(2) Direct payment to farmers.
(3) Least development countries do not need to make cuts.
(4) Cut back of domestic policies which directly affect production and trade.
Answer : 1
68. Under TRIPS Agreement, patent is granted subject to which of the following ?
a. The product or the process is new one.
b. It contains an inventive step.
c. It is capable of industrial application for 15 years from the grant of the patent.
d. It is capable of industrial application for 20 years from the grant of the patent.
Codes :
(1) Only a and b (2)Only a,b and c
(3) Only a,b and d (4) Only a and d
Answer : 3
November 2017 UGC - NET
69. From the following statements of Assertion (A) and Reasoning (R), indicate the correct code:
 Assertion (A) : Industrial liberalization became an imperative condition for the growth of forces of
competition leading to high efficiency and productivity in Indian industries.
Reasoning : Industrial development and curbing of poverty is only possible through government
intervention.
Code :
(1) A and R both are not correct.
(2) A is correct but R is not the correct explanation of A.
(3) A is correct and R is correct explanation of A.
(4) A is not correct but R is correct.
Answer : 2
70 . which of the following statements are not correct ?
Statement I : Sustainable development means an attempt to achieve the balance between
economic growth and conservation / protection of environment.
Statement II : Sustainable development means meeting the needs of industries without
compromising the needs of import – export balancing.
Statement III: Sustainable development means creation of sufficient surplus budgets through stock
of capital assets including land.
Code :
(1) Statement I and II.
(2) Statement II and II.
(3) Statement I and II.
(4) Statement I,II, and III.
Answer : 2
71. Match the items of List –I with List – II relating to macro environment of business and indicate the code of
correct matching :
List – I List - II
a. Economic environment. i. Ethical issues.
b. Political and government environment ii. Trade and transport policies.
c. Socio – cultural environment. iii. Economic stratification of population.
d. Demographic environment. iv. Judiciary powers.
Codes:
(1) ii, iv, i, iii.
(2) i, iii, ii, iv.
(3) iv, ii, iii, i.
(4) iii, i, iv, ii.

Answer : 1
72. For which one of the basic reasons, the “Structural Adjustment Programme” was undertaken in India in
1991 ?
(1) Curbing competition among private sector.
(2) Establishing predominant role of public sector.
(3) establishing a free market economy.
(4) Regional balancing through planning and licensing.
Answer: 3
73. Match the items of List –I with List – II and indicate the correct code of matching:
 List – I List - I
a. Micro external environment i. Economic and political factors.
b. Macro external environment ii. Competition among diverse products targeting
c. Non – price competition disposal income of consumers.
d. Desire competition iii. Input suppliers.
iv. Sponsoring of events like sports.
Code:
(1) iii, i, iv, ii.
(2) ii, iii, iv, i.
(3) iv, ii, iii, i.
(4) iv, i, ii, iii.
Answer : 1

November 2017 UGC - NET

74. Which one among the following has the largest share of exports from India ?
(1) Agricultural and allied commodity.
(2) Gems and Jewellery.
(3) Handicrafts.
(4) Electronic Goods.
Answer : 2
75. Which one among the following is not a part of TRIPS agreement ?
(1) Industrial Design (2) Geographical Indications
(3) Interior Design (4) Layout Design of Integrated circuits.
Answer : 3
76. Which one among the following is not correct?
(1) IMF’s headquarter is in Washington, D.C.
(2) IMF has 198 countries as its members.
(3) IMF is an outcome of the Bretton Woods Conference.
(4) IMF was found on July 7, 1944.
Answer : 2
77. Statement – I: Served from India Scheme (SFIS) has been replaced with service exports from
India Scheme(SEIS).
Statement – II : The rate of reward under SEIS would be based on net foreign exchange earned.
Code:
(1) Statement – I is correct but statement – II is incorrect.
(2) Statement – II is correct but statement – I is incorrect.
(3) Both the statements – I and II are incorrect.
(4) Both the statements – I and II are correct.
Answer :2

July 2018 UGC - NET

78. Which one of the following is not the function of NABARD?
(1) To provide refinance assistance by way of short term credit to state cooperative banks and sectoral
rural banks, etc..,approved by the RBI for some specific pueposes.
(2) To undertake inspection of cooperative societies other than primary cooperative societies and RRB.
 (3) To promote research in various aspects of the problems of urban development.
(4) To subscribe to share capital or invest in securities of any institution concerned with agricultural and
rural development.
Answer : 3
79. Which one of the following financial institutions co – ordinates the functions and operations of all the
financial institutions into a single integrated financial structure so that each may contribute to the growth of the
economy ?
(1) IFCI (2) UTI (3) IDBI (4) SIDBI
Answer : 3
80. Assertion (A) : The Reserve Bank of India is entrusted with the management of the public debt and issue of
new loans and treasury bills on behalf of the central and state Governments.
Reasoning (R) : The Governor and the Deputy Governor of Reserve Bank of India are appointed by the
Central Government.
Code :
(1) A is correct but R is not correct.
(2) A and R both are correct but R is not the right explanation of A.
(3) A and R both are correct and R is the right explanation of A.
(4) A and R both are not correct.
Answer : 2
81. --------- refers to the process of removing or stripping the legal status of a currency.
(1) Digitization (2) Financial Inclusion.
(3) Demonetization (4) Micro finance
Answer : 3
82. Which one of the following is not the objective of UTI ?
(1) To mobilize savings of the community by offering savers the triple benefits of safety, liquidity, and
profitability of Investments.
(2) To channelize the pooled savings into productive outlets.
(3) To provide finance under hire purchase finance and housing finance to its members.
(4) To give every one a chance to indirectly own and securities in a large number of select companies.
Answer : 3
83. Assertion (A) : An export processing zone is different from free trade zone as it promotes units primarily
devoted to exports.
Reasoning (R) : Goods imported to a free trade zone may be re – exported without any processing , in the same
form. But, goods exported by units in an EPZ are expected to have undergone some value addition by
manufacturing / processing.
Code :
(1) A is correct and R is correct explanation of A.
(2) A is correct but R is not the correct explanation of A.
(3) A is correct but R is incorrect.
(4) A is incorrect but R is correct.
Answer : 1
84. Match the items of List – II with the items of List – I relating to liberalization of agricultural trade.
List – I List - II
a. Tariffication i. They have demonstrably adverse effects on
other member countries.
 b. Prohibited subsidies
c. Actionable subsidies ii. They act on goods which are contingent upon export
d. Non – actionable subsidies performance.
iii. Replacement of existing non – tariff restrictions.
iv. For industrial research in disadvantaged regions.
Codes :
(1) ii, iii, i, iv.
(2) iv, i, ii, iii.
(3) iii, ii, i, iv.
(4) Ii, iv, iii, i.
Answer : 3
85. Match the items of List – II and with the items of List –I relating to WTO impact:
List - I List – II
a. NAMA i. Liberaliusation of intenational investments.
b. GATTS ii.Includes industrial goods, textile, jewellery,fish and fisheries product

c. TRIMs
d. TRIPs manufacturing industries.
iii. Liberalisation of trade in goods and services.
iv. Provides monopoly power to owners of intellectual property.
Codes :
(1) ii, i, iv, iii.
(2) iv, ii, iii, i.
(3) ii, iii. i, iv.
(4) iii, ii, iv, i.
Answer : 3
86. Indicate the correct code of the following statements being correct or incorrect. The statement relate to the
type of transaction recorded in the current / capital accounts of the balance of payment.
Statement I : The capital account consists of long – term capital transactions only.
Statement II : The current account includes all transactions which give rise to or use up national income
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement I is correct while Statement II is incorrect.
(4) Statement I is incorrect while statement II is correct.
Answer : 4
2018 December UGC - NET:
87. Which one of the following statement is correct?
1. The purpose of issuing different types of rules and regulations by SEBI is to bring monitory gains to
investor.
2. SEBI has been constituted under the securities (Contract and Regulation) Act, 1956.
3. One of the objectives of setting up SEBI is to protect the interests of investors.
4. SEBI is constituted from amongst the directors of various stock exchanges.
Answer: 3
88. Who among the following is not an observer country of the SAARC?
1. Iran 2. China
3. Canada 4. USA
Answer: 3

89. When RBI reduces CRR, it results into

1. Increase in deposits
2. Increase in lendable resources
3. Decrease in lendable resources
4. Decrease in deposits
Answer: 2
90. Which one of the following is not the function of RBI?
1. Custodian of Cash Reserves of Commercial Banks
2. Controller of credit
3. Accepting deposits and advancing loans to public.
4. Issue of Bank notes
Answer: 3
91. Foreign investment can be made through which of the following routes?
i. Foreign Direct Investment (FDI)
ii. Foreign Portfolio Investment (FPI)
iii. Private Equity Investment (PEI)
iv. Foreign Venture Capital Investors (FVCI)
Choose the correct answer from the code given below:
1. i, iii and iv
2. i, ii, iii and iv
3. i, ii, and iv
4. i and iv
Answer: 2

92. Which of the following are included in the international liquidity? Indicate the correct code.
i. Foreign exchange reserve
ii. Borrowing capacity of the various countries
iii. Gold reserves
Choose the correct answer from the code given below:
1. ii and iii
2. i and ii
3. i and iii
4. i, ii and iii
Answer : 4

93. Which one of the following is the main government agency responsible for development and monitoring
international trade in India?
1. Export Promotion Council
2. Department of Commerce
3. Indian Institution of foreign Trade
 4. Federation of Indian Export organizations
Answer: 2

94. Foreign direct investment can be made through which of the following routes?
i. Foreign Direct Investment (FDI)
ii. Foreign Portfolio Investment (FPI)
ii. Private Equity Investment (PEV)
iv. Foreign Venture Capital Investment (FVCI)
Options
1. i, iii, and iv
2. i, ii, iii, and iv
3. i, ii, and iv
4. i and iv
Answer: 2

2019 June UGC - NET

95. Which among the following institution is NOT a part of World Bank group?
1. International Development Association (IDA)
2. International Monitory Fund (IFM)
3. International Finance Corporation (IFC)
4. Multilateral Investment Guarantee Agency (MIGA)
Answer: 4
96. Which one of the following is used for international money transfer?
1. RTGS
2. NEFT
3. SWIFT
4. DD
Answer: 2
97. Assertion(A): RBI is an important regulatory and administrative authority to executive FEMA
provisions.
Reason (R): Being monitory authority and custodian of foreign exchange, Reserve bank of India enjoys
requisite expertise of FEMA administration.
In the context of the above two statements, which one of the following option iscorrect?
1. Both (A) and (R) are correct and (R) is the right explanation of (A)
2. Both (A) and (R) are correct but (R) is not the right explanation of (A)
3. Both (A) and (R) are incorrect
4. (A) is correct and (R) is not correct
Answer: 2
98. Which is the most appropriate mode of entry in international business to an enterprise with little experience
of international market?
1. Acquisition 2. Strategic Alliance
3. Joint venture 4. Exporting
Answer: 2
99 . match list I with list II
List I (Trade and finance institution) List II (Headquarters)
 a. WTO i. Brussels
b. IMF ii. Geneva
c. FAO iii. Washington
d. EU iv. Rome

Chose the correct option from those given below:

1. a-ii, b-iii, c- iv, d-i
2. a-I, b-ii, c-iii d-iv
3. a-iii, b-ii, c-I d-iv
4. a-I, b-iii, c-ii d- iv
Answer: 1

100. Currency Swap is the method of

1. Hedging against foreign exchange risk
2. Speculating of foreign exchange
3. Leverage instrument used by cooperative banks
4. mode of payment in international trade
Answer: 1

Unit 02: ACCOUNTING AND AUDITING

(JUNE 2012)

1. Assertion (A): A company should pay minimum dividend to its shareholders.

Reason (R) : Dividends are heavily taxed than capital gains.
Codes :
a) Both (A) and (R) are correct
b) Both (A) and (R) are incorrect
c) (A) is not correct, but (R) is correct
d) (A) is correct, but (R) is wrong Ans: a)
2. Insurance expenses paid to bring an equipment from the place of purchase to the place of installation is
a type of-
a) Revenue expenditure c) Deferred revenue expenditure
b) Capital Expenditure d) Operating expense Ans: b)
3. ABC Ltd. Was incorporated with an authorised Share capital of Rs 100000 equity shares of Rs 10each.
The board of Directors of the company decided to allot 10000 shares credited as fully paid to the
promoters of the company for their services. Which account should be debited in the books of ABL Ltd.
?
a) Promoter’s Account c) Goodwill account
b) Services Account d) Share Capital account Ans: c)
4. In a reconstruction scheme, the reduction of capital may take the form of-
 a) Reducing the liability of the shareholders in respect of any unpaid amount on the shares held by
them.
b) Paying-Off any paid-up share capital which is in excess of its requirements.
c) Cancelling any paid-up share capital which is lost or un presented by available assets.
d) All of the above. Ans: d)
5. While determining the normal rate of return for the valuation of shares in market value method, which
of the following should be taken into consideration?
a) The degree of risk involved
b) The current rate of interest on gilt-edged securities
c) Weighted Average Cost of Capital
d) All of the above Ans: d)
6. Master Budget is a-
a) Functional budget c) Summary Budget
b) Operating Budget d) Financial Budget
Ans: c)

(DECEMBER 2012)
7. Identify the item which does not include under Current Account transaction
a) Services c) Unilateral transfer
b) Non-Monetary movement of gold d) Investment income
Ans: b)
8. Social balance sheet shows:
a) Social costs c) Value of employees of the organisation
b) Social Revenues d) All of the above
Ans: c)
9. Which of the following comes under efficiency ratios?
a) Average collections period c) Fixed assets turnover ratio
b) Inventory turnover ratio d) All of the above Ans: d)
10. Match the items of the following two lists:
List I List II
a) Statement of changes in Working Capital 1. Cash Flow Statement
b) Deferred tax 2. Fixed Assets
c) Three activities 3. Fund Flow Statement
d) Impairment of loss 4. Balance Sheet
Codes:
(a) (b) (c) (d)
 (A) 1 2 3 4
(B) 3 4 2 1
(C) 3 4 1 2
(D) 4 3 1 2
Ans: c)
11. Match the items of the following two lists and indicate the correct answer-
List I List II
a) Earning ability of the firm 1. Basis of accounting
b) Conservatism 2. P/V ratio
c) Cash Profit 3. Cash flow statement
d) Cash and accrual 4. Prudence
Codes:
(a) (b) (c) (d)
(A) 2 4 3 1
(B) 2 1 4 3
(C) 3 4 1 2
(D) 3 4 2 1
Ans: A)
12. Assertion (A): Only the relevant costs should be taken into consideration for decision making
Reason (R) : All variable costs are relevant costs and all fixed costs are irrelevant costs.
Codes:
(A) Both (A) and (R) are correct
(B) Only (A) is correct and (R) is wrong
(C) Only (R) is correct, but (A) is wrong
(D) Both (A) and (R) are wrong
Ans: B)

13. Which of the following is not a category of Non-Performing assets?

a) Substandard assets c) Loss Assets
b) Doubtful Debts d) Devaluated Assets Ans: d)
14. Assertion (A): Ratio analysis is one of the tools employed to know the financial health of a concern.
Reason (R) : Ratio Analysis is not the only technique available to take investment decision.
Codes:
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is incorrect explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true. Ans: A)
15. Consider the following parties:
1. Secured creditors
2. Unsecured creditors
3. Partners who have granted loans
4. Partners who have contributed over and above profit sharing ratio.
Arrange them in correct sequence in the event of dissolution of a firm-
a) 2,1,3,4 c) 1,2,4,3
b) 1,2,3,4 d) 2,1,4,3 Ans: b)
16. Which method does not consider the time value of money?
a) NPV c) IRR
b) ARR d) profitability index Ans: b)
17. Which formula is used to measure the degree of operating leverage?
a) EBIT/ Sales c) EBIT/EBT
b) C/ EBIT d) EBIT/C Ans: b)
18. Which one is more appropriate for cost of retained earnings?
a) Weighted Average Cost of Capital c) Expected rate of return by the investors
b) Opportunity cost to the firm d) None of the above Ans: b)
19. Owners’ equity stands for
a) Fixed assets minus Fixed liabilities
b) Fixed assets minus Current Liabilities
c) Current assets minus Fixed liabilities
d) Total assets minus total outside liabilities Ans: d)
20. When the debt turnover ratio is 4, what is the average collection period?
a) 5 months c) 3 months
b) 4 months d) 2 months Ans: c)
21. Which of the following will result into sources of funds?
1. Increase in current assets
2. Decrease in current assets
3. Increase in current liabilities
4. Decrease in current liabilities
Codes:
(A) 1 and 4 (C) 2 and 3
(B) 1 and 3 (D) 2 and 4 Ans: C)

22. Assertion (A):Accounting information refers to only events which are concerned with business firm.
Reason(R): Accounting information is presented in financial statements.
Codes:
(A) (A) is correct, but (R) is wrong
(B) Both (A) and (R) are correct
(C) (A) is wrong, but (R) is correct
(D) Both (A) and (R) are wrong Ans: B)
23. The main objective of Accounting Standards is-
a) To prepare the accounting reports which is easily understood by common man
b) To comply with the legal formalities
c) To harmonise the diversified accounting practices
d) To comply with the requirements of the IAS Ans: c)
24. Given below are two statements:
I) Activity ratios show where the company is going.
II) Balance Sheet ratios show how the company stand
CODE:
(A) (I) is correct, but II is wrong
(B) Both I and II are correct
 (C) I is wrong but II is correct
(D) Both I and II are wrong Ans: B)
25. Income and expenditure account of non-profit organisation is a-
a) Real account c) Personal account
b) Nominal account d) Representative Personal Account
Ans: b)
26. Which of the following statements are correct?
a) Inventory includes raw materials, finished goods and work-in-progress
b) Inventory is a part of the working capital
c) Inventory includes goods likely to be purchased.
Codes:
a) A, B,C c) A and C
b) B and C d) A and B Ans: d)
27. If the current ratio is 2:1 and working capital is Rs 60,000, what is the value of the current Assets?
a) Rs 60000 c) Rs 1,20,000
b) Rs 1,00,000 d) Rs 1,80,000 Ans: c)
28. Consider the following items-
a) Debentures c) Prepaid rent
b) Interest accrued d) Bank Overdraft
Which of these are current liabilities?
a) 1,2,3 and 4 c) 2,3 and 4
b) 4 d) 1,2 and 3 Ans: b)

29. Consider the following:

1. Basic defensive and interval ratio
2. Current ratio
3. Super quick ratio
4. Quick ratio
Arrange these ratios in sequence to reflect the identify in descending order.
a) 2,4,3 and 1 b) 1,2,4 and 3
b) 4,2,3, and 1 d) 3,4,1 and 2 Ans: a)
30. Which one is not an important objective of Financial Management?
a) Profit Maximisation c) Value maximisation
b) Wealth maximisation d) Maximisation of social benefits
Ans: d)
31. Which one refers to cash inflow under payback period method?
a) Cash flow before depreciation and taxes
b) Cash flow after depreciation and taxes
c) Cash flow after depreciation but before taxes
d) Cash flow before depreciation and after taxes Ans: b)
32. The concept of present value is based on the-
a) Principle of compounding c) (A) and (B) both
 b) Principle of discounting d) None of the above Ans: b)
33. Cost of capital from all the sources of funds is called-
a) Specific cost c) Implicit cost
b) Composite cost d) Simple average cost Ans: a)
34. If opening Stock is Rs 10000, Net purchases Rs 70,000, wages Rs 2,500, carriage inward Rs 500 and
closing stock Rs 15,000. What is the manufacturing cost?
a) Rs 65,000 c) Rs 68,000
b) Rs 83,000 d) Rs 73,000 Ans: c)
35. What does a high pay-out ratio indicate?
a) A high EPS
b) The management is not ploughing back enough profit
c) The management is ploughing back profit
d) The company is earning high profit Ans: b)
36. Identify the statement of the following-
a) Balance sheet is always prepared from the point of view of the business, but not from that of the
owners.
b) The financial relationship of the business to its owners is shown in the balance sheet
c) Balance sheet is always related to a period of time.
Codes:
a) 1 and 2 c) 1 and 3
b) 2 and 3 d) 1,2 and 3 Ans: a)
37. X and Y are partners in a firm sharing profits in the ratio of 2:1. Z is admitted with 1/3 profit sharing.
What will be the new profit sharing ratio of X, Y and Z?
a) 3:3:3 c) 4:2:3
b) 4:3:2 d) 2:3:4
Ans: c)
38. Which of the following will not affect the working capital?
a) Realisation of cash from debtors
b) Sale of plant and machinery in cash
c) Issue of equity shares
d) Redemption of debentures Ans: a)
39. Assertion (A): When accompany earns profit prior to its incorporation, it is called Capital profit
Reason(R): Capital profit cannot be used for distribution as dividend to the shareholders.
Codes:
a) (A) is correct, but (R) is wrong
b) Both (A) and (R) are correct
c) (A) is wrong but (R) is correct
d) Both (A) and (R) are wrong Ans: b)
40. Reconstruction of the company takes place when-
a) The company is undercapitalised
b) Company has incurred heavy losses which must be written off
c) The company is overcapitalised
Which of the following is correct?
a) 1 and 2 only c) 2 and 3 only
 b) 1 and 3 only d) All of the above Ans: c)
41. Match the following
List I List II
a. Leverage ratio 1. Short term solvency
b. Liquidity ratio 2. Earning capacity
c. Turnover ratio 3. Relationship between debt and equity
d. Profitability ratio 4. Efficiency of Asset Management
Codes:
(a) (b) (c) (d)
(A) 2 1 4 3
(B) 3 2 1 4
(C) 4 3 1 2
(D) 3 1 4 2
Ans: D)
42. Assertion (A): Sinking fund is a charge against profit and loss account
Reason(R): Sinking fund is created for repayment of a long term liability.
Codes:
(A) (A) is correct, but (R) is wrong
(B) Both (A) and (R) are correct
(C) (A) is wrong but (R) is correct
(D) Both (A) and (R) are wrong Ans: B)
43. Match the following
List I List II
a. Goodwill of a company 1. Current liability
b. Overdraft 2. Fixed assets
c. Preliminary expenses 3. Reserves and surplus
d. Premium on issue of shares 4. Fictitious assets

Codes:
(a) (b) (c) (d)
(A) 2 1 4 3
(B) 1 2 4 3
(C) 1 2 3 4
(D) 2 1 3 4
Ans: A)
44. What is the correct sequence of the following actions required for the preparation of financial accounts?
a) Trading accounts
b) Making adjusting entries
c) Balance sheet
d) Profit and loss account
Select the correct answer from the codes given below-
Codes-
a) 4,2,1,3 c) 2,1,4,3
b) 2,4,3,1 d) 4,2,3,1 Ans: c)
45. The main effect of inflation on the financial statement is-
 a) Profits are understated
b) Overstatement of assets
c) Adequacy of funds for replacement of assets
d) Erosion of capital Ans: d)

(JUNE 2013)
46. Responsibility accounting aims to :
a) Ensure that a manager is punished, if things go wrong
b) Ensure that costs become the responsibility of a specific manager
c) Allocate costs to all areas of a business
d) Reduce the costs that a department incurs Ans: b)
47. Interim cash inflows are reinvested at a rate of return equal to the internal rate of return is the built-in –
mechanism for:
a) Net Present Value Method
b) Internal Rate of Return
c) Profitability index method
d) None of the above Ans: a)
48. Which of the following items would be specifically included in the statement of cash flows constructed
in compliance with AS-3?
a) Conversion of debt to equity
b) Acquiring an asset through lease
c) Operating and non-operating cash flow information
d) Purchasing a building by giving a mortgage to the seller Ans: c)

49. Which of the following is a non-operating expense?

a) Salary of Managing Director
b) Depreciation
c) Advertisement expenditure
d) Interest on Loan Ans: c)
50. Improvement of profit volume ratio can be done by-
a) Increasing selling price c) Reducing variable cost
b) Altering sales mixtures d) All of the above Ans: d)

(DECEMBER 2013)
 51. The most suitable coverage ratio for deciding the debt capacity of a firm-
a) Interest Coverage ratio c) Debt Service Coverage Ratio
b) Cash flow coverage ratio d) Fixed Assets Coverage Ratio Ans: b)
52. Which of the following is the most popular method for estimating the cost of equity?
a) Capital asset pricing model c) Gordon’s dividend discount model
b) Dividend yield method d) earnings yield method Ans: a)
53. Which of the following is not the internal factor affecting the weighted average cost of capital of a
firm?
a) Investment policy of the firm c) Dividend policy followed
b) Capital structure of the firm d) Market risk premium for the firm
Ans: d)
54. Most common approach for analysing the capital structure of a firm is-
a) Ratio Analysis c) Comparative analysis
b) Cash flow analysis d) Leverage analysis Ans: c)
55. Match the following:
List I (name of the securities) List II ( Type of the securities)
a) Bonds of land development banks 1. Semi government securities
b) Treasury bills 2. First order securities
c) Shares of public Ltd. Co. 3. Personal securities
Codes:
(a) (b) (c)
(A) 1 2 3
(B) 2 1 3
(C) 3 2 1
(D) 1 3 2 Ans: A)
56. The present value of the future contributions of employees is one of the methods of-
a) HR accounting c) Social Accounting
b) Inflation accounting d) Responsibility accounting Ans: a)
57. Match the following
List I List II
a) Zero-base budgeting 1. Internal reconstruction
b) Goodwill or capital Reserve 2. Earnings Per Share
c) Reduction of capital 3. Control of expenditure
d) Basic and diluted 4. Business Combination
Codes:
(a) (b) (c) (d)
(A) 3 4 2 1
(B) 4 3 1 2
(C) 4 1 3 2
(D) 3 4 1 2
Ans: D)

58. Assertion (A): Dividend paid out of pre-acquisition profit by the subsidiary company to the holding
company is deducted from the cost of investment.
 Reason (R) : Dividend paid out of pre-acquisition profit by the subsidiary company should be treated as
a return of capital to the holding company.
Which of the following is correct?
(A) Both (A) and (R) are correct
(B) (A) is correct, but (R) is wrong
(C) (a) is wrong, but (R) is correct
(D) Both (A) and (R) are wrong
Ans: A)
59. Mutually exclusive projects can be more accurately ranked as per-
a) IRR method c) Modified IRR method
b) NPV method d) ARR method Ans: b)

(JUNE 2014)

60. A partner in a firm is drawing Rs 500 regularly on the 16 thof every month. He will have to pay interest
at the given rate in a year on Rs 6000 for the total period of

a) 5 months c) 6 months
b) 7 months d) 12 months Ans: c)
61. Subsequent expenditure that extend the useful life, improve the quality of output, or reduce operating
costs of an existing asset beyond their originally estimated levels are –
a) Capital expenditure c) Deferred Revenue expenditure
b) Revenue expenditure d) None of the above Ans: a)
62. The debt equity ratio of a company is 2:1. In this relation, match the following:–
List I List II
a) Issue of equity shares 1. No changes on the ratio
b) Cash received from debtors 2. Reduce the ratio
c) Redemption of debentures 3. No changes on the ratio
d) Purchased goods on credit 4. Reduce the ratio

Codes:
(a) (b) (c) (d)
(A) 1 2 3 4
(B) 2 3 4 1
(C) 1 3 4 2
(D) 2 4 1 3 Ans: b)

63. A firm wants to know the Degree of Operating Leverage (DOL) with the following information :–
Current level of sales : 6000 units
Break-even point sales : 4000 units
What would be the DOL ?
 a) 1.50 c) 3.00
b) 0.67 d) None of these Ans: c)
64. Assertion (A): Weighted average cost of capital should be used as a hurdle rate for accepting or
rejecting a capital budgeting proposal.
Reason ( R):It is because by financing in the proportions specified and accepting the project, yielding
more than the weighted average required return, the firm is able to increase the market price of its stock.

