# CBSE NET Management September-2013 Solved Paper III

1. The elasticity of demand is greater than unity, when

1. Percentage change in demand is equal to the percentage change in price.

2. Percentage change in demand is more than the percentage change in price.

3. Percentage change in demand is less than the percentage change in price.

4. There is change in price.

2. GDP includes which of the following measures?

1. The size of a population that must share a given output within one year.

2. The negative externalities of the production process of a nation within one year.

3. The total monetary value of all final goods and services produced within a nation within one year.

4. The total monetary value of goods and services including barter transactions within a nation in one year.

3. If the equation y = 5 + 0.6x was graphed, the

1. Slope would be – 5

2. Vertical intercept would be + 0.6

3. Slope would be + 5

4. Slope would be + 0.6

4. Match the following:

 List-I List-II The producers will offer more of a product at a higher price. The quantum that producers want to sell is equal to the quantum that consumers want to buy. The sensitivity of consumers to price changes. Percentage change in quantity demanded to percentage change in price. Market in equilibrium Law of supply Co-efficient of price elasticity of demand. Price elasticity of demand
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• Statement 1: I: The slope of an indifference curve is the Marginal Rate of Substitution in the consumption (MRSc), which is increasing.
• Statement 2: II: The slope of the budget line is ratio of the prices of two goods and is the Marginal Rate of Substitution in exchange (MRSe)
1. Statement 1 and II are correct.

2. Statement 1 is correct, but II is incorrect.

3. Statements I and II are incorrect.

4. Statement 1 is not correct, but II is correct.

5. Forming a fixed opinion or attitude towards a single person or object is termed as

1. Perceptual defense

2. Stereo typing

3. The Halo effect

4. The perceptual set

6. Which of the following best describes the theory X?

1. People are committed to their responsibilities.

2. Motivation is a result of rational behaviour towards attaining goals.

3. The perceived relationship between a given level of efforts and an expected performance.

4. None of the above:

7. Hawthorne experiments were conducted at

1. Hawthorne Electric Company

2. Western Electric Company

3. General Electric Company

4. Eastern Electric Company

8. Match the following: OD Interventions Grouping Term Proposed by

 List-I List-II OD Cube Consul cube Intervention families Four quadrants French and Bell Freneh and Bell Blake and Mouton Schmuck and Miles
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9. Match the following:

 List-I List-II Stability Strategy Synergy Span of control Number of subordinates that report to one supervisor. The whole is greater than the sum of its parts. Plans for the allocation of frm's scarce resources to reach identified goals in time. Employees should not be moved frequently from one job to another
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10. Role of Human Resource Manager is

2. Mediator Role

3. Representative Role

4. All of the above

11. Which statement is true?

1. Job analysis is a group of positions that are similar as to kind and level of work.

2. A promotion is the advancement of an employee to a better job better in terms of greater responsibilities, more prestige or status, greater skill and especially, increase rate of pay or salary.

3. A promotion is the vertical transfer of an employee.

4. All of the above

12. Job is defined as

1. Set of activities performed in the organization.

2. Set of activities similar as to kind of work.

3. Set of position similar as to nature and kind of work.

4. None of these.

13. The benefit of paraphrasing in Employee Appraisal is that it

1. Suggests interest and active listening.

2. Clarify and convey to the rater that you are listening actively.

3. Shows that you are trying to understand the emotional aspect of the work place.

4. All of the above:

14. An employee can be laid off when the organization has

1. Acquired labour more than the required.

2. Purchased raw material more than the immediate required.

3. Breakdown of machinery.

4. All of the above:

15. Match the following:

 List-I (Items of HRM) List-II (Features) Human Resource Planning Selection Advancement Industrial relations Forecast man power needs based strategies of the trend. Use the criteria and measures developed to match individual skills in the job requirements. Promotion. Amicable and harmonious working in the organization.
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16. Which one of the following is a disadvantage of having expatriate employees to staff international subsidiaries?

