TELEGRAM MCQs AT ONE PLACE

1. The ability of a firm to convert an asset to cash is called……..:

(a) Solvency
(b) Return
(c) Marketability
(d) Liquidity

2. Which of the following is not a Criticism of Profit Maximisation Objective?

(a) it ignores timings of returns
(b) it ignores risk factors
(c) it emphasis generally on long run projects
(d) it is vague conceptually

3. _________is the most appropriate goal of the firm.

(a) Wealth Maximization
(b) Profit Maximization
(c) Brand Maximization
(d) EPS Maximization

4. Which of the following is not function of finance manager?

(a) Managing Assets
(b) Managing Funds
(c) Managing Economy
(d) Managing Flow of Internal Funds

5. According to Solomon………… means maximizing the net present value of a course of action
to shareholders.
(a) Wealth maximization
(b) Profit maximization
(c) Dividend maximization
(d) None of the above

6. Using………… in the capital structure of a company is called financial gearing.

(a) Borrowed funds
(b) Owners funds
(c) Government Grants
(d) Reserves & surplus

7. “A company is found to have prepared fraudulent financial statements” is a ___________:

(a) Systematic Risk
(b) Unsystematic Risk
(c) Not a Risk at all
(d) Can’t say

8. “Economic recessions” is an Example of __________:

(a) Systematic Risk
(b) Unsystematic Risk
(c) Not a Risk at all
(d) Can’t say

9. XYZ Ltd. has capital investment of ₹ 150 crores. After tax operating income is ₹ 20 crores
and company has a cost of capital of 12%. Estimate the Economic Value Added of the firm.
(a) 20 Crores
(b) 2 Crores
(c) 18 Crores
(d) Cant Say
10. __________ensures that firm utilizes its available resources most efficiently under conditions
of competitive markets.
(a) Profit maximisation
(b) Wealth maximisation
(c) both of above
(d) None of above

11. ___________is to decide whether the firm should distribute all profits or retain them or
distribute a portion and retain the balance.
(a) Investment Decision
(b) Financing Decision
(c) Dividend Decision
(d) None of the above

12. ____________are concerned with the determination of how much funds to procure from
amongst the various avenues available i.e. the financing mix or capital structure.
(a) Investment Decision
(b) Financing Decision
(c) Dividend Decision
(d) None of the above

13. Capital budgeting consists of planning development of available capital for the purpose of
maximizing the ________profitability of the concern:
(a) Short Term
(b) Medium Term
(c) Long Term
(d) Annual

14. Which of the following is not a special feature of Capital Budgeting Decisions:
(a) Risk & Uncertainty
(b) Difficult to make
(c) Involvement of Small Amount of Funds
(d) Irreversible Decisions

15. In managing __________, the firm has to cope with the

variability of the demand for its products, their prices, input prices, etc.
(a) Business Risk
(b) Financial Risk
(c) Combined Risk
(d) Any of above

16. Which of the following represents the amount of time that it takes for a capital budgeting
project to recover its initial cost?
(a) Maturity period
(b) Payback period
(c) Redemption period
(d) Investment period

17. Which of the following is a Non-Discounted Cash Flow Technique:

(a) Payback period method
(b) Average Rate of Return method
(c) Both of above
(d) None of above

18. Which of the following is a Discounted Cash Flow Technique:

(a) Net Present Value method
(b) Internal Rate of Return Method
(c) Profitability Index method
(d) All of above
19. The current worth of a sum of money to be received at a future date is called:
(a) Real value
(b) Future value
(c) Present value
(d) Salvage value

20. Generally, a project is considered acceptable if its net present value is:
(a) Negative or zero
(b) Negative or positive
(c) Positive or zero
(d) Negative

21. Which of the following method is based on trial & error method:
(a) Net Present Value method
(b) Internal Rate of Return Method
(c) Profitability Index Method
(d) Accounting Rate of return

22. In case of Internal Rate of Return method, reinvestment rate is ________:

(a) Rate of Discounting
(b) Internal Rate of Return
(c) Average of A & B
(d) None of above

23. _____________is the most suitable method in those circumstances where availability of
resources is not a constraint.
(a) Net present value
(b) Internal Rate of Return
(c) Payback Period
(d) Accounting Rate of Return

Which of the following are two most widely used methods of Capital Budgeting Decisions:
24. (a) Payback Period & Accounting Rate of Return
(b) NPV & IRR
(c) NPV & Profitability Index
(d) IRR & Profitability Index

