Hawk‟s Eye Academy - Kochi UGC NET/JRF Mock Test 1 PAPER III – COMMERCE Time: 2 hours {Answer

ALL Questions} 1. A company is considered to have controlling interest securities when equity securities held by such company are having voting rights more than
(a) 75% of voting stock of investee‟s company (b) 50% of voting stock of investee‟s company (c) 30% of voting stock of investee‟s company (d) 20% of voting stock of investee‟s company

Maximum Marks: 150

6. Which of the following network topologies among the list below is incorrect? a. Star b. Internet c. Ring d. Bus 7. In classical theory the equality between saving and investment is brought about by: (A) Rate of interest (B) Income (C) Consumption (D) Multiplier 8. The normal condition of a capitalist economy in classical theory is: (A) Underemployment (B) Full employment (C) General unemployment (D) Frictional unemployment 9. Equation of exchange is associated with: (A) Pigou (B) J.B.Say (C) Marshall (D) Irving Fisher 10. The theory explaining the direct relationship between the price level and quantity of money is known as : (A) Quantity theory of money (B) Say‟s law of markets (C) Real theory of interest (D) None of these 11. Saving is a function of (A) Export (B) Import (C) Investment (D) Income 12. Entrepreneurs will have no tendency to expand or contract output and employment when (A) AD>AS (B) AD<AS (C) AD=AS (D) None of the above

2. Cost-volume-profit analysis is most important for the determination of (a) Volume of operations necessary to break even (b) Margin of safety necessary to equal fixed costs (c) Sales revenue necessary to equal fixed costs (d) Relationship between revenues and costs at various levels of operations (e) Sales revenue necessary to equal total costs 3. Which of the following statements is true? (a) Fixed cost per unit remains constant (b) Depreciation is an out-of-pocket cost (c) Variable cost per unit varies with the increase in the volume of output (d) An item of cost that is direct for one business may be indirect for another 4. ………is paperless document transfer between companies a. EFT b. EDI c. ETS d. RTGS 5. IIS stands for: a. International Information Service b. Internet Information Server c. Internet Information standards d. All of these
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Hawk‟s Eye Academy - Kochi 13. The slope of the consumption function is called (A) MPC (B) MPS (C) APC (D) APS 14. The concept of effective demand is associated with the name of (A) Marshall (B) Keynes (C) Krugman (D) Say 15. Outstanding expenditure is a __________ account. a) Nominal b) Personal c) Real d) Current 16. _________ deals with the depreciation accounting. a) AS4 b) AS6 c) AS10 d) AS13 17. According to which concept, proprietor of a business is treated as a creditors to the extent of his capital a) Money measurement b) Cost c) Dual aspect d) Business entity 18. Net worth of business means a) Total assets b) Fixed assets – current assets. c) Equity capital d) Total assets – total liabilities 19. Depreciation is a) An accounting necessity only b) Tax necessity only c) Tax and accounting necessity d) Tax, account and audit necessity 20. Hire purchase act is a) 1932 b) 1956 c) 1972 d) 1872 21. Rs 280 received from Roy is credited to his account as Rs 208,this error is called a) Compensating errors b) Errors of principle c) Errors of omission d) Errors of commission 22. According to functional foremanship, the speed boss, Inspector, foreman and gang boss are entrusted with the ……………aspect of work. a) Planning b) Organizing c) Doing d) None of these 23. …………..is undertaken to find out the one best way of doing the thing a) Job Analysis b) Merit rating c) Job enrichment d) None 24. According to _ principle, each group of activities with the same objective must have one head and one plan a) Unity of Direction b) Unity of command c) Either of these d) None 25. Everything which goes to increase the importance of subordinate‟s role is a) Decentralization b) Centralization c) Either A or B d) None 26. …………..school of thought has developed on the idea that there is no single best method to find solutions to Managerial problems a) System approach b) Empirical c) Contingency d) Operational 27. The two factor theory of Motivation was developed by ……………. a) A.H.Maslow b) Douglas Mc. Gregor c) Herzberg d) Rensis Likert Page 2