1. Brings cultural similarities with parent company.

2. Gives employees a multinational orientation.

3. Attempts to establish a foreign culture to the company.

17. Whistle Blowing is the situation wherein an employee

1. Causes indiscipline in the organization.

2. Discloses other employees'illegal immoral or illegitimate activities.

3. Discloses the employer's illegal immoral or illegitimate activities.

4. All of the above:

18. Distributive bargaining may be explained as

1. Bargaining wherein both parties are willing to negotiate over wages, hours and conditions of employment.

2. Bargaining that focuses on convincing the other party that the cost of disagreeing with the proposed terms would be very high.

3. Bargaining that focuses on convincing the other party that the benefits of agreeing with the proposed terms would be very high.

4. None of the above:

19. Match the following:

 List-I List-II Balancing Equity Internal Equity Individual Equity External Equity The perceived fairness of the pay structure within a firm. The perceived fairness in pay relative to what other employers are paying for the same type of labour. The perceived fairness in establishment of internal and external pay equity. The perceived fairness of individual pay decisions.
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20. Which of the below features is not wealth maximization objective of Financial Management?

1. Considers both quantity and quality dimensions of benefits.

2. Based on the concept of cash flows generated by the decision rather than accounting profit.

3. Decision should be oriented to the maximization of profits.

4. Focus is on the value to the owners or suppliers of equity capital.

21. Financial Break-even Level of EBIT is one at which

1. EPS is one

2. EPS is infinite

3. EPS is zero

4. EPS is negative

22. Which of the following is not considered by Miller-Orr Model?

1. Variability in cash requirement

2. Cost of transaction

3. Holding cash

4. Total annual requirement of cash

23. If the minimum stock level and average stock level of material A are 4000 and 9000 units respectively, what is the Reorder quantity?

1. 8000 units

2. 10, 000 units

3. 11, 000 units

4. 9, 000 units

24. According to Lintner Model, factors affecting dividend of current year are

1. DPS of previous year, EPS, target pay-out ratio and adjustment rate.

2. EBIT, interest rate and retention ratio.

3. P/E ratio, retention ratio and pay-out ratio.

4. E/P ratio, pay-out ratio and rate of interest on it.

25. Given the sales volume, which of the following would lead to an increase in contribution margin?

1. Variable cost remains same.

2. Variable cost per unit decreases.

3. Variable cost per unit increases.

4. Fixed cost increase.

26. Vertical merger represents merger of firms

1. Engaged in the same line of business.

2. At different stages of production in an industry.

3. Engaged in unrelated line of activities.

4. All of the above:

27. A high debtor's turnover ratio indicates

1. Low amount tied upon debtors

2. Increase in sales turnover

3. Efficient conversion of debtors into cash

4. A & (C)

28. Match the following:

 List-I (Statement) List-II (Term) Independent floating exchange rate. Exchange rate depending entirely on market forces. Floating exchange rate regime where the monetary authorities interfere in the foreign exchange market for stabilizing exchange rate. Non-convertible paper currency. Fiat money Clean float Managed float Free float
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29. Projected cash flows change with changes in projected demand, price, cost of production, cost of capital, etc. All these changes are accommodated in a random manner by

1. Sensitivity Analysis

2. Simulation Technique

3. Decision-Tree

4. None of the above

30. When a firm has diversified in unrelated products, it is called

1. Scramble diversification

2. Related diversification

3. Product mix

4. Product line simplification

31. Which of the following condition is true about determinants and strengths of positioning strategy?

1. There should be competition warranting positioning.

2. The market segment to be served should be sizeable and profitable.

3. The market segment should be able to effectively receive communication messages transmitted by the company.

4. All of these.

32. Delphi method of estimating future demand for a product or service is associated with

1. Past sales analysis

2. Expert opinion method

3. Market test method

4. Composite of sales force opinion

33. A method for deriving the utility values that consumers attach to varying levels of a product attribute is called

1. Product analysis

2. Conjunctive analysis

3. Conjoint analysis

4. Market price analysis

• Statement 1: I: Opinion leaders who provide product related information to the buyer and assist him or her in buying is called market mover.
• Statement 2: II: Opinion leaders who understand the buyer's personal needs and use situations and aid the buyer is called purchase pal.
1. Statement 1 alone is correct.

