October 2014 GSET Commerce Solved Paper
Paper – II (Commerce)
Subject Code: 17
Marks: 100
Time: 75 Minutes (1.25 Hours)
Note: This paper contains FIFTY (50) multiple choice/Assertion/Reasoning Matching questions. Each question carrying TWO (2) marks. Attempt All the questions.
1. Internal environment is also called as:
(A) Macro-environment.
(B) Micro-environment.
(C) International environment.
(D) Technological environment.
Ans: (B) Micro-environment.
2. Environmental scanning is done:
(A) For increasing business environment.
(B) For giving new direction to the business.
(C) For creating new ventures in business.
(D) For meeting growing competition from the rivals.
Ans: (D) For meeting growing competition from the rivals.
3. Which one of the following is not a feature of capitalism?
(A) No freedom in fixing the price.
(B) Freedom of enterprises.
(C) Profit maximization.
(D) Freedom of choice.
Ans: (A) No freedom in fixing the price.
4. Which one is not an element of second generation reforms?
(A) High growth of agriculture.
(B) Growing Indian transnational corporations.
(C) Empowering the poor.
(D) HYVP and GRT.
Ans: (D) HYVP and GRT.
5. The liberalisation has:
(A) expanded the scope of private sector.
(B) restricted the scope of private sector.
(C) maintained the status quo of private sector.
(D) expanded the scope of public sector.
Ans: (A) expanded the scope of private sector.
6. All of the following are fundamental accounting assumptions, except:
(A) Business entity.
(B) Accrual.
(C) Going concern.
(D) Consistency.
Ans: (A) Business entity.
7. Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. In what ratio do the remaining partners contribute to such compensation amount?
(A) Gaining ratio.
(B) Capital ratio.
(C) Sacrificing ratio.
(D) Profit-sharing ratio.
Ans: (A) Gaining ratio.
8. When the object of reconstruction is usually to reorganise capital or to compound with creditors or to effect economies, then such type of reconstruction is called:
(A) Internal reconstruction with liquidation of a company.
(B) Internal reconstruction without liquidation of a company.
(C) External reconstruction.
(D) Absorption.
Ans: (B) Internal reconstruction without liquidation of a company.
9. The contribution margin increases when revenues remain the same and:
(A) variable cost per unit increases.
(B) variable cost per unit decreases.
(C) fixed cost decreases.
(D) fixed cost increases.
Ans: (B) variable cost per unit decreases.
10. The interest on calls-in-advance is paid for the period from the _______.
(A) date of receipt of application money to the due date of call.
(B) date of receipt of allotment money to the due date of call.
(C) due of receipt of advance to the due date of call.
(D) due date of call to the date of dividend payment.
Ans: (C) due of receipt of advance to the due date of call.
11. The demand curve slopes downward because:
(A) Increase in prices increases quantity demanded.
(B) Decrease in prices increases quantity demanded.
(C) Price change does not change quantity.
(D) Change in quantity does not depend on change in prices.
Ans: (B) Decrease in prices increases quantity demanded.
12. The income elasticity of a product was found to be negative which indicates that:
(A) More quantity would be purchased if income decreased.
(B) More quantity would be purchased if income increased.
(C) Less quantity would be purchased if income decreased.
(D) Same quantity would be purchased if income increased.
Ans: (A) More quantity would be purchased if income decreased.
13. For maximising utility, a consumer is constrained by:
(A) Its income.
(B) Choices of the products.
(C) Prices of the products.
(D) All of the above.
Ans: (D) All of the above.
14. A consumer benefits most in:
(A) Oligopolistic market.
(B) Perfectly competitive market.
(C) Monopoly market.
(D) Regulated market.
Ans: (B) Perfectly competitive market.
15. A seller sells in two different markets. In first market the price elasticity of demand is – 0.6 and in the second market it is – 0.3. The seller wants to increase sales by 10% in both the markets. The seller will:
(A) reduce the price by the same percentage in both markets.
(B) increase the price in the first market and decrease the price in the second market.
(C) decrease the price in the first market and increase the price in the second market.
(D) decrease the price in the first market and second market both, but a larger decrease in the second market.
Ans: (D) decrease the price in the first market and second market both, but a larger decrease in the second market.
16. Classification of M. Com. Students according to their specialization is an example of the following:
(A) Nominal data.
(B) Ordinal data.
(C) Interval data.
(D) Ratio data.
Ans: (A) Nominal data.
17. Type-I error is defined as the probability to:
(A) accept a hypothesis when it is true.