25. Benefit Cost Ratio method is the other name of ___________:

(a) Net Present Value Method
(b) Internal Rate of Return Method
(c) Profitability Index Method
(d) Payback period method

26. Reinvestment Rate in case of Net Present Value method is ____________:

(a) Internal Rate of Return
(b) Return on Investment
(c) Cost of Capital
(d) Return on Government Bonds

27. __________is also known as break even financing rate for the project:
(a) Cost of Capital
(b) Internal Rate of return
(c) Return on Equity
(d) Return on Investment

28. A profitability index of 0.90 for a project means:

(a) The present value of benefits is 90% greater than the project’s costs
(b) The project’s NPV is positive
(c) The project returns 90 cents in present value for each current rupee invested
(d) The payback period is less than two years
29. For a Project, the cost benefit ratio is equal to one, then:
(a) IRR will be greater than one
(b) IRR will be greater than discount rate
(c) IRR will be lesser than discount rate
(d)IRR will be equal to discount rate

30. Which of the following is not included in capital structure?

(a) Long term debt
(b) Preferred stock
(c) Current Liabilities
(d) Retained earnings

31. Financial structure is _________ concept while capital structure is ________ concept
(a) Inappropriate; appropriate
(b) Appropriate; inappropriate
(c) Narrow; broader
(d) Broader; narrow

32. Which of the following is vulnerable to hostile takeovers?

(a) Horizontal Capital Structure
(b) Vertical Capital Structure
(c) Pyramid Shaped Capital Structure
(d) All of the above

33. Which of the following is not a valid assumption of MM approach to capital structure?
(a) Securities are infinitely divisible
(b) Lack of free flow of information
(c) Transactions costs are zero
(d) No taxation

34. Decisions related to the mix of debt and equity in the balance sheet best relates to which of
the following?
(a) Capital budget
(b) Capital structure
(c) Capital expenditure
(d) Operating leverage

35. A firm with high operating leverage has:

(a) Low fixed costs in its production process.
(b) High variable costs in its production process.
(c) High fixed costs in its production process.
(d) High price per unit

36. Degree of __________ is the ratio of percentage change in earning per share to the percentage
change in sales.
(a) Financial leverage
(b) Operating leverage
(c) Combined leverage
(d) Working leverage

37. ____________is the level of EBIT at which EPS is Zero:

(a) Cost BEP
(b) EBIT EPS Point
(c) Financial BEP
(d) Operating BEP

38. ____________is also known as Trade Off theory of Capital Structure:

(a) Net Income Approach
(b) Net Operating Income Approach
(c) Traditional Approach
(d) Modified MM Approach

39. A Ltd. issues ` 50,000 8% debentures at a discount of 5%. The tax rate is 50%. The cost of
debt capital is:
(a) 5.42%
(b) 5.1%
(c) 4.42%
(d) 4.21%

Explanation
𝐼(𝑙 − 𝑡)
𝐾𝑑 = × 100
𝑁𝑃

8(1 − 0.5)
= × 100
100 − 5%

= 4.21%

40. If expected level of EBIT is more than the breakeven point, then the EPS will be –
(a) Minimum
(b) Negative
(c) Positive
(d) Infinite

41. As per Net Income Approach, the value of the firm will be maximum at a point where –
(a) Average cost of equity is minimum.
(b) Average cost of debt is minimum.
(c) Weighted average cost of equity is maximum.
(d) Weighted average cost of capital is minimum.

42. Floatation costs are those expense which are incurred while –
(a) Issuing securities
(b) Repayment of debts
(c) Negotiations for business deal
(d) Repayment of equity and debts

43. ________________Capital Structure is highly vulnerable to Collapse:

(a) Horizontal
(b) Vertical
(c) Pyramid Shaped
(d) Inverted Pyramid

44. Which of the following capital structure consist of zero debt components in the structure
mix?
(a) Pyramid Shaped Capital Structure
(b) Inverted Pyramid Shaped Capital Structure
(c) Horizontal Capital Structure
(d) Vertical Capital Structure

45. The Cost of Retained earnings are often taken as equal to ________________:
(a) Cost of Debt
(b) Cost of Preference Shares
(c) Cost of Equity
(d) Sum of a, b and c

