Business & Commercial Knowledge

1) Which of the following is incorrect?

a. Private company has minimum 2 and maximum 200 members
b. Public company has minimum 7 and maximum no limit
c. Private company shares are freely tradable on stock exchange
d. Companies Act 2013 provides that there may be constitution of One Person Company

2) In which form of business do the owners have obligations to pay off liabilities from personal
wealth as well if the businesses money and assets are not enough?
a. Private Company
b. Public Company
c. HUF
d. LLP

3) We can classify all similar businesses relating to a particular activity as.

a. Business
b. Companies
c. Organizations
d. Industry

4) Which apex body of regulation oversees the governance of LLP?

a. RBI
b. Ministry of Commerce and Industry
c. Ministry of Corporate Affairs
d. Ministry of Micro, Small and Medium Enterprises

5) In recent news articles from around the world, there has been an increasing trend of
“Privatization” of Companies. Why is there such a trend?
a. To save taxes
b. To save the costs of compliance requirements
c. To make personal wealth
d. To be more sustainable and socially aware

6) Which of the following is not true about a Limited Liability Partnership (LLP)?
a. Separate Legal Entity
b. Incorporation not mandatory like normal partnership
c. Designated Partners
d. Hybrid Form of Business Organization
7) Gain for one is a loss for someone else - this concept can be understood by which of the
characteristics of Business Environment?
a. It is Dynamic
b. It has far reaching impact
c. It is multi-faceted
d. It is complex

8) Dormant Companies can be incorporated for which of the following purposes?

a. For Future Projects
b. Holding Intellectual Property
c. Both a or b
d. Only for creating a dummy company to book insignificant transactions

9) Which of the following is not a function of RBI?

a. Promotion of Banking
b. Collection of Foreign Institutional Data
c. Banker to Government
d. Funding NABARD

10)Trends relate to
a. Happening of events in internal Environment
b. Grouping of similar or related events
c. Demands made by Interested group
d. None of the above

11)Which of the following exhibit characteristic of Business Environment?

(I) Environment is static
(II) Environment is dynamic
(III) Environment is complex and multi-faceted
(IV) It has short term reach
Options:
a. Point I & III
b. Point I, II & III
c. Point II & IV
d. Point II & III

12)A threat is
a. An unfavorable condition in organization environment which creates risk or damage
to the environment
b. An inherent limitation or constraint
c. An unfavorable condition in organization environment which consolidates its strength
d. None of the above
13)Highest Price the buyer is willing to pay is called?
a. Bid
b. Ask
c. Badla
d. Beta

14)Who occupies the central position in the marketing environment?

a. Consumer
b. Customer
c. Organization
d. All of the above

15)____________ with their own bargaining power affect the cost structure of the industry.
a. Intermediaries
b. Suppliers
c. Consumer
d. Government

16)Which of the following is not an example of socio-cultural environment?

a. Role of women in society
b. Rising income
c. Family structure
d. Educational levels

17)Environment which is close to business and affect its capacity to work is known as _______
environment:
a. Micro
b. Macro
c. Internal
d. External

18)Policy Formulation process is?

a. Uni-Directional
b. Bi-Directional
c. Multi-Directional
d. Single Point of Contact Oriented

19)What is the single word that can best describe today’s business?
a. Technology
b. Persistence
c. Profit making
d. Change
20)___________ is the process by which organizations monitor their relevant environment to identify
opportunities and threats affecting their business for the purpose of taking strategic decisions.
a. Forecasting
b. Assessment
c. Scanning
d. None of the above

21)The following statement relates to which strategic response approach to the environment:
They seek to monitor the changes in that environment, analyze their impact on their own goals and
activities and translate their assessment in terms of specific strategies for survival, stability and
strength.
a. Proceed with caution
b. Least resistance
c. Dynamic response
d. Static Response

22)Which of the following is not a part of the economic environment?

a. Market and trade cycles
b. Consumer buying patterns
c. Strength of consumer spending
d. Interest and exchange rates