2. Statement 2 alone is correct.

3. Both statements are wrong.

4. Both statements are correct.

• Statement 1: I: As per disjunctive decision rule consumers set a minimum acceptable cut off level for each attribute and choose the first alternative that meets the minimum standard for all selected attributes.
• Statement 2: II: As per lexicographic decision rule consumers choose the best brand on the basis of its perceived most important attribute.
1. Statement 1 alone is correct.

2. Statement 2 alone is correct.

3. Both statements are correct.

4. Both statements are wrong.

34. Arrange the following stages in the industrial buying process in the sequential order:

1. General need description

2. Supplier search

3. Problem recognition

4. Performance review

5. Order route specification

6. Product specification

7. Proposal solicitation

8. Supplier selection

1. 3 − 1 − 2 − 6 − 7 − 8 − 5 − 4

2. 3 − 2 − 1 − 7 − 6 − 5 − 8 − 4

3. 3 − 1 − 6 − 2 − 7 − 5 − 8 − 4

4. 3 − 1 − 6 − 2 − 7 − 8 − 5 − 4

35. Match the following:

 List-I (Statements) List-II (Terms) Attacking the weak spots of the competitor Avoiding the main competitor and attacking easier ones. Attacking the leader on several areas. Attacking the leader on its strong area. Flank attack Frontal attack Encirclement attack By Pass attack
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36. Match the following:

 List-I (Statements) List-II (Terms) A market situation in which many competitors offering undifferentiated products or services. A market situation in which many compettors offering differentiated products or services. A market situation in which a small number of large firms offering differentiated and standardized products or services. A market situation in which only one firm provides a certain products or services. Pure monopoly Oligopoly Monopolistic competition Pure competition
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37. Which one of the three basic approaches used customarily explaining the Marketing System?

1. Commodity, institutions and functional approach.

2. Commodity, functional risks, management approach.

3. Product, service mix, functional and institutional approach.

4. None of the above:

• Statement 1: I: One of the key factors impacting on Production Managers is that the country's borders no longer provide protection from foreign imports due to globalization.
• Statement 2: II: To succeed in global competition, Production Management of Companies must make a commitment to innovate products and services with high quality at low prices.
1. Both the statements are incorrect.

2. Statement 1 is correct, but II is incorrect.

3. Statement 1 is incorrect, but II is correct.

4. Both statements are correct.

38. Positioning the production system means

1. Selecting the type of product design.

2. Selecting the type of production processing system.

3. Selecting the type of finished goods inventory policy for each product group.

4. All of the above:

39. Which one is not a part of control charts for variables?

1. X-chart

2. R-chart

3. σ-chart

4. C-chart

40. Match the following:

 List-I List-II Decision-making under conditions of certainty. Decision-making under conditions of risk. Decision-making under conditions of uncertainty. When the outcomes are known but the probabilities of outcomes are not known. When elements of decision problem are clear and also the outcomes of different alternatives are known. When outcomes probabilities are known.
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41. Edwards Deming, one of the Quality Gurus, introduced a concept of cycle for continuous improvement of quality. The cycle consists of