46. ATM Corporation common stock has a beta, (𝛽), of 1.5. The risk-free rate is 8%, and the
market return is 12%. Determine the cost of equity shares using the CAPM.
(a) 14%
(b) 11%
(c) 12%
(d) 13%

Explanation:
𝐾𝑒 (𝐶𝐴𝑃𝑀) = 𝑅𝑓 + 𝛽(𝑅𝑚 − 𝑅𝑓 )

= 8% + 1.5(12% − 8%)
= 14%
47. Market values are often used in computing the weighted average cost of capital because –
(a) This is the simplest way to do the calculation.
(b) This is consistent with the goal of maximizing shareholder value.
(c) This is required by the Securities & Exchange Board of India.
(d) This is a very common mistake.

48. Prasanna Ltd. issued 12% bonds of ` 100 each at par. Corporate tax rate is 34% including
surcharge and education cess. Cost of Debt = ?
(a) 12%
(b) 8.42%
(c) 7.92%
(d) 12.48%

Explanation
𝐼 (1 − 𝑡) 12 (1 − 0.34)
𝐾𝑑 = = = 0.0792 𝑖. 𝑒. 7.92%
𝑁𝑒𝑡 𝑃𝑟𝑜𝑐𝑒𝑒𝑑𝑠 (𝑁𝑃) 100

49. A critical assumption of the net operating income (NOI) approach to valuation is:
(a) That debt and equity levels remain unchanged
(b) That dividends increase at a constant rate
(c) That Ko remains constant regardless of changes in leverage
(d) That interest expenses and taxes are included in the calculation

50. An EBIT-EPS indifference analysis chart is used for __________________ :

(a) Evaluating the effects of business risk on EPS
(b) Examining EPS results for alternative financial plans at varying EBIT levels
(c) Determining the impact of a change in sales on EBIT
(d) Showing the changes in EPS quality over time

51. The _____________ is the percentage change in earnings per share that results from a
percentage change in operating income.
(a) Degree of combined leverage
(b) Degree of financial leverage
(c) Break-even point
(d) Degree of operating leverage

52. If the firm fails to earn return at the expected rate, the market value of shares will ______:
(a) Fall
(b) Remains constant
(c) Rise
(d) Can’t Say

53. Long term finance is not required for which of the following:
(a) To finance fixed assets
(b) To finance permanent part of working capital
(c) To finance temporary part of working capital
(d) To finance growth & expansion of business

54. Which of the following is uncontrollable factor affecting the cost of capital of the firm?
(a) Investment Policy
(b) Capital Structure Policy
(c) Level of Interest Rates
(d) Dividend Policy

55. Which of the following is floatation cost?

(a) Commission of underwriters
(b) Brokerage paid on issue of securities
(c) Stationery expenses on issue of securities
(d) All of the above

56. _________ denotes the level of EBIT for which the firm’s EPS equals zero.
(a) Financial break-even point
(b) Margin of safety
(c) Equilibrium point
(d) Min-max point

57. As per Net Income Approach, the value of the firm will be maximum at a point where –
(e) Average cost of equity is minimum.
(f) Average cost of debt is minimum.
(g) Weighted average cost of equity is maximum.
(h) Weighted average cost of capital is minimum.

58. Initial Working Capital –

(a) Supplies the funds necessary to meet the current working expenses.
(b) Is used to raise the volume of production by improvement or extension of machinery.
(c) Is required at the time of the commencement of business.
(d) Represents the amount utilized at the time of contingencies.

59. Capital which is needed to meet the seasonal requirements of the business –
(a) Gross Working Capital
(b) Reserve Margin Working Capital
(c) Net working capital
(d) Fluctuating Working Capital

60. Gross working capital refers to –

(a) The amount utilized at the time of contingencies.
(b) The firm’s investment in current assets.
(c) The capital which is required at the time of the commencement of business.
(d) The working capital which is necessary on a continuous and uninterrupted basis.

