1

BUSINESS STUDIES
MOCK

MBA WT (ANALYTICAL WRITING

TEST) AT IIM

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BUSINESS STUDIES
1. What does entrepreneurship education primarily (a) It limits product distribution
equip individuals with? (b) It excludes promotion strategies
(a) Narrow perspectives (c) It integrates product, price, place, and promotion
(b) Skills for bureaucracy decisions
(c) Risk management abilities (d) It neglects consumer needs
(d) Fear of failure
7. What is the primary function of a stock exchange in
2. What role does innovation play in entrepreneurship? financial markets?
(a) It impedes progress (a) Regulating government policies
(b) It encourages complacency (b) Facilitating buying and selling of securities
(c) It fosters growth and competitiveness (c) Administering tax laws
(d) It restricts creativity (d) Setting interest rates
3. What is the primary objective of consumer protection 8. What is the role of a mutual fund in financial markets?
laws? (a) Selling insurance policies
(a) Favoring businesses (b) Investing in various securities on behalf of
(b) Exploiting consumer ignorance investors
(c) Safeguarding consumers' interests (c) Regulating market operations
(d) Endorsing deceptive practices (d) Issuing government bonds
4. Which factor does consumer protection primarily 9. What is the function of a financial manager in
focus on? business finance?
(a) Promoting deceptive advertising (a) Maximizing financial risks
(b) Ignoring product quality (b) Minimizing shareholder wealth
(c) Ensuring product safety and reliability (c) Making financial decisions to maximize
(d) Facilitating misleading marketing shareholder value
(d) Limiting business profits
5. What is the purpose of market segmentation in
marketing? 10. What is the significance of a balance sheet in business
(a) Limiting consumer choices finance?
(b) Reducing product diversity (a) Showing a company's revenue and expenses
(c) Identifying and targeting specific consumer groups (b) Providing a snapshot of a company's financial
(d) Ignoring consumer preferences position at a specific time
(c) Analyzing cash flow activities
6. What is the significance of the marketing mix in
(d) Determining a company's profitability
business?

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11. What does the term 'deviation' signify in the control (A) Underwriting
process? (B) Allotment of Securities
(a) Compliance with standards (C) Securities Listing
(b) Departure from expected performance (d) Securities Subscription
(c) Adherence to organizational norms (a) D, C, B, A (b) A, B, D, C
(d) Limiting organizational growth (c) D, A, B, C (d) C, D, B, A
12. What is the purpose of corrective actions in the 17. Arrange the stages in the functioning of a stock
control process? exchange in the correct sequence:
(a) Rewarding non-performance (A) Listing of Securities
(b) Encouraging deviations (B) Trading of Securities
(c) Addressing and rectifying deviations (C) Clearing and Settlement
(d) Limiting employee responsibilities (D) Securities Regulation
(a) B, A, D, C (b) A, B, D, C
13. What is the primary goal of the directing function in
(c) D, A, B, C (d) C, D, A, B
management?
(a) Stifling employee initiatives 18. How does 'career planning and development'
(b) Ensuring strict adherence to rules contribute to staffing?
(c) Guiding and leading employees towards (a) Limiting employee career growth
organizational objectives (b) Encouraging employee stagnation
(d) Limiting employee communication (c) Facilitating employee career growth and
advancement
14. What role does motivation play in the directing
(d) Discouraging employee training
function?
(a) Discouraging employee engagement 19. How does 'span of control' impact organizing?
(b) Limiting employee performance (a) Limiting managerial authority
(c) Inspiring and energizing employees towards goal (b) Encouraging centralized decision-making
attainment (c) Determining the number of subordinates a
(d) Encouraging employee turnover manager can supervise effectively
(d) Reducing employee performance
15. What is the purpose of 'performance appraisal' in the
staffing function? 20. What does 'centralization and decentralization' refer
(a) Limiting employee promotions to in organizing?
(b) Assessing and evaluating employee performance (a) Limiting managerial decision-making
(c) Encouraging employee conflicts (b) Encouraging employee autonomy
(d) Reducing employee morale (c) Concentration or dispersion of decision-making
authority
16. Arrange the steps in the process of issuing securities
(d) Discouraging organizational efficiency
in the primary market in the correct sequence:

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21. What is the significance of 'SWOT analysis' in the (A) Consumer Awareness
planning process? (B) Consumer Education
(a) Limiting strategic assessment (C) Consumer Movement
(b) Evaluating organizational strengths, weaknesses, (D) Consumer Legislation
opportunities, and threats (a) D, C, B, A (b) A, B, C, D
(c) Encouraging risk-taking (c) C, A, B, D (d) B, D, C, A
(d) Reducing strategic insights
27. What role does 'economic factors' play in the business
22. How does 'contingency planning' contribute to environment?
effective planning? (a) Limiting business opportunities
(a) Limiting flexibility in decision-making (b) Encouraging market growth and stability
(b) Encouraging a reactive approach to challenges (c) Influencing employee attire
(c) Preparing for unexpected events or situations (d) Reducing customer preferences
(d) Reducing organizational adaptability
28. Arrange the stages in the capital budgeting process in
23. What does the term 'business environment' refer to? the correct sequence:
(a) The physical office space (A) Project Evaluation
(b) The economic, social, and legal conditions (B) Project Identification
affecting business (C) Project Implementation
(c) Employee work habits (D) Project Selection
(d) Financial resources of a business (a) A, B, C, D (b) D, C, B, A
(c) B, A, D, C (d) C, D, A, B
24. The __________ market deals with the issuance and
trading of long-term debt and equity instruments. 29. What is the primary role of 'division of work' in
(a) Money (b) Capital management principles?
(c) Primary (d) Derivative (a) Limiting employee specialization
(b) Encouraging generalization
25. Arrange the following steps in the consumer
(c) Enhancing efficiency through specialization
complaint redressal process in the correct sequence:
(d) Reducing employee engagement
(A) Lodging Complaint
(B) Seeking Redressal in Consumer Forum 30. How does 'authority and responsibility' contribute to
(C) Investigation by Consumer Forum effective management?
(D) Hearing by Consumer Forum (a) Encouraging confusion in roles
(a) A, C, D, B (b) B, D, A, C (b) Limiting accountability
(c) C, A, D, B (d) D, B, C, A (c) Aligning authority with responsibilities
(d) Reducing managerial control
26. Arrange the stages in the formation of Consumer
Rights in the correct sequence:

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31. What best defines the role of management in an 36. Match the control techniques with their descriptions:
organization? Control
Descriptions:
(a) Imposing strict regulations Techniques:
(b) Organizing resources and directing activities to A) Budgetary i) Compares actual
achieve objectives Control performance against
(c) Reducing employee responsibilities planned figures.
(d) Ignoring organizational goals B) Ratio ii) Utilizes financial data
Analysis for performance
32. What is the significance of planning in management?
(a) Limiting organizational growth evaluation.
(b) Encouraging chaos in operations C) Management iii Involves comparing
(c) Setting goals and defining strategies Information ) financial ratios for
(d) Reducing employee involvement Systems insights.
(MIS)
33. Arrange the following entrepreneurial process stages D) Variance iv) Monitors and regulates
in the correct sequence: Analysis expenditures.
(A) Idea Generation (a) A - i, B - ii, C - iii, D - iv
(B) Opportunity Evaluation (b) A - iv, B - i, C - iii, D - ii
(C) Business Plan Preparation (c) A - iv, B - iii, C - ii, d - i
(D) Market Analysis (d) A - ii, B - i, C - iii, d - iv
(a) D, B, A, C (b) B, A, C, D
(c) C, D, B, A (d) A, D, B, C 37. Arrange the following types of organizational
structures in the correct sequence from the most
34. Arrange the following types of innovations in the centralized to the most decentralized:
correct sequence of their impact: I. Functional structure
(A) Incremental Innovation II. Matrix structure
(B) Disruptive Innovation III. Divisional structure
(C) Radical Innovation (a) II - III – I (b) I - III – II
(D) Sustaining Innovation (c) III - I – II (d) I - II - III
(a) B, C, A, D (b) A, B, C, D
(c) C, D, B, A (d) A, D, B, C 38. Match the types of interviews with their
characteristics:
35. Match the types of controls with their respective Types of Characteristics:
descriptions: Interviews:
Types of Controls: Descriptions: A) Structured i) Compares actual
A) Feedforward i) Monitors deviations Interviews performance against
Control during the actual planned figures.
operations. B) Unstructured ii) Utilizes financial data
B) Concurrent ii) Assesses performance Interviews for performance
Control against long-term evaluation.
goals. C) Panel iii) Involves comparing
C) Feedback iii) Anticipates problems Interviews financial ratios for
Control before they occur. insights.
D) Strategic iv) Occurs while activities D) Behavioral iv) Monitors and regulates
Control are in progress. Interviews expenditures.
(a) A - i, B - ii, C - iii, D - iv (a) A - i, B - ii, C - iii, D - iv
(b) A - iii, B - iv, C - i, D - ii (b) A - iv, B - i, C - iii, D - ii
(c) A - iv, B - iii, C - i, d - ii (c) A - iv, B - iii, C - i, d - ii
(d) A - ii, B - i, C - iii, d - iv (d) A - ii, B - iv, C - i, d - iii