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Hawk‟s Eye Academy - Kochi 28. Marketing is a process of converting the potential customers into ………….. a) Actual customers b) Prospective customers c) Marketers d) None of these 29. The concept of marketing mix was developed by a) Philip Kotler b) Stapleton c) N.H Borden d) Albert W Emery 30. Branding is a function of …………. a) Research b) Exchange c) Physical supply d) Facilitating 31. Consumers show …………… while buying their products on regular basis a) Dissonance Reduction Buying Behaviour b) Variety Seeking Buying Behaviour c) Complex Buying Behaviour d) Habitual Buying Behaviour 32. The negative feeling which arises after purchase causing inner-tension is: a) Cognitive dissonance b) Post purchase dissonance c) Buyer‟s remorse d) All of these 33.Yellow goods include ………goods. a) Red & white b) White & brown c) Orange & red d) White & orange 34. Which of the following is not a method of cost based pricing? a) Cost Plus Pricing b) Marginal Cost Pricing c) Differential Pricing d) Target Pricing 35. Which of the following is not a non store retailing ? (a) Kiosk marketing (b) Retail chains (c) Direct marketing (d) Telemarketing
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36. If X and Y are two independent random variables then a) E(XY)=1 b) E(XY) = 0 c) E(XY)=E(X).E(Y) d) E(XY) = a constant 37. Which of the following real life situations follow Poisson distribution? a) The number of printing mistakes per page of a book b) The number of defects per item produced c) The number of persons arriving in a queue d) All the above. 38. Two perfect dice are thrown simultaneously, If x = face number of the first dice and y that on the 2nd dice, which of the following is zero? a) P(x=1, y=1) c) P (x=2, y>3) b) P (x+y =1) d) P (x=y) 39. Nibble contain a) 16 bit b) 8bit c) 1024 bit d) 4 bit 40. The fixed assets of Venus Ltd., are Rs.12,45,000 and the current ratio is 5:2. If the current assets of the firm are Rs.7,70,000. The fixed assets ratio of the firm is (a) 0.73 (b) 1.00 (c) 0.69 (d) 0.98 41. The following information is pertaining to Beta Pharmacies Ltd. Current ratio 4.0 Acid-test ratio 2.8 Current liabilities Rs.31 lakh The value of inventory is (a) Rs. 62.0 lakh (b) Rs. 43.0 lakh (c) Rs. 37.2 lakh (d) Rs.105.4 lakh

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Hawk‟s Eye Academy - Kochi 42. Seizens Ltd., provided the following information: Profit before tax Rs.12,00,000 Dividend per share Rs. 10 Number of outstanding equity shares 9,000 Tax rate 40% The dividend pay-out ratio of Seizens Ltd., is (a) 15.00% (b) 16.67% (c) 12.50% (d) 20.00% 43. The following balances are extracted from the books of Rio Ltd.:
Particulars Amount (Rs) 2007-08 2006-07

Current liabilities Current assets

6,000 38,000

24,000 32,000

Compare to 2006-07, the working capital in 2007-08 has (a) Increased by Rs.32,000 (b) Decreased by Rs.32,000 (c) Decreased by Rs.24,000 (d) Increased by Rs.24,000 44. Consider the following sales and receivable data of a company: Sales And Receivables Data Month Sales Receivables Month Sales Receivable January 350 400 July 650 750 February 450 500 August 720 755 March 650 710 September 780 850 April 750 750 October 800 900 May 550 600 November 780 850 June 500 655 December 820 950 How many days sales are outstanding at the end of third quarter? (a) 28 days (b) 33 days (c) 36 days (d) 40 days 45. Consider the following data of a project:
Year 0 1 2 3 4 5 Cash flows (Rs.) (1,50,000) 54,500 72,400 83,700 88,000 93,000

46. If the net benefit cost ratio is 0.2, the net present value is Rs.40,000, the present value of the cash inflows associated with the project is (a) Rs.1,80,000 (b) Rs.2,00,000 (c) Rs.2,40,000 (d) Rs.2,70,000 47. For a manufacturing firm, the estimated annual usage of material is 3600 units and the cost per order is Rs.225. The carrying cost is Rs.200 per unit and the safety level stock is 10% of the EOQ. If the estimated daily usage is 15 units and the lead time is 8 days, what is the reorder point for the material? (a) 109 units (b) 116 units (c) 129 units (d) 135 units Page 4