61. Which of the following represents the amount utilized at the time of contingencies?
(a) Reserve working capital
(b) Net working capital
(c) Extra working capital
(d) Fixed working capital

62. Permanent working capital is also known as –

(a) Hard current assets
(b) Core current assets
(c) Core current liabilities
(d) Hard current liabilities

63. ______________is one of the most reliable methods of computation of working capital:
(a) Ratio of Sales
(b) Ratio of Fixed Investment
(c) Operating Cycle
(d) Current Assets Holding Period
64. Cash Management Model has been propounded by: (DEC 19)
(a) Linter
(b) Walter
(c) Baumol
(d) Gordon

65. According to the Walter’s model, a firm should have 100% dividend pay-out ratio when:
(a) 𝑟 = 𝑘𝑒
(b) 𝒓 < 𝒌𝒆
(c) 𝑟 > 𝑘𝑒
(d) 𝑔 > 𝑘𝑒

66. Modigliani and Miller argue that the dividend decision ……………………. .
(a) Is irrelevant as the value of the firm is based on the earning power of its assets
(b) Is relevant as the value of the firm is not based just on the earning power of its assets
(c) Is irrelevant as dividends represent cash leaving the firm to shareholders, who own the firm
anyway
(d) Is relevant as cash outflow always influences other firm decisions

67. Bill Discounting is always_________________:

(a) With Recourse
(b) Without Recourse
(c) With or Without Recourse
(d) As per Industry Standards

68. The cash discount is given to customers for:

(a) Early payments
(b) Good business relations
(c) Bulk purchase
(d) Frequent purchases

69. ……….. is an arrangement to have debts collected by a third party entity for a fee.
(a) Factoring
(b) Aging
(c) Forming
(d) Crediting

70. Which of the following assets is not a quick current asset?

(a) Short term bills receivables
(b) Cash
(c) Stock
(d) Debtors less provision for bad and doubtful debts

71. __________________is a form of financing of receivables pertaining to International Trade:

(a) Factoring
(b) Bill Discounting
(c) Forfaiting
(d) Accounts Receivable Loans

72. Under Forfaiting, Promissory Notes/ Bills are guaranteed by a bank which may not
necessarily be the Importer’s bank. Such Guarantee by Bank is referred to as ____________:
(a) Commission
(b) Aval
(c) Bank Guarantee
(d) Cross Border Guarantee

73. ……………. is an optimum quantity of material to be ordered every time an order is placed
so that total cost of Inventory management is lowest:
(a) Quantity in such lot which has maximum discount
(b) Special Order Quantity (SOQ)
(c) Standard Order Quantity (SOQ)
(d) Economic Order Quantity (EOQ)

74. Which of the following is a Motive of Holding Cash:

(a) Transactional
(b) Speculative
(c) Contingency
(d) All of above

75. Concept of Maximum Permissible Bank financial was introduced by:

(a) Kannan Committee
(b) Chore Committee
(c) Nayak Committee
(d) Tandon Committee

76. Interest coverage ratio of 6 indicates:

(a) Sales are 6 times of interest.
(b) Profit after tax is 6 times of interest.
(c) EBIT is 6 times of interest.
(d) Interest is 6 times profit after tax.

77. Economic Order Quantity (EOQ) determines:

(a) The order size that minimize the total inventory cost.
(b) The order size where ordering cost is the lowest.
(c) The order size where the carrying cost is minimum.
(d) The order size which will earn discounts on purchase.

78. Net working capital is equal to:

(a) Fixed Assets-Current Assets
(b) Current Assets-Current Liabilities
(c) Current Assets-Cash
(d) Long Term Loans-Short Term Loans

79. Funds represented by cheques which have been issued, but which have not been debited
from bank is technically referred to as:
(a) Indenture
(b) Forward Cover
(c) Float
(d) Proxy

80. The annual cash requirement of A Ltd. is ` 25 lakh. Cost of conversion of marketable
securities per lot is ` 2,500. The company can earn 5% annual yield on its securities. What
will be the economic lot size according to the Baumol Model?
(a) ` 1,00,000
(b) ` 2,50,000
(c) ` 5,00,000
(d) ` 4,75,000

Working
Economic Lot Size=√((2×25,00,000×2,500)/(5%))
=5,00,000

81. Factoring is essentially a ______________financing deal:

(a) Short Term
(b) Medium Term
(c) Long Term
(d) Any of Above

82. According to William J. Baumol’s economic order quantity model with respect to cash
management, optimum cash level is that level of cash where:
(a) Carrying costs are maximum and transactions costs are minimum
(b) Carrying costs and transactions costs are minimum
(c) Carrying costs and transactions costs are maximum
83. Carrying costs are minimum and transactions costs are maximum

_________________are the games of chances in which return is dependent upon a particular event
happening:
(a) Investment
(b) Speculation
(c) Betting & Gambling
(d) Any of above