Codes:
a) Both ( A) and (R) are false
b) Both (A) and (R) are true
c) (A) is true, while (R) is true
d) (A) is false, while (R) is true Ans: b)
65. Which is not the limitation of budgetary control?
a) Budgets are based on the forecasts which may not be true
b) Installation and operation of a system of budgetary control is costly
c) Budget is a tool of management and not a substitute of management
d) Budgets do not pinpoint the lack of efficiency or the presence of it. Ans: d)
66. If debt is Rs 220, cash balance is Rs 20 and equity is Rs 300, then the gearing ratio is-
a) 20% c) 40%
b) 50% d) 30% Ans: c)

(JUNE 2015)

67. A retiring partner continues to be liable for obligations incurred after his retirement
a) If unpaid amount is transferred to his loan account
b) If he does not give public notice
c) If he starts a similar business elsewhere.
d) In all the situation till he survives Ans: b)
68. In what order, the following assets are shown in the balance sheet of a company?
a) Trade receivables
b) Cash
c) Furniture and fittings
d) Investment in shares and debentures
Codes:
1. b, a, d, c 3. a, b, c, d
2. c, d, a, b 4. d, c, b, a Ans: 2)
69. When opening stock is Rs 50000, closing stock is Rs 60000 and the cost of goods sold is Rs 2,20,000,
the stock turnover ratio is:
a) 2 times c) 4 times
b) 3 times d) 5 times Ans: c)
70. If, stock turnover ratio is 6 times, average stock is Rs 8000, Selling price is Rs 25% above cost
What is the amount of gross profit?
 a) Rs 2000 c)Rs 10,000
b) Rs 4000 d)Rs 12,000 Ans: d)
71. Preparation of consolidated statement of accounts as per AS-21 is :
a)Optional b) Mandatory for Private Ltd. Companies
c) Mandatory for Listed companies d) Mandatory for all companies
Ans: c)

72. Which one of the following is not true of cash Budget?

a) The shortage or excess of cash would appear in a particular period.
b) All inflows would arise before outflows for those periods.
c) Only revenue nature cash flows are shown
d) Proceeds from the issue of share capital is shown as an inflow. Ans: c)

73. Study the following transactions:

a) Raising of the short term loans c) Payment of the bonus in the form of shares
b) Goods purchased for cash d) Issue of shares in lieu of raw materials
Flow of funds is:
1. a,b,c and d 2. b,c and d
3. c and d 4. Only d
Ans: 4)

(DECEMBER 2015)
74. Interest on loan taken for the purchase of fixed assets is a :
a) Revenue expenditure b) Capital expenditure
c) Deferred revenue expenditure d) Capital loss Ans: b)

75. Dual aspect concept is results in the following accounting equations:

a) Revenue = Expenditure b) Capital+ profit= Assets +expenses
c) Capital + liabilities= Assets d) Capital + Drawings = Owner’s equity
Ans: c)
76. Match the following:

Column I Column II
a) Materiality concept i) The same accounting method used by a firm from period to
another
b) Going concern concept ii) An inappropriate assumption of a firm being bankrupt
c) Historical cost concept iii) A normal basis used for accounting assets
d) Consistency concept iv) Relates to the importance of an item or event

Codes:
(a) (b) (c) (d)
(A) iv ii iii i
(B) i ii iii iv
(C) ii iii iv i
(D) iv ii i iii Ans: A)
 77. X ltd has a liquid ratio of 2:1. If its stock is Rs 40000 and its current liabilities are of Rs 1 lakh, its
current ratio will be:
a) 1.4 times b) 2.4 times
c) 1.2 times d) 3.4 times Ans: b)

78. When a business is purchased, any amount paid in excess of the total of assets, minus the liabilities taken
is called:
a) Share premium b) Goodwill
c) Capital employed d) Working capital Ans: b)

79. Indicate the correct code as regards the sources of funds for a fund flow statement from the following:
a) increase in working capital
b) Decrease in working capital
c) Writing off the intangible / fictitious assets
d) Issuing equity shares for acquisition of a building for office
e) Charging depreciation on fixed assets
Codes:
a) a, c, d b) b, c, e c) a, d, e d) b, c, d Ans: b)

80. Which of the following statements are correct?

a) Analysis and interpretation of financial statements is a function of accounting
b) Profit and loss account is prepared for ascertaining financial position of a firm
c) Goodwill is a wasting asset
d) Balance sheet is prepared for ascertaining financial position of a firm.
Codes:
a) a and b b) a and c c) a and d d) b and c Ans: c)
81. Match the following:
List I List II
a) Debtors turnover Ratio i) Solvency ratio
b) Proprietary ratio ii) Liquidity ratio
c) Operating ratio iii) Activity ratio
d) Acid test ratio iv) Profitability ratio
Codes:
(a) (b) (c) (d)
(A) ii iv iii i
(B) iii ii i iv
(C) iii i iv ii
(D) iv iii ii I Ans: c)
82. Ram and Shyam are partners in a firm with capital of Rs 4, 80,000 and Rs 3, 10,000 respectively. They
admitted Ganesh as a partner with 1/4th share of profit. Ganesh brings Rs 3, 00,000 as his capital.
Ganesh’s share of goodwill be:
a) Rs 1,10,000 b) Rs 27,500 c) Rs 17,500 d) Rs 70,000
Ans: b)

(JULY 2016)
83. X LTD purchased 70% of the shares of Y ltd at a price of Rs 1, 00,000. Share capital of Y ltd was of Rs
70,000 and its accumulated profit is Rs 90,000. What will be the amount of minority interest in the
consolidated balance sheet?
a) Rs 25,000 b) Rs 70,000 c) Rs 1, 00,000 d) Rs 40,000

84. A, B, and C are the partners in a firm, sharing profits and losses in the ratio of 4:3:2. They agreed to take D
into partnership and give him 1/8 share. What will be their profit sharing ratio?
a) 4:3:2:1 b) 28:21:14:9 c) 28:21:14:8 d) 4:1:2:1 Ans: b
85. Which of the following is not a cash flow?
a) Decrease in debtor b) Decrease in creditor
c) Issue of shares d) Sale of fixed assets Ans: a

AUGUST (2016)
86. According to which of the following categories of activities, a cash flow statement should be prepared as per
AS 3?
a ) cash flow from operating activities
b ) cash flow from investing activities
c ) cash flow from financing activities
d ) cash flow from production activities
e ) cash flow from selling activities
codes
1)a,b,c 2 ) a,b,c,d,e 3) a,b 4 ) b ,c, d, e ans - 1
87. Capital in the business is treated as liability due to
a ) duel aspect concept
b ) business entity concept
c ) going concern concept
d ) accrual concept ans – b

88. while preparing cash flow statement suggest the correct code for the items treated as cash and cash
equivalents:
a) balance in the current with Allahabad bank
b) investment in 5 years government bonds maturing after 1 week
c) investment in the share of a subsidiary company
d ) investment in equity mutual funds
e ) fixed deposit with SBI maturing after 1 year
codes
1) a,b,c 2 ) a,c,d 3) a,c 4) a, b ans - 4
89. The directors of X ltd resolved to forfeit 2000 equity shares of Rs 10 each. On these shares Rs 7.50 per
share was paid up, but final call of rs 2.50 per share was unpaid. 1000 of the forfeited share were reissued
at rs 7 per share. Capital reserve account will be credited by
 a ) Rs 4500 b )Rs 7500 c) Rs 2500 d ) Rs 5000 ans – a

(NOVEMBER 2017)
90. Assertion (A): Debt-Equity ratio indicates the long term solvency of a company.
Reason(R) : It measures the ability of the company to pay off its long term liabilities.
Codes: a) Both (A) and (R) are correct and (R is the correct reason for (A).
b) Both (A) and (R) are correct but (R) does not explain (A) correctly.
c)(A) is correct but (R) is wrong.
d)(A) is wrong but (R) is correct Ans: a)
91. Goodwill of firm of X and Y is valued at Rs 30,000. It is appearing in the books at Rs 12,000. Z is admitted
for ¼ shares. What amount he is supposed to bring for goodwill?
a) Rs 3000 b) Rs 4500 c) Rs 7500 d) 10,500 Ans: c)
92. A Ltd issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000
shares and pro-rata allotment was made on the application of 2,400 shares. If A has been allotted 40
shares, how many shares he must have applied for?
a) 40 b) 44 c) 48 d) 52 Ans: c)

(JULY 2018)
93. Which of the following is not true?
a) An expenditure intended to benefit current year is revenue expenditure
b) Amount paid for acquiring goodwill is capital expenditure
c) Wages paid for installation of a new machine is usually debited to wages account
d) Revenue expenditure is not intended to benefit future period. Ans: c)

94. X Ltd forfeited 20 shares of Rs 10 each, RS 8 called up, on which John had paid application and allotment
money of Rs 5 per share, of these, 15 shares were reissued to Parker as fully paid up for Rs 6 per share.
What is the balance in the share Forfeiture account after the relevant amount has been transferred to
Capital Reserve Account?
a) NIL b) Rs 5 c) Rs 25 d) Rs 100 Ans: c)

95. X and Y sharing profits in the ratio of 7:3, admit Z for 3/7 share in the new firm in which he takes 2/7 from
X and 1/7 from Y. The new ratio of X, Y and Z will be,
a) 7:3:3 b) 4:2:3 c) 14:6:15 d) 29:11:30 Ans: d)

96. Assertion (A): A high operating ratio indicates a favourable position

Reason (R): A high operating ratio leaves a high margin to meet non-operating expenses.

Codes:
1. (A) and (R) both are correct and (R) correctly explains (A)
2. Both (A) and (R) are correct, but (R) does not explain
3. Both (A) and(R) are incorrect
4. (A) is correct but (R) is incorrect Ans: 3)
97. Statement I: Accounting profit is a surplus of total revenue over and above all paid-out costs, including
both manufacturing and overhead expenses.
Statement II: Economic or pure profit is a residual left after all contractual costs have been met,
including the transfer costs of management, insurable risks, depreciation and payments to
shareholders sufficient to maintain investment at its current level.
Code:
 1. Both the statements are correct
2. Both the statements are incorrect
3. I is correct and II is not correct
4. II is correct and I is incorrect Ans: 1)
98. Consolidated financial statements are prepared on the principle
a) In form the companies are one entity, in substance they are separate
b) In form companies are separate, in substance they are one.
c) In form and substance the companies are one entity.
d) In form and substance the companies are separate. Ans: c)

99. Match the following:

List I List II
a. Acid Test Ratio i. Profitability analysis
b. Debt Service coverage ratio ii. Activity analysis
c. Debt equity ratio iii. Liquidity analysis
d. Stock turnover ratio iv. Long-term solvency analysis
Codes:
a b c d
(1) ii i iii Iv
(2) ii iii iv I
(3) iii iv i Ii
(4) iii i iv ii
Ans: (4)
100. If sales of a firms are Rs 74 lakh, variable costs Rs 40 lakh, fixed costs Rs 8 lakhs, then operating leverage
of the firm will be:
a) 1.87 b) 1.31 c) 2.51 3.27 Ans: b)

MCQ’S QUESTION BANK - AUDITING

1. The main object of audit is
a) Expression of opinion b) detection and prevention of fraud and error
c)both (a) and (b) d) depends on the type of audit
ans – d
2. which of the following is not a limitation of audit as per AAS -4 ?
a) objectivity of auditor’s judgment b) selective testing
c) persuasiveness of evidence d) limitations of internal control system.
Ans – a
3 . auditing standards differ from audit procedures in that procedures relate to
a) audit assumption b) acts to be performed
c ) quality criterion d) methods of work
ans – b
4 . The most difficult type of misstatement to a detect fraud is based on
a) related party purchases b ) related party sales
c) the restatement of sales d ) omission of a sales transaction from being recorded.
 Ans- d

5 . professional skepticism requires that the auditor assume that management is

a) reasonably honest b ) neither honest nor dishonest
c)not necessarily honest d )dishonest unless proved otherwise
Ans – b
6 . audit of banks is an example of ---------
a ) statutory audit b ) balance sheet audit
c ) concurrent audit d ) both (a) and (b)
e )all of the above Ans – e
7. concurrent audit is a part of ------------
a) internal check system b ) continuous audit
c) internal audit system d )none Ans –c

8. Balance sheet audit include verification of -------------

a) Assets b ) liabilities
c) Income and expense accounts where appropriate d) all the above
Ans –d
9. which of the following factor is most important in determining the appropriation of audit evidence ?
a ) the reliability of audit evidence and its relevance in meeting the audit objective
b ) the objectivity and integrity of the auditor
c ) the quantity of audit evidence
d ) the independence of source of evidence ans- a
10. audit programme is prepared by
a) The auditor b ) the client
c ) the audit assistants d )the auditor and his audit assistants
Ans-d

11. The working papers which auditor prepares for financial statements audit are :
a) Evidence for audit conclusions b) Owned by the client
c) Owned by the auditor d) Retained in the auditor’s office until a change
Ans-c

12. The auditor’s permanent working papers file should not normally include,
a) Extracts from client’s bank statements b) Past year’s financial statements
c) Attorney’s letters d) debt agreements
Ans-a
13. The current file of the auditor’s working papers, generally includes:
a) A flowchart of the internal controls b) Organization chart
c) A copy of financial statements d) Copy of bond and debenture

Ans: C
 14. Which of the following sections deals with qualification of the auditor?
a) Section 226 (1) and Section 226(2) b) Section 224 (1)and Section 224(2)
c) Section 226(3) and section 226 (4) d )section 224 (3) and section.224
ans –a
15. As per the requirements of section 226(3) and 226(4)a person is disqualified from being
appointed as a statutory auditor if he holds-
a) equity share or debentures of the company
b ) equity shares carrying voting of the company
c ) shares carrying voting rights of the company
d ) security carrying voting rights of the company
ans- d
16. The board of directors shall appoint first auditor of a company
a) with in one month of completion of capital subscription state of the company
b) with in one month of the promotion of the company
c) with in one month of the commencement of the business of the company
d) with in one month of incorporation of the company ans- d
17. In case the direction fail to appoint first auditor (s) , the shareholders shall appoint them at …….. by
passing a resolution
a ) a general meeting b ) first annual general meeting
c ) statutory meeting d ) annual general meeting
Ans:a

18. Life insurance corporation of india holds twenty five percent of subscribed of capital of XYZ ltd.
The appointment of statutory auditor in XYZ ltd . would be by ----------
a ) ordinary resolution b ) special resolution
c ) a or b d) none of the above
ans:b
19. Auditor of a ………… company does not have the authority to visit the foreign branches of the
company.
a) Unlimited liability b) Manufacturing c) Banking d) Non-profit Making
Ans: b
20. In order to vouch, which of the following expenses, the auditor will examine in Bill of Entry?
a) Custom b) Excise duties c) Sales tax d) Income tax
Ans: a
BUSINESS ECONOMICS
NET 2012 JUNE
1. Which of the following refers to Perfect competition ?
i) There are restrictions on buyers and sellers
ii) There are no restrictions on movement of goods
iii) There are no restrictions on factors on production correct one is
a. Only (i) and (ii)
b. Only (ii) and (iii)
c. Only (i) and (iii)
d. Only (i)
Answer B
2. Assertion (A): Total utility will be maximum when marginal utility to price of respective products are equal.
Reason (R) : Deviation from this situation leads to reduction in maximum utility
a. (A) and (R) are not correct
b. (A) is correct but (R) is not correct
c. (A) and (R) are correct
d. (A) is in correct, (R) is correct
AnswerC
3. Consider the Oligopoly models:
i) Sweezy’sKinked demand curve model
ii) Newman and Morgenstern Game theory model
iii) Cournal’s Duopoly model
iv) Baumal’s sales maximization model arrenge them in correct sequence as per order of evolution
Codes
a. (iv), (iii), (ii),(i)
b. (ii), (i), (iii), (iv)
c. (iii), (i), (ii), (iv)
d. (i), (iii), (ii), (iv)
Answer C
4. A commodity is used for multiple purpose, and then the demand for it is known as
a. Joint demand
b. Composite demand
c. Direct demand
d. Autonomous demand
Answer B
5. Match the items of List- I with those in List –II and select the correct code for the answer
List I List II
a. Contraction of demand i. Non price change effect
b. Decrease in demand ii. Demand curve remains the same
c. Increase in demand iii. Price change effect
d. Expansion of demand iv. Shifts the demand curve
Codes:
 (a) (b) (c) (d)
A. (iii) (i) (iv) (ii)
B. (iv) (iii) (ii) (i)
C. (i) (ii) (iii) (iv)
D. (ii) (iv) (i) (iii)
Answer A
NET December 2012
6. Assertion (A) : Business economics is tool Centrics facilitating decision making in business.
Reason (R) : It provides an analytical understanding of economic activities.
Codes :
a. Both (A) and (R) are not correct
b. Both (A) and (R) are correct .
c. (A) is true, but ® is false
d. (R) is true, but (A) is false

Answer B
7.Demand has the following elements-

a. Quantity
b. Price
c. Time
d. All of the above

Answer D
8.Kinked demand curve is curve is related with –
a. Monopoly
b. Discriminating monopoly
c. Oligopoly
d. Perfect competition
Answer C
9.If price of any commodity decreases by 20% and the demand for that commodity increases by 40%, then
elasticity of demand would be-
a. Perfectly elastic
 b. Perfectly inelastic
c. Unit elastic
d. Highly elastic
Answer D
10.In perfect competition, the demand curve of a firm is-
a. Vertical
b. Horizontal
c. Positively sloped
d. Negatively sloped
Answer B
NET JUNE 2013
11. Match the items of List I with the items of List II and select the correct answer
List I List II
a. Indifference curve i. Slope downword to the right
b. Demand curve ii. P=AR=MR=d
c. Perfect competition iii. Oligopoly
d. Price leadership iv.Convex to the origin
Codes :
(a) (b) (c) (d)
(A) (ii) (iii) (iv) (i)
(B) (iii) (iv) (i) (ii)
(C) (iv) (i) (ii) (iii)
(D) (i) (ii) (iii) (iv)
Answer C
12. Price, Marginal Revenue and Elasticity are related to each other. When e=1, then:
a. MR>0
b. MR <0
c. MR=0
d. MR=1
Answer C
13. Consumer attitudes and beliefs about diet, health and nutrition are influenced by
a. Economic environment
b. Cultural environment
c. Social environment
d. Natural environment
Answer B
NET July 2013
14. TVC +TFC =
a. FC
b. VC
c. TFC
d. TC
Answer D
15. ‘Extention of demand’ means
a. More quantity demanded at a lower price
b. More quantity demanded at a higher price
c. More quantity demanded at the same price
d. None of these
Answer A
16. The short run supply curve of market always
a.Slope upward from left to right
b. Slope downward from left to right
c. Slope horizontally
d. None of these
Answer C
17. Dumping means selling at
a. Higher price in home market and a lower price in foreign market
b. A lower price in the home market and a higher price in the foreign market
c. The same price in the home and the foreign market
d. None of the above
Answer B
18. If the supply of a factor cannot be increased in the short period and demand for it increase it will;
a. Earn an economic rent
b. Earn a quasi-rent
c. Earn a windfall profit
d. Increase its transfer earnings
Answer B
NET 2014 JUNE
19. Which one of the following does not explain the basic nature of business economics
a. Behaviour of firms in theory and practice
b. Distribution theories like rent, wages and interest along with the theory of profit
c. Use of the tools of economic analysis in clarifying problems in organizing and evaluate information and in
comparing alternative course of action.
D. Integration of economic theory with business practices for the purpose of facilitating decision making.
Answer B
20. At a point of satiety for a commodity the marginal utilities
a. Negative
b. Positive
c. Zero
d. Highly positive
Answer C

21. A rectangular hyperbola shaped demand curve on all its points has
a. Equal slopes and equal point elasticities
b. Unequal slopes and unequal point elasticities
c. Unequal slopes and equal points elasticities
d. Equal slopes and unequalpoint elasticities
Answer C
22. Match the items of List I and List II and indicate the correct code.
List I List II
a. Absolute cost advantage Theory i.The empirical evidence based on US
export of labor intensive goods challenging
the factor endowment theory.
b. Comparative cost advantage theory ii. A country having a direct cost advantage
in the production of a product on account of
greater efficiency.
c. Factor Endowment Theory iii. A country should produce and export a
commodity that primarilyinvoles a factor of
production abundantly available with in the
 country.
d. Leontief Paradox iv. A country should specialized in the
production and export of a commodity in
which it is possesses greatest relative
advantage.
Codes:
a. b. c. d.
1) ii iv iii i
2) ii iv i. iii
3) ii. i. iii. iv.
4) I iv iii ii.
Answer 1
23. When income effect become stronger than substitution effect, the labour supply curve will
a. slope positively
b. Negatively sloped
c. Bend backward
d. slope upwards
Answer B

24. predatory pricing policy is designed to

a. Drive competitors out of business
b. Maximize profits
c. Encourage entrants into the market
d. Attain least cost output
Answer A
25. An industry whose long run supply curve is horizontal is called
a. Constant cost industry
b. Increasing cost industry
c. Decreasing cost industry
d. Efficient industry
Answer A
26. The practice of charging each consumer the reservation price is called
a. peak load pricing
b. Inter temporal price discrimination
c. First degree price discrimination
d. Third degree price discrimination
Answer C
27. If the demand of the domestic consumers is infinitely elastic and the supply of the foreign producer is
perfectly inelastic, then the whole of the tariff will
a. be paid by the domestic consumers
b. be paid by the foreign producer
c. be equally shared by the domestic consumers and the foreign producer
d. yield neither revenue nor protection to either of them
Answer B
28. Which of the following are the basic assumptions of cardinal utility analysis?
a. Utility is a measurable and quantifiable entity
b. Marginal utility of money changes with changes in real income.
c. Utilities derived from various goods are inter-dependent
d.The use of introspective method in the judging the behaviour marginal utility.
Answer C

29. The oligopoly model in which the businessman assumes that his competitors output are fixed and
simultaneously decide how much to produce is
a. Cournot oligopoly model
b. Stackelberg oligopoly model
c. Chamberlin’s oligopoly model
d. Bertrand oligopoly model
Answer A
30. When the aggregate supply schedule is positively sloped, continuous increases in the nominal money
supply, ceteris perilous, result in
a. No change in the price level and proportional increases in real output
b. No change in real output and proportional increases in the price level.
c. An increase in the price level and real output
d. An increase in the price level and a decrease in real output
Answer C
31. A tax imposed upon monopoly profits
a. Can be shifted forward.
b. can be shifted backward
c. Can be shifted both forward and backward
d. cannot be shifted
Answer D
32. The percentage changes in demand due to a change in consumer income is
a.Income elasticity of demand
b. Cross elasticity of demand
c. Price elasticity of demand
d. None of the above
Answer A
33. The maximum price that a buyer will agree to pay for a commodity will no exceed
A. Total utility
b. Marginal utility
c. Average utility
d. None of the above
Answer B
34. When the supply is in inelastic, the entire burden of sale tax are Excise tax is borne by:
a .Producer
b. government
c. Consumer
d. None of the above
Answer A
35. Which among these is false about isoquants?
a. Isoquants are negatively sloped
b. Isoquants intersect each other
c. Isoquants are convex to the origin
d. None of the above
Answer B
NET DECEMBER 2014
36. Monopolists prefer to sell the products in the market with
a. Elastic demand
b. Unitary elastic demand
c. Inelastic demand
d. Absence of elasticity of demand
Answer A
37. Assertion (A): In long run under perfect competition all firms invariably get only normal profit .
Reason (R): All firms incure minimum average cost and incure no selling cost due to absence of product
differentiation .
Codes:
(A) Assertion(A) and Reasoning(R)Both are correct.
(B) Assertion(A) is correct but Reasoning (R) is incorrect
(C) Assertion(A) is in correct, but reasoning(R) is correct
(D) Assertion(A) and Reasoning(R) both are incorrect
Answer C
38. Cost – Plus pricing is considered appropriate for
I. Product tailoring II. Public Utility Pricing
III. Refusal pricing IV. Monopoly pricing
Codes:
a. I and II only b. I , II and III only
c. II , III and IV only d. III and IV only
Answer B
39. Statement (A): The Isoquant curves are drawn convex to the origin due to diminishing technical rate of
substitution.
Statement (B) : The Lesser the convexity of the isoquant curve the greater curve the greater the possibility of
the complementarity of two inputs .
Codes:
a. Statement(A) and ( B) both are correct
b. Statement (A) is correct but (B) is incorrect
c. Statement (A) is incorrect but (B) is correct.
d. Statement (A) and (B) both are incorrect.
Answer B
40.Match the Items of the List- I with those of List – II and suggest the correct code
List- I List – II
a. Constant average cost over a range of output i. Economic capacity
b. Average cost becomes constant momentarily ii. Reserve capacity
c. Normal average cost is a U- shaped curve iii. Production and Managerial costs
effects
d. Modern long –run average cost is L-shaped iv. Economics and diseconomies
Codes:
a. b. c. d
A. i. ii. iii. iv
B. ii. iii. iv. i.
C. iii. iv. ii. i.
D. ii. i. iv. iii
Answer D

NET June 2015

41. A rectangular hyperbola shaped demand curve on all its points as
a. Equal slopes of the price demand curve
b. Price elasticity equal to unity
c. Varying price elasticity
d. Both slope and price elasticity equal
Answer B
42. In case of short run equilibrium, a perfectly competitive firm while earning abnormal profits operates at an
output level where?
a. Marginal cost is the minimum
b. Average cost is the minimum
c. Both marginal cost and average cost are equal
d. Marginal cost is higher than average cost
Answer D
43. Which one of the following statement is false?
a. Normally, a price demand curve slopes downward from left to right
b. Economies of scale and Economies of scope are the same
c. For optimization, equality between marginal cost and marginal revenue is a necessary condition but it is not
a sufficient one.
d. Law of variable proportions denotes input-output relationship during short-run
Answer B
44. match the items of List – I with the items of List II:
List- I List- II
a. Law of diminishing marginal utility i. Cross demand
b. Relationship between price of one commodity
and commodity and demand for other commodity ii Ologopoly
c. Skimming the cream policy iii. Cardinal approach
d. Price rigidity iv. Pioneer pricing
Codes:
(a) (b) (c) (d)
1. (i) (ii) (iii) (iv)
2. (iii) (i) (ii) (iv)
3. (ii) (iv) (i) (iii)
4. (iv) (iii) (ii) (i)
Answer A
45. The following are the demand and supply equations in a perfectly competitive market:
P= 12+0.3Qs
P=40-0.4 Qd
The equilibrium market price would be:
a. 24
b. 10
c. 40
d.20
Answer A

NET June 2015 paper II

46. A rectangular hyperbola shaped demand curve on all its point has :
a. Equal slopes of the price demand curve
b. Price elasticity equal to unity
c. varying price elasticity
d. Both slope and price elasticity equal.
Answer B
47. In case of short- run equilibrium, a perfectly competitive firm while earning abnormal profits operates at an
output level where :
a. Marginal cost is the minimum
b. Average cost is the minimum
c. Both marginal cost and average cost are equal.
d. Marginal cost is higher than average cost
Answer D
48. Which one of the following statements is false?
a. Normally, a price demand curve slopes downward from left to right.
b. Economics of scale and economies of scope are the same.
c. For optimization, equally between marginal cost and marginal revenue is a necessary condition but it is not a
sufficient one.
d. Law of variable proportions denotes input- output relationship during short –run.
Answer B
NET JUNE 2015 Paper III
49. In the short run, when a simple monopoly firm attains equilibrium and earns only normal profit, its level of
output will correspond to :
a. Lowest average cost
b. average cost above optimum level of output
c. Average cost equals marginal cost
d. marginal cost much below average cost
Answer D
50. In case the elasticity of demand on an average revenue curve is equal to unity, the marginal revenue will be :
a. More than unity
b. Equal to unity
c. Equal to a fraction of unity
d. Equal to zero
Answer D
51. Match the items of List – with those of the List-II and indicate the correct code :
List – I List- II
a. Excess capacity of the plant i)Cost reduction with output expansion
b. Resorting to new technology ii) Constant cost with output expansion
c. Setting up of the training institutions iii) Internal economies
d. Reserve capacity of the plant iv) External economies
Codes:
 (a) (b) (c) (d)
1 (i) (iii) (iv) (ii)
2 (iii) (i) (iv) (ii)
3 (ii) (iii) (i) (iv)
4 (iv) (ii) (iii) (i)
Answer A

52. Match the items of the List –I with those of the List- II and indicate correct code:
List-I List- II
a. Trade channel discount i) Oligopoly
b. Loss leadership ii) Locational price differentials
c. Pricing being non – responsive to change in iii) Differential pricing
the demand and the cost
d. Basic point pricing iv) Product – line pricing
Codes:
(a) (b) (c) (d)
1. (iv) (iii) (ii) (i)
2. (iii) (iv) (i) (ii)
3. (ii) (iii) (iv) (i)
4 (i) (ii) (iii) (iv)
Answer B
53. For the following two statements of Assertion (A) and Reasoning (R), indicate the correct code:
Assertion (A) : The quantity of a commodity demanded invariably changes inversly to changes in its price.
Reasoning (R) : The effect is the net result of the positive substitution effect and negative income effect.
Codes :
a. (A) and (B) both are correct
b. (A) is correct but (R) is incorrect
c. (A) is incorrect but (R) is correct
d. (A) and (R) both are incorrect.
Answer C

54. Economic capacity of a plant representation its :

a. Maximum physical output level
b. Average output level over a period
c. Break even output and sales level
d. Output level that equates the average and the marginal costs.
Answer D
55. Perfectly inelastic demand exist when:
a. ed = 0 b.ed = 1
c.ed< 1 d. ed> 1
Answer A
56. Break Even point is a point in which;
a. No profit and no loss is earned
b. Profit just starts accuring
c. losses are being incurred by the firm
d. None of the above
Answer A
57. which among these is true?
a. TFC = TVC+ TC
b. TFC+TVC =TC
c. TFC-TVC = TC
d. TFC-TC = TVC
Answer A

58. -------- is the locus of all the combinations of two factors of production that yield the same level of
satisfaction
a. Isoquant
b. MRTS
c. Isocosl
d. None of the above
Answer A
59. Two goods are substitutes when
a. Their elasticity of demand is positive
b. They satisfy the same need of the consumer
c. They are highly elastic
d. None of the above
Answer B
NET Dec 2015
60. Marginal rate of technical substitution is equal to :
a. Relative marginal utilities of factors
b. Elasticity of technical substitution
c. Both A and B
d. None of these
Answer A
61. The ‘Standard Costing’ is a tool or method of:
a. Cost control
b. Cost Reduction
c. Budgetary control
d. Ratio Analysis
Answer A
62. The equilibrium prices of duopoly model are obtained at the intersection of their reaction curves. It is
correct in the case of
a . Edgeworth model
b. Sweezy model
c. Bertrand’s duopoly
d. None
Answer C
63. The upper portion of the kinked demand curve is relatively
a. More inelastic
b. More elastic
c. less elastic
d. inelastic
Answer B
64. Excess capacity is the resort of free entry of firms with no price competition, according to
a. Keynes
b. Marshall
c. Joan Robinson
d. J.hicks
AnswerC
65. Which of the following curve is not unshaped?
a. AVC
b. AFC
c. AC
d. MC
Answer B
66. marginal cost curve cuts the average cost curve from below at;
a. Its lowest point
b. The left of the lowest point
c. Right of the lowest point
d. All the above
Answer A
67. Which economist stated the positive impact of monopoly?
a. Marshall
b. Adam Smith
c. Joseph schumpter
d. Pigou
Answer C
68. If the demand curve confronting an individual firm is perfectly elastic, then firm is
A. Price taker
b. Adjust output
c. Adjust price
d. All of these
Answer A
69. Concentration of monopoly is implemented under
a. FERA
b. MRTP
C. IRDA
d. FEMA
Answer B
70. Which costs are also known as social cost?
a. Economic cost
b. Product Cost
c. Fixed cost
d. Real cost
Answer D
NET 2016 JULY
71. Monopoly is not considered desirable from the point the point of view of the society mainly because the
monopolist endeavours to
a. Earn net revenue on sale of all goods including those involving no cost of production
b. Earn net revenue on sale of goods in short run as well as long run .
c. Charge different prices for the same product from the different categories of buyers.
d. Produce below economic capacity level when he exhibits satisfaction with normal profit only.
Answer D
72. ordinal utility analysis of the consumer’s behaviour is considered superior to the cardinal utility analysis
mainly due to
a. Assumption of the rationality of the consumers behaviour
b. Possibility of the derivation of the consumer’s demand
c. Bifurcation of price effects into income and substitution effects
d. Consideration of the available limited resources for satisfying consumer’ demand
Answer: C

NET 2017 NOVEMBER

73. Manufacturing of T.V sets and refrigerators and their pricing in India belongs to which one of the following
market structures ?
a. Monopolistic competition
b. Perfect competition
c. Monopoly
d. Oligopoly
Answer: A
74. The Kinked demand curve model of oligopoly was developed by
a. Augustincournot b.Stackelber
c. Edgeworth d.Sweezy
Answer: D
75..For the Success of the penetration price policy, which one of the following is not desirable?
a.Short-run and demand for the product to have elasticity greater than unity
b. availability of economies of large scale production
c. Product to have very low cross – elasticity of demand
d. Easy acceptance and adoption of the product by the consumers
Answer: C
76. Match the items of list-I with the items of list- II and indicate the code of their correct matching.
List I List II
a. Non- price quantity relationships of demand a. Extention and contraction of
demand
b. Income effect of a price rise greater than its b. Ordinal utility approach
Substitution effects
c. Transitivity and consistency of choices c. Increase and decrease in demand
d. Price quantity relationships of demand d. Giffen goods
Answer: C
2014 K- SET
77.The concept of shadow prices is related to
A. Monopolistic competition B. Oligopoly
C. Input- Output techniques D. Linear programming
Answer: D
78. The concept of technological dualism has been developed is
A. R. Rondan B. A. Lewis
C. J. H. Bokey D. Higgins
Answer:D
K SET 2014
79. When there is technological progress, the isoquant will
A. Shifts left wards
B. Shifts right wards
C. Remains at the same level
D. Will become a straight line
Answer A
80. Y=Ka(AL)1-a whom of the following economist used this equation in his growth model?
A. Adam smith B. David Ricardo
C. R.M.Solow D. W.W.Rostow
Answer C
81. Given the total utility function, the first derivative gives
A. Average utility
B. Marginal utility
C. Equi Marginal utility
D. Ordinal utility
Answer B
K SET 2015
82. Product differentiation and selling cost are the distinctive features of
A. Perfect competition
B. Monopolistic competition
C. Monopoly
D. None of the above
Answer B
83. Hicksian demand function is also called
A. Compensated demand function
B. Expenditure demand function
C. Consumption demand
D. None of the above
Answer A
84. The number of oranges that an individual is willing to give up for one more apple is referred to as the
A. Total utility of oranges
B. Law of diminishing marginal utility
C. Marginal rate of substitution of apples for oranges
D. Marginal rate of substitution of oranges for apples
Answer C
85. In Walrasian general equilibrium model, all prices and quantities in all markets are determined
A. Independently
B. Simultaneously
C. One after another
D. Separately
Answer B
86. The optimum output of a firm under perfect competition would be at
A. The increasing part of the average cost curve
B. The minimum point of average cost curve
C. The decreasing part of average cost curve
D. The decreasing part of marginal cost curve
Answer B
2016 K-SET
87. When price elasticity is equal to unity marginal revenue will be
A. One B. Zero
C. >1 D. <1
Answer B
88. Given the neo-classical aggregate supply curve, an increase in effective demand results in
A. An increase in income
B. An increase in price levels and decrease in income
C. An increase in price levels and unchanged income
D. An increase in income and unchanged price
Answer: C
89.The gains from devaluation of currency are expected to accrue to a nation in the form of increase in
A. Exports B. Imports
C. Production D. Investment
Answer: A
90. The calculating GNP which of the following is excluded?
A. Interest payments
B. Government transfer payments
C. Rental incomes
D. Net income from abroad
Answer: B
K-SET 2017
91. Under the indifference curve analysis the consumer will be in equilibrium
A. At the highest indifference curve
B. At the lowest indifference curve
C. At the point of tangency between the indifference curve and budget line
D. At the intersection of two indifference curve
Answer C
92. Under monopoly
A. Marginal cost curve is the supply curve
B. Marginal cost curve is not the supply curve
C. Marginal cost curve is perfectly elastic
D. Marginal cost curve is perfectly inelastic
Answer D
93. Under the monopolistic competitive market, the seller
A. Has no discretion to make price
B. Has discretion only to make price
C. Has no discretion as regard product differentiation
D. Has discretion to make price and can differentiate the product
Answer D
94. “Supply creates its own demand”. This is
A. Grasham’s Law
B. Giffen’s Law
C. Say’s Law
D. Gossen’s Law
Answer C
95. Neutrality of money implies changes in money affect
A. Nominal variables alone
B. Real variables alone
C. Both nominal and real variables
D. Neither nominal nor real variables
Answer A
96. The theory of unlimited supply of labor was propounded by
A. Simon Kuznets
B. A.W.Lewis
C. Harvey Leibenstien
D. Ragnar Nurkse
Answer B
KSET June 2018
97. If the elasticity of demand for a commodity is zero, it is
a. Perfectly elastic demand
b. Perfectly inelastic demand
c. Relatively elastic demand
d. Relatively inelastic demand
Answer : B
98. Classical Economists believed in
a. Wage price flexibility
b. Full employment
c. Economic instability
d. Monetary policy for increasing employment
Codes:
A. I and II are correct
B. I and IV are correct
C. I and III are correct
D. I, III and IV are correct
Answer: A
99. Assertion : Monopolistic competition is a blend of both competition and monopoly.
Reason: Under Monopolistic competition there are large number of buyers and sellers and the sellers sell
differentiated products.
Codes:
(A) Both (A) and (R) are correct. (R) is correct explanation of (A)
(B) Both (A) and (R) are correct. (R) is wrong explanation of (A)
(C) (A) is correct but (R) is wrong
(D) (R) is correct but (A) is wrong
Answer: A
100. When the LM curve shifts rightwards due to increased money supply, the changes expected in the
economy are
I. Income increases and interest rate falls
II. Income decreases and interest rate falls
III. Consumption increases and investment increases
IV. Consumption decreases and investment increases
Codes:
(A) I and IV are correct
(B) I and II are correct
(C) I and III are correct
(D) II and IV are correct
Answer C
101. Which of the following is the most appropriate indicator of economic growth ?
A. National Income
B. Real GDP
C. Real per capita GNP over a long period of time
D. Capital formation
Answer C
102. W.W.Leontief has empirically verified the theory of
A. Absolute cost advantage
B. Comparative cost advantage
C. Factor proportions
D. Reciprocal demand
Answer C

BUSINESS FINANCE

1. Assertion (A): Ratio analysis is one the tools employed to know the financial health of a concern.[ UGC NET
DEC-2012]

Reason (R): Ratio analysis is not the only technique available to take investment decision. 

