NTA UGC NET/JRF Exam, June 2019

COMMERCE
Solved Paper
1. After US dollar, which of the following (C) Breach of contract/voidable contract U/S 2 (i):
currencies has largest weightage in determining An agreat which is enforceable by law at the option of
the value of SDR? one or more of the parties there to, but not at the option
(a) Japanese Yen of the other or other is a variable contract.
(b) Chinese Yuan (Renminbi) 4. What is the probability that sum of outcomes
(c) Euro on pair of dice is equal to 8?
(d) British Pound (a) 6/36 (b) 5/36
Ans. (c) : The IMF decided that the Renminbi (Chinese (c) 4/36 (d) 3/36
Yuan) would be added to the SDR basket since October Ans. (b) : Possible Outcome:
1, 2016. Since then SDR basket consists of the (1, 1) (1, 2) (1, 3) (1, 4) (1, 5) (1, 6) (2, 1) (2, 2) (2, 3)
following five currencies: (2, 4) (2, 5) (2, 6) (3, 1) (3, 2) (3, 3) (3, 4) (3, 5) (3, 6)
(i) Dollor 41.73% (4, 1) (4, 2) (4, 3) (4, 4) (4, 5) (4, 6) (5, 1), (5, 2) (5, 3)
(ii) Euro 30.93% (5, 4) (5, 5) (5, 6) (6, 1) (6, 2) (6, 3) (6, 4) (6, 5) (6, 6)
(iii) Reniminbi (Chinese Yuan) 10.92% are the total number we get when we throw a pair of
dice that is 36
(iv) Japanese Yen 8.33%
Expected outcome: The probability of getting a sum of
(v) British pound 8.09% 8: (2, 6) (3, 5) (4, 4) (5, 3) (6, 2) are the 5 pairs which
2. Product A requires 10 kg of material at the upon adding we get 8
rate of ` 5 per kg. The actual consumption of Probability is the ratio of the number of expected
material for the manufacturing of product A outcomes to the no. of all possible outcomes.
comes to 12 kg of material at the rate of ` 6 per Therefore 5/36 is the answer.
kg. Direct material cost variance is
5. In which of the following commodities, when a
(a) ` 22 (favourable) (b) ` 22 (unfavourable) consumer spends so much that negative income
(c) ` 12 (favouravle) (d) ` 12 (unfavourable) effect overwhelms the positive substitution
Ans. (b) : effect so as the underlying demand curve is
Material cost variance = total standard cost – total actual positively sloped?
cost (a) Inferior goods (b) Superior goods
= (SQ × SP) - (AQ × AP) (c) Giffen goods (d) Normal goods
= (10 × 5) - (12 × 6) Ans. (c) : In Giffen goods, a consumer spends so much
= 50 – 72 = - 22 that the negative income effect overwhelms the positive
= Rs. 22 (Unfavourable) substitution effect so as the underlying demand curve is
positively sloped.
3. Arrange the following in order of their
manifestations: • A Giffen goods is a low income, a non-luxury product
(A) Offer (B) Acceptance .......... standard economic and consumer demand theory.
(C) Breach of contract (D) Contract • Demand for Giffen goods rises when the price rises
and falls when the price falls.
Choose the correct option from the following:
(a) (A), (B), (C) and (D) • In econometrics, this results in an upward-sloping
demand curve.
(b) (A), (B), (D) and (C)
(c) (B), (C), (A) and (D)
(d) (A), (D), (C) and (B)
Ans. (b) : Correct order of their manifestations-
(A) Proposal/offer : U/S 2 (a)- When one person
signifies to another his willingness to do or to obstain
from doing anything with a view to obtaining the assent
of that other such act or abstinence he is said to make a 6. Chalapathi Rao Committee was constituted for
proposal restructuring of
(B) Promise/Acceptance: U/S 2 (b) : When the person (a) State Financial Corporation in India
to whom the proposal is made signifies his assent the (b) Commercial Bank in India
reto, the proposal is said to be accepted. (c) Co-operative Bank in India
A proposal, when accepted, becomes a promise. (d) Regional Rural Banks in India
UGC CBSE NET Commerce IInd Paper June, 2019 301 YCT
Ans. (d) : Chalapathi Rao Committee was constituted Ans. (b) : Section 80 GGA allows deductions for
for the restructuring of Regional Rural Banks in India. donations made towards scientific research or rural
• The committee under the chairmanship of Chalapathy development.
Rao in 2003 recommended that the entire system of • This deduction is allowed to all assesses except those
RRBs may be consolidated while retaining the who have an income (or loss) from a business and
advantages of the regional character of these profession.
institutions. Mode of Payment :
• As part of the process, some sponsor banks may be Donations can be made in the form of a cheque or by a
eased out. draft, or in cash; However, cash donations over Rs.
• The sponsoring institutions may include other 2,000 are not allowed as deductions.
approved financial institutions as well, in addition to • 100% of the amount donated or contributed is eligible
commercial banks. for deductions.
7. Assertion (A) : Brainstorming technique demands 10. Match List-I with List-II:
generation of a number of alternatives to a List-I List-II
problem.
(A) Sec 6 (i) (i) Agriculture Income
Reason (R) : Participants generate as many
(B) Sec 10 AA (ii) Leave Travel
alternatives as possible without evaluating them in
Concession
brainstorming sessions;
(C) Sec 10(i) (iii) Resident
In the context of the above two statements,
which one of the following codes is correct? (D) Sec 10(5) (iv) Leave Salary
(a) Statement (A) is correct and (R) is the correct Choose the correct option from those given
explanation of (A) below :
(b) Statement (A) and (R) both are correct but (a) (A)-(i); (B)-(iv); (C)-(iii); (D)-(ii)
(R) is not the correct Explanation of (A) (b) (A)-(iii); (B)-(iv); (C)-(ii); (D)-(i)
(c) Statement (A) is correct but (R) is incorrect (c) (A)-(iii); (B)-(ii); (C)-(iv); (D)-(i)
(d) Both (A) and (R) are correct (d) (A)-(iii); (B)-(iv); (C)-(i); (D)-(ii)
Ans. (a) : Assertion (A): Brain storming technique Ans. (d) : The following are of the correct answers-
demands generation of a number of alternatives to a List-I List-II
problem. (A) Sec- 6 (i) (iii) Resident
• Therefore assertion (A) is the correct. (B) Sec- 10 AA (iv) Leave salary
Reason (R): participants generate as many alternatives (C) Sec- 10 (i) (i) Agriculture income
as possible without evaluating them in brainstorming (D) Sec- 10 (5) (ii) Leave travel
sessions concession
• Therefore Reason (R) is the correct and R is the
11. Which one of the following is NOT the pre-
correct explanation of (A)
requisite of price discrimination?
8. Which of the following is the predecessor of the (a) Firm must have monopoly power
IRDA Act, 1999?
(b) Product have multiple close substitutes and
(a) The Insurance Act, 1938
different uses
(b) The Life Insurance Corporation Act, 1956
(c) Markets are separated and segmented
(c) The Marine Insurance Act, 1963
(d) Price elasticity of product must differ in
(d) The Public Liability Insurance Act, 1991 different markets
Ans. (a) : The Insurance Regulatory and Development Ans. (b) : Price discrimination is a selling strategy that
Authority of India (IRDAI) is a regulatory body under
charge customers different prices for the same product
the jurisdiction ministry of finance, government of
or service based on what the seller thinks they can get
India.
the customer to agree to.
• It was constituted by the insurance regulatory and Conditions for price discrimination:-
development authority act 1999 (IRDA) an act of
parliament passed by the government of India. • The seller must have some control over the supply of
his product. Such monopoly power is necessary to
• In 1938 the legislation was Consolidated and amended
discrete the price.
by the insurance act, 1938 with comprehensive
provision to control the activities of insurers. • Markets are separated and segmented.
9. In tax laws, donation to approved and notifed • Price elasticity of product must differ in different
association for scientific research is allowed as markets.
(a) 125% of the donation 12. Which one of the following is used for
(b) 100% of the donation international money transfer?
(c) 175% of the donation (a) RTGS (b) NEFT
(d) 150% of the donation (c) SWIFT (d) DD
UGC CBSE NET Commerce IInd Paper June, 2019 302 YCT
Ans. (c) : (C) Satisfying behaviour (iii) Williamson
• Society for World Wide Inter Bank Financial hypothesis
Telecommunication (SWIFT)- (D) Sales Maximization (iv) Cyert-March
• It is a cooperation society registered in may 1973 in hypothesis
Brasells (Belgium) Choose the correct option from those given
below :
• It is a trusted Messaging system for banks and other (a) (A)-(ii); (B)-(iii); (C)-(iv); (D)-(i)
financial institutions around the world.
(b) (A)-(iii); (B)-(iv); (C)-(i); (D)-(ii)
13. Match List-I with List-II : (c) (A)-(iv); (B)-(i); (C)-(ii); (D)-(iii)
List-I List-II (d) (A)-(i); (B)-(ii); (C)-(iii); (D)-(iv)
(Theories of Profit) (Economists) Ans. (a) : The following are the correct answer:
(A) Risk theory of profit (i) Schumpeter List-I (objective of List-II (Hypothesis)
(B) Innovation theory of (ii) Walker business firm)
profit (A) Maximization of (ii) Marris hypothesis
(C) Rent theory of profit (iii) Hawley firm's growth rate
(D) Dynamic theory of (iv) Clark (B) Manaser utility (iii) Williamson
profit function hypothesis
Choose the correct option from those given (C) Satisfying behaviour (iv) Cyert-march
below: hypothesis
(a) (A)-(iii); (B)-(iv); (C)-(ii); (D)-(i) (D) Sales maximization (i) Baumol's hypothesis
(b) (A)-(iv); (B)-(ii); (C)-(iii); (D)-(i) 16. Statement (I): Agreement without consideration
(c) (A)-(iii); (B)-(i); (C)-(ii); (D)-(iv) is always valid.
(d) (A)-(iv); (B)-(i); (C)-(ii); (D)-(iii) Statement (II): All contracts are agreements but
Ans. (c) : The below are the correct match: all agreements are not contracts.
List-I List-II In the context of the above two statements,
which one of the following codes is correct?
(Theories of profit) (Economic) (a) Statement (I) and (II) both are correct
(A) Risk theory of profit (iii) F.W. Hawley's (b) Both Statements (I) and (II) are incorrect
(B) Innovation theory of (i) Prof. Schumpeter (c) Statement (I) is incorrect and Statement (II) is
profit correct
(C) Rent theory of profit (ii) Francis L. Walker (d) Statement (I) is correct but Statement (II) is
incorrect
(D) Dynamic theory of (iv) Prof. J.B. Clark
profit Ans. (c) : Statement-I Agreement without consideration
is always valid.
14. Consumer behaviour does NOT consist which Therefore, Statement-I is incorrect.
of the following activities? Statement-II All contracts are agreements but all
(a) Obtaining (b) Consuming agreement are not contracts.
(c) Disposition (d) Producing Therefore, Statement II is correct.
Ans. (d) : 17. Match List-I with List-II
• Consumer behaviour may be defined as the behaviour List-I List-II
that consumers display in searching for purchasing, (A) Net income approach (i) Inventory
suing, evaluating and disposing of produces. management
• Thus, the study of consumer behaviour is the study of (B) Gordan model (ii) Capital
how individuals make decisions to spend. their available budgeting
resource-money, time and effort-on consumption- (C) Internal rate of return (iii) Capital structure
related items. theory
• However, it may be noted that consumer behaviour (D) Recorder level (iv) Dividend theory
research today goes for beyond "What, why, now, Choose the correct option from those given
when, where, and now often" facts of consumer below:
behaviour and also consider the uses which consumers (a) (A)-(ii); (B)-(iii); (C)-(iv); (D)-(i)
make use of the goods they buy and evalutions of these (b) (A)-(iii); (B)-(iv); (C)-(ii); (D)-(i)
goods after use. (c) (A)-(iii); (B)-(iv); (C)-(i); (D)-(ii)
15. Match List-I with List-II (d) (A)-(ii); (B)-(i); (C)-(iv); (D)-(iii)
List-I List-II Ans. (b) : The below are the correct answer.
(Objectives of business (Hypothesis) List-I List-II
firms) (A) Net income (iii) Capital structure
(A) Maximization of (i) Baumol's approach theory
firms' growth rate hyothesis (B) Gordan model (iv) Dividend theory
(B) Manager Utility (ii) Marris (C) Internal rate of return (ii) Capital budgeting
function hypothesis (D) Recorder level (i) Inventory management
UGC CBSE NET Commerce IInd Paper June, 2019 303 YCT
18. A statement of change in financial position Ans. (d) : The Miller-orr-model of cash management is
typically would NOT disclose the effect of developed for businesses with uncertain cash inflow and
(a) share capital issued to acquire productive outflow. This approach allows lower and upper limits of
facilities cash balance to be set and determine the return point
(b) Dividends on share declared (target cash balance). This is different from the Baumol-
(c) cash dividend declared but not yet paid Tobin model, which is based on the assumption that the
(d) purchase and retirement of treasury stock cash spending rate is constant.
Ans. (b) : A statement of change in a financial position 22. Deduction u/s 37(I) is allowed under tax laws
typically would NOT disclose the effect of dividends on for those expenditures which are
share declared. (a) revenue
Explanation: (b) capital
• A statement of changes in financial position is a (c) both revenue and capital
statement that outlines the causes of a changing the (d) deferred revenue expenses
financial position of a company during an accounting Ans. (a) : According to section 37 (i) of the income tax
period. act, 1961, any expenditure (not being expenditure of the
• However, the statement of changing financial position nature described in sections 30 to 36 and not being in
won't disclose information about dividends on shares the nature of capital expenditure or personal expenses of
declared as the journal entry to record the declaration of the assesses), laid out or expended wholly and
the cash dividends involves a decrease (debit) to exclusively for the purpose of the business or profession
retained earnings (a stockholder's equity about) and an shall be allowed in competing the income chargeable
increase (credit) to cash dividends payable (a liability under the head "profit and gains of business or
account). This will nullify (Net off) the overall effect. profession.
19. Promoting team spirit, harmony and unity • Expenditure is not of nature as described in section 30
within the organization is the principle of to 36 of the act.
(a) order (b) scalar chain • Expenditure is revenue in nature not capital in nature.
(c) spirit de corps (d) equity
23. Following are the steps in the activity-based
Ans. (c) : cost allocation :
• Esprit de corps it is the principle of management, (A) Identification of The main activities
according to which a manager should replace 'I' with (B) Collection of cost pool
'we' in all his conversation with workers.
(C) Determination of the activity cost drivers
• Literally speaking, the phrase 'esprit de crops' means
(D) Calculation of activity driver rate
the spirit of legality and devotion which unites the
members of the group. (E) Charging the cost of activities to products
• According to fayol, management should promote a Select the correct sequence of the above steps:
team spirit of unity and harmony among employees (a) (A), (B), (C), (E), (D)
20. Following are the information for a house (b) (A), (B), (E ), (D), (C)
property : (c) (A), (B), (C), (D), (E)
Municipal value ` 4,50,000 (d) (A), (D), (C), (B), (E)
Fair rental value ` 5,00,000 Ans. (c) : Activity based costing (ABC) is an
Standard rent ` 4,80,000 accounting technique that utilizes cost attachment rather
Actual rent ` 4,20,000 than cost allocation to determine the actual cost of
products and service:
What is the gross annual value of the house
property? The ABC can be performed by-
(a) ` 4,80,000 (b) ` 5,00,000 (i) Identifying activities
(c) ` 4,20,000 (d) ` 4,50,000 (ii) Determining the cost for each activity
(iii) Determining cost drivers (cost drivers are the factor
Ans. (a) :
that affect the cost of an activity, e.g. poor quality)
(a) Municiple value ` 4,50,000 (iv) Collecting activity data
(b) Fair rental value ` 5,00,000 (v) Calculating product cost
(c) Higher of a or b ` 5,00,000 24. Assertion (A) : Reserve Bank of India is an
(d) Standard rent ` 4,80,000 important regulatory and administrative authority
(e) Expected rent ` 4,80,000 to execute FEMA Provisions.
(Lower of c or d) Reason (R) : Being monetary authority and
(f) Actual rent ` 4,20,000 custodian of foreign exchange, Reserve bank of
India enjoys requisite expertise of FEMA
Gross Annual value ` 4,80,000 administration.
(higher of e or f) In the context of the above two statements,
21. Miller-Orr model is used in the management of which one of the following option is correct?
(a) Inventory (b) Leverage (a) Both (A) and (R) are correct and (R) is the
(c) Receivables (d) Cash right explanation of (A)
UGC CBSE NET Commerce IInd Paper June, 2019 304 YCT
 (b) Both (A) and (R) are correct but (R) is not the In the context of the above two statements,
right explanation of (A) which one of the following codes is correct?
(c) Both (A) and (R) are incorrect (a) Both the Statements (I) and (II) are correct
(d) (A) is correct and (R) is not correct (b) Both the Statements (I) and (II) are incorrect
Ans. (a) : (c) Statement (I) is correct but (II) is incorrect
Assertion (A): Reserve Bank of India is an important (d) Statement (II) is correct but (I) is incorrect
regulatory and administrative authority to execute Ans. (a) : Statement-I : Explanation-
FEMA provision. • The common assumption made when doing a T-test
– Therefore Assertion (A) is the correct. include those regarding the scale of measurement,
Reason (R): Being monetary authority and custodian random sampling, normally of data distribution,
of foreign exchange Reserve Bank of India enjoy adequacy of sample size and equality of variance in
requisite expertise of FEMA administration. standard deviation.
– Therefore Reason (R) is the correct and (R) is the • The same assumption are consideration while doing
correct explanation of (A) an f-test
25. New reform in Indian banking system include – Thus, the statement I is correct
(A) Digitization of bank operations Statement-II Explanation-
(B) Banking consolidation • A T-test used of compare the means of two population
(C) Borrowing from Government in contrast, f-test is used to compare two population
(D) Agency work varies.
Choose the correct option from the following: • While T-test used for comparison between two groups
(a) (A) and (B) (b) (C) and (D) f-test is used to test the significance of multiple
(c) (B), (D) and (C) (d) (A), (C) and (D) variables at once.
Ans. (a) : New reform in Indian banking system – Thus statement II is also correct.
include- 28. Match List-I with List-II:
• Digitization of bank operations List-I List-II
• Banking consolidation (A) Cyber Crime (i) Intectual
• Mobile banking Property Right
• Cashless banking Act
• Plastic currency, etc (B) Doctrine of Caveat (ii) Negotiable
26. Which of the following committee is related to Emptor Instrument Act
the investor protection? (C) Dishonour of Bill (iii) Sale of Goods
(a) Bhagwati Committee Act
(b) N.K. Mishra Committee (D) Patent and Copyrights (iv) The Information
(c) J.R. Varma Committee Technology Act
(d) L.C. Gupta Committee Choose the correct option from those given
below :
Ans. (b) : N.K. Mitra committee is related to investor
(a) (A)-(iii); (B)-(iv); (C)-(i); (D)-(ii)
protection, in April 2001.
(b) (A)-(iii); (B)-(ii); (C)-(iv); (D)-(i)
Committee Related function
(c) (A)-(iv); (B)-(iii); (C)-(ii); (D)-(i)
Bhagwati committee Unemployment (d) (A)-(ii); (B)-(iv); (C)-(iii); (D)-(i)
L.C. Gupta committee Permitted exiting stock Ans. (c) : The following are of the correct match:-
exchanges having cash
trading to trade in List-I List-II
derivative contracts (A) Cyber crime (iv) The information
through a separate technology act
segment with Separate (B) Doctrine of caveat (iii) Sale of goods act
membership emptor
J.R. Verma committee Criminal law so as to (C) Dishonor of bill (ii) Negotiable
provide for quicker trail instrument act
and enhanced punishment (D) Patent and copyrights (i) Intectual property
for criminals accused of right act
committing sexsual 29. When a company distributes its products
assault against women. through a channel structure that includes one
27. Statement (I) : t-test and F-test are based on the or more resellers, it is known as
identical assumption. (a) direct marketing
Statement (II) : t-test is used for comparison (b) indirect marketing
between two groups whereas F-test is used for (c) integrated marketing
comparison between more than two groups. (d) multi-level marketing
UGC CBSE NET Commerce IInd Paper June, 2019 305 YCT
Ans. (b) : Indirect marketing:- is a way for a business 33. Under which of the following situations, the
to market their product, idea or service without having decision outcome on evaluation of investment
to use the methods of direct advertising and marketing. opportunities vary under NPV and IRR
Examples of indirect marketing include- methods per se?
(A) Time disparity (B) Cost disparity
• Search engine
(C) Life disparity (D) Volume disparity
• Content marketing
Choose the correct combination of situations:
• PR (a) (A) and (D) only
• Social media (b) (B) and (D) only
• Referrals (c) (A), (B) and (C) only
30. Assertion (A) : At times, a business may face (d) (B), (C) and (D) only
the situation where it has to shut down its Ans. (c) : Conflicts between NPV and IRR: when
operations. analyzing a single conventional project, both NPV and
Reason(R) : If the revenue is less than its IRR will provide the same indicator about whether to
variable cost, the operation should down. accept the project or not. However, when comparing
In the context of the above two statements, two project, the NPV and IRR may provide conflicting
which one of the following codes is correct? result. Conflicting result arise because of the following
(a) (A) is correct but (R) is not correct reason:
(b) (A) and (R) both are correct and (R) is the 1. A significant difference in the size (amount) of cash
right explanation of (A) outlays of various proposals under consideration.
(c) (A) and (R) both are correct and (R) is not the 2. The problem of difference in the cash flow patterns
right explanation of (A) or timing of the various proposals and
(d) Both (A) and (R) are incorrect 3. The difference in service life or unequal expected
lives of the project.
Ans. (b) : Assertion (A): At times, a business may face • Volume disparity does not lead to conflict between
the situation where it has to shut down its operations. NPV and IRR decisions.
– Therefore, assertion (A) is the correct statement
34. The attitude based on beliefs, opinion,
Reason (R): If the revenue is less than its variable cost, knowledge or information about the particular
the operation should be dore down. event which the employees possesses is
– Therefore, Reason (R) is correct and (R) is the right (a) behavioural attitude (b) positive attitude
explanation of (A) (c) cognitive attitude (d) affective attitude
31. The retail supply chain does NOT include Ans. (c) : Cognitive Attitude- refers to the thought,
(a) manufacturer (b) retailer perception or ideas of the person toward the object of
(c) wholesalers (d) regulators the attitude. Affective component is about emotional
Ans. (d) : Retail supply chain is the process you use to reaction or feeling of the person toward the object of the
get your products to your consumer. It encompasses attitude such as like or dislike.
everything from obtaining the raw materials to make 35. Match List-I with List-II:
your product to delivering that product into your List-I List-II
shopper's hands. (A) 80 TTA (i) Deduction in respect of
Players in the supply chain: payment of interest on
• Supplier loan taken for higher
• Manufacturer education
(B) 80 CCD (ii) Deduction in respect of
• Distribution interest on loan taken for
• Retailer respect of interest on
• Customer loan taken for residential
32. Find the marginal revenue of a firm that sells a house property
product at a price of ` 10 and the price (C) 80 E (iii) Deduction in respect of
elasticity of demand for the product is (-) 2. interest on deposits in
(a) ` 5 (b) ` 10 savings account
(c) ` 30 (d) ` 15 (D) 80 EE (iv) Deduction in respect of
contribution to national
Ans. (a) : Formula: pension system
Elasticity = Average revenue/(average revenue- Choose the correct option from those given
marginal revenue) below :
2 = 10/(10–mR) (a) (A)-(iii); (B)-(iv); (C)-(i); (D)-(ii)
20–2 mR = 10 (b) (A)-(iii); (B)-(iv); (C)-(ii); (D)-(i)
10 = 2 mR (c) (A)-(iii); (B)-(i); (C)-(ii); (D)-(iv)
Therefore, mR = Rs. 5 (d) (A)-(i); (B)-(ii); (C)-(iii); (D)-(iv)
UGC CBSE NET Commerce IInd Paper June, 2019 306 YCT
 Ans. (a) : The following are of the correct match: (2) A business must refrain from secret kick backs or
List-I List-II pay off to customers, suppliers, administrations etc.
to follow the principle of loyalty, honesty and
(A) 80 TTA (iii) Deduction in respect of interest integrity.
on deposits in saving account (3) And a business must ensure payment of fair wages
(B) 80 CCD (iv) Deduction in respect of and fair treatment of employees to follow the
contribution to national pension principle of fairness and respect.
system 38. Match List-I with List-II :
(C) 80 E (i) Deduction in respect of payment List-I List-II
of interest on loan taken for (A) Ind AS - 16 (i) Income tax
higher education (B) Ind AS- 38 (ii) Leasing
(D) 80 EE (ii) Deduction in respect of interest (C) Ind AS- 17 (iii) Intangible
on loan taken residential house assets
property (D) Ind AS- 12 (iv) Property, plant
36. X is an individual of 55 years of age having and equipments
gross total income ` 3,50,000. What is the tax Choose the correct option from those given below:
liability for assessment year 2018-19? (a) (A)-(iv); (B)-(iii); (C)-(i); (D)-(ii)
(a) ` 5,000 (b) ` 2,500 (b) (A)-(iv); (B)-(iii); (C)-(ii); (D)-(i)
(c) ` 2,580 (d) ` 3,000 (c) (A)-(iii); (B)-(ii); (C)-(iv); (D)-(i)
(d) (A)-(iv); (B)-(ii); (C)-(i); (D)-(iii)
Ans. (c) : Explanation-
Ans. (b) : Following are of the correct match:
– Tax liability for an individual less 3,50,000
than age of 60 year having gross total List-I List-II
income (A) Ind AS-16 (iv) property, plant and
equipment
– 5% of the amount by which the 5000
total income exceeds Rs. 2,50,000 (B) Ind AS-38 (iii) Intangible assets
(i.e. 3,50,000–2,50,000) × 5%) (C) Ind AS-17 (ii) Leasing
– (–) rebate under section 87A (lower 2,500 (D) Ind AS-12 (i) Income tax
of tax payable or Rs. 2,500) 39. Which among the following is NOT included in
– (+) Cess @ 3% 75 negotiable instrument?
(a) Cheque (b) Demand Draft
– Tax liability 2,575
(c) Promissory Note (d) Mutual Fund
37. List out from the given statements the Ans. (d) : Negotiable Instrument: means transferable
important ethical principles that a business by delivery and instrument is a written document which
should follow : creates a right in favour of any person.
(A) To take the necessary action for the – Negotiable instrument recognised by status are:
development of the concerned industry or (i) Promissory notes
business. (ii) Bill of exchange
(B) Pay taxes and discharge other obligations (iii) Cheques
promptly
40. Capital structure and leverage decisions come
(C) To ensure the best utilisation of the human in the ambit of
resources.
(a) Investment decisions
(D) Refrain from secret kickbacks or pay-offs to (b) distribution decisions
customers, suppliers, administrators, etc.
(c) financing decisions
(E) Ensure payment of fair wages and fair (d) dividend decisions
treatment of employees.
Ans. (c) : Capital structure ratio are calculated to test
Choose the correct answer from the options
the long term financial position of the business concern.
given below : The following ratios are calculated to analyze the
(a) (C), (D) and (E) (b) (B), (C) and (E) capital structure of the business concern.
(c) (A), (B) and (C) (d) (A), (C) and (E) 1. Capital gearing ratio
Ans. (b) : 12 Ethical principle to be followed in • Financial leverage
business are as follows:- Honesty, integrity, • Operating leverage
trustworthiness, loyalty, fairness compassion/empathy, • Combined leverage
respect, law-abiding, commitment to excellence, 2. Debt equity ratio
positive leadership, reputation and moral,
3. Total investment to long term liabilities
accountability.
(1) Thus, a business must pay taxes and discharge other 4. Ratio of fixed assets of funded debt
obligations promptly to follow the principle of law 5. Ratio of current liabilities to proprietors funds
abiding. 6. Ratio of reserve to equity capital