84. According to Dow Jones Theory, Share prices demonstrate a pattern over ________________:
(a) One to three years
(b) Three to four years
(c) Four to Five Years
(d) Four to Six Years

85. Systematic Risk is due to the influence of _________factors on an organisation.

(a) Internal
(b) External
(c) Both
(d) None of above

86. The beta of the market is:

(a) – 1.0
(b) 0
(c) 1.0
(d) 0.5

87. Dow Jones theory was formulated by –

(a) John P. Dow
(b) Charles H. Dow
(c) James T. Dow
(d) Michel R. Dow

88. Unsystematic Risk is due to the influence of ______________factors on an Organisation:

(a) Internal
(b) External
(c) Both of above
(d) None

89. _______________is that level after which the share price refuses to move up in repeated efforts:
(a) Support Levels
(b) Resistance Levels
(c) Head & Shoulder
(d) None of above

90. ______________indicates the bottom which the share values are unable to pierce:
(a) Support Level
(b) Resistance Level
(c) Head & Shoulder
(d) None of above

91. As per Dow Jones Theory, Primary Trend lasts from ______________________:
(a) One year
(b) One to two Years
(c) One to Three Years
(d) Two to Three Years
 92. If the primary trend is upward, it is called as ______________phase of the market:
(a) Golden
(b) Rising
(c) Bullish
(d) Bearish

93. _______________moves in the opposite directors of the Primary Trend or as a Correction to the
Primary Trend:
(a) Secondary Trend
(b) Intermediate Trend
(c) Minor Trend
(d) A & B Both

94. If the primary trend is downward, it is called as ______________phase of the market:

(a) Weak
(b) Declining
(c) Bullish
(d) Bearish

95. In General, Secondary trend typically lasts between ____________________:

(a) Less than three weeks
(b) Three weeks to three months
(c) Three months to 12 months
(d) One to three years

96. The basic assumption of _________________is that history trends to repeat itself:
(a) Fundamental Approach
(b) Technical Approach
(c) Efficient Market Theory
(d) All of above

97. Treasury Bills are issued by:

(a) Public limited companies.
(b) Blue chip companies.
(c) Banks and selected all-India Financial Institutions only.
(d) Central government

98. Which of the following does not contribute to systematic risk?

(a) Change in the interest rates.
(b) Change in the level of government spending.
(c) Emergence of a new competitor.
(d) Change in the industrial policy.

99. _______________, the future earning capacity is predicted with the help of accounting ratios.
(a) Technical Analysis
(b) Industry Analysis
(c) Economic Analysis
(d) Company Analysis

100. As per Dow Jones Theory, Minor Trend lasts from ______________________:
(a) Less than three weeks
(b) Three Weeks to Three Months
(c) Three Months to 12 months
(d) One Year to three years

101. Double Bottom formation represents _________________development:

(a) Bearish
(b) Bullish
(c) Stability
(d) Speculation
102. Performance of the company is the basis for decision of which of the following:
(a) Investment
(b) Speculation
(c) Gambling
(d) All of above

103. Choice of correlation coefficient is between –

(a) 0 to 1
(b) 0 to 2
(c) -1 to + 1
(d) -1 to 3

104. Portfolio theory was originally proposed by Harry Markowitz in _____________:

(a) 1940s
(b) 1950s
(c) 1960s
(d) 1990s

105. Markowitz model presumed generally investors are –

(a) Risk averse
(b) Risk natural
(c) Risk seekers
(d) Risk moderate

106. The Coefficient of correlation between two securities is 0, then _______________exists:

(a) Perfect Positive Correlation
(b) Perfect Negative Correlation
(c) Both are Independent
(d) None of above

107. Beta measures the ______________associated with any individual portfolio as measured in
relation to the risk of the market portfolio:
(a) Absolute Risk
(b) Relative Risk
(c) Both of above
(d) None of above

108. As you increase the number of stocks in a portfolio, the systematic risk is likely to:
(a) Remain constant
(b) Increase at a decreasing rate
(c) Decrease at a decreasing rate
(d) Decrease at an increasing rate

109. The Security Market Line shows the relationship between:

(a) Expected rate of return and beta
(b) Expected rate of return and diversifiable risk
(c) Required rate of return and unsystematic risk
(d) Realized rate of return and beta