Codes:

a. Both (A) and (R) are true and (R) is the correct explanation of (A).

b.(B) Both (A) and (R) are true, but (R) is incorrect explanation of (A).

c .C) (A) is true, but (R) is false

d.(D) (A) is false, but (R) is true.

Ans:a

 2. Which of the following relate to measures of non-financial performance of a concern?

[UGC NET DEC-2012]

i. Customer satisfaction

ii. Business process improvement

 iii. Learning organisation

Choose the right combination.

a. i iii ii iv

b. ii iv iii

c. iv i iii

d. I ii iv

Ans:d

3. Which method does not consider the time value of money? .[ UGC NET DEC-2012]

a.Net Present Value

b. Internal Rate of Return

c .Average Rate of Return

d. Profitability

Ans:c

4. Which formula is used measure the degree of Operating leverage? .

[ UGC NET DEC-2012]

a. EBIT/sales

b. C/EBIT

c. EBIT/EBT

d. EBIT/C

Ans :b

5.Which one is more appropriate for cost of retained earnings?

.[ UGC NET DEC-2012]

a. Weighted Average Cost of Capital

b. Opportunity cost to the firm

c. Expected rate of return by the investor

d. None of the above

Ans:b

 6. Match the following with the most suitable options.[ UGC NET DEC-2012]

List-I                                                               List-II

a. Modigliani-miller approach              1. Commercial paper

b. Net Operating income approach                 2. Working capital

c. Short term money market instrument         3. Capital structure

d. Factoring                                                     4. Arbitrage

Codes:

A B C D

a. 4 3 1 2

b. 3 4 1 2

c. 3 2 1 4

d. 4 2 3 1

Ans:a

7. Which one is not the source of External Finance? .[ UGC NET DEC-2012]

a. WTO Funds

b. World Bank Group

c. Export Credit

d. Foreign Direct Investment

Ans: a

 8. Which one of the following expression represents a correct matching?

[UGC NET 2013 – Dec]

 a. A decrease in the proportional claim on earnings and assets of a share of common stock due to the
issuance of additional shares: Dilution.

b. Anticipated annual dividend divided by the total book value of the firm: Dividend Yield.

c. When a shareholder receives lesser number of new shares in exchange for a given number of old
shares: Stock split.

d. The costs associated with issuing securities, such as underwriting, legal, listing and printing fees: Transaction
Costs.

Ans:a

9. When the internal rate of return of a project is more than the hurdle rate, the Net Present Value would be:
[UGC NET 2013 – Dec]

a. Zero

b. Positive

c. Negative

d. Uncertain

Ans:b

 10. Statement I: The presence of fixed operating costs in the operating cost structure of a firm regardless of the
volume denotes the presence of financial leverage.

Statement II: Super leverage is the result of the multiplicative combination of the degree of operating leverage
and financial leverage. [UGC NET 2013 – Dec]

Codes:

a. Both statements are true.

b. Both statements are false.

c. Statement I is true, but Statement II is false.

d. Statement I is false, but Statement II is true.

Ans:d

 11. Which one of the following expressions has incorrect matching? [UGC NET 2013 – Dec]

a. A method of financing where each asset would be offset with a financing instrument of the same
approximate maturity: Hedging Approach.
b. A method of financing where all long term funds are used to finance the current assets: Aggressive
Approach.

c. The amount of current assets required to meet a firm’s long term minimum needs: Permanent working
capital.

d. Trade credit and other payables that arise in the firm’s day to day operations: Spontaneous Financing.

Ans:b

12. The GDRs and ADRs can be listed on [UGC NET 2013 – Dec]

a. Luxemburg Stock Exchange (LSE)

b. New York Stock Exchange (NYSE)

c. Over the Counter Exchange of India (OTCEI)

d. Any of the Overseas Stock Exchanges

Ans:d

13. Which one of the following is not among the assumptions of the Modigliani-Miller model? [ UGC NET
2013 – Dec]

a. Perfect capital market

b. Equivalent risk classes

c. Unity for dividend pay out ratio

d. Absence of taxes

Ans:c

 14.The most suitable coverage ratio for deciding the debt capacity of a firm is

[UGC NET 2013 – Dec]

a. Interest Coverage Ratio

b. Cash Flow Coverage Ratio

c. Debt Service Coverage Ratio

d. Fixed Assets Coverage Ratio

Ans:b
 15. Which one of the following is the most popular method for estimating the cost of equity? [UGC NET 2013
– Dec]

a. Capital asset pricing model

b. Dividend yield method

c. Gordon’s dividend discount model

d. Earnings yield method

Ans: a

 16. Which one of the following is not the internal factor affecting the weighted average cost of capital of a
firm? [UGC NET 2013 – Dec]

a. Investment policy of the firm

b. Capital structure of the firm

c. Dividend policy followed

d .Market risk premium for the firm

Ans:d

 17. Most common approach for analysing the capital structure of a firm is

[UGC NET 2013 – Dec]

a. Ratio Analysis

b. Cash Flow Analysis

c. Comparative Analysis

d. Leverage Analysis

Ans: c

18. Match the statements in List-I with dividend models in List-II as follows:

[ UGC NET 2013 – June]

List – I                                                                                                                        List – II

I Dividend Capitalisation Approach.                                                              1. Traditional Model

II Dividend Policy has a bearing on the share valuation.                               2. Gordon Model
III Stock Market places more weight on dividends than on retain earnings. 3. Walter Model

IV Dividend pay-out is irrelevant to the value of the firm.                            4. Modigliani and Miller Model

Codes:

       I II III IV

a. 2 3 1 4

b. 1 2 4 3

c. 4 1 3 2

d. 3 4 2 1

Ans:a

 19. What combination of the following factors influences the working capital requirement? [UGC NET 2013 –
June]

I Market Conditions

II Production Policy

III Firm’s goodwill

IV Supply conditions

Codes:

a. I II III

b. II III IV

c. I III IV

d. I II IV

Ans: d

20. Which of the following is not included in the assumptions on which Myron Gordon proposed a
model on stock valuation [UGC NET June 2014]
a. retained earnings only sources of financing
b. Finite life if the firm
c. taxes do not exists
 d. constant rate of return on firm’s investment
Ans: b
21. A view that the dividend policy of a firm has a bearing on share valuation advocated by James E
Walter is based on which one of the following assumptions?
[UGC NET June 2014]
a. Retained earnings is only source of financing
b. cost of capital does not remain constant
c. Return on investment fluctuates
d. all of the above
Ans: a

22. Match the following [UGC NET June 2014]

List i list ii
a. Dividend capitalisation approach i. Traditional
model
b. Dividend policy has a bearing on the share valuation ii. Gordon model
c. Stock market places more weight on dividends iii. Walter Model
than one retained earnings
d. Dividend pay out is irrelevant to the value of the firm iv Modigliani &
Miller model
Codes:
A B C D
a. ii iii i iv
b. i ii iv iii
c. iv i iii ii
d. iii iv ii i
Ans: a

23. Assertion (A): A company should pay minimum dividend to it’s share holders
Reason (R): dividends are heavily taxed than capital gains [UGC NET June 2014]
a. Both A and R are true
b. Both A and R are false
 c. A is false but R is true
d. A is true but R is false
Ans: a
24. Which one of the following assumptions is not covered in the Walter’s model of the dividend policy
[UGC NET June 2014]
a. All financing is done through retained earrings
b. firm’s business risk does not change due to additional investments
c. The firms has an infinite life
d. the key variables like EPS and DPS keep on changing
Ans: d
25. Who formulated the following model for estimating the market price of equity share? [UGC NET
June 2014]
D+ Ra / Rc (E-D)
P= -----------------------
Rc
Where, P= market price of equity share
D= Dps
E= EPS
E-D=Retained earnings per share
Ra= internal rate of return on investment
Rc = cost of capital
a. Modigliani – miller
b. Myron Gordon
c. James E Walter
d. Clarkson and Elliot
Ans: c
26. Dividend capitalisation model is developed by [UGC NET June 2014]
a. Ezra Solomon
b. Myron J Gordon
c. James E Walter
d. Merton H Miller and Franco Modigliani
Ans: b
27. Which one of the following assumptions is not included in the James E Walter valuation Model?
[ UGC NET June 2015]
a. All financing by retained earnings only
b. No change in the key variables such as EPS and DPS
c. The firm has finite life
d. All earnings are either distributed as dividends are invested internally immediately
Ans : c
28. In case cost of capital is 10% EPS Rs 10, IRR 8% and retention ratio is 60 % than the value of equity
share as per Goldon’s model will be [ UGC NET Dec 2015]
a. Rs 100
b. Rs 87
c. Rs 90
d. Rs 77
Ans: d
29. Under which of the following situation the decision out come on evaluation of investment
opportunities vary under NPV and IRR methods per se.
[ UGC NET June 2019]
a. Time disparity
b. Cost disparity
c. Life disparity
d. Volume disparity
Choose the correct combination of situation
a. (A)and (D) only
b. (B) and (D) only
c. (A) (B) and (C) only
d. (B) (C) and (D) only
Ans: c
30. Match list I with II [ UGC NET June 2019]
List –I List II
a. Net income approach i. inventory management
b. Gordon model ii. capital budgeting
c. Internal rate of return iii. Capital structure theory
d. Reorder level iv. Dividend theory
 Choose the correct options from those given below:
a. (a) –(ii) ; (b) –(iii) ; (c) – (iv); (d) –(i)
b. (a) –(iii) ; (b) –(iv) ; (c) – (ii); (d) –(i)
c. (a) –(iii) ; (b) –(iv) ; (c) – (i); (d) –(ii)
d. (a) –(ii) ; (b) –(i) ; (c) – (iv); (d) –(iii)
Ans: b
31. Capital structure and leverage decision come in the ambit of -------
[UGC NET June 2019]
a. Investment decisions
b. distribution decisions
c. financing decision
d. dividend decision
Ans: c
32. Which one of the following analysis is suitable for risk –return analysis in financial decisions? [UGC
NET June 2019]
a. CAPM analysis
b. SWOT analysis
c. capital gearing
d. EVA analysis
Ans : a
33. A sale and lease back arrangement is more suitable for lessee having ------
[ UGC NET june-2019]
a. liquidity crisis
b. Supply fund
c. High profit
d. No profit no loss
Ans: a
34. A company issues 10% irredeemable preference shares the face value per share is 100 but the issue
price is 95. What is the cost of preference shares?
[ UGC NET June 2019]
a.10.63%
b 10.73%
c.10.83%
d.10.53%
Ans. d
35. Redeemable preference shares of 200000 are to be redeemed at par for which fresh equity shares of
80000 are issued at a discount of 10%. What amount should be transferred to capital resumption reserve
a/c. [UGC NET june-2019]
a.200000
b.120000
c. 128000
d.472000
Ans: c
36. Dividend irrelevance hypothesis implied in the [ UGC NET Dec 2019]
a. Traditional model
b. Walter model
c. Gordon Model
d. MM model
Ans: d
37. Assertion (A): according to net income (NI) approach capital structure decision is relevant in the
valuation of firm.
Reason (R): A firm can change its total value and its overall cost of capital by change in the degree of
leverage in its capital structure
a. (A) is correct and (R) is correct explanation of ( A)
b. (A) is correct but (R) is wrong
c. (R) is correct but (A) is wrong
d. Both (A) and (R) are correct and (R) is the right explanation of (A)
Ans. d
38. Consider the following statement in relation to theories of capital structure and identify the
Correct code:
Statement I: in net income approach, Ko increases with the increase in leverage
Statement II: In net operating income approach, Ke will change with the degree of leverage
a. Statement I only is true
b. Statement II only is true
c. Both the Statements are true
d. None of the Statements is true
 Ans: b
39. Assertion (A): Market value weights are sometimes preferred to the book value weights in
computing weighted average cost of capital
Reason (R): Market values are readily available
a. Both (A) and (R) are true but (R) is not the correct explanation of (A)
b. Both (A) and (R) are true and (R) is correct explanation of (A)
c. (A) is correct but (R) is not
d. (R) is correct but (A) is not
Ans: c

40. Which of the following statement is incorrect in context of payback method of capital budgeting
a. The shorter the payback period, the more desirable a project
b. In case of uncertainty in future this method is most appropriate
c. The timing if returns and cost of capital is considered
d. None is incorrect
Ans: c
41. While computing IRR (internal rate of return ), in which of the following cases investment would
increase
Shareholders wealth
a. IRR> cost of capital
b. IRR< cost of capital
c. IRR<=cost of capital
d. IRR is not concerned with wealth of shareholders
Ans: a
42. In matching approach of working capital management, long term funds will finance:
A. fixed assets
B. Permanent working capital
C. Temporary working capital
a. A&B
b. B&C
c. A&C
d. A only
Ans: a
43. The concentration of investors in companies with divided policy that are matched to their preferences
is
Called the:
a. concentration effect
b. Clientele effect
c. Preferential arrangement
d. dividend balancing
Ans: b
44. Consider the following statements reading depository receipts and identify the correct code:
A. American depository receipts (ADR’s) are issued by non – US companies
B. A company based in USA, willing to get it’s stock listed on German stock exchange can do with the
help
of Global depository receipts (GDR’s )
a. A only is true
b. B only is true
c. Both are true
d. None is true
Ans: c
45. The correct formula for finding degree of financial leverage is:
a. EBIT/ (EBIT- interest)
b. EBIT/ (EBIT+ interest)
c. EBIT / (EBIT- taxes)
d. EBIT/ (EBIT + taxes)
Ans:a
46. Consider the following statements regarding time value of money and identify
the correct code:
Statements 1: The method used to determine the future value of present investment is known as
compounding
Statements 2: The method used to determine the present value of future cash flows is known as
discounting.
a. Statement 1 only is true
b. Statement 2 only is true
c. Both the Statements are true
d. None of the Statements is true
Ans: c
47. Assertion (A): The evaluation of a foreign project from the project view point is useful in
determining its captivity compare to local firms
Reason (R): Multinationals should invest only if they can earn a risk- adjusted return greater than that
of local competitors.
a. Both (A) & (R) are true and (R) is correct explanation of (A)
b. Both (A) & (R) are true but (R) is not correct explanation of (A)
c. (A) is correct but (R) is not
d. (R) is correct but (A) is not
Ans: a
48. In Financial Statement Analysis, Shareholders Focus will Be On The:
a. Liquidity of the Firm
b. Long Term Cash Flow of the Firm
c. Profitability and Long Term Health of the Firm
d .Return On Investment
Ans: c
49. The Statement of Cash Flows Helps Users to Assess and Identify All of the Following Except:
a .The Impact of Buying and Selling Fixed Assets.
b. The Company's Ability to Pay Debts, Interest and Dividends.
c. A Company's Need for External Financing.
d. The Company's Reliance On Capital Leases.
Ans: d
50. Suppose You has Corporation has Balance of Merchandise of 5000 Units. It Wants to Sell 2000
Units At 90% of Its Cost On Cash. What Would Be the Effect of this Transaction On the Current Ratio?
a. Fall
b. Rise
c. Remain Unchanged
d. None of the Given Option
Ans: a
51. If the Interest rate is 18% compounded Quarterly, What Would Be the 8-Year Discount Factor?
a. 1.42215
b. 2.75886
c.3.75886
d.4.08998
Ans: d
52. You have a Cash of Rs.150, 000. If a Bank Offers Four Different Compounding Methods for
Interest, Which Method Would You choose to maximize the value of Your Rs.150, 000?
a. Compounded Daily
b. Compounded Quarterly
c. Compounded Semi annually
d. Compounded Annually
Ans :a
53. Ali Corporation has a Cash Coverage Ratio of 6.5 Times. Whereas Its Earnings before Interest and
Tax is Rs.750 Million and Interest On Long Term Loan is Rs.160 Million. What Would Be the Annual
Depreciation for the Current year?
a .Rs.200 Million
b.Rs.240 Million
c.Rs.275 Million
d.Rs.290 Million
Ans: d
54. Suppose RZ Corporation Sales for the year are Rs.150 Million. Out of this 20% of the Sales are On
Cash Basis While Remaining Sales are On Credit Basis. The Past Experience revealed that the Average
Collection Period is 45 Days. What Would Be the Receivable Turnover Ratio?
a .6.12 Times
b.7.11 Times
c.8.11 Times
d. 9.11 Times
Ans: c
55. A Bank Offers 20% Compounded Monthly. What Would Be the Effective Annual Rates of Return?
a.20.00%
b. 20.50%
c.21.00%
d.21.99%
Ans: d
 56. Nz Corporation Reported Earnings Before Interest and Taxes of Rs.500, 000 for the Current year. it
has Taken a Long Term Loan of Rs.2 Million From a Local Bank @ 10% Interest. The Tax is Charged
At the rate of 32%.What will Be the Saving in Taxes Due to Presence of Debt Financing in the Capital
Structure of the Firm?
a .Rs.60, 000
b. Rs.64, 000
c. Rs.72, 000
d. Rs.74, 000
Ans: b
57. Ntp Corporation has decided to Pay Rs.16 Per Share Dividend Every year. If this Policy is to
Continue Indefinitely, Then the value of a Share of Stock Would be ----------, If the Required rate of
Return is 25%?
a. Rs.60
b. Rs.64
c. Rs.68
d. Rs.74
Ans: b
58. MT Corporation has a previous year Dividend of Rs.14 Per Share Where as Investors Require a 17%
Return On the Similar Stocks. The Company’s Dividend Grows By 7%.The Price per Share in this Case
Would Be______________.
a. Rs. 149.8
b. Rs.184.9
c. Rs.198.4
d. Rs.229.9
Ans: a
59. RTU Corporation Stock is selling for Rs.150 Per Share. The Next Dividend is Rs.35 per Share and it
is expected to Grow 14%More Or Less Indefinitely. What Would Be the Return does this Stock Offer
You If this is Correct?
a. 17%
b. 27%
c. 37%
d. 47%
Ans: b
60. Suppose a Corporation has 3 Shareholders; Mr Salman with 25 Shares, Mr Kareem with 35 Shares,
and Mr Amjad with 40 Shares. Each Wants to Be Elected as One of the Six Directors. According to
Cumulative Voting Rule Mr Kareem Would Cast
a. 150 Votes
b. 210 Votes
c. 240 Votes
d. 300 Votes
Ans :b
61. ________ is the Market in Which Already Issued Securities are Traded Among Investors.
a. Primary Market
b. Secondary Market
c. Financial Market
d. Capital Market
Ans: b
62. Suppose Mehran Corporation is dealing in the Automobile Industry. Based On Projected Costs and
Sales, it Expects that the Cash Flows Over the 3-Year Life of the Project will Be Rs.5, 000,000 in First
year, Rs.7, 000,000 in the Next year and Rs.8,000,000 in the Last year. This Project Would Cost About
Rs.10, 000,000. The Net Present value of the Project Would Be ________, If Discount rate is assumed to
be 25%
a. Rs.2, 060, 800
b. Rs.3, 060,800
c. Rs.1, 576, 000
d. Rs.4, 060,800
Ans:a
63. The Projects Costs are Rs.1 5,000,000. The Payback Period for this Investment
Would Be ______________.
a. 1.58 years
b. 2.08 years
c. 2.38 years
d. 3.00 years
Ans: c
64. Suppose Z Corporation, has the Present value of Its Future Cash Flows is Rs.450,000 and the Project
has a Cost of Rs.300, 000,Then the Profitability Index Would Be ________________.
a. 0.667
b. 1.00
c. 1.25
d. 1.50
Ans: d
65. Fee Paid to the Consultant for Evaluating the Project is an Example of ______________.
a. Opportunity Cost
b. Sunk Cost
c. Decremented Cost
d. None of the Given Option
Ans: b
66. If the Sales of the AB Corporation is Rs.20, 000,000 Where as Its Cost is Rs.12,000,000 During the
Same Period. Assume the Annual Tax rate is 37%. Its Annual Depreciation is Rs.5, 000, 000.The
Operating Cash Flow of the Organization Would Be ________.
a. Rs.3,810,000
b. Rs.4,810,000
c. Rs.5,190,000
d. Rs.6,890,000
Ans: d

67. Treasury Notes and Bonds Are:

a. Default Free
b. Taxable
c. Highly Liquid
d. All of the Above
Ans: d
68. The Difference between an Investment’s Market value and Its Cost is Called the __________ of the
Investment.
a. Net Present Value
b. Economic Value
c. Book Value
d. Future Value
Ans: a
69. When Real rate is High, All the Interest Rates Tend to Be _______.
a. Higher
b .Lower
c. Constant
d. None of the Above
Ans: a
70. _______ is a Grant of Authority By a Shareholder to Someone Else to Vote the Shareholder’s Share.
a. Cumulative Voting
b. Straight Voting
c. Proxy Voting
d.None of the Above
Ans: c
71. The Payment of the Dividend is At the Discretion of The:
a. Chairman
b. Board of Directors
c. Shareholders
d. Stakeholders
Ans: b
72. Based on ________ the Investment is Accepted If the _____ exceeds the Required Return. It Should
Be Rejected Otherwise.
a. Profitability Index
b. Payback Period
c. Internal rate of Return
d.Net Present Value
Ans: c
73. If Two Investments are Mutually Exclusive, Then Taking One of Them Means That:
a. We Cannot Take the Other One
b. The other is pending for the Next Period
c. The Projects are Independent
d. None of the Above
Ans: a
74. Profitability Index (PI) Rule is to Take an Investment, If the Index Exceeds______:
a. -1
b. 0
c. 1
d. All of the Above
Ans: c
75. Average Accounting Return is a Measure of Accounting Profit Relative To:
a. Book Value
b. Intrinsic Value
c. Cost
d. Market Value
Ans: a
76. It is Not Unusual for a Project to have Side or Spill over Effects Both Good and Bad. This
Phenomenon is called:
a. Erosion
b. Piracy
c. Cannibalism
d. All of the Above
Ans: d
77. Mr Miner Purchased Goods of Rs.100,000 On June01, 2006 From Zeeshan & Brothers On Credit
Terms of 3/10, Net 30. On June 09 Mr. Miner Decided to Make Payment to Zeeshan and Brothers. How
Much He Would Pay to Zeeshan & Brothers
a.100,000
b.97,000
c.103,000
d.50,000
Ans: b
78. A Firm has Cash Cycle of 100 Days. it has an Inventory Turnover of 5 and Receivable Turnover of
2. What Would Be Its Accounts Payable Turn Over?
a. 3.347 Approximately
b. 5.347 Approximately
c. 2.347 Approximately
d. 6.253 Approximately
Ans: c
79. During the Financial year 2005-2006 Ended On June 30, the Cash Cycle of Climax Company was
150 Days, and Its Payable Turnover was 5. What was the Operating Cycle of the Company during 2005-
2006?
a. 234 Days
b.223 Days
c.245 Days
d.230 Days
Ans: b
80. Which of the Following is the Cheapest Source of Financing Available to a Firm?
a. Bank Loan
b. Commercial Papers
c. Trade Credit
d. None of the Above.
Ans: c
81. Which of the Following Illustrates the Use of a Hedging (Or Matching) Approach to Financing?
a. Short-Term Assets Financed with Long-Term Liabilities.
b. Permanent Working Capital Financed with Long-Term Liabilities.
c. Short-Term Assets Financed with Equity.
d .All Assets Financed with a 50 % Equity, 50 % Long-Term Debt Mixture
Ans: b
82. --------------- is an Incentive Offered By a Seller to Encourage a Buyer to Pay Within a Stipulated
Time.
a .Cash Discount
b. Quantity Discount
c Float Discount
d. All of the Above
Ans: a
83. Which of the Following Illustrates the Use of a Hedging (Or Matching) Approach to Financing?
a. Short-Term Assets Financed with Long-Term Liabilities.
b. Permanent Working Capital Financed with Long-Term Liabilities.
c. Short-Term Assets Financed with Equity.
d .All Assets Financed with a 50 % Equity, 50 % Long-Term Debt Mixture
Ans: b
84. The value of Net Working Capital will Be Greater Than Zero When:
a. Current Assets > Current Liabilities
b. Current Assets < Current Liabilities
c .Current Assets = Current Liabilities
d. None of the above
Ans: a
85. According to Du Pont Identity, ROE is Affected By Which of the Following?
a. Operating Efficiency
b. Asset Use Efficiency
c. Financial Leverage
d. All of the Above
Ans: d
86. Balance Sheet for a Company Reports Current Assets of Rs.700,000 and Current Liabilities of
Rs.460,000.What Would Be the Quick Ratio for the Company If There is an Inventory Level of
Rs.120,000?
a.1.01
b.1.26
c.1.39
d.1.52
Ans: b
87. Standard Corporation Sold Fully Depreciated Equipment for Rs.5,000. This Transaction will Be
Reported On the Cash Flow Statement as a (n):
a. Operating Activity
b. Investing Activity
c. Financing Activity
d. None of the Above
Ans: a
88. Balance Sheet for a Company Reports Current Assets of Rs.700,000 and Current Liabilities of
Rs.460,000.What Would Be the Current Ratio for the Company If There is an Inventory Level of
Rs.120,000?
a.1.01
b.1.26
c.1.39
d.1.52
Ans: d
89. In Which Type of Business, All Owners Share in Gains and Losses and All have Unlimited Liability
for All Business Debts?
a. Sole-Proprietorship
b. General Partnership
c. Limited Partnership
d. Corporation
Ans: a
90. A Firm Uses Cash to Purchase Inventory, Its Current Ratio Will:
a. Increase
b. Decrease
c. Remain Unaffected
d. Become Zero
Ans: c
91. Which of the Following is an Example of Positive Covenant?
a. Maintaining Any Collateral or Security in Good Condition
b. Limiting the Amount of Dividend According to Some Formula
c. Restricting Pledging Assets to Other Lenders
d. Barring Merger with another Firm
Ans: a
92. Which of the Following Refers to the Difference Between the Sale Price and Cost of Inventory?
a. Net Loss
b. Net Worth
c. Markup
d .Markdown
Ans: c
93. Which of the Following Allows a Company to Repurchase Part Or All of the Bond Issue At a Stated
Price?
a. Repayment
b .Seniority
c. Call Provision
d. Protection covenants
Ans: c
94. ABC Corporation has Two Shareholders; Mr Amir with 50 Shares and Mr Imran with 70 Shares.
Both Want to Be Elected as One of the Four Directors But Mr Imran Doesn’t Want Mr Amir to Be
Director. How Much Votes Would Mr Amir Be Able to Cast as Per Cumulative Voting Procedure?
a .70
b .120
c. 200
d.280
Ans: c
95. The Difference between the Return On a Risky Investment and that On a Risk-Free Investment.
a .Risk Return
b. Risk Premium
c. Risk Factor
d.None of the Above
Ans: b
96. A Group of Assets Such as Stocks and Bonds Held By an Investor is Called:
a. Portfolio
b. Capital Structure
c .Budget
d.None of the Above
Ans: a
97. If the Variance or Standard Deviation is Larger than the Spread, Returns will be:
a. less
b. More
c. Same
d. None of the above
Ans: b
98. The Following Risk is Entirely Wiped out by Diversification.
a .Systematic Risk
b .Unsystematic Risk
c. Portfolio Risk
d. Total Risk
Ans: b
99. The Objective for Using the Concept of Diversification is To:
a. Minimize the Risk
b. Maximize the Return
c. A & B
d. None of the Above
Ans: c
100. While Studying the Relationship in Risk and Return, it is Commonly Known That:
a. Higher the Risk, Lower the Return
b. Lower the Risk, Higher the Return
c. Higher the Risk, Higher the Return
d. None of the Above
Ans: c
101. This Type of Risk Affects Almost All Types of Assets.
a. Systematic Risk
b. Unsystematic Risk
c. Total Risk
d. Portfolio Risk
Ans: a

