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

Total Questions: 100

51. For which of the following considerations, investors prefer current (near) cashflows over the future (distant) cashflows?

A. Inflation and value erosion.
B. Risk aversion and avoidance.
C. Liquidity preferences
D. Return generation and value protection.
E. Risk appetite and tolerance.
Choose the most appropriate answer from the options given below:

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

Inflation and value erosion, Risk aversion and avoidance, liquidity preferences and return generation and value protection, future uncertainty. There are reasons why investors emphasize present cash flows rather than future cash flow.

52. Based on asymmetric information, managers prefer to finance firms' capital structure in which order as postulated in the Pecking Order Theory?

A. Retained earnings and internal sources.
B. External debt financing.
C. Hybrid security and convertible bonds.
D. New issue of Equity shares.
Choose the correct order from the options given below:

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

Pecking order theory states that companies prioritize their sources of financing (From Internal financing to equity) and consider equity financing as a last resort. Internal Funds are used first, and when they are depleted, debt is issued. When it is not prudent to issue more debt equity is issued. This theory maintains that business adhere to a hierarchy of financial sources and prefer Internal financing when available and debt is preferred over equity if external financing is required.

53. Which of the following are integral dimensions of a firm's credit policy?

A. Credit Standards.
B. Credit appraisal.
C. Credit period.
D. Cash discount.
E.Collection policy.
Choose the most appropriate answer from the options given below:

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

The important dimensions of a firm's credit policy are credit standard, Credit period, Cash Discount and Collection effort.
These variables are related and have a bearing on the level of sales, bad debts loss, discounts taken by customer's and collection expenses.
Hence, option (b) is correct answer.

54. According to Ansoff Product-Market Expansion Grid, intensification can be achieved through three distinct strategies. Identify them out of the following:

A. Market Attractiveness.
B. Market Penetration.
C. Market Development.
D. Product Development.
Choose the correct answer from the options given below:

Correct Answer: (b) B, C and D only
Solution:

A Market product grid is also known as an Ansoff matrix or a product market expansion grid. It is a tool the businesses use to develop a growth strategy.
4 strategies of Ansoff Matrix.
1. Market Penetration
2. Product Development
3. Market Development
4. Diversification
Market Attractiveness is not Ansoff matrix strategies.

55. Under the cost-based pricing, the following methods/approaches are commonly used:

A. Marginal cost pricing.
B. Markup pricing (cost-plus pricing).
C. Absorption cost pricing (full cost pricing).
D. Return on Investment pricing.
Choose the correct answer from the options given below:

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

Cost based pricing is a pricing method that is based on the cost of production, manufacturing, and distribution of a product. Marginal costing pricing, cost plus pricing and Absorption cost pricing method are used in cost base pricing.

56. Planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit is known as:

A. Inventory Management.
B. Marketing Logistics.
C. Physical Distribution.
D. Selling Management.
Choose the correct answer from the options given below:

Correct Answer: (b) B and C only
Solution:

To marketing logistics and physical distribution is known as, planning implementing and controlling the physical flow of materials, final goods and related information from points to origin to points of consumption to meet customer requirement.

57. Customer Relationship Management (CRM) performs several tasks and brings several benefits. Identify them out of the following:

A. Support cross-selling and upselling to existing customers.
B. Manages customer interaction and customer service.
C. Serves as a sustainable competitive advantage.
D. Helps convert buyers into profitable customers, build enduring relations with them and retain them as customers for life.
Choose the correct answer from the options given below:

Correct Answer: (d) A, B, C and D- AlI
Solution:

Support Cross-Selling and Upselling to existing customers manager customer interaction and customer service, serves as a sustainable competitive advantage and helps convert buyers into profitable customer, build enduring relation with them and retain them as customers for life are benefits of customer Relation Management.

58. Identify the most important types of retail stores :

A. Convenience store.
B. Online store.
C. Departmental store.
D. Direct-selling store.
E. Superstore.
Choose the correct answer from the options given below:

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

Retail store types-
1. Grocery/Supermarket
2. Big Box/super store
3. Convenience store
4. Specialty store
5. Department store
6. Discount store
7. Super store etc.
Hence, option (b) is correct answer.

59. For calculating arithmetic mean for a grouped data set, assumptions are:

A. The class intervals must be closed.
B. The width of each class interval should be equal.
C. The mid-value of each class interval must represent the average of all values in that class.
D. All values of observations can not be evenly distributed.
Choose the most appropriate answer from the options given below:

Correct Answer: (b) A, B and C only
Solution:

The class intervals must be closed, The width of each class intervals must be equal, The mid-value of each class interval must represent the average of all values in that class are important assumptions for calculating Arithmetic mean for a grouped data set.

60. The function which states the determinants of the quality to be either maximized or minimized is called as :

A.Feasible function.
B. Optimal function.
C. Criterion function.
D. Sustainability function.
E. Objective function.
Choose the correct answer from the options given below:

Correct Answer: (c) C and E only
Solution:

Criterion function, dependent upon the decision and the true underlying distributions, which express the loss produced in taking the decision. Objective function is a means to maximize something. Exproduction quantity, Profit value. Every materials saved from streamlined process.
Hence, option (c) is correct answer.