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Question: Which of the following is not an element of
promotion mix?
Options:
(a) Personal selling
(b) Public relations
(c) Labelling
(d) Advertising
Correct Option/Answer: (c) Labelling
Explanation: Marketing mix includes various P’s; promotion is one of them, whose
elements may include personal selling, sales promotion, public relation, direct
mail, etc. Labelling is an element of the product mix and not the promotion mix.
Question: Which of the following is/are the use/uses of the
internet in marketing?
Options:
(a) Product and market expansion
(b) Marketing research
(c) Promotion of a product
(d) All of the above
Correct Option/Answer: (d) All of the above
Explanation: The Internet can be used in modern marketing for a successful

business. By using the internet, national boundaries become limitless and growth
becomes unlimited. The internet in marketing can be used for marketing research,
marketing testing, product and market expansion, promotion of products, etc.
Question: Identify the incorrect statement.
1. The retailer is the person who sells the product directly to the consumers.
2. Channel of distribution refers to the ways through which products are
delivered to the ultimate consumers.
3. Satisfied customer is an aspect of traditional marketing.
4. None of the above
Correct Option/Answer: (c) A satisfied customer is a meant of
traditional marketing.
Explanation: Traditional marketing was more concerned about product sales

rather than customer satisfaction, whereas the modern marketing concept is
more inclined or more concerned about customer satisfaction, which is an aspect
of modern marketing.
Question:
Assertion (A): Marketing research helps the firm to identify and solve problems,
identify and evaluate market opportunities and develop the efforts needed for
exploitation.
Reason (R): It involves asking questions, recording information and taking time to
comprehend the information.
Codes:
(a) (A) and (R) are true and (R) is the correct explanation of (A)
(b) (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is false but (R) is true
(d) (A) is true but (R) is false
Correct Option/Answer: (a) (A) and (R) are true and (R) is the
correct explanation of (A)
Explanation: Marketing research helps the firm to identify and solve problems,
identify and evaluate market opportunities and develop the efforts needed for
exploitation. It involves asking questions, recording information and taking time to
comprehend the information.
Question: ___________ specifies the overall framework and the
specific procedures for collecting and analysing the data.
Options:
(a) Research methodologies

(b) Research design
(c) Research data
(d) Research type
Correct Option/Answer: (b) Research design
Explanation: Research design is a step in the research process that specifies the
overall framework and the specific procedures for collecting and analysing the
data. Research designs can be classified based on functions or methodologies
Question: Which of the following is not a mode of traditional
marketing?
Options:
(a) Personal selling

(b) Online marketing
(c) Brand management
(d) Both (a) and (b)
Correct Option/Answer: (d) Both (a) and (b)
Explanation: Traditional marketing is a marketing concept in which the internet

and modern technologies are not used for performing the marketing functions.
Traditional marketing can be of various types, such as personal selling, direct or
door-to-door marketing, fax, print media, etc.
Question: Which of the following is/are the objective/objectives of
the plant layout?
Options:
(a) To improve productivity

(b) To reduce health hazards
(c) To make easy supervision
Explanation: Plant layout has various objectives, such as improving productivity,

using available space, using the equipment and employees efficiently and
effectively, improving the flow of materials, improving production capacity,
providing volume flexibility, etc.
Question: Identify the factors of process design decision.
Options:
(a) Nature of product

(b) Level of product
(c) Nature of demand
Explanation: The factors of process designs may include the nature of the product,
nature of service, nature of demand, degree of vertical integration, level of
product, level of quality, degree of automation, volume flexibility, product fitness
and service quality.
Question:
Assertion (A): In regression analysis, the pattern of the relationship is studied
along with the closeness of the relationship, in absolute terms
Reason (R): The prominence is on determining whether the variables move in the
same or opposite direction and the extent of the relationship between the two
variables.
Options:
(a) (A) and (R) are true and (R) is the correct explanation of (A)
(b) (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is false, but (R) is true
(d) (A) is true, but (R) is false
Correct Option/Answer: (b) (A) and (R) are true but (R) is not the
Explanation: The first statement defines regression analysis, which explains that
the pattern of the relationship and the closeness of the relationship are studied in
absolute terms, whereas the second statement defines the correlation analysis.
Therefore, both statements are correct but the reason is not a correct explanation
of the assertion.
Question: Identify the elements of total quality management.
Options:
(a) Supplier quality

(b) Continuous improvement
(c) Supplier partnership
Explanation: Total quality management is the process that considers

all the aspects of production to ensure a quality improvement of the
products produced. It has various elements, such as supplier quality,
supplier partnership, continuous improvement, etc.
Question: Which of the following is used for the acceptance
sampling of attributes?
Options:
(a) Single sampling plan