102. Suppose You Bought 1,500 Shares of a Corporation At Rs.25 Each. After a year, You Received
Rs.3000 (Rs.2 Per Share) in Dividends. At the End of year the Stock Sells For Rs.30 Each. If You Sell
the Stock At the End of the year, Your Total Cash Inflow will Be Rs.48,000 (1500 Shares @30 Each =
Rs.45000 & Dividend = 3000).
According to the Given Data, the Capital Gain will Be:
a.10,500
b.7,500
c.10,000
d.7,000
Ans: b
103. According to the Given Data, the Dividend Yield will Be:
a.8.50 %
b .6.25%
c. 8.00%
d.6.67%
Ans: c
104. According to the Given Data, Total %Age Returns will Be:
a. 20%
b .28%
c.32%
d.35%
Ans: b
105. Which One of the Given Options Involves the Sale of New Securities From the Issuing Company to
General Public?
a. Secondary Market
b Primary Market
c. Capital Market
d. Money Market
Ans: b

BUSINESS STATISTICS AND RESEARCH METHODS

(2012 JUNE NET)
1. Which of the following is not a restricted random sampling technique?
(A) Stratified sampling
(B) Simple random sampling
(C) Systematic sampling
(D) Multistage sampling ANSWER: (B)
2. Classification of respondents only on the basis of gender is an application of
(A) Ordinal scale
(B) Nominal scale
(C) Interval scale
(D) Ratio scale ANSWER: (B)
3. Karl Pearson’s co-efficient of correlation between two variables is
(A) The product of their standard deviations
(B) The square root of the product of their regression co-efficient
(C) The co-variance between the variables
(D) None of the above ANSWER: (B)
4. Statistical software package for research in social sciences include
(A) SPSS
(B) STATA
(C) Mini Tab
(D) All of the above ANSWER: (D)

(2012 DECEMBER NET)

5. Which one of the following is not a measure of dispersion?
(A) Quartile
(B) Range
(C) Mean Deviation
(D) Standard Deviation ANSWER: (A)
6. If bxy=0.25 and byx=0.64, correlation coefficient is
(A) 0.16
(B) 0.40
(C) 0.89
(D) 0.30 ANSWER: (B)
7. Sampling distribution of mean is very close to the standard normal distribution when
(A) Population is normally distributed.
(B) Population is not normally distributed, but sample size is large.
(C) Both (A) and (B).
(D) Neither (A) nor (B) ANSWER: (C)
8. If the value of co-efficient of determination is 0.64, what is the value of coefficient of correlation?
(A) 0.40
(B) 0.80
(C) 0.08
(D) 0.04 ANSWER: (B)
 (2013 JUNE NET)
9. Consider the following statistical tests:
(i)’F’ test (ii)’t’ test (iii)’z’ test (iv)’Chi-Square’ test
Which of these are parametric tests?
(A) (i), (ii), and (iv)
(B) (i), (iii) and (iv)
(C) (i), (ii) and (iii)
(D) (ii), (iii) and (iv) ANSWER: (C)
10. The difference between sample statistic and its corresponding population parameter is
(A) Sampling error
(B) Measurement error
(C) Coverage error
(D) Non-response error ANSWER: (A)
11.Match the items in List-I with items in the List-II
List-I List-II
(i)Level of Significance a) Sample mean is equal to population mean
(ii)Standard deviation of sampling b) Parameter
Distribution
(iii)Numerical value that describes c) Type-I error
the characteristics of the population
(iv) Normally distributed population e) Standard error
Codes:
(i) (ii) (iii) (iv)

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

(B) (c) (d) (b) (a)
(C) (c) (b) (d) (a)
(D) (d) (b) (c) (a) ANSWER: (B)
12. Kendall’s co-efficient of concordance is used to
(A) Test the difference among two or more sets of data.
(B) Test the relationship between variables.
(C) Test the variation in the given data.
(D) Test the randomness of samples ANSWER: (B)
13. Identify from the following the test statistic for which the value of numerator should always be greater than
that of denominator.
(A) ‘Chi-Square’
(B) ‘F’ Value
(C) ‘Z’ Value
(D) ‘t’ Value ANSWER: (B)
14. Which of the following test can be applied to ordinal scale data?
(i) Chi-Square test (ii) ‘Z’ test (iii) Kruskal-Wallis test (iv) Wilcoxon Mann-
Whitney test
Codes:
(A) (i), (ii) and (iii)
(B) (ii), (iv) and (iii)
(C) (i), (iii) and (iv)
(D) (i), (ii) and (iv) ANSWER: (C)
15. Which of the following tests can be based on the normal distribution?
(A) Difference between independent means
(B) Difference between dependent means
(C) Difference between proportions
(D) All the above ANSWER: (D)

16. From the following identify one situation where ‘F’ test cannot be used?
(A) To compare more than two populations means.
(B) To test the hypothesis about a single population variance.
(C) To test the hypothesis about two-population variance.
(D) To study about randomized block design. ANSWER: (B)
17. Which statistical test should be applied to test the effectiveness of ‘special coaching’ on the marks scored by
the students?
(A) Paired‘t’ test
(B) ‘Chi-Square’ test
(C) ‘Z’ test
(D) ‘F’ test ANSWER: (A)
18. In a linear equation, Y=a+bx, ‘a’ refers to
(A) Slope
(B) Y- intercepts
(C) Dependent Variable
(D) Independent Variable ANSWER: (B)

(2013 SEPTEMBER NET)

19. From a population with mean of 220 and standard deviation of 30, a sample of 36 was drawn at random.
Calculate the standard error of the sampling distribution and choose the correct answer from the following
options.
(A) 7.3
(B) 6.2
(C) 6.0
(D) 5.0 ANSWER: (D)

20. A committee of six people is to be formed from a group of seven men and four women. What is the
probability that the committee will have exactly two men?
(A) 0.456
(B) 0.803
(C) 0.962
(D) None of the above ANSWER: (D)
21. From the following ANOVA table, calculate the ‘F’ value and select the correct answer from the options
given below:
Sources of Variation Sum of Squares Degree of Freedom
Between columns 100 3
Between rows 24 16
Total 124 19
 (A) 22.2
(B) 31.5
(C) 33.3
(D) 36.2 ANSWER: (A)
(E)
22. For the hypothesis test, alpha (𝜶) is 0.05 and beta (β ) is 0.10. The power of this test is
(A) 0.95
(B) 0.90
(C) 0.80
(D) 0.15 ANSWER: (B)
23. A time series is a set of data collected at
(A) Random intervals
(B) Regular intervals
(C) Convenient intervals
(D) All of the above ANSWER: (B)

24. Find the chi-square value for the following:

Event Expected Observed
X 60 52
Y 40 48
Choose the correct answer from the following options:
(A) 2.67
(B) 2.77
(C) 3.33
(D) 4.33 ANSWER: (A)
25. Given the following data calculated the regression coefficient of X on Y. Pearson’s correlation coefficient=
+0.8. Regression coefficient of Y on X =0.8
Choose the correct answer from the following:
(A) 0.32
(B) 0.64
(C) 0.80
(D) 0.82 ANSWER: (C)
26. Which kind of test from the following options is the right test to use when the hypothesis for testing are
stated as:
H0: Population mean is equal to the sample mean.
H1: Population mean is not equal to the sample mean.
(A) One-tailed test
(B) Two-tailed test
(C) Either one tailed or two tailed test
(D) None of the above ANSWER: (B)

(2013 DECEMBER NET)

27. Match the following items in List-I with most suitable options in List-II
List-I List-II
(a) Fisher (i) Inverse probability
(b) Karl Pearson (ii) Normal Distribution
(c) Thomas Baye’s (iii) Correlation Coefficient
(d) Karl Gauss (iv) Index Numbers
Codes:
(a) (b) (c) (d)
(A) (iv) (iii) (ii) (i)
(B) (iv) (iii) (i) (ii)
(C) (iv) (ii) (iii) (i)
(D) (iv) (ii) (i) (iii) ANSWER:(B)
28. The law of statistics, which says ‘Moderately large numbers of items chosen at random from a large group
process the characteristics of the large group’, is referred to as:
(A)The Central Limit Theorem
(B) The Law of Statistical Regularity
(C) The Law of Inertia of Large Numbers
(D) None of the above ANSWER: (B)
29. A distribution, where the value of arithmetic mean is maximum as compared to median and mode, is
(A) Normal Distribution
 (B) Positively-skewed distribution
(C) Negatively-skewed distribution
(D) None of these ANSWER: (B)

30.The most appropriate average to be used to compute the average rate of growth in population is
(A) Arithmetic Mean
(B) Median
(C) Geometric mean
(D) Harmonic Mean ANSWER: (C)
31. “The life expectancy of people in Kerala is more than that of Tamil Nadu.” This statement is an example of
(A) Descriptive Hypothesis
(B) Casual Hypothesis
(C) Correlational Hypothesis
(D) None of the above ANSWER: (C)
32. Assertion (A): If regression coefficient of X on Y is greater than one, regression coefficient of Y on X must
be less than one.
Reason (R): The geometric mean between two regression coefficient is the coefficient of correlation.
On the basis of the above, choose the appropriate answer:
(A) (A) and (R) are correct.
(B) (A) is correct, but (R) is not correct.
(C) (A) is not correct, but (R) is correct.
(D) Both (A) and (R) are not correct. ANSWER: (A)
33. If the sum of deviation within samples is 140 with 12 degrees of freedom and the sum of squares of
deviation between samples is 190 with 2 degree of freedom, the test statistic will be
(A) 81.4
(B) 12.28
(C) 8.14
(D) 1.22 ANSWER: (C)
 (2014 JUNE NET)
34. Which one of the following options deals with the process of making estimates, predictions and decisions?
(A)Descriptive statistics
(B) Inferential statistics
(C) Probability theory
(D) None of the above ANSWER: (B)
35. A hypothesis test is being performed for a process in which a Type-I error will be very costly, but a Type-II
error will be relatively inexpensive and unimportant. Which of the following would be the best choice for alpha
(α) in this test?
(A) 0.10
(B) 0.05
(C) 0.01
(D) 0.50 ANSWER: (C)
36. If the dependent variable increases as the independent variable increases in an estimating equation, the
coefficient of correlation will be in the range
(A) 0 to (-) 1
(B) 0 to (-) 0
(C) 0 to (-) 0.05
(D) 0 to 1 ANSWER: (D)
37. In a decision problem having four possible alternative decisions and six possible states of nature, the pay-off
table will include
(A) Four payoffs
(B) Six payoffs
(C) Twenty four payoff
(D)Ten payoff ANSWER: (C)

38. Assertion (A): When there is an evidence of a linear relationship between two variables, it may not always
mean an independent- dependent relationship between the two variables.
Reason (R): The casual relationship between the two variables may not imply a reasonable theoretical
relationship between the two.
Choose the right answer from the following statements:
Codes:
(A) Both (A) and (R) are true and (R) is the correct explanation.
 (B) Both (A) and (R) are true, but (R) is not the correct explanation.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true. ANSWER: (A)
39. Which of the following is not true about Matrix Organisation?
(A) It is relatively permanent.
(B) Its project managers authority is distributed reasonably.
(C) There is slow information processing.
(D) Its project heads have to share resources with functional heads. ANSWER: (C)
40. Assertion (A): The expected values should be at least 5 to apply the chi-square test
Reason (R): The chi-square distribution provides and adequate approximation of the sampling distribution.
Indicate the correct answer from the following:
Codes:
(A) Both (A) and (R) are true, and (R) is the right explanation.
(B) Both (A) and (R) are true, but (R) is not the correct explanation.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true. ANSWER: (A)

41. The mathematical formula for joint probabilities P (AB) = P(A/B) x P(B), holds when
(A) The events are statistically independent.
(B) The events are statistically dependent.
(C) The event is either independent or dependent
(D) None of the above ANSWER: (B)
42. Which one of the following statements is the correct interpretation of P-Value of less than 0.01 in
hypothesis testing?
(A) There is overwhelming evidence to infer that the alternative hypothesis is true.
(B) There is strong evidence to infer that the alternative hypothesis is true.
(C) There is weak evidence to indicate that the alternative hypothesis is true.
(D) There is no evidence to infer that the alternative hypothesis is true. ANSWER: (A)
(2014 DECEMBER NET)
43. Which of the following is not probability sampling method?
(A) Simple Random Sampling
 (B) Cluster Sampling
(C) Judgemental Sampling
(D) Systematic Sampling ANSWER: (C)
44. The research carried out to expand the knowledge of a particular field is known as
(A) Applied research
(B) Qualitative research
(C) Quantitative research
(D) Basic research ANSWER: (D)

45. In univariate data analysis is t-test is used when the data are in the form of
(A) Metric data with one sample
(B) Non-metric data
(C) Non-metric data with independent variable
(D) Metric data with independent two sample ANSWER: (D)
46. To show the trend for a variable, which one of the presentation method is used?
(A) Histogram
(B) Frequency polygon
(C) Line graph
(D) Scatter graph ANSWER: (C)
47. Which one of the following objectives is not the objective of secondary data collected?
(A) Identify the problem
(B) Test the hypothesis of the relevant present problem
(C) Better define the problem
(D) Interpret primary data more insightfully ANSWER: (B)
48. In the hypothesis testing procedure a researcher may commit type II error in which of the following
conditions?
(A) When the true null hypothesis is rejected.
(B) When the alternative hypothesis is accepted
(C) When the false null hypothesis is accepted
(D) When the true null hypothesis is accepted ANSWER: (C)
49. Which one of the following tenets is not correct in the context of Central Limit Theorem?
(A) If a population from which a sample is drawn is normally distributed the Sampling Distribution of Mean
(SDM) will be normal for all sample sizes.
(B) The mean of the SDM is the population mean.
(C) If the population is not normal from which the sample is drawn, the SDM is not normal for any
sample size
(D) If the population is not normal from which a sample is drawn, the SDM approaches normality as the sample
size increases. ANSWER:(C)
50. The transformation of raw data into a form that will make them easy to understand and interpret, rearranging
and manipulating data to generate information is called
(A) Descriptive research
(B) Descriptive analysis
(C) Casual research
(D) Exploratory research ANSWER: (B)
(2015 JUNE NET)
51. All the properties or order, interval and zero origin are simultaneously passed by :
(A) Nominal Data
(B) Interval Data
(C) Ratio Data
(D) Ordinal Data ANSWER :(C)
52. The process of thoroughly checking the collected data to ensure optimal quality level is referred to as:
(A) Validation
(B) Editing
(C) Classification
(D) Entry ANSWER: (A)

53. Under which of the following situation, chi - square test is applicable?
a) Testing homogeneity
b) Testing goodness of fit
c) Testing equality of two sample means
 d) Testing equality of two sample proportions
e) Testing Independence of attributes
Codes:
(A) Only (a),(b) and (c)
(B) Only (a), (b) and (e)
(C) Only (c), (d) and (e)
(D) Only (a), (c) and (e) ANSWER:(B)
54. Which one of the following is not the correct statement regarding sampling distribution of mean?
(A) Sampling distribution of mean is normally distributed for large sized samples.
(B) Sampling distribution of mean is normally distributed for small sized samples drawn from not normally
distributed population.
(C)'t' distribution is not normally distributed.
(D) Mean of the sampling distribution of mean is equal to the parametric value of mean.
ANSWER: (C)
55. If the population is heterogeneous, which one of the following probability sampling methods is more
appropriate?
(A) Sequential sampling
(B) Quota sampling
(C) Double sampling
(D) Stratified sampling ANSWER: (D)

56. Consider the following statements and identify the wrong statements:
Statement - I: Accepting null hypothesis, when it is false, is called a level of significance.
Statement - II: 1 - a is called power of a test
Statement - III: Critical value of Z - static for two - tailed test at 5% level of significance is 1.96.
Codes:
(A) Statements I, II and III
(B) Statements I and III
(C) Statements II and III
(D) Statements I and II ANSWER: (D)
(2015 DECEMBER NET)
57. Which one of the following is not a method of studying association of attributes?
 (A) Concurrent Deviation Method
(B) Population Method
(C) Yule's Method
(D) Coefficient of Contingency ANSWER: (A)

58. A set of data can be distinguished from other set of data by means of:
(A) Central value and dispersion
(B) Central value, dispersion, and skewness
(C) Central value, dispersion, skewness and Kurtosis
(D) None of the above ANSWER: (C)

59. Identify which of the following steps would be included in hypothesis testing :
(A) State the null and alternative hypothesis.
(B) Set the significance level before the research study.
(C) Eliminate all outliers.
(D) Obtain the probability value using a computer program such as SPSS.
(E) Compare the probability value to the significance level and make the statistical decision.
Codes:
(A) (a), (c) and (d)
(B) (c), (d) and (e)
(C) (a), (b), (d) and (e)
(D) (b), (c), (d) and (e) ANSWER: (C)
60. Select the methods of finding out correlation from the following :
(a) Karl Pearson's Method
(b) Spearman's Rank Method
(c)Yule's Method
(d) Coefficient of Contingency
(e) Concurrent Deviation Method
Codes :
(A) (a), (b), (c)
(B) (a), (b), (c), (d)
(C) (a), (b), (e)
(D) (c), (d), (e) ANSWER: (C)

61. The Advent of computers in research has led to:

(A) Limitations of options in analysis
(B) Tremendous amount of flexibility with marginal increase in cost
(C) Myopic exposure of statistics to the researcher
(D) None of the above ANSWER:(B)
62. Statement-I: When a null hypothesis gets rejected in statistical hypothesis testing, it is known as II type -
error in hypothesis testing.
Statement- II: When a sample is small sized and parametric value of the standard deviation is not known, z -
test is the most appropriate test for hypothesis testing.
Codes:
(A) Both statements are correct
(B) Both statements are incorrect
(C) Statement - I is correct while statement - II is incorrect
(D) Statement – II is incorrect while statement - II is correct ANSWER: (B)
63. The following are the estimated regression equations for x and y variables:
x=0.85y y=0.89x
With this information, the value of the coefficient of correlation would be:
(A) 0.87
(B) 0.86
(C) 0.89
(D) 0.75 ANSWER: (B)
64. The power of the statistical hypothesis is denoted by:
(A) α ( alpha)
(B) β ( beta)
(C) 1- α
(D) 1 – β ANSWER: (D)
65. Assertion (A): A reasonably large sized sample drawn randomly from a given population contains almost
all the characteristics of the population.
Reason (R): As per the sampling theory, the assertion is based only on the ‘Law of Inertia’ of large numbers.
Codes:
(A) Assertion (A) is correct and Reason (R) as per the sampling theory is also fully correct.
(B) Assertion (A) is correct but the Reason (R) as per the sampling theory is not fully correct.
(C) Both assertion (A) and Reason (R) are incorrect.
(D) Assertion (A) is incorrect but the Reason (R) is sufficient as per the sampling theory.
ANSWER: (B)

(2015 KSET)
66. When skewness is zero,
(A) Mean is equal to Median but not Mode
(B) Mean is equal to Median and Mode
(C) Mean is equal to Mode but not Median
(D) Mean, Median and Mode will have different values ANSWER: (B)
67. Factor analysis is a
(A) Univariate statistical technique
(B) Bivariate statistical technique
(C) Multivariate statistical technique
(D) Sample statistical technique ANSWER: (C)
68. When the populations of the study is not popularly defined
(A) It is a sampling error
(B) It is a non sampling error
(C) It is not an error at all
(D) None of the above ANSWER: (B)
(2016 JULY NET)
69. Which of the following is not the characteristic of normal distribution?
(A) Mean, median and mode for the normal distribution are equal.
(B) The two-tails of the normal curve extend to infinity in both directions but never touch the horizontal axis.
(C) For different values of standard deviation, the height of the mean ordinate remains the same.
(D) The number of independent constraints of normal distribution are N, X bar and ϭ.
ANSWER: (C)
70. Read the following statements and choose the correct code:
Statement-I: Non-parametric tests are based on some assumptions about the parent population from which the
sample has been drawn.
Statement-II: The standard deviation of the sampling distribution of mean is called standard error of mean.
Codes:
(A) Both statements are true.
(B) Both statements are true.
(C) Statement-I is true while Statement-II is false.
(D) Statement-I is false while Statement-II is true. ANSWER: (D)
71. When the data are classified only on the basis of descriptive characteristics which cannot be quantified is
known as
(A) Geographical classification
(B) Chronological classification
(C) Qualitative classification
(D) Quantitative classification ANSWER: (C)

72. Which one of the following is false description?

(A) In a moderately a symmetrical distribution, the empirical relationship between mean, mode and median
suggested by Karl Pearson is
Mean- Mode=3 (Mean-Median)
(B) Coefficient of variation is an absolute measure of dispersion.
(C) Measure of skewness indicates the direction and extent of skewness in the distribution of numerical values
in the data set.
(D) Kurtosis refers to the degree of flatness or peakedness in the region around the mode of a frequency curve.
ANSWER: (B)
73. Statement-I: When the null hypothesis is true but as per the hypothesis-testing, it is rejected, it is known as
beta type error in hypothesis testing.
Statement-II: Chi-square test is exclusively a non-parametric test.
Codes:
(A) Both the statements are true.
 (B) Both the statements are false.
(C) Statement-I is true while Statement-II is false.
(D) Statement-I false while Statement-II is true. ANSWER: (B)

(2016 AUGUST NET)

74. Which one of the following is not the probability based sampling technique?
(A) Cluster sampling
(B) Stratified sampling
(C) Snow-ball sampling
(D) Multi-stage sampling ANSWER: (C)

75. Read the following statements and choose the correct code:
Statement-I: In statistical hypothesis-testing, null hypothesis states that there is a difference between
population parameter and sample statistic.
Statement-II: The two-tailed test in hypothesis testing is a non-directional test.
Codes:
(A) Both the statements are true.
(B) Both the statements are false.
(C) Statement-I is true while Statement-II is false.
(D) Statement-I is false while Statement-II is true. ANSWER: (D)
76. The area under the nominal curve covered within µ ±1.96 ϭlimit is?
(A) 0.95
(B) 0.68
(C) 0.50
(D) 0.99 ANSWER: (A)
77. Statement-I : The absolute value of the difference between an unbiased estimate based on a randomly
selected representative sample and the corresponding population parameter is known as sampling error.
Statement-II: Coefficient of correlation is independent of the change of origin and scale of measurement.
Codes:
(A) Both the statements are true.
(B) Both the statements are false.
(C) Statement-I is true while Statement-II is false.
(D) Statement-I is false while Statement-II is true. ANSWER: (A)
(2016 KSET)
78. For the given set of data : 4,4,5,6,6 which of the following is true?
(A) Mean=Mode
(B) Median= mode
(C) Mean =Median
(D)Mean<Median ANSWER: (C)

79. Statement (A): A sample from population does not have to share the same characteristics as the population.
Statement (B): The difference between a sample statistic and it's corresponding population parameter is called
sampling error.
Codes:
(A) Statement (a) is correct and (b) is incorrect
(B) Statement (a) is incorrect and (b) is correct
(C) Both the statements are correct
(D) Both the statements are in correct ANSWER: (B)
80. The classification method in which the upper limit of interval is the same as of lower limit class interval is
called
(A)Mid-point method
(B) Exclusive method
(C) Inclusive method
(D)Ratio method ANSWER: (B)
81. ln a normal distribution, the increased spread and decreased height represents
(A)Larger value of standard deviation
(B) Smaller value of variance
(C) Larger value of variance
(D) Smaller value of standard deviation ANSWER: (A)
 (2017 JANUARY NET)
82. Which one of the following statements is false regarding normal distribution?
(A) Mean, Median and Mode always coincide.
(B) Within ±1.96 𝝈 limits from Mean values, the area under the distribution is 99 percent of the total
area.
(C) The are under the normal curve represents probabilities for the normal random variable and the total area for
the normal probability distribution is one.
(D) For every pair of values of mean and standard deviation, the curve of the distribution is bell- shaped and
symmetric.
ANSWER: (B)
83. If unexpected variation between variables X and Y is 36% , what is the coefficient of correlation between
the variables ?
(A) 0.36
(B) 0.6
(C) 0.60
(D) 0.80 ANSWER: (D)
84. Which of the following is a false statement?
(A) The signs of the regression coefficients are always the same.
(B) Correlation coefficients is the geometric mean of the two regression coefficients.
(C) The co-variance between two variables divided by the product of their standard deviations produces the
value of coefficient of correlation.
(D) Co-efficient of correlation is independent of origin but not of scale. ANSWER: (D)
85. If the two-regression coefficients are 0.8 and 0.2, then the value of the coefficients of correlation is
(A) -0.16
(B) 0.50
(C) 0.40
(D) -0.40 ANSWER: (C)
86. Process of arranging data into a new order is called
(A) Manipulation of data
(B) Standardization of data
(C) Sequencing of data
(D) Standardized input ANSWER: (A)
 (2017 NOVEMBER NET)
87. The application of x2 -test as parametric test will be in which one of the following situations?
(A) Test of Independence of attributes
(B)Test of goodness of fit of a specific type of distribution
(C)Test for population variance in the basis of small sized sample variance
(D)Test of homogeneity of several populations with respect to some characteristic of interest
ANSWER: (C)
88. In which one of the following situations is the application of t- test is most appropriate?
(A) Testing the significance of coefficient of correlation between paired observations of small sized
sample
(B) Testing the significance of coefficient of correlation between paired observations of large sized sample
(C) Comparing variances of two small sized samples
(D) Testing the significance of the difference among mean values of more than two samples groups
ANSWER: (A)
89. Which of the following is not a logical data structure?
(A) Chain
(B) Stack
(C) List
(D) Tree ANSWER: (A)

90. The scale of measurement which has no order, distance and unique origin is known as which one of the
following?
(A) Nominal scale
(B) Ordinal scale
(C) Interval scale
(D) Ratio scale ANSWER: (A)
91. The formula to determine the number of classes given by Sturge’s Rule is which one of the following?
(A)K=1+3.322(log N)
(B)K= (log N)1.322
(C)K=1+3.322/(log N)
(D)K=3.322/(log N)+1
Where: K=Number of classes
N=Total number of observations
(Log N)=logarithms of the total number of observations ANSWER: (A)
92. Which one of the following is not the characteristic of normal distribution?
(A) Bell- shaped and symmetric
(B) Mean, Median and Mode of the distribution are equal
(C) The total are under the curve for the normal probability distribution is one
(D) The two tails of the distribution in both the directions touches the horizontal axis.
ANSWER: (D)

93. Assertion (A): A reasonably sized sample drawn randomly from large sized population contains almost all
the characteristics which exist in the population.
Reasoning (R): The theory of sampling is based on the two important laws of statistics, viz.., law of statistical
regularity and law of inertia of large numbers.
Codes:
(A) Both (A) and (R) are correct and (R) is the complete explanation of (A).
(B) Both (A) and (R) are correct but (R) is not the complete explanation of (A).
(C) (A) is not correct while (R) is correct.
(D)Both (A) and (R) are not correct. ANSWER: (A)
(2017 KSET)
94. The standard normal distribution has
(A) Mean=1 and S.D=0
(B) Mean=1 and S.D=1
(C) Mean=0 and S.D=0
(D) Mean=0 and S.D=1 ANSWER: (D)
95. In testing of hypothesis, the decision to use single tailed or two tailed test depends upon
(A) Size of the samples
(B) Alternative hypothesis
(C) Null hypothesis
(D) Sampling error ANSWER: (B)
96. Two variables are perfectly positively correlated when the covariance between them is
(A) 0
(B) 1
(C) -1
(D) 𝝈 1 , 𝝈2 ANSWER: (D)

(JULY 2018 NET)

97. Assignment of numerals to the objects to represent their attributes is known as:
(A)Nominal data
(B)Ordinal data
(C)Interval data
(D)Ratio data ANSWER:(A)

98. A graph of a cumulative frequency distribution is called:

(A) Frequency polygon
(B) Frequency curve
(C) Ogive
(D) Pie diagram ANSWER: (C)
99.In the case of classification of data, the class having its upper limit is treated as the lower limit of its next
class is called:
(A)Open ended class
(B) Close ended class
(C)Exclusive class
(D) Inclusive class ANSWER:(C)
100. For a standard normal probability distribution, the mean (μ) and the standard deviation (𝝈) are
(A) µ=0, ϭ=1
(B) µ=16, ϭ=4
(C) µ=25, ϭ=5
(D) µ=100, ϭ=10 ANSWER: (A)

BUSINESS MANAGEMENT AND HUMAN RESOURCE MANAGEMENT

Source: NET Previous Years Question paper
(June 2011)
1. Match the following components of business environment:
a) Economic Environment i) Exim policy
b) Social Environment ii) Customs
c) Political Environment iii) Social values
d) Legal Environment iv) Business Law and Banking Act
(a) (b) (c) (d)
A (i) (ii) (iii) (iv)
B (iii) (iv) (ii) (i)
C (iii) (i) (ii) (iv)
D (i) (ii) (iv) (iii) ANSWER :( A)
2. Planning is a----------process
A. Goal oriented B. Flexible
C. Time bound D. All the above ANSWER: (D)
3. HRM is amalgam of
A. Job analysis, recruitment and selection
B. Social behaviour and business ethics
C. Organizational behaviour, personnel management and industrial relation
D. Employer and Employees
ANSWER: (D)
4. Recruitment is concerned with the process of
A. Selection of right candidate
B. Developing a pool of potential employees
C. Inviting applications for jobs
D. None of the above ANSWER :(B)
5. The mechanism to identify employee’s growth potential is done through
A. .Job enrichment
B. Job evaluation
C. Job assessment centre
D. Position description ANSWER : (B)
6. An interview conducted at the time of an employee leaving the organization is called
A. Exit interview
B. Feedback interview
 C. Convincing interview
D. Directed interview ANSWER:(B)
7. Statement (A): A Manager delegates authority.
Reason (R): The manager wants to shirk his responsibility.
A. Both statement (A) and Reason (R) are correct
B. Both statement (A) and Reason (R) are false
C. Statement (A) is correct, but Reason (R) is false.
D. Statement (A) is false, but Reason (R) is correct. ANSWER:(A)

(December2012)
8.Assertion (A): All decisions taken through mental process are rational
Reason(R): Decision making is a mental process
A. (R) is correct, but (A) is not correct.
B. (A) is correct, but (R) is not correct
C. Both (A) and (R) are correct
D. Both (A) and (R) are not correct ANSWER: (A)
9. Who among the following developed the technique of management by Exception?
A. Joseph L. Massie
B. Lester R. Bittel
C. L.F Urwick
D. Peter F. Drucker ANSWER: (B)