23)Security whose price is derived from another underlying asset is called?

a. Derivative
b. Options
c. Forwards
d. Futures

24)What is the kind of response in which a business should make efforts to exploit the opportunity
and reduce the threats:
a. Strategic Responses
b. Least resistance
c. Diversify
d. Simplify

25)Perceiving the needs of the external environment and catering to them, satisfying the expectations
and demands of the clientele groups is:
a. Reciprocal agreement
b. Interdependent process
c. Management process
d. Interaction process
26)__________ response not merely recognizes and wards off threats but also convert threats into
opportunities:
a. Aggressive
b. Dynamic
c. Static
d. Passive

27)The businesses should continuously ________ and _________ to the environment if it is to service and
prosper.
a. Identify, appraise
b. Monitor, adapt
c. Identify, monitor
d. Monitor, appraise

28)Through SWOT analysis:

a. Strengths and weakness existing within the environment can be matched with
opportunities and threats in the organization.
b. Strengths and weakness existing outside the organization can be matched with
opportunities and threats with the internal environment
c. Strengths and weakness existing outside the organization can be matched with
opportunities and threats with the external environment.
d. Strengths and weakness existing within an organization can be matched with
opportunities and threats in the environment.

29)According to Peter Drucker aim of the business is to _________ and ________

a. Create and retain customer
b. Retain customer and create profits
c. Create and retain consumer
d. Retain consumer and maximize wealth

30)The non-specific elements of the organizations surroundings that may affect its activities are;
a. Customers, suppliers and employees
b. Suppliers, owners, employees
c. Owners, Board of Directors and Employees
d. Customers, Intermediaries, Suppliers.

31)Select the correct statement out of the following:

a. Environmental factors are totally beyond the control of a single industrial enterprise.
b. Environmental factors are largely beyond the control of a single industrial
enterprise.
c. Environmental factors are totally within the control of a single industrial enterprise.
d. None of the above.
32)The term PESTLE analysis is used to describe a framework for analyzing:
a. Macro Environment
b. Micro Environment
c. Both Macro and Micro Environment
d. None of above

33)Which of the following is incorrect?

a. Value system, Mission, Objectives & Corporate culture are part of internal environment
b. Customers, Company and Suppliers constitute external but micro environment
c. Technological advancement and Government policy constitute internal but macro
environment
d. Demographic, Political and Global factors constitute external but macro environment

34)Which of the following internal strategies to respond to environment involves formulation and
clarification of organization’s mission?
a. Competitive Response
b. Administrative Response
c. Dynamic Response
d. Collective Response

35)While analyzing technological environment, which of the following is not considered?

a. Capital requirement
b. Current technology being used
c. Upcoming technologies relevant to business
d. The relations with the country creating the technology

36)Find the odd one out.

a. Agricultural Policy
b. Industrial Policy
c. Foreign Trade & Investment Policy
d. Monetary Policy

37)Following statements pertain to the meaning, importance and impact of economic policies. These
statements are either correct or incorrect. Pick up the answer option that gets it all right.

i Macroeconomic policies operate only on the demand side of the economy.

ii. The impact transmission of the policies occurs through institutions and policy instruments.
iii. Policy formulation does not involve discussion with the stakeholders.
iv The impact of Sectoral policies is on the economy as a whole.

a. i-Correct; ii-Correct iii-Correct; iv-Incorrect

b. i-Incorrect; ii-Correct; iii-Incorrect; iv-Incorrect
c. i-Incorrect; ii-Incorrect; iii-Correct; iv-Incorrect
d. i-Correct; ii-Correct; iii-Incorrect; iv-Incorrect
38)The form of privatization, where government keeps hold of responsibility and private enterprise
handles the management of it fully or partly is known as:
a. Disinvestment
b. Deregulation
c. Delegation
d. Decentralization

39)Which of the following is not attributable to Facilitative/ Developmental policies?

a. Lifting of curbs on business
b. Easing of doing business
c. Creation of conducive conditions
d. Imposition of clearances and approvals.