UGC CBSE NET Commerce IInd Paper June, 2019 307 YCT
41. In which of the following pricing policies, a • Mode test
firm charges higher initial price for the • Kruskal-wallis test
product and reduces it over time as the demand • Spear man rank
at higher price is satisfied? • Mooses test
(a) Peak load pricing (b) Incremental pricing
• Pages test
(c) Skimming (d) penetration pricing
• Kendall's correlation
Ans. (c) :
44. Currency swap is a method of
– Price skimming: is a product pricing strategy by
(a) hedging against foreign exchange risk
which a firm charges the higher initial price that
customers will pay and then lowers it over time. (b) speculating in foreign exchange
(c) leverage instrument used by cooperative
– As the demand of the first customers is satisfied and
banks
competition enters the market, the firm lower the price
to attract another, more price-sensitive segment of the (d) mode of payment in international trade
population. Ans. (a) : – Currency Swap: A currency swap is an
agreement in which two parties exchange the principle
42. Redressal mechanism for consumer disputes
amount of a loan and the interest in one currency for the
under. Section 9 of the Consumer Protection
principle and interest in another currency .
Act envisages a
– Currency swaps are used to obtain foreign currency
(a) single-tier system
loans at a better interest rate than a company could
(b) two-tier system obtain by borrowing directly in a foreign market or as a
(c) three-tier system method of hedging transaction risk on foreign currency
(d) open system independent of hierarchy loans which it has already taken up.
Ans. (c) : Section: 9 There shall be established for the 45. Which of the following characteristics are
purpose of this act, the following agencies namely:- related to relationship marketing?
(1) A consumer disputes redressal forum to be known as (A) Product feature orientation
the "District forum" established by the state government (B) Product benefit orientation
in each district of the state by notification: (C) Frequent consumer contact
Provide that the state government may, it is deems fit, (D) High concern for quality
establish more than one district forum in a district. Choose the correct option from the following:
(2) A consumer disputes redressal commission to be (a) (B), (C) and (D) (b) (A), (B) and (C)
known as the "state commission" established by the (c) (A), (C) and (D) (d) (A), (B) and (D)
state government in the state by notification.
Ans. (a) : The following characteristics are related to
(3) A national consumer disputes redressal commission relationship marketing.
established by the central government by notification. (1) Product benefit orientation: relationship
43. Which of the following are considered non- marketing focus on product benefit orientation as it
parametric tests? creates products and service only after carefully
(A) Mann-Whitney U test studying and interacting with its target customers.
(B) Kruskal-Wallis test (2) Frequent consumer contact: relationship
(C) F-test marketing is attracting, maintaining and enhancing
(D) T-test customer relationships.
(E) Chi-square test (3) High concern for quality: relationship marketing
Choose the correct option from the following: is defined as "a strategy that aims at developing and
(a) (A), (B) and (E) managing long-term relations with customers,
suppliers and distributors in order to earn and retain
(b) (A), (B) and (C) the business of the enterprise"
(c) (A), (B), (C) and (D)
46. Match List-I with List-II :
(d) (A), (B), (C), (D) and (E)
List-I List-II
Ans. (a) : Non-parametric test: refers to test in which (Trade and Finance (Headquarters)
the researcher does not make assumption about the Institution)
parameter of the population from which a sample is
(A) WTO (i) Brussels
drive.
(B) IMF (ii) Geneva
Types-
(C) FAO (iii) Washington
• Chi-square test (D) EU (iv) Rome
• Kolo mogrove test Choose the correct option from those given
• Wileoxon signed rank test below:
• Median test (a) (A)-(ii); (B)-(iii); (C)-(iv); (D)-(i)
• Run test (b) (A)-(i); (B)-(ii); (C)-(iii); (D)-(iv)
• Mann-whitney (U) test (c) (A)-(iii); (B)-(ii); (C)-(i); (D)-(iv)
• Cochran's Q Test (Q) test (d) (A)-(i); (B)-(iii); (C)-(ii); (D)-(iv)

UGC CBSE NET Commerce IInd Paper June, 2019 308 YCT
 Ans. (a) : Following are the correct match list-I with Ans. (b) : Hedge fund are still at an initial phase and are
list-II not as widely known as other mutual funds. Though
Trade and finance Headquarters they to pool investments from various investors, they
institution use highly complex strategies to 'hedge' risk and deliver
(A) W.T.O. (World trade (ii) Geneva high returns.
organization) (1) Hedge fund are not mutual fund.
(B) IMF (International (iii) Washington D.C (2) Hedge fund can't be sold to pubic.
monetary fund) (3) Investor in mutual fund must pay various fees and
expenses.
(C) FAO (Food and (iv) Rome
agriculture organization) (4) Mutual fund provide economic of scale to
investment decision.
(D) EU (European union) (i) Brussels
50. Return of income is submitted under which
47. Which of the following is true about India Section of Income-tax Act?
Trade Policy (Export-Import), 2015-2019?
(a) Section 138 (1) (b) Section 142 (1)
(A) Doubling the exports (both merchandise and
services) (c) Section 139 (1) (d) Section 129 (1)
(B) Achieve 3.5% share in global exports Ans. (c) : Under section 139 (i), in the following cases
(C) Introduced two new schemes (MEIS and the filing of income tax return is mandatory:
SEIS) • Every person who has a total income that exceeds the
(D) Introduced simplified Aayat-Niryat Form exemption limit is liable to furnish income tax return
Choose the correct answer from the following: within the due date.
(a) (A) and (B) only (b) (A) and (C) only • Any private, public, domestic or foreign company
(c) (A), (B) and (C) only (d) All are correct located or doing business in India.
Ans. (d) : Indian's Foreign trade policy aims to- • Any firm including LLP or unlimited liability
(1) Increase the country's share of global trade from the partnership.
current 2.1 % to 3.5 % • Any resident who has an asset located outside of India
(2) Double its exports to $ 900 billion by 2020 or any resident who retains signing authority for an
(3) Introduced two new schemes (MEIs and SEIs) account based outside India
(4) Introduced simplified aayat-nirgat form • Every HUF, AOP and BOI
(5) India's trade policy framework must be supported by 51. Which of the following are included in digital
economic reform that result in an open, competitive and payment system?
technologically innovative Indian economy (A) RTGS (B) Demand draft
48. The social environment of the job affects (C) NEFT (D) Cheque
people and is also affected by them and not by Choose the correct option from the following:
management alone, is the main proposition of (a) (A), (C) and (D) (b) (B) and (D) only
(a) contingency theory of organization (c) (A) and (C) only (d) (B), (C) and (D)
(b) system theory of organization Ans. (c) : Digital payment: The digital India
(c) classical theory of organization programme is a flagship programme of the government
(d) Neo-classical theory of organization of India with a vision to transform India into a digitally
Ans. (d) : empowered society and knowledge economy. "Faceless,
– The Neo classical theory is the extended version of paperless cashless" is one of professed role of digital
the classical theory wherein the behavioral sciences India.
gets included into the management. These mode are:
– According to this theory, the organization is the • RTGS
social system and its performance does get affected • NEFT
by the human actions. • IMPS
– Thus, the researchers tried to identify the reasons for • Banking card
human behaviour at work.
• UPI
– This approach is often referred to as "behavioural
theory of organization or human relations". • Mobile banking
49. Which among the following is NOT a correct 52. SIDBI was set up as a subsidiary of IDBI to
statement? (a) takeover the functions of small business
(a) Hedge funds are not mutual funds financing of IDBI
(b) Hedge funds can be sold to public (b) takeover the venture capital operation of IDBI
(c) Investors in mutual funds must pay various (c) reconstruct and rehabilitate the sick and
fees and expenses closed industrial units financed by IDBI
(d) Mutual funds provide economies of scale to (d) facilitate, finance and promote India's foreign
investment decisions trade
UGC CBSE NET Commerce IInd Paper June, 2019 309 YCT
Ans. (a) : SIDBI (Small industry development bank of In the context of the above two statements,
India) is the apex regulatory body for overall licensing which one of the following codes is correct?
and regulation of micro, small and medium enterprise (a) Both the Statements (I) and (II) are correct
finance companies in India. (b) Statement (I) is correct but (II) is incorrect
– It is under the jurisdiction of ministry of finance, (c) Both Statements (I) and (II) are incorrect
government of India H.Q. at Lucknow and having its (d) Statement (II) is correct but (I) is incorrect
offices all over India.
Ans. (b) : Statement-I: If the tax liability has been
– SIDBI was established on 2nd April 1990. Through an reduced within the legal framework, it is tax planning.
act of parliament.
Statement-II: If tax liability has been reduced to get
– Its purpose is to provide refinance facilities to bank
benefit of deduction available under the income tax, it is
and financial institution and engage in term lending and
called tax management not tax evasion.
working capital finance to industry.
• If tax liability has been reduced to get benefit of
53. Which of the following commodities is kept
deduction available not under the income tax it is called
outside the purview of GST?
tax evasion.
(a) Tobacco products (b) Petroleum products
(c) Edible oils (d) Insurance products 56. The essence of the law of diminishing returns is
(a) Inelastic production/
Ans. (b) : Outside of GST:
(b) Negative marginal production
(1) Alcohol for human – Power to tax remains
(c) Declining total production
consumption with the state
(d) Declining average production
(2) Five petroleum – GST council to decide
product- crude oil, the date from which Ans. (b) :
diesel, petrol natural GST will be applicable • Law of diminishing returns states that as one variable
gas and ATF input is increased, with all other remaining fixed, a
(Aviation turbine oil) point will be reached beyond which the marginal
(3) Tobacco – Part of GST but power physical product of the variable factor will begin to
to heavy additional decrease.
excise duty with central • Still, if additional variable input is added, it will lead
government. to negative marginal production.
(4) Entertainment tax – Power to tax remains
levied by local bodies with local bodies.
54. Assertion (A) : According to Net Income (NI)
approach, capital structure decision is relevant in
the valuation of firm.
Reason (R) : A firm can change its total value
and its overall cost of capital by change in the
degree of leverage in its capital structure. 57. Organization structure that shows a unique
In the context of the above two statements, combination of strategy, structure and
which one of the following options is correct? management process is known as
(a) Both (A) and (R) are correct and (R) is the (a) free-form organization
right explanation of (A) (b) virtual organization
(b) Both (A) and (R) are correct and (R) is not (c) network organization
the right explanation of (A)
(d) horizontal organization/mecemlejerÙe mebie"ve
(c) Both (A) and (R) are incorrect
(d) (A) is correct but (R) is incorrect Ans. (c) : Network Organization: In a network
structure, managers coordinate and control relationship
Ans. (a) : Assertion (A): According to Net Income (NI)
that are both internal and external to the firm.
approach, capital structure decision is relevant in the
valuation of firm. • The concept underlying the network structure is the
– Therefore Assertion is the correct statement. social network a social structure of interactions. Open
Reason (R): A firm can change its total value and its communication and reliable partners (both internally
overall cost of capital by change in the degree of and externally) are key components of social network.
leverage in its capital structure. • It show a unique combination of strategy, structure
– Therefore Reason (R) is the correct and (R) is the and management process.
right explanation of (A). 58. Which of the following reflects the sum of
55. Statement (I) : If the tax liability has been perceived tangible and intangible benefits and
reduced within the legal framework, it is tax costs to a customer?
planning. (a) Customer satisfaction
Statement (II) : If tax liability has been reduced (b) Customer delight
to get benefit of deduction available under the (c) Customer value
income tax, it is called tax evasion. (d) Customer expectation
UGC CBSE NET Commerce IInd Paper June, 2019 310 YCT
Ans. (c) : Customer value is the perception of what a (c) Prevent monopolistic rights arising out
product or service is worth to a customer versus the intellectual property
possible alternatives worth means whether the customer (d) Regulate mergers and acquisitions
feels she or he got benefits and service over that s/he Ans. (c) : Competition Act, 2002: was enacted by the
paid. In a simplistic equation form customer value is parliament of India and replaced MRTP Act, 1969. Two
benefits-cost main features of the competition Act, 2002 is the
CV = B-C framework it provides for the establishment of the
59. Which of the following types of goodwill is competition commission, and the tools it provide to
considered to be the best? prevent anti-competitive practices and to promote
(a) Dog goodwill (b) Cat goodwill positive competition in the Indian market.
(c) Rat goodwill (d) Cow goodwill Object: To provide the framework for the
establishment of the competition commission.
Ans. (b) : The classification of good will-
It is fascinating to think about the order or good will • To prevent monopolies and to promote competition
dependent on customer conduct. in the market.
• DOG good will • To protect the freedom of trade for the participating
individuals and entities in the market.
• CAT good will
• To prevent practices having an adverse effect on
• RAT good will competition.
• RABBIT good will • To promote and sustain competition in markets.
CAT goodwill- considered the best good will in cat
• To protect the interests of consumers
good will the customers are progressively loyal to the
brand and the organization. The board or authority 63. Which one of the following analysis is suitable
groups don't concern them. for risk-return analysis in financial decisions?
60. Which of the following is NOT a main stage in (a) CAPM analysis (b) SWOT analysis
a customer relationship life cycle? (c) Capital gearing (d) EVA analysis
(a) Customer acquisition Ans. (a) : CAPM (Capital asset pricing modal)
(b) Customer development describes the relationship between systematic risk and
(c) Customer satisfaction expected return for assets, particularly stocks.
(d) Customer annoyance – CAPM is widely used throughout finance for pricing
risky securities and generating expected returns for
Ans. (c) : Customer life cycle in terms of customer assets given the risk of those assets and cost of capital.
relationship Management the customer life cycle
describes the various stages a consumer goes through Ke = RF + (Rm – Rp) × β rF = Time pref. rate
before during and after they complete a transaction. Rm = market rate
– Five basic stages of a customer life cycle: β = systematic risk
64. Which among the following institutions is NOT
a part of World Bank group?
(a) International Development Association (IDA)
(b) International Monetary Found (IMF)
(c) International Finance Corporation (IFC)
(d) Multilateral Investment Guarantee Agency
Ans. (b) : World Bank Groups:

61. The arithmetic mean of 10 items is 50. If each

item is increased by 5, then new arithmetic
mean would be
(a) 50 (b) 55 • Twins of BWC - IMF + IBRD
(c) 60 (d) 45
Ans. (b) : Mean of 10 items = 50
∴ Total of 10 items = 50×10 = 500 • World bank group – IBRD + IDA + IFC + MIGA +
if each number is increased by 5, then total increase = ICSID
10×5 = 50 65. Which of the following are NOT the sources of
Then, total of 10 number = 500+50 = 550 secondary data?
∴ New Arithmetic mean = 550/10 = 55 (A) Interview (B) Questionnaire
62. Which of the following does NOT fall in the (C) Observation (D) Unpublished thesis
ambit of the objectives of Competition Act, (E) Annual report
2002? Choose the correct option from the following:
(a) Encourage Competition (a) (A), (D) and (E) (b) (B), (C) and (D)
(b) Prevent abuse of dominant position (c) (C), (D) and (E) (d) (A), (B) and (C)
UGC CBSE NET Commerce IInd Paper June, 2019 311 YCT
Ans. (d) Ans. (b) : In management (1973), he wrote, "There will
always, one can assume, be a need for some selling. But
the aim of marketing is to make selling superfluous. The
aim of marketing is to known and understand the
• Statistical methods • Financial reports customer so well that the product or service fits him and
• Surveys • Sales reports sells itself".
• Polls • Government reports • He expanded on this by saying. "Ideally, marketing
• Interview • Mission should result in a customer who is ready to buy. All that
• Delphi technique • Vision statement should be needed then is to make the product or service
• Focus group • Internet available, i.e. logistics rather than salesmanship, and
66. Which is the most appropriate mode of entry in statistical distribution rather than promotion".
international business to an enterprise with 69. For a very large population the ratio between
little experience of international markets? SEx and σ is 8:40. The Sample size n will be
(a) Acquisition (b) Strategic Alliance (a) 5 (b) 25
(c) Joint Venture (d) Exporting (c) 32 (d) 48
Ans. (d) : Exporting:
Ans. (b) : Formula: SE X = σ / n
• Exporting is the most appropriate mode of entry in
international business to an enterprise with little Therefore, n = σ / SE
X
experience in international markets.
• In the case, the company need not make any n = 40 / 8
investment overseas. n =5
• This strategy requires direct foreign investment from n = 25
the company.
• Thus, exporting is the cheapest mode available among 70. Match List-I with List-II :
the rest and is preferable to a business enterprise with List-I List-II
little experience of international market (A) Interbank call market (i) Money Market
• Under this strategy, the company exports the product (B) Commercial Bills (ii) Promissory note
from its home base, without any marketing or (C) Commercial papers (iii) Short-term
production or organization overseas. maturity
67. Which of the following are the rights of a (D) Treasury bills (iv) Government
Statutory Auditor? papers
(A) To receive remuneration Choose the correct option from those given below:
(B) To attend Board of Directors' Meeting (a) (A)-(i); (B)-(ii); (C)-(vi); (D)-(iii)
(C) To attend the General Meeting (b) (A)-(iii); (B)-(i); (C)-(ii); (D)-(iv)
(D) To visit the branch office (c) (A)-(i); (B)-(iii); (C)-(iv); (D)-(ii)
Choose the correct answer from the following: (d) (A)-(iv); (B)-(iii); (C)-(ii); (D)-(i)
(a) (A) and (B) (b) (A), (B) and (D) Ans. (c) : The following are the right match List I to
(c) (A), (C) and (D) (d) (A), (B), (C) and (D) List II
Ans. (c) : Statutory Rights of an Auditor: (A) Inter Bank call market (i) Money market
• Right to access to books of accounts.
(B) Commercial bills (iii) Short-term maturity
• Right to obtain information and explanations.
• Right to make suggestions to the board. (C) Commercial paper (iv) Government papers
• Right to visit branches. (D) Treasury bills (ii) Promissory note
• Right to receive notice and attend meetings. 71. Which of the following does NOT come under
• Right to sign the audit report. the definition of 'information' as per the Right
• Right to remuneration. to Information Act (RTI Act), 2005?
• Right to be indemnified. (a) Logbooks
• Right to take legal and technical advise. (b) Data material held in electronic from
(c) File noting
68. Peter F. Drucker noted the relationship
between selling and marketing in which of the (d) Circular
following terms? Ans. (c) : 'Information' as per RTI, Act 2005: The
(a) Marketing is a subsidiary component of type of information which may be obtained is defined
selling under section 2(f) of the act as any material in any form,
(b) The aim of marketing is to make selling including records, document, memos, e-mails, opinions,
superfluous advices, press releases, circular, orders, log books,
(c) The aim of selling is to make marketing contract, reports papers, samples, models, data material
superfluous held in electronic form and information relating to any
(d) Selling and marketing are essentially the private body which can be accessed by a public authority
same thing under any other law for the time being in force.
UGC CBSE NET Commerce IInd Paper June, 2019 312 YCT
72. Amount unutilized in capital gain account (c) Mobilised surplus liquidity is held in the MSS
scheme for which exemption claimed u/s 54 account with the Reserve Bank of India
shall be treated as long-term capital gain, if (d) MSS account liquidity can be used for normal
(a) 2 years have expired from the date of transfer government expenditure of capital nature
(b) 2 years have expired from the date of deposit
Ans. (d) : Market stabilization scheme (MSS):
(c) 3 years have expired from the date of transfer
(d) 3 years have expired from the date of deposit • The MSS was launched by the RBI in April 2004
Ans. (c) : Following conditions should be satisfied to • There was certain background due to which the MSS
claim the benefit of section 54. was introduced.
• The benefit of section 54 is available only to an • To mop up this excess liquidity, the RBI used its
individual or HUF. huge stock of government securities.
• The asset transferred should be a long-term capital • But over a period of time, this stock of securities held
assets, being a residential house property. with RBI come down.
• Within a period of one year before or two year after • Under the MSS, the government issues T-bills in
the date of transfer of the old house. The taxpayer addition to its normal borrowing requirements.
should acquire another residential house or should • The amounts raised under the MSS will be held in a
construct a residential house within a period of three separately identifiable cash account entitled MMS
year from the date of transfer of the old house. In the account.
case of compulsory acquisition, the period of
acquisition or construction will be determined from the • The MSS will curb short-term volatility in the forex
date of receipt of compensation (whether original or market.
additional). 76. If two regression coefficients are -0.8 and -0.2,
73. The current market price of a company's share then the value of coefficient of correlation is
is ` 90 and the expected dividend per share (a) -0.16 (b) -0.50
next year is ` 4.5. If the dividend is expected to (c) +0.40 (d) -0.40
grow at a constant rate of 8%, the
shareholder's required rate of return will be Ans. (*) : The geometric mean between the two
(a) 8 % (b) 5 % regression coefficients is equal to the correlation
(c) 20 % (d) 13 % coefficient.
Ans. (d) : Shareholder's required return = (D1/Po×100) co-efficient of correlation = ( byx × bxy )
+G
Where, D1 = Expected dividend for next year = ( −0.8) × ( −0.2)
Po = Current market price of share = 0.16
G = Growth rate = –0.40
Shareholder's required return = (4.5/90×100) + 8 – The '+' or '–' sign is given to the correlation coefficient
= 5 + 8 = 13% based on the signs of the two regression coefficients.
74. 'Motivation-force or level of efforts is not equal 77. Statement (I) : Though closely related, job
to satisfaction and performance' is propounded evaluation and performance
by
appraisal are not the same.
(a) Porter-Lawler model
(b) Vroom's expectancy theory Statement (II) : The purpose of job evaluation is
to fix the remuneration and other
(c) X and Y theory
relevant benefits.
(d) Adam's equity theory
In the context of the above two statements,
Ans. (a) :
which one of the following codes is correct?
• Porter-Lawler Model: This model has been
(a) Both the Statements (I) and (II) are correct
practically applied also in their study of managers. This
is a multivariate model which explains the relationship (b) Both the Statements (I) and (II) are incorrect
that exists between job attitudes and job performance. (c) Statement (I) is correct, while Statement (II)
• Infact, porter and Lawler's theory is an improvement is incorrect
over vroom's theory. They say that motivation does not (d) Statement (I) is incorrect, while Statement (II)
equal satisfaction or performance. The model suggested is correct
by them encounters some of the simplistic traditional Ans. (a) : Job evaluation and performance appraisal are
assumptions made about the positive relationship closely related in the sense that they both help in the
between satisfaction and performance. determination of salary/wages.
75. Which one is NOT true regarding the Market Statement-I: Though closely related job evolution and
Stabilization Scheme (MSS)? performance appraisal are not the same.
(a) It absorbs surplus liquidity of enduring
nature arising out of large capital flows Thus, the statement are correct.
(b) It absorbs surplus liquidity through sale of Statement-II: The purpose of job evolution is to fix the
short-dated government securities and remuneration and other relevant benefits.
treasury bills Thus, the statement are correct.