10. Which among the following are parts of job description?

i. Duties performed
ii. Job summary
iii. Job identification
iv. Supervision given
v. Delegation of authority
A. (i) (ii) (iii) (iv)
B. (ii) (iii) (iv) (v)
C. (i) (iii) (iv) (v)
D. (i) (ii) (iii) (v) ANSWER:(A)
11. Arrange the following staffing procedures in the correct sequence:
 i. Determining sources of personal supply
ii. Preparing personnel specification
iii. Selection of personnel
iv. Determining personnel characteristics
A. (ii) (i) (iv) (iii)
B. (i) (ii) (iii) (iv)
C. (ii) (i) (iii) (iv)
D. (ii) (iii) (i) (iv)v ANSWER:(A)
12. Assertion (A): Management is a continuous process.
Reason (R): Managers first plan, then organise and finally perform the function of controlling.
Codes:
A. Both (A) and (R) are correct and (R) is correct explanation of (A)
B. Both (A) and (R) are correct, but (R) is not a correct explanation of (A)
C. (A) is correct, but (R) is incorrect
D. (A) is incorrect, but (R) is correct. ANSWER: (A)
13. Induction of employees relates to
A. Organisational awareness
B. Training programme
C. Introduction
D. Assignment of duties ANSWER: (C)
14. Who is not associated with HRM?
A. Michael J jucius
B. Dale Yodar
C. Edvoin B. Flippo
D. K.K. Devit ANSWER: (D)
15. Which is used for short-term sales achievement?
A. Personnel selling
B. Advertising
C. Sales promotion
D. Public relations ANSWER:(D)
(June 2013)
16. Assertion (A): when span of control is wide co-ordination and control becomes difficult.
Reason (R): In a narrow span, levels of authority reduce.
Codes:
A. Both (A) and (R) are true and (R) is the correct explanation of (A)
B. Both (A) and (R) are true, but (R) is not a correct explanation of (A)
C. (A) is true, but (R) is false
D. (A) is false, but (R) is true ANSWER: (C)
17. The general pattern of behaviour, shared belief and values that members have in common is known as:
A. Organisation climate
B. Organisation culture
C. Organisation effectiveness
D. Organisation matrix ANSWER : (B)
(December 2013)
18. Which of the following are major major principles of leading?
i. Principle of motivation
ii. Principles of continuous development
iii. Principle of harmony of objectives
iv. Principle of open competition
v. Principle of communication clarity
Select the correct answer from the codes given below
Codes:
A. (i) (ii) (iii) (v)
B. (i) (ii) (iii) (iv) (v)
C. (i) (iii) (iv) (v)
D. (i) (iii) (v) ANSWER:(D)
19. The following are the steps of management control process :
i. Taking corrective action from standards
ii. Establishing standards
iii. measuring actual performance
iv. comparing performance against standards
Select the correct sequence of these steps from the codes given below:
Codes:
A. (i) (ii) (iii) (iv)
B. (ii) (iii) (iv) (i)
C. (iii) (iv) (i) (ii)
 D. (ii) (iv) (i) (iii) ANSWER :(B)
20. Consider the following:
i.Planning is today’s action for tomorrow’s decision
ii.Planning is forward looking while controlling is looking back
iii.Motivation is about getting voluntary willingness of subordinates for action
iv.Line and staff organisation is the oldest form of organisation
Select the correct statements from the codes given below:
Codes:
A. (i) and (iii) are correct
B. (i) (ii) and (iv) are correct
C. (i) (iii) and (iv) are correct
D. All are correct ANSWER :(A)

21. Which one of the following does not serve the main objective of performance appraisal?
A. Development uses
B. Administrative uses
C. Ethical and moral values
D. Organisational objectives ANSWER: (C)
22. Statement (l) : job evaluation is a technique of assessing the worth of each job in comparison with others
throughout an organisation.
Statement (ll): job evaluation and job rating are one and the same for employee’s appraisal purposes.
Codes:
A. Statement (I) is correct, but Statement (II) is incorrect
B. Statement (II) is correct, but statement (I) is incorrect
C. Both the statements (I) and (II) are correct
D. Both the statements (I) and (II) are incorrect ANSWER (A)
23. Assertion (A): merit rating of an employee is the process of evaluating the employee’s performance on the
job in terms of the requirements of the job.
Reason (R): employee’s merit rating is a technique for fair and systematic evaluation of an employee’s
capacities and abilities and performance on the specific job.
Codes:
 A. Both (A) and (R) are correct, and (R) is the right explanation of (A)
B. Both (A) and (R) are correct, but (R) is not the right explanation of (A)
C. Both (A) and (R) are incorrect
D. (R) is correct, but (A) is incorrect ANSWER:(B)

24 .Match the items of list I with the items of list II and choose the correct answer
List I list II
a) Intrapersonal communication 1) Information sharing
b) Element of a communication event 2) Development of “will” to work
c) Objective of organisational communication 3)Thinking
d) Goals of organisational communication 4)Purpose
codes:
(a) (b) (c) (d)
(A) 1 2 3 4
(B) 3 4 2 1
(C) 2 3 1 4
(D) 4 3 2 1
ANSWER (B)
25.”No ideas are ever criticized” and “ the more radical the ideas are the better” – are the rules of which
decision making process?
A. Programmed decision making
B. Non programmed decision making
C. Brainstorming
D. Group discussion ANSWER : (C)
26 .According to McClelland’s needs theory, which of the following is not a motivating need?
A. Need for poverty
B. Need for security
C. Need for achievement
D. Need for affiliation ANSWER :(B)
27. Who propounded “Theory Z”?
A. William ouchi
B. Peter F Drucker
C. Joseph H Jurau
D. Douglas Mc Gregor ANSWER :(A)
28. Which of the following are methods of on-the job training?
1. Coaching
2. Vestibule training
3. Demonstration
4. Role playing
5. Apprenticeship training
Select the right answer from the following codes:
A. 1,2,3,4
B. 1,3,5
C. 2,3,4
D. 1,2,3,4,5
ANSWER :( B)
29. The idea that a manager tends to be promoted to the level of his incompetence is referred to as..
A. The advancement principle
B. The Parkinson law
C. The Peter Principle
D. The job design principle
ANSWER: (C)
(June 2014)
30. Which of the following training methods exposes the newly recruited employee to the various business
functionsdivisions and departments.
A. Orientation
B. Vestibule training
C. Transition analysis
D. Role playing ANSWER: (A)

31. Match the names of authors given below with motivational theories they are associated with
List I List II
1) Herz berg a) ERG theory
2) McGregor b) Three need theory
3) Alderfer c) theory X and theory Y
4) David Mcclelland d) Two factor theory
 Codes:

1 2 3 4
A) a b c d
B) d c b a
C) b a d c
D) d c a b ANSWER:( D)
32. Under the Trade Union Act 1926 how many minimum number of members are required for a trade union to
the registered.
A. 5
B. 7
C. 9
D. 1 ANSWER: (B)
33. The idea that a manager tends to be promoted to a level of his incompetence is referred to as:
A. The advancement principle
B. The Paul principle
C. The peter principle
D. The job design principle ANSWER: (C)
34. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason(R):
Assertion (A): classical organisations believed in the use of authority to achieve coordination.
Reason (R): classical thinkers consider organisation is an open system
Codes:
A. (A) is correct, but (R) is the incorrect
B. Both (A) and (R) are correct
C. (A) is incorrect, but (R) is correct
D. Both (A) and (R) are incorrect ANSWER : (A)
35. The process of receiving and welcoming an employee when he first joins a company and giving him the
basic information he needs to settle down quickly and happily and starts working is referred to as:
A. Placement
B. Orientation
C. Job rotation
D. Counselling ANSWER:(B)
36. Which is not relevant of succession planning?
A. Analysis of the demand for managers
B. Review of existing executives
C. Planning individuals carrier paths
D. Recruitment to meet immediate needs ANSWER :( D)
37. Where does recognition of an employee fall in Maslow’s hierarchy of needs theory?
A. Self actualisation
B. Security needs
C. Social needs
D. Esteem needs ANSWER: (D)
38. Which of the following is not included in the model of the systems approach to human resource
management?
A. Departmentation
B. Recruitment
C. Performance appraisal
D. Promotion ANSWER: (A)
39. Which one of the following is not an example of Herzberg’s Hygiene factors?
A. Advancement
B. Interpersonal relations
C. Job security
D. Work condition ANSWER: (A)
40. Who observed that workers behaviour and sentiments are closely related?
A. Peter Drucker
B. Elton Mayo
C. FW Taylor
D. Dale Yoder ANSWER:(B)
41. What is not an operative function of HRM?
A. Procurement
B. Development
C. Organising
D. Integration ANSWER:(C)

(December 2014)
42. The process of narrowing a large number of candidates to a smaller field is called
A. Rushing
B. Recruitment
C. Selection
D. Enrolment ANSWER: (C)
43. According to which theory, people are motivated to the extent to which they expect that their actions will
help in achievement of goals
A. Vroom’s vectorValenca Theory
B. Need theory
C. Z theory
D. X theory ANSWER: (A)
44. This responsibility of the organisation to workers includes
i. The payment of fair wages
ii. Arrangement of proper training and education of the workers
iii. The installation of an efficient grievance handling system
iv. Welfare of family members
v. The provision of the best possible working condition
Identify the correct combination
A. (i) (ii) (iii) (v)
B. (ii) (iii) (iv) (v)
C. (i) (ii) (iii) (iv)
D. (i) (iii) ( iv) (v) ANSWER:( A)

45. Internal environment of a business includes

i. Business ethics and moral standards
ii. Business and managerial policies
iii. Prospects of business development
iv. Government rules and regulations
v. Industrial relations
Codes:
A. (i) (ii) (iv) (v)
 B. (ii) (iii) (iv) (v)
C. (i) (ii) (iii) (iv)
D. (i) (ii) (iii) (v) ANSWER: (D)
46. Assertion (A): the span of management at the upper level is generally narrow while at the lower level
span is wide
Reason (R): The task allocated to subordinates at the lower level of management is more specific and precise
and thus making supervision easy and simple.
Suggest correct code:
A. (A) is correct but (R) is wrong
B. (A) is wrong but (R) is correct
C. Both (A) and (R) are correct
D. Both (A) and (R) are wrong ANSWER: (C)
47. Match the following
List IList II
a) To check the quality of worki) Speed loss
b) To see that work is completed in time ii) Inspector
c) To check absenteeism of workers iii)Instruction and check
d) To issue instructions regarding method of work iv) shop discipline
Codes:
(a) (b) (c) (d)
A. (iii) (ii) (i) (iv)
B. (ii) (i) (iv) (iii)
C. (ii) (i) (iii) (iv)
D. (iv) (iii) (i) (ii) ANSWER:(B)

48. F. W Taylor called “The military type of foreman” to

A. Unity of command
B. Span of control
C. Delegated legislature
D. Department ANSWER :(A)
49. Match the items of List-I with List-II
List I List ll
a) Commentary four chambault i) F.W. Taylor
 b) Midvale steel works ii) Claud Henry Saint
c) Charleton twist company iii) Henry Fayol
d) Credit mobilier iv) Robert Owen
Codes:
(a)(b) (c) (d)
A. (iii) (ii) (iv) (i)
B. (i) (ii) (iii) (iv)
C. (iii) (i) (ii) (iv)
D. (iii) (i) (iv) (ii) ANSWER :(D)
50. Assertion (A): job design relates to the manner in which tasks are put together to form complete job.
Reason(R): The matrix organisation is a project organisation plus a functional organisation.
Codes:
A. Both (A) and (R) are true
B. (A) is true, but (R) is false
C. (A) is false, But (R) is true
D. Both (A) and (R) are false ANSWER : (A)
51. HRD as a total system includes the following major sub-systems:
A. Performance appraisal
B. Career planning
C. Role analysis
D. ABC analysis
E. Rewards
Select the correct answer from the codes
Codes:
A. 1,2,3,4
B. 1,2,3,5
C. 2,3,4,5
D. 1,3,4,5 .ANSWER: (B)
52. Which of the following is not true about employee grievances?
A. Grievance is a sign of employees discontent with job or its nature
B. Grievance provides a downward channel of communication
C. Grievance arises only when an employee feels that injustice has been done to him
D. Grievance can be real on imaginary ANSWER :( B)
53. Which of the following is not a component of job Analysis?
A. Job description
B. Role analysis
C. Job summary
D. Job specification ANSWER :( C)
54. One of the objectives of organisational change is
A. Increased motivation
B. Greater innovation
C. Solving inter-group problems
D. Changes in an organisations level of adoption of its environment ANSWER: (D)
(June 2015)
55. Match the items of List I with List II
List I List II
a) “He who can manage, can manage anything” i) Henry Fayol
b) “ Due to these experiments, a factory does not ii) William B. cornell
Remain a factory, it is converted into a laboratory”
c) Management succeeds or fails as human relations in iii) F.W. Taylor
Business are intelligently or unintelligently handled”
d) “ A place for everything and everything in its place” iv) Lawrence A. Appley
Codes:
(a)(b) (c) (d)
A. (i) (ii) (iii) (iv)
B. (i) (ii) (iv) (iii)
C. (iv) (iii) (ii) (i)
D. (iii) (ii) (i) (iv) ANSWER: (C)

56. Match the items of list with List II

List I List II
i. Management of tomorrow i) Chris Argyris
ii. Motivation and personality ii) Fredrick Herzberg
iii. The motivation of work iii) LF, Urwick
iv. Personality and organisation iv) A.H. Maslow
Codes:
 (a) (b) (c) (d)
A. (i) (iv) (ii) (iii)
B. (iii) (iv) (i) (ii)
C. (iv) (iii) (ii) (i)
D. (iii) (iv) (ii) (i) ANSWER: (D)
57. Which of the following are not basic objectives of HRM?
A. To attract HR into the organisation
B. To develop and motivate HR for better performance
C. To have the reward and punishment system for HR
D. To integrate maintain HR in the organisation ANSWER : (C)
58. What is ‘gate hiring’?
A. To select people who approach on their own for employment in the organisation
B. To select people who are recommended by the employees
C. To select people from public employment exchanges
D. To select people supplied by labour contractors ANSWER: (A)
59. The barriers to effective performance appraisal are
i. Psychological blocks of managers
ii. Facility assumptions of the parties concerned
iii. Technical pitfalls
iv. Faulty written communications
Codes
A. All are correct
B. Only (ii)and (iii) are correct
C. Only (i)and (ii) are correct
D. Only (i), (ii) and (iii) are correct ANSWER: (D)
60. Statement (I) :management is the art of knowing what you want to do and then seeing that it is done in the
best and the cheapest way
Statement (II): management is the process of planning and regulating the activities of an enterprise
A. Statement (I) is correct, but (II) is incorrect
B. Statement (II) is correct, but (I) is incorrect
C. Both the Statements (I) and (II) are incorrect
D. Both the Statements (I) and (II) are correct ANSWER: (D)
61. Match the items of List-I with List-II
List-I List-II
(a) Credit mobilier (i) Charles Babbage
(b) Charleton twist company (ii) Henry Fayol
(c) Difference engine (iii)Claud Henri saint simon
(d) Commentry four chambault (iv) Robert Owen
Codes :
(a) (b) (c) (d)
A. (iii) (iv) (i) (ii)
B. (iii) (i) (iv) (ii)
C. (iii) (iv) (ii)
D. (ii)) (i) (iv) (iii) ANSWER: (A)
62. Which one of the following is a traditional method for selection of personnel?
A. Interview
B. Selection test
C. Phrenology
D. Aptitude test ANSWER:(C)

63. The method of training in crafts, trades and technical areas is known as
A. Vestibule training
B. Coaching
C. Mentoring
D. Apprenticeship ANSWER: (A)
64. Behaviourally Anchored rating scale is a technique used for:
A. Selection
B. Succession planning
C. Performance appraisal
D. Recruitment ANSWER: (C)
65. Which of the following is not a mechanism of managing stress?
A. Rust out
B. Cognitive therapy
C. Job enrichment
D. Networking ANSWER :(A)
66. Assertion (A): job evaluation is essentially a job rating process, not unlike the rating of employees.
Reasoning(R): -job evaluation is a practice which seeks to provide a degree of objectivity in measuring the
comparative value of jobs within an organisation and among similar organisations.
A. Both assertion(A) and Reasoning (R) are correct
B. Both assertion(A) and Reasoning (R) are incorrect
C. Assertion(A) is correct, but Reasoning (R) is incorrect
D. Reasoning (R) is correct, but Assertion(A) is incorrect ANSWER: (A)
67. Which among the following are not parts of staffing process?
A. Human resources planning
B. Recruitment
C. Selection
D. Induction and orientation
E. Training and development
F. Performance appraisal
G. Transfers
H. Separations
Codes;
A. (e) (f) and (h)
B. (g) and (h)
C. (f) and (h)
D. None of the above ANSWERS :( D)

(December 2015)
68. Who among the following is not related to the planning function given by Taylor?
A. Route clerk
B. Time and cost clerk
C. Inspector
D. Disciplinarian ANSWER: (C)
69. Which of the following is a key role of HR manager as defined by Ulrich etal (2009)?
A. Personnel Administrator
B. Business ally
C. Payroll advisor
D. Organizational geographies. ANSWER: (B)
70. Which of the following is the most serious problem that might arise due to excessive reliance on internal
recruitment?
A. Reduced job performance
B. High labour turnover
C. Lack of motivation
D. Internal resistance ANSWER: (D)
71. The internal factor affecting the wage mix includes:
a) Relative worth of the job
b) Area wage rates
c) Employers ability to pay
d) Manpower market conditions.
Codes:
A. (a) (b) and (c)
B. (a) and (c)
C. (b) (c) and (d)
D. All of the above ANSWER :(B)

72. Match the items of List-I with List-II according to “The Harvard Framework Developed for HRM”
List-I List-II
a) Stakeholders interest i) Work systems
b) Situational factor ii) Lost effectiveness
c) HRM policy choice iii) Individual well being
d) HR outcome iv) Government
e) Long term consequence v) Business strategy
Codes:
(a) (b) (c) (d) (e)
A. (iv) (i) (ii) (iii) (v)
B. (v) (iv) (ii) (i) (iii)
C. (iv) (v) (i) (ii) (iii)
D. (i) (v) (ii) (iii) (iv) ANSWER :(C)
73. Choose the correct code for statements given below:
Statement I: T- Group and sensitivity training are not the same
Statement II: T- Group participants belong to diverse groups and may not be familiar with each other
Statement III: T- Group training sessions are well structured
Codes:
A. Statement (I) and (II) only are correct
B. Only (II) and (III) statements are correct
C. All the three statements are correct
D. Only statement (II) is correct ANSWER: (D)
74. A review is heavily influenced only by any one characteristics of the employee whose performance is being
reviewed is known as:
A. Recency of events error
B. Central tendency
C. Logical error
D. Halo effect ANSWER:(D)

75. Which one of the following tests is not recommended for the top level positions?
A. Presentations
B. Role plays
C. Interviews
D. Leaderless group discussions ANSWER : (B)
(June 2016)
76. Which of the following statement is correct about scalar chain principle as given by Fayol?
a) Each communication going up or down must flow through each position in the line authority
b) Chain of communication cannot be broken under any circumstances
Codes:
A. Only (a) is correct
B. only (b)is correct
C. neither (a)nor(b)is correct
D. Both (a) and (b)are correct ANSWER :(A)
77. Assertion (A): “Grapevine “trends to be more active during periods of change, excitement, anxiety and
sagging economic conditions
Reasons(R): Employees use this communication to fill in important information gaps and clarity management
decision
Codes:
A. (A) is right and (R) is wrong
B. (A) is wrong and (R) is right
C. Both (A) and (R) are right and (R) explains (A)
D. Both (A) and (R) are right but (R) does not explains (A) ANSWER :( C)

78. Which of the following is NOT true in case of HRM?

A. Employees are seen as an investment to be nurtured as well as a cost to be controlled
B. Conflicts are dealt with by team members within their teams
C. Preference is for collective bargaining of pay and working conditions
D. Emphasis is a competitive pay and conditions to stay ahead of competitors ANSWER :( C)
79. Which one of the following is an advantage of magazines as a source of recruitment?
A. Less expensive
B. Long lead time for advertisement placement
C. Reach a diverse audience
D. Many unmotivated applicants ANSWER :( C)
80. Examine the following statement and choose the correct code:
Assertion (A): Human resource planning must always be seen within the strategy making context
Reason(R): Human resource planning process removed from the realities of the business will be a waste of time
Codes
A. Both (A) and (R) are correct
B. Both (A) and (R) are wrong
C. is correct but (R)is wrong
D. is not correct but(R) is correct ANSWER: (A)
81. Which of the following is a deterioration of mental efficiency, reality testing and moral judgement that
results from in group pressure?
A. Harassment
B. Group think
C. Group burnout
D. Group control ANSWER :( B)
82. According to fielders contingency model of leadership favourableness of situation depends on which
combination of the following?
A. Leader member relationship
B. Member member relationship
C. leaders position power
 D. Degree of task structure
E. Degree of training ANSWER : (B)

83. The apex body at the highest level of the unit/division which oversees the functioning of quality circles is
called
A. Facilitator
B. coordinator
C. steering committee
D. Supervisory committee ANSWER (C)
84. A training technique in which trainees are first shown good management technique in a firm are asked to
play roles in a simulated situation, and are then given feedback and praise by their supervisor is known as
A. Behaviour modelling
B. Role playing
C. In house development center
D. Management game
ANSWER: (A)
(2017 November)
85. Staement 1: Management is not just a creature of the economy it is the creator as well.
Statement 2: He, who can manage, can manage anything.
Codes:
A. Statement 1 is correct but 2 is incorrect
B. Statement 2 is correct but 1 is in correct
C. Both the statements 1 and 2nd are incorrect
D. Both the statement are correct
ANSWER: D
86. Assertion (A): Due to these experiments (time, motion and fatigue studies) a factory does not remain a
factory, it is converted into a laboratory.
Reasoning(R): management succeeds or fails as human relations in business are intelligently or unintelligently
handled
Codes:
A. Both (A) nd (R)are correct and (R) is the right explanation of (A)
B. Both (A) AND (R) are correct but (R) is not the right explanation of (A)
 C. (A) is correct but (R) is not correct
D. (R) is correct but (A) is not correct ANSWER :(B)
87. Who among the following is not associated with theories of motivation?
A. A H Maslow
B. Cris Argyris
C. Frederick Herzberg
D. Peter F Drunker ANSWER: (D)
88. As per the Herzberg’s Hygiene theory of motivation, which among the following is not a motivational
factor?
A. Recognition
B. Working condition
C. Responsibility
D. Achievements ANSWER :(B)
89. The Job Description Index (JDI) Technique is used for measuring which one of the following?
A. Job attitude
B. Job description/Definitions
C. Job analysis record
D. Job skill requirements ANSWER :(A)
90. From the following two statements of Assertions (A) Reasoning (R) indicate the correct code
Assertion (A): Development in HRM is a short term educational processes with temporary intervention
Reasoning(R): It is a educational processes utilizing a systematic and organized procedure for development of
operative employees performance in current jobs.
Codes:
A. (A) is correct and (R) is correct explanation of (A)
B. (A) is correct but (R) is not correct explanation of (A)
C. (A) is not correct but (R) is correct
D. (A) and (R) both are not correct ANSWER:(D)
91. Which one of the following is not a physical barriers of communication?
A. Poor vocabulary
B. Noise
C. Improper time
D. Over load information ANSWER: (A)
92. Statement 1: Management control seeks to compel events to conform to plans
Statement 2: Controlling is determining what is motivational to the employees of the organization
Codes:

A. Statement 1 is correct but 2 is incorrect

B. Statement 2 is correct but 1 is correct
C. Both the statements 1 and 2 are correct
D. Both the statement 1 and 2 are incorrect ANSWER : (D)
93. Which of the following is not a method of deciding acceptable level of reliability or consistency of
measurement in selection methods?
A. Regiocentric approach
B. Split half method
C. Test related method
D. expectancy diagram ANSWER : (A)
(July 2018)
94. Assertion (A): management is a set of principles relating to its functions
Reasoning (R): management is essential to run all types of organisations.
Codes:
A. (A) and (R) both are correct; and (R) is the right explanation of (A)
B. (A) and (R) both are correct; but (R) is not the right explanation of (A)
C. Both (A) and (R) are incorrect
D. (A) is correct ; but (R) is incorrect ANSWER : (B)
95. Select the correct code of the statements being correct or incorrect
Statement (I) : it is a significant features of human that he plans
Statement (II): A plan is a trap to capture the future.
Codes:
A. Statement (I) is correct but (II) is incorrect
B. Statement (II) is correct but (I) is incorrect
C. Both the statements (I) and (II) are correct
D. Both the statements (I) and (II) are incorrect ANSWER : (C)
96. The popular statement, -“ if all you have is a hammer, everything looks like a nail”, is given by :
A. AH Maslow (Hierarchy of needs)
B. Henry Fayol (industrial and general administration)
 C. F.W. Taylor (scientific management)
D.Fredrick Herzberg (Hygiene theory)
ANSWER : (A)
97. Functional leadership theory is associated with :
A. Hackman and Walton and McGrath
B. Bernard and Ordway Tead
C. Koontz and O’ Donnell
D. Alford and Beatty ANSWER (A)
98. Assertion (A): in real terms, workers participation in management has failed in India
Reasoning (R) : there is lack of attitudinal change, multiplicity of unions and absence of a procedure to
determine a sole bargaining agent in an organisation.
A. (A) is correct and (R) is correct explanation of (A)
B. (A) is correct but (R) is not correct explanation of (A)
C. (A) is correct but (R) is incorrect
D. (A) is incorrect but (R) is correct ANSWER : (A)
99. Which one of the following is not an advantage of external recruitment?
A. Scope for resentment, jealousies and heartburn are avoided
B. Benefits of new skills, new talents and new experiences to organisations are available
C. Compliance with reservation policy becomes easy
D. Good performance is rewarded ANSWER : (D)
100. Which one of the following items is not a part of jobs specification?
A. Judgement
B. Initiative
C. Location
D. Emotional characteristics ANSWER :(C)

BANKING AND FINANCIAL INSTITUTION

2012 JUNE NET
1. Imperial Bank was established on January 27,1921 on the advise of
A. J. M. Keynes
B. Lord Illingworth
C. King George V.
 D. Winston Churchill
ANS: A
2. Read the following events
I.Allowing convertibility of rupee at the market rate in the current account
II. Nationalizations of general insurance business.
III . Establishment of IDBI.
IV. Nationalization of life insurance business.
V. Capital adequacy norms for commercial banks.
Arrange the event in the ascending order of their occurrence.
A.IV, III, II, I, V
B.V, IV, III, II, I
C.I, II, III, V, IV
D.I, V, II, IV, III
ANS : A
3. In India, the commercial banks are given licence of operation by
A. The government of India
B. The ministry of finance
C. Reserve Bank of India
D. Banking companies regulation Act, 1949
ANS: C
4. The provisions of general reserve banking companies are made keeping in view the provisions of
A. Indian Companies Act, 1956
B. Banking companies Act, 1949
C. SEBI act, 1992
D. Statutory audit
ANS: B
5. Which among the following is not true with regard to merchant banker?
I. It can accept deposits
II. It can advance loans
III.It can do other banking activities
IV.It can be a manager to a public issue
 A.I, II and III
B.II,III and IV
C.I, III and IV
D.II and IV
ANS: A
6. The commercial banks do not perform one function out of the following
A. Mobilisation of savings
B. Giving loans and advances
C. Issuing currency notes
D. Financing priority sectors
ANS: C
7. There are two lists of items, match the items of List -1 with the items of List -2
List-1. List-2
I. Reserve Bank of India. 1. NPA
II.EXIM Bank. 2.Facilitating small scale industries
III. SIDBI. 3. Credit control
IV. Capital adequacy 4. Export/Import Financing
Codes:
I II III IV
A. 1 2 3 4
B. 4 3 2 1
C. 2 3 4 1
D. 3 4 2 1
ANS: D
8. One of the items is not related with e-banking:
A. Demand draft
B. SPNS
C. ECS
D. ATM
ANS: A.
2012 DECEMBER NET
9. Match the following
a. Credit control 1.MCA
 b. Corporate control 2.SEBI
c. IPO control 3.IRDA
d. ULIP control 4.RBI

Codes :
a b c d
A. 4 2 3 1
B. 4 1 2 3
C. 2 3 4 1
D. 4 1 3 2

ANS: D
10. Which one among the following has not started commercial banking?
A.SIDBI
B.IDBI
C.ICICI
D.UTI
ANS: A

11. What is OTP in credit card transaction?

A. Odd transaction password
B. Owner’s trading password
C. One time password
D. One time pin code
ANS: C
12. The powers of controller of capital issues of India now shifted to
A. Ministry of finance
B.SEBI
C.AMFI
D. Ministry of corporate affairs
ANS: B
13. The success of E-banking depends upon :
i. Multi-layer security system
ii. Risk and surveillance management
iii. Updated flawless software’s
iv. Stringent legal framework

A. ii and i
B. i, ii and iii
C. ii, iii and iv
D. i ,ii, iii and iv
ANS : B.
14. Which one of the following is not a money market instrument?
A. Commercial paper
B. Participatory certificates
C. Warrants
D. Treasury bills
ANS: C.

15. Assertion (A) : Use of paper money is replaced by plastic money. The future will see the electronic
money clearance through satellite networking.
Reason (R) : RBI is encouraging e- banking.
A. (A) is false, but (R) is true.
B. (A) is true, but (R) is false.
C. Both (A) and (R) are false
D. Both (A) and (R) are true.
ANS: D.
16. Which is not finance company?
A. Hire-purchase finance company
B.IRDA
C. Mutual benefit finance companies
D. Loan companies
 ANS: B.
2013 JUNE NET
17. Match the items of List-I with the items of List-II and select the correct answer.
List-I List -II
i. Debit card a. Several storage
ii. Credit card b. Online recovery of amount
iii. Electronic purse c. Image processing use
iv. Cheque function d. Revolving credit

Codes:
i ii iii iv
A. c a d b

B. a b d c
C. d c a b
D. d c b a
ANS: B
18. Assertion (A) : The Indian economy could survive in the recent global recession due to its strong
banking system.
Reason(R) : The Indian economy contains a large amount of black money.

Codes:
A. Both (A) and (R) are correct and (R) is the explanation of (A)
B. Both (A) and (R) are correct but (R) is not the correct explanation of (A)
C. (R) is correct, but (A) is not the appropriate assertion of (R)
D. Both (A) and (R) are incorrect.
ANS: B.
19. Transaction of internet banking excludes
A. Withdrawal of cash anywhere in India.
B. Statement of account for a specific period.
C. Transfer funds from one account to another account.
D. Balance enquiry.
ANS: A.
20. Under the provisions of the Industries (Development and Regulation) Act, 1951, a licence is necessary
for:
A. Changing the location of an existing industrial undertaking.
B. Producing or manufacture a new article in an existing industrial undertaking.
C. Establishing a new undertaking.
D. All of the above.
ANS: D.
21. Assertion (A) : Most of the development banks in India have setup private commercial banks after the
introduction of capital adequacy norms.
Reason (R) : Development banks in India have not adhered to their basic objectives.