40)FIFP stands for:

a. Foreign Institutional Facilitation Board
b. Foreign Institutional Forward Board
c. Foreign Investment Forward Board
d. Foreign Investment Facilitation Portal

41)Sale of 50% stake in a PSU to a single private sector company is an example of:
a. Displacement of stake
b. Decentralization of Authority
c. Delegation of stake
d. Disinvestment to form a Joint Venture

42)After independence, India followed a:

a. Socialistic Path of Development
b. Commonwealth Model of Growth
c. Mixed Economic Path
d. Capitalistic Model of Development

43)BRICS is an economic organization comprising:

a. Brazil, Russia, India, China, South Korea
b. Brazil, Russia, India, China and South Africa
c. Bangladesh, Russia, India, China, South Korea
d. Bhutan, Russia, India, China, South Africa

44)Which of the following is incorrect?

a. FDI is made with an intention of exercising control over an enterprise
b. FDI is called Portfolio Investment
c. FDI is a long run Investment
d. FDI helps in upgradation of technology
45)Choose the correct statement:
a. For sustainable economic development, FII is more preferable to FDI
b. FDI has strong speculative effect in equity market
c. In India, permission for FDI is not uniform for all sectors
d. FDI is usually done to reap short term gains

46)Choose the correct answer from among the combinations given below the following table

a. (a)-(iii); (b)-(i); (c)-(ii)

b. (a)-(iii); (b)-(ii); (c)- (i)
c. (a)-(i); (b)-(ii); (c)-(iii)
d. Either a. or b.

47)Which of the following is not implied by liberalization?

a. Decontrol
b. Deregulation
c. General broadening of the freedom of private enterprise
d. Disinvestment of public sector enterprises

48)Which of the following reasons is/are correct for considering moderately low external value of
domestic currency as conducive for domestic business?
a. Protecting the domestic industry from competition from imported goods
b. Making the exports competitive
c. Tariff-jumping FDI
d. All of the above

49)Reasons why lower interest rate may be conducive for business include:
a. Makes investment proposals with lower returns eligible
b. Enables mobilization of savings of the households
c. Reduces cost of capital
d. (a) & (c)

50)Who was the regulatory body for controlling financial affairs in India before SEBI?
a. Controller of Capital Issues
b. Reserve Bank of India
c. Insurance Regulatory and Development Authority of India
d. Government of India
51)When was SEBI constituted?
a. 1988
b. 1990
c. 1986
d. 1989

52)How many members of SEBI should be from RBI?

a. 4
b. 3
c. 1
d. 2

53)Where can the first appeal against SEBI be made?

a. High Court
b. Supreme Court
c. Securities Appellate Tribunal
d. RBI

54)The RBI has been vested with extensive power to control and supervise commercial banking
system under which Act?
a. The Reserve Bank of India Act, 1933
b. The Reserve Bank of India Act, 1934
c. The Reserve Bank of India Act, 1935
d. The Reserve Bank of India Act, 1936
55)When was IRDAI constituted?
a. 1997
b. 1998
c. 1999
d. 2000

56)Which Section of IRDAI Act, 1999 lays down the duties, powers and functions of IRDAI?
a. Section 10
b. Section 12
c. Section 14
d. Section 5

57)What is the constitution of Competition Commission of India?

a. A chairperson and 6 members appointed by the Central Government
b. A chairperson and 5 members appointed by the Central Government
c. A chairperson and 5 members appointed by the RBI
d. A chairperson and 6 members appointed by the RBI
58)The regional office of SEBI is not located in:
a. Chennai
b. Kolkata
c. Chandigarh
d. Ahmedabad

59)Which one of the following statements is incorrect?

a. The SEBI members consist of a Chairman, who shall be appointed by Central Government.
b. The SEBI members consist of two members from amongst the officials of the Ministry of the
Central Government.
c. The SEBI members consist of one member from amongst the official of RBI, who shall be
nominated by RBI
d. The SEBI members consist of five other members out of which at least four members
shall be whole-time members, who shall be appointed by Central Government.