If the cost of capital is 15%, the discounted payback period is approximately (a) 1.8 years (b) 1.11 years (c) 2.3 years (d) 2.11 years

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Hawk‟s Eye Academy - Kochi 48. The current price of the stock of XYZ Ltd. is Rs.50 and it is expected that the stock price after one year will increase or decrease by 20%. If its exercise price is Rs.50 and the risk-free rate of return is 10%, the value of the call option on the stock is (a) 6.82 (b) 6.96 (c) 8.62 (d) 8.82 49. Dumping means (a) Destroying the goods to create scarcity (b) Throwing the goods in the sea to create scarcity (c) Donating the goods to least developed countries as charity (d) Selling the goods below the cost. 50. Playing the float indicates (a) Issuing cheques without balance in the account (b) Purchasing machinery and dishonouring the instrument after the delivery of the machinery (c) Converting a credit customer into a cash customer (d) Expediting the implementation of a project to the firm‟s convenience before sanction of the loan 51. Given below are the cash flows pertaining to a project: Year Amount (Rs.) 0 –11,00,000 1 6,00,000 2 2,00,000 3 1,00,000 4 5,00,000 The IRR from the project approximately is (a) 10.25% (b) 10.55% (c) 11.25% (d) 12.25% 52. Which of the following statements is false with respect to the issue of stock dividend and special dividends? (a) Stock dividend represents a recapitalization of the company (b) Special dividends are sometimes recognized as return of capital by companies (c) Stock dividends will be a major implication on controlling interest (d) Special dividends are also known as capital dividends 53. The capital employed by SK Industries is Rs.180 lakh. The weighted average cost of capital for the firm is 14.45%. The net profit made by the firm during the year is Rs.36 lakh. Economic Value Added of the firm according to the residual income method is (a) Rs. 5 lakh (b) Rs.10 lakh (c) Rs.15 lakh (d) Rs.18 lakh 54. Which of the following statements is not true about the moving average? (a) Technical analysts observe moving averages more for crossovers than for the changes in direction (b) When the moving average rises above the price line, a reversal in bullish trend is signaled (c) The price line that falls below a rising moving average only indicates a secondary reaction and not a trend reversal (d) A moving average represents a smoothened trend and therefore does not act as a support/resistance line 55. Other things remaining the same, if the standard deviation of the returns on the market index increases by 25%, the standard deviation of the returns on security „X‟ increases by 20%, and the covariance between the security „X‟ and

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Hawk‟s Eye Academy - Kochi the market index decreases by 15%, the systematic risk of the security (a) Increases by 46% (b) Increases by 54% (c) Decreases by 46% (d) Decreases by 54% 56. The unsystematic risk of a stock is 60% of its systematic risk and the variance of its returns is 225(%)2. If the variance of the market return is 125 (%)2, beta of the stock is (a) 0.73 (b) 0.96 (c) 1.06 (d) 1.21 57. In which of the following stage of an industry life cycle, the product penetrates the market place and becomes more commonly used? (a) Pioneering stage (b) Expansion stage (c) Stabilization stage (d) Declining stage 58. Which of the following is/are the application of ex-ante SML? I. Test of asset pricing theories. II. Test of market efficiency. III. Evaluating the performance of a portfolio manager. IV. Identifying undervalued securities. (a) Only (IV) above (b) Both (II) and (III) above (c) Both (II) and (IV) above (d) (I), (II) and (III) above 59. The holding period return for a stock is equal to (a) The real yield minus the inflation rate (b) The dividend yield plus the capital gains yield (c) The capital gains yield minus the tax rate (d) The capital gains yield minus the dividend yield 60. The profitability of an industry decreases if (a) Entry barriers are high (b) Switching cost is higher for the customer (c) More information is available regarding suppliers and customers (d) Industry growth is higher 61. The amount of VAT paid by a processor on purchase of raw materials shall be treated as his ___ in the books of authorities (a) Input VAT debit (b) Input VAT credit (c) Output VAT debit (d) Output VAT credit 62. Seema received Rs 1,50,000 as gift from her relatives on her engagement day. This shall: (a) Be Taxable (b) Not be Taxable (c) Be Partially taxable (d) Insufficient information 63. Loss under the head "Capital Gains" (a) Can be set off against any other income (b) Cannot be set off against any other income, and shall be carried forward (c) Cannot be set off against any other income and shall not be carried forward (d) Either (A) or (B) 64. Methods of computation of VAT does not include: I. Addition Method II. Subtraction Method III. Invoice Method IV. Multiplication Method (a) Only IV (b) III and IV (c) II, III and IV (d) All these Page 6