Codes:
A. (A) and ( R) both are correct, and(R) is correct explanation of (A)
B. (A) and ( R) both are correct, but(R ) is not a correct explanation of (A).
C. (A) is correct, but ( R) is incorrect.
D. ( R) is correct, but (A) is incorrect.
ANS : C.
22. When a loan will be NPA?
A. Interest and/or loan instalments overdue for more than 90 days.
B. Account is out of order for more than 90 days in case of overdraft /cash credit.
C. Bill remains overdue for more than 90 days.
D. All of the above.
ANS: D.

23. Direct supervision over depositories and mutual funds is undertaken by

A.NBFCs
B.RBI
C.SEBI
D. All of the above
ANS: C.

24. In the call /notice money market, which of the following participants is allowed to trade?
A. All banks, primary dealers and mutual funds
 B. All corporate
C. Only commercial banks.
D. All of the above
ANS: C

25. RBI ensures that banks operate within the set norms by conducting ________ inspections and _______
monitoring.
A. On site, off site
B. Off site, on site
C. On site, field
D. Field, on site
ANS: A.
2013 SEPTEMBER NET
26. Which one of the following techniques is used by the commercial banks in India to measure the risk
arising from trading activity?
A. Network Analysis
B. Sensitivity Analysis
C. Value at risk methodology
D. E. V. A
ANS: C
27. Which of the following schemes introduced by NABARD is intended to provide credit to farmers?
A. Rural infrastructure development fund
B. Kisan credit card
C. Micro – Finance
D. Co-operative development Fund
ANS: B
28. Which one of the following is a recent E-banking initiative in commercial banks in India?
A.RTGS
B.NEFT
C.NECS
D. NET banking
ANS: C
29. Which if the following fee-based services are provided by IDBI?
 i. Credit syndication
ii. Corporate trustee services
iii.Custodial services
iv. Foreign services

Codes:
A. i, ii and iv
B. i and ii
C. ii iii and iv
D. iii and iv
ANS : A
30. SIDBI provides financial assistance in the following forms :
I. Bills financing
II. Project financing
III. Re-finance assistance
IV. Resource support to institutions

Which of the following sequence is correct?

A. I, III, IV and II
B. II, IV, I and III
C. III, I, IV and II
D. IV, I, III and II
ANS : C
2013 DECEMBER NET
31. Who is the fiscal agent and advisor to Government in monetary and financial matters?
A.NABARD
B. SBI
C.RBI
D. None of the above
ANS : C
32. Match the items of List -I with the items of List -II :

List-I List-II
 a. National manufacturing competitiveness council (NMCC)
Licensing policy. I. Industrial
b. National Investment fund (NIP) year plan II. Eleventh five
c. The Industries (Development and Regulation) Act (IDRA),
1951 act, 2002 III. The competition
d. Increase in employment undertakings IV. Public sector

Codes :
a. b. c. d.
A. IV. I. II. III.
B. III. IV. I. II.
C. I. II. III. IV.
D. IV. III. II. I.
ANS: B
33. Match the following items of List -I and List -II in terms of functions of commercial banks :
List-I List –II
a. Letter of reference I. Advancing loans
b. Sale of gold coins II. Receiving deposits
c. Recurring account III. Non-banking function
d. Overdraft IV. Agency function
Code :
a b c d
A. I. II. III. IV.
B. IV. III. II. I.
C. IV. II. III. I.
D. I. III. II. IV.
ANS : B.
34. Which of the following are included under representation function of a bank?
I. Payment of cheques and bills
II. Providing remittance facilities
III. Underwriting of securities
IV. Advancing clean credit
V. Allowing overdrafts in current account
 VI. Purchase and sale of securities
Codes:
A. I ,II, III and IV
B.III, IV, V and VI
C. I, II, III and VI
D. II, III, V and VI
ANS: C
35. Reserve Bank of India controls the activities of some of following banks in India :
I. Commercial banks
II. Cooperative banks
III. Foreign banks
IV. Rural banks

Codes:
A. I,II and III
B. I, III and IV
C. II, III and IV
D. I, II, III and IV
ANS : D
36. Match the following List -I with List -II :
List -I (Name of securities) List -II
a. Bonds of land development banks I. Semi-government securities
b. Treasury Bills II. First order securities
c. Shares of public Ltd co. III. Personal securities

Codes:
a b c
A. I II III
B. II I III
C. III II I
D. I III II
ANS : A
37. The following activities are mainly related to which organization?
 i. Micro finance
ii. Rural finance
iii. Self help groups
iv. Cooperative Banks finance

A.Industrial finance corporation of India

B. Ministry of finance
C. Reserve Bank of India
D. National bank for agriculture and rural development
ANS: D

38. PIN banking transactions is known as

A. Postal Index Number
B. Permanent Identification Number
C. Personal Identification number
D. Public Interlocking Numeric
ANS: C
39. Reserve Bank of India was nationalized on
A. January 26,1948
B. January 01,1949
C. January 26,1950
D. January 01,1956
ANS :B
40. When a banking company is placed under moratorium under section 45 of the banking (Regulation) Act,
1949,the RBI must prepare a scheme of
A. VRS for staff
B. Capital buy back
C. Reconstruction of the company or amalgamation with any other bank
D. IPO of the bank
ANS: C
2014 JUNE NET
41. The profitability of public sector bags is low due to
I. Over-caution approach to lending
 II. Reserve Bank policies
III. High overhead costs
IV.Social – sector lending
Codes:
A. I and II
B. I and IV
C. I, III, and IV
D. II and III
ANS: C

42. Match the items of List -I with those List -II and select correct answer :
List -I List-II
1. Narasimham committee a. Lending under consortium arrangement
2. Shetty committee b. Frauds and malpractices in banks
3. Ghosh committee c. Securities operation of banks and financial institution
4. Janakiraman committee d. Financial system in India
Codes :
a b c d
A. 3 4 2 1
B. 2 3 4 1
C. 4 2 3 1
D. 3 4 1 2
ANS : B
43. Which of the following financial institutions is not with in the supervisory purview of RBI?
A. Foreign commercial banks operating in India
B. Regional Rural Banks
C. Mutual funds
D. State Co-operative banks
ANS: C
44. The Report rate and Reserve Repo rates are resorted to by the RBI as a tool of
A. Credit control
B. Settlement system
C. Currency Management
 D. Liquidity Control
ANS: D

45. Which one of the following institutions is promoted by IFCI :

A. Credit Analysis and Research Ltd (CARE)
B. Rashtriya Garmin VikasNidhi (RVGN)
C. Clearing Corporations of India Ltd (CCIL)
D. Small Industries Development Bank of India (SIDBI)
ANS: B
46. Which if the following committees is intended to review the working of the monetary system in India?
A. Narasimham Committee
B. TandonCommittee
C. SukhamoyChakravarty Committee
D. DehejaCommittee
ANS : C
47. Match the items of List -I with those in List -II and select the correct answer.
List -I List -II
a. Bank Rate policy 1.Involving the shortening of the currency of bills eligible for
Rediscount.
b.Credit rationing 2.Involving the purchase and sale of securities in the open market.
c .Variable reserve system 3. Involving the alteration of discount rate.
d. Open market operation 4. Involving the variation of the minimum reserves.

Codes :
a b c d
A 1 4 2 3
B 2 1 3 4
C 4 2 1 3
D 3 1 4 2
ANS :D
48. Match the items of List -I with the items of List -II and select the correct answer using the codes given
below the lists.
List-I List-II
a. Rural Industries Programme I. Meant for various target groups like rural youth, Ex-
Serviceman, women and scheduled castes /Tribes.
b. MahilaVikasNidhi scheme II. Aim at ensuring flow of credit to the disadvantaged
sections of the society.
c. Entrepreneurship development III. Commercial exploitation of local resources
Programme
d. Micro Credit Scheme IV. Provides assistance to voluntary organization for the
benefit of women.
Codes:
a b c d
A. I III II IV
B. II IV I III
C. IV II III I
D. III IV I II
ANS : D
2014 DECEMBER NET
49. Match the items of List -I with List -II :
List -I List -II
a. RBI Nationalization I.1964
b. Imperial Bank Nationalisation II. 1949
c. Nationalization of 14 commercial banks III. 1955
d. Establishment of IDBI IV. 1969

Identify the correct combination :

a b c d
A. I II III IV
B. II III I IV
 C. III II IV I
D. II III IV I
ANS : D
50. What is call money?
A. Money borrowed or lent for a day or overnight
B. Money borrowed for more than one day put upto3 days
C. Money borrowed for more than one day but upto 7 days
D. Money borrowed for more than one day but put upto 14 days
ANS : A
51. The regular authority of Regional Rural Bank is
A. NABARD
B. Central Government
C. State Government
D. Sponsor Bank
ANS : A
52. As per the RBI act, 1934, the following function are described as the functions of central bank:
I. Banking Functions
II. Advisory functions
III. Supervisory functions
IV.Promotional functions
Identify the correct combination :
A. I, III and IV
B. I, II and IV
C. II, III and IV
D. Only I and III
ANS : A

53. What is true about the Basel Committee on banking supervision (BCBS)?
I.BCBS is an Indian National Committee of banking supervisory authority.
II.BCBS was established by a group of 19 nationalized commercial banks.
III.BCBS was established in 1996
IV.It provides a forum for regular cooperation on banking supervisory matters.
 Codes :
A. I and II only
B. II and III only
C. III and IV only
D. IV only
ANS : D
54. Under Cooperative Bank structure, the apex institution is
A. National Cooperative Bank
B. State Cooperative Bank
C. District Cooperative Bank
D. IDBI bank
ANS: B
55. What is SLR ratio of a bank?
A. Ratio of total deposits against total investments.
B. Amount deposited by the bank with the Central Bank in the form of cash, gold and securities.
C. Amount that commercial banks are required to maintain before providing credit to customers.
D. Amount that commercial banks deposit with the foreign banks.
ANS : C
2015 JUNE NET
56. In 1992, the banking sector reforms were introduced as per:
1.C. Rangarajan Committee report
2.M. Nararsimham Committee Report
3.Suresh Tandulkar Committee Report
4.Sukhamoy Chakrbarty Committee Report
ANS: 2
57. For the purpose of extending rural banking and agro finance, the NABARD:
1. Directly lends and monitors the rural borrowers
2. Refinances the banks extending rural finance
3. Refinances the rural borrowers obtaining credit from banks
4. Direcly finances the rural borrowers and gets refinance from government.
ANS: 2
58. When RBI Grants loan to commercial banks and charges interest on it, it is called:
1. Rapo rate
 2. Reverse Rapo rate
3. Sweep stack rate, basic rate
4. Bank rate
ANS: 4
59. E- Banking business is essentially regulated by the information technology act, 2000, under which
Personal signature is replaced by:
1. Encrypted signature
2. Image signature
3. Digital signature
4. Online signature
ANS: 3
60. In order to control inflation and ensurestability in money market:
1.The RBI works under the direction of ministry of finance, government of India.
2.The RBI acts independently and can refuse the government directive.
3.The RBI acts under the board of directors.
4.The RBI’s board of governors shall abide by the government directive.
ANS: 2
61. The operations of banks and financial institutions are regulated by:
1. The RBI Act 1934 only
2. The Banking Regulation Act 1949 only
3. Information Technology Act 2000 only
4. All of the above.
ANS: 4
62. The operationalize online, internet, mobile banking, debit card and credit card tools, some of the
essential ingredients are:
1. Compliance with the Information Technology Act 2000
2. Satellite connection
3. Selection of a portal and server
4. All of the above
ANS:4
2015 DECEMBER NET
63. Concentration Banking is a method of :
1.Decentralised collection
 2.Centralised collection
3.Direct collection
4.Payment only through cheques
ANS: 1
64.Identify the years in which different phases of Bank Nationalisation took place in India:
a)1950 b) 1955 c)1969
d) 1949 e) 1980
Codes:
1. a,b,c,d
2. b,c,e
3.b,d,e
4. c,d,e
ANS :2

65.'SWIFT' stands for:

1. Society for worldwide Inter- bank Fund Transfer
2. Society for worldwide Inter-bank Fast Transmission
3. Society for worldwide Inter-bank Financial Telecommunications.
4. None of the above
ANS: 3
66. Select the techniques of monetary control adopted by RBI from the following:
a) Cash Reserve Ratio
b) Statutory Liquidity Ratio
c) Bank Rate
d) Currency Rate
Codes:
1. a,b,c,d
2. b,c,d
3. a,c,d
4. a,b,c
ANS: 4
67. Which of the following is not a development banking institution?
1. IDBI
 2. IFCI
3. EXIM Bank
4. ICICI
ANS: No option is correct.
68."Skimming " in e- banking refers to :
1. Identifying fraudsters copying vital information from credit cards
2. Multiple transactions by one credit card
3. Conversion of a debit card into credit card
4. None of the above
ANS: 1

69.Which among the following is not a subsidiary of Reserve Bank of India?

a) Deposit Insurance and Credit Gaurantee Corporation of India.
b) Bharatiya Reserve Bank Note Mudran Private Limited
Codes:
1. Only a
2. Only b
3. Both a and b
4.Neither a not b
ANS: 4
70. Which among the following is not associated with NABARD?
a. NIEAF b. BIRD c. RIDF d. SHPI

Code:
1. a only
2. b only
3. b and c only
4. None of the above.
ANS: 4
2016 JULY NET
71.Identify the correct combination of statements with regard to banking in India.
a) For many years the presidency bank had acted as quasi - central banks.
 b) The Bank of Hindustan was liquidated during 1829-32.
c) General Bank of India was an unsuccessful bank and was dissolved in 1791.
d) Bank of Calcutta was renamed as Bank of Bengal in 1921.
Codes:
1. a, b and c 2.b,c and d
3. a, b and d 4.a,b,c and d
ANS:1

72. Which combination of the following methods indicates quantitative methods of control of credit creation
practiced by the Reserve Bank of India.
a)Bank Rate
b) Open Market Operations
c) Variable Reserve Ratios
d) Credit Rationing
Codes:
1.a,b and c 2.a,b and d
3.b,c and d 4.a,c and d
ANS:1
73. Which one of the following development financial institutions in India has started the special refinance
Scheme for the resettlement and rehabilitation of voluntary retired workers of the National Textile
Corporation of India.
1.IDBI
2.SIDBI
3.ICICI
4.None of the above
ANS:1
74.Read the following statements and choose the correct code:
Statement -I: Small Industry Development Bank of India (SIDBI) was set up as a wholly owned subsidiary
of RBI.
Statement -II: SIDBI has taken over the responsibility of administering small industry development fund
managed IDBI.
 Codes:
1.Only( I) is correct
2.Only (II)is correct
3.Both (I) and (II) are correct
4.both (I) and (II) are wrong.
ANS:2
75. Which of the following are the instruments of money market ?
i)Call money market
ii) Commercial bill market
iii) Industrial securities market
iv) Short -term loans market
v) Treasury bill market
Codes:
1. i ,ii, iv, v
2. i ,ii, v
3.i, ii, iii, iv, v
4.i, ii, iii, iv
ANS:1

76. Assertion (A) : "Banks globally are facing more challenges now, and Macro sustainability is a necessity
but not sufficient for sustainable economic growth."
Reason (R): "Putting regulations in place is only one part and their implementation is equally important
for achieving growth and sustainability".

Codes:
1. (A) and (R) are true and (R) is correct explanation of (A)
2. (A) and (R) both are true but (R) is not the correct explanation of (A)
3.(A) is true and (R) is false
4. (A) is false and (R ) is true
ANS:1
77.Banking on telephone service includes:
 i) Automatic balance voice out
ii) Inquiry all term deposit account
iii) Direct cash withdrawal
iv) Utility bill payment
v) Voice out last five transactions

Codes:
1.i, ii, iii and v
2.i, ii, iv and v
3. ii, iii, iv and v
4. All i, ii, iii, iv and v
ANS:2
78.Which one of the following banks currently ranks number one in India in terms of market capitalization?
1. State Bank of India
2. I.C.I.C.I.Bank
3. U.T.I.Bank
4. I.D.B.I.Bank
ANS:1
79. Which is not correct about International Development Association (IDA)
a) Following earthquake in 2015,IDA has helped Nepal rebuild and recover
b) IDA ranks as the highest performing multilateral Development Bank in 2016
c) IDA is a subsidiary bank of IBRD
d) India has procured highest amount of international loan from IDA.
Codes:
1. a and b 2.c
3. d 4.a and c
ANS:3
2016 AUGUST NET
80. Match the items of List-I with those of List -II.
List-I List-II
a. Locally operated i. Community
financial institutions Development
that empower Bank
 employees
make local decisions
to serve their customers
and partners
b. Regulated Banks that ii. Offshore
provide financial Bank
services and credit
to under served markets
or population
c. Banks that prioritise iii.Community
the transparency of all Bank
operations
d. Bank located in iv.Ethical Bank
jurisdictions with
low taxation and
regulations.
Codes:
a b c d
1. i iv ii iii
2. iii ii iv i
3. iii i iv ii
4. iv iii ii i
ANS: 3

81.If you need to transfer money to another person through internet , which of the following methods you
could use?
1. Financial cybermediary
2. Electronic cheque
3. Electronic bill presentation and payment
4. All of the above
ANS: 4
82. Which of the following methods are qualitative methods of control of credit creation practiced by the
Reserve Bank of India?
 a. Open Market Operations
b. Variable Reserve Ratios
c. Credit Rationing
d. Margin Requirements.
Codes:
1. a and b
2. b and c
3. c and d
4. d and a
ANS: 3
83. E-Banking is also referred to as
a) Web -based Banking
b)Branchless Banking
c)Virtual Banking
d) Internet Banking
e)Western Banking
f) Neo-classical Banking
Codes:
1. a,b,c and d
2. a,b,c and e
3.a,c,d and f
4.a,c,d and e
ANS:1
84. SBI has applied to open branches in Pakistan in recent agreement between India and Pakistan at
1. Islamabad and Karachi
2. Lahore and Karachi
3. Rawalpindi and Sindh
4. Lahore and Islamabad
ANS: 2

2017 JANUARY NET

85.In which year IFCI act was amended in order to make it possible to provide assistance inter alia ,
for Medical health or other allied services?
 a).1960 b)1970
c)1973 d)1986
ANS:D

86. SIDBI was setup as a subsidiary of IDBI to?

a) Take over the functions of small business financing of IDBI
b) Take over the venture capital operations of ICICI.
c) Reconstruct and rehabilitate the sick and closed industrial units financed by IDBI
d) Facilitate, finance and promote India’s foreign trade
ANS:a
87. Letters of credit, guarantees, forward contracts etc., come under which one of the following ?
a)Liabilities of a bank b)Asset of a bank
c)Foreign exchange item of a bank d)Off –balance sheet items of bank
ANS: a

2017 NOVEMBER NET

88. Which of the following are the forms of E-Banking? Select the correct code.
A.Internet banking
B.Telephone banking
C.Electronic cheque conversion
D.Electronic bill payment
E.Direct fund transfer through RTGS
Code :
1. A,C and D 2. A,B,C and D
3.B,C and D 4.A,B,C,D and E
ANS: 4
89. Which of the following statements are false? Indicate the correct code.
A.RBI has prescribed guidelines for the operations of credit rating agencies in India.
BAll venture capital fund in India have been promoted by government.
C.A mutual fund can operate as venture capital fund.
D.Credit rating is an authoritative guarantee regarding the credit position of a person.
Code:
 1. A, B, C and D 2.A, B and D
3. A, B and C 4. A and c
ANS: 2
90. Dividends declared by Unit Trust of India or by Mutual fund is :
1.Fully exempt in the hands of unit holders.
2.Fully taxable in the in the hands of unit holders.
3.Fully exempt in the hands of individual unit holders and fully taxable in the hands of institutional
Unit holder.
4.Included in the gross total income but a deduction is allowed under section 80L
ANS: 1

91. Match the following items of List-I with the items of List-II and indicate the code of correct matching:
List-I List-II
A. IDBI i.1956
B. ICICI ii.1955
C. LIC of India iii.1990
D. SIDBI iv.1964
Code:
A B C D
1. iii i ii iv
2. iii i iv ii
3. iv ii i iii
4. i ii iii iv
ANS: 3
92.Statement ( I) :Capital adequacy norms help banks in strengthening their capital base.
Statement (II) : Capital adequacy norms help banks in sanctioning more loans.
Code:
1. Both the Statements (I) and (II) are correct.
2. Both the statements (I) and (II)are incorrect.
3. Statement (I) is correct but (II) is incorrect.
4. Statement ( I) is incorrect but (II) is correct.
ANS: 3
93. Read the following events:
 i. Capital adequacy norms for commercial banks
ii. Establishment of IDBI
iii. Allowing convertibility of rupee at the market rate in the current account
iv. Nationalisation of general insurance business.

Arrange the events in the ascending order of their occurance:

1. i, ii, iii, iv 2. iv, iii, ii,i
3. iv,ii, i,iii 4. i, ii,iv,iii
ANS:1
94. Which among the following is not an international economic institution?
1.IMF
2.IBRD
3.ADB
4.IFRS
ANS:4
95. Assertion (A): The future will see mostly the electronic money clearance through satellite
Networking.
Reasoning (R) : RBI is encouraging e-banking.
Code:
1. (A) is true (R) is false.
2. (A) is false but (R) is true.
3. Both (A) and (R) are true and (R) is the correct explanation of (A)
4. Both (A)and (R) are true but (R) does not support (A).
ANS : 3
2018 JULY NET
96. Which one of the following is not the function of NABARD?
A.To provide refinance assistance by way of short term credit to state cooperative banks and sectoral
rural banks, etc., approved by the RBI for some specific purposes.
B.To undertake inspection of cooperative societies other than primary cooperative societies and RRBs.
C.To promote research in various aspects of the problems of urban development.
D.To subscribe to share capital or invest in securities of any institution concerned with agricultural and
rural development.
ANS: C
 97. Which one of the following financial institutions co-ordinates the functions and operations of all the
financial institutions into a single integrated financial structure so that each ay contribute to the growth
of the economy?
A.IFCI
B.UTI
C.IDBI
D.SIDBI
ANS: C
98. Assertion (A): The Reserve Bank of India is entrusted with the management of the public debt and issue
Of new loans and treasury bills behalf of the central and state government.
Reasoning (R): the Governor and the Deputy governors of Reserve Bank of India are appointed by the
Central government.
Code:
1. (A) is correct but (R) is not correct.
2.(A) and (R) both are correct but (R) is not the right explanation of (A).
3.(A) and (R) both are correct and (R) is the right explanation of (A).
4.(A) and (R) both are not correct.
ANS: 2
99.____________ refers to the process of removing or stripping the legal status of a currency.
1.Digitisation
2.Financial inclusion
3.Demonetisation
4.Micro finance
ANS: 3
100. Which one of the following is not the objective of UTI?
1.To mobilise savings of the community by offering savers the triple benefits of safety, liquidity and
profitability of investments.
2.To channelize the pooled savings into productive outlets.
3.To provide finance under hire purchase finance and housing finance to its members.
4.To give everyone a chance to indirectly own shares and securities in a large number of select
companies.
ANS: 3
 UGC/NET

MARKETING MANAGEMENT
(2016- July Paper II )
1. Which type of differentiation is used to gain competitive advantage through the way a firm designs its
distribution coverage, expertise and performance?
(1) Channel differentiation (2) Services differentiation
(3) People differentiation (4) Product differentiation
Ans: A
2. Which one of the following is the most likely result of a marketing strategy that attempts to serve all potential
customers?
(1) All customers will be delighted.
(2) Customer-perceived value will be increased.
(3) The company will need to follow up with a demarketing campaign.
(4) Not all customers will be satisfied.
Ans: D
3. Which of the following is not a primary activity in Michael Porter’s value chain ?
(1) Inbound logistics (2) Operations
(3) Outbound logistics (4) Procurement
Ans:D
4. Which of the following represents consistency of results when the test instrument is used repeatedly?
(1) Validity (2) Reliability
(3) Relativity (4) Sensitivity
Ans:B
5. Assertion (A) : Too many stimuli make a person accommodated to those sensations. Sensory adaptation is a
problem that concerns many advertisers, which is why they try to change their advertising campaigns regularly.
Reason (R) : To cut through advertising clutter and to ensure that consumers perceive advertisement,
marketers try to increase sensory input.
CODES :
(1) (A) is right and (R) is wrong.
(2) (A) is wrong and (R) is right.
(3) Both (A) and (R) are right but (R) does not explain (A).
(4) Both (A) and (R) are right and (R) explains (A).
Ans:D
(2016-July Paper 3)
6. Identitfy the universal buying motives from the following:
A) Profit or gain
b) Beauty and complexion
c) Fear of loss
d) Competation and struggle
e) Comfort and pleasure
f) Avoidence of pain
g) Love and affection
h) pride and prestige
CODES:
a) a, b, c, d, e, f
b) a, c, d, e, g, h
c) a, c, e, f, g, h
d) a, b, c, f, g, h
Ans:C
7. Which form of e-market place brings together buyers and sellers from the same industry?
a) Horizontal
b) Vertical
c) Integrated
d) Inclined
Ans:B
8. Assertion(A): Download price pressure for a changing economic environment has coincided with some long
term trends in technological environment
Reasoning(B): Through internet, buyers can get instant price comparisions and markets can monitor customer
behaviour to tailor their offers to individuals
CODES:
a) (a) is right and (r) is wro0ng
b) (a) is wrong and (r) is right
c) Both (a) and (r) are right
d) Both (a) and (r) are wrong
Ans: C
9. Assertion(A) : Marketing is anything you create/ share that tells your story.
Reasoning (B): Marketing is a way to connect what products and services you have to connect what products
and services you have to offer with customers who want and need such product and services.
CODES:
A) A is correct but R is not correct.
b) A and R both are correct but R is not the correct explanation of A
C) A and R both are correct and R is the correct explanation of A
d) A and R both are incorrect
Ans:C
(2015- June – Paper 2)

10. The service marketing mix is an extended marketing mix and includes.
1) People 2) Process
3) Service 4) Physical evidence
Select the correct answers using the codes given below
a) 2, 3, 4 b) 1, 2, 3
c)1, 2, 4 d) 1, 3, 4
Ans: C
11. Black box model in marketing relates to
a) Marketing planning
b) Marketing mix
c) Marketing control
d) Consumer behaviour
Ans: D
12. Items, considered part of the augmented product, do not include
a) Guarantee b)Warranty
C) Complementary product d) Channels of distribution
Ans: D
13. Which of the following is not a type of direct marking?
a) Direct mail marketing b) Retail marketing
c) Tele marketing d) E-mail direct marketing
Ans- B
14. ‘Press release’ is a part of
a) Public relation b)Advertising
c) Sales promotion d) None of these
Ans: A
( 2015 JUNE PAPER 3)
15. A Marketing network consists of
a)The tasks to devise the marketing activities.
b) The tasks of hiring, training and motivating employees.
c)The activities that help in designing and implementing the marketing programmes.
d)The company and its supporting stakeholders with whom it has built mutually profitable business
relationships.
Ans: D
16. Target marketing involves which of the following activities?
a)Market positioning
b) Market targeting
c)Market behaviour
d) Market segmentation
Select the correct answers using the codes given below
a) 1 and 2
b) 2 and 4
c) 1,2 and 4
d) 2,3 and 4.
Ans: C
17.The pricing strategy which adjusts the basic price to accommodate differences in customers, products and
locations is called
a) Differentiated pricing
b)Promotional pricing
c)Geographical pricing
d)Price discount and allowances.
Ans:A
18.Horizontal marketing system comprises of
a)The producer,wholesaler and retailer acting in a unified system.
b) Multinational marketing
c)Two/more marketing channels to reach one or more customer segments.
d)Two/ more unrelated companies put together resources to exploit an emerging market.
Ans :D
19. Match the following

List I List II
a)Face to face interaction with one or more 1) Sales promotion
prospective purchasers.
b) Any paid form of non- personal promotion 2) Public relations
c) Short-term incentives to encourage 3) Personal selling
purchase
d) Programmes to promote company’s image 4) Adverstising

Codes: A B C D
a) 3 4 2 1
b) 3 4 1 2
c) 2 1 3 4
d) 2 3 1 4
Ans: B
(2014-Dec,paper II)
20.Managerial grid suggests the following as the best leader behaviour
a) High structure and high consideration.
b) Low structure and low consideration
c) High concern both for production and people.
d) Low concern both for production and people.
Ans: C
21. Marketing strategy development is also known as
a) Marketing control
b) Marketing Excercise
c) Marketing Planning
d) Situation analysis.
Ans: C
22. For most people,the purchase of cheese for daily use can be described as a
a) Completely novel buy
b) Modified re- buy
 c) Routine re-buy
d) High involvement product
Ans:C
23. The promotion mix of a company consists which of the following?
a) Marketing communication,promotion decisions.
b)Personal Selling,product objectives.
c) Advertising,personal selling,sales promotion, publicity and public relations.
d) Consumer psychology ,buyers motives,brand equity.
Ans: C
24. Rational buying motives that determine purchase decisions are mostly based on
a)Price factor
b)Psycological factors
c) Quality of product
d) Advertisement
Ans: B
(2014- Dec –PAPER III)
25. Monopolists prefer to sell the products in the markets with
a) Elastic demand
b)Unitary elastic demand
c)Inelastic demand
d)Absence of elasticity of demand.
Ans:A
26.Assertion(A) In long-run under perfect competition,all forms invariably get only normal profits.
Reason (R) All firms incur minimum average cost and incur no selling costs due to absence of product
differentiation.
Codes:
a) A AND R both are true
b)A is true, but R is false
c )A is false ,but are false
D)A and R both are false
Ans: C
27. Assertion(A)Differential pricing structure is designed to accommodate the various categories of buyers.
Reason(R) It aims at increasing sales and revenue and driving the competitors out from the market
 Select the correct answers using the codes below
a) A and R both are true
b) Ais true but Ris false
c) A is false, but are false
d) Aand R both are false.
Ans: B
28.Cost –plus pricing is considered appropriate for
1) Product tailoring
2) Public utility pricing
3) Refusal pricing
4)Monopoly pricing
Select the correct answer using the codes given below
a) 1 and 2
b) 1, 2 and 3
c) 2,3 and 4
d) 3 and 4
Ans:B
29. For promoting sales, advertising endeavours may be made as per
1) competitive parity
2) Objective and task
3) Tied sales
4) All- one-can afford
Select the correct answers using the codes given below
a) 1 and 2
b) 2, 3 and 4
c)1, 2 and 4
d) 3,2 and 4
Ans: C
(2014-Dec –PAPER III)
30. Which one of the following stages of the marketing research process is most expensive?
a) Data analysis
b) Data collection
c) Developing the research plan
 d) Report writing
Ans: B
31.The people to adopt a new product first are called
a) Early adopters
b) First users
c)Initial adopters
d) Innovators
Ans:D
32.A concept in retailing that helps explain the emergence of new retailers is called the ------------ Hyphotesis
a) Product life cycle.
b) Service assortment
c) Retail life cycle
d) Wheel- of- retailing
Ans: D
33. Manufactures of cars and motor cycles typically seek ---------distribution.
a) Selective
b)Intensive
c)Exclusive
d)Restrictive.
Ans:D
34.Which method of setting advertising budget is most scientific and logical?
a) All you can afford method
b) Competitive parity method
c) Objective and task method
d) Percentage of sale method
Ans: C
(2014 June paper 2)
35. A primary group influencing the buyer behaviour is a
a)Family
b)Professional association
c) Regional group
d) Trade union
Ans:A
36.After conductingthe business analysis for developing a new product, a company must do
a)Idea generation
b)Product positioning
c)Product development and testing
d) Test marketing
Ans:C
37.Match the following
List I List II
A. Post purchase behaviour 1.AIDA
B. Personal selling 2.ACMEE
C. Everitt M.Rogers 3.Diffusion of innovation
D.Sales person training 4.Cognitive dissonace