60)The RBI has been vested with extensive power to control and supervise commercial banking
system under the-
a. Reserve Bank of India Act, 1934.
b. The Banking Regulation Act, 1949.
c. Both (a) and (b).
d. None of the above

61)Which one is not a function of RBI?

a. Monopoly of Note issue
b. Banker to the Government
c. Advancing loan to large business houses
d. Controller of Credit

62)Which one of the following is not a SEBI function as one body?

a. Quasi-legislative
b. Quasi-judicial
c. Quasi-fiscal
d. Quasi-executive

63)Which of the following statement is incorrect regarding development banks in India?

a. Development banks provide funds to new and upcoming business houses
b. Development banks accept long term deposits from individual and firms
c. IFCI was the first development bank in India
d. The other two banks ICICI & IDBI have been converted into commercial banks

64)Which of the following is incorrect?

a. SLR and CRR are quantitative measures of credit control RBI
b. Repo rate is the rate at which banks borrow money from RBI
c. Bank rate and Repo rate are the same rate used for different purposes
d. Qualitative measures of credit control are also called selective credit control
65)Which of the following statements are correct?
a. Development banks filled the void of underdeveloped capital markets in the first four
decades since independence
b. Development banks do not accept deposits; these are mere purveyors of credit.
c. ICICI and IDBI even today enjoy the status of apex level special purpose financial
institutions.
d. (a) & (b)

66)From the following combinations of the financial institutions and their functions which is/ are not
correct
a. SEBI sets rules of the game for money market
b. RBI sets rules of the game for capital market
c. CCI sets rules of the game for products and services in non-financial markets
d. (a) & (b)

67)Which of the following institutions converted into a Non-Banking Finance Company?

a. IFCI
b. IDBI
c. ICICI
d. CCI

68)‘Personal selling’ is done through:

a. Written communication
b. Oral communication
c. TV and media
d. Sign language

69)What is price sensitivity?

a. The effect a change in price will have on customers.
b. Charging a relatively high price for a short time where a new, innovative, or much-
improved product is launched onto a market
c. A strategy involves setting low prices in order to discourage or deter potential new
entrants to the supplier’s market.
d. It measures the responsiveness of a change in demand for a product following a change in
its own price.

70)Carrying forward of transaction form one settlement period to the next without effecting delivery
or payment is called__________.
a. Badla
b. Beta
c. Blue chips
d. Basket trading
71)A stock that provides a constant dividends and stable earnings even in the periods of economic
downturn is __________.
a. Defensive Stock
b. Cash budget
c. Income stock
d. Listed stock

72)___________ is the measure of return on investments in terms of percentage.

a. Yield
b. Index
c. Equity
d. Bonus

73)________is a very wide term that is used in context with financial agreements and contracts.
a. Account balance
b. Acceptance
c. Annuity
d. Arbitrage

74)______ is a strategy that is used to minimize the risk of a particular investment and maximize the
returns of an investment
a. Cap
b. Encryption
c. Hedge
d. Term insurance

75)____________ is a technology where the banking organizations resort to the use of electronics,
computers and other networks to execute transactions and transfer funds
a. E-cash
b. Digi-cash
c. Hedge
d. Cap

76)_________________ is the simultaneous purchase and sale of two identical commodities or

instruments. This simultaneous sale and purchase is done in order to take advantage of the price
variations in two different markets.
a. Cap
b. Term insurance
c. Arbitrage
d. Hedge
77)A guarantee given by the lender that there will be no change in the quoted mortgage rates for a
specified period of time, which is called the _______________________________.
a. Lock-in period
b. Maturity
c. Holding Period
d. Due date

78)________is a road map of company’s future

a. Objective
b. Goal
c. Vision
d. Aim

79)When two or more companies come together to expand their business operations.
a. Joint venture
b. Acquisition
c. Consolidation
d. Merger

