COMMERCE
PAPER – II
Note : This paper contains fifty (50) objective type questions, each question carrying two (2)
marks. Attempt all the questions.
1. GDP at factor cost is
(A) P(Q) + P (S)
(B) GDP – IT – S
(C) GDP + DT + S
(D) GDP – DT + S
Answer:(X)
2. Which one is not the main objective of
fiscal policy in India ?
(A) To increase liquidity in the
economy.
(B) To promote price stability.
(C) To minimize the inequalities of
income and wealth.
(D) To promote employment
opportunities.
Answer:(A)
3. Which one is not an element of internal
environment ?
(A) Marketing capability
(B) Operational capability
(C) Money and Capital market
(D) Personnel capability
Answer:(C)
4. Out of the following, which four
benefits are available to host countries
from MNCs ?
i. Transfer of technology
ii. Learning of business mannerism
iii. Strategic information sharing
iv. Creation of jobs
v. Entertainment
vi. Better utilisation of resources
vii. Enhancing social contacts
viii. Improved competition in local
economy
(A) i, iii, v, vii
(B) ii, iv, vi, viii
(C) i, iv, vi, viii
(D) iii, vi, vii, viii
Answer:(C)
5. Environmental degradation does not
consist of
(A) Land degradation and soil
erosion
(B) Problem of overgrazing and
ecological degradation
(C) Floods
(D) None of the above
Answer:(D)
6. Which one of the following concepts is
used as fund in the preparation of
Funds Flow Statement ?
(A) Current Assets
(B) Working Capital
(C) Cash
(D) All Financial Resources
Answer:(B)
7. Window dressing is prohibited due to
(A) Conservative Convention
(B) Convention of Disclosure
(C) Convention of Materiality
(D) Arrear of book accounts
Answer:(B)
8. 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.
Answer:(A)
9. Which of the following relate to
measures of non-financial performance
of a concern ?
i. Customer satisfaction
ii. Business process improvement
iii. Economic value added
iv. Learning organisation
Choose the right combination.
(A) i, iii, ii, iv
(B) ii, iv, iii
(C) iv, i, iii
(D) i, ii, iv
Answer:(D)
10. Consider the following parties :
i. Secured creditors
ii. Unsecured creditors
iii. Partners who have granted loans
iv. Partners who have contributed
over and above profit sharing
ratio.
Arrange them in correct sequence in
the event of dissolution of a firm.
(A) ii, i, iii, iv
(B) i, ii, iii, iv
(C) i, ii, iv, iii
(D) ii, i, iv, iii
Answer:(B)
11. Which kind of economics explains the
phenomenon of cause and effect
relationship ?
(A) Normative
(B) Positive
(C) Micro
(D) Macro
Answer:(B)
12. Assertion (A) : Marginal cost and
differential cost do not convey the
same meaning in all the
circumstances.
Reason (R) : Differential cost
increases or decreases due to
change in fixed cost.
Codes :
(A) (A) is true but (R) is false.
(B) (A) is false, but (R) is true.
(C) (A) and (R) are correct and (R) is
correct explanation of (A).
(D) Both (A) and (R) are correct, but
(R) is not the correct explanation
of (A).
Answer:(C)
13. Consider the following :
i. Pricing objectives
ii. Pricing methods
iii. Pricing strategies
iv. Pricing decisions
Arrange them in correct sequence :
(A) i, iii, ii, iv
(B) i, iv, iii, ii
(C) ii, i, iv, iii
(D) iv, ii, iii, i
Answer:(A)
14. A commodity is used for multiple
purposes, then the demand for it is
known as
(A) Joint Demand
(B) Composite Demand
(C) Direct Demand
(D) Autonomous Demand
Answer:(B)
15. Match List – I with List – II and select
the correct answer.
List – I List – II
1. Administered a. Landed cost
price of imports
2. Parity pricing b. Liberalized economy
3. Competitive price c. Public enterprise
4. Discriminating d. Fixed by Government
price
Codes :
a b c d
(A) 1 2 3 4
(B) 2 3 4 1
(C) 3 4 2 1
(D) 4 2 1 3
Answer:(B)
16. Sample design involves the following :
i. Sampling unit
ii. Size of samples
iii. Type of universe
iv. Source list
v. Sampling procedure
Which one of the following sequence
is correct ?
(A) i, ii, iii, iv, v
(B) iii, iv, i, ii, v
(C) iii, i, iv, ii, v
(D) iii, v, i, iv, ii
Answer:(C)
17. Which one of the following is not a
measure of dispersion ?
(A) Quartile
(B) Range
(C) Mean Deviation
(D) Standard Deviation
Answer:(A)
18. 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)
19. Sturge’s rule is used to find out directly
(A) Number of classes in a
continuous distribution
(B) Size of class limits
(C) Direction of the classification
(D) None of the above
Answer:(A)
20. Which of the following software has
applications in both Mathematics and
Statistics ?
(A) SPSS
(B) SAS
(C) R
(D) None of the above
Answer:(D)
21. Match the following :
a. The Practice of 1. Henry Fayol
Management
b. Philosophy of 2. F.W. Taylor
Management
c. Scientific 3. Oliver Sheldon
Management
d. General and 4. Peter F Drucker
Industrial
Administration
.
Codes :
a b c d
(A) 1 2 3 4
(B) 4 3 2 1
(C) 4 3 1 2
(D) 3 4 2 1
Answer:(B)
22. Assertion (A) : All decisions taken
through mental process are rational.
Reason (R) : Decision making is a
mental process.