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39. Match the recruitment sources with their respective Direction (Q.41-Q.45): The business environment
descriptions: encompasses various factors that influence organizational
Recruitment operations and decision-making. One crucial aspect is the
Descriptions:
Sources: economic environment, which includes factors like inflation,
A) Internal i) Involves existing interest rates, and GDP growth. Another significant element
Sources employees is the legal environment, consisting of laws and regulations
recommending governing business activities, ensuring compliance and
candidates. ethical practices.
B) External ii) Tapping candidates Moreover, technological advancements continuously shape
Sources outside the the business landscape. Innovation and digitization have
organization. revolutionized operations, offering new opportunities and
C) Advertisement iii) Utilizes media or challenges. The social-cultural environment reflects societal
online platforms to values, beliefs, and demographics, impacting consumer
attract applicants. behavior and market trends. Furthermore, globalization has
D) Employee iv) Filling job positions interconnected economies, fostering international trade and
Referrals from within the impacting competitiveness.
organization. 41. Which factor is a part of the economic environment?
(a) A - i, B - ii, C - iii, D - iv (a) Technological advancements
(b) A - iv, B - ii, C - iii, D - i (b) Government regulations
(c) A - iv, B - iii, C - i, d - ii (c) Inflation rates
(d) A - ii, B - i, C - iii, d - iv (d) Social-cultural values
40. Match the training methods with their respective 42. _________ advancements have transformed business
descriptions: operations, introducing new methods and
Training Descriptions: opportunities.
Methods: (a) Legal (b) Technological
A) On-the-job i) Simulates actual work (c) Social-cultural (d) Economic
Training environment without
affecting production 43. Globalization has fostered _________, connecting
B) Vestibule ii) Involves moving economies and impacting competitiveness.
Training employees through (a) Inflation (b) International trade
various positions. (c) GDP growth (d) Government regulations
C) Job Rotation iii) Takes place in a 44. The legal environment ensures business _________ to
traditional classroom laws and regulations, promoting ethical practices.
setting. (a) Compliance (b) Influence
D) Classroom iv) Employees learn while (c) Adherence (d) Innovation
Training performing tasks.
45. Which aspect is influenced by the social-cultural
(a) A - i, B - ii, C - iii, D - iv
environment?
(b) A - iv, B - i, C - i, D - iii
(a) Inflation rates (b) Consumer behaviour
(c) A - iv, B - iii, C - i, d - ii
(c) International trade (d) Legal regulations
(d) A - ii, B - i, C - iii, d - iv

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Directions (Q.46-Q.50): Entrepreneurship is the 47. What characteristic fosters an entrepreneurial

cornerstone of innovation and economic growth. It involves mindset?
identifying opportunities, taking calculated risks, and (a) Resistance to change
transforming ideas into viable businesses. An essential (b) Creativity
characteristic of successful entrepreneurs is their ability (c) Avoidance of networking
to embrace failure as a learning opportunity and persist (d) Fear of failure
despite challenges.
48. Entrepreneurs leverage __________ opportunities to
Moreover, fostering an entrepreneurial mindset involves collaborate and access resources crucial for business
developing creativity, adaptability, and a strong sense of growth.
initiative. Entrepreneurs often leverage networking (a) Networking (b) Isolation
opportunities to collaborate, seek mentorship, and access (c) Avoidance (d) Resistance
resources crucial for business growth. Furthermore,
49. Understanding market demands and consumer needs
understanding market demands and consumer needs is
is pivotal for crafting __________ solutions.
pivotal for crafting innovative solutions and gaining a
(a) Conventional (b) Repetitive
competitive edge in the industry.
(c) Innovative (d) Standardized
46. What is an essential characteristic of successful
50. Successful entrepreneurs embrace failure as a
entrepreneurs?
learning opportunity and exhibit __________ in
(a) Aversion to risk
pursuing their goals.
(b) Fear of failure
(a) Aversion (b) Persistence
(c) Persistence
(c) Fear (d) Avoidance
(d) Avoidance of challenges