Codes: A B C D
a) 1 2 3 4
b) 4 2 3 1
c) 3 2 1 4
d) 4 1 3 2
Ans:D
38.Which type of retail stores generally has the highest operating costs?
a) Department stores
b) Super market
c) Chain store
d) Co-operative stores
Ans:A
39.Which of the following statement is correct?
a) India has been a pioneer in social marketing
b)Advertising standard council of india is a statutory body set-up the government of india
c) Neither ‘a’ or ‘b’
d) None of the above
Ans: B
(2013 Dec paper2)
40.The factor that exerts the broadest and deepest influence on consumer behaviour is
 a) Culture
b) Sub- culture
c) Social class
d)Income
Ans:A
(2013 Dec paper 3)
41) At which stage of product life cycle are the pricing decisions most complex?
A) Decline
B) Growth
C) Introduction
D) Maturity
Ans: D
42) Which one is not an element of market logistics?
a) Inventory
b) Order -processing
c) Warehousing
d0 Supply Chain management
Ans : D
43) Under which legislation, the manufactures and distributes are required to declare maximum retail price
(MRP) on placed commodities?
a) The bureau of Indian standard act, 1986
b) The consumer protection act 1986
c) The standards of Weights and Measures act, 1976
d)The Essential Commodities Act, 1955
Ans: C
44) In modern marketing, which of the following functions of distribution middleman is gaining maximum
importance? ‘
a) Marketing persuasive communication
b) Price negotiation
c) Keeping adequate inventory
d) Gathering market information
Ans : D
45) Which methods of setting the advertising budget of a company is considered to be the most scientific and
logical?
a) All you can afford method
b) Percentage of sale method
c) Competitive parity Method
d) Objectives parity method
Ans: D
(2013 June paper 2)
46) Which of the following concepts are based on development, design and implementation of marketing,
programmes, process and activities that recognise their breadth and Interdependence?
a) Product concept
b) Sales concept
c) Social marketing concept
d) Holistic Marketing concept
Ans: D
47) The concept of marketing mix, consists of 4P’s marketing was developed by,
A0 E Jerome McCarthy
b) Peter E Drucker
c) Phillip Kotler
d) William J Stonton
Ans: A
48) The selling concept is most likely to be used by firms which sells,
a) Convenience goods
b) Shopping goods
c) Speciality goods
d) Unsought goods
Ans: D
49) Match the following
List – 1 List – 2
A) Everitt M Regers 1) Service quality model
B) J. D Powervb 2) Three types of marketing for services
C) parasuraman Zeithami and 3) Quality rating of automobiles.
Berri
D) Gronroos 4) Diffusion of Innovation
CODES:
A B C D
a) 3 2 1 4
b) 1 2 3 4
c) 2 1 4 3
d) 4 3 1 2
Ans: D
50) Consumer attitudes and beliefs about deit, health and nutrition are influenced by
a) Economic environment
b) Cultural environment
c) Social environment
d) Natural environment
Ans: B
(2012 Dec paper 2)
51.A method for achieving maximum market response from limited marketing resource by reorganising
differences in the response characteristics of various parts of the market is known as
a) Market targeting
b)Market positioning
c)Market segmentation
d)Market strategy
Ans:C
52.Who plays their significant role in distribution of goods, when they do not sell to ultimate users or
consumers?
a)Retailer
b) Wholesaler
c) Mediator
d) Commission agent
Ans: B
53.In marketing mix, which four P’s are covered?
a)Product ,Price, Place, Promotion
b) Product, Price, Power, Promotion
c ) Product ,Price, Penetration, Promotion
 d) product, price, positioning, promotion.
Ans:A
54. Which research includes all type of researches into human motives,When it refers to qualitative research
designed to uncover the consumer’s sub-concinousers/hidden motivations?
a)Motivational Research
b)Marketing Research
c)Managerial Research
d)Price Research
Ans:A
55.False and misleading claims and vulgarity in advertisements do not match with
a) Aggressive advertising
b) Ethics in advertising
c) Mass level of advertising
d) sales promotion
Ans: B
(2012 Dec paper 3)
56) Match the following
List 1 List 2
A) Loyal customers____ products 1) Less attention
B) Loyal Customers are____ sensitive 2) Cheaper
C) Loyal customers pay ____ to competitors advertising 3) Less price
D) Serving existing customer’s is____ 4) Buy more
CODES:
A B C D
A) 3 1 2 4
B) 4 3 1 2
C) 2 1 3 4
Ans: B
57) ASSERTION (A) : High customer expectations leads to dissatisfaction as products performance never
matches them
REASON (R): Product performance is always customer specific
CODES:
a) Both A and R are true and R is the correct explanation of A
b) Both A and R are true and R is not the correct explanation
c) A is true, but R is false
d) A is false, but R is true
Ans: B
58) Under which concept of marketing do you find greater emphasis on techniques and technology of
production?
a) Product
b) Selling
c) Marketing
d) None of these
Ans: D
59) Which is used for short term sales achievement?
a) Personal selling
b) Advertising
c) Sales promotion
d) Public relations
Ans: C
60) Public distribution system relates to
a) Marketing system
b) Retailing system
c) Industrial System
d) Selling system
Ans: B
(2012 June paper 3)
61) Which element of the promotion mix do wholers generally apply to obtain their promotional objective?
a) Advertising
b) Personal selling
c) Trade promotion
d) Direct marketing
Ans: C
62) Match the following
List 1 List 2
A) Mega marketing 1) Advertising
B) Penetration pricing 2) Kotler
C) Promotion mix 3) Low price
D) Customer satisfaction 4) Post purchase behaviour
CODES-
A B C D
a) 1 2 3 4
b) 3 1 2 4
c) 4 3 2 1
d) 3 4 1 2
Ans: B
63) Statement (1): Sales promotion has a strong impact on consumer behaviour in rural India.
Statement (2) : Rural people in India give utmost significance to sales promotion schemes.
CODES:
a) Statement 1 is correct but statement 2 is incorrect.
b) Statement 1 is incorrect, but statement 2 is correct.
c) Both statement 1 and statement 2 are correct.
d) Both statement 1 is and statement 2 are correct.
Ans: A
64) Market subdivides on the basis of behavioural characteristics is called
a) Segmentation
b) Aggregation
c) Precision
d) None of these
Ans : A
65) What is mass marketing?
a) Offering the same products and marketing mix to all consumers
b) Offering variety of products to the entire market
c) Offering differentiated products tom all customers
d) Following concentrated marketing strategy
Ans: A
66) Which concept of marketing is based on the assumption that superior products sell themselves?
a) Production
b) Marketing
c) Societal
d) Product
Ans: D
67) In broader sense, marketing communication includes
a) Product
b) Place
c) Price
d) All the above
Ans: D
68) Physical distribution provides
a) Place utility
b) Time utility
C) Place and time utility
d) Form utility
Ans: C
69) What is relevant to place variable of marketing mix?
a) Branding
b) Price penetration
c) Sales personnel motivation
d) None of these
Ans: C
70) Which one of the following is incorrect?
a) Marketing arouse emotional motives
b) Marketers satisfy rational motives
c) Marketers formulate different sales promotions for different motives.
d) None of these
Ans: D
71) Non store-marketing includes
a) Home selling’
b) VPP
C) Vending machines
d) All of these
Ans : D
72) What is customer delight?
a) Performance equal to expectation
b) Performance less than expectation
c) Performance more than performance
Ans: A
73) Which terms are often used interchangeably in marketing literature
a) Concept, method, philosophy
b) Concept, approach, technique
c) Orientation, concept, philosophy
d) Philosophy, system, concept
Ans: C
(2018 July paper 2)
74) When two separate companies or two divisions with the same company agree to place both of their
respective brands on a particular product or enterprise, this arrangement is termed as:
a) Differential branding
b) Co-branding
c) Dual branding
d) Both co branding and Dual branding
Ans: D
75) The tangible goods which a consumer wants to compare quality, price and perhaps style in several stores
before making a purchase are called:
a) Convenience goods
b) Shopping goods
c) Speciality goods
d) Unsought goods
Ans: B
76) When a company treats each single customer as a separate segment, that is called:
a) Niche marketing
b) Ntano marketing
c) Single marketing
d) Micro marketing
Ans : D
77) Under which of the following conditions, The level of consumers involvement will not be high?
a) The consumers considers the amount of money involved to be large
b) The product is seen as having low potential for providing significant benefits
c) The consumers lacks information about alternatives for satisfying the needs
d) The product has considerable social importance
Ans: B
78) Statement (1) : The mindset which is commonly associated with a long ago era when the demands for goods
generally exceeded the supply, and the primary focus in business was to effectively produce medium quantities
of products; finding the customers was viewed as a relatively major function.
Statement(2) : The firms with product orientation typically focus on the quality and quantity of offering while
assuming that customers will seek out and buy reasonably priced, will made products.
From the above statements indicate the correct code of being statement or incorrect. THE statements
relate to concepts of marketing
a) Both the statements (1) and (2) are correct is not correct
b) Both the statements (1 ) and (2) are correct
c) Statement (1) is correct but statement (2) is not correct
d) Statement (1) is not correct but statement (2) is correct
Ans: D
(2017 Nov paper 3)
79) Which of the statements are correct select the code
Statement(1) : Opinions can be describes as the slow responses might give to opinion poll questions about
any issue.
Statement(2): Attitudes are held by with a greater degree of conviction, over longer duration and more likely to
influence behaviour.
Statement(3): Values are held more strongly than attitudes and underpin ourv attitudinal behaviour.
CODES:
a) (1) AND (2)
b) (2) AND (3)
C) (1) AND (3)
D) (1), (2), AND (3)
Ans: B
80) Which of the following is not a major aspect of digital marketing?
a) Jurisdiction
b) Ownership
c) Security
d) Entertainment
Ans: D
81) Which of the following statements are correct select the correct code:
Statement(1): Horizontal conflicts between channel members in caused due to channel members impinge
On the market territory of their intermediaries at different level
Statement(2) : Vertical conflict is caused due to intense price competition, disagreement about promotional
activities, attemptys to by pass intermediary and distribute, direct, differing expectations as to channel or
intermediary performance
Statement(3): Hybrid channel conflict arises due to grey marketing
CODE:
a) (1) and (3)
b) (1) and (2)
c) (2) and (3)
d) (1), (2), and (3)
Ans: C
82)Which of the following statements are incorrect Indicate the correct code.
Statement(1):As Consumer’s income increases,the percentage of income spent for food items decreases, for
rent, fuel and light remains the same for clothing remains the same and for sundries increases.
Statement(2):Societal marketing period was from 1960 on wards.
Statement(3):Our debt to social anthropology decreases more and mpre as we use qualitative market research
approaches.
Statement: (4) The economic concepts of perfect compitation and matching of supply and demand underlie
the marketing concept, particularly in relation to the concepts of the price at which goods are sold and quantity
distributed.
Code:
a) 1 and 2
b) 2 and 3
c)2 and 4
d) 1 and 4
Ans:B
83.A research technique used particularly in retailing (onlineand offline),in which consumers are recruited by
researchers to act as ononymous buyer in order to evaluate customer satisfaction,service quality and customer’s
own evaluation of their experiences is known as:
a) Consumer Jury
b)Projective Technique
c) Mystery Shopping
d) Semiotic Research
Ans:C
84.Match the items of List –I with items of List –II and select the correct code of matching:
List-I List-II
a) Market leader i)Avoid hostile attracts on rivals
b)Market Challenger ii) Attack the market
c)Market Follower iii)Provide high level of specialisation
d)Market Nicher iv) Attack the market
Codes: ( a) (b) (c) (d)
a) 4 2 1 3
b) 2 4 3 1
c) 3 1 4 2
d) 1 3 4 2
Ans:A
(2017 Nov paper 2)
85.When Walt Disney World’s Magic kingdom lets customers visit a fairly kingdom,a pirateship, oror a
haunted house,then what is marketed in this example?
a) Services
b) Events
c) Experiences
d) Ideas
Ans:C
86.Which one of the following statements is true according to VAIS framework of Psychographic
segmentation?
1)The consumers who are primarily motivated by ideas are guided by knowledge and principles.
2) The consumers who are motivated by achievement look for knowledge and principles.
3) The consumers who are motivated by self expression don’t desire social/physical activity,variety and risk.
4)The consumers who are motivated by achievement desire social/physical activity variety and risk.
Ans:A
87. From the following two statements of assertion (A) AND Reason (R), indicate the correct code:
Assertion(A): A transformational appeal of communication elaborates on a non- product related benefit
/image.
Reasoning(R): Transformational appeals often do not attempt to stir up emotions that will motivate purchase.
Code:
a) (A) and (R) both are correct
b) (A) is correct (R) is in not correct
c) (A) is not correct (r) is correct
d) (A) and (R) both are incorrect
Ans:B
88.Select the correct sequence for hierarchy of effects model related to marketing communication
a) Awareness --- knowledge----Liking---Preference---Conviction---Purchase .
b)Knowledge--- Awareness--- Liking--- Conviction--- Preference--- Purchase .
c) Awareness—Liking--- Knowledge---- Conviction—Preference-- Purchase .
d) Liking---Awareness--- Knowledge--- Preference--- Conviction--- Purchase .
Ans:A
89.Match the items of List I with the items of List II and denote the code of correct matching:
List I List II
a)Basic product i)Set of attributes and conditions buyers
normally expect.
b)Expected product ii)Possible augmentation and transformation
the product might undergo in future
c)Augmented product iii)Exceed customers expectation
d)Potential product iv)Converting core benefits into product.

Codes: (a) (b) (c) (d)

a) 3 4 1 2
b) 1 3 4 2
c) 1 4 3 2
d) 4 1 3 2
Ans:D
(2017 Jan paper 3)
90.Which of the following is not a measure for quality service for consumer ?
a)Responsiveness
b) Competition
c)Empathy
d)Tangibility
Ans:B
91.Which of the following is not a targeting strategy?
a)Standardization
b)Differentiation
c)Fows
d)All of the above
Ans:A
92.Match the of List I with items of List II and indicate the code of correct matching

List I List II
a) Real needs i)Expecting good service from car dealer
b) Unstated needs ii)Customer expects to be seen by his friends
as value-oriented savvy consumer
c)Delight needs iii)Customer wants car at low operational
cost and not initial cost.
d) Secret needs iv)Customer receives free insurance on
purchase of car

Codes: a b c d
a) 3 1 4 2
b) 1 3 2 4
c) 2 4 1 3
d) 4 2 1 3
Ans:A
(2017 Jan paper 2)
93.The marketing task which finds ways to alter the time pattern of demand through flexible pricing, promotion
and other incentives is called
 a)Demarketing
b)Sycromarketing
c)Fleximarketing
d)Gorilla marketing
Ans:B
94.Which of the following is not a reason for a firm to lose its market share to competitors?
a)A product/model is perceived by the target customer group as satisfying needs.
b)Customers not being covered by the company’s sale force and distribution outlets.
c) Customers may have been lost to competitors due to poor service by the firm or its sales personnel/product
becoming obsolete or more expensive.
d)All the above are correct reason for given condition
Ans:A
95.Match the items of List I with List II and denote the code of correct matching

List I List II
a)Invest startegy i)No receiving of new resources.
b)Protect strategy ii)Well financed marketing efforts
c)Harvest startegy iii)Selective resource allocation
d)Divert strategy iv)Not warranting substantial new resources.

Codes: a b c d
a) 2 3 4 1
b) 1 3 2 4
c) 2 1 4 3
d) 4 3 2 1
Ans:A
96.An elaborated version of the idea expressed in meaningful consumer term is called
a)Product image
b)Product idea
c)Product concept
d)Prototype.
Ans:C
97. Which of the following is not the major component of holistic marketing?
 a)Relationship marketing
b)Integrated marketing
c) Customer satisfaction
d) Social responsible marketing
Ans:C
98. Which of the legislations listed below do not form part of the marketing envirment of India?
a) The drug and cosmetics act, 1940
b) The prevention of food and adulteration act, 1954
c)The monopolies and restrictive trade practices act, 1969
d)Both B and C
Ans: D
99. The set of all actual and potential buyers of a product is known as
a)Customer group
b)Industry
c)Market
d)None of the above.
Ans: C
100. In the model of consumer behaviour given by Philip kotler, what constitutes the marketing stimuli?
a)Marketing environment
b) Four P’s of marketing
c) Consumer needs and wants
d) None of the above
Ans:B

Legal Aspects of Business

(CA – CPT DEC 2016)
1. . It is the duty of finder to return the goods to true owner. Otherwise the finder is guilty of
a) Criminal Misappropriation of goods
b) Theft
c) Extortion
d) None of the above
Ans: a)
2. Which of the following is not a document of title to goods?
a) Bill of lading
 b) Railway receipt
c) Dock warrant
d) Proforma invoice
Ans: d)
3. . Rasheed sends gold to Adam for making an ornament. This is a _________
a) Contact of sale
b) Contract of work and labor
c) Hire purchase agreement
d) Sale on approval basis
Ans: b)
(CA-CPT_June-2017)
4. Right of lien is______________
a) Right of stoppage of goods in transit
b) Right of sub sale
c) Right to retain the goods
d) Right to resell
Ans: c)
5. A person appointed to bid on behalf of seller is called
a) Puffer
b) Auctioneer
c) Damper
d) Either b) or c)
Ans: a)
6. Future goods are___________
a) Identified at the time of sale
b) Produced after contract of sale
c) Identified by description at the time of sale
d) None
Ans: b)
(CA-CPT_June-2017)
7. A voidable contract __________
a) Can be enforced by both the parties
b) Can be enforced by one or more of the parties only
 c) Can be enforced at the option of law
d) Cannot be enforced by both parties
Ans: b)
8. The term quid pro quo is applied in relation to
a) Consideration
b) Capacity of parties
c) Free consent
d) Legality of object
Ans: a)
(Mercantile law – P P S Gogna)
9. A jus in personam means a right against
a) a specific person
b) the public at large
c) a specific thing
d) none of these
Ans: a)
(CA-CPT_DEC- 2017)
10. Right in Rem means ___________
a) Right to make contract with one party
b) Right to sue a particular person
c) Right available to a person against whole world
d) None of the above
Ans: c)
11. ‘A’ owes ₹25,000 to ‘B’ ₹22,000 in full and final settlement of account. This is:
a) Novation
b) Alteration
c) Remission
d) Cancellation
Ans: c)
12. A lunatic person means
a) Insolvent person
b) Person of unsound mind
c) Person disqualified by law
 d) Alien enemy
Ans: b)
13. Amount withdrawn from ATM is
a) Quasi contract
b) Express contract
c) Tacit contract
d) None of the above
Ans: c)
14. In case of misrepresentation, parties have option to
a) Alter the contract
b) Rescind the contract
c) Novate contract
d) Accord the contract
Ans: b)
15. Mere silence as to facts likely to affect the desire of the party does not amount to __________
a) Coercion
b) Fraud
c) Mistake
d) Misrepresentation
Ans: b)
16. ‘X’ agrees ‘Y’ to work from 1-4-17. On 27-3-17, he writes a letters to ‘Y’ that no need to join in work.
It is _________ type of breach.
a) Actual
b) Anticipatory
c) Substitution
d) Cancellation
Ans: b)
17. Which of the following statement is incorrect?
a) Ordinary damages are recoverable
b) Special damages are recoverable only if the parties knew about them.
c) Remote or indirect damages are not recoverable
d) None of these sentences are incorrect.
Ans: d)
18. A party entitled to rescind the contract, losses the remedy where
a) He has ratified the contract
b) Third party has acquired right in good faith
c) Contract is not separable and rescission is sought of a party only.
d) All of these
Ans: d)
19. Sometimes, a party is entitled to claim compensation in proportion to the work done by him. It is
possible by a suit for
a) Damages
b) Injunction
c) Quantum meruit
d) None of these
Ans: c)
20. A contract is discharged by rescission which means the
a) Acceptance of lesser performance
b) Cancellation of existing contract
c) Change in one or more terms of a contract
d) Abandonment of rights by a party.
Ans: b)
21. A government company is one in which 51%or more of the paid up share capital is held by
a) Central government alone.
b) State Government alone
c) Central and state Government jointly.
d) Any of the above
Ans: d)
22. A blank share transfer instrument is valid for
a) 12 months
b) 3 months
c) 6 months
d) 2 months
Ans: a)
23. In hire-purchase agreement ownership is transferred
a) Immediately
 b) At a future date
c) On payment of last installment
d) None of these Ans: c)
24. A purchased a dog from B for RS.500. The dog died on the next day. Can A recover the loss from B?
a) Cannot recover the loss
b) Can recover the loss
c) Can recover half of the loss
d) Can recover 1/4 th of the loss
Ans: a)
25. The property in goods is transferred from seller to buyer in case of unascertained goods when:
a) Goods are ascertained
b) Goods are appropriated
c) Goods are ascertained and appropriated both
d) None of these
Ans: c)
26. In case of delivery of larger quantity of goods than contracted sell, the buyer has a right to :
a) Reject the whole
b) Accept the whole
c) Accept the quantity ordered and reject the rest
d) Use any of the above rights
Ans: d)
27. Marking of a cheque is done by :
a) The Drawer
b) The Holder
c) The Drawer Banker
d) None of these
Ans: c)
28. Who can become a party to a negotiable instrument?
a) Minor
b) Insolvent
c) Agent
d) Lunatic
Ans: c)
29. If a finder of a bill gets payment of lost bill, the person who pays it in due course:
a) Gets a valid discharge
b) Continues to be liable to the holder who lost the bill
c) Does not get a valid discharge
d) Is liable to all prior parties Ans: a)
30. Valid acceptance for honor may be done:
a) With the consent of the holder
b) After noting or protesting
c) It must be made in writing
d) All these cases
Ans: d)
31. The maximum age limit of a member of the District Forum is:
a) 65 years
b) 67 years
c) 70 years
d) 75 years
Ans: a)
32. Contract of Indemnity do not include:
a) Implied contracts to indemnify
b) When the loss is caused by some accident
c) When the loss is caused by some events
d) All the above
Ans: d)
33. In a contact of bailment there is transfer of:
a) Right to sue for reward
b) Right of lien
c) Right of sale
d) Right of ownership
Ans: d)

34. A transaction of depositing money in a bank is:

a) Contract of bailment
b) Contract of guarantee
 c) Contract of pledge
d) Contract of custody
Ans: a)
35. Substituted agent is appointed by:
a) Principal
b) Agent
c) Sub-agent
d) None of these
Ans: a)
36. The person being appointed by the agent to act under his control is called:
a) Substituted agent
b) Special agent
c) Sub agent
d) General agent
Ans: c)
37. Which of the following is valid promissory note?
a) A I owe you same amount
b) A I owe you ₹1000
C) I promise to pay A or order ₹ 1000
d) I promise to pay the bearer ₹ 1000
Ans: c)

38. A promissory note is a document in writing containing:

a) A conditional promise to pay
b) A conditional order to pay
c) An unconditional promise to pay
d) An unconditional order to pay
Ans: c)
39. Which does not apply on bill of exchange?
a) It should be in writing
b) It should be accepted
c) It should be stamped
d) It should be registered
 Ans: d)
40. Who may cross the cheque?
a) The holder
b) The drawer
c) Both Holder and Drawer
d) None of these
Ans: c)
41. Negotiation of negotiable instruments may be done by_____
a) Drawer
b) Drawee
c) Maker
d) All of them
Ans: d)
42. Where a bill is dishonoured by non-acceptance, presentment for payment:
a) Is unnecessary
b) Necessary
c) Is optional
d) May or may not be
Ans: a)
43. If any of the signatures on a negotiable instrument are forged, a person acting in good faith:
a) Acquires a good title to it
b) Does not acquire any title to it
c) Does not acquire a good title to it
d) None of the above
Ans: b)
44. The effect of material alteration is:
a) Makes the instrument void
b) Makes the instrument partly payable
c) It has no effect on the instrument
d) None of these
Ans: a)
45. In case of insufficiency of funds in the bank account of the customer, the banker can:
a) Bounce the cheque
 b) Dishonour of cheque
C) Both bounds and Dishonour
d) None of these
Ans: c)

46. A banker can disclose the balance of his customer:

a) When asked by his wife
b) When asked by his employer
c) When asked by his creditor
d) When required by any law
Ans: d)
47. A negotiable instrument should be presented for payment to the party who is____________
a) Primarily liable
b) Secondarily liable
c) Willing to make payment
d) Capable of making payment
Ans: a)
48. Material alteration of a negotiable instrument, without the consent of the parties, discharge the parties
who have become liable
a) After such alteration
b) Prior to such alteration
c) Because of alteration
d) without such as alteration
Ans: b)
49. A, B, C borrowed ₹ 90000 from bank. The bank compelled to A to pay the whole amount. Which of the
following statement is correct?
a) A's payment is valid and B and C are not liable to repay the balance amount to A.
b) A can recover the amount paid by him from bank.
c) A is entitled to recover the amount of ₹30000 each from B and C.
d) None of the above
Ans: c)
50. If the seller makes delivery of goods more than the contracted goods, what are the rights of the buyer?
a) Reject the whole goods
 b) Accept the whole goods
c) Accept the contracted goods and reject the excess
d) All the above
Ans: d)
Internet source
(NACEN, RTI, Kanpur)
51. Which of the following is an “intellectual property” as per IPR Laws in India?
a) Original literary work;
b) Industrial Design of Maruti800 car;
c) Trademark of Tata Company
d) All the above
Ans: d)
52. A trademark is represented by several key characteristics. Which of the following is one of them?

a) A trademark identifies a product's origin

b) Slogans are not covered under trademark law

c) Trademarks are never an indicator of quality

d) Trademarks are "shorthand" for retailers to use in determining pricing strategy

Ans: a)
53. Why an invention should be patented?
a) It gives protection to a patentable invention.
b) It gives legal recognition to the invention.
c) It makes others aware of the fact as to whom does the invention belong
d) Patenting one’s invention make useful data relating to the invention available to other inventions for
further research and development.
Ans: b)
54. The rights of a patentee are
a) Sell or distribute
b) License
c) Assign the property to others
d) All of the above
 Ans: d)

55. Which of the following is not one of the three essential elements for a patent to be granted for an
invention?
a) Be a product.
b) Be new to the public.
c) Involve an inventive step.
d) Be capable of industrial application.
Ans: a)
56. What is the duration of copyright protection for a novel?
a) A novel will not gain copyright protection.
b) The day the author dies
c) The end of the calendar year in which the author died.
d) 70 years from the end of the calendar year in which the author died.
Ans: d)
57. Which of the following is not an intellectual property law?
a) Copyright Act, 1957
b) Patent Act, 1970
c) Design Act, 2000
d) Customs Act, 1962
Ans: d)
58. Why an invention should be patented?
a) It gives protection to a patentable invention.
b) It gives legal recognition to the invention.
c) It makes others aware of the fact as to whom does the invention belong
d) Patenting one’s invention make useful data relating to the invention available to other inventions for
further research and development.