1. Act

2. Plan

3. Do

4. Check

The correct order of this cycle of activities is

1. 1, 3, 4, 2

2. 2, 4, 3, 1

3. 2, 3, 4, 1

4. 1, 2, 3, 4

42. Variable which has a strong contingent effect on the independent dependent variable relationship is referred to as

1. Extraneous variable

2. Intervening variable

3. Moderating variable

4. None of the above

43. Coefficient of determination (R2) indicates

1. Percentage of variation in the dependent variable that can be explained by independent variable.

2. Percentage of variation in the dependent variable that cannot be explained by independent variable.

3. Percentage variation in the independent variable that can be explained by dependent variable.

4. Percentage variation in the independent variable that cannot be explained by the dependent variable.

44. If α = 0.05 and β = 0.10, the power of that hypothesis test is

1. 0.15

2. 0.90

3. 0.85

4. 0.95

45. Match the following:

 List-I List-II Connects a very large number of devices and spans across a dispersed geographical location covering many cities. Encrypted communication tunnels with access control and user authentication Physical or geometric arrangement of the network influenced by the physical connections of links and nodes. Local area network technology that sends communication through radio frequency signals. Topology Ethernet Wide Area Network Virtual Private Network
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• Statement 1: I: One of the important aspects of IT enabled services is value addition.
• Statement 2: II: ERP and CRM are examples for IT enabled services.
1. Statements I and II are correct.

2. Statement 1 is correct, but II is incorrect.

3. Statements I and II are incorrect.

4. Statement 1 is incorrect, but II is correct.

46. Statement A: The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organisation divisions in a schematic diagram. Statement B: The BCG Matrix requires more information about the divisions than the IE matrix.

1. Statements A and B both are correct.

2. Statements A and B both are incorrect.

3. Statement A is correct, but Statement B is incorrect.

4. Statement A is incorrect, but Statement B is correct.

47. Match the following:

 List-I List-II Individual within (Psychological) Group within (Normative) Individual outside (implied) Group outside (Social) Interpretations that third parties make regarding contractual terms. Broad beliefs and obligations associated with society's culture. Beliefs that individuals hold, regarding promises made, accepted and relied on between and another themselves. The shared psychological contract that emerges when members of a social group/organization/work unit hold.
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48. Statement A: SWOT involves specifying the objectives of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. Statement B: Setting the objectives should be done after the SWOT analysis has been performed.

1. Both the statements are correct.

2. Statement A is correct, but Statement B is incorrect.

3. Statement A is incorrect, but Statement B is correct.

4. Both the statements are incorrect.

49. The three disciplines of WTO agreements are

1. International trade in goods, international transactions in services and protection of intellectual property rights.

2. International trade in goods, international transaction in services and protection of interest of MNCs.

3. International trade in goods, international transaction in services and protection of interest of P. S. Units.

4. International trade in goods, international transaction in services and protection of interest of Domestic Government.

50. Substitute question marks with appropriate terms: Products Existing Products New Products Markets Existing Market 1 – 2 – New Market 3 – 4 – Options:

1. 1-Market development 2-Market penetration 3-Product development 4-Diversification

2. 1-Market penetration 2-Product development 3-Market development 4-Diversification

3. 1-Market development 2-Diversification 3-Market penetration 4-Product development

4. 1-Market penetration

2-Product development

3-Diversification

4-Market development

51. Arrange the Entrepreneurial motivation factors on the basis of proper sequences.

1. Need for achievement, Locus of control, vision, desire for independence, passion and drive.

2. Locus of control, vision, desire for independence, passion, drives and need for achievement.

3. Vision, desire for independence, passion, drive, locus of control and need for achievement.

4. Desire for independence, need for achievement, and locus of control, vision, passion and drive.

52. The main function of venture capitalist is to

1. Provide funds to the steps necessary to establish the commercial viability of a new product, process or service.

2. Provide funds at all stages of marketing of new product, process or service.

3. Provide funds at all stages of production of a new product, process or a service.

4. Provide funds at all stages of Research of a new product, process or a service.

53. An industrial unit, according to RBI, is sick if

1. Incurred cash loss in the previous accounting year.

2. Likely to incur loss in the following year.

3. Current ratio is less than 1: 1 with weak debt: Equity ratio.

4. All of the above:

54. SIDBI has been entrusted with the responsibility of

1. Providing financial assistance to all sectors.

2. Developing medium and large scale industry.

3. Providing incentives to medium scale industry.

4. Developing and supporting small business.

55. Match the following:

 List-I (Innovation) List-II (Refers to) Paradigm innovation Position innovation Product innovation Process innovation Changes in the things which are organization offers. Changes in the ways in which they are created and delivered. Changes in the context in which the products/services are introduced. Changes in the underlying mental models which frame what the organization does.
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56. A Business Organization deals with product/service and has relationship with stakeholder which is being considered a part of ‘management discipline’ is known as