(b) Double sampling plan
(c) Multiple sampling plans
Explanation: Acceptance sampling is a type of statistical quality control technique

that is classified as acceptance sampling for variables and acceptance sampling for
attributes. Acceptance sampling for attributes is of three types i.e. single sampling
plan, double sampling plan and multiple-sampling plans.
Match the following:
List 1 List 2
Case Study Situation-related problems are given
Lecture Method Interaction of humans in an imaginary
situation
Role Playing The direct method of providing instructions
Codes:
A B C
(a) 1 3 2
(b) 2 3 1
(c) 3 2 1
(d) 1 2 3
Correct Option/Answer: (a) A-1, B-3, C-2
Case study, lecture method and role-playing are off-the job training methods.
Under the method of case study, trainees are given situation-related problems to
check their understanding. Lecture method is a direct way of providing the
instructions to the employees. The method of role-playing is the interaction of
humans in an imaginary situation. Therefore, option (a) is the correct answer.
Which among the following techniques of competency mapping gathers and
analyses the data, affecting both failure and victory in performing a job?
Options:
(a) Questionnaires
(b) Assessment Centre
(c) Critical Incidents Technique
(d) Interviews
Correct Option/Answer: (c) Critical Incidents Technique
Explanation: Critical Incidents Technique is a method of competency mapping. In

this method, the data is gathered and analysed in order to reach towards the
victory or failure of a task.
Therefore, option (c) is the correct answer.
Statement 1: MBO is an evaluation technique which focuses on establishing the
job goals of the employees.
Statement 2: BARS is a method of multi-person evaluation technique which is a
combination of the rating scale and the critical incident technique.
Codes:
(a) Both statements are correct

(b) Only statement 1 is correct
(c) Only statement 2 is correct
(d) Both statements are incorrect
Correct Option/Answer: (b) Only statement 1 is correct
Explanation: The first statement is correct as Management by Objective (MBO)

MBO is an evaluation technique which focuses on establishing the job goals of the
employees. The second statement is incorrect as the Behaviourally Anchored
Rating Scale (BARS) is a method of individual evaluation technique, which is a
combination of the rating scale and the critical incident technique.
Statement 1: Sensitivity training is the training in which employees are asked to
communicate in groups. It is recognised as the training in the laboratory.
Statement 2: Team building is the technique in which the ability of employees is
enhanced and they are motivated to work effectively.
Codes:

Correct Option/Answer: (a) Both statements are correct
Explanation: Both the statements are correct as sensitivity training is the training
in which employees are asked to communicate in groups. It is recognised as the
training in the laboratory. Team building is the technique in which the ability of
employees is enhanced and they are motivated to work effectively.
Therefore, option (a) is the correct answer.
Assertion (A): Human resource development focuses on involving people and
trusting them with the task.
Reason (R): People work better in situations that give them a chance to grow and
make them responsible.
Codes:
(a) (A) and (R) are correct and (R) is the correct explanation of (A)
(b) (A) and (R) are correct but (R) is not the correct explanation of (A)
(c) (A) is incorrect, but (R) is correct
(d) (A) is correct, but (R) is incorrect
Correct Option/Answer: (a) (A) and (R) are correct and (R) is the correct
explanation of (A)
Explanation: Human resource development focuses on involving the people and

trusting them with the task. People work better in situations that give them a
chance to grow and make them responsible.
Therefore, both assertion and reason are correct and the reason correctly explains
the assertion. Therefore, option (a) is the correct answer.
Which among the following retention strategies implies guiding the employees
with their performance and responsibility?
Options:
(a) Professional Growth

(b) Selection
(c) Career Development
(d) Defining roles
Correct Option/Answer: (d) Defining roles
Explanation: Strategies that are helpful in the retention of employees include

selection, professional growth, career development, defining roles and
acknowledging achievements. The performance and responsibilities are stated to
the employees for effective working outcomes under defining roles.
Assertion (A): Flexitime is the method that provides employees with the freedom
to choose their working hours.
Reason (R): The theory believes that the workers in an organisation should be
paid as per their working hours.
Codes:
(d) Both are incorrect
Correct Option/Answer: (a) (A) and (R) are correct and (R) is the correct
explanation of (A)
Explanation: Both assertion and reason are correct as the reason provides the
correct meaning. Flexitime is the method that provides the employees with the
freedom to choose their working hours. The theory of flexitime in work-life
balance believes that the workers in the organisation should be paid as per their
working hours.
Assertion (A): The Marxist approach to industrial relation states that the conflict
in the organisation is due to the mental gap between the workers and the
management.
Reason (R): The conflict can be resolved by collective bargaining and arbitration
only in the Marxist approach.
Codes:
(d) Both are incorrect
Correct Option/Answer: (d) Both are incorrect
Explanation: Both assertion and reason are incorrect. This is because the Marxist
approach to industrial relation states that the conflict in the organisation is not
due to the mental gap between the workers and the management but due to the
division in the society between the capitalist and labour class. Moreover, conflict
can be resolved by collective bargaining and arbitration only in Pluralistic
approach.
Statement 1: Parties of industrial relations include workers and their organisation,
employees and their organisation and the government.
Statement 2: The government influences the relations of industries by regulating
the bonus and intervening in the working relationship.
Codes:

Correct Option/Answer: (a) Both statements are correct
Explanation: Both statements are correct as the parties of industrial relations

could include workers and their organisation, employees and their organisation
and the government. The government influences the relations of industries by
regulating the bonus and intervening in the working relationship.
Statement 1: The factors involved in performance appraisal is to adapt the criteria
and the situations experienced by the employees and workers in an organisation.
Statement 2: Appraisals should be provided by home country managers only and
an appraisal from the host country manager is meaningless.
Codes:

Explanation: The first statement is correct as the factor involved in performance

appraisal is to adapt the criteria and the situations experienced by the employees
and workers in the organisation. The second statement is incorrect as appraisals
should be provided by both home country and host country managers.
Calculate the current liabilities of the firm with the given information.
Inventories = Rs 1,00,000
Current Ratio = 3:1
Liquid Ratio = 2:1
Options:
(a) Rs 1,25,000
(b) Rs 2,00,000
(c) Rs 1,00,000
(d) Rs 1,50,000
Correct Option/Answer: (c) Rs 1,00,000
The calculation of liquid ratio is as follows:
Liquid Ratio = Liquid Assets / Current Liabilities
2 = Liquid Assets/Current Liabilities
2 x Current Liabilities = Liquid Assets
Current Ratio = Current Assets / Current Liabilities

3 = Current Assets / Current Liabilities
Current Liabilities x 3 = Current Assets
Current Assets = Liquid Asset + Inventories

3 Current Liabilities = 2 x Current Liabilities + 1,00,000
3 Current Liabilities – 2 Current Liabilities = Rs 1,00,000
Current Liabilities = Rs 1,00,000
The EBIT of the company is Rs 30,00,000, while the interest paid by the company
is Rs 1,00,000. The value of contribution is Rs 5,00,000. Calculate the financial
leverage of the firm.
Options:
A. 1.05
B. 1.06
C. 1.03
D. 1.09
Correct Option/Answer: (c) 1.03
Explanation: The formula to calculate financial leverage is as follows:

Financial Leverage = EBIT/EBT
Financial Leverage = Rs 30,00,000/(30,00,000 – 1,00,000)
Financial Leverage = Rs 30,00,000/Rs 29,00,000
Financial Leverage = 1.03
Answer questions 33-37 on the basis of the given case study.
Proceeds from the sale of fixed asset: Rs 1,00,000

Purchase of fixed assets: Rs 4,00,000
Repayment of loans: Rs 7,00,000
Proceeds from issue of shares: Rs 8,00,000
Net profit from the statement of profit and loss: Rs 5,00,000
Depreciation: Rs 90,000
Interest income: Rs 70,000
Increase in current assets: Rs 50,000
Increase in current liabilities: Rs 50,000
Calculate the cash flow from operating activities with the given information.
Options:
(a) Rs 5,70,000
(b) Rs 5,50,000
(c) Rs 5,20,000
(d) Rs 5,10,000
Explanation: Cash Flow from operating activities is calculated as
follows:
Net profit from the statement of profit and loss = Rs 5,00,000

Add: Depreciation = Rs 90,000
Less: Interest Income = Rs 70,000
Less: Increase in current assets = Rs 50,000
Add: Increase in current liabilities = Rs 50,000
Cash flow from operating activities = Rs 5,20,000
Calculate the cash flow from investing activities with the given information.
Options:
(a) Inflow of Rs 3,50,000

(b) Inflow of Rs 4,30,000
(c) Outflow of Rs 3,00,000
(d) Outflow of Rs 2,50,000
Correct Option/Answer: (c) Outflow of Rs 3,00,000
Explanation: Cash Flow from investing activities is calculated as follows:

Proceeds from the sale of fixed assets: Rs 1,00,000
(Less) Purchase of fixed assets: Rs 4,00,000
Cash outflow from investing activities = (Rs 3,00,000)
Calculate the cash flow from financing activities with the given
information.
Options:
(a) Rs 2,00,000
(b) Rs 2,50,000
(c) Rs 1,50,000
(d) Rs 1,00,000
Correct Option/Answer: (d) Rs 1,00,000
Explanation: Cash Flow from financing activities is calculated as

follows:
Proceeds from issue of shares: Rs 8,00,000
(Less) Repayment of loans: Rs 7,00,000
Cash flow from financing activities = Rs 1,00,000
Calculate the total increase/decrease in the cash flow with the
given information.
Options:
(a) Rs 3,00,000
(b) Rs 3,20,000
(c) Rs 4,00,000
(d) Rs 3,10,000
Correct Option/Answer: (b) Rs 3,20,000
Explanation: The net increase/decrease in cash flow is as follows:

Cash Flow from operating Activities = Rs 5,20,000
(Less) Cash Flow from Investing Activities = Rs 3,00,000
(Add) Cash Flow from Financing Activities = Rs 1,00,000
Total Cash Flow = Rs 3,20,000
Calculate the closing balance of cash and cash equivalents when
the opening cash and cash equivalents is Rs 3,50,000.
Options:
(a) Rs 5,70,000
(b) Rs 6,50,000
(c) Rs 6,70,000
(d) Rs 5,50,000
Explanation: The closing balance of cash and cash equivalents is calculated as

follows:
Opening balance = Rs 3,50,000
(Add) Increase in cash and cash equivalents = Rs 3,20,000
Closing balance = Rs 6,70,000
What would be the decision of a company when the present value
of inflows is Rs 6,50,000 and the present value of outflows is Rs
7,00,000 by the method of profitability index?
Options:
(a) 0.92
(b) 0.95
(c) 1.25
(d) 1.50
Correct Option/Answer: (a) 0.92
Explanation: The calculation of profitability index is as follows:

PI = Present value of inflows / Present value of outflows
PI =Rs 6,50,000 / Rs 7,00,000
PI =0.92
Statement 1: Direct material cost variance is calculated by the difference between
standard cost for actual output and the actual cost.
Statement 2: Material mix variance is calculated by using the formula of standard
price (standard quantity – actual quantity).
Codes:

Explanation: The first statement is correct as the direct material cost

variance is calculated by the difference between the standard cost
for actual output and the actual cost. The second statement is
incorrect as the material usage variance is calculated by using the
formula of standard price (standard quantity – actual quantity).
Assertion (A): The value at which the assets of the company would be sold is
called the replacement value.
Reason (R): The price paid in order to purchase the new asset by selling similar old
assets is important for the replacement value.
Correct Option/Answer: (c) (A) is incorrect, but (R) is correct
Explanation: The assertion is incorrect as the value at which the

assets of the company would be sold is called the liquidation value.
The price paid in order to purchase a new asset by selling a similar
old asset is important for the replacement value. Therefore, the
reason is correct but the assertion is incorrect.
Answer questions 41-45 on the basis of the given case study.
Annual Usage = 40,000 units

Cost of placing an order = Rs 10
Storage cost = Rs 20
Maximum usage = 18,000 units
Minimum usage = 10,000 units
Maximum lead time = 6 days
Minimum lead time = 1 days
Average usage = 15,000 units
Average lead time = 4 days
Calculate EOQ with the information given below.
Options:
(a) 180 units

(b) 165 units
(c) 155 units
(d) 200 units
Calculate the Reorder Level with the given information.
Options:
(a) 1,68,000 units

(b) 1,66,000 units
(c) 1,08,000 units
(d) 1,65,000 units
Correct Option/Answer: (c) 1,08,000 units
Explanation: The calculation of the reorder level is done in the

following way:
Reorder level = Maximum usage x Maximum time
Reorder level = 18,000 x 6
Reorder level = 1,08,000 units
Calculate maximum level with the given information.
Options:
(a) 95,500 units

(b) 93,500 units
(c) 92,250 units
(d) 98,200 units
Correct Option/Answer: (d) 98,200 units
Explanation: The calculation of maximum level is carried out in the

following way:
Maximum level = Reorder Level + Reorder Quantity – (Minimum

usage x Minimum time)
Maximum level = 1,08,000 + 200 - (10,000 x 1)
Maximum level = 1,08,000 + 200 – 10,000
Maximum level = 98,200 units
Calculate minimum level with the given information.
Options:
(a) 48,000 units

(b) 33,200 units
(c) 32,550 units
(d) 31,250 units
Correct Option/Answer: (a) 48,000 units
Explanation: The calculation of minimum level is as follows:

Minimum level = Reorder Level – (Average usage x Average lead
time)
Minimum level = 1,08,000 - (15,000 x 4)
Minimum level = 1,08,000 – 60,000
Minimum level = 48,000 units
Calculate the average level with the given information.
Options:
(a) 72,500 units

(b) 73,100 units
(c) 75,350 units
(d) 71,450 units
Correct Option/Answer: (b) 73,100 units
Explanation: The calculation of average level is carried out in the

following way:
Average level = (Minimum Level + Maximum Level)/2
Average level = (48,000 + 98,200)/2
Average level = 73,100 units
Assertion (A):The return received by the investor in the case of zero coupon
bonds is the difference between the redemption value and the face value at which
the bond was purchased.
Reason (R):Minimal interest is paid to the investor in the case of zero coupon
bonds, which is equal to the risk of government bonds.
Correct Option/Answer: (d) (A) is correct, but (R) is incorrect
Explanation: The assertion is correct as the return received by the

