NTA UGC NET/JRF Exam, Dec. 2021/June 2022 (Commerce) Shift-I

Total Questions: 100

21. Match List I with List II

List I Marketing ConceptList II Description
(A) Brand Equity(i) The maximum possible demand for a product when marketing expenditure in the industry is infinite
(B) Brand Identity(ii) The mental perception and associations of consumers related to a brand
(C) Brand Image(iii) The peculiar distinguishing color, design, label of a brand which distinguish brand of a firm
(D) Market Potential(iv) A pool of goodwill consumers have related to a brand

Choose the correct answer from the options given below :

(A)(B)(C)(D)
(a)iviiiiii
(b)iiiiviii
(c)iiiiivii
(d)iiiiiiiv
Correct Answer: (a)
Solution:
List I Marketing ConceptList II Description
(A) Brand Equity(iv) A pool of goodwill consumers have related to a brand
(B) Brand Identity(iii) The peculiar distinguishing color, design, label of a brand which distinguish brand of a firm
(C) Brand Image(ii) The mental perception and associations of consumers related to a brand
(D)Market Potential(i)The maximum possible demand for a product when marketing expenditure in the industry is infinite

22. Given below are two statements

Statement I : In the case of Life Insurance, the insurable interest must be present in the person insured at the time when the event happened.
Statement II : In the case of Fire Insurance, the insurable interest must be present in the object insured at the time when the policy is taken and the event has happened.
In light of the above statements, choose the correct answer from the options given below

Correct Answer: (d) Statement I is false but Statement II is true
Solution:

In the case of life insurance, insurable interest must be present at the time the life insurance policy is purchased, not in the person insured at the time when the event happened. Statement II is correct.

23. Which of the following approaches of capital structure pleads that debt financing initially increase the value of the firm : however excess debt financing beyond a particular point reduces the value of the firm?

Correct Answer: (c) Traditional Approach
Solution:Traditional Approach favour that as a result of financial leverage up to some point, cost of capital comes down and value of firm increases. However, beyond that point reverse trends emerge.
• The principle implication of this approach is that the cost of capital is dependent on the capital structure and there is an optimal capital structure which minimize cost of capital.

24. Which of the following are the essential elements for defining a business?

(A) Dealers
(B) Products
(C) Markets
(D) Competitors
(E) Functions
Choose the correct answer from the options given below :

Correct Answer: (a) B, C and E only
Solution:

Essential elements for defining a business:-
• Products
• Markets
• Functions
• People
• Money

25. Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R.

Assertion A : By switching to long-term government bonds, the investor acquires an asset whose price fluctuates as interest rates vary.
Reason R : Bonds prices fall when interest rates rise and rise when interest rates fall.
In light of the above statements, choose the correct answer from the options given below.

Correct Answer: (a) Both A and R are true and R is the correct explanation of A
Solution:

In order to protect against risk every investor wanted to earn those asset from government bonds, whose value would keep on decreasing according to the change in interest rates. Every investor starts selling the bond in order to make profit from rising interest rates, due to which the value of bond starts falling due to excess supply of the bond on contrary, a fall in the interest rate increases the purchase of bonds, that is, due to more demand, their value increases.

26. Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R.

Assertion A : R² tends to be smaller for cross sectional data than for time series data.
Reason R : Wider fluctuations in the cross sectional data cause smaller value of R²
In light of the above statements, choose the correct answer from the options given below :

Correct Answer: (a) Both A and R are true and R is the correct explanation of A
Solution:

Time series data is data that is recorded over consistent intervals of time. Cross sectional data consists of several variables recorded at the same time. Pooled data is a combination of both time series & cross sectional data. R² is the percent of variance explained by the model that is R² is the function of dependent variable. If the errors is less than variance of dependent variable. So, A and R is true & R is the correct explanation of A.

27. Arrange the following steps in a logical sequence of the process of management audit

(A) Identification of responsibility centers
(B) Review of organizational structure
(C) Reporting
(D) Identify and segregating the objectives of business
(E) Review of performance of each responsibility centre
Choose the correct answer from the options given below

Correct Answer: (d) D, B, A, E, C
Solution:

Management audit is a process in which auditor evaluates company's overall activities & performance steps in a logical sequence of the process of management audit
(i) Identifying & segregating the objectives of business
                              ↓
(ii) Review of organizational structure
                              ↓
(iii) Identification of responsibility centers
                              ↓
(iv) Review of performance of each responsibility centre
                              ↓
(v) Reporting

28. SEBI's 'Skin in the game' rule is applicable to which of the following financial intermediaries?

Correct Answer: (c) Mutual funds
Solution:

SEBI's 'skin in the game' rule is applicable to Mutual funds. It is a phrase which is popularized by Warren Buffet. It is a situation in which high ranking insiders use their own fund to buy stock in the company they are running.
Skin-in-the- game rules would be effective form October 1, 2021.
In the SEBI rule junior employees (below the age of 35 & not head of department, fund managers and CEOs) must invest 10% of their compensation in MF schemes in the first year. And share will increase by 15% in the second year.
And the key employees of asset management companies must invest a minimum of 20% of their gross annual CTC from October 1, 2021.

29. Which one of the following aims at the Task Dimension of organizational change?

Correct Answer: (d) Reallocating authority
Solution:

Diversifying into additional business is the aims at task Dimension of organizational change.

30. Sweezy's kinked demand curve model to explain the price and output determination relates to which type of market structure?

Correct Answer: (d) Oligopoly
Solution:

Kinked demand curve of oligopoly was developed by paul M. Sweezy in 1939 this model explains the price & output determination relates to oligopoly Market. The kinked demand curve model seeks to explain the reason of price rigidity under oligopolistic market situations.