1. Maximisation of Wealth

3. Relationship Management

4. Optimisation of Profits

57. Lawrence Kohlberg, in his six stage model of cognitive development, explains:

1. Why people make different decisions in similar ethical situations?

2. How people make decisions based on the stage of cognitive moral development?

3. Both of the above:

4. None of the above:

58. The Board of Directors can appoint

2. Causal Director

3. Alternative Director

4. Nominee Director

1. 1, 2 and 3

2. 2, 3 and 4

3. 3, 4 and 1

4. 4, 1 and 2

• Assertion (A): The poor compliance to environmental regulations is attributed to tax enforcement despite regulatory framework.
• Reason (R): The Government is not capable of enforcing full compliance.
1. A is correct and R is the right explanation of (A).

2. A and R both are correct, but R is not the right explanation of (A).

3. A is correct, but R is not correct.

4. Both A and R are incorrect.

59. Match the following:

 List-I List-II Work ethics Values Environmental responsbility of a business Corporate Social Responsibility includes taking care of issues like air and water pollution, toxic waste disposal etc. is an organisation's obligation to benefit society in ways that transcend the prime business objectives of maximizing profit. is a characteristic attitude of a group towards what constitutes the morality of work. determine the overall personality of an individual and the organization that he is working for:
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60. The degree to which the value of future cash transactions can be affected by exchange rate fluctuations is referred to as

1. Economic exposure

2. Transaction exposure

3. Translation exposure

4. None of the above

61. Forward Premium or Discount can be computed by which of the following formulae?

1. (Spot rate – Forward rate)/Spot rate × 360/Future point in time

2. (Spot rate – Forward rate)/forward rate × 360/Future point in time

3. (Forward rate – Spot rate)/Forward rate × 360/Future point in time

4. (Forward rate – Spot rate)/Spot rate × 360/Future point in time

62. Which of the following is not a product technology transfer?

1. Collaboration in R and D.

2. Transfer of product designs and technical specifications.

3. Feedback on product performance.

4. Provision of machinery and equipment to suppliers.

63. Stops involved in settling disputes under WTO is given below. Arrange them in correct order.

1. Panel set up and appointment of panelists.

2. Final Report to WTO members.

3. Final Report to partners.

4. Consultations, mediations, etc.

5. Adoption of Report by Dispute Settlement Body.

Codes:

1. 1, 4, 2, 3, 5

2. 4, 1, 2, 3, 5

3. 4, 1, 3, 2, 5

4. 1, 2, 3, 5, 4

• Statement 1: I: To become a global corporation, a firm passes through different stages, via, capturing markets abroad, establishing joint venture/subsidiaries abroad, developing into MNCs and moving towards global mode of operation.
• Statement 2: II: Government support is not a pre-requisite for the successful globalization of the business.
1. I is correct and II is wrong.

2. I and II are correct.

3. I and II are wrong.

4. I is wrong, but II is correct.

64. The main function (s) of WTO is/are:

1. To handle trade disputes constructively.

2. To help promote peace among business community.

3. To provide rules that make life easier for all people involved in foreign trade.

4. All of the above:

65. Which of the following transactions reflect economic exposure but not transaction exposure?

1. A firm's imports/exports denominated in local currency.

2. A firm's imports/exports denominated in foreign currency.

3. Interest received from foreign investments.

4. Interest owed on foreign funds borrowed.

66. Which of the following is the rate at which a banker is willing to buy foreign currency?

2. Offer rate

3. Bid rate

67. Euro dollars are

1. Currency

2. Deposits

3. Bonds

4. Equity