investor in the case of zero coupon bonds is the difference between
the redemption value and the face value at which the bond was
purchased. The reason is incorrect as no interest is paid to the
investor in the case of zero coupon bonds.
Assertion (A):Walter assumes that there is no change in the earnings per share
and the dividend per share. The life of the firm is perpetual.
Reason (R): Financing is done through retained earnings under the Walter model
of dividend theory.
Correct Option/Answer:
(b) (A) and (R) are correct but (R) is not the correct explanation of
(A)
Explanation: Both assertion and reason are correct but reason doesn’t explain the
assertion. Walter assumes that there is no change in earnings per share and
dividend per share. The life of the firm is perpetual. Financing is done through
retained earnings under the Walter model of dividend theory. Both statements
are assumptions of the Walter Model. Therefore, option (b) is the correct answer.
Assertion (A):Packman defence is a technique under which the
targeted firm tries to defeat and acquire an acquiring firm.
Reason (R): The company might use its war chest that is kept for
uncertainties in order to defeat the acquiring firm.
Codes:
Correct Option/Answer: (a) (A) and (R) are correct and (R) is the
Explanation: Both assertion and reason are correct as the reason explains the
assertion correctly. This is because pacman defence is a technique under which
the targeted firm tries to defeat and acquire an acquiring firm. The company
might use its war chest, which is kept for uncertainties in order to defeat the
acquiring firm.
List I List II
1. World Bank A. 1944
2. IDA B. 1960
3. IFC C. 1956
4. WTO D. 1995
Codes 1 2 3 4
(a) B A C D
(b) A B D C
(c) B C A D
(d) A C D B
Correct Option/Answer: (b) 1-A, 2-B, 3-C, 4-D
List I List II
1. World Bank A. 1944
2. IDA B. 1960
3. IFC C. 1956
4. WTO D. 1995
The World Bank was developed in 1944. International Development Association

(IDA) was developed in 1960. International Financial Corporation was developed
in 1956. The World Trade Organisation (WTO) was developed in 1995. Therefore,
option (b) is the correct answer.
Statement I: The derivatives have the advantage of hedging risk
exposure and have low risk.
Statement II: Derivatives can be speculative and can have a
counterparty failure.
Options:
(a) Statement I is correct, but statement II is incorrect
(b) Statement II is correct, but statement I is incorrect
(c) Both statements are correct
Correct Option/Answer: (b) Statement II is correct, but statement I
is incorrect
Explanation: Statement one is incorrect as the derivatives have the

advantage of hedging risk exposure and have high risk. Statement
two is correct as the derivatives can be speculative and can have a
counterparty failure.
Statement I: Turnaround strategy, disinvestment and liquidation are the three
types of expansion corporate strategies.
Statement II: Use of multiple strategies in order to achieve the desired results is
known as combination strategy.
Options:

is incorrect
Explanation: The first statement is incorrect as turnaround strategy,

disinvestment and liquidation are the three types of retrenchment
corporate strategies. The second statement is correct because the
use of multiple strategies in order to achieve the desired results is
known as a combination strategy.
Statement I: The culture of the organisation influences the soft areas under the
McKinsey 7S Framework.
Statement II: The hard areas under the McKinsey 7S Framework are easy for the
management to change and influence.
Options:

Correct Option/Answer:(c) Both statements are correct
Explanation: The culture of the organisation influences the soft

areas under the McKinsey 7S Framework. The hard areas under the
McKinsey 7S Framework are easy for the management to change
and influence.
Therefore, both statements are correct.
Arrange the following steps in the correct order of evaluating the strategy.
1. Analysing Variance
2. Taking corrective action
3. Measurement of performance
4. Fixed benchmark of performance
Options:
(a) 4, 3, 2 and 1
(b) 3, 4, 1 and 2
(c)1, 3, 4 and 2
(d) 4, 3, 1 and 2
Correct Option/Answer: (d) 4, 3, 1 and 2
Explanation: The steps involved in strategy evaluation are as follows:

1. Fixed Benchmark of Performance
2. Measurement of Performance
3. Analysing Variance
4. Taking Corrective Action
Statement I: The cash cows under the BCG Matrix are treated and known as
former stars in the growing market.
Statement II: The dogs under the BCG Matrix are considered as organisations with
a weak market share in the high growing market.
Options:
Correct Option/Answer: (a) Statement I is correct, but statement II
is incorrect
Explanation: The first statement is correct as the cash cows under

the BCG Matrix are treated and known as former stars in the
growing market. Statement two is incorrect as the dogs under the
BCG Matrix are considered as organisations with a weak market
share in a weak growing market. Therefore, option (a) is the correct
answer.
Which of the following options correctly expands the acronym
“PESTEL”?
Options:
(a) Political, Ecological, Security, Technological, Environmental and Legal

(b) Political, Ecological, Social, Technological, Environmental and Legal
(c) Political, Economic, Social, Technological, Environmental and Legal
(d) Political, Economic, Security, Technological, Environmental and Legal
Correct Option/Answer: (c) Political, Economic, Social,
Technological, Environmental and Legal
Explanation: PESTEL Analysis is an external analysis under strategy

analysis that is used to scan the external environment or the macro-
environmental factors. The acronym PESTLE states Political,
Economic, Social, Technological, Environmental and Legal
Environment.
Which of the following concepts of marketing focuses on capturing
the growth by customer share and loyalty?
Options:
(a) Production Concept

(b) Product Concept
(c) Customer Concept
(d) Societal Marketing Concept
Correct Option/Answer: (c) Customer Concept
Explanation: The customer concept of marketing focuses on the fact

that market share can be captured by gaining the loyalty of the
customers; this can be done by treating them appropriately and
providing them with after-sales service.
Statement 1: Segmenting the market on the basis of people’s behaviour is known
as behavioural segmentation. It can be on the basis of user status, usage rate, and
loyalty status.
Statement 2: The market segmentation should be complex and highly segmented
such that the target audience is identified properly.
Codes:

Explanation: The first statement is correct as segmenting the market

on the basis of people’s behaviour is known as behavioural
segmentation. It can be on the basis of user status, usage rate, and
loyalty status. The second statement is incorrect as the market
segmentation should be easily accessible and servable. It should be
compatible and not complex.
Assertion (A):New products are being manufactured and introduced
when the product reaches the stage of maturity.
Reason (R): Maturity is the stage at which the demand exceeds the
supply.
Codes:
Correct Option/Answer: (d) (A) is correct, but (R) is incorrect
Explanation:
Maturity is the stage at which the supply exceeds the demand.
Therefore, the assertion is correct but reason is incorrect and option
(d) is the correct answer.
Assertion (A): Luxury products are sold to customers under a
skimming pricing policy.
Reason (R): In the beginning, the products are sold at a higher price
to people with high status and later the middle- income group is
targeted.
Codes:
Explanation: Luxury products are sold to customers with the

skimming pricing policy. The products are sold at a higher price in
the beginning for the people with a high status; later, the middle
income group is targeted.
Therefore, both assertion and reason are correct and the reason
explains the assertion correctly.
Which among the following is/are the tool(s) of sales promotion?
1. Samples
2. Frequency programs
3. Prizes
4. Personal selling
5. Advertisement banners
Options:
(a) 2, 3 and 4
(b) 1, 2 and 5
(c) 1, 2 and 3
(d) 3, 4 and 5
Correct Option/Answer: (c) 1, 2 and 3
Explanation: The tools of sales promotion include the following:
1. Samples
2. Refunds
3. Price Packs
4. Premium
5. Frequency Programs
6. Prizes
7. Patronage Awards
8. Free Trails
9. Product Warranties
10. Tie-in Promotions
11. Cross Promotion
12. Demonstrations
Which of the following state(s) the factor(s)that influence consumer behaviour?
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Legal Factors
Options:
(a)3 and 4
(b)1, 2 and 4
(c)1, 2, 3 and 4
(d) 1, 2 and 3
Correct Option/Answer: (d) 1, 2 and 3
Explanation: The factors influencing consumer behaviour include the

following:
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors
Statement I: Professor Francesco M Nicosia developed the Nicosia Model of
consumer behaviour in 1966.
Statement II: The model is divided into four major fields, namely the firm’s and
customer’s attribute, search and evaluation, the act of purchase and the feedback
of the sales results.
Options:

Correct Option/Answer: (c) Both statements are correct
Explanation: Both the statements are correct as Professor Francesco

M Nicosia developed the Nicosia Model of consumer behaviour in
1966. The model is divided into four major fields, namely the firm’s
and customer’s attribute, search and evaluation, the act of purchase
and the feedback of sales results.
Which among the following levels of Keller’s Brand Equity Model
signifies, “Who are you”?
Options:
(a) Brand Identity

(b) Brand Meaning
(c) Brand Resonance
(d) Brand Response
Correct Option/Answer: (a) Brand Identity
Explanation: The model of Keller’s Brand Equity has four levels in

order to understand the brand.
The four levels of Keller’ Brand Equity Model are as follows:
1. Brand Identity signifies “Who are you?”
2. Brand Meaning signifies “What are you?”
3. Brand Response signifies “What about you?”
4. Brand Resonance
Statement I: Production, inventory, price, transportation and information are the
five drivers of supply chain management.
Statement II: The efficient supply chain helps in boosting the customer service to
have a strong position in the market.
Options:

is incorrect
Explanation: The first statement is incorrect as production,

inventory, location, transportation and information are the five
drivers of supply chain management.
The second statement is correct as an efficient supply chain helps in
boosting the customer service to have a strong position in the
market.
Which among the following includes the introduction of new
flavours, colours or packaged sizes?
Options:
(a) Multi Branding

(b) Co-branding
(c) Brand Extension
(d) Line Extension
Correct Option/Answer: (d) Line Extension
Explanation: The brand strategy decision can take place by line

extension, brand extension, multi-brand and co-branding.
Introducing new flavours, colours or packaged sizes of the products
that already exist in the market is included in line extension.
Assertion (A):Educating can be a marketing strategy of service firms as providing
knowledge and educating about the offered services is important.
Reason (R): The demonstration strategies can be in the form of seminars,
webinars or lunch meetings.
Codes:
Correct Option/Answer:(d) (A) is correct, but (R) is incorrect
Explanation: The assertion is correct but the reason is incorrect as

educating can be a marketing strategy of the service firms as
providing knowledge and education about the offered services is
important. The education of marketing strategies can be in the form
of seminars, webinars or lunch meetings.
Assertion (A): The focus of the company is to build a strong relationship with
every customer as this would help them in increasing their sales.
Reason (R): Offering loyalty points, special discounts, connecting the customers
through social networking sites are examples of different strategies that are used
for building customer relationships.
Codes:
Explanation: The focus of the company is to build a strong relationship with every
customer as this would help them in increasing their sales. Offering loyalty points,
special discounts, connecting the customers through social networking sites are
examples of different strategies that are used for building customer relationships.
Therefore, both assertion and reason are correct and option (a) is the correct
answer.
Statement I: A speciality store is a type of retail outlet with a narrow product line
and deep assortments.
Statement II: Supermarket is a type of retail outlet in which the products are
large, low cost and have a low margin and a high volume.
Codes:

Correct Option/Answer:(c) Both statements are correct
Explanation: Both statements are correct as the speciality store is a

type of retail outlet with a narrow product line and deep
assortments. The supermarket is a type of retail outlet in which the
products are large, low cost and have a low margin and a high
volume.
What is the correct full form of COBRA?
Options:
(a) Consumers Online Brand Related Adventure

(b) Consumer’s Offline Brand Related Activities
(c) Consumer’s Online and Bearer Related Activities
(d) Consumers Online Brand Related Activities
Correct Option/Answer: (d)Consumers Online Brand Related
Activities
Explanation: Consumers Online Brand Related Activities is the

correct full form of COBRA. It is a method that is used by the
advertisers in order to promote the product.
List 1 List-2
Longer Payment Terms Providing free of cost services
Warranties and Discounts Stretching loans for a longer period.
Special Event Pricing Offering special prices in special seasons to attract customers
Psychological Discounting Setting a high artificial price and then offering discounts
Codes:
A B C D
(a) 4 1 2 3
(b) 3 1 2 4
(c) 1 3 2 4
(d) 2 1 3 4
Correct Option/Answer: (d) A-2, B-1, C-3, D-4
List 1 List-2
A. Longer Payment Terms 2. Stretching loans for a longer period
B. Warranties and Discounts 1. Providing free of cost services
C. Special Event Pricing 3. Offering special prices in special seasons to
attract customers
D. Psychological Discounting 4. Setting a high artificial price and then
offering discounts
Longer payment terms mean stretching loans for a longer period in order to lower
the monthly instalments. Warranties and discounts mean providing free of cost
services. Special event pricing is a type of pricing under which special prices are
offered in special seasons to attract customers. Psychological discounting includes
setting a high artificial price and then offering discounts.
Which among the following options is incorrect for primary data?
Options:
(a) Questionnaires is an example

(b) Original data
(c) Cost of data collection is high
(d) Saves time
Correct Option/Answer: (d) Saves time
Explanation: Primary data can be understood as original data that

has a high cost of data collection. It is time consuming and involves
a huge collection cost. A questionnaire is an example of primary
data. The data collected is reliable as well as creditable. Controlling
the quality of data is in their hands.
Calculate the arithmetic mean of the data given below.
Class Interval X F
50-150 100 4
150-250 200 6
250-350 300 3
350-450 400 7
450-550 500 10
(a) 325.52
(b) 350.54
(c) 343.33
(d) 320.45
Correct Option/Answer: (c) 343.33
Class Interval X F Xf
50-150 100 4 400
150-250 200 6 1200
250-350 300 3 900
350-450 400 7 2800
450-550 500 10 5000
TOTAL 10,300
Mean = Sigma Xf/ Sigma f

Mean = 10,300/30
Mean = 343.33
Which among the following is the correct formula for testing a
sample by the Chi-square test?
Options:
A. Summation of (E-O)2/ E
B. Summation of (O-E)2/ O
C. Summation of (E-O)2/ O
D. Summation of (O-E)2/ E
Correct Option/Answer: (d) Summation of (O-E)2/ E
Explanation:
The formula to test a sample by the Chi-square test is as follows:
Summation of (O-E)2/ E
Where, O stands for observed frequency and E stands for expected
frequency. It is used in calculating the goodness of fit.
Statement I: The numbers of trials under binomial distribution are independent of
each other.
Statement II: The probability of success is determined by p, while the probability
of failure is determined by (1-p).
Options:

Explanation: Both statements are correct as the numbers of trials

under binomial distribution are independent of each other. The
probability of success is determined by p, while the probability of
failure is determined by q = (1-p).
Which of the following comprises non-probability sampling?
1. Quota Sampling
2. Snowball Sampling
3. Cluster Sampling
4. Convenience Sampling
Options:
(a) 2 and 4
(b)1 and 4
(c) 1, 3 and 4
(d) 1, 2 and 4
Correct Option/Answer: (d) 1, 2 and 4
Explanation: The non-probability sampling technique comprises of the following:
1. Convenience Sampling
2. Judgement Sampling
3. Quota Sampling
4. Snowball Sampling
Probability sampling techniques consists of the following:
1. Simple Random Sampling
2. Stratified Sampling
3. Cluster Sampling
4. Systematic Sampling
5. Multistage Sampling
Which of the following modules of ERP handles the methods and
procedures of collecting raw material?
Options:
A. Sales and Marketing