80)A very large loan extended by a group of small banks to a single corporate borrower is called as
which of the following?
a. Time Deposit
b. Long term loan
c. Annuities
d. Syndicated loan

81)Which of the following are the additional Ps of Marketing?

a. People, Product, Place
b. Product, Price, Place
c. Promotion, Product, Purpose
d. People, Physical Evidence, Processes

82)Marketing, Finance, Operations, Human Behaviour, Law and Policy, Economics, all together derive
BCK. What does it tell us about BCK’s domains?
a. BCK is Vast
b. BCK is Expanding
c. BCK is Eclectic
d. BCK is Vague

83)A HUF cannot comprise members of a:

a. Hindu & Sikh family
b. Jain family
c. Buddhist family
d. Muslim family
84)Setting low prices in order to discourage or deter potential new entrants to the suppliers’ market:
a. Pre-Emptive Pricing
b. Price Sensitivity
c. Price Discrimination
d. Price Elasticity

85)Government decides to spend 400 crores in the next 5 years for the benefit of women
entrepreneurs in India. This is an example of?
a. Fiscal Policy
b. Monetary Policy
c. FDI Policy
d. Industrial Policy

86)Mark Incorrect:
a. Business has only one motive; profit
b. Plurality of the objective is a modern phenomenon
c. Objective of survival & growth of business are called organic objectives
d. In addition to economic motive, it may have non-economic motives like social, ethical or
environmental

87)Usually, economic activities are driven by which of the following motives?

a. Emotions
b. Profitability
c. Rationality
d. Revenue maximization

88)Which of the following is required to obtain certificate of commencement of business in addition

to certificate of incorporation?
a. Private limited company
b. Hindu undivided family
c. Public limited company
d. One-person company

89)Which of the following is not an economic objective of business

a. Responsibility towards suppliers
b. Efficiency
c. Sales
d. Return on investment

90)Which of the followings is not correct about LLP?

a. It has designated partners
b. It has separate legal entity
c. It has perpetual succession
d. It has common seal
91) Which of the following is a hybrid form of business organization?
a. HUF
b. Partnership
c. LLP
d. Public company

92) A strategic response where business is very passive in their behaviour is called as
a. Least resistance
b. Proceed with caution
c. Dynamic response
d. Strategic action

93) The corporate pressure to increase and improve diversity in the country’s workforce is an area of
study for the consumer business affecting which element of the environment?
a. Demographic
b. Political-legal
c. Socio-cultural
d. None of the above

94) The price at which the holder of an option can buy or sell the securities they held when the option
is executed is known as:
a. Strike price
b. Stock price
c. Stock split
d. Market price

95) Bridge financing is also known as

a. Base-finance
b. E-finance
c. Gap financing
d. Mortgage finance

96) The idea of being concerned with people, profits and planet is a concept under?
a. PESTLE
b. SWOT
c. Sustainable development
d. Triple bottom line

97) India’s first development bank was _______ setup in 1948

a. IDBI
b. ICICI
c. NABARD
d. IFCI
98) Tariff advisory committee is a part of
a. RBI
b. IRDAI
c. SEBI
d. CCI

99)Which of the following statements is true?

a. Consumer and customer are always the same person
b. Customer may or may not be the consumer
c. Environmental study is optional for any business
d. Micro environment is a part of internal environment

100) External factors affecting a business environment is also referred to as __________ factors?
a. Controllable
b. Relevant
c. Global
d. Uncontrollable

101) Which of the following response is either proactive or reactive?

a. Administrative
b. Competitive
c. Collective
d. Dynamic

102) Policy context has a core motive behind it, which is?
a. Economic welfare
b. GDP growth
c. Holistic development
d. Social welfare

103) Identify the one which may be considered as a public policy:

a. A decision by a central government to purchase a fleet of cars
b. An old building to be demolished by municipal corporation
c. All citizens are to be provided with biometric Aadhar card
d. Government passes a special resolution to change the name of a part

104) Akbar introduced land reforms under the leadership of_______

a. Birbal
b. Todarmal
c. Tansen
d. Maansingh
105) First industrial policy in India was introduced in the year
a. 1947
b. 1948
c. 1950
d. 1951