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ANSWER KEY AND EXPLANATIONS
1. (c) Risk management abilities
Explanation: Entrepreneurship education aims to
equip individuals with skills to navigate risks and
uncertainties in business ventures.
2. (c) It fosters growth and competitiveness
Explanation: Innovation is crucial in entrepreneurship
as it drives growth and enhances competitiveness by
introducing new ideas and products.
3. (c) Safeguarding consumers' interests
Explanation: Consumer protection laws aim to
safeguard consumers against unfair, deceptive, or
fraudulent practices in the marketplace.
4. (c) Ensuring product safety and reliability
Explanation: Consumer protection laws primarily
focus on ensuring products meet safety and quality
standards for consumers' well-being.
5. (c) Identifying and targeting specific consumer groups
Explanation: Market segmentation helps in identifying
specific consumer groups with distinct needs and
preferences for targeted marketing strategies.
6. (c) It integrates product, price, place, and promotion
decisions
Explanation: The marketing mix involves integrating
product, price, place, and promotion decisions to
achieve marketing objectives.
7. (b) Facilitating buying and selling of securities
Explanation: Stock exchanges provide a platform for
trading securities, such as stocks and bonds, by
facilitating their buying and selling.
8. (b) Investing in various securities on behalf of investors
Explanation: Mutual funds pool funds from various
investors and invest in diversified portfolios of
securities.
9. (c) Making financial decisions to maximize shareholder
value
Explanation: Financial managers aim to make decisions
that enhance shareholder value and maximize profits.
10. (b) Providing a snapshot of a company's financial position
at a specific time
Explanation: A balance sheet displays a company's
assets, liabilities, and equity at a specific point in time.
11. (b) Departure from expected performance
Explanation: Deviation refers to the variance or
departure from the expected or standard performance.
12. (c) Addressing and rectifying deviations
Explanation: Corrective actions aim to address and
rectify deviations from standards to bring performance
back on track.
13. (c) Guiding and leading employees towards organizational
objectives
Explanation: Directing involves guiding and leading
employees towards achieving organizational objectives
by providing instructions and motivation.
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14. (c) Inspiring and energizing employees towards goal
attainment
Explanation: Motivation in directing encourages
employees to perform better and achieve goals.
15. (b) Assessing and evaluating employee performance
Explanation: Performance appraisal evaluates and
assesses employee performance against set criteria.
16. (a) D, A, B, C
Explanation: The issuance process starts with Securities
Subscription, followed by Underwriting, then Allotment
of Securities, and finally, Securities Listing on the stock
exchange.
17. (a) Correct Sequence: D, A, B, C
Explanation: The functioning of a stock exchange
involves Securities Regulation first, then Listing of
Securities, followed by Trading of Securities, and
finally, Clearing and Settlement of transactions.
18. (c) Facilitating employee career growth and advancement
Explanation: Career planning and development
programs assist employees in growing and advancing
their careers within the organization.
19. (c) Determining the number of subordinates a manager
can supervise effectively
Explanation: Span of control defines the number of
subordinates a manager can effectively supervise.
20. (c) Concentration or dispersion of decision-making
authority
Explanation: Centralization and decentralization
define the concentration or dispersion of decision-
making authority within an organization.
21. (b) Evaluating organizational strengths, weaknesses,
opportunities, and threats
Explanation: SWOT analysis assesses internal strengths
and weaknesses along with external opportunities and
threats.
22. (c) Preparing for unexpected events or situations
Explanation: Contingency planning involves preparing
for unforeseen events to minimize their impact on
organizational objectives.
23. (b) The economic, social, and legal conditions affecting
business
Explanation: The business environment encompasses
various external factors that impact business operations,
including economic, social, and legal conditions.
24. (b) Capital
Explanation: The capital market involves long-term
debt and equity instruments like stocks and bonds.
25. (a) Correct Sequence: A, C, D, B
Explanation: The consumer complaint redressal
process initiates with Lodging Complaint, followed by
Investigation, then Hearing, and finally, Seeking
Redressal in Consumer Forum.
26. (c) Correct Sequence: C, A, B, D
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Explanation: The evolution of Consumer Rights starts
with Consumer Movement, followed by Consumer
Awareness, then Consumer Education, and finally,
Consumer Legislation.
27. (b) Encouraging market growth and stability
Explanation: Economic factors affect market growth,
stability, and business opportunities.
28. (c) Correct Sequence: B, A, D, C
Explanation: The capital budgeting process starts with
Project Identification, followed by Project Evaluation,
then Project Selection, and finally, Project
Implementation.
29. (c) Enhancing efficiency through specialization
Explanation: Division of work enhances efficiency by
assigning specific tasks based on individual
specialization.
30. (c) Aligning authority with responsibilities