UGC CBSE NET Commerce IInd Paper June, 2019 313 YCT
78. Shopping goods have which of the following Ans. (d) Economics of scale has the following effects:
features? • It reduces the per-unit fixed cost. As a result of
(A) These products are generally durable in increased production, the fixed cost gets spread over
nature more output than before.
(B) Consumers generally compare the goods of • It reduces per-unit variable costs. This occurs as the
various sellers and the buy such goods expanded scale of production increases the efficiency of
(C) Per unit price of these goods is generally high the production process.
(D) These goods are regularly and continuously in 82. Statement (I) : The arithmetic mean is an all
demand purpose average.
(E) These goods are sold as a result of aggressive Statement (II : Median and mode are called
promotional efforts positional averages.
Choose the right answer from the options given In the context of the above two statements,
below : which one of the following codes is correct?
(a) (C), (D) and (E) (b) (A), (B) and (C) (a) Both the statements (I) and (II) are correct
(c) (B), (C) and (D) (d) (A), (C) and (E) (b) Both the statements (I) and (II) are incorrect
Ans. (b) : Shopping goods features: (c) Statement (I) is correct but (II) is incorrect
• These products are generally durable in nature. (d) Statement (II) is correct but (I) is incorrect
• Consumers generally compare the goods of various Ans. (a) : Statement-I: The arithmetic mean is an all
sellers and the buy such goods. purpose average are the correct, because the arithmetic
• Per unit price of these good is generally high. mean is the average of all the items in a series, it is the
simplest measure of central tendency.
• Purchase of shopping products are usually pre-
planned and there is a small degree of impulse buying in Statement-II: Median and mode are called positional
these products. averages are the correct because it represents the static
position any no. series.
79. Quantitative import restrictions that limit the – Therefore, both the statement (I) and (II) are correct.
quantity of a product being imported is called
83. Building long-term mutually satisfying
(a) embargo (b) quota
relations with key customers, suppliers,
(c) trade restraint (d) import tariff distributors in order to earn and retain their
Ans. (b) : Quota: A quota is a government-imposed long-term preference and business is known as
trade restriction that limits the no. or monetary value of (a) relationship marketing
goods that a country can import or export during a (b) social marketing
particular period. Countries use quotas in international (c) niche marketing
trade to help regulate the volume of trade between them (d) service marketing
and other countries.
Ans. (a) :
• Quota are quantitative restrictions on imports and
exports of certain goods. • Relationship marketing is facet of customer
relationship management (CRM) that focuses on
• An import quota is an NTB that places a direct customer loyalty and long-term customer engagement
restriction on the quantity of some goods that can be rather than shorter-term goals like customer acquisition
imported. and individual sales.
80. A 'Sale and lease back' arrangement is more • The goal of relationship marketing is to create strong,
suitable for a lessee having even emotional customer connections to a brand that
(a) liquidity crisis (b) surplus fund can lead to ongoing business, free word-of mouth
(c) high profit (d) no-profit no-loss promotion and information from customers that can
Ans. (a) : Who uses leasebacks and why:- generate leads.
• The most common users of sale-lease backs are 84. 'Doctrine of Caveat Emptor' means
builders or companies with high-cost fixed assets and (a) buyer should make payment well in time
one having liquidity crises- like property, land, or large (b) buyer should be beware of all aspects of
expensive equipment. buying
• As such, lead backs are common in the building and (c) buyer will be responsible for the whole
transportation industry and the real state and aerospace payment
sectors. (d) buyer will not be responsible at any cost
81. Under which of the following situations, Ans. (b) : 'Doctrine of Caveat Emptor'-
economies of scale exists to the potential and • The doctrine of caveat emptor means let the buyer
persists? beware this means that will purchasing goods must at
(a) When firm is too small and too specialized with "Third eye and ear".
(b) When firms' decision to hire inputs do not • If the buyer is not careful and he finds latter on that
result in an increase in the input costs the goods not serve his purpose he cannot hold the seller
(c) When firm is too large and over diversified liable for it.
(d) When long-run cost of producing a unit falls • He should be careful to see that the goods purchase
as the output increases with some his purpose sale.

UGC CBSE NET Commerce IInd Paper June, 2019 314 YCT
85. Redeemable preference shares of ` 2,00,000 are Select the correct sequence for the above events :
to be redeemed at par for which fresh equity (a) (A), (B), (D) and (E)
shares of ` 80,000 are issued at a discount of (b) (A), (C), (D) and (E)
10%. What amount should be transferred to (c) (B), (C), (D) and (E)
Capital Redemption Reserve Account?
(d) (A), (B), (C) and (D)
(a) ` 2,00,000 (b) ` 1,20,000
(c) ` 1,28,000 (d) ` 72,000 Ans. (d) : Organizational culture: is defined as the
underlying beliefs, assumptions, values and ways of
Ans. (c) : Transfer to capital redemption reserve
interacting that contribute to the unique social and
account = preference shares redemption amount - fresh
equity shares amount psychological environment of organisation.
– The following are the events that come under
 10 
= 2,00,000  80, 000 − 80, 000 ×  organization culture.
 100  • Customer orientation and employee policies.
= 2,00,000 - (80,000-8,000) • Quality orientation, directing and motivating styles.
= 2,00,000 - 72,000 • Decision-making, products and service and
= ` 1,28,000 responsibilities to society.
86. A firm consumes 90,000 units of a certain item • Reaction to competitors and gratitude towards nation.
of raw material in its production process
annually. It costs ` 3 per unit, the cost per 89. The channel alternative is NOT to be assessed
purchase order is ` 300 and the inventory on the basis of
carrying cost is 20% per year. What is the EOQ? (a) economic criteria
(a) 9470 units (b) 9487 units (b) control criteria
(c) 9480 units (d) 9840 units (c) adaptive criteria
(d) accumulation criteria
2DS
Ans. (b) : EOQ = Ans. (d) : The channel alternative is NOT to be
H assessed on the basis of accumulation criteria.
Where, D = Annual demand in units = 90,000
• A firm must identify the type of channel members
S = ordering cost per purchase order i.e., cost of placing available to carry out its channel work in terms of type
and receiving 1 order = Rs. 300
of intermediaries number of intermediaries and
H = Holding cost or carrying cost = [Inventory carrying
responsibility of each.
cost (%)] × [cost of material per unit] = 20% × Rs. 3 =
Rs. 0.6 • After identifying the channels the company must
evaluate them against economic, control and adaptive
2 × 90,000 × 300 criteria.
EOQ =
0.6 90. Study the following information:
EOQ = 90,000,000 Covariance between X and Y series =- 17.8
= 9486.8329 units Standard deviation of X series = 6.6
Thus, the EOQ is 9487 unit Standard deviation of Y series = 4.2
87. SUGAM is also known as No. of pairs of observation = 20
(a) ITR-1 (b) ITR-2 The coefficient of correlation is
(c) ITR-3 (d) ITR-4 (a) -0.642 (b) 0.642
Ans. (d) : SUGAM: ITR -4 S form if you have chosen (c) 0.253 (d) -0.253
the presumptive income scheme as per section 44 AD Ans. (a) : Karlpearson's correlation coefficient formula-
and 44AE of the income tax act, 1961. If you have
Co − Variance of x & y
small business, then instead of maintaining books of Correlation Coefficient (r) =
accounts you declare your income on a presumptive σx. σy
basis, rather than on an actual basis. As per presumptive r = correlation coefficient
taxation, your income is calculated on a percentage σx = standard deviation of x series = 6.6
sales. The due date for filing this form is 31 July of
every year. σy = standard deviation of y series = 4.2
−17.8
88. Following are the events of an organizational r=
culture : 6.6 × 4.2
(A) Customer orientation and employee policies −17.8
(B) Quality orientation, directing and motivating r=
27.72
styles r = –0.642
(C) Decision-making, products and services and
responsibilities to society 91. Which of the following is an instance of non-
(D) Reaction to competitors and gratitude towards conventional dumping?
nation (a) Sporadic dumping (b) Predatory dumping
(E) Role ambiguities, trade union and policies (c) Reverse dumping (d) Persistent dumping
UGC CBSE NET Commerce IInd Paper June, 2019 315 YCT
Ans. (c) : Dumping is a term used in the context of Ans. (a) :
international trade its when a country or company List-I List-II

X
- σ
M
exports a product at a price that is lower in the foreign

j
=
importing marketing then the price in the exporter's Q
domestic market. a. (iii) Karl Pearson's coefficient
• Reverse dumping is followed in the overseas markets of skewness
where the demand is less elastic.
Q3 - Q1 - 2M Q
• Such markets tolerate a higher price. b. j= (ii) Bowley's measure of
• Thus dumping is done in the manufacturer's home Q3 - Q1
market by selling locally at a lower price. skewness
• Reserve dumping is an instance of non-conventional P90 + P10 − 2P50
dumping. c. j = (i) Kelly's coefficient of
P90 − P10
92. Assertion (A) : U-shaped long-run average cost
curve is based on the assumption that economies skewness
of scale prevails at small levels of production and 94. Which among the following is NOT true about
diseconomies of scale prevails at larger level of BASEL?
production. (a) Initially it was named as Committee of
Reason (R) : Decreasing returns to scale arises Banking Regulations and Supervisory
primarily because as the scale of operation Practices (CBRS)
increases, it becomes even more difficult to (b) BASEL was established by the Central Bank
manage the firm effectively. Governors of fifteen countries
In the context of the above two statements, (c) It was established by the end of 1974
which one of the following codes is correct? (d) Disturbances in international currency and
(a) Both (A) and (R) are correct and (R) is the banking markets were responsible for its
right explanation of (A) establishment
(b) Both (A) and (R) are correct and (R) is not Ans. (b) : BASEL NORMS: Basel norms or basel
the right explanation of (A)
accords are the international banking regulations issued
(c) (A) is correct But (R) is incorrect by the basel committee on banking supervision.
(d) Both (A) and (R) are incorrect
• The basel norms is an effort to coordinate banking
Ans. (b) : Assertion (A): U-shaped long-run average regulations across the globe, with the goal of
cost curve is based on the assumption that economies of strengthening the international banking system.
scale prevails at small level of production and
Basel committee on banking supervision:
diseconomies of scale prevails at larger level of
production. • Intitially it was named as committee of banking
– Thus the assertion (A) is the correct statement regulation and supervisory practices (CBRS)
Reason (R): Decreasing returns to scale arises • It was established by the central bank governors of the
primarily because as the scale of operation increases, it group of '10' countries in 1974.
becomes even more difficult to manage the firm • Disturbance in international currecny and banking
effectively. markets were responsible for its establishment.
– Thus the Reason (R) is the correct statement but not • It provides a forum for regular cooperation on banking
explained the A supervisory matters.
93. Match List-I with List-II : 95. Excess capacity is NOT noticed in which of the
List-I List-II following market conditions?
X
- σ
M
j
=

(a) Monopoly
Q
(A) (i) Kelly's coefficient (b) Monopolistic competition
(c) Oligopoly
of skewness/
(d) Perfect competition
Q3 - Q1 - 2M Q
(B) j = (ii) Bowley's measure Ans. (d) :
Q3 - Q1 • A perfectly competitive market is a hypothetical
of skewness market where competition is at its greatest possible
P90 + P10 − 2P50 level. New classical economists argued that perfect
(C) j = (iii) Karl Pearson's competition would produce the best possible outcomes
P90 − P10
• When the firm is producing less than what it can
coefficient of
produce then it is said that the firm is having an excess
skewness
capacity.
Choose the correct option from those given
below : • It means that the firm can produce more at a lower
(a) (A)-(iii); (B)-(ii); (C)-(i) cost.
(b) (A)-(iii); (B)-(i); (C)-(ii) • Whereas in the case of perfect competition the firm
(c) (A)-(i); (B)-(ii); (C)-(iii) produces at the optimum level of output where cost is
(d) (A)-(ii); (B)-(i); (C)-(iii) minimum and there is no excess capacity.

UGC CBSE NET Commerce IInd Paper June, 2019 316 YCT
96. Credit worthiness score in India ranges between 99. One belt, one road initiative (BRI) is NOT
(a) 300 to 600 (b) 300 to 900 intended to
(c) 500 to 1000 (d) 900 to 1600 (a) trade protectionism
Ans. (b) : (b) strengthening logistic and supply chain
• A credit score refers to a '3' digit numeric value that (c) improve cost competitiveness
represent the credit worthiness of an individual. (d) rebalance trade dominance
The credit worthiness ranges between 300 to 900 with Ans. (a) : The initiative defines five major priorities:
900 being the highest and 300 being the least. This • Policy coordination
score is computed with the help of the credit history of • Infrastructure connectivity
an individual. • Unimpeded trade
• Banks and most financial institutions prefer extending • Financial integration
credit to an individual whose score is 750 and more. • And connecting people
97. As per Section 53 of the companies Act, 2013, – The objective are stated to be achieved by
the balance in the Security Premium Account strengthening logistics and supply chain, improving cost
cannot be utilized for competitiveness, rebalancing trade imbalances and
(a) payment of dividend many other strategies that will promote market
(b) writing off discount on issue of shares integration.
(c) issue of fully paid-up bonus share 100. Match List-I with List-II :
(d) capital losses List-I List-II
Ans. (a) : (A) Fiscal, Monetary (i) Social
– Share premium can be defined as the excess amount and industrial responsibities
received the company over and above the face value of policies
its shares. All types of companies can issue their shares (B) Social obligations (ii) Stakeholders
at a premium. towards several interest group
– It states the specific purpose for which this balance stakeholders
may be uses, so the account can only be used for the (C) Consumers, (iii) Business ethics
following purpose and no other purpose. shareholders,
• For the issue of fully paid bonus share capital. suppliers,
• For meeting the preliminary expense incurred by the creditors ete.
company. (D) Moral principles that (iv) Economic
• For meeting the expenses, commission or discount defines the right or policies
incurred concerning securities previously issued by the wrong
company. Choose the correct option from those given
• For ensuring the availability of the premium on the below :
redemption of redeemable debentures or preference (a) (A)-(iii); (B)-(i); (C)-(iv); (D)-(ii)
share capital of the company. (b) (A)-(i); (B)-(ii); (C)-(iv); (D)-(iii)
98. A company issues 10% irredeemable (c) (A)-(ii); (B)-(iv); (C)-(iii); (D)-(i)
preference shares. The face value per share is ` (d) (A)-(iv); (B)-(i); (C)-(ii); (D)-(iii)
100, but the issue price is ` 95. What is the cost Ans. (d) : Correct match List-I with List-II
of preference share? List-I List-II
(a) 10.63% (b) 10.73% (A) Fiscal, monetary and (iv) Economic policies
(c) 10.83% (d) 10.53% industrial policies
Ans. (d) : Cost of preference share (B) Social obligations (i) Social
Annual dividend of preferenceshares towards several responsibilities
= stakeholders
Market price of the preferencestock
(C) Consumer, (ii) Stakeholders interest
100 × 10% shareholder, group
=
95 suppliers, creditors
10 etc.
=
95 (D) Moral principles that (iii) Business ethics
= 0.10526 defines the right or
= 10.53% wrong

UGC CBSE NET Commerce IInd Paper June, 2019 317 YCT
 NTA UGC NET/JRF Exam, Dec. 2019
COMMERCE
Solved Paper
1. Quality circle is a type of general. A business with good logistics can keep track
(a) Problem-solving team of product shipments and move products or information
(b) Cross-functional team quickly to the correct locations.
(c) Self-directed team Therefore in recent year- the major gain in logistical
(d) Project team efficiency have come from advances in information
technology.
Ans. (a) : Conceptually Quality Circles can be
described as a small group of employees of the same 5. Which of the following statements is NOT
work area 'doing similar work that meets voluntarily correct regarding the duties of an auditor?
and regularly to identify' analyze, and resolve work - (a) Physical verification of fixed assets is
related problems. primarily the responsibility of the auditor
2. Which of the following are the methods of (b) Ownership of fixed assets should be verified
determining cost behaviour? by examining the title deed by the auditor
(A) High and low point method (c) Auditor should ascertain that the assets are in
(B) Least square regression method the possession of the client
(C) Accounting or analytical approach (d) The auditor should satisfy himself that the
(D) Non-parametric method assets have been valued in the financial
statements according to the accounting
Choose the correct answer from the options principles
given below
(a) (A), (B) and(D) (b) (A), (C) and (D) Ans. (a) : -Some of the duties of an auditor :-
(c) (B), (C) and (D) (d) (A), (B) and (C) (i) Ownership of fixed assets should be verified by
examining the title deed by the auditor.
Ans. (d) : cost behavior analysis refers to management's
(ii) Auditor should ascertain that the assets are in the
attempt to understand how operating costs change in
relation to a change in an organization's level of Possession of the client.
activity. (iii) The auditor should satisfy himself that the assets
The following are the methods of determining cost have been valued in the financial statements according
behavior: to the accounting principle.
(I) High and low point method 6. If the risk-free return (Rf) is 6%, Beta value (β)
(II) Least square regression method is 1.5 and market rate of return (Km) is 10%,
(III) Accounting or analytical approach the expected rate of return would be
(a) 15³ (b) 12³
3. Which one of the following is a void contract?
(a) Unilateral contract (c) 17.5³ (d) 16³
(b) A contract which ceases to be enforceable by Ans. (b) : Formula : R = rf + β(rm-rf)
law where , R = Expected rate of return.
(c) Implied contract rf = risk free rate
(d) Express contract rm = market rate of return
Ans. (b) : Sec.2(j) of the act defines a Void Contract β = project beeta (systematic Risk)
as '' A contract which ceases to be enforceable by ..... R = 6+1.5(10- 6) = 12%
becomes void when it ceases to be enforceable'' This Therefore if the risk - free return (Rf) is 6% Beta value
makes all those contracts that are not enforceable by a (β) is 1.5 and market rate of return (Km) is 10 % the
court of law void. expected rate of return would be 12%
4. In the recent years – the major gain in 7. Which two of the following statements are
logistical efficiency have come from which one true?
of the following?
(A) A simple monopoly firm always earns super
(a) Advances in Information Technology normal profit
(b) Reduction in petroleum prices (B) Sweezy's kinked demand curve model is the
(c) Fast order processing best known model explaining relatively more
(d) Increase in production of commercial vehicles satisfactory behaviour of oligopoly firm for
Ans. (a) : Logistical efficiency Pertains to the process price rigidity
of how effectively a business conducts operation. This (C) A perfectly competitive firm is price-taker
relates to all areas of the operation that include (D) Firms under monopolistic competition earn
transportation, warehousing' and over all distribution in only normal profits
UGC NTA NET Commerce IInd Paper December, 2019 318 YCT
 Choose the correct option from those below (i) Indifference map - The graphical presentation of
(a) (A) and (D) (b) (B) and (D) the indifference schedule is known as the indifference
(c) (B) and (C) (d) (A) and (C) curve.
Ans. (c) : (i) A monopoly firm does not always earn An indifference schedule is table which represent
super normal profits. rather than various combinations of two goods, which yield equal
- In the long run , if the super normal profits continue it satisfaction to consumer.
will attract other producer to enter market and the (2) Price line/ Budget line - The budget line is a
monopoly will lose these profit and may have to graphical delineation of all feasible combinations of two
shutdown its production if it incurs loses commodities that can be bought with provided income
(ii) Sweezy's kinked demand curve model is the best and cost so that the price of each of these combination
known model explaining relatively more is equivalent to the monetary earnings of the customer.
satisfactory behaviour of oligopoly firm for price (3) Equality of slopes of IC and budget line : -
rigidity. Note that the equilibrium quantities are those for which
(iii) A perfectly competitive firm is price taker not the slope of the indifference curve equal the slope of
price maker. the budget line that is, where the marginal rate
(iv) firm under monopolistic completion earn only substitution equals the price ratio.
normal profits in the long run. (4) Point of tangency between IC and budget line.
8. Which of the following is NOT part of the 10. A company raises ` 1,00,000 by issue of 1000,
process of management audit? 10% debentures of ` 100 each at a discount of
(a) Identification of responsibility center 2% redeemable after 10 years. If the corporate
(b) Review of performance of each responsibility tax rate is 40%, what would be the cost of
center capital?
(c) Review of organizational structure (a) 6.82³ (b) 5.98³
(d) Investigating the depreciation method and its (c) 6.18³ (d) 5.5³
application on fixed assets in the company
Ans. (c) : Before-Tax cost of Debt = I+[( FV–NP)/n] /
Ans. (d) : Audit management is responsible for (FV+NP)/2
ensuring that board where, I = Interest, FV = face proceeds, NP = net
- approved audit directives are implement . Audit proceeds, n = no. of year
management helps simplify and well-organize the
I = 100×10% = Rs 10
workflow and collaboration process of compiling
audits. most audit teams heavily rely on email and FV = Rs 100
shared drive for sharing information with each other. NP = FV–Discount = 100–2% = Rs 98
Typically task such as submitting client request sender NO. of year (n) = 10 year
reminder and following up on finding are all done from Before - Tax cost of
using broad tools.
(100 − 98 ) 
-Process of management Audit- 10 + 
(i) Identification of responsibility center Debt = 10
(ii) Review of performance of each responsibility 100 + 98
center. 2
(iii) Review of orgnizational structure . = 10+0.2/99 = 10.2/99 = 10.30%
9. In the case consumers equilibrium to be After - Tax cost of debt = Before - Tax cost of debt
explained through an ordinal approach, when ×(1–t) where, t = tax Rate
there are two commodities with their prices After -Tax cost of debt = 10.30 (1–0.40) = 6.18%
given and with limited income of the consumer, 11. Given below are two statements. One is labelled
the following information is required: as Assertion (A) and the other is labelled as
(A) Price line/budget line Reason (R).
(B) Indifference map Assertion (A): In the case of short run cost
(C) Point of tangency between IC and budget line behaviour, MC curve intersects AC curve at its
(D) Equality of the slopes of IC and budget line minimum
Arrange the information required in the Reason (R): While AC continues to decrease, MC
correct sequence and choose the right option begins to rise. Also, when AC is at its minimum, it
from those below is neither increasing nor decreasing. It is constant
(a) (B) → (D) → (A) → (C) when AC is constant, it is equal to MC at the point
(b) (B) → (A) → (D) → (C) of intersection
(c) (A) → (D) → (B) → (C) Choose the correct option from those below
(d) (A) → (B) → (C) → (D) (a) Both (A) and (R) true and (R) is the correct
Ans. (b) : In the case consumers equilibrium to be explanation of (A)
explained through an ordinal approach, when there are (b) Both (A) and (R) true but (R) is NOT the
two commodity with their prices given and with limited correct explanation of (A)
income of the consumer, the following information is (c) (A) is true but (R) is false
required in the correct sequence :- (d) (A) is false but (R) is true
UGC NTA NET Commerce IInd Paper December, 2019 319 YCT
Ans. (a) : Assertion (A) :- cost in the short run- Ans. (c) : Specific goods , Unascertained goods,
* Short -run costs curves tend to be U-shaped because Ascertained goods are available with the seller and are
of diminishing return. immediately transferred to the buyer once the
* in the short run capital is fixed. After a certain point, agreement is reached. But future goods are not
increasing extra workers leads to declining available with seller and are not immediately transferred
Productivity . to the buyer.
* Marginal cost always passes through the lowest point 14. In e-commerce, one of the key design elements
of the average cost curve. of an effective website-community refers to
(a) Its layout and design
(b) The way site enables user to user
communication
(c) Site's ability to tailor itself to different users
or to allow users to personalize the site
(d) Degree that the site is linked to the other sites
Ans. (b) : * Electronic commerce :- e-commerce is a
term that conceptualize commerce or trading using
the internet.
Therefore, from the above explanation Assertion (A) is * Electronic commerce is a term for any type of
true. business, or commercial transaction that involves the
Reason (R) : while AC continues to decrease, MC transfer of information across the internet.
begins to rise. Also, when AC is at its minimum, it is * It covers a range of different types of businesses from
neither increasing nor decreasing it is constant when AC consumer- based retail sites, through auction or music
is constant, it is equal to MC at the point of intersection, sites, to business exchanges trading goods and services
Explanation : between corporations.
* It is currently one of the most important aspects of the
internet to emerge.
* E- commerce allows consumers to electronically
exchange goods and services with no barriers of time or
distance.
15. According to Sale of Goods Act, which two of
when MC is equal to AC i.e. when MC and AC curves the following are defined as 'goods'?
interact each other at point A, AC is constant and at its (A) Moveable property
minimum point. (B) Growing crops
- Therefore, from the above explanation, Reason (R) is (C) Actionable claims
correct, and R is the correct explanation of (A). (D) Book debt
12. Arrange the steps to e-filing of Income Tax Choose the correct answer from the following
Return in correct sequence: options:
(A) Register yourself (a) (A) and (D) (b) (B) and (C)
(B) Verify ITR V (c) (A) and (B) (d) (D) and (B)
(C) Select the requisite form Ans. (c) : Sale of Goods Act 1930- Goods are any
(D) Fill form and upload merchandise or possession. An important clause in the
Choose the correct option: contract for sale goods is described in section 2(7) as:
(a) (A) → (C) → (D) → (B) (a) It is a moveable property (except for money and
(b) (A) → (B) → (C) → (D) actionable claims)
(c) (A) → (B) → (D) → (C) (b) Stocks and shares
(d) (C) → (A) → (D) → (B) (c) Growing crops, grass, standing timber
Ans. (a) : Following are the 6 steps for E-filling (d) The things that are attached to the land but are
Income-Tax return. agreed to be served before the sale.
STEP-1- Register yourself Thus, we conclude here that goods are moveable
properly barring money and actionable claims.
STEP-2- choose how you want to e-file
STEP-3- Select the requisite form 16. Companies that are becoming skilled in
Customer Relationship Management (CRM)
STEP-4- keep the document ready
focus on:
STEP-5- Fill the form and upload
(a) Understanding the perceived performance and
STEP-6- verify ITR-V buyer's expectations
13. Which of the following is the odd one out? (b) Giving benefits to the customers by reducing
(a) Specific goods cost
(b) Un-ascertained goods (c) Developing programs to attract and retain the
(c) Future goods right customers and meeting the individual
(d) Ascertained goods needs of valued customers
UGC NTA NET Commerce IInd Paper December, 2019 320 YCT
 (d) Giving the quality in features and 1
L −β  − β
characteristics of a product or service that Q = A αK −β + (1 − α )
bear on its ability to satisfy stated or implied  
needs −
1
K −β
Ans. (c) : Customer Relationship Management (CRM) Q = A αL−β + (1 − α )  β
is a business strategy that enables organizations to get  
closer with their customer to better serve their needs, When A > (0) , 0< a <1 and β > –1
improve customer service enhance customer Where L = Labour, K = capital, and A,a, and β are three
satisfaction and there by maximize customer loyalty and parameters.
retention.
19. What are the drivers of globalization?
17. Assertion (A): Auto companies and other (A) Population mobility especially of labour
consumer goods companies offer cash rebates to
encourage purchase of the manufacturer's products (B) Financial flows
within a specified period (C) Exporting
Reason (R): The same product is priced (D) Assembly operations
differently at different times. Choose the correct answer from the following
In the context of the two statements above to (a) (A) and (D) (b) (B) and (D)
pricing strategy, which one of the following (c) (A) and (B) (d) (C) and (D)
options is correct?
(a) Both (A) and (R) are correct Ans. (c) : Drive of Globalization:-
(b) Both (A) and (R) are not correct - Economic Globalization stand for the economic inter
(c) (A) is correct but (R) is not correct connectedness of countries with the global economic as
(d) (A) is not correct but (R) is correct a whole.
-This interdependence relates both to the exchange of
Ans. (c) : Assertion(A) - Explanation- factor of production (Labour, capital technologies
* Cash rebate is an offer given to consumers for a cash know-now) and the exchange of products ( material
discount when they purchase a consumer good.
goods and services finished and unfinished products,
* Hence a cash rebate can be thought of as a discount
consumer and capital goods)
coupon.
* Usually , the rebate is offered by either the There are three main drivers for economic
manufacturer of the product or the retailer. globalization and its different characteristics such as
* Thus, the assertion is correct. trade, international capital markets, currency markets,
Reason (R)- Explanation- migration and more:
* Automobile product have a highly elastic demand.
* Thus, the consumer will wait for the price to fall if
the product is priced differently at different times.
* Consumer goods are generally priced at The
Maximum Retail Price (MRP).
* A maximum Retail price is a manufacturer calculated
price that is the highest price that can be charged for
a product sold in India and Bangladesh. 20. Which two of the following are correct in terms
* Thus, the reason is incorrect. of rate of tax deduction at source (TDS)?
18. A production function expressed as (a) Income by way of winning from the horse
Q = A [αK-β + (1-α) L-β]-1/β race @ 30%
Or (b) Insurance Commission @ 10%
Q = A [αL-β + (1-α) K-β]-1/β (c) Rent of Plant & Machinery @ 5%
When A > 0, 0 < α <1 and β > -1 (d) Rent of furniture @ 5%
Where L = labour, K = Capital and A, α and β Choose the correct option from the following:
are three parameters is called (a) (A) and (B) (b) (A) and (C)
(a) Constant elasticity substitution function (c) (A) and (D) (d) (B) and (C)
(b) Variable elasticity substitution function Ans. (c) : TDS -(Tax Deduction at source)- According
(c) Leontief-type function to the Income tax Act 1961, a specific amount is
(d) Cobb – Douglas function reduced when a certain payment like salary,
Ans. (a) : Constant elasticity substitution function :- commission, rent, Interest, professional fees, etc. is
The CES production function is a Neoclassical made. The person who makes the payment deducts tax
Production function that displays constant elasticity of at source, and the person who receives a payment
substitution in the words , the Production technology /income has the liability to pay tax.
has constant percentage change factor (e.g. Labour and It lowers tax evasion because tax will be collected at
capital) properties due to a percentage change in the the time of making a payment.
marginal rate of technical substitution. The two factors -TDS Rates under section 194(i):
(capital, Labour) CES production Function introduced
by Slow, and later made Popular by Arrow, chenery, Rate of the tax deduction depend on the nature of
minhas, and Slow are - payment and are given below