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Hawk‟s Eye Academy - Kochi 65. Section 71(2A) disallows set-off of loss computed under the head __ against income under the head “Salaries”. (a) Profits and gains of business or profession (b) Capital Gains (c) Income from House Property (d) Income from Other Sources 66. According to Michael Porter a country‟s competitiveness depends upon its industries‟ ability to (a) Increase profits (b) Reduce costs (c) Innovate (d) Capture markets 67. The act formulated to protect literary and artistic works in India is (a) Copyrights Act, 1957 (b) Trade and Merchandise Marks Act, 1958 (c) Patents Act, 1970 (d) SEBI Act, 1992 68. The World Bank has classified nations as developed, developing and under developing economies based on I. Gross National product. II. Human Development Index. III. Per capita income. (a) Only (I) above (b) Only (II) above (c) Both (I) and (II) above (d) Both (I) and (III) above. 69. Anu & Binu are partners sharing profits and losses in the ratio 5:3. On admission Cinu brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C are 7:5:4. Find the sacrificing ratio as A:B (a) 4:7 (b) 3:1 (c) 5:4 (d) 2:1
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70. Ajai of Kolkata sends out 500 boxes to Vijay of Delhi costing Rs 200 each. Consignor‟s expenses Rs 5000. 1/5th of the boxes were still in transit. 3/4th of the goods received by consignee, were sold. The amount of goods still in transit will be: (a) Rs.20,000 (b) Rs.21,000 (c) Rs.21,200 (d) None 71. Elite Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro rata basis. The amount payable on application is Rs.2. Fred applied for 420 shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from Fred will be (a) 60 shares; Rs.120 (b) 340 shares; Rs.160 (c) 320 shares; Rs.200 (d) 300 shares; Rs.240 72. Zenith Ltd. issued 10,000 shares of Rs.10 each. The called up value per share was Rs.8. The company forfeited 200 shares of Mr. Ajith for non-payment of 1st call money of Rs.2 per share. He paid Rs.6 for application and allotment money. On forfeiture, the share capital account will be: (a) Debited by Rs.2,000 (b) Debited by Rs.1,600 (c) Credited by Rs.1,600 (d) Debited by Rs. 1,200 73. Mr. Vinod is a partner in a firm. He withdraws Rs.200 at the end of each month. If rate of interest is @ 5% p.a., the interest on drawings is (a) Rs.65 (b) Rs.55 (c) Rs.60 (d) Rs.50 Page 7

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74. The relationship between the Co-venturers in a Joint venture is that of: (a) Debtor – Creditor (b) Supplier –Customer (c) Principal – Agent (d) None of these 75. The business environment has become very fluid and turbulent in the recent times. In this scenario, it is a very challenging task for HR professionals to attract, mould, develop and retain or retrench valuable human resources. Which of the following is/are true regarding Quality of Work Life (QWL) as a challenge to HR professionals? I. It refers to the extent to which an employee‟s work meets his personal needs. II. It gets better when more and more employees who have some expectations from their work are satisfied. III. The Japanese, who are staunch supporters of the QWL approach, design work around teams and lay stress on a strong organizational culture. IV. Though it has a positive impact on organizational performance and it does not help organizations to compete in the global marketplace. (a) Only (III) above (b) Both (II) and (III) above (c) (II), (III) and (IV) above (d) All (I), (II), (III) and (IV) above.

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