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

Total Questions: 100

31. Break-even point is not affected with the changes in which one of the following?

Correct Answer: (c) Number of units sold
Solution:Number of units sold.
Break - even - point is not affected with the changes in number of units sold.
The break even point represents the sales point where all the costs are covered but no profit or loss is realized by the firm. It is used to calculate the number of units where the total cost is equal to the total revenue.

32. The current market price per share of New Age Limited is Rs. 80. The dividend expected a year from now is Rs. 4 and it is expected to grow at a constant rate of 10 percent. The flotation (issue) cost for the new issue will be 8 percent. What is the cost of new equity?

Correct Answer: (a) 15.43 percent 
Solution:

Given, current Market price/share = 80
Dividend a year after = 4
expected growth rate = 10%
floating cost for issue of share = 8%

33. From which of the following employees derive authority?

A. Position
B. Experience
C. Moral worth
D. Past service
E. Intelligence
Choose the most appropriate answer from the options given below:

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

As the management consists of getting the work done through others, it implies that the employee as a manager should have the right to give orders and to exact obedience. An employee as manager may exercise formal authority and also personal power. Formal authority is derived from his official position, while personal power is the result of intelligence, experience, moral worth, ability to lead, past services.

34. A company should undergo a step-wise process before selecting a final price. According, arrange the following steps of pricing policy process to help ‘XYZ’ company to decide the final price of its product.

A. Selecting the pricing method.
B. Examining competitor's costs, prices and offers.
C. Estimating the demand curve and the probable quantities company will sell at each possible price.
D. Selecting the pricing objective of the company.
E. Estimating costs for different levels of output, for different levels of accumulated production experience, and for differentiated marketing offers.
Choose the correct answer from the options given below:

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

Following is the step-wise process a company should undergo before selecting a final price of a product.

35. The qualified characteristics determining (constituting) consumer ‘rationality’ includes

A. Economic selfish motives
B. Risk-return optimiser
C. Clarity of preferences
D. Possession of information
E. Non-satiation of needs
Choose the most appropriate answer from the options given below:

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

Consumer rationality is an assumption made that people seek to maximize their own welfare from consuming goods and services. They choose those products that will provide them with maximum utility and satisfaction.
Characteristics which determine consumer ‘rationality’ includes Non - satiation of needs (benefit from additional consumption), economic selfish motives, clarity of preferences (logically, selections between goods are rational) possession of information (consumer makes choices based on this information).

36. The pricing practice to extract all of the consumer surplus from consumers to maximize the total revenue and profits from the sale of a particular quantity of product is called:

Correct Answer: (a) First-degree price discrimination
Solution:

First - degree price discrimination :- The pricing practice to extract all of the consumer surplus from consumers to maximize the total revenue and profits from the sale of a particular quantity of product is called First - degree price discrimination.

37. Which one of the following is not an advantage of organization structure by territory?

Correct Answer: (a) Makes control easy for top management
Solution:

Organization structure by territory means an organization structure in which units are divided on the basis of territory or geographical region.
Following are the advantages of organization structure by territory:-
• places responsibility at lower level.
• Improves co-ordination in a region.
• Takes advantage of economies of local operations.

This structure makes problem for effective control, so, makes control easy for top management is not the advantage of organization structure by territory.

38. A spot sale of a currency combined with a forward repurchase of the same currency is:

Correct Answer: (a) Forex swap
Solution:

Forex swap is also known as foreign exchange swap or Fx swap. It is a spot sale of a currency combined with forward repurchase of the same currency.
In simple words, it is an agreement between parties which involves lending one currency and borrowing another simultaneously at an initial date.
Finally, both of the parties swap the amount of the involved currencies at maturity.
Interest as well as principal payments of the involved currencies at maturity.

39. Written plan containing the details regarding the conduct of a particular audit is called:

Correct Answer: (d) Audit Programme
Solution:

Audit programme is a written plan containing the details regarding the conduct of a particular audit.
Audit notebook is a diary or register maintained by auditor to note errors, doubtful queries, problems found out during the course of Auditing.
Audit planning procedure involves establishing the overall audit strategy for engagement and developing an audit plan.

40. Arrange the following negotiation rounds of WTO (World Trade Organization) in reverse chronological order:

A. Uruguay Round
B. Geneva Round
C. Kennedy Round
D. Doha Round
E. Tokyo Round
Choose the correct answer from the options given below:

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

There have been nine rounds of trade negotiations since the second world war :-

  1. Geneva Round (GATT) was signed - April 1947
  2. Annecy Round (Tariff concessions) - April 1949
  3. Torquay Round (Cut in tariff levels) - September 1950
  4. Geneva II Round (Japan admitted) - January 1956
  5. Dillon round (Tariff concessions) - September 1960
  6. Kennedy Round (Anti - Dumping Covered) -
                    May 1964
  7. Tokyo Round (Tariff and non - tariff measures discussed) - September 1973
  8. Uruguay Round (WTO created) - September 1986
  9. Doha Round - November 2001