UGC NTA NET Commerce IInd Paper December, 2019 321 YCT
 Type of Income TDS Rate 23. Which of the following are true about
-Income by way of winning from 30% TDS conditions according to the Sale of Goods Act?
horse race (A) Title
-Insurance commission 5% TDS (B) Description
(C) Quite possession
- Rent of plant and machinery 2% TDS
(D) Encumbrances
- Rent of land, furniture, fitting , 10% TDS
Choose the correct answer from the following
or building to HUF or individual
options :
-Rent of land furniture or 10 % TDS (a) (A) and (D) only (b) (B) and (C) only
building to other than HUF or an (c) (A), (C) and (D) only (d) (A) and (B) only
individual
Ans. (d) : Sale of Goods Act, 1930 (Section -1 )1st
21. Which one of the following relates to warranty? July 1930
(a) It is of vital importance for completion of -Earlier scale of goods related provision was covered
contract under Indian contract Act 1872
(b) If there is breach, the aggrieved party can -When Scale of Goods act '1930' came into force from
repudiate the contract then section '76 to 123' of Indian contract act was
(c) It is essential to the main purpose of the Repealed
contract - Earlier its name the 'Indian sale of goods 1930 ' on
(d) In case of breach, the aggrieved party can 23rd Sept. '1963' the word 'Indian' removed from the
claim only damages earlier name and now new name is 'Sale of Goods Act
Ans. (d) : Warranty - A warranty is a type of 1930 '
guarantee that a manufacture or similar party makes -This act extend to whole of India except J&K.
regarding the condition of its product. it also refers to -Implied condition according to the sale of goods Act.-
the terms and situations in repairs or exchanges will be (i) Seller's Title to goods is valid
made if the product does not function as originally (ii) Goods comply with Description & sample
described or intended. (iii) Quality or fitness of goods for the purpose specified
Key Takeaways - * warranties often have conditions by buyer.
limiting the warranty. (iv) Wholesomeness of eatables
* The buyer must fulfill certain duties for the warranty 24. Match List-I with List-II
be honored by the manufacturer. List-I List-I
* some of the most common warranties are expressed (A) Qualified Report (i) Auditor
implied, extended and special warranty deeds. Duty
*The Magnusson- moss warranty Act was created to (B) Examine Valuation and (ii) Auditor
protect consumers from fraud and misrepresentations. Disclosure Liabilities
*A guarantee is a promise from a seller that their (C) Access (iii) Auditor
product will meet certain quality and performance to records of Company Report
standards. and its subsidiaries
22. What percentage of income from compensation (D) Mis-statement in (iv) Auditor
on disaster is exempted from tax liability? prospectus in company Right
(a) 100% (b) 75% issue of capital
(c) 50% (d) 25% Choose the correct option from those given
Ans. (a) : Compensation on account of any disaster below
[Section 10 (10 BC)]: (a) (A)-(ii), (B)-(i), (C)-(iv), (D)-(iii)
Any amount received from the central Government or (b) (A)-(iii), (B)-(i), (C)-(iv), (D)-(ii)
state government or a local Authority by an individual (c) (A)-(iii), (B)-(i), (C)-(ii), (D)-(iv)
or his legal heirs as compensation on account of any (d) (A)-(iv), (B)-(ii), (C)-(iii), (D)-(i)
disaster is 100% exempt from tax. Ans. (b) :
*However, no deduction is available in respect of the List -I List - II
amount received or receivable to the extent such Qualified Auditor Report - An auditor's report
individual or his legal heirs has been allowed a Report qualified when there is either a
deduction under the Act on account of loss or damage limitation of scope in the auditor's
caused due to such disaster. work or when there is a disagreement
*Disaster here means any disaster due to any natural or with management regarding
man-made causes or by accident /negligence which application, acceptability, or adequacy
results in substantial loss of human life or damage to of accounting policies.
property or environment and the magnitude of such -For auditors, an issue must be
disaster is beyond the coping capacity of the community material or financially worth
of the affected area. consideration to quality report.
UGC NTA NET Commerce IInd Paper December, 2019 322 YCT
 Examine -Auditors play an important role in 26. Which of the following is NOT a presumption
valuation the valuation of inventories. about a negotiable instrument?
and - They are responsible for physical (a) Date
Disclosure verification of inventories, Records (b) Consideration
verification, Records verification, (c) Stamp
valuation and confirmation. (d) Absolute and good title to the transferee
Access to -Auditor right - every auditor of a Ans. (d) : Negotiable Instrument :- 1881
records of company shall have a right of access 'Negotiable means transferable by delivery and
company and at all time to the books of account and 'Instrument 'is a written document which creates a right
its vouchers of the company whether in favor of any person. therefore, a negotiable
subsidiaries kept at the registered office of the instrument is a written document which creates a right
company or at any other place and in favor of any person and which transferable by
shall be entitled to require from the delivery.
officers the company such A negotiable instruct means a promissory note, bill of
information and explanation as he exchange or cheque payable either to order or to
may consider necessary for the bearer.
performance of his duties as an -Presumptions as to negotiable instruments
auditor and amongst other matters (Sec.118): Until the contrary is proved, the following
inquire into. presumptions shall be made:-
Misstatement -Auditor Liabilities- The auditor's (i) of consideration
in the liability represents the legal liability (ii) as to date
prospectus in that is assumed when the auditor is (iii) as to the time of transfer
company performing professional duties. (iv) as to the acceptance
issue of The auditor is liable for client
capital (v) as to order of endorsements
accounting misstatements in the
(vi) as to stamp
financial statements.
(vii) that holder is a holder in due course:
25. Non-Banking Financial Companies can be
classified as : 27. Which two of the following statements are
(A) Asset Finance Company (AFC) true?
(A) The sum of the deviations from mean
(B) Investment Company (IC)
(ignoring algebraic signs) is greater than the
(C) Loan Company sum of the deviations from median (ignoring
(D) Foreign Trade Company (FTC) algebraic signs)
Choose the correct answer from the options (B) Standard deviation is independent of change
given below: of origin and change of scale
(a) (A), (B) and (C) only (C) In a symmetrical distribution, mean deviation
(b) (B), (C) and (D) only equals 4/5 of standard deviation
(c) (A), (C) and (D) only (D) In a symmetrical and bell shaped distribution,
(d) (A), (B) and (D) only quartile deviation is 1/3 of standared
Ans. (a) : A Non-Banking financial company deviation
(NBFC) - is a company registered under the companies Choose the correct answer from the options
Act, 1956 engaged in the business of loans and given below
Advances acquisition of share / stocks / bonds / (a) (B) and (D) (b) (A) and (C)
debentures / securities issued by Government or local (c) (C) and (D) (d) (A) and (B)
authority or other Marketable. Ans. (b) : Below are the explanation of the above
Securities of a like nature, leasing, hire-purchase, statements :
insurance business chit business but does not include 1- Deviation- method of mean deviation does not give
any institution whose principle business is that of accurate result.
agriculture activity industry activity , purchase or sale - And if we compute mean deviation from mean that is
of any goods (other than securities) or providing any also not desirable because the sum of the deviations
service and sale / purchase / construction of immovable from the mean (ignoring signs) is greater than the
property. sum of the deviation from the median (ignoring
-Within this broad categorization the different types of signs).
NBFCs are as follows: 2- Standard deviation - is independent of the change
(i) Asset Finance Company (AFC) of origin and but not of scale.
(ii) Investment Company (IC) 3- In a Symmetrical distribution, the mean deviation
(iii) Infrastructure Finance Company (IFC) equals 4/5 of standard deviation.
(v) Systematically Important Core Investment Company 4- in symmetrical and bell-shaped distraction,
(CIC-ND-SI) quartile deviation is the distance from the median to the
(vi) Mortgage Guarantee Company (MGC) lower quartile or to the upper quartile.

UGC NTA NET Commerce IInd Paper December, 2019 323 YCT
28. Which one is odd? (A) Develop operational excellence in sales
(a) Economic Policies forecasting, warehouse management,
(b) Economic Planning transportation and material management
(c) Socio-cultural factors (B) Select the best channel design and network
(d) Macro-economic scenario strategy for reaching the customers
(C) Implement the solution with the best
Ans. (c) : 1- Economic policies - An economic policy
information systems, equipment, policies and
is a Course of action that is intended to influence or procedures
control the behavior of the economy.
(D) Decide on company's value proposition to its
2- Economic planning :- is a resource allocation its customers
solution.
Select the correct option from those below :
3- Macroeconomic scenario- As the term implies,
macroeconomics looks at the overall, big-picture (a) (A)→ (B) → (C) → (D)
Scenario of the economy. (b) (D)→ (B) → (A) → (C)
4- Socio cultural factors are the larger scale force (c) (D)→ (B) → (C) → (A)
within cultures and societies that affect the thoughts, (d) (D)→ (C) → (B) → (A)
feelings and behaviors. Ans. (b) Market logistic planning four correct step -
29. The theories that explain the formation of (D) Decide on company's value proposition to its
'Informal Groups' are to include which of the customers
following? ↓
(A) Propinquity Theory (B) select the best channel design and network strategy
(B) Similarity or Balance Theory for reaching the customer
(C) Displacement Theory ↓
(D) Need for achievement Theory (A) Develop operational excellence in sales forecasting,
Choose the correct option from those given ware house Management transportation and Material
below : Management
(a) (A) and (D) only ↓
(b) (A) and (B) only (C) Implement the solution with the best information
(c) (A), (B) and (C) only system, equipment policies and procedures.
(d) (A), (B), (C) and (D) 31. Following are the events which generally
Ans. (b) : The four important theories of group happen in the life of a public limited company
formation are- (A) Public issue of shares (IPO)
1- Propinquity theory:- The propinquity theory of (B) Firm Incorporation
group formation states that individuals from group due (C) Preliminary expenditures
to Spatial and geographical nearness. (D) Issue of equity shares to promoters of the
- The word propinquity means " Nearness" company
- According to this theory people who work within the Choose the correct sequence (chronological
same business area or at nearby places are more likely order) of the events from the options given
to affiliate with each other and form a group than those below :
who work in distant places. (a) (A) → (B) → (C) → (D)
2- Homan's theory :- (b) (B) → (C) → (D) → (A)
According to George C. Homans, " The more activates (c) (C) → (B) → (A) → (D)
Person share, the more numerous will be there (d) (C) → (B) → (D) → (A)
interactions and the stronger will be their shared Ans. (d) : Public limited company:-
activities and Sentiments, and the more Sentiments
-A public limited company is a voluntary association of
people have for one another, the more will be their
members that are incorporated and, therefore has a
shared activates and interactions". separate legal existence and the liability of whose
- The key element is interaction because of which members is limited.
people develop common sentiment for one another. - Public limited company are listed on the stock
3- Balance Theory- similarity / balance theory states exchange where it's share/ stock are traded publicly.
that people having similar attitudes and values are - The whole process of company formation may be
attracted to each other and form a group. divided into the following four stages :
-The similarity of attitudes is the main factor for (C) Preliminary expenditures
developing a group among people as per theory.
↓
4- Exchange theory - it is based on reward- cost
(B) Firm incorporation
outcomes of interactions
- To be attracted to a group, a person thinks in terms of ↓
what he will get in exchange for interaction with group (D) Issue of equity share to promoters of the
members. company
30. Market logistic planning has the following four ↓
steps. Arrange the steps in correct sequence (A) Public Issue of shares (IPO)

UGC NTA NET Commerce IInd Paper December, 2019 324 YCT
32. Which two of the following are correct about Choose the correct option:
TDS Certificates? (a) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv)
(A) TDS on non-salary payment Form 16 (b) (A)-(ii), (B)-(i), (C)-(iv), (D)-(iii)
(B) TDS on salary payment Form 16A (c) (A)-(ii), (B)-(iii), (C)-(i), (D)-(iv)
(C) TDS on sale of property Form 16 B (d) (A)-(i), (B)-(iv), (C)-(ii), (D)-(iii)
(D) TDS on rent Form 16 C Ans. (b) : The following are the explanation for the
(a) (A) and (B) (b) (C) and (D) correct match :
(c) (A) and (D) (d) (A) and (C) Test Situation
Ans. (b) : Tax deducted at source - (A) Z- test (ii) A Z-test is a statistical test to
-TDS stand for 'Tax deducted at source' determine whether two population
-It was introduced to collect tax at the source from means are different when the variances
where an individuals income generated. are known and sample size is large
- the government uses TDS as a tool to collect tax in - Testing the significance of the
order to minimize tax evasion by taxing the income difference between averages of two
(Partially or wholly ) at the time it is generated rather large-sized sample groups (Parametric
than at a later date. data)
- The following are the correct statements about TDS (B) (i) analysis of variance (ANOVA) is a
certificates: ANOVA collection of statistical models and
1- form 16: form 1b is your salary TDS certificate their associated estimation procedures
2- form 16A- is also TDS certificate while from 16 is (Such as the "variation " among and
for only salary income, form 16 A is applicable for TDS between groups ) used to analyze the
on Income other than salary. different among group means in a
3-Form 16B- Form 16 B for tax deduction at source sample.
verifies the volume of tax deduction at source when - Comparing the differences in the
Making a property purchase. mean values of more than two sample
-In a nutshell, this is a TDS certificate for all TDS groups (Parametric data)
deducted upon property sale. (C) CHi- (iv) The chi-square test of
4- Form 16 C:- form 16 C is the TDS certificate to be Square test independence determine whether there
issued by the deductor (Tenant of property) to the is an association between categorical
deductee (landlord of property) in respect of the tax variable (i.e. whether 1 variables are
deducted and deposited as TDS on rent under sec. 194- independent or related )
IB of the Income -tax act 1961.
-It is a nonparametric test
33. Match the tests with suitable situations of their - Testing the significance of the
application for hypothesis-testing: association between two attributes.
Test Situation
(D) (iii) - The Kruskal-wall is H test
(A) z-test (i) Comparing the Kruskal- (sometimes also called the " one -way
differences in the wall is test ANOVA on ranks") is a rank -based
mean values of nonparametric test that can be used to
more than two determine if there are statistically
sample groups Significant differences between two or
(Parametric data) more groups of an independent
(B) ANOVA (ii) Testing the variable on a continuous or ordinal
significance of the dependent variable.
difference between 34. Which of the following statements are true?
averages of two (A) Pay-back period method considers all cash
large sized sample flows of a project
groups (Parametric (B) Pay-back period method concerns more with
data) the recovery of cost than profitability
(C) Chi-Square Test (iii) Comparing the (C) Net Present Value represents net addition to
differences in the the wealth of shareholders
mean values of (D) Accounting Rate of Return method
more than two incorporates risk as well as time value of
sample groups money
(Non-parametric Choose the correct option from those below:
data) (a) (A) and (B) (b) (A) and (D)
(D) Kruskal-Wallis (iv) Testing the (c) (B) and (C) (d) (B) and (D)
Test significance of the Ans. (c) :(A) Pay-back period method simply projects
association incoming cash flows from given project and identifies
between two the break-even point between profit and paying back
attributes invested money for a given process.