106) First Five-year plan was launched in

a. 1956
b. 1948
c. 1950
d. 1951

107) Goods & Services Tax is a form of

a. International Trade policy
b. Inclusive policy
c. Policy reform
d. Public welfare scheme

108) Which of the following policies aim to provide protection to the business to make them self-
sustain and grow?
a. Protective policies
b. Reactive policies
c. Regulatory policies
d. Developmental policies

109) Foreign exchange management Act (FEMA), would fall under which of the following type of
Public policy?
a. Restrictive
b. Regulatory
c. Facilitating
d. Advisory

110) The formation of National Skills Development Corporation (NSDC) is an example of:
a. Restrictive policy
b. Regulatory policy
c. Facilitative policy
d. Protective policy

111) For a business, inflation as an indicator shall be most detrimental if?

a. It is extremely low
b. It is extremely high
c. It is moderate
d. It is rising
112) Selling a portion of ownership in a public enterprise to private parties is called as which of the
following?
a. Delegation
b. Divestment
c. Displacement
d. Disinvestment

113) FDI in sectors which required prior approval is identified as

a. Institutional route
b. Automatic route
c. Government route
d. NRI route

114) Economic reforms introduced in India in 1991 are called LPG that refers to
a. Liquidation of loss making units
b. Popularize Public private partnership
c. Good Governance
d. None of the above

115) Which one of the following is not a sectoral policy?

a. Agricultural policy
b. Industrial policy
c. Foreign trade policy
d. Fiscal policy

116) Which of the following is not meant by liberalization?

a. Decontrol
b. Disinvestment of PSU
c. Freedom to do business
d. Deregulation

117) ____ helps a budding business quickly launch a product and put it in the fast lane of commercial
success
a. Business incubator
b. Business accelerator
c. Merchandiser
d. Freight forwarder

118) The current Reverse Repo rate is 2.5%. The difference between repo & reverse repo is 250
basis points. RBI increases the reverse repo by 150 basis points. What is the new Repo rate?
a. 6%
b. 6.5%
c. 7%
d. 7.5%
119) Which one of the following is not a quantitative measure of credit?
a. Bank rate
b. Repo rate
c. Statutory liquidity ratio
d. Moral suasion

120) Central office of RBI was initially established in which city?

a. Delhi
b. Bangalore
c. Bombay
d. Calcutta

121) Which of the following is not a function of RBI?

a. Issue of currency
b. Refinance to financial institution
c. Bankers’ bank
d. Custodian of foreign exchange reserve

122) CCI was established by the central government on____

a. 14th Oct, 2002
b. 14th Oct, 2003
c. 1st April, 2003
d. 1st April, 2002

123) Which one of these are originally privately owned?

a. SEBI
b. IRDAI
c. RBI
d. NABARD

124) The rate at which bank borrows money from RBI against pledging is known as:
a. Repo rate
b. Reverse repo rate
c. Bank rate
d. Discount rate

125) A company is said to undergo_________ when its assets are sold off piecemeal rather than one
single operating entity?
a. Acquisition
b. Merger
c. Liquidation
d. Sale off
126) ________ put option means the stock price is above the strike price
a. In the money
b. At the money
c. Out of the money
d. Call money

127) Which of the following is correct?

a. The bid is higher than the offer
b. The bid is equal to the offer
c. The offer is higher than the bid
d. Both offer and bid are unrelated

128) A water bottle sold in a Mall versus the same bottle sold for half the price on roadside is an
example of?
a. Pre-emptive pricing
b. Price skimming
c. Price discrimination
d. Price elasticity of demand

129) Charging high price initially to build conscious customer base is called?
a. Price sensitivity
b. Price skimming
c. Price Discrimination
d. Price margin analysis

130) Token money paid in the early stages of negotiation is called?

a. Early money deposit
b. Earning money deposit
c. Token e cash
d. Earnest money deposit