(B) accept a hypothesis when it is false.
(C) reject a hypothesis when it is false.
(D) reject a hypothesis when it is true.
Ans: (D) reject a hypothesis when it is true.
18. Which of the following is not a standard type of sampling?
(A) Stratified sampling.
(B) Simple cluster sampling.
(C) Cluster sampling.
(D) Systematic sampling.
Ans: (B) Simple cluster sampling.
19. Which of the following statements, on testing of a hypothesis is always true?
(A) When the null hypothesis is rejected at 5% level of significance, it is always rejected at 1% level also.
(B) When the null hypothesis is rejected at 1% level of significance, it is also rejected at 5% level also.
(C) When the null hypothesis is not rejected at 1%, it is rejected at 5% level of significance.
(D) No definite assertion can be made.
Ans: (B) When the null hypothesis is rejected at 1% level of significance, it is also rejected at 5% level also.
20. Which of the following software has applications in both Mathematics and Statistics?
(A) SPSS.
(B) SAS.
(C) R.
(D) None of the above.
Ans: (D) None of the above.
21. The original source of an organization’s culture is most strongly associated with any one of the following:
(A) Influences of overseas.
(B) General economic trends.
(C) The vision of the organization’s founder(s).
(D) Political factors in the external environment.
Ans: (C) The vision of the organization’s founder(s).
22. It is the organization structure which brings about horizontal coordination to project and hence the chances of success of the projects are higher. It is called as:
(A) Functional structure.
(B) Matrix organization structure.
(C) Hybrid structure.
(D) Divisional structure.
Ans: (B) Matrix organization structure.
23. Which is not a characteristic of informal organization?
(A) General nature is official.
(B) Authority and responsibility are major concepts.
(C) Primary focus on person not position.
(D) Guidelines for behaviour is rules.
Ans: (C) Primary focus on person not position.
24. Which is not characteristic of planning in an organisation?
(A) Pervasive.
(B) Non-rational.
(C) Perpetual.
(D) Integrated process.
Ans: (B) Non-rational.
25. It is the strategy of large organisation, the purpose of which is to identify the business areas in which an organisation will carry out its operations and states how these businesses can be coordinated to make the organisation more competitive:
(A) Operational strategy.
(B) Business level strategy.
(C) Corporate level strategy.
(D) None of the above.
Ans: (C) Corporate level strategy.
26. Consumers are buying all products put into the market place. This demand state is called as:
(A) Latent demand.
(B) Full demand.
(C) Overfull demand.
(D) Unwholesome demand.
Ans: (B) Full demand.
27. The marketing audit is a part of the following:
(A) Annual plan control.
(B) Efficiency control.
(C) Profitability control.
(D) Strategic control.
Ans: (D) Strategic control.
28. Family can be regarded as following type of reference groups:
(A) Secondary reference group.
(B) Primary reference group.
(C) Aspirational reference group.
(D) Disassociative reference group.
Ans: (B) Primary reference group.
29. An element of the buyer’s image on the product performance is related to the following:
(A) Make-up pricing.
(B) Target return pricing.
(C) Perceived value pricing.
(D) Going rate pricing.
Ans: (C) Perceived value pricing.
30. All the product classes that can satisfy a core need with reasonable effectiveness, it is known as:
(A) Product type.
(B) Produce class.
(C) Product line.
(D) Brand and Item.
Ans: (B) Produce class.
31. The most important goal of financial management is:
(A) Profit maximisation.
(B) Matching income and expenditure.
(C) Using business assets effectively.
(D) Wealth maximisation.
Ans: (D) Wealth maximisation.
32. A project having discount rate of 10% has the following cash-flows:
|
Year |
Cash flows (Rs. Lacs) |
|
0 1 2 3 |
– 50   60 – 30   80 |
The NPV of the product is:
(A) Rs. 39.84 Lakhs.
(B) Rs. 39.48 Lakhs.
(C) Rs. 40.48 Lakhs.
(D) Rs. 93.84 Lakhs.
Ans: (A) Rs. 39.84 Lakhs.
33. PQR Ltd. has taken a term loan of Rs. 20 lakhs at an interest rate of 14% p.a. If the tax rate applicable is 30%, the cost of term loan is:
(A) 8.9%.
(B) 9.8%.
(C) 14.0%.
(D) 4.2%.
Ans: (B) 9.8%.
34. In Miller-Orr model of cash management:
(A) The lower limit of cash balance is set by the management and the upper limit and return point for cash balance are derived.