UGC NTA NET Commerce IInd Paper December, 2019 325 YCT
(B) The pay-back period refers to the amount of time it 37. Match the modes of communication in
takes to recover the cost of an investment. marketing and their communication platforms
-Shorter pay-backs mean more attractive investment. Mode of Communication
-Therefore , The payback period method concerns more Communication Platform
with the recovery of the cost than profitability. (a) Advertising (i) Blogs
(C) The NPV technique measures the present value of (b) Sales Promotion (ii) Brochures &
the future cash flows that a project will produce. Booklets
-A positive NPV means that the investment should (c) Word of mouth (iii) Sales meetings
increase the value of the firm and lead to maximizing marketing
share hold wealth.
(d) Personal selling (iv) Contests
- Thus, using NPV as a guideline for capital investment
decision is consistent with the goal of Creating wealth. Choose the correct option:
(D) Accounting rate of return (ARR) is a formula that (a) (A)-(ii), (B)-(iii), (C)-(iv), (D)-(i)
reflects the percentage rate of return expected on an (b) (A)-(ii), (B)-(iv), (C)-(i), (D)-(iii)
investment, or asset. compared to the initial investments (c) (A)-(iv), (B)-(iii), (C)-(ii), (D)-(i)
cost. (d) (A)-(iv), (B)-(iii), (C)-(i), (D)-(ii)
- ARR does not consider the time value of money or Ans. (b) : The following are the explanation for the
cash flows. Which can be an integral part of correct Match:
maintaining a business.
Mode of Communication platform
35. 'Maximization of firm's growth rate subject to communication
managerial and financial constraints' as one of
the important alternative objectives of (A) Advertising (ii) Brochures Booklets form an
especially large business corporation was integral part of the traditional
pleaded by: printed marketing collateral
(a) Milton Friedman (b) Robin Marris despite the growing popularity
(c) Cyert and March (d) H.A. Simon of online marketing initiatives
Ans. (b) : Maximization of firm's growth rate subject to (B) Sale (iv) Contests are sales promotion
managerial and financial Constraints as one of the promotion events that give consumers the
important alternative objectives of the especially large chance to win something such as
business corporations was pleaded by Robin marris. cash, trips, or goods.
-Robin marris suggested an alternative objective of - Contests are conducted to
'Maximization of firm's growth rate.' attract new customer.
-According to marris, managers have their own goals (C) word of (i) Blogs is a discussion or
other than profit maximization, which is the goal of mouth marketing informational website published
shareholders on owners. on the world wide web
36. 14 Days intermediate T-bills were brought into consisting of discrete often
effect from 1996-97 after the abolition of which informal diary-style text entries
of the following? (Post)
(a) 91 Days T-bills (b) 182 Days T-bills (D) Personal Sales meeting- Personal selling
(c) 273 Days T-bills (d) 364 Days T-bills selling is where businesses use people
Ans. (a) : Treasury Bill are the main instrument of short (The" sales force) to sell the
term Borrowing these are popularity known as T.Bill product after meeting face to-
- Bill issued by the government of the country. face with the customer.
T. Bill is a specific type of promissory notes issued by - The sellers promote the
government to pay a specific sum after a specified product.
period of time on behalf of government, these bill are 38. Who are the parties to a cheque?
sold by the central bank. (A) Drawer (B) Payee
Features- Highly liquid short term instrument. (C) Acceptor (D) Holder
T.Bill are issued by RBI with different maturity period
Choose the correct answer from the following
such as 91 day, 182 days, and 364 days treasury Bill.
options :
- T. Bill Quality to include in SLR
(a) (A) and (B) only
- Issued in multiple of 25000
(b) (A), (B) and (D) only
-Subsequently 91 Day To bills were introduced on an
auction basis in January 1993. (c) (A) and (C) only
- When the 91 days ad-hoc To Bills were discontinued (d) All of these (A), (B), (C), (D)
in April 1997, to enable finer cash management of the Ans. (b) : Cheque (Sec-6) ' A cheque is a bill of
government and to provide an avenue for state exchange drawn on a specified banker and not
governments and some foreign central banks to invest expressed to be payable otherwise than on demand and
surplus funds. 14 day To Bill were introduced in it includes the electronic image of truncated cheque and
April 1997. a cheque in the electronic form.
UGC NTA NET Commerce IInd Paper December, 2019 326 YCT
Parties:- -The term " Experimental Design " and " Design of
Drawer:- The person or entity whose transaction on experiments" are used interchangeably and mean the
account is to be drawn usually, the drawers name and same thing.
account is preprinted on the cheque, and the drawer is - However, the medical and social sciences tend to use
usually the signatory the term" Experimental Design " While engineering ,
Payee :- The person or entity who is to be paid the industrial, and computer Sciences for our the term
amount. "Design of experiments".
Drawee:- The bank or other financial Instruction where Design of Experiments involves:
the cheque can be presented for payment. * The systematic collation data.
This is usually preprinted on the cheque. * A focus on the design itself, rather than the result
39. Under which of the following approaches, the *Planning changes to independent (input)variables and
cost of equity is assumed to increase linearly the effect on depend variables or response variables.
with leverage, i.e., the average cost of capital * Ensuring results are valid, easily interpreted and
remains constant with increased use of definitive.
leverage? The following are the experimental research design:
(a) Net Operating Income Approach - Before and after with control group design
(b) Net Income Approach -Factorial design
(c) Traditional Approach -Latin square design.
(d) Walter Approach 42. Which of the following types of authorities are
Ans. (a) : According to Gerstenberg " capital structure found in most organizations?
refers to the makeup of a firm's capitalization" in other (A) Division Authority
words it represents a mix of different source of long- (B) Line Authority
term founds. (C) Staff Authority
In general , the exports in finance define the term (D) Functional Authority
capital structure to include only long-term debt and total Choose the correct option from those given
stockholders' Investment. below:
-NET Operating Income (NOI) Approach:- This (a) (A) and (B) only
approach is propounded by Durand. (b) (B) and (C) only
- According to this approach the overall cost of Capital (c) (A), (B) and (C) only
value of the firm is independent of capital structure (d) (B), (C) and (D) only
decisions and a change in the degree of financial
leverage does not bring about and change in the value of Ans. (d) : Authorities- Authorities is the right to
the firm and cost of capital. perform or command.
-The net operating income approach says that the -It allows its holder to act certain designated ways and
value of a firm depends on operating income and to directly influence the actions of others through
associated business risk. orders.
-Barnard defines authority as the character of
40. ADEN Rules, 1953 is related to which of the communication by which an order is accepted by an
following? individual as governing the action that an individual
(a) Tax exemption takes within the system.
(b) Residential status Types of Authority:
(c) Double taxation relief (1) Line Authority
(d) Assessment of corporate entity (2) staff Authority
Ans. (c) : Income- tax (Double taxation relief) (3) Functional Authority
(ADEN)Rules, 1953-
43. Which of the following is NOT true about web
- In exercise of the powers available under section 49A marketers?
of the 1922 Act, the Government of India had issued a
(a) Web marketers usually try to attract prospects
Notification dated 24/03/1953 called the Income- tax
to their site through email, advertisements in
(Double Taxation relief) (Aden) Rules 1953 Providing
newspapers
for grant of relief in respect of income on which tax
has been paid both in India and Aden. (b) Use attractions like discounts, gifts and
contests
41. Which of the following is an incomplete (c) Askcustomers to give their personal data
experimental research design? mandatorily
(a) Before and after with control group design (d) Give a lot of publicity to the discount schemes
(b) Factorial design
(c) One group before-after design Ans. (c) : Web Marketing- web marketing is processes
(d) Latin Square design of using the internet to market your business. It includes
the use of social media, search engines, blogging,
Ans. (c) : Experimental Research Design:- The
experimental design is a way to carefully plan videos and email.
experiments in advance so that your results are both -Promoting a business takes effort,
objective and valid . - There are a verity of ways do to it.

UGC NTA NET Commerce IInd Paper December, 2019 327 YCT
-It takes your massage to the big wide web -The world economy has witnessed a frequent shift in
- Web markets usually try to attract prospects to their organizational structure, trade patterns and culture.
site through email, advertisements in newspapers. * Therefore, Assertion is the correct statement
-Use attractions like discounts, gifts and contests Reason (R) Explanation -
-Give a lot of publicity to the discount Schemes. -The integration of national economies under the WTO
44. Which among the following are NOT qualified framework has restrained countries from increasing
to be appointed as auditor of a company? tariffs and imposing explicit non-tariff trade barriers
(A) An individual who is a Chartered Accountant - Such barriers include quality and technical
and holds a Certificate of Practice as per CA specification, environmental issue, regulations
Act, 1949 related to human exploitation such as child labor
(B) A limited liability partnership firm, which has *Therefore Reason (R) is the correct statement.
all partners as Chartered Accountants 46. Match the following countries with the types of
(C) Officer or employee of a company who is Double Taxation Avoidance Agreement signed
qualified Chartered Accountant degree holder by India with them:
too Country Type of Agreement
(D) Any Chartered Accountant whose appointment (A) Austria (i) Limited Agreement
will result in the person being the auditor of
more than 10 companies (B) Bahamas (ii) Comprehensive
Choose the most appropriate option: Agreements
(a) (A) and (B) (b) (B), (C) and (D) (C) Lebanon (iii) Comprehensive
(c) (C) and (D) (d) (A), (B) and (D) Agreements/
Limited
Ans. (b) : Auditor- A Auditor is a person of financial
records and ensure that companies comply with tax Multilateral
laws. They protect business from fraud, Point out Agreement
discrepancies in according method and, on occasion, (D) Sri Lanka (iv) Tax Information
work on a consultancy basis, helping organizations to Exchange
spot ways to boost operational efficiency. Auditors Agreement
work in various capacities within different industries. Choose the correct option:
Auditor Qualifications- Only a qualified charted (a) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii)
Accountant within the meaning of the charted Accounts (b) (A)-(ii), (B)-(iv), (C)-(i), (D)-(iii)
Act, 1949 can be appointed as an auditor.
(c) (A)-(ii), (B)-(iv), (C)-(iii), (D)-(i)
-If the charted Accountant is holding a certificate of
practice and practicing in his individual capacity. he (d) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv)
may be appointed as an auditor only as an individual. Ans. (b) : The following are the correct match:
- If the charted Accountant is holding a certificate of (A) Austria (ii) some of the countries with which it
practice and is a partner of a firm of chartered has comprehensive agreements include
Accountants. Australia, Canada the United Arab,
45. Given below are two statements. One is labelled Emirates, Germany, Mauritius,
as Assertion (A) and the other is labelled as Singapore the United Kingdom and the
Reason (R). USA.
Assertion (A): Globalization refers to the free (B)Bahmas (iv) The 'Bahams' report is also
cross-border movement of goods, services, capital, available on the Global forum's website
information and people bilateral .Tax information exchange
Reason (R): Countries are consistently evolving agreements or TIEAs are bilateral
innovative marketing barriers that are WTO agreement by which countries make
compatible arrangements to corporate the exchange
In the light of the above statements, choose the of information in relation to matters
correct answer from the options given below
(C)Lebanon (i) Limited Agreement in 2017 the
(a) Both (A) and (R) true and (R) is the correct business and economic environment in
explanation of (A) Lebanon was challenging with growth
(b) Both (A) and (R) true but (R) is NOT the slowing.
correct explanation of (A)
(D)Sri (iii) The India- Srilanka comprehensive
(c) (A) is true but (R) is false
Lanka Economic Partnership Agreement
(d) (A) is false but (R) is true addressed many of the negative aspects
Ans. (b) : Assertion (A) Explanation:- of the FTA in a broader economic
- Globalization is the interdependence and integration integration framework but was unable
of the global economy to enhance the worldwide come into operation due to public
exchange of capital goods and services Misconceptions and lack of
-Tremendous economic growth and internationalization enterprencrial and political leadership
of business were not possible without globalization. in Srilanka.

UGC NTA NET Commerce IInd Paper December, 2019 328 YCT
47. Which of the following is NOT a factor Ans. (c) : The following are the explanation for the
contributing to MBO program failure? correct match -
(a) Altering goals to meet changes in Theory Propounder
circumstances (A) Profit as Rent of (iv) F.A. Walker
(b) Easy goals Ability
(c) Lack of management support (B) Dynamic Theory of (iii) J.B. Clark
(d) Setting of unrealistically difficult goals Profit
Ans. (a) : Reason why MBO Fail: In spit of many
advantage MBO may not be considered as a panacea,
Risk Theory of (i)
for all the evils of the organization. The Success of the (C) F.B Hawley
Profit
program fails it is largely due to the following reasons-
* lack of top Management involvement and support (D) Innovation Theory (ii) Joseph
*Lack of understanding of Profit Schumpeter
*Difficultly in setting realistic and meaningful50. Choose incorrect statement from the following:
objectives (a) 28 Days T-bills were introduced in 1998
*Increased time pressure. (b) 364 Days T-bills were introduced in 1992
*Lack of relevant skills (c) 182 Days T-bills were introduced in 1986
*Lack of individual motivation (d) 273 Days T-bills were introduced in 2006
*Poor integration with other systems. Ans. (d)
• 14 days T- Bills were introduced in April 1997
48. Which of the following statements are correct?
• 28 days T-bills were introduced 1998.
(A) Dividend payout ratio refers to that portion of
• 182 days T-bills were introduced in Nov. 1986 on
total earnings which is distributed among
equity shareholders of the company auction basis.
• The 182 days T-bills were replaced by the
(B) 'Bird in hand' argument is given by Gordon's
model introduction of 364 day T-bills on a fortnightly auction
basis since April 1992.
(C) MM model suggest that dividend payment is
very relevant for value of the firm • Subsequently, 91 days T-bills were introduced on an
(D) Walter's Model suggests that dividendauction basis in January 1993.
• Currently, 91 days, 182 days and 364 days T-bills are
payment does not affect the market price of
the share sold on an auction basis.
(a) (A) and (B) (b) (A) and (C)
51. Which two of the following are correct about
(c) (B) and (C) (d) (C) and (D) the due date of issue of the TDS certificate?
Ans. (a) : Correct statement - (A) Form No 16-Annual
* Dividend payout ratio refers to that portion of total(B) Form No 16A-Quarterly
earnings which is distributed among equity shareholders(C) Form 16 B-Half Yearly
of the company - True (D) Form No 16 C-Monthly
*'Bird in hand' argument is given by Gordon's model Choose the correct option from those below :
- True (a) (A) and (D) (b) (A) and (C)
* MM model suggest that dividend payout is irrelevant (c) (A) and (B) (d) (C) and (D)
in calculating the valuation of the firm. Ans. (c) : TDS certificate : Form 16, Form 16 A,
* Walter's Model suggests that dividend payout affect
Form 16 B and Form 16 C are all TDS certificate.
and relevant the market price of the share holder.
Form 16 is issued by the employer to the employee.
49. Match the following theories of profit with Form Certificate of Frequency Due date
their propounders
Form-16 TDS on Yearly 31st May
Theory Propounder salary
(A) Profit as Rent of (i) F.B. Hawley
Form-16A TDS on non- Quarterly 15 day
Ability salary from due
(B) Dynamic Theory of (ii) Joseph A date of
Profit Schumpeter filling
return
(C) Risk Theory of Profit (iii) J.B. Clark Form 16 TDS on sale Every 15 day
B of property Transaction from due
(D) Innovation Theory of (iv) F.A. Walker date of
Profit filling
Choose the correct option from those given return
below: Form 16 TDS on Rent Every 15 day
(a) (A)-(iv), (B)-(ii), (C)-(iii), (D)-(i) C Transaction from due
(b) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv) date of
(c) (A)-(iv), (B)-(iii), (C)-(i), (D)-(ii) filling
(d) (A)-(iii), (B)-(i), (C)-(ii), (D)-(iv) return.

UGC NTA NET Commerce IInd Paper December, 2019 329 YCT
52. The sum total of the values of two variables 'X' (3) Joint probabilities of prior probability and
and 'Y' is equal for all the observations. The conditional probability.
value of the coefficient of correlation between (4) Arbitrary event with probability # 0 and for which
'X' and 'Y' is: conditional probabilities are also know.
(a) +1 (perfectly positive) 55. Given below are two statements. One is labelled
(b) –1 (perfectly negative) as Assertion (A) and the other is labelled as
(c) Zero (No correlation) Reason (R).
(d) > 0 < 1 (Imperfect correlation) Assertion (A): If the firm is prepared to incur
Ans. (b) : According to the direction of change in increased cost on transportation, it may be in a
variables. There are two types of correlation (1) Positive position to reduce its inventory cost.
correlation (2) Negative correlation. Reason (R): As in such a case, the firm can use
• Now, since the sum total of the vales of two variables the fastest mode of transport and rush the
‘X’ and ‘Y’ equal for all the observations. goods/stocks to the desired warehouse,
unmindful of the cost of transportation
i.e. X+Y = ‘Z’ (equal), for ‘Z’ to remain same (equal)
In the context of the above two statements
for all observations, if ‘X’ increase ‘y’ Should decrease
related to logistics management, which of the
and vice-versa.
following options is correct
Thus, option ‘2’ is the correct answer. (a) Both (A) and (R) true and (R) is the correct
53. On which of the following assumptions, the explanation of (A)
theory of consumer behaviour or cardinal (b) Both (A) and (R) true but (R) is NOT the
utility approach is NOT based? correct explanation of (A)
(a) Consumer is rational (c) (A) is true but (R) is false
(b) Limited money income of the consumer (d) (A) is false but (R) is true
(c) Maximization of total satisfaction Ans. (a) : Assertion - If the firm is prepared to
(d) Diminishing marginal utility of money increased cost on transportation, it may be in a position
Ans. (d) : Cardinal utility approach assumptions : to reduce its inventory cost are true statement.
• Consumer are Rational. Therefore, Reason (R) is correct, and (R) is the correct
• Limited money income of the consumer. explanation of (A).
• Maximization of total satisfaction. Reason:- As in Such a case, the firm can use of fastest
mode of transport and rush the goods /stock to the
• Utility is measurable. desired warehouse unmindful of the cost of
• Constant marginal utility of money. transportation. These are true statement.
• Utility is additive. 56. Michael Porter proposed generic strategies that
54. For calculating posterior probabilities provide good starting points for strategic
(conditional probabilities under statistical thinking. Identify them from the below
dependence), the following information is mentioned strategies
available (A) Overall cost leadership
(A) Conditional probabilities (B) Innovation
(B) original probability estimates (prior- (C) Focus
probabilities) of mutually exclusive and (D) Differentiation
collectively exhaustive events Choose the correct answer from the options
(C) Arbitrary event with probability # 0 and for given below:
which conditional probabilities are also (a) (A) and (B) only
known (b) (A), (C) and (D) only
(D) Joint probabilities of prior probability and (c) (A), (B) and (D) only
conditional probability (d) All of these (A), (B), (C) and (D)
Given the information that the arbitrary event Ans. (b) : Micheal Porter’s Generic Strategies -
has occurred, arrange the above information in
a sequence of their requirement as per Baye's • Porter’s generic strategies describe how a company
Theorem pursues a competitive advantage across its chosen
market scope.
(a) (A) → (B) → (D) → (C)
• The generic strategies are either lower cost
(b) (C) → (B) → (A) → (D) differentiation, or focus.
(c) (B) → (C) → (D) → (A) • A company chooses to pursue one of two types of
(d) (B) → (A) → (D) → (C) competitive advantage, either via lower costs than its
Ans. (d) : We require the following information is order competition or by differentiating itself along dimensions
to derive posterior probability : valued by customers to command a higher Price.
(1) Original probability estimates (prior probabilities) • A company also chooses one of two types of scope,
of mutually exclusive and collectively exhaustive either focus (Offering its products to selected segments
events. of the market) or industry-wide, offering its product
(2) Conditional probabilities. across may market segments.