B. Purchase
C. Human Resource
D. Inventory
Correct Option/Answer: (b) Purchase
Explanation: Under Enterprise Resource Planning, the purchase

module handles all the methods and procedures that are related to
the process of collecting raw materials or items in the organisation.
The ERP Modules include supply chain management, sales and
marketing, purchase, human resource, inventory and finance and
accounting.
Statement I: Under group layout, team attitude and job
enlargement tend to occur.
Statement II: Under process layout, specialised supervision is not
possible.
Options:
Correct Option/Answer: (b) Statement I is correct, but statement II
is incorrect
Explanation: Statement one is correct as under group layout, team

attitude and job enlargement tend to occur. Statement two is
incorrect as under process layout, specialised supervision is possible.
Assertion (A): SOT helps in delay delivery and the generation of cash.
Reason (R): Liquidity is maintained under SOT as cash might stick at jobs that are
long and do not generate cash.
Codes:
Correct Option/Answer: (c) (A) is incorrect, but (R) is correct
Explanation: Assertion is incorrect as the Shortest Operation in Time

(SOT) helps in quick delivery and generation of cash as liquidity is
maintained under SOT considering the cash might stick at jobs that
are long and do not generate cash. Therefore, the reason is correct
but the assertion is incorrect.
Statement I: International business provides the potential for growth in foreign
countries that helps in attaining higher profits.
Statement II: International business helps in removing the constraints of the
domestic market.
Options:

Explanation: Both statements are correct as an international

business provides the potential for growth in foreign countries,
which helps in attaining higher profits. International business helps
in removing the constraints of the domestic market.
Which among the following state(s) are the advantages of
international business?
Options:
(a) Benefit to consumers

(b) Over specialisation
(c) Both (a) and (b)
(d) Can lead to starvation
Correct Option/Answer: (a) Benefit to consumers
Explanation: The advantages of international business include the

following:
1. Import of goods which the country is not able to produce
2. Maximum utilisation of resources
3. Benefit to consumers
4. Trade fluctuations are removed
5. International trade brings goodwill and peace among nations
6. Surplus produce is utilised
Who among the following developed the theory of factor
endowment?
Options:
(a) Raymond Vernon

(b) Heckscher-Ohlin
(c) David Ricardo
(d) Adam Smith
Correct Option/Answer: (b) Heckscher-Ohlin
Explanation: The international trade theory of factor endowment is

developed by Heckscher-Ohlin, the product life cycle theory was
developed by Raymond Vernon. The theory of comparative cost is
given by David Ricardo. The theory of absolute advantage is given by
Adam Smith.
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Explanation: The Internet can be used in modern marketing for a successful

Explanation: Traditional marketing was more concerned about product sales

(a) Research methodologies

(a) Personal selling

Explanation: Traditional marketing is a marketing concept in which the internet

(a) To improve productivity

Explanation: Plant layout has various objectives, such as improving productivity,

(a) Nature of product

(a) Supplier quality

Explanation: Total quality management is the process that considers

(a) Single sampling plan

Explanation: Acceptance sampling is a type of statistical quality control technique

Explanation: Critical Incidents Technique is a method of competency mapping. In

(a) Both statements are correct

Explanation: The first statement is correct as Management by Objective (MBO)

(a) Both statements are correct

Explanation: Human resource development focuses on involving the people and

(a) Professional Growth

Explanation: Strategies that are helpful in the retention of employees include

(a) Both statements are correct

Explanation: Both statements are correct as the parties of industrial relations

(a) Both statements are correct

Explanation: The first statement is correct as the factor involved in performance

Current Ratio = Current Assets / Current Liabilities

Current Assets = Liquid Asset + Inventories

Explanation: The formula to calculate financial leverage is as follows:

Proceeds from the sale of fixed asset: Rs 1,00,000

Net profit from the statement of profit and loss = Rs 5,00,000

(a) Inflow of Rs 3,50,000

Explanation: Cash Flow from investing activities is calculated as follows:

Explanation: Cash Flow from financing activities is calculated as

Explanation: The net increase/decrease in cash flow is as follows:

Explanation: The closing balance of cash and cash equivalents is calculated as

Explanation: The calculation of profitability index is as follows:

(a) Both statements are correct

Explanation: The first statement is correct as the direct material cost

Explanation: The assertion is incorrect as the value at which the

Annual Usage = 40,000 units

(a) 180 units

(a) 1,68,000 units

Explanation: The calculation of the reorder level is done in the

(a) 95,500 units

Explanation: The calculation of maximum level is carried out in the

Maximum level = Reorder Level + Reorder Quantity – (Minimum

(a) 48,000 units

Explanation: The calculation of minimum level is as follows:

(a) 72,500 units

Explanation: The calculation of average level is carried out in the

Explanation: The assertion is correct as the return received by the

The World Bank was developed in 1944. International Development Association

Explanation: Statement one is incorrect as the derivatives have the

(a) Statement I is correct, but statement II is incorrect

Explanation: The first statement is incorrect as turnaround strategy,

(a) Statement I is correct, but statement II is incorrect

Explanation: The culture of the organisation influences the soft

Explanation: The steps involved in strategy evaluation are as follows:

Explanation: The first statement is correct as the cash cows under

(a) Political, Ecological, Security, Technological, Environmental and Legal

Explanation: PESTEL Analysis is an external analysis under strategy

(a) Production Concept