(B) The lower limit and the upper limit of cash balance are pre-decided by the management and return point for cash balance is derived.
(C) The lower limit for cash balance and the return point for the cash balance are pre-decided by the management and upper limit for cash balance is derived.
(D) Both upper limit for cash balance and return point for cash balance are pre-decided by the management and lower limit for cash balance is derived.
Ans: (A) The lower limit of cash balance is set by the management and the upper limit and return point for cash balance are derived.
35. According to net income approach, the average cost of capital of firm:
(A) declines as debt-equity ratio increases.
(B) increases as debt-equity ratio increases.
(C) remains constant irrespective of change in debt-equity ratio.
(D) keeps on fluctuating with increase in debt-equity ratio.
Ans: (A) declines as debt-equity ratio increases.
36. Which of the following is not environmental challenge facing human resources?
(A) Competition for scarce resources.
(B) Government rules and regulations.
(C) Global competition.
(D) Changing workers.
Ans: (A) Competition for scarce resources.
37. Job evaluation is:
(A) Determining the equal pay for the job of same value.
(B) Systematic procedure used to determine the related worth of the job.
(C) The minimum and maximum pay rates for each job class.
(D) None of the above.
Ans: (B) Systematic procedure used to determine the related worth of the job.
38. Which of the following is not offered by job analysis?
(A) Workers attributes.
(B) Performance appraisals.
(C) Working conditions.
(D) Job specifications.
Ans: (B) Performance appraisals.
39. From the below, which is the first step in the systematic approach to training?
(A) Determination of training objectives.
(B) Design of training program.
(C) Selection of training method.
(D) Assessment of training needs.
Ans: (D) Assessment of training needs.
40. Grievance adversely affects:
(A) Trade unions.
(B) Shareholders.
(C) Employees.
(D) Management.
Ans: (C) Employees.
41. The Capital to Risk Weighted Asset Ratio is used to determine:
(A) Non-performing assets of the Bank.
(B) Profitability of Bank.
(C) Capital adequacy position.
(D) All of the above.
Ans: (C) Capital adequacy position.
42. Which of the following is most important for a Bank?
(A) Systematic risk.
(B) Country risk.
(C) Credit risk.
(D) Sovereign risk.
Ans: (C) Credit risk.
43. EXIM banks are created for financing:
(A) Industrial manufacturing.
(B) Mining.
(C) Oil exploration.
(D) Trade promotion.
Ans: (D) Trade promotion.
44. Which one is a rediscounting rate used by Reserve Bank of India?
(A) Repo Rate.
(B) Bank Rate.
(C) Credit Rate.
(D) Growth Rate.
Ans: (B) Bank Rate.
45. Match the items of List I with the items of List II and choose the correct option from the codes given below:
|
List I |
List II |
|
(a) Central Bank of India. (b) Industrial Finance Corporation. (c) Reserve Bank of India. (d) Insurance. |
(1) Central Bank. (2) IRDA. (3) Industrial Bank. (4) Commercial Bank. |
 Codes:
(A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(B) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
(C) (a)-(3), (b)-(4), (c)-(2), (d)-(1).
(D) (a)-(2), (b)-(1), (c)-(4), (d)-(3).
Ans: (B) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
46. Which of the following is not included in the current account of the balance of payments account?
(A) Transactions for exports.
(B) Interest payments.
(C) Remittances made by nationals working abroad.
(D) Long-term loans received by the country from World Bank in foreign currency.
Ans: (D) Long-term loans received by the country from World Bank in foreign currency.
47. The Dunkel draft was responsible for:
(A) Liberalizing trade.
(B) Abolition of GATT.
(C) Establishment of WTO.
(D) All of the above.
Ans: (D) All of the above.
48. The difference between Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) is:
(A) FDI is in domestic currency and FII in foreign currency.
(B) FDI brings in real foreign capital and FII is speculative.
(C) FII involves production and FDI does not.
(D) None of the above.
Ans: (B) FDI brings in real foreign capital and FII is speculative.
49. The ‘Most Favoured Nation Clause’:
(A) Promotes trade discrimination.
(B) Reduces trade discrimination.
(C) Creates trade blocs.
(D) Creates customs unions.
Ans: (B) Reduces trade discrimination.
50. Country’s balance sheet is called:
(A) Balance of payment.
(B) Terms of trade.
(C) Trade ratios.
(D) Direction of trade.
Ans: (A) Balance of payment.
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