UGC NTA NET Commerce IInd Paper December, 2019 330 YCT
57. Which two of the following are the function of Reason (R): Some economists are of the
WTO opinion that when tax has already been paid on
(A) To facilitate the implementation, the profit of the company and balance is
administration and operation of trade distributed as dividend to the owners, tax need
agreement not be levied on them
(B) To carry out periodic reviews of the trade In the light of the above two statements, choose
policies of its member countries the correct answer from the options given
below
(C) To assist it the establishment of a multilateral
(a) Both (A) and (R) true and (R) is the correct
system of payments explanation of (A)
(D) To promote international monetary cooperation (b) Both (A) and (R) true but (R) is NOT the
Choose the correct option from the following: correct explanation of (A)
(a) (A) and (D) (b) (B) and (C) (c) (A) is true but (R) is false
(c) (C) and (D) (d) (A) and (B) (d) (A) is false but (R) is true
Ans. (d) : Functions of WTO :- Ans. (a) : Assertion – Tax should not be charged on
• The main function of WTO was to liberalize and dividend income from the shareholders these statement
expand trade in goods so as to bring about all around are true.
economic prosperity. Therefore the assertion (A) is correct.
• Raising standard of living. Reason (R) – Some economists are of the opinion what
when tax has already been paid on the profit of the
• Ensuring full employment. company and balance is distributed as dividend to the
• Fully utilization of rescue of the world. owner's tax need not be levied on them.
• To increase trade of service. Therefore the Reason (R) is correct and (R) is the
• To facilitate to implementation administration and correct explanation of (A).
operation of trade policies of its member countries. 60. Match List-I with List-II
• To carry out periodic reviews of the trade policies of List-I List-II
its member countries. (A) Size of market (i) Globalization of
58. Which among the following is a correct business
statement about residential status of a company? (B) Demographic (ii) Foreign trade policy
(a) A company can be classified as "not environment
ordinarily resident" (C) Export (iii) Macro- economic
(b) A company can never be classified as "not oriented units environment
ordinarily resident" (D) Multinational (iv) Non-economic
(c) A company can be classified as "not corporations environment
ordinarily resident" with the permission from Choose the correct option from those given
Ministry of Finance below
(d) A company can be classified as "not (a) (A)-(iv), (B)-(ii), (C)-(iii), (D)-(i)
ordinarily resident" with the permission from (b) (A)-(ii), (B)-(iii), (C)-(i), (D)-(iv)
Ministry of Commerce (c) (A)-(iii), (B)-(ii), (C)-(i), (D)-(iv)
Ans. (b) : Companies can be classified into two (d) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i)
residential status categories only. A company can either Ans. (d) : Correct match of List-I to List-II.
be a resident or non-resident. List-I List-II
(A) Resident – A company is said to be resident in
(A) Size of market (iii) Macro-economic
Indian in any previous year if (i) it is a Indian environment
company or (ii) during the year, the control and
management of its affairs are situated wholly in (B) Demographic (iv) Non-economic
India. environment environment
(B) Non- Resident – (i) If company does not satisfy any (C) Export oriented (ii) Foreign Trade
of the aforesaid conditions of residence, it is said to units policy
be a ‘non- resident’ company. (D) Multinational (i) Globalization of
(ii) In Other words, if the company is not registered in corporation business
India and its control and management is situated 61. Which three of the following types of cyber
wholly or partially outside India. It is regarded as a attacks may occur in the process of mobile
non-resident. banking?
59. Given below are two statements. One is labelled (A) Backdoor attack
as Assertion (A) and the other is labelled as (B) Front door attack
Reason (R). (C) Denial of service attack
Assertion (A): Tax should not be charged on (D) Direct access attack
dividend income from the shareholders Choose the correct option from those given below :
UGC NTA NET Commerce IInd Paper December, 2019 331 YCT
 (a) (A), (B) and (C) (b) (B), (C) and (D) Choose the correct option from those given
(c) (A), (B) and (D) (d) (A), (C) and (D) below:
Ans. (d) : The following are type of cyber - attack that (a) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv)
may occur in the process of mobile banking - (b) (A)-(ii), (B)-(i), (C)-(iv), (D)-(iii)
(1) Back door attack - A back door attack is a malware (c) (A)-(iv), (B)-(iii), (C)-(ii), (D)-(i)
type that negates normal authentication procedures (d) (A)-(ii), (B)-(iii), (C)-(iv), (D)-(i)
to access a system. Ans. (b) :
• As a result, remote access is granted to resource Committee Purpose
within an application, such as database and file servers, (A) Y.V Reddy (ii) Rationalization
giving perpetrators the ability to remotely issue system Committee of interest rate
commands and update malware. on small saving
(2) Denial of service attack -
(B) Rashid Jilani (i) Revised method
• A DoS (Denial of Service) attack is an attack meant to Committee of lending in
shut down a machine or network, making it inaccessible place of cash
to its intended users. credit system.
• DoS attack accomplish this by flooding the target with (C) S.M. Kelkar (iv) Regional Rural
traffic or sending it information that triggers a crash. Commitee Bank
(3) A Direct Access attack is an attack where a hacker is
able to gain access to computer and be able to directly (D) I.T. Vaz Committee (iii) Working capital
download data from it. lending norms
64. Which of the following is the non-random
62. Which of the following are part of Corporate
method of selecting samples from a given
Social Responsibility (CSR) to consumers?
population?
(A) Reasonable chances and proper system for
accomplishment and promotion (a) Stratified Sampling
(B) To supply goods at reasonable prices even (b) Systematic Sampling
when there is seller's market (c) Quota Sampling
(C) Improving the efficiency of the business (d) Multi-stage Sampling
operation Ans. (c) : Type of Non-Probability Sampling :-
(D) To provide an opportunity for being heard • Accidental Sampling : is also based upon
and redress genuine grievances convenience in accessing the sampling population.
Choose the correct option from those given below : • Judgment/Purposive sampling : The primary
(a) (A) & (B) (b) (B) & (D) consideration in purposive sampling is the
(c) (B) & (C) (d) (A) & (C) researcher’s judgment as to who can provide the best
Ans. (b) : Corporate Social Responsibility (CSR) :- information to achieve the objects of your study.
CSR is a type of business self – regulation with the aim • Snowball Sampling : it is also called network or
of being socially accountable. chain referral sampling.
The responsibility towards consumers that corporate • Quota Sampling : The researcher is guided by some
social responsibility includes is as follows : visible characteristics, such as gender or race of the
study population that is of interest to him.
• To provide goods of standard quality.
• Dimensional Sampling : it is an extension of quota
• To change fair prices i.e., to supply goods at sampling where the researchers takes into account
reasonable prices even when there is a sellers market. several characteristics such as gender, residence,
• To provide prompt and courteous after-sale service. education etc.
• To handle consumer complaints and grievances 65. Which one of the following is the correct
quickly. sequence of various stages of operating cycle of
• To avoid unfair trade practices like adulteration, black a manufacturing company?
marketing and hoarding. (a) Raw material conversion period, work-in-
63. Match the following Banking Sector reform progress conversion period, Finished goods
committees with their respective purposes: conversion period, Receivables conversion
Committee Purpose period
(A) Y.V. Reddy (i) Revised method of (b) Raw material conversion period, work-in-
Committee lending in place of progress conversion period, Creditors
cash credit system payment period, Receivables conversion
(B) Rashid Jilani (ii) Rationalization of period
Committee interest rate on (c) Creditor payment period, Raw material
conversion period, Receivables conversion
small savings period, work-in-progress conversion
(C) S.M Kelkar (iii) Working capital (d) Raw material conversion period, Finished
Committee lending norms goods conversion period, work-in-progress
(D) I. T Vaz (iv) Regional Rura conversion period, Receivables conversion
Committee Banks period
UGC NTA NET Commerce IInd Paper December, 2019 332 YCT
Ans. (a) : Correct sequence of various stages of Ans. (c) : According to Section ‘4’ of the Indian
operating cycle a manufacturing company :- partnership act, 1932. Partnership means “The
Raw material conversion period relationship between the persons who have agreed to
share profit of business carried on by all or any of them
⇓ acting for all.”
Work-In-Progress conversion period • All persons who have entered into a partnership with
⇓ one another are called individually ‘Partners’ and
Finished goods conversion period collectively a ‘firm’ and the name under which business
⇓ is carried on is called the ‘Firm Name’.
Receivables conversion period 69. Which of the following is NOT a method for
calculating or ascertaining the amount of
66. Match the 'Category of Compensation' with purchase consideration?
'Compensation Plan' (a) Net Payment Method
Category of Compensation Plan (b) Net Assets Method
Compensation (c) Gross Receipts Method
(A) Pay for time not (i) Savings Plan (d) Share Exchange Method
worked Ans. (c) : Purchase consideration :- In the case of
(B) Services and (ii) Stock Option amalgamation, purchase consideration is the agreed
Perquisites amount that the transferee company (Purchasing
(C) Protection (iii) Pension company) pays to the transferor company (Vender
Programme company) in exchange of the ownership of the
(D) Incentive Pay (iv) Sick Leave transferor company. It may be in form of cash shares or
(E) Deferred Pay (v) Low Cost Meals any other assets as agreed between both companies.
Choose the correct option from those given Method of purchase consideration :-
below: (i) Net asset method
(a) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i), (e)-(v) (ii) Net payment method
(b) (A)-(iv), (B)-(v), (C)-(iii), (D)-(ii), (e)-(i) (iii) Lump - sum method
(c) (A)-(iv), (B)-(v), (C)-(i), (D)-(ii), (e)-(iii) (iv) Intrinsic value/share exchange method
(d) (A)-(iii), (B)-(v), (C)-(i), (D)-(iv), (e)-(ii) 70. What is the typical sequence in which the
following selection devices are used by the
Ans. (b) : The following are the for correct match :-
company?
Category of Compensation plan (A) Reference checks (B) Physical examination
compensation (C) Application Blank (D) Hire
(A) Pay for time not (iv) Sick Leave (E) Conditional Offers (F) More interviews
worked (G) Screening interviews
(B) Services and (v) Law cost meals (H) Tests
perquisites Choose the correct answer from the options
(C) Protection (iii) Pension given below
programme (a) (C)→(G)→(H)→(F)→(A)→(E)→(B)→(D)
(D) Incentive pay (ii) Stock Option (b) (D)→(G)→(F)→(H)→(A)→(E)→(B)→(C)
(E) Deferred pay (i) Saving plan (c) (C)→(H)→(G)→(A)→(F)→(E)→(B)→(D)
67. Which of the following terms means the (d) (D)→(G)→(H)→(F)→(A)→(E)→(B)→(D)
tendency of a supervisor to rate a subordinate Ans. (a) : Following steps are involved in the selection-
lower than his performance? (C.) Application Blank
(a) Horns Effect (b) Halo Effect ⇓
(c) Central Tendency (d) Pointing Tendency (G.) Screening interviews
Ans. (a) : Horns Effect :- ⇓
• The horn effect occurs when “individuals believe that H. Tests
negative traits are connected to each other”.
• It is a phenomenon in which an observer’s judgment ⇓
of a person is adversely affected by the presence of (for (F.) More interviews
the observer) an unfavorable aspect of this person. ⇓
• In this effect, there is a tendency of a supervisor to (A.) Reference checks
rate of subordinate lower than his performance. ⇓
68. Under which of the following categories, a (E.) Conditional Offers
partner of partnership firm will be assessed? ⇓
(a) An individual (B.) Physical examination
(b) HUF
(c) Firm ⇓
(d) Body of an Individual (D.) Hire
UGC NTA NET Commerce IInd Paper December, 2019 333 YCT
71. Which two of the following statements are No two points on a straight -line demand curve have the
true? same elasticity.
(A) Skewness studies the flatness or peakedness
of the distribution
(B) A positively skewed distribution curve is
stretched more to the right than to the left
(C) On the basis of empirical relationship
between mean, mode and median for
moderately asymmetrical distribution, Karl
Pearson's coefficient of skewness can be
Statement- II Explanation :- Rectangular hyperbola is a
measured by 3 (Mean-Median) divided by
curve under which all rectangular areas are equal. When
Standard Deviation the elasticity of demand is equal to unity (ed = 1) at all
(D) If mean < mode, the distribution is positively points of the demand curve, then the demand curve is a
skewed rectangular hyperbola.
Choose the correct option from those below:
(a) (A) and (B) (b) (B) and (C)
(c) (C) and (D) (d) (B) and (D)
Ans. (b) : Below are the features of Karl Pearson’s
coefficient of Skewness :
• Skewness studies or measures the lack of symmetry in
the distribution.
• If there is a long tail towards the distribution towards
the higher values or right – hand side i.e. larger spread
on the higher side of mode, the skewness is positive or 73. Given below are two statements. One is labelled
right - handed. In this case, Mean > Medium > Mode. as Assertion (A) and the other is labelled as
Such data is termed ‘elongated Reason (R).
bell- shaped data Assertion (A): Indian Accounting Standards
contain some 'carve outs' and for convergence
• In Practice, the value of this coefficient usually lies with IFRS with some changes applied in India
between ± 3. if the mode is ill-defined, then using the Reason (R): Financial statements prepared in
approximate relationship : Mode = 3 Median- 2 Mean. India with Indian Accounting Standards will
This formula reduces to skewness = 3 (Mean – not be IFRS compliant
Median/standard) deviation. In the light of the above two statements, choose
• If the mean is greater than the mode (mean the the correct option
coefficient of skewness would be positive otherwise (a) Both (A) and (R) are true and (R) is the
negative. correct explanation of (A)
72. The following are the two statements regarding (b) Both (A) and (R) are true but (R) is NOT the
elasticity of demand and its measurement correct explanation of (A)
Statement I : On every point on the straight (c) (A) is true but (R) is false
line demand curve, the point elasticities are all (d) (A) is false but (R) is true
equal Ans. (b) : Assertion (A) : Indian Accounting Standards
Statement II : On every point on the straight contain some ‘curve outs’ and for convergence with
line demand curve, the point elasticities are all IFRS with some change applied in India.
equal Therefore, Asserting (A) is the correct statement.
Reason (R) : Financial statement prepared in India with
Select the correct option for those below:
Indian Accounting Standards will not be IFRS
(a) Both the statements are correct complaint.
(b) Both the statements are not correct Therefore, Reason is the correct statement but (R) is
(c) Statement I is correct while Statement II is NOT the correct explanation of (A).
incorrect 74. National Housing Bank was established in 1987
(d) Statement I is incorrect while Statement II is as wholly owned subsidiary of which of the
correct following?
Ans. (b) : Statement - I : Explanation - (a) State Bank of India
Elasticity And Demand Slope : The slope of a straight- (b) Life Insurance Corporation of India
line demand curve, one with a constant slope, has (c) Reserve Bank of India
constantly changing elasticity. (d) Industrial Finance Corporation of India

UGC NTA NET Commerce IInd Paper December, 2019 334 YCT
Ans. (c) : National Housing Bank (NHB) : Ans. (b) : Match the following methods of capital
• It was set up in July 1988 under the National Housing with their formula :
Bank Act, 1987 as the apex bank in the field of housing Method Formulas
finance. (A) ARR method (iii) Average Income ÷
• It is a wholly-owned subsidiary of the Reserve Bank Average
of India. Investment
• It is the principle agency to promote housing finance
institutions at the regional and local levels and to (B) Pay back period (iv) Investment ÷
provide financial and other support to such institutions. method Annual cash
inflows
75. Match List-I with List-II
List-I List-II (C) NPV method (i) Present value of
(A) Transfer of (i) Negotiable cash inflows –
ownership Instrument Present value of
(B) Sale of goodwill (ii) Contract of sale cash out flows
after dissolution of goods (D) Probability Index (ii) Present value of
(C) Buy-back of (iii) Dissolution of cash inflows ÷
securities partnership firm Present value of
(D) Promissory Note (iv) Share capital of cash out flows
company 77. Which among the following is NOT a correct
Choose the correct option from those given statement?
below: (a) The Reserve Bank of India worked as Central
(a) (A)-(ii), (B)-(iii), (C)-(iv), (D)-(i) Bank of Burma till April 1947
(b) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i) (b) The Reserve Bank of India worked as Central
(c) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii) Bank of Pakistan till June 1948
(d) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv) (c) The Reserve Bank of India worked as Central
Ans. (a) : Bank of Bangladesh from January 1972 to
List-I List-II December 1975
(d) The Reserve Bank of India commenced its
(A) Transfer of (ii) Contract of sale of operations on April 1, 1935
ownership. goods.
Ans. (c) : Burma (Myanmar) seceded from the Indian
(B) Sale of goodwill (iii) Dissolution of
after dissolution. partnership firm Union in 1937 but the RBI continued to out as the
Central Bank for Burma till the Japanese occupation of
(C) Buy - back of (iv) Share capital of Burma till the Japanese. Occupation of Burma and later
securities company up to April 1947. After the participation of India.
(C) Promissory Note (i) Negotiable • The Reserve Bank Served as the Central Bank of
Instrument Pakistan UP to June 1948 when the state Bank of
*** Pakistan commenced operations. The Bank, which was
76. hetbpeeriele yepeefšbie kesâ efvecveefueefKele heæefleÙeeW keâes originally setup as a share holder’s bank, was
mebyebefOele met$eeW kesâ meeLe megcesefuele keâjW: nationalized in 1949.
Method Formuls • The RBI Act, 1934 (II of 1934) provides the statutory
(A) ARR method (i) Present Value of basis of the functioning of the Bank, which commenced
Cash Inflows – operations on April 1, 1935.
Present Value of • Bangladesh Bank is the Central Bank of Bangladesh
Cash Outflows and is a member of the Asian clearing union.
(B) Pay back period (ii) Present Value of 78. Which of the following statements is false?
Method Cash Inflows ÷ (a) When value of correlation coefficient is one,
Present Value of the two regression lines coincide
Cash Outflows (b) The regression coefficients are independent of
(C) NPV Method (iii) Average Income ÷ the change of origin and of scale
Average (c) The sign of the regression coefficients are
Investment always the same
(D) Probability Index (iv) Investment ÷ (d) The square of the coefficient of correlation is
Annual Cash called coefficient of determination
Inflows Ans. (b) : Some of the properties of regression
Choose the correct option from those given coefficient.
below • If two variables are there say ‘X’ and ‘Y’, two value
(a) (A)-(iii), (B)-(i), (C)-(iv), (D)-(ii) of the regression coefficient are obtained. One will be
(b) (A)-(iii), (B)-(iv), (C)-(i), (D)-(ii) obtained when X is independent and Y is dependent and
(c) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv) other when consider Y as independent and X as a
(d) (A)-(i), (B)-(iv), (C)-(ii), (D)-(iii) dependent.
UGC NTA NET Commerce IInd Paper December, 2019 335 YCT
• Both of regression coefficients must have the same 82. Which of the following sections of Companies
sign. If byx is positive, bxy will also be positive and it is Act, 2013 facilitates amalgamation, absorption
true for vice versa. and reconstruction of companies?
• The regression coefficients are independent of the (a) 319 (b) 320
change of the origin. But, they are not independent of (c) 410 (d) 502
the change of scale. Ans. (a) : Section ‘319’ of Companies Act, 2013
• The coefficient of determination is the square of the facilitates amalgamation, absorption, and reconstruction
correlation (r) between predicted ‘y’ scores and actual y of companies.
scores; Thus, it ranges from 0 to 1. Power of company liquidator to accept shares, etc., as
consideration for the sale of property of the company.
79. The informal group's communication system is • Section ‘320’ - Distribution of property of the
called company.
(a) Group Dynamics (b) Grapevine • Section ‘410’ - National Company Law Appellate
(c) Exchange (d) Interaction Tribunal (NCLAT) was constituted under section ‘410’
Ans. (b) : In the business context, informal of the Companies Act, 2013 for hearing appeals against
communication is called a “grapevine” as it difficult to the orders of National Company Law Tribunal (S)
define the beginning and end of the communication. (NCLT), with effect from 1st June 2016.
There are four types of informal communication • Section ‘502’- Appointment of liquidator.
(Grapevine) networks that show now. 83. Functions of a first-level or front line
Communication is facilitated These are : supervisors are to include which of the
1. Single strand chain following?
2. Gossip chain (A) To determine individual job assignment
3. Probability chain (B) To attend to grievances and resolve conflicts
4. Cluster chain (C) To provide technical knowledge and guidance
to workers
80. In which of the following years, the Bretton
(D) To supply strategic information relating to
Woods Agreement was signed by the delegates production to management
from 44 nations which led to the establishment
Choose the correct answer from the options
of the IMF? given below:
(a) 1940 (b) 1952 (a) (A) and (B) only
(c) 1944 (d) 1957 (b) (A) and (C) only
Ans. (c) : Approximately 730 delegates representing 44 (c) (A), (B) and (C) only
countries met in Bretton woods in July 1944 with the (d) All of them (A, B, C, D)
principle goals of certing an efficient foreign exchange Ans. (d) : Function of A first-level or front line
system, preventing competitive devaluations of supervisors are :
currencies and promoting international economic
• To determine individual job assignment.
growth. The Bretton woods agreement and system were
Central to these goals. The Bretton woods Agreement • To Attend to grievances and resolve conflicts.
also created two important organization. • To provide technical knowledge and guidance to
workers.
• The International Monetary Fund (IMF).
• To supply strategic information relating to production
• The World Bank. to management.
81. Which of the following laws affect business • Plan and assign daily work load to team members.
organizations? • Develop process improvement to enhance quality and
(a) Incorporation and Bankruptcy laws productivity.
(b) Environmental Protection Laws 84. Which one of the following is NOT correct
(c) Occupational Health and Safety Laws according to the Consumer Protection Act?
(d) Competition Laws (a) District Forum shall consist of a lady social
Ans. (a) : Rules and regulations have been implemented worker
to control how businesses operate. (b) State Commission shall consist of person who
These laws protect consumers and also preserve is or has been a judge of a High Court
competition between businesses. Businesses that do not (c) District Forum shall consist of four members
obey any of the business laws will face fines or (d) National Consumer Disputes Redressal
penalties. Commission shall consist of a person who is
• Environment protection law. or has been a judge of the Supreme Court
• Occupation Health and Safety law. Ans. (c) : Consumer Protection Act 1986 :- Three tier
system Under Consumer Act.
• Competition Laws.
District Forum :- These Forum are set by the district of
In India business organization is not affected by the state concerned in each district wherein it consists of
incorporation and Bankruptcy law rather it is affected president and two member of which one should be
by Insolvency and Bankruptcy code 2016. woman and is appointed by the State Government.
UGC NTA NET Commerce IInd Paper December, 2019 336 YCT
State Commission :- Each State Commission shall Ans. (d) : Rights of INDEMNITY HOLDER –
consist of a person who is or has been a Judge of a High (1) He is entitled to recover all damages which he may
Court, appointed by the State Government. be compelled to pay in any suit in respect of any
National Commission :- The National Commission shall matter to which the promise to indemnity applied.
consist of a person who is or who has been a Judge of (2) He is entitled to recover from the indemnifier, all
Supreme Court, appointed by the Central Government. costs which he had paid in bringing or defending
85. Which two of the following measures of central any suit in respect of contracts of indemnity.
tendency are NOT capable of algebraic (3) He is entitled to recover from the indemnifier, all
treatment? the amount which he had paid under the terms of
(A) Geometric Mean (B) Median the compromise of such suit.
(C) Arithmetic Mean (D) Mode • The indemnity holder is entitled to the above ‘3’
(E) Harmonic Mean rights. Thus, the indemnity holder is NOT entitled to
Choose the correct answer from the options damages for liability incurred which is not absolute.
given below: 88. Which two of the following statements are
(a) (A) and (B) (b) (D) and (E) correct?
(c) (B) and (D) (d) (C) and (E) (A) In the short – run, ∆TFC = 0, therefore ∆TC
Ans. (c) : =∆TVC
(B) If decrease in AFC < increase in AVC, then
AC decreases
(C) If decrease in AFC = increase in AVC, AC
remains constant
(D) If decrease in AFC > increase in AVC, then
AC increases
Choose the correct answer from the options
given below
(a) (A) and (C) (b) (B) and (C)
(c) (B) and (D) (d) (A) and (D)
86. According to FEMA, foreign exchange does Ans. (a) : The correct form of the given statements are
NOT include as follows :
(a) Deposits payable in any foreign currency (A) In the short-run ∆TFC = 0, therefore ∆TC = ∆TVC
(b) Bills of exchange drawn in Indian currency (B) If decrease in AFC < increase in AVC, then AC
but payable in any foreign currency increase.
(c) Travelers cheques drawn by institutions (C) If decrease in AFC = increase in AVC, AC remains
outside India but payable in Indian currency constant.
(d) Drafts drawn by banks outside India and (D) If decrease in AFC > increase in AVC, then AC
payable in foreign currency decrees.
Ans. (d) : Foreign Exchange means foreign currency 89. Which of the following statements are true?
and includes : (A) Transaction exposure is inherent in all foreign
(1) Deposits, Credits and balances payable in any currencies denominated contractual
foreign currency. transactions
(2) Drafts, traveler’s cheques, letters of credit, or bills (B) Translation exposure relates to the change in
of exchange expressed or drawn in Indian accounting income and balance sheet
currency but payable in any. foreign currency. statements caused by change in exchange rate
(3) Drafts, traveler's cheques, letters of credit or bill (C) Economic exposure has an impact on the
of exchange drawn by banks, institutions or valuation of a firm
persons outside India but payable in Indian (D) Operating exposure does not have any impact
currency. on the firm's future operating revenues or
• According to FEMA, foreign exchange includes drafts future operating costs
drawn by banks outside India and payable in Indian Choose the correct option from those below:
currency but it does not include any drawn by banks (a) (A) and (B) only
outside India and payable in foreign currency. (b) (B) and (C) only
87. The indemnity holder is NOT entitled to (c) (B) and (D) only
(a) All damages which he may be compelled to (d) (A), (B) and (C) only
pay in any suit in respect of any matter to Ans. (*) :
which the promise applies (A) Translation exposure is inherent all foreign
(b) All costs that he may be compelled to bear in currencies denominated contractual translation.
defending any such suit Thus, statement A is correct.
(c) All sums that he may have paid under the (B) Translation exposure (also known as translation
terms of any compromise of such suit risk) is the risk that a company’s equities, assets,
(d) Damages for liability incurred which is not liabilities, or income will change in value as a
absolute result of exchange rate change.
UGC NTA NET Commerce IInd Paper December, 2019 337 YCT
 (C) Economic exposure is a type of foreign exchange 91. The insurance business in India was started
exposure caused by the effect of unexpected first by which one of the following?
currency fluctuation on a company’s future cash (a) Americans (b) Indian merchants
flows, foreign investments and earning. (c) Europeans (d) Afro-Indians
(D) Operating exposure refers to how exchange rate Ans. (c) : Let’s have a look at the 2nd sentence from the
change can input on a firms future cash flows and paragraph - “The oriental life insurance company
consequently affect the firms value. started by Europeans in Calcutta was first life Insurance
90. Arrange the following financial institutions in Company on Indian Soil”.
ascending order of their year of establishment: • Upon perusal of the above statement, it can be
(A) National Housing Bank concluded Europeans were the first to start the
(B) Export-Import Bank of India insurance business in India.
(C) NABARD 92. Which among the following was later renamed
(D) Unit Trust of India as Bombay Life?
Choose the correct option: (a) The Indian Mercantile General Assurance
(a) (B)→ (D) → (C) →(A) (b) The Oriental Life Insurance Company
(b) (D)→ (B) → (A) → (C) (c) National Insurance
(c) (D)→ (B) → (C) → (A) (d) Swadeshi Life
(d) (D)→ (C) → (B) → (A) Ans. (d) : Let’s have a look at the 9th sentence from the
Ans. (c) : Financial Institution in ascending order of paragraph :-
their year of establishment :- • The Indian mercantile, General Assurance and
Institutions Establishment Year Swadeshi Life (Later Bombay Life) were some of the
companies established during the same period.”
D. Unit Trust of India (UTI) 1st July 1964
B. Export Import Bank 1st January 1982 • upon perusal of the above statement, it can be
concluded Swadeshi Life was later renamed Bombay
(EXIM) Life.
C. (NABARD) 12 July 1982
93. Identify the correct statement from the
A. National Housing Bank (NHB) 9 July 1988
following
Read the passage carefully and answer the questions (a) Initially, insurance companies used to
that follow– discriminate Indian and European clients
Life Insurance in its modern form came to India from (b) There was no discrimination in Indian and
England in the year 1818. The Oriental Life Insurance European clients by the insurance companies
Company started by Europeans in Calcutta was the first initially
life insurance company on Indian soil. All the insurance (c) Indian clients were charged lower premium
companies established during that period were brought by the insurance companies in the beginning
up with the purpose of looking after the needs of the
(d) Indian insurance companies charged higher
European community and Indian natives were not being
premium to Europeans at a later stage
insured by these companies. However, later with the
efforts of eminent people like Babu Muttylal Seal, Ans. (a) : Let’s have a look at the 3rd sentence from the
foreign insurance companies started insuring Indian lives paragraph :
too. But Indian lives were being treated as sub standard “All the insurance companies established during that
lives and heavy extra premium were being charged upon period were brought up with the purpose of looking
them. The Bombay Mutual Life Assurance company in after the needs of the European community and Indian
the year 1870 and covered Indian lives at normal rates. natives were not being insured by these companies.”
Starting as an Indian enterprise with highly patriotic • Upon perusal of the above statement, it can be
motives, insurance companies came into existence to concluded that initially, insurance companies used to
carry the message of insurance and social security discriminate between Indian and european clients.
through insurance to various sectors of society. In 1907, 94. The paragraph is about which of the following?
the Hindustan Co-operative Insurance Company took (a) Genesis of insurance in India
birth in one of the rooms of 'The Jorsanko', house of the (b) Struggle of insurance business
great poet Rabindranath Tagore in Calcutta. The Indian (c) Conflict of insurance business
Mercantile, General Assurance and Swadeshi Life (later
(d) Complications of insurance business
Bombay Life) were some of the companies established
during the same period. Prior to 1912, India had no Ans. (a) : Let’s have a look at the first two sentence
legislation to regulate the insurance business. In the year from the paragraph :
1912, Life Insurance Companies Act and Provident Fund - “Life insurance in its modern form came to India from
Act were passed. The Life Insurance Companies Act, England in the year 1818. The Oriented Life Insurance
1912 made it necessary that the premium rate tables and company started by Europeans in Calcutta was the First
periodical valuations of companies should be certified by Life Insurance Company on Indian Soil”.
an actuary. But the Act discriminated between foreign • Upon perusal of the above statement, it can be
and Indian Companies on many accounts, putting Indian concluded that the paragraph is about the Genesis of
Companies at a disadvantage. insurance in India.

