UGC NTA NET/JRF Exam, Management, December-2020/June-2021

Total Questions: 100

11. The holistic, integrated and goal-oriented process of planning, recruiting, selecting, developing, managing, and compensating employees is known as

Correct Answer: (c) Talent Management
Solution:

Talent management as the system in which people are recruited, developed, promoted and retained to optimize the organizations ability to realize positive lousiness outcomes in the face of shifting competitive landscapes and labour requirements.
Therefore, the holistic, integrated and goal-oriented process of planning, recruiting, developing, managing and compensating employees is known as talent management

12. Which one of the following performance appraisal methods prevents supervisors from rating all or most employees "satisfactory" or "high"?

Correct Answer: (b) Forced Distribution Method
Solution:

Forced distribution method is based on presumption that all employees can be divided into five categories viz, outstanding, above average, average, below average and poor.
Therefore, forced distribution method prevents supervisors from rating all or most employees "Satisfactory" or "high".

13. In case of agency problem, the actions of managers are very likely to be directed towards the goal of

Correct Answer: (c) Survival and self-sufficiency
Solution:

The agency problem occurs when a conflict of interest prevents one party from acting in the best interest of the other party. You can reduce the chances of this happening to your business by taking specific steps and staying organized. In case of agency problem the actions of the managers are very likely to be directed towards the survival and self-sufficiency goal.

14. Which one of the following measures better explains inflation in an economic ecosystem?

Correct Answer: (d) Rate of change in GNP deflator
Solution:

The most well-known indicator of inflation is the Consumer Price Index (CPI) which measures the percentage change in the price of a basket of goods and services consumed by households.

15. Du Pont analysis formula involves which financial elements for computation of earning power?

Correct Answer: (a) Net profit margin, Total assets turnover and Equity multiplier
Solution:

The DuPont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. DuPont Analysis = Net profit margin × AT × EР

16. Following information is available for the year 2018 and 2019 of ABC Ltd:

Year                   2018                            2019

Sales                  Rs.32,00,000          Rs. 57,00,000

Profit/Loss/    (Rs. 3,00,000)         Rs. 7,00,000

Calculate P/V ratio

Correct Answer: (a) 40%
Solution:

17. Which methods of risk analysis better serve lender's perspective in the capital budgeting decisions?

Correct Answer: (b) Certainty Equivalent approach
Solution:

Certainty equivalent is a return that an investor accepts now rather than taking the chance of expecting higher returns in the future that is uncertain. In other words, as an investor, you are ready to accept the current return instead of taking a risk on a an uncertain return in the future.
Therefore, certainty equivalent approach methods of risk analysis better serve lender's perspective in the capital budgeting decision.

18. As per Walter's model, the market value of a growing firm will increase if the divident payout ratio is

Correct Answer: (b) Decreased
Solution:

Prof. James E walter formed a model for share valuation that states that the dividend policy of a company has an effecton its valuation.
The companies paying higher dividends have more value as compared to the companies that pay lower dividends or do not pay at all.

Therefore, as per Walter's model, the market value of a growing firm will increase if the dividend Payout ratio is Decreased.

19. In the absence of covariance among securities in the portfolio, if each security has an average standard deviation of 20%, the portfolio of 100 securities would have a standard deviation of

Correct Answer: (a) 2%
Solution:

20. The relationship between an investor's expectation of return on bonds with respect to the investment horizon is called

Correct Answer: (d) Term structure of interest rates
Solution:

The term structure of interest rate can be defined as the graphical representation that depicts the relationship between interest rates (or yield on a bond) and a range of different maturities.
Therefore, The relationship between an investor's expectation of return on bonds with respect to the investment horizon is called term structure of interest rates.