110. Diversification can eliminate risk, if the securities of a portfolio are:

(a) Perfectly positively correlated
(b) Perfectly negatively correlated
(c) Weakly positively correlated
(d) Weakly negatively correlated

111. Beta of the Market portfolio generally is:

(a) Zero
(b) 1
(c) 2
(d) Negative

112. Before taking investment decision, an investor makes a comparison of the …………………
available from each avenue and elements of ………………. involved in it.
(a) Gross profit, Management
(b) Returns, Management
(c) Returns, Risk
(d) Risk, Returns

113. Tansen Ltd. has a beta of 0.80. If the expected market return is 21.50 and the risk free
rate of return is 9.50%. Using CAPM mode to calculate the appropriate required rate of
return:
(a) 19.10%
(b) 20.10%
(c) 20.30%
(d) 22.00%

Working
CAPM = 9.5% + [0.80 × (21.5% – 9.5%)] = 19.1%

114. Which of the following is most closely associated with the terms ‘primary trend.’
‘intermediate trend.’ and ‘short-term trend’ ?
(a) Trend line
(b) Dow Theory
(c) Candlestick chart
(d) Bar chart

115. _____________will be incorporated by investors into their expectations of returns on

individual stocks and thus will be incorporated into market prices:
(a) Anticipated Events
(b) Unanticipated Events
(c) Both of above
(d) None of above

116. Professor Sharpe won a Nobel Memorial Prize in Economic Sciences in 1990 for his work
on the _______________:
(a) Arbitrage Pricing Model
(b) CAPM
(c) Sharpe Ratio
(d) All of above

117. The main aim of portfolio is to reduce ___________ by diversification:

(a) Risk
(b) Profit
(c) Cash flow
(d) Borrowing Fund

118. Management is –
(a) Science
(b) Art
(c) Both science and art
(d) History

119. Who is popularly known as the ‘founder of modern management theory’?

(a) Frederick Taylor
(b) Luther Gulick
(c) Newmann and Sumer
(d) Henry Fayol
120. The result of planning function is___________________:
(a) Leadership, Communication, Development and incentives
(b) Reports, Comparisons, Cost & Budgets
(c) Objectives, Goals, Policies, Procedures and Methods
(d) Work Division, Work Assignment and authority Utilization

121. Which of the following is fundamental function of management and all other functions of
management are greatly influenced by it?
(a) Controlling
(b) Directing
(c) Motivating
(d) Planning

122. _______________are the sub plans which aid in the accomplishment of master plan:
(a) Primary Plan
(b) Secondary Plan
(c) Derivative Plan
(d) Functional Plan

123. The result of Organizing Function is_________________:

(a) Leadership, Communication, Development and incentives
(b) Reports, Comparisons, Cost & Budgets
(c) Objectives, Goals, Policies, Procedures and Methods
(d) Work Division, Work Assignment and authority Utilization

124. Which of the following is not one of the five elements of management?
(a) Planning
(b) Co-ordination
(c) Centralization
(d) Commanding

125. Control is closely related to the ___________ job of the manager.

(a) Planning
(b) Discipline
(c) Order
(d) Motivation

126. Which of the following can be treated as internal planning premise?

(a) Politico-technological conditions
(b) Socio-economic conditions
(c) Sales forecast
(d) Technological changes

127. Which of the following can be treated as external planning premise?

(a) Politico-technological conditions
(b) Marketing plans
(c) Sales forecast
(d) Strategic Plans

128. The Result of Directing Function is____________________:

(a) Leadership, Communication, Development and incentives
(b) Reports, Comparisons, Cost & Budgets
(c) Objectives, Goals, Policies, Procedures and Methods
(d) Work Division, Work Assignment and authority Utilization

129. ………………….is a conscious attempt made by the executive to influence the role of
individual and group behaviours.
(a) Direction
(b) Motivation
(c) Leadership
(d) Controlling

130. The first ever 14 principles of ‘classical management theory’ was shelled out by:
(a) George R Terry
(b) Henry Fayol
(c) Peter Drucker
(d) Harold Koontz

131. The Result of Control Function is ____________________:

(a) Leadership, Communication, Development and incentives
(b) Reports, Comparisons, Cost & Budgets
(c) Objectives, Goals, Policies, Procedures and Methods
(d) Work Division, Work Assignment and authority Utilization

132. _____________________are the two wings of direction in the process of management:

(a) Supervision & Communication
(b) Leadership & Supervision
(c) Leadership & Motivation
(d) Leadership & Commanding

133. Generally, in what order managers perform their managerial functions?

(a) Organizing, planning, controlling, leading
(b) Organizing, leading, planning, controlling
(c) Planning, organizing, leading, controlling
(d) Planning, organizing, controlling, leading

134. The Answer to the Question “Who should do what work?” is given by:
(a) Planning
(b) Organizing
(c) Directing
(d) Controlling

135. _____________is the final step of strategic management process:

(a) Strategy Formulation
(b) Strategy Evaluation
(c) Strategy Implementation
(d) Environment Scanning

136. Planning process begins with:

(a) Establishment of objectives
(b) Generating alternatives
(c) Selecting alternatives
(d) Resource allocation

137. The ________ consists of the factors in the company’s immediate environment that affects
the performance and working of the company.
(a) Micro environment
(b) Macro environment
(c) Business environment
(d) Outside environment

138. Strategic management helps organizations to be more –

(a) Reactive
(b) Turbulence
(c) Uncertain
(d) Proactive

139. Identify which of the following forces does not form part of Porter’s Competitive Position
Analysis?
(a) Buyer power
(b) Threat of Inflation
(c) Threat of new entry
(d) Supplier power

140. What is the term for the monitoring of events both internal and external to the organization
that effects strategy?
(a) Operational control
(b) Strategic control
(c) Strategic surveillance
(d) Environmental scanning

141. Which of the following is a part of Macro Business environment?

(a) Suppliers
(b) Customers
(c) Competitors
(d) Technology

142. Business Level Strategy is formulated by _________________:

(a) Lower Level Management
(b) Middle Level Management
(c) Top Level Management
(d) Industry Experts

143. Vision Statement answers the question –

(a) What do we do?
(b) What makes us different?
(c) Where do we aim to be?
(d) Whether is it possible to make growth?

__________ of a company focuses on the question:

144. ‘Who we are’ and ‘What we do’.
(a) Vision statement
(b) Mission statement
(c) Philosophy
(d) Statement of Philosophy

145. Which of the following is NOT ‘external environment consideration?

(a) Political trends
(b) Economic shifts
(c) Operational inefficiencies
(d) Changes in consumer taste

146. A situation analysis should be conducted –

(a) After developing a strategy.
(b) At the beginning of any program or project
(c) Before company is incorporated
(d) At a later stage in quality management

147. The low growth, low share businesses in BCG matrix are:
(a) Cows
(b) Dogs
(c) Cats
(d) Question Marks

148. _______________strategy is more suitable if customers are price sensitive:

(a) Cost Leadership
(b) Differentiation
(c) Focus
(d) All of above
149. In consulting engagement with General Electric Company in the 1970’s McKinsey &
Company developed a _______ cell portfolio matrix as a tool for screening GE’s large portfolio
of strategic business units (SBU).
(a) Ten
(b) Nine
(c) Twelve
(d) Six

150. Which of the following can be said to be the strategy followed in TOWS approach?
(a) Defensive Strategy
(b) Offensive Strategy
(c) Attack Strategy
(d) Functional Strategy

151. The origin of the SWOT analysis is supposed to be rooted in the concept of Fore Field
Analysis pronounced by __________________in 1950s:
(a) Michael Watkins
(b) Arthur D. Little
(c) K. Levin
(d) General Electric

152. Project Evaluation & Review Technique (PERT) developed by the _____ in the 1950s.
(a) Gary Hamel
(b) United States Navy
(c) Heinz Weirich
(d) James E. Kelley

153. In _____________strategy, Company is able to fetch a premium price for its products or
services:
(a) Cost Leadership
(b) Differentiation
(c) Focus
(d) All of above

154. Build,’ ‘Hold,’ Harvest’ and ‘Divest’ are the strategies explained by:
(a) Ansoff’s Product Matrix Growth
(b) ADL matrix
(c) GE McKinsey Matrix
(d) BCG Matrix

155. What is the term used in Ansoff’s matrix for increasing market share with existing products
in new markets?
(a) Market development
(b) Market penetration
(c) Product development
(d) Diversification

156. When two organizations combine to increase their strengths and financial gains, it is
called:
(a) Hostile takeover
(b) Liquidation
(c) Merger
(d) Acquisition