UGC NTA NET Commerce IInd Paper December, 2019 338 YCT
95. Which one among the following grew along Ans. (d)
with insurance business in India? • A Xerox company may be defined as the one that
(a) Pension Fund (b) Provident Fund
manufactures Xerox machines.
(c) Gratuity (d) Arbitrage
• As per the passage, the product definition needs to be
Ans. (b) : Let’s have a look at the 3rd last sentence from
paragraph : product-specific i.e. we make copying equipment.
- “In the year 1912, Life Insurance Company Act and • As per the passage, the market definition needs to be
provident Fund Act were passed.” customer-oriented i.e. we help improve office
• Upon perusal of the above statement, it can be productivity.
concluded that provident fund grew along with 98. Pepsi could define its 'target market' as:
insurance business in India. (a) Everyone who drinks carbonated soft drinks
Read the given passage carefully and answer the and are competitors
question that follow
(b) Anyone who drinks liquid
Companies often define themselves in terms of products:
They are in the "auto business" or the "clothing (c) Everyone who drinks non-milk drinks
business". Market definitions of a business, however, (d) Anyone who drinks competitor's drinks
describe the business as a customer – satisfying process. Ans. (a) : Upon perusal of the above statement, Pepsi
Products are transient, basic needs and customer groups
can be concluded everyone who drinks carbonated soft
endure forever. Transportation is a need: the horse and
carriage, automobile, railroad, airline, ship and truck are drinks and competitors are Pepsis's target market.
products that meet the need. Viewing business in terms 99. Which of the following is the correct market
of customers can suggest additional growth definition of 'BPCL'?
opportunities. There exists a difference between a target (a) We distribute oil products
market definition and a strategic market definition. To
(b) We are the largest oil supply company in
define its mission, a company should address Peter
Drucker's classic question: What is our business? India
96. Which of the following is the correct product (c) We supply energy
definition of 'Blue Star'? (d) Bharat's own oil distribution company
(a) We provide climate control in homes and Ans. (c) : Bharat Petroleum Corporation Limited
offices
(BPCL) is an Indian public sector oil and gas company
(b) We supply air conditioners
headquartered in Mumbai Maharashtra.
(c) We make air cooling systems
(d) We make air conditioners • As per the passage, the market definition needs to be
Ans. (d) : Blue Star Limited is an Indian multinational customer-oriented.
Company specializing in designing, developing, • Of the given option, only the 3rd option i.e. we
manufacturing and marketing a wide variety of products supply energy, has an innate appeal and the rest of
in the Air conditioning and commercial refrigeration the options are to satrightforward.
industry and his headquarter in Mumbai, India.
100. Which of the following is NOT a major
97. Which of the following is the correct
combination of Product Definition and Market characteristic of a good mission statement?
Definition of Xerox Company? (a) They have very limited words
(a) Product Definition – We sell photocopies (b) They focus on a limited number of goals
Market Definition – We help improve office (c) They stress the company's major competitive
efficiency spheres in which company will operate
(b) Product Definition – We make photo
(d) They have a long term view
machines
Market Definition – We improve copy speeds Ans. (a) : • Let’s have a look at the last sentence from
(c) Product Definition – We sell copying the paragraph :
equipment - “To define its mission, a company should address
Market Definition – We make office more Peter Druker’s classic question : what is our
efficient business?”
(d) Product Definition – We make copying
• Upon persual of the above statement, it can be
equipment
concluded that limited words is not a major
Market Definition – We help improve office
productivity characteristic of a good mission stated.

UGC NTA NET Commerce IInd Paper December, 2019 339 YCT
 NTA UGC NET/JRF Exam, June 2020
COMMERCE
Solved Paper
Exam Date: 17.10.2020 Shift-I

1. As per Section 80G maximum deduction Ans. (d) : Direct selling means when distributors avoid
allowed for any cash donation is upto intermediaries in the supply chain and sell products
(a) Rs. 1,000 (b) Rs. 2,000 directly to consumers.
(c) Rs. 5,000 (d) Rs. 10,000 ♦ In traditional retail settings, products are sold online
Ans. (b) : As per sect. 80G maximum deduction or at a physical store, but direct selling relies heavily on
allowed for any cash donation is upto '2000'. sales people getting in front of customer in
nontraditional settings.
♦ Finance Act 2017 amendel section 80G so as to
♦ Hindustan unilever Ltd. a large distribution network
provide that no deduction shall be allowed.
comprising 5000 redistribution stockists and 40 'c & f'
Under section 80G in respect of donation of any sum agents (clearing & forwarding). The first phase of the
exceeding `2000-/ unless such sum is paid by any mode HUL distribution network had wholesalers placing bulk
other than cash. earlier this limit was Rs. 10,000. orders directly with the company.
2. In Leontief production function, L is 5. Which one of the following statements is 'True'
considered as in partnership?
(a) Structural constraint in the production process (a) In the absence of any provision in the
(b) Degree of Homogeneity partnership deed, only a working partner is
(c) Binding constraint in the production process entitled to remuneration.
(d) Optimisation constraint in the production (b) Any firm which earns normal profit has no
process goodwill
Ans. (c) : (1) The Leontief production function (LPF) (c) The business of the firm must be carried on
named for the father of input-output economics wassily by all the partners.
Leontief. It is also known as the fixed proportions (d) Interest on loan given by a partner to the firm
production function. We still see the output (Q) being a shall be paid if there are profits.
function of capital (K) and Labour (L). The designation Ans. (b) : Good will is the value of the reputation of a
of min refers to the smallest number for K and L. firm built over time with respect to the expected future
(2) The Isoquants in the LPF are right angles. profit over and above the normal profits.
(1). In absence of a partnership deed, no partner is
(3) A binding constraint is one where some optimal entitled to remuneration.
solution is on the line for the constraint. Thus if this (2). Business of the firm may be carried on by one or
constraint were to be changed slightly (in a certain more partners.
direction) This optimal solution would no longer be (3). Interest on loan given by a partner to the firm shall
feasible. A non-binding constraint is one where no be paid irrespective of profit or losses.
optimal solution is on the line for the constraint.
6. Which of the following relationships is NOT
3. EPRG Framework in International Business true in a model distribution
refers to (a) Mean – Mode = 3 (Mean–Median)
(a) Ethno, Poly, Rogio, Geo Transformations (b) Mode 3 Median – 2 Mean
(b) Ethnocentirc, Polycentric, Regiocentric and (c) 3 Median = 2 Mean + Mode
Geocentric Orientations (d) 2 Median – 3 Quartile Deviation = 2 Mean
(c) Ethics, Policies, Regulations, Guidelines Ans. (a, b, c): In the case of a moderately skewed
Orientations distribution i.e. in general, the difference between
(d) Every Person Refers Global Framework means and mode is equal to three times the difference
Ans. (b) : EPRG frame work in International Business between the mean and median. Thus, the empirical
refers to Ethnocentric Polycentric. Regio-centric and relationship as- Mean-mode - 3 (mean-median)
Geocentric orientations. It is a frame work created by if solved furthers-
Howard V perlmuter and wind and Douglas. in '1969'. It Mode = 3 Median – 2 Mean and 3 Median = 2 Mean +
designed to be used in the internationalization process Mode
of businesses and mainly addresses how companies Hence- 2 median - 3 Quartile Deviation = 2 mean is not
view international management orientations. true in a model distribution.
4. Which one of the following is not a major 7. In continuous compounding, the time it takes to
direct selling company in India? double the sum grossly follow 'Rule of 69'. If it
(a) Eureka Forbes is changed to discrete compounding, the
(b) Amway India Enterprises relevent rule of thumb is................
(c) Modicare (a) Rule of 69.3 (b) Rule of 72
(d) Hindustan Unilever Ltd. (c) Rule of 84 (d) Rule of 64
UGC NTA NET Commerce IInd Paper June, 2020 340 YCT
Ans. (b) : The Rule of '72' is a simplified way to Cobb-Douglas production function
estimate the doubling of an investments value based on Q = A(K a )(Lb )
a logarithmic formula.
♦ The Rule of '72' can be applied to investments if a + b > 1 ⇒ Increasing returns
inflation or anything that grows seen as GDP or if a + b = 1 ⇒ Constant return
population. if a + b < 1 ⇒ Decreasing returns
♦ The formula is useful for understanding the effect of
Then Q = 10K 0.6 L0.8
compound interest.
The formula for the Rule of '72' is ⇒ a = 0.6, b = 0.8 or 0.6+0.8 = 1.4 > 1
Years to double = 72/Interest Rate.
Where: Interest Rate = Rate of return on investment. = a + b >1
8. The 'going concern concept' is underlying basis 12. Pricing strategy of setting a high price when a
for product is introduced and gradually lowering
(a) Disclosing the market value of securities its price is known as
(b) Consolidating the accounts of subsidiary (a) Skimming (b) Penetration pricing
companies with those of parent company (c) Peak load pricing (d) Dumping
(c) Depreciating fixed assets over their useful Ans. (a) : Price skimming is a product pricing strategy
lives by which a firm charge highest initial price that
(d) Disclosing the sales and other operating customer will pay and then lowers it over time.
information in the income statement 13. Which one of the following is not true for Mass
Ans. (c) : The going concern concept is a fundamental Marketing?
principle of accounting. It assumes that during and (a) Provides very little scope for customisation
beyond the next fiscal period a company will complete (b) Deals with customers directly
its current plans, use it existing assets, and continue to (c) Normally followed in case of FMCG and
meet its financial obligations simply put, it is an SMCG Goods
assumption that the company will stay in business and (d) Relies heavily on advertising
that the value of its assets will endure.
Ans. (b) : Mass marketing does not deal with customers
♦ Disclosing the market value of securities is going directly.
concern concept.
♦ Mass marketing is a market strategy in which a firm
9. 'Constraint Optimisation' is closer to which of decides market with one offer or one strategy, which
the following objectives of business firm? supports the number of people possible.
(a) Sales maximisation
(b) Profit maximisation ♦ Mass marketing has very little direct cannot with its
(c) Satisfying behaviour customer and must distribute its proat through various
(d) Rent seeking behaviour retail outlets a long side its competitors.
Ans. (c) : Constraints can be either hard constraints, 14. A manufacturing enterprise monthly consumes
which set conditions for the variables that are required 1,350 units of raw material at the cost of Rs. 20
to be satisfied, or soft constraints, which have some per unit. Determine its economic order
variable values that are penalized in the objective quantity given the ordering cost of Rs. 2,400
function if, and based on the extent that, the conditions and carrying cost of inventory being 30 percent
on the variables are not satisfied. of the price paid.
10. In a rising consumer income scenario, the (a) 3,600 units (b) 2,400 units
preferred decision choice of business firms for (c) 4,800 units (d) 2,700 units
low income elastic products will be............... Ans. (a) : Economic Order Quantity (EOQ) =
(a) Product promotion 2× A×O
(b) Cost control EOQ =
(c) Product repositioning H
(d) Product improvement Monthly Demand = 1350 units (given)
Ans. (d) : Product improvement is the process making Annual demand = 1350 × 12 = 16200 (monthly units ×
meaningful product changes that result in new 12)
customers or increased benefits realized by existing Ordering cost = 2400 (given)
customer the two most popular ways to make product Price paid = Rs. 20 per unit
improvements are to add new product features or Carrying cost = 30% × 20 = 0.03 × 20 = 6 (As carrying
improve existing ones. cost of inventory being 30 percent of the price paid)
where- AR- Consumption of the article concerned (in
11. If an estimated Cobb-Douglas production
units) during a year.
function is Q=10K0.6L0.8, what type of returns
to scale does this production function indicate? OC = Cost of placing one order including the cost of
(a) Increasing returns (b) Decreasing returns receiving the goods or ordering cost and
(c) Constant returns (d) Negative returns C = Interest payment per unit per year including another
variable cost of storing it (Carrying cost per unit per
Ans. (a) : Cobb-Douglas production function is mainly
annum)
three type-
(1) Increasing return (2) Constant return (3) Decreasing 2 × 16200 × 2400
EOQ =
return states- 20 × 30%
UGC NTA NET Commerce IInd Paper June, 2020 341 YCT
 77760000 Where-
EOQ = = 12960000 n : The number of trials in the binomial experiment.
6 p : The probability of success on an individual trial.
EOQ = 3600 unit q : The probability of failure on an individual trial
(This is equal to 1-p)
15. The portfolio theory articulates diversification 19. When sampling is done without replacement
to reduce which of the following risks? then standard error of mean is:
(a) Market risk (b) Financial risk
(c) Unsystematic risk (d) Business risk σ σ N−n
(a) SE x = (b) SE x =
Ans. (c) : The portfolio diversification theory used n n N −1
today was first established by economist Harry σ N −1 σ n
Murkowitz. (c) SE x = (d) SE x = 1−
♦ Labeled the modern portfolio theory, this particular n N−n n N
set of equations and principles helps investors better Ans. (b) : In sampling without replacement, the formula
understand how to create a diversified portfolio that for the standard deviation of all sample means for
mitigates against volatility and risk. samples of size n must be modified by including a finite
♦ Diversification can help an investor manage risk and population correction. The formula becomes
reduce the volatility of an assets price movements. σ N−n
However, No matter how diversified your portfolio is, SE x =
n N −1
risk can never be eliminated completely. Where
♦ The portfolio theory articulates diversification to N is the population of size
reduce unsystematic risk. n is the sample size.
Investors confront two main types of risk when they
20. Which of the following is not an example of
invest compressed data?
♦ The first known is systematic or market risk and the (a) Data array
second type is unsystematic or diversifiable risk. (b) Frequency distribution
16. When foreign currency assets and liabilities (c) Histogram
match in terms of amount of exposure and (d) Ogive
timing of maturities, it is described as: Ans. (a) : Compression is the conversion of Data to a
(a) Financial hedge (b) Natural hedge format that requires less storage space.
(c) Perfect hedge (d) Netting The frequency distribution, histogram and ogive all
Ans. (b) : A Hedge is an investment that is made with respresent a large amount of data with a much smaller
the intention of reducing the risk of adverse price diagram/graph or formula. Thus, they represent a
movements in an asset. Natural Hedging- is the compressed form of data.
balancing act by adding assets that have a negative 21. The Human Relations Approach rejected the
correlation. 'rabble hyothesis' by giving which of the
♦ A compay can also go for a natural hedge by using its following argument?
normal operating procedures. (a) The worker does not work for money only
17. What is the probability that a randomly (b) A worker operates in a techno-economic
choosen card from a deck of cards will either system with no room for emotions.
be a King or a Spade? (c) Authoritarian style of leadership is more
(a) 0.3077 (b) 0.3269 productive.
(c) 0.0384 (d) 0.3169 (d) Individual pays attention to self-achievement
Ans. (a) : No. of King to cards in 4 (one each of spades, irrespective of informal group norms.
hearts, clubs and diamonds) Ans. (a) : The human relation Approach rejected the
No. of spade cards = 13 (There include one king too, rabble hypothesis' by arguing the worker does not work
which we have already counted above) for money only.
So. the No. of king and spades cards taken together = 16 the word rabble means crowd or mob and the Rabble
Hence, probability of drawing a king or spades card = hypothesis takes the view of men being a crowd of
16/52 = 4/13 = 0.3077 individuals interested in their individual interest such a
negative view of man by Taylor's scientific
18. The standard deviation of the binomial management was called rabble hypotheses.
distribution is:
22. Which of the following is not correct with
(a) np (b) np respect to matrix organisation?
(c) npq (d) npq (a) It is a combination of functional and product
organisation
Ans. (d) : The binomial distribution has the following (b) Functional departments are not permanent
properties: fixtures of a matrix organisation
(1) The mean of the distribution (µx) is equal to np. (c) Product departments are created as the need
(2) The variance ( σ 2x ) is npq. for them arises
(d) Team members have functional home when
(3) the standard deviation (σx) is npq they are not needed on a project

UGC NTA NET Commerce IInd Paper June, 2020 342 YCT
Ans. (b) : (1) Matrix organisation combines two forms company and such long term financing is generally of
of departnatalization - functional and product/project. high amount.
(2) Functional structure is a permanent feature of the External commercial borrowing (ECB)- is a long term
matrix orginazation and retains authority for the overall source of finance.
operation of the functional units. ECB is an instrument used in India to facilitate Indian
(3) Matrix organization also called grid organistion, is a companied to raise money outside the country in foreign
hybrid structure combining two complementary currency.
structures namely, functional departmatation with pure 28. What is a 'Repo Rate'?
project structure. (a) Is the rate at which RBI lends to State
23. As per Carroll Model, the four levels of Government
Corporate Social Responsibility are: (b) Is the rate at which International aid agencies
(a) Physical, economic, social and legal lends to RBI
(b) Physical, economic, legal and ethical (c) Is the rate at which the RBI lends to Banks in
(c) Philanthropic, economic, legal and ethical
case of short maturity
(d) Philanthropic, economic, social and ethical
(d) Is the rate at which RBI borrows funds from
Ans. (c) : Carroll's four part definition of CSR was the Commercial Banks in the country
originally stated as follows. Corporate social
responsibility encompasses the economic, legal, ethical, Ans. (c) : Repo rate is the rate at which the central bank
and discretionary (Philanthropic) expectations that of a country lends money to commercial banks in the
society has of organizations at a given point in time. event of any short fail of finds. Repo rate is used by
monetary Authorities to control inflation.
24. Who coined the term 'Collective Bargaining'? 29. In Marketing, DSA stands for.....................
(a) Reed Richardson (a) Delivery Staff Agency
(b) Kurt Lemin (b) Direct Supplier Agent
(c) W.E. Deming (c) Direct Selling Agent
(d) Sydney Webb and Beatrice Webb (d) Distribution and Supply Agency
Ans. (d) : The phrase 'collective Bargaining' is coined Ans. (c) : ♦ DSA is an abbreviation of direct selling
by famous authors Sydney and Beatrice webb in their agent.
celebrated treatise on 'History of Trade unions'. ♦ A direct selling agent or DSA is a person who works
25. The headquarters of the ASEAN is located in as a referral agent for a bank or NBFC
which of the following country? ♦ They are marketing Agents who bring business to the
(a) Indonesia (b) Vietnam
banks.
(c) Thailand (d) Singapore
♦ The job of a DSA is to find potential customer for the
Ans. (a) : The association of southeast Asian Nations or
ASEAN was established on 8 Aug. 1967 in Bangkok, bank they represent.
Thailand, currently there are '10' permanent members of ♦ To do this, DSA will look for people who are in the
this Association. its headquarters is in Jakarta market for a loan.
(Indonesia). 30. In which of the following stages of product life
26. What is the rate of tax deduction at source cycle a company reduces sales promotion to
from insurance commission is case of 'Person': take advantage of heavy consumer demand?
(a) 2 percent (b) 5 percent (a) Introduction (b) Growth
(c) 10 percent (d) 4 percent (c) Maturity (d) Decline
Ans. (b) : Sec. 194 D is applicable for all such paymets Ans. (b) : The term product life cycle refers to the
made to a resident whether they are an individual, length of time a product is introduced to consumer into
company or any other category of persons. The rate of the market until its removed from the shelves.
TDS is mentioned below. ♦ The life cycle of a product is broken into four stages-
Details Rate of TDS Introduction growth, maturity and decline.
Person other than 5%
a company
Domestic company 10%
27. Which of the following is a long term source of
finance?
(a) Commercial Paper (CP)
(b) External Commercial Borrowings (ECB)
(c) Factoring
(d) Line of Credit (LOC) (1) Introduction stage:- The show low sales numbers as
Ans. (b) : Long term financing means financing by loan the product is being introduced in the market.
or borrowing for a term of more than one year by way (2) Growth Stage :- During the growth stage sales rise
of issuing equity share by the form of debt financing by rapidly as consumers begin to accept product
long term loans, leases or bonds and it is done for sales promotion strategy reduces to take advantage
usually big projects financing and expansion of the of heavy consumer demand.
UGC NTA NET Commerce IInd Paper June, 2020 343 YCT
(3) Maturity stage: During the maturity stage of the ♦ free constant of both parties. U/S-14
product life cycle the sharp growth in sales begins ♦ lawful consideration - U/S 2(d)
to slow, and profits at the beginning of this stage ♦ Possibility of performance
decline. ♦ Necessary legal formality.
(4) Decline stage:- Where the product's sales and profit 34. Which of the following is not an implied
fall very quickly and most competitors leave the condition in a contract of sale?
market. (a) Condition as to quality or fitness
31. In which of the following price adjustment (b) Condition as to merchantable quality
strategies, a company reduces prices to reward (c) Condition as to wholesomeness
customer responses such as volume purchases, (d) Condition as to free from encumbrances
paying early or promoting the product? Ans. (d) :
(a) Discount and allowance pricing ♦ Transfer or Agreut to transfer the ownership of goods
(b) Psychological pricing ♦ The subject matter of the contract must necessarily be
(c) Promotional pricing goods
(d) Dynamic pricing ♦ The consideration is price
Ans. (a) : (1) Discount and allowance pricing is a price ♦ A contract of sale may be in writing or by oral
adjustment strategy where a company reduces price to ♦ All other essentials of a valid contract must be
reward customer response such as volume purchases, present
paying early, or promoting the product.
♦ There must be at least 'two' parties
(2) Psychological pricing- Adjusting prices for
psychological effect. ♦ Condition as to quality or fitness
(3) Promotional pricing- Temporarily reducing prices to 35. Which of the following does not come under the
increase short-run sales. definition of "Information" under RTI Act,
(4) Dynamic pricing- Adjusting prices continually to 2005?
meet the characteristics and needs of individual (a) Log Books
customers and situations. (b) Circulars
32. Some doctors charge patients for missed (c) File Noting in the process
appointments because the service value existed (d) Data material held in any electronic form
only at that point and disappeared when the Ans. (c) : Section 2(F) of the RTI Act defines
patient did not show up, is an example of which 'information' as any material in any form, including
one of the following four service records, documents memos, e-mails, opinions, advice,
characteristics? press releases, circulars, orders. logbook, contracts,
(a) Inseparability (b) Intangibility reports, papers, samples, models, data-material held in
(c) Variability (d) Perishability any electronic form and information relating to any
Ans. (d) : private body which can be accessed by a public authority
(1) Perishability- means that services cannot be stored under any other law for the time being in force.
for later sale or use 36. Under which section of Information
(2) Inseparability- Which means that services are Technology Act of 2000, updated in 2008,
produced and consumed at the same time. stealing any digital asset or information is
(3) Intangibility- means that services cannot be seen considered as cyber crime?
tasted. Felt, heard or shelled before they are bought. (a) Section 65 (b) Section 65.D
(4) Variability- it refers to the fact that the quality of (c) Section 67 (d) Section 70
services can very greatly, depending on who Ans. (a) : Section 65- of the information technology act
provides them and when, where, and how. of 2000, updated in 2008. Stealing any digital asset or
33. Which one is False as per the relevant information is considered as cyber crime.
provisions of the Indian Contract Act, 1872? 37. Which one of the following statements is true
(a) A void agreement is one that is not for the set off and carry forward of loss under
enforceable by law the head 'house property' in India?
(b) Assignment is the obvious mode of discharge (a) Can be carried forward for 8 years
of a contract (b) Cannot be carried forward
(c) Where a party waives its rights under the (c) Can be carried forward for 4 years
contract, the other party is released of its (d) Can be carried forward infinitely
obligations under the contract Ans. (a) : The loss from house property is allowed to be
(d) Where the subject matter of a contract is carried forward for '8' Assessment year such loss should
destroyed for no fault of the promissor, the be set off in the subsequent assessment year if there is
contract does not become void by income under head mouse property.
impossibility of performance the balance which has not been set off shall be carried
Ans. (b) : All agreements are not contract only those forward to the next Assessment year.
agreements which are enforceable by law are 'contracts'. 38. Surcharge of 10% (percent) is payable by an
Following are the essential requirements of a valid Individual where the total income exceeds:
contract. U/S-10 (a) Rs. 7,50,000 (b) Rs. 8,50,000
♦ offer and its acceptance (c) Rs. 50,00,000 (d) Rs. 20,00,000

UGC NTA NET Commerce IInd Paper June, 2020 344 YCT
Ans. (c) : Choose the correct answer from the options
♦ A surcharge of 10% is levied if an individual income given below:
is '50' Lakh to 1 crore. (a) A, B only (b) B, C only
(c) A, B, D only (d) B, C, D only
♦ A surcharge of 15% is levied if the individuals
income is '1' crore to '2' crore. Ans. (c) : Negative impacts of FDI on domestic firms in
host countries are
♦ A surcharge of '25%' is levied if the individual (a) Market monopoly (b) Technology dependence
income is '2' crore to '5' crore. (c) Profit and flow
♦ A surcharge of '37%' is levied if the individual ♦ A foreign, direct invstut (FDI) is an investment made
income is above '5' crore. by a firm or individual in one country into business
39. Mohan, has rendered his services in India and interests located in another country.
retired in 2015. He then shifted and settled in ♦ However, FDIs are distinguished from portfolio
Singapore. The pension received by him for investments in which an investor merely purchases
such services would be..............? equities of foreign based companies.
(a) Deemed to accrue or arise outside India ♦ An increase in FDI may be associated with improved
(b) Deemed to accrue or arise in India only when economic growth due to the influx of capital and
it is received outside India increased tax revenues for the host country.
(c) Deemed to accrue or arise in India only when ♦ Besides, the trade regime of the host country is
it is received outside India named as an important factor for the investor's decision-
(d) Deemed to accrue or arise in India making.
Ans. (d) : If a person retires from service in India and ♦ Host countries often try to channel FDI investment
lives abroad and receives pension from employment into new infrastructure and other projects to boost
then such pension is considered to accrue in India. development.
43. Charging different prices for the same product
40. Sugam is also known as: in different markets until the MR of last unit
(a) ITR-1 (b) ITR-2 sold equals the MC of the product sold in each
(c) ITR-4 (d) ITR-6 market is described by................
Ans. (c) : A. Price discrimination of first degree
♦ ITR-1 SAHAJ from is not for non-ordinary resident B. Price discrimination of second degree
or for an individual who is either director in a company C. Price discrimination of third degree
or has done Investment in unlisted equity share. D. Equilibrium price
♦ ITR-2 is filed by the individuals of HUFs who is E. Price discrimination
earning income other than Income from "Profits and Choose the correct answer from the options
gains from business or profession and the individuals given below:
who are not eligible to fill ITR-1 from" (a) A and B only (b) A and C only
(c) C and E only (d) A and D only
♦ ITR-4 SUGAM Form is for the tax payers who have
opted for the presumptive income scheme under section Ans. (c) : 1. First- degree price discrimination-
'44AD' sec, '44ADA' and sec '44AE' of the income tax first degree discrimination, or perfect price
discrimination occurs when a business charge the
act.
maximum possible price for each unit consumed.
♦ ITR-6 is a tax return form for all the companies Where a company charges a different price for every
which not claiming the exemption U/S 11 (Income from good or service sold.
property held for charitable or religious purposes. 2. Second-degree price discrimination,-
41. Mercosur, a South American Trade block is a: second degree price discrimination occurs when a
(a) Free Trade Area company charges a different price for different
(b) Common Market quantifies consumed such as quantity discounts on bulk
(c) Custom Union purchases.
(d) Economic Cooperation 3. Third-degree price discrimination-
Ans. (b) : Mercosur is an economic and political bloc third-degree price discrimination occurs when a
consisting of 'Argentina, Brazil, Paraguay and company charges a different price to different consumer
groups.
Uruguagy Venezuela was suspended indefinitely in
4. Equilibrium price-
'2016'. on a group, the point where the supply curve (S) and the
♦ Founded in '1991' to create a 'common market', spur demand curve (D) intersect is the equilibrium. The
development and bolster democracy, Mercosur saw equilibrium price is the only price where the desires of
early successes. including a tenfold increase in trade consumers and the desires of producers agree- that is,
within the bloc in its first decade. where the amount of the product that consumers want to
42. Which of the following are possible negative buy (quantity-demanded) is equal to the amount
impacts of FDI on domestic firms in host producers want sell (quantity supplied).
countries? "Therefore, charging different prices for the same
A. Market monopoly product in different market until the 'MR' of the last unit
B. Technology dependence sold equals the 'MC' of the product sold in each market
C. Increased competition is described by price. discrimination of third-degree and
D. Profit outflow price discrimination.