Explanation: Authority and responsibility align to
ensure individuals have the necessary power to carry
out assigned tasks.
31. (b) Organizing resources and directing activities to
achieve objectives
Explanation: Management involves organizing
resources and guiding activities toward achieving
organizational goals.
32. (c) Setting goals and defining strategies
Explanation: Planning in management involves setting
goals and developing strategies to achieve them.
33. (d) A, D, B, C
Explanation : The entrepreneurial process typically
begins with Idea Generation, followed by Market
Analysis to assess its viability, then Opportunity
Evaluation to further refine the idea, and finally
Business Plan Preparation before execution.
34. (a) B, C, A, D
Explanation: Disruptive Innovation has the most
significant impact, followed by Radical and Incremental
Innovations, with Sustaining Innovation having the least
disruptive impact on markets.
35. (b) Correct Match:
A - iii) Feed forward Control: Anticipates problems
before they occur.
B - iv) Concurrent Control: Monitors deviations during
the actual operations.
C - i) Feedback Control: Occurs while activities are in
progress.
D - ii) Strategic Control: Assesses performance against
long-term goals.
Explanation: Different types of controls serve distinct
purposes within the Controlling function. Feedforward
Control aims to anticipate issues, Concurrent Control
monitors ongoing activities, Feedback Control occurs
during operations, and Strategic Control assesses long-
term goal achievement.
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36. (c) Correct Match:
A - iv) Budgetary Control: Monitors and regulates
expenditures.
B - iii) Ratio Analysis: Utilizes financial ratios for
performance evaluation.
C - ii) Management Information Systems (MIS):
Involves comparing financial data for insights.
D - i) Variance Analysis: Compares actual performance
against planned figures.
Explanation: Various control techniques like Budgetary
Control, Ratio Analysis, MIS, and Variance Analysis
employ different methodologies to assess and regulate
performance using financial and managerial data.
37. (c) III - I - II
Explanation: The correct sequence from most
centralized to most decentralized is Divisional structure
(III), Functional structure (I), and Matrix structure (II).
In divisional structures, units have more autonomy,
while functional structures are more centralized, and
matrix structures blend both functional and divisional
aspects.
38. (d) Correct Match:
A - ii) Structured Interviews: Follows a predetermined
set of questions.
B - iv) Unstructured Interviews: Allows flexibility and
free-flowing conversation.
C - i) Panel Interviews: Involves a group of
interviewers assessing a candidate.
D - iii) Behavioral Interviews: Focuses on past
behavior and experiences.
Explanation: Different types of interviews like
Structured, Unstructured, Panel, and Behavioral have
distinct characteristics in terms of question structure,
flow, assessment approach, and focus on past
experiences of candidates.
39. (b) Correct Match:
A - iv) Internal Sources: Filling job positions from
within the organization.
B - ii) External Sources: Tapping candidates outside
the organization.
C - iii) Advertisement: Utilizes media or online
platforms to attract applicants.
D - i) Employee Referrals: Involves existing employees
recommending candidates.
Explanation: Recruitment sources like Internal and
External sources, Advertisement, and Employee
Referrals serve as means to acquire candidates either
from within the organization or externally by utilizing
various methods.
40. (b) Correct Match:
A - iv) On-the-job Training: Employees learn while
performing tasks.
B - i) Vestibule Training: Simulates actual work
environment without affecting production.
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C - ii) Job Rotation: Involves moving employees
through various positions.
D - iii) Classroom Training: Takes place in a
traditional classroom setting.
Explanation: Training methods like On-the-job,
Vestibule, Job Rotation, and Classroom Training vary in
how they deliver training - whether hands-on,
simulated, rotational, or in a classroom setup - to
develop employee skills and knowledge.
41. (c) Inflation rates are a component of the economic
environment, affecting business operations and
financial decisions.
42. (b) Technological advancements have transformed
business operations.
43. (b) Globalization has fostered international trade,
connecting economies.
44. (a) The legal environment ensures business compliance to
laws and regulations.
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Explanation for each correct answer is provided to aid in
understanding the concepts covered in the Business
Environment, focusing on economic factors, legal
regulations, technological impacts, social-cultural
influences, globalization, and compliance requirements.
45. (b) The social-cultural environment significantly
influences consumer behavior and market trends.
46. (c) Persistence is crucial for entrepreneurs as it enables
them to overcome challenges and continue pursuing
their goals despite setbacks.
47. (b) Creativity is integral to an entrepreneurial mindset as
it drives innovation and the ability to generate unique
solutions and ideas.
48. (a) Entrepreneurs leverage networking opportunities for
collaboration and resource access.
49. (c) Understanding market demands helps entrepreneurs
craft innovative solutions.
50. (b) Successful entrepreneur’s exhibit persistence in
pursuing their goals despite failures or setbacks
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