Codes :
(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)
23. 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:(X)
24. 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 and iv
(B) ii, iii, iv and v
(C) i, iii, iv and v
(D) i, ii, iii and v
Answer:(A)
25. Appointment of independent Directors
is the part of Corporate Governance as
per the
(A) SEBI
(B) Indian Companies Act
(C) Government of India
(D) RBI
Answer:(A)
26. A method for achieving maximum
market response from limited
marketing resources 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
Answer:(C)
27. Who plays their significant role in
distribution of goods when they do not
sell to ultimate users or consumers ?
(A) Retailer
(B) Wholeseller
(C) Mediator
(D) Commission agent
Answer:(B)
28. 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
Answer:(A)
29. Which research includes all types of
researches into human motives when it
refers to qualitative research designed
to uncover the consumer’s
subconsciousness or hidden
motivations ?
(A) Motivational Research
(B) Marketing Research
(C) Managerial Research
(D) Price Research
Answer:(A)
30. 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
Answer:(B)
31. Arrange the following steps involved
in capital budgeting in order of their
occurrence :
i. Project selection
ii. Project appraisal
iii. Project generation
iv. Follow up
v. Project execution
(A) ii, iii, i, v, iv
(B) iii, ii, i, v, iv
(C) i, iii, ii, v, iv
(D) i, ii, iii, v, iv
Answer:(B)
32. Which method does not consider the
time value of money ?
(A) Net Present Value
(B) Internal Rate of Return
(C) Average Rate of Return
(D) Profitability Index
Answer:(C)
33. Which formula is used to measure the
degree of Operating leverage ?
(A) EBIT/Sales
(B) C/EBIT
(C) EBIT/EBT
(D) EBIT/C
Answer:(B)
34. Which one is more appropriate for cost
of retained earnings ?
(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.
Answer:(B)
35. Match the following with the most
suitable option.
List – I List – II
a. Modigliani-Miller 1. Commercial paper
approach
b. Net Operating 2. Working capital
income approach
c. Short term money 3. Capital structure
market instrument
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
Answer:(A)
36. During which plan was the National
Apprenticeship Training Scheme
introduced ?
(A) 1st Five Year Plan
(B) 2nd Five Year Plan
(C) 4th Five Year Plan
(D) Annual Plans
Answer:(B)
37. Match the following :
List – I List – II
a. An ordinary person 1. Hierarchy Theory
does not want to
work on his own.
b. An individual is 2. Hygiene Theory
willing to work on
his own.
c. Motivational Factors 3. X-Theory
d. Esteem Needs 4. Y-Theory
Codes :
a b c d
(A) 1 2 3 4
(B) 3 4 1 2
(C) 1 4 2 3
(D) 3 4 2 1
Answer:(D)
38. Arrange the following staffing
procedures in the correct sequence :
i. Determining sources of
Personnel supply.
ii. Preparing personnel
specifications.
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
Answer:(A)
39. Which among the following is not a
voluntary method for prevention and
settlement of disputes ?
(A) Collective Bargaining
(B) Standing Orders
(C) Joint Consultation
(D) Works Committee
Answer:(D)
40. Statement-I : It is no better to pay
employees for little than to pay too-much
Statement – II : Competent
employees will remain competent
forever.
(A) Statement I is true, but II is false.
(B) Statement II is true, but I is false.
(C) Both Statements I and II are true.
(D) Both Statements I and II are false.
Answer:(A)
41. 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
Answer:(B)
42. Which one among the following has
not started Commercial Banking ?
(A) SIDBI
(B) IDBI
(C) ICICI
(D) UTI
Answer:(A)
43. What is OTP in credit card
transactions ?
(A) Odd Transaction Password
(B) Owner’s Trading Passcode
(C) One Time Password
(D) One Time Pincode
Answer:(C)
44. The powers of Controller of Capital
Issues of India is now shifted to
(A) Ministry of Finance
(B) SEBI
(C) AMFI
(D) Ministry of Corporate Affairs
Answer:(B)
45. The success of E-banking depends
upon :
i. Multi-layer Security System
ii. Risk and Surveillance
Management
iii. Updated Flawless Softwares
iv. Stringent Legal Frame-work
(A) i and ii
(B) i, ii and iii
(C) ii, iii and iv
(D) i, ii, iii and iv
Answer:(B)
46. International liquidity comprises which
four of the following ?
i. Gold held by Central Banks.
ii. Gold held by families.
iii. Forex Reserve held by
Commercial Banks.
iv. Mineral wealth.
v. SDRs
vi. Borrowing facilities.
vii. NRIs FDRs
viii. Credit facilities available under
SWAP
(A) i, ii, iii, iv
(B) ii, iii, iv, viii
(C) i, iii, v, viii
(D) iii, iv, vii, viii
Answer:(C)
47. Which among the following are
important bodies of WTO ?
i. Dispute Settlement Body.
ii. NAFTA
iii. Trade Policy Review Body
iv. ASEAN
v. Council for Trade in Goods
vi. IBRD
vii. Council for Trade related aspects
of Intellectual Property Rights.
viii. GATT
An appropriate combination is
(A) i, ii, iii, iv
(B) ii, iii, iv, v
(C) i, iii, v, vii
(D) iv, v, vi, viii
Answer:(C)
48. Which one is not the source of External
Finance ?
(A) WTO Funds
(B) World Bank Group
(C) Export Credit
(D) Foreign Direct Investment
Answer:(A)
49. Which one is called Bretton-Wood
Twins ?
(A) IBRD and IDA
(B) IMF and IFC
(C) IMF and IBRD
(D) IDA and IFC
Answer:(C)
50. UNCTAD stands for
(A) United Nations Committee on
Tariff and Development.
(B) United Nations Conference on
Trade and Deficit.
(C) United Nations Conference on
Trade and Development.
(D) Union of Nations Cause for Trade
and Development
Answer:(C)