Out of four reasons given above, please identify the correct reasons:-
a) (ii) and (iii)
b) (ii), (iii) and (iv)
c) None of the above
d) All of the above
Ans: b)
59. Intellectual Property Rights (IPR) protect the use of information and ideas that are of
a) Ethical value
b) Moral value
c) Social value
d) Commercial value
Ans: d)

60. Which of the following statements is true?

a) Trademark registrations can be renewed for an unlimited number of ten year periods
b) Trademark law is intended to protect the owner’s original work
c) To qualify for federal protection, a mark must be distinctive and have a "Secondary meaning."
d) Surnames alone can be trademarked
Ans: a)
61. Which of the following is not come under the definition of 'information' under RTI Act 2005?
a) Log books
b) File noting
c) Data material held in any electronic form
d) Circulars
Ans: b)
62. Turquand Rule is related to:
a) Doctrine of ultra vires
b) Doctrine of constructive notice
c) Doctrine of indoor management
d) Doctrine of subrogation
Ans: c)
63. An act is said to be ultra vires a company when it is beyond the powers.
a) Of the company
b) Of the directors
c) Of the directors but not the company
d) Conferred on the company by the Articles of Association
Ans: a)
64. Which one of the following is not the content of the Memorandum of Association ?
a) Name clause
 b) Registered office clause
c) Objects clause
d) Board of directors clause
Ans: d)
65. A private company which is subsidiary of a public company is treated as.
a) Public company
b) Private company
c) Holding company
d) Family company
Ans: a)
66. Under the companies Act, 2013, “Significant influence “constitutes how much % of total share capital or
business decisions under an agreement?
a) At least 2%
b) At least 2.5%
c) At least 10%
d) A least 20%
Ans: d)
67. Document that regulates the management of internal affairs of a company of internal affairs of a
company are-
a) Memorandum of Association
b) Prospectus
c) Articles of Associations
d) Certificate of incorporation Ans: c)
68. Minimum number of directors in case of a public company is________
a) 3
b) 2
c) 1
d) 4 Ans: a)
69. The term company is defined under which sec of the Act?
a) Sec 2(20)
b) Sec 4
c) Sec 2
d) Sec 1(3)
 Ans: a)
70. The _______on equity shares is not cumulative.
a) Dividend
b) Profit
c) Loss
d) Reserve
Ans: a)
71. The ________constitute the top administrative organ of the company.
a) General manager
b) Share holders
c) Board of directors
d) Advisory panel
Ans: c)
72. Mark out the document that need not be prepared and registered with the registrar of companies in
public limited companies.
a) Statutory declaration
b) Memorandum of Association
c) Articles of Association
d) Directors undertaking to take up and pay for qualification shares
Ans: c)
73. The share capital of a company may be reduced by_______
a) An ordinary resolution
b) A special resolution
c) A resolution of the board of directors
d) Obtaining permission from the company law board
Ans: b)
74. The most important document of a company is its_______
a) Prospectus
b) Annual report
c) Memorandum of association
d) Articles of association
Ans: c)
75. Mark out the type of alteration that is permitted in the articles of association _____
 a) That may not be in the company’s interest
b) That is country to the provisions of the companies act
c) That increases a member’s liability without his written consent
d) That is consistent with the Memorandum of association
Ans: d)
76. What is the proposed punishment for Cyber Terrorism in IT Act?
a) 1Crore rupees penalty
b) Life imprisonment
c) 10 year imprisonment
d) 6 year imprisonment
Ans: b)

77. Which is the Act which provides legal framework for e-Governance in India?
a) IT (amendment) Act 2008
b) Indian Penal Code
c) IT Act 2000
d) None of the above
Ans: c)
78. What is /are component of IT Act 2000?
a) Legal Recognition to Digital Signatures
b) Regulation of Certification Authorities
c) Digital Certificates
d) All the above
Ans: d)
79. The section deals with the use of electronic records and digital signature in Government and its agencies
a) Section 3
b) Section 5
c) Section 6
d) Section 7
Ans: c)
80. IT Act 2000 amended various sections of which of the following Acts?
a) Indian Penal Code 1860
b) Reserve Bank of India Act 1934
 c) Indian evidence Act 1872 & Bankers book evidence Act 1891
d) All of the above
Ans: d)

82. Which among following Act is not amended in Information Technology Act 2000 ?
a) The Bankers Books Evidence Act, 1891
b) BSNL IT Policy
c) RBI Act 1934
d) The Indian Evidence Act 1872 Ans: b)

83. Controller of Certifying Authorities (CCA) work under?

a) Prime Minister Office
b) Reserve Bank Of India
c) Ministry of Communication and IT
d) Autonomous body
Ans: c)
84. What is the punishment for identity theft in IT Act?
a) Two year imprisonment or 1 lakh rupees penalty or both
b) Three year imprisonment or 1 lakh rupees penalty or both
c) Three year imprisonment or 2 lakh rupees penalty or both
d) None of the above

Ans: b)

85. Which are the sections of IT Act applicable for Cyber pornography?
a) 66, 66A, 66B
b) 67, 67A, 67B
c) 67, 67C, 67D
d) None of the above

Ans: b)

86. Which is the appeal court on the orders issued by Cyber appellate tribunal?

a) Munsiff Court
 b) District court
c) High court
d) Supreme court
Ans: c)

87. Which is the Act which provides legal framework for e-Governance in India
a)  IT Act 2000
b) Indian Penal Code
c)  IT (amendment) Act 2008
d)  None of the above
Ans: a)

88.  Which of the following is not done by cyber criminals?

a) Unauthorized account access
b) Mass attack using Trojans as botnets
c)  Email spoofing and spamming
d) Report vulnerability in any system Ans: d)
89. Which of the following is not a type of peer-to-peer cyber-crime?
a) Phishing
b) Injecting Trojans to a target victim
c) MiTM
d) Credit card details leak in deep web
Ans: d)
90. Which of the following is not an example of a computer as weapon cyber-crime?
a) Credit card fraudulent
b) Spying someone using key logger
c) IPR Violation
d) Pornography
Ans: b)

91. What type of cyber-crime, its laws and punishments does section 66 of the Indian IT Act holds?
a) Cracking or illegally hack into any system
 b) Putting antivirus into the victim
c) Stealing data
d) Stealing hardware components
Ans: a)

92. Which of the following is not regulated by the competition act, 2002? (December- 2013, Paper III UGC
NET)
a) Anti-competitive agreements
b) Predatory pricing
c) Medical negligence
d) Abuse of dominant
Ans: c)

93. Which of the following is not the objective of the Competition Act, 2002
a) Prohibition of Anti-competitive Agreements
b) Prohibition of Dominant Position
c) Prohibition of Restrictive Trade Practices.
d) Regulation of Combinations
Ans: c)
NET June 2019
94. As per section 52 of the Competition Act, 2013, the balance in the Security Premium Account cannot be
utilized for
a) Payment of dividend
b) Writing off discount on issue of shares
c) Issue of fully paid up bonus share
d) Capital loss
Ans: a)

95. Which of the following does NOT come under the definition of ‘information’ as per the Right to
Information Act (RTI Act), 2005
a) Logbooks
b) Data material held in electronic form
 c) File noting
d) Circular
Ans: c)

96. Which of the following does NOT fall in the ambit of the objectives of Competition Act, 2002?
a) Encourage competition
b) Prevent abuse of dominant position
c) Prevent monopolistic rights arising out of intellectual property
d) Regulate mergers and acquisition
Ans: c)

97. Which of the following commodities is kept under the purview of GST?
a) Tobacco products
b) Petroleum products
c) Edible oil
d) Insurance products
Ans: c)
98. Match List – I with List – II

List – I List – II
(a) Cyber-crime (i) Intellectual property right
(b) Doctrine of Caveat Emptor (ii) Negotiable instrument
(c) Dishonour of bill (iii) Sale of goods Act
(d) Patent and copy rights (iv) The information Technology Act

Choose the correct option from those given below:

a. (a)-(i); (b)-(iv); (c)-(iii); (d)-(ii)
b. (a)-(iii); (b)-(iv); (c)-(ii); (d)-(i)
c. (a)-(iii); (b)-(ii); (c)-(iv); (d)-(i)
d. (a)-(iii); (b)-(iv); (c)-(i); (d)-(ii)
Ans: d)
97. Which of the following sections of Companies Act, 2013 facilitates amalgamation, absorption and
reconstruction of companies?
 1. 319
2. 320
3. 410
4. 502
Ans: a)
98. Which of the following is NOT a presumption about a negotiable instrument?
1. Date
2. Consideration
3. Stamp
4. Absolute and good title to the transferee
Ans: d)
99. According to Sale of Goods Act, which two of the following are defined as 'goods'?
a. Moveable property
b. Growing Crops
c. Actionable claims
d. Book debt
Choose the correct answer from the following options:
a) a and d
b) b and c
c) a and b
d) d and b
Ans: c)
NET December 2019
100. Which of the following are true about conditions according to Sale of Goods Act?
a. Title
b. Description
c. Quite possession
d. Encumbrances
Choose the correct answer from the following options:
a) a and d only
b) b and c only
c) a, c and d only
d) a and b only
 Ans: d)
101. March List l with II
List I List II
(a) Transfer of ownership (i) Negotiable instrument
(b) sale of goodwill after dissolution (ii) Contract of sale of goods
(c) Buy back of securities (iii) Dissolution of partnership
firm
(d) Promissory Note (iv) Share capital of company
Choose the correct option from those given below:
a) (a) - (ii); (b) - (iii); (c) - (iv); (d) - (i)
b) (a) - (iii); (b) - (iv); (c) - (ii); (d) - (i)
c) (a) - (iv); (b) - (ii); (c) - (i); (d) - (iii)
d) (a) - (i); (b) - (ii); (c) - (iii); (d) - (iv) Ans: d)
102. Which of the following laws affect the business organization?
a) Incorporation and bankruptcy laws
b) Environmental protection laws
c) Occupational healthy and safety laws
d) Competition laws
Ans: a)
103. Which of the following types of cyber-attacks may occur in the process of mobile banking?
a. Back door attack
b. Front door attack
c. Denial of service attack
d. Direct access attack
Choose the correct option from those given below:
a) a, b and c
b) b, c and d
c) a, b and d
d) a, c and d
Ans: d)

2012 December UGC NET

 1. Minimum Alternative Tax (MAT) under Sec.115 JB of the Income Tax Act is applicable on
(A) Partnership firm
(B) Association of persons
(C) Certain companies (D) All types of
companies Option: (C)

2. For the Assessment Year 2011-12, deduction under Sec. 80G is available without any limit but at the rate of 50% on
(A) Prime Minister’s National Relief Fund.
(B) National Foundation for communal Harmany.
(C) Jawahar Lal Nehru Memorial Fund. Option: (C)
(D) Chief Minister Relief Fund.

3. Interest on capital paid by a firm to its partners, under the Income Tax Act, 1961, is allowed
(A) 6%
(B) 12%
(C) 15%
(D) 18% Option: (B)

4. Under capital gains head of the Income Tax Act, the income from sale of Household Furniture is
(A) Taxable Income
(B) Capital Gain
(C) Revenue Gain Option: (D)
(D) Exempted Income

5. Under Section 80E of the Income Tax Act, 1961 deduction in respect of payment of interest on loan taken for higher
education shall be allowed up to
(A) Rs. 10,000
(B) Rs. 15,000
(C) Rs. 20,000 Answer: (D)
(D) Without any limit

6. If the taxable income of a domestic company for the Assessment Year 2011-12 is Rs. 9, 00,000, its tax liability will be
(A) Rs. 2, 76,800
(B) Rs. 2, 78,100
(C) Rs. 3, 70,800 Option: (B)
(D) Rs. 3, 70,880

7. Unabsorbed depreciation which could not be setoff in the same assessment year, can be carried forward up to
(A) 4 years
(B) 8 years
(C) 10 years Option: (D)
(D) Indefinite period

8. If the book profits of a partnership firm are Rs. 1, 10,000, the remuneration admissible to working partners under Sec.40 (b) o
the Income Tax Act, 1961 is
(A) Rs. 1, 10,000
(B) Rs. 1, 50,000
(C) Rs. 99,000 Option: (B) (D) None of the
above

9. Which of the following expenses is inadmissible while computing income from other sources?
(A) Interest paid on amounts borrowed to meet tax liabilities.
(B) Collection charges paid to the banker or any other person to collect interest/dividend.
(C) Interest on loan taken to invest in securities. Option: (A)
(D) Depreciation on let-out machinery and plant.

10.If the book profits of a partnership firm is Rs. 1, 10,000, the remuneration admissible to working partners under
Sec.40 (b) of the Income Tax Act, 1961 is
(A) Rs. 1, 10,000
(B) Rs. 1, 50,000
(C) Rs. 99,000 Option: (B)
(D) None of the above

2014 June UGC NET

10. Mr. X, a non-resident, earned 36,000 as interest on German Development Bonds. Of this, he received one-sixth
in India. The amount to be included as interest for the computation of his Gross Total Income is
(A) ` 36,000
(B) ` 30,000
(C) ` 6,000 Option: (C)
(D) Nil

11. Consider the following problem relating to a let-out house property :

Municipal value – ` 60,000
Fair rent – ` 68,000
Standard rent under the Rent Control
Act – ` 62,000
Annual Rent received – ` 65,000
The Gross Annual Value of the property will be
(A) ` 68,000
(B) ` 62,000
(C) ` 65,000 Option: (C)
(D) ` 60,000

12. Which of the following are true in tax planning?

(i) It is futuristic in its approach.
(ii) It has limited scope compared to tax management.
(iii) The benefits arising from it are limited particularly in the short run.
(iv) Its main objective is to reduce the tax liability.

Codes :
(A) (i), (ii) and (iii)
(B) (i) and (ii)
 (C) (i) and (iv) Option: (C)
(D) (ii), (iii) and (iv)

13. The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
(A) High marginal tax rates and low non-interest tax benefits
(B) Low marginal tax rates and low non-interest tax benefits
(C) High marginal tax rates and high non-interest tax benefits Option: (A)
(D) Low marginal tax rates and high non-interest tax benefits.

14. The entertainment allowance is applicable to _______________.

(a) Private sector employees
(b) Public sector employees
(c) Government employees
(d) All of the above Option: (C)

15. The family pension received by the family members of armed forces after death of employee
is _______________.
(a) Exempt fully
(b) Exempted after fulfilling of certain conditions
(c) Not exempted
(d) None of the above Option: (D)

16. The assessment period for income tax on salary is _______________.

(a) Only more than 12 months
(b) 12 months and less than 12 months
(c) Only 12 months
(d) 12 months and more than 12 months Option: (C)

17. Total income is to be rounded off to nearest multiple of _______________ and tax is to be
rounded off to nearest multiple of _______________.
(a) Ten rupee
(b) Hundred, ten
(c) Ten, ten
(d) Rupee, rupee Option: (C)

December 2014 - Paper 3 UGC NET

18.Under Section 271 C of the Income Tax Act, 1961 the amount of penalty for failure to deduct tax at source is
(A) 10% of tax which is otherwise deductible under Section 194 C.
(B)100% of tax which is otherwise deductible under Section 194 C.
(C)200% of tax which is otherwise deductible under Section 194 C. Option: D
(D)300% of tax which is otherwise deductible under Section 194 C.

19. Which one of the following is not an example of tax evasion?

(A) Submitting misleading documents.
(B) Not maintaining proper accounts of income earned
(C) Suppression of facts. Option: D
(D) Interpreting the tax law in ones own way to minimise tax liability.
20.Consider the following problem relating to a let-out house property :
Municipal value – ` 60,000
Fair rent – ` 68,000
Standard rent under the Rent Control Act – ` 62,000
Annual Rent received – ` 65,000
The Gross Annual Value of the property will be
(A) ` 68,000
(B) ` 62,000
(C) ` 65,000 Option: (c)
(D) ` 60,000

21. Which of the following are true in tax planning ?

(i) It is futuristic in its approach.
(ii) It has limited scope compared to tax management.
(iii) The benefits arising from it are limited particularly in the short run.
(iv) Its main objective is to reduce the tax liability.

Codes :
(A) (i), (ii) and (iii)
(B) (i) and (ii)
(C) (i) and (iv) Option: (c)
(D) (ii), (iii) and (iv)
August 2016 UGC NET

22. Rent free accommodation provided to the government employees shall be taxable upto (1) 20% of the employee’s
salary
(2) 15% of the employee’s salary
(3) Licence fee fixed by the government
(4) 10% of the employee’s salary
Option: (C)

23. Marginal relief on income tax of a resident individual was available under which section of the Income Tax Act,
1961 for the assessment year 2015-16 ?
(1) Section 86
(2) Section 88 E
(3) Section 89
(4) Section 87 A Option: (D)

24. Match the items of List – I with those of the List – II and indicate the correct code :
List – I List – II
a. Section 80 D i. Pension fund of LIC
b. Section 80 CCC ii. Interest on loan taken for studies
c. Section 80 G iii. Health Insurance
d. Section 80 E iv. Donation

Codes :
a b c d
(1) i ii iii iv
(2) i iii ii iv
(3) iii i iv ii
(4) i iii iv ii

Option: (C)

25. Income of the previous year is not taxable in the subsequent assessment year for which combination of the
following ?
I. Income of non-resident from shipping
II. Income of casual nature
III. Income of bodies formed for short duration
IV. Income of a person trying to alienate his assets
Codes :
(1) I II III
(2) II III IV
(3) I II IV
(4) I III IV
Option: (D)

26. As per the Income Tax Act, 1961, rate of tax for long term capital gain for the assessment year 2015-16 is
(1) 20% (2) 30%
(3) 10% (4) 25%
Option: (A)

27. As per the Income Tax, 1961, capital gain arising from the sale of agricultural land owned for 5 years in rural areas is
(1) Taxable as short term capital gains
(2) Taxable as long term capital gains
(3) Exempted
(4) Partly taxable and partly exempted.
Option: (C)
28. Capital expenditure on scientific research in a previous year, which could not be absorbed due to insufficiency of profit in
the relevant assessment year, can be carried forward for its setting off upto
(1) Next assessment year (2) Five assessment years
(3) Ten assessment years (4) Indefinite number of assessment years
Option: (D)
Exam January 2017 UGC NET

29. If an assessee is engaged in the business of growing and manufacturing tea in India, the portion of agricultural
income in that case shall be
(1) 100%
(2) 60%
(3) 50%
(4) 40% Option: (2)

30. Which of the following statements is not correct ?

(1) X is an individual assessee. He pays a monthly rent of ` 10,000 pm. He cannot deduct tax at source.
(2) On salaries, tax is deducted at source according to provisions of Sec. 192. 
(3) No tax is deducted at source in respect of interest on securities issued by a domestic company.
(4) Bank will deduct tax at source @ 10% if bank fixed deposit’s interest credit is more than Rs. 10,000 in a year.
Option: (4)

31. X donated ` 20,000 to a charitable institution, which is eligible for deduction u/s 80 G, during the financial year
2015-16. His total income during the period was Rs. 1,50,000. How much deduction he can claims u/s 80 G ?
(1) Rs. 7,500
(2) Rs. 10,000
(3) Rs. 15,000
(4) Rs. 20,000 Option: (2)

32. X is employed in a private company at a salary of Rs. 70,000 per month and Rs. 10,000 per month as dearness
pay. He received Rs. 2,000 per month as house rent allowance. He paid Rs. 2,500 per month as house rent. What is
the exempted portion of house rent allowance? 
(1) Rs. 2,500
(2) Rs. 2,000
(3) Rs. 1,000
(4) NIL Option: (3)

33. Surcharge is payable by an individual where the total income exceeds

(1) Rs. 10 lacs
(2) Rs. 25 lacs
(3) Rs. 50 lacs
(4) Rs. 1 crore Option: (3)

34. Which one of the following statements is not correct ?

(1) A person may not have assessable income but still be an assessee.
(2) In some cases, the assessment year and the previous year can be same.
(3) An Indian company is always resident assessee.
(4) Surcharge is additional tax calculated on total income.
Option: (1)

2016 July As per the Income Tax, 1961, capital gain arising from the sale of agricultural land owned for 5 years in
rural areas is (1) Taxable as short term capital gains (2) Taxable as long term capital gains (3) Exempted (4) Partly
taxable and partly exempted

35.Match the items of the List – I with those of the List – II and indicate the correct code :
List – I List – II
a. Residential status of an individual i. Section 10 (13A)
b. Agricultural income ii. Section 10 (10)
c. House rent allowance iii. Section 6
d. Gratuity iv. Section 10

(1) Codes :
 A b c d
(1) i iii ii iv
(2) iii iv i ii
(3) ii i iii iv
(4) iv ii i iii
Option: (B)

36. Match the items of the List – I with List – II and indicate the correct code :
List – I List – II
a. House rent allowance i. A deduction from income
b. Casual income ii. A step taken by tax authorities
c. Collection charges of interest on securities iii. Taxable income
d. Best judgement assessment iv. Partly taxable allowance

Codes :
a b c d
(1) iv iii ii i
(2) iv iii i ii
(3) iii iv i ii
(4) ii iv i iii
Option: (B)

37. The statutory limit for deduction u/s 80 GG of Income tax Act, 1961, for the assessment year 2015-16 is
(1) ` 2,000 per month (2) ` 3,000 per month
(3) ` 2,500 per month (4) ` 5,000 per month
Option: (A)

38. For the purpose of assessment under Income Tax Act, 1961, which combination of the following represents
income?
(I) Tax-free salary from the private sector employer.
(II) Pin money received by a family member.
(III) Awards received by the sports persons.
(IV) Loss incurred by the assessee.
(V) Perquisites received by employees.
Codes:
(1) (I), (II), (III), (IV)
(2) (II), (III), (IV), (V)
(3) (I), (III), (IV), (V)
(4) (I), (II), (IV), (V)
Option: (C)
 39. Indicate the correct code for forms for filing income tax return from the following Income Tax Return Forms:
(a) ITR-4S
(b) ITR-2
(c) ITR-2B
(d) ITR-3

Codes: (1) (a), (b) and (c) (2) (b), (c) and (d)
(3) (a), (b) and (d) (4) (a), (c) and (d)
Exam November UGC NET 2017

40. Which of the following will be considered as tax planning effort ?

(a) Mr. A purchased a house for self residence of Rs. 80 lacs by taking a loan of Rs. 60 lacs from SBI at 10% interest,
instead of using his own funds.
(b) Mr. A made investment in purchasing 12% redeemable debentures of TISCO worth Rs. 1.50 lac
(c) Mr. A purchased 100 gram gold biscuits of Rs. 2.5 Lac from SBI on the occasion of Diwali.
(d) Mr. A invested ` 1 crore in purchasing 5 acres of agricultural land in his native village in Gaya.
Code :
(1) (a) and (b)
(2) (b) and (c)
(3) (a) and (d)
(4) (c) and (d) Option: (3)

41. Assertion (A) : If the interest is payable outside India, tax must be deducted at source.
Reason (R) : If tax has not been deducted at source, the amount paid as interest will not be allowed as a deduction in
computing business income.
Select the correct answer from the code given below :

(1) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(2) (A) and (R) both are correct but (R) is not the correct explanation of (A).
(3) (A) is correct but (R) is wrong.
(4) (A) is wrong but (R) is correct. Option: (1)

42.  Exemption, under Sec.54 F of the Income Tax Act, 1961, shall not be allowed if the assessee,  on the date of
transfer owns :
(1) Any residential house
(2) A residential house which is let out
(3) A house which is self occupied
(4) More than one residential house Option: (4)

43. The income from the sale of a machinery used in business is treated as :
(1) Income from business and profession
(2) Short-term capital gain
(3) Long-term capital gain
(4) Income from other sources Option: (2)
Option: (C)

2018 July UGC NET

44.The benefits of debt financing over equity financing are likely to be highest in which of the following situations ? 75
(A) High marginal tax rates and low non-interest tax benefits
(B) Low marginal tax rates and low non-interest tax benefits
(C) High marginal tax rates and high non-interest tax benefits Option: (A)
(D) Low marginal tax rates and high non-interest tax benefits.

16. Which one of the following is agricultural income under the Income Tax Act , 1961 ?
(A) Interest on arrears of rent in respect of agricultural land.
(B) Interest received by a money-lender in the form of agricultural produce
(C) Income from sale of trees of forest which are of spontaneous growth and in relation to which forestry operations alone ar
performed.
(D)  Interest on capital received by a partner from the firm engaged in agricultural operations.

Option: (D)

45. Under the Income Tax Act, 1961 “block of assets” for the purpose of charging depreciation means:
(A) Value of all the assets after depreciation
(B) Value of all tangible assets after charging depreciation
(C) Value of all those assets to which one rate of depreciation is applicable
(D) Gross value of machinery and plant less accumulated depreciation
Option: (C)
46. The maximum amount of exemption of compensation received at the time of voluntary retirement U/S 10(10C) of the
Income Tax Act, 1961, is:
(A) Rs. 1,00,000
(B) Rs. 2,50,000
(C) Rs. 5,00,000
(D) Rs. 10,00,000 Option: (C)

47.  Which one of the following statements is not correct with reference to the assessment of firms?
(A) All partnership firms formed under the Indian Partnership Act, 1932, are assessed as firms under the Income
Tax Act, 1961.
(B) Income of a firm is taxable at a flat rate of 30% without any exemption.
(C) Partners’ share in the income of a firm is not chargeable to tax in the hands of partners.
(D) Remuneration paid to partners of a firm (assessed as such) is allowed as deduction subject to statutory limit.
Option: (A)
48. The due date of first instalment of advance tax by assessees other than companies is:
(A) 15th April
(B) 15th June
(C) 15th September
(D) 15th December
Option: (B)
49. Which one of the following items is not allowed as deduction while computing income from business and
profession?
(A) Fees paid to the lawyer for drafting partnership deed
(B) Loss due to embezzlement by an employee
(C) Legal expenses paid to protect the building of the business
(D) Cost of installing a new telephone
Option: (A)
1. Income tax is collected on all types of income except _______________.
(a) Agricultural Income (b) Industrial Income
(c) Capital Gain (d) Household Property

2. The Income Tax Act came into force from _______________.

(a) 1st March 1971 (b) 1st April 1971
(c) 1st March 1961 (d) 1st April 1961

3. The Income Tax Act came into force all over India except _______________.
(a) Andaman & Nicobar (b) Maldives
(c) Jammu & Kashmir (d) None of the above

4. As per Income Tax Act, 1961, income tax is charged on the income of _______________ at a
rates which are prescribed by the Finance Act of relevant assessment year.
(a) Current year (b) One year before previous year
(c) Previous year (d) None of the above

5. The tax payer liability is determined with reference to his or her _______________.
(a) Financial Status (b) Residential Status
(c) All of the above (d) None of the above

6. As per the definition of Income, the income includes the following _______________.
(a) Profits and gains (b) Dividend declared
(c) Voluntary contribution received by a trust create (d) All of the above

7. The period of 12 months commencing on the first day of April every year and ending on 31st
March is called as _______________.
(a) Previous Year (b) Assessment year
(c) Accounting Year (d) Financial Year

8. Previous year means the financial year immediately preceding the _______________.
(a) Accounting Year (b) Assessment Year
(c) All of the above (d) None of the above

9. Under Income Tax Act, the income liable for tax is classified on the basis of
_______________.
(a) Income from Salaries (b) Income from House Property
(c) Agricultural Income (d) Both (a) and (b)

10. Agricultural income is completely exempted for assessment year _______________.

(a) 1974-75 (b) 1985-86
(c) 1975-76 (d) 1978-79

11. The income from foreign companies by providing the services in project connected with security of India is
_______________ from tax liability.
(a) 50% exempted (b) 20% exempted
(c) 100% exempted (d) 55% exempted

12. An individual is said to be resident in India if _______________.

(a) It is in India in the previous year for a period of 182 days or more
(b) It is in India for period of 60 days or more during the previous and 365 days or more during the four years
immediately proceeding previous year
(c) All of the above
(d) None of the above

13. The HUF is said to be resident in India if _______________.

(a) The control and management of its affairs is wholly or partly situated in India
(b) The control and management of its affairs is partially situated out of India
(c) The control and management of its affairs is wholly or partly in out of India
(d) None of the above

14. The awards and rewards are exempted from Income Tax if _______________.
(a) Payment is in cash (b) Payment is in kind
(c) Payment is in cash or in kind (d) None of the above

15. Income received in India whether occurred in India or outside India, the tax incidence in case
of resident is _______________.
(a) Taxable as per slabs (b) Exempted from tax
(c) Partly exempted (d) None of the above

16. Income received in India whether occurred in India or outside India, the tax incidence in case
of resident but not ordinarily resident is _______________.
(a) Taxable as per slabs (b) Exempted from tax
(c) Partly exempted (d) None of the above

17. Income received in India whether occurred in India or outside India, the tax incidence in case
of non-resident is _______________.
(a) Taxable as per slabs (b) Exempted from slab
(c) Partly exempted (d) None of the above

18. Income deemed to be received in India whether occurred in India or outside India, the tax
incidence in case of resident is _______________.

(a) Taxable as per slabs (b) Exempted from slab

(c) Partly exempted (d) None of the above

19. The income received and accrued outside India from a business controlled or profession set
up in India, the tax incidence in case of resident is _______________.
(a) Taxable (b) Non-taxable
(c) Partly taxable (d) None of the above

20. The income received and accrued outside India from a business controlled or profession set
up in India, the tax incidence in case of non-resident is _______________.
(a) Taxable (b) Non-taxable
(c) Partly taxable (d) None of the above

21. The tax incidence for company or firm in which income received in India and company is
resident is _______________.
(a) Taxable (b) Non-taxable
(c) Partly taxable (d) None of the above

22. The tax incidence for company or firm in which income received in India and company for
non-resident is _______________.
(a) Taxable (b) Non-taxable
(c) Partly taxable (d) None of the above

23. The tax incidence for company or firm in which income received outside India from a source
controlled from India for resident is _______________.
(a) Taxable (b) Non-taxable
(c) Partly taxable (d) None of the above

24. The tax incidence for company or firm in which income received outside India from a source
controlled from India for non-resident is _______________.
(a) Non-taxable (b) Taxable
(c) Partly taxable (d) None of the above

25. _______________ is exempted from income tax.

(a) Interest from Indian company
(b) Dividend from foreign company
(a) Cooperative dividend
(d) Dividend from Indian company
26. Which section of the Income Tax Act exempted incomes have been mentioned?
(a) Section 80C (b) Section 80DD
(c) Section 10 (d) Section 2

27. _______________ of Income Tax Act is related to residential status.

(a) Section 2 (b) Section 6
(c) Section 5 (d) Section 4

28. Resident of India includes _______________.

(a) Ordinarily resident (b) Not ordinarily resident
(c) NRI (d) Both (a) and (b)

29. The Company may have the residential status as _______________.

(a) Resident or Non-resident (b) Not ordinarily resident
(c) Non-resident (d) Resident

30. The meaning of exempted income is _______________.

(a) Not included in total income
(b) Agricultural income
(c) Not taxable under income tax
(d) All of the above

31. The number of income source for a person are _______________.

(a) One head (b) Two heads
(c) Various heads (d) Any of the above

32. The sum of various heads is called as _______________.

(a) Taxable income (b) Total income
(c) Gross total income (d) Adjusted income

33. The agricultural income includes _______________.

(a) Income from sale of crop
(b) Income from preparation of crop
(c) Income from nursery
(d) All of the above

34. _______________ comes under agricultural income.

(a) Tea garden (b) Commodity farming
(c) All of the above (d) None of the above

35. If the agricultural income is _______________, then the agricultural income is considered for calculating tax.
(a) More than ` 5,000 and total income is exceeding exemption limit
(b) More than ` 5,000
(c) More than ` 10,000
(d) Any amount

36. The Income Tax Act, 1961 broadly covers _______________.

(a) Basic charging income
(b) Rebates and reliefs
(c) Incomes exempted from income tax
(d) All of the above

37. The capital gain is chargeable under _______________ of Income Tax Act.
(a) Section 45 (b) Section 55
(c) Section 56 (d) Section 40

38. The definition of the person includes _______________.

(a) An individual (b) A company
(c) A Hindu undivided family (d) All of the above

39. Any rent or revenue derived from land which is situated in India and is used for agricultural purpose is
_______________.
(a) Partially taxable (b) Fully taxable
c) Exempted from tax (d) None of the above

40. Residential Status of an assesses can be _______________.

(a) Different for different previous year in the same assessment year
(b) Different for different assessment year
(c) None of the above
(d) All of the above

41. The income of previous year is chargeable to tax in the _______________.

(a) Immediately succeeding assessment year
(b) Same previous year
(c) Immediately preceding academic year
(d) None of the above

42. The interest on loan paid by the Government of India to a non-resident outside India is
_______________ in India.
(a) Not taxable (b) Partially taxable
(c) Taxable (d) Can’t say

43. An individual is resident and ordinarily resident of India if _______________.

(a) Person had been resident in India at least 2 out of 10 previous years immediately proceeding the relevant previous
year
(b) Person been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous
year
(c) All of the above
(d) None of the above

44. The Resident HUF is ordinarily resident in India, if _______________.

(a) He has been resident in India at least 2 years out of 10 previous years immediately
(b) He has been resident in India at least 3 years out of 10 previous years immediately
(c) He has been resident in India at least 2 years out of 5 previous years immediately
(d) None of the above

45. Basic condition will be for a person who leaves India for employment _______________.
(a) At least 182 days in India
(b) At least 60 days in previous year and 365 days in preceding 4 years
(c) At least 730 days in preceding 7 years
(d) All of the above

46. Which of the following is not included in the term Income under the Income Tax Act, 1961?
(a) Reimbursement of travelling expenses
(b) Profits and gains of business or profession
(c) Dividend
(d) Profit in lieu of salary

47. The term income includes the following types of incomes.

(a) Illegal (b) Legal income from India only
(c) Legal (d) Legal and illegal both

48. _______________ is the casual income.

(a) Interest received (b) Dividend income
(c) Pension received (d) Winning from lotteries

49. The way of tax liability by taking full advantage provided by the Act is _______________.
(a) Tax management (b) Tax avoidance
(c) Tax planning (d) Tax evasion

50. Mr. A, partner of M/s ABC, is assessable as _______________.

(a) Firm (b) An individual
(c) Body of individual (d) HUF

1 (a) 11 (c) 21 (a) 31 (d) 41 (a)

2 (d) 12 (c) 22 (a) 32 (c) 42 (a)
3 (d) 13 (a) 23 (a) 33 (d) 43 (c)
4 (c) 14 (c) 24 (a) 34 (c) 44 (a)
5 (b) 15 (a) 25 (d) 35 (a) 45 (a)
6 (d) 16 (a) 26 (c) 36 (d) 46 (d)
7 (b) 17 (a) 27 (b) 37 (a) 47 (d)
8 (b) 18 (a) 28 (d) 38 (a) 48 (d)
9 (d) 19 (a) 29 (a) 39 (c) 49 (c)
10 (a) 20 (b) 30 (d) 40 (b) 50 (a)
**************