UGC NTA NET Commerce IInd Paper June, 2020 345 YCT
44. Arrange the following steps in logical sequence Choose the correct answer from the options
of operation of the Arbitrage Pricing Theory given below:
(APT). (a) A and D only (b) B, C and D only
A. Estimate the Factor Sensitivities (c) A, C and D only (d) A, B and C only
B. Estimate the Risk Premium for Factor(s) Ans. (d) :
C. Identify the Macroeconomic Factors Conditions necessary for price discrimination:-
Choose the correct answer from the options (1) Firm must have some monopoly power:
given below:
(a) A, B, C (b) B, A, C ♦ first, the market must be a form of imperfect
(c) C, B, A (d) C, A, B competition.
Ans. (c) : Arbitrage pricing theory is a general theory of ♦ there must be some level of monopoly power to allow
assets pricing that states that a financial assets expected producers the ability to be price-maker and not price-
return can be modelled as a linear function of different taker.
variable or theoretical market indices, with each factor's (2) A key condition for price discrimination to occur is
susceptibility to changes expressed by a factor- specific the identification of different market segments.
beta coefficient. (3) This is because different groups have different price
45. Cost audit for Materials covers: elasticities of demand.
A. Goods inward procedure Therefore the firm can charge different prices
B. Methods of calculating standard cost variance depending on the consumers sensitivity to price changes
C. Classification of overhead for example they could charge higher for richer,
D. Accounting for scrap, wastage, materials inelastic consumers who continue buying no matter how
transfers much the price rises.
E. Accounting treatment of under or over ♦ The firm continues to gain profit as long as the
absorption marginal revenue is greater than marginal cost.
Choose the most appropriate answer from the 48. Consumer rationality in business economics is
options given below: collective manifestation of which of the
(a) A, D only (b) A, E only following assumptions?
(c) A, B only (d) E, C only A. Non-Satiation
Ans. (a) : A cost audit represents the verification of cost B. Clarity of preference
accounts and checking on the adherence to the cost C. Divisibility of goods and services
accounting plan. Cost audit ascertains the accuracy of D. Economic selfish motive
cost accounting records to ensure that they are in E. Possession of information
conformity with cost accounting principle, plans, Choose the most appropriate answer from the
procedures, and objectives. options given below:
46. Which of the following explains the declining (a) A, B and D only
slope of indifference curves? (b) A, C and E only
A. Diminishing marginal utility (c) A, B, C and D only
B. Diminishing Marginal Rate of substitutions (d) A, B, D and E only
between the commodities
C. Diminishing Marginal Rate of technical Ans. (d) : Consumer rationality in business economics
substitution is a collective manifestation of the following
D. Ordinal measurement of utilities assumption:-
E. Diminishing Marginal utility of money 1. Non-satiation- the assumption that a consumer will
Choose the most appropriate answer from the always benefit from additional consumption. The
options given below: demand for some good may have a finite limit but it is
(a) A and D only (b) B and D only likely that there is some good or service a consumer
(c) C and D only (d) A and E only would benefit from having more of
Ans. (b) : Property of Indifference curves. 2. Clarity of preferences: This assumption states that,
♦ Convex to the origin (because MRS decline) logically selections between goods are rational because
♦ Negative slope of the transitivity statement, which posits that people
♦ No intersection point always prefer goods in the following order: A is
♦ I.C. need not to be paraller preferred to 'B' and 'B' is preferred to 'C', So a is
♦ Ordinal measurement preferred to 'C'.
♦ Level of satisfaction is equal. 3. Economic selfish motive: The notion that human
47. Which of the following is/are condition(s) for behavior is governed by selfishness as an ultimate
price discrimination of product? motive-without Altruism (Selflessness) and group
A. Firm must have some monopoly power. selection.
B. Price elasticity of demand for the product in 4. Possession of information: The assumption states that
different market must differ a consumer has perfect and complete information and
C. Market must be separable or able to be he makes choices based on this information.
segmented Divisibility of goods and services is not an assumption
D. Free entry and exit of firms of consumer rationality.
UGC NTA NET Commerce IInd Paper June, 2020 346 YCT
49. Net Present Value (NPV) and Internal Rate of coefficients if any constant is subtracted from the value
Return (IRR) methods yield conflicting of 'X' and 'Y'. By scale, we mean that if the value of 'X'
outcomes due to................ and 'Y' is either multiplied or divided by some constant
A. Unconventional cash flows then the regression coefficients will also change.
B. Investment size disparity 52. Which of the following are positional averages?
C. Investment life disparity A. Arithmetic Mean B. Median
D. Cash flow pattern disparity C. Mode D. Geometric Mean
Choose the most appropriate answer from the E. Harmonic Mean
options given below: Choose the most appropriate answer from the
(a) A and B only (b) A and C only options given below:
(c) A, B and C only (d) B, C and D only (a) B, C only (b) B, C, D only
Ans. (d) : Conflicts between NPV VS IRR (c) B, C, A only (d) A, B, C, D only
When analyzing a typical project, it is important to Ans. (a) : The measure of central tendency: the measure
distinguish between the figures returned by NPV VS of central tendency measures the average value of the
IRR, as conflicting result arise when comparing two sample in descriptive statistics, there are two types of
different project using the two indicators. averages-
NPV ($) IRR(%) Mathematical avg. Positional Avg.
- Arithmetic mean median
The positive and negative The discount rate at Geometric mean mode
future cush flows through which the NPV of an Harmonic mean Quartile
out a projects life cycle investment equals zero Quadratic mean
discounted today
53. Which of following is not correct about
Typically, one project may provide a larger IRR, while properties of correlation coefficient?
a rival project may show a higher NPV. The resulting A. Depends on the origin
difference may be due to a difference in cash flow B. Depends on the scale.
between the two project. Let's have a look first at what C. Depends on both origin and scale.
each of the two discounting rates stands for. D. Is independent with respect to origin.
50. In which of the following situations, the E. Is independent with respect to unit of scale.
payback period method is advised for Choose the correct answer from the options
evaluation of investment opportunities? given below:
A. Overleveraged businesses (a) A, D, E only (b) A, B, D only
B. Cash rich businesses (c) A, B, C only (d) D, E, B only
C. Uncertain market conditions Ans. (c) : Correlation never decide the cause and effect
D. Stable market conditions between two variable it just only determine the
Choose the most appropriate answer from the relationship between variable.
options given below: Properties-
(a) A and B only (b) A and C only ♦ Linear relationship
(c) B and C only (d) C and D only ♦ Independent of change of scale and origin
Ans. (b) : Payback period method: ♦ Measure degree and direction
♦ The payback period refers to the amount of time it 54. What type of defense mechanism is used by a
takes to recover the cost of an investment or how long it person when he gets angry at his child or
takes for an investor to reach breakeven. spouse because he had a bad day at work?
♦ Account and fund managers use the payback period A. Denial B. Repression
to determine whether to go through with an investment. C. Projection D. Displacement
E. Regression
♦ Shorter paybacks mean more attractive investments, Choose the most approriate answer from the
while longer payback periods are less desirable. options given below:
♦ The payback period is calculated by dividing the (a) A and B only (b) B only
amount of the investment by the annual cash flow. (c) D only (d) E only
51. The Regression Coefficient is independent of Ans. (d) : Denial- is one of the most common defence
the change of mechanisms it occurs when you refuse to accept
A. Scale only reality or facts.
B. Origin only ♦ Repression- is a defense mechanism whereby
C. Both Scale and Origin unpleasure- provoking mental processes. Such as
D. Neither Scale nor Origin morally disagreeable impulses and painful memories,
Choose the most appropriate answer from the are actively prevented from entering conscious
options given below: awareness.
(a) A only (b) B only ♦ Projection- is defense mechanism that involves
(c) C only (d) D only taking our own unacceptable qualities or feelings and
Ans. (b) : Regression coefficients is not effected by the ascribing them to other people.
origin bet effected by the scale. ♦ Regression- is a defense mechanism proposed by
♦ The regression coefficients are independent of the Anna Freud where by the ego reverts to an earlier
change of origin but not of the scale. By origin, we stage of development usually in response to stressful
mean that there will be no effect on the regression situations.
UGC NTA NET Commerce IInd Paper June, 2020 347 YCT
 ♦ Displaced Aggression- if a person is angry but 57. Objectives of IMPS (Immediate Payment
cannot direct their anger toward the source without Service) are:
consequences. they might 'take out' their anger on a A. To enable bank customers to use mobile
person or thing that process lass of a risk. instruments as a channel for accessing their
55. Out of the following statements which of them banks accounts and remit funds 24×7.
explains the difference between enculturation B. Making payments simpler just with the
and acculturation as a part of Cross-Cultural mobile number of the beneficiary
Training? C. To build the foundation for a full range of
A. Enculturation refer to the process of learning mobile based banking services
and adopting host cultural norms, and D. To create competition with NEFT and RTGS
acculturation is the process of learning our Choose the most appropriate answer from the
own native culture. options given below:
B. Enculturation is a anthropological term used (a) A, B, C only (b) B, C, D only
for socialisation like acculturation. (c) A, B, D only (d) B, (D) only
C. Both terms refer to the process of Learning Ans. (a) : IMPS- Basally involve a transfer mechanism
through social interaction. using the mobile phone facility 24 hour.
D. Enculturation refers to the process of learning Minimum - 1`
'our own culture, and acculturation refers to Maximum- 2,00,000
the process of learning host cultural norms For metal in - 22 Nov. 2010
Choose the most appropriate answer from the ♦ It is an instant real time interbank electronic fund
options given below: transfer system in India.
(a) A, B, C only Owner of IMPS- National payment corporation of India
(b) B, D only 58. Which among the following are correct
(c) B, C, D only statements with regard to NBFC in India?
(d) A, B, C and D only A. All NBFCs should be registered with RBI.
Ans. (c) : Enculturation refers to the process of learning B. NBFCs cannot accept demand deposits.
our own (native) culture, whereas, acculturation is the C. NBFCs do not from part of the payment and
process of learning and adopting host is the process of settlement system and cannot issue cheques
learning and adopting host cultural norms, values and drawn on itself.
beliefs. Learning native cultural norms and values of a D. Deposit insurance facility of Deposit
particular society are essential for an individual, to Insurance and Credit Guarantee Corporation
function in society. is not available to depositors of NBFCs.
♦ Therefore, enculturation is an anthropological term Choose the correct answer from the options
used for socialization like acculturation and both term given below:
refer to the process of learning through social (a) A, B, C only (b) A, B, C, D only
interaction. (c) A, B, D only (d) A, D, only
56. Which of the following financial institution(s) Ans. (b) : NBFC is defined as a company registered
got merged with their subsidiary? under the companies Act 2013 and also under the RBI
A. UTI B. IFCI act 1934 under section 45-IA. These type of companies
C. ICICI D. IDBI provides banking services without holding any banking
E. Global Trust Bank license.
Choose the correct answer from the options NBFCs lend and make investment and hence their
given below: activities are akin to that of banks:
(a) A, B only (b) B, C only However, there are a few difference as given below:
(c) C, D only (d) C, E only (1) NBFC cannot accept demand deposits.
(2) NBFCs do not form part of the payment and
Ans. (c) : In September 2003 the company diversified
settlement system and cannot issue chaque drawn
its business domain further by acquiring the entire
on them service.
shareholding of Tata finance Ltd in TATA Home
(3) The deposit insurance facility of deposit insurance
finance Ltd. and credit guarantee corporation is not available to
♦ The fully-owned housing finance subsidiary was depositors of NBFCS, unlike in the case of bank.
renamed IDBI Home finance Ltd.
59. Which of the following are true about
♦ In October 2004 the company was transformed into a delivering customer value?
banking company to undertake all kinds of banking to A. A company can go alone in creating customer
Activities while continuing to play their secular value
development financial institution role B. Company must work within a broader
♦ Also, they changed their name to the network of partners to accomplish customer
♦ Industrial Development Bank of India Ltd (IDBI). value.
♦ In 2005 IDBI Ltd merged their banking subsidiary C. Individual companies and brands compete;
IDBI Bank with themselves. their entire value delivery network don't
UGC NTA NET Commerce IInd Paper June, 2020 348 YCT
 D. Individual companies and brands don't Choose the most appropriate answer from the
compete; 'their entire value delivery networks options given below:
do. (a) A only (b) B only
E. Value = Contribution/cost (offer higher (c) C only (d) B, E only
contribution through product or service to Ans. (b) : Defensive marketing refers to the actions of a
clients and lowers the cost) brand. especially a market leader, to protect its brand
Choose the most appropriate answer from the and maintain its position as a market leader. if a brand
options given below: fails to maintain its position then it might lose some of
(a) A and E only (b) A, B and E only its customers to the competitors.
(c) B, C and E only (d) B, D and E only 62. Out of the following statements, which is not
Ans. (d) : Customer value is the perception of what a correct about the RTI Act, 2005?
product or service is worth to a customer versus the A. The RTI Act come into force from October
possible alternatives. Worth means whether the 13, 2005.
customer feels she or he got benefits and services over B. Any citizen may request information from a
what she paid. Public Authority (Both Govt. and Private)
In a simplistic equation form, customer value is C. Reply for information asked can be given
benefits-cost within 30 days.
(CV = B – C) D. There is nominal application fee that are
♦ Firm rarely work alone in creating value for needs to pay to get information under the RTI
customers and building profitable customer relationship. application.
♦ When it comes to creating customer value and E. For getting information, applicant has to pay
building strong customer relationships today's marketers Rs. 10/- per page of information for Central
know that they can't go it alone. They must work Govt. Departments.
closely with a variety of marketing partners. Choose the correct answer from the options
♦ Individual companies and brands don't complete, given below:
their entire value delivery networks do. (a) A, B, E only (b) B, E only
♦ Value has two components: Contribution and cost. (c) C, E only (d) B, C, D, E only
The relationship between the two can be defind as Ans. (a) : Right to information (RTI) is an act that sets
follows: out rules and regulations regarding citizen's right to
value = contribution/cost information. It replaced the former freedom of
60. Market for automobiles needs to be segmented information act 2002.
on the basis of: RTI Act 2005-
A. Buying behaviour B. Psychographics ♦ The RTI Bill was passed in parliament an come into
C. Geographics D. Demographics force from October 12.2005.
Choose the most appropriate answer from the ♦ Any citizen may request information about the
options given below: activities of the public authority i.e.- government
(a) A, D only (b) C, D only authority.
(c) A, B, D only (d) A, B, C, D ♦ The information can be obtained with in '30' days.
Ans. (d) : In today's time, the Automobile sector is from the date of request in normal case and in the
robust with growth, and more and more players are matter of life or liberty of a person, information can be
entering the automobile industry. market segmentation obtained with in '48' hours from the time of request
is a marketing term that refers to aggregating ♦ There is a nominal application fee that is needed to be
prospective buyers into group or segments with paid to get information under the RTI application.
common needs and who respond similarly to a ♦ The nominal fee to get the information is Rs, '10' for
marketing action. every application as per rule '3' of the RTI rules 2005.
market segmentation enables companies to target 63. Out of the following which are not the features
different categories of consumers who perceive the full of GST 2017 in India.
value of certain products and services differently from A. GST is applicable on 'supply' of Goods and
one another. services.
The market for automobiles needs to be segmeted on B. GST is based on the principle of origin based
the basis of- taxation rather than principle of destination
♦ Geographic segmentation based consumption.
♦ Demographic segmentation C. Import of Goods is treated as Inter-State
♦ Psychological segmentation supplies and would be subject to IGST in
addition to applicable Custom Duties.
♦ Buying behavior segmentation D. It is a dual taxation with Centre and State
61. The strategies of flanking defense, preemptive simultaneously levying it on a common base.
defense, mobile defense, contractor defense and E. GST is applicable to all Goods and Services
counter offensive defense is used by which without any exemptions.
market player? Choose the correct answer from the options
A. Market Challenger B. Market leader given below:
C. Market follower D. Market Nicher (a) A, B, E only (b) B, C, E only
D. Start up Marketer (c) B, E only (d) C, D, E only
UGC NTA NET Commerce IInd Paper June, 2020 349 YCT
Ans. (c) : GST is considered to be the biggest tax Lump-sum exempt exempt see note exempt
payment at from tax from tax in from tax
reform in India since independence. It will help realize the time of some
the goal of "one nation-one tax- one market" GST is 'or' cases.
expected to benefit all the stake holders- industry, termination When not
government and consumer. of service exempt
GST come into force from '1' July 2017. provident
fund will
The features of GST 2017 are as follows: be traded
♦ The state GST and central GST shall be levied on all as an
transaction of goods and service. unrecogniz
♦ The structure of Indian GST is dual taxation with ed fund
from the
centre and state simultaneously levying it on a common beginning
base. 65. Which of the following expenses debited to
♦ GST is applicable to any 'supply' of goods and Profit and Loss a/c but disallowed while
service. computing income from Business?
♦ GST is based on the principle of destination- based A. General Expenses
consumption B. Personal Expenses
♦ Import of goods is treated as inter-state supplies and C. Expenses of Income which is taxable under
would be subject to IGST in addition to applicable
customer duties. the other heads of income
♦ There are exemptions in goods and service to the D. Charities and donations
applicability of GST like food (fruits and vegetables, Choose the correct answer from the options
cereals, meat and fish etc.) raw materials, given below:
tools/instruments, service provided by RBI or any (a) A, B, C only (b) B, C, D only
foreign diplomatic mission in India transportation of (c) C, D only (d) A, B, C, D only
Individuals via public transport etc. Ans. (d) : Expenses debited to profit and loss A/C but
64. Which of the followings is correct about disallowed while computing income from business-
deduction available in respect of contribution • The general expense (purchase or raw materials,
to various provident funds in case of salaried expenditure on salary trading goods etc) are debited to
employees? profit and loss A/C but are also disallowed while
A. Employer's contribution to recognised computing income from business only if the amount
provident fund is exempted upto 12% of exceeds Rs. 10,000. Otherwise it is allowed.
salary. • Personal expense that is disallowed while computing
B. Employer's contribution to unrecognised
income from business but it is not debited to the P/L
provident fund is exempted from tax.
C. Employer does not contribute to Public A/C as it is transferred as drawing A/C to the partiers
Provident Fund. capital A/C.
D. Deduction under Section 80 C is available for • Expenses of Income that are taxable under the other
employer's contribution in unrecognized heads of income are debited to profit and loss A/C but
provident fund. always disallowed while computing income from
Choose the correct answer from the options business.
given below: • Charities and donations being a non-business
(a) A, B, C only (b) A, B, D only expenditure are disallowed while computing income
(c) B, C, D, only (d) A, C, D only from business and may be allowed u/s '80G' if it is an
Ans. (a) : The government has set up various kinds of eligible donation for computing total income and will be
provident fund in order to encourage saving for the shown on the debit side of the profit loss A/C.
social security of the employer. 66. Match List I with List II
The employee contributes a fixed percentage of his
salary towards these funds and also the employees List I List II
contributes in many cases. Authors of Trade Theory Name of Theory
Treatment of provident fund for Income tax:- (A) Steffan Linder (i) Product Life Cycle
SPF RPF UPF PDF Theory
(Statuto (Recogniz (Unreco (Public (B) Raymond Vernon (ii) Country Similarity
ry PF) ed PF) gnized ) P.F) Theory
Employer's exempt Exempt up exempt The
Contributi from tax to 12% of from tax employer (C) Hecksher-Ohlin (iii) Absolute
on to PF salary. does not Advantage Theory
contribute (D) Adam Smith (iv) Factor Proportion
Deduation Availabl Available Not Available
under sec. e Availabl Theory
'80C' e Choose the correct answer from the options
Interest exempt exempt exempt exempt given below:
credit to from tax from tax from tax
PF. of the rate (a) (A)-(iv), (B)-(iii), (C)-(ii), (D)-(i)
of interest (b) (A)-(ii), (B)-(i), (C)-(iv), (D)-(iii)
notified (c) (A)-(i), (B)-(iii), (C)-(iv), (D)-(ii)
rate of
interest (d) (A)-(iii), (B)-(ii), (C)-(i), (D)-(iv)
UGC NTA NET Commerce IInd Paper June, 2020 350 YCT
Ans. (b) : (C) Monopolistic (iii) Increasing market
Authors of Name of theory size
Trade (D) Oligopoly (iv) Intimation of
Theory product or service
A- Steffan (ii) He developed the country Choose the correct answer from the options
Linder similarity theory in 1961 as he tried given below:
to explain the intra industry trade. (a) (A)-(i), (B)-(iii), (C)-(iv), (D)-(ii)
B- Raymond (i) Product life cycle theory was (b) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii)
Vernon propounded by Raymond Vernon in (c) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i)
1966 (d) (A)-(ii), (B)-(i), (C)-(iii), (D)-(iv)
• This Theory explains the various Ans. (c) :
stages a product goes through after Market Role of selling
it enters the market. forms
C- Hacksher (iv) Factor proportion theory was A- Perfect (iii)
Ohlin developed by two Swedish competition • It is a market structure where
economists, Eli Hecksher and his there are a large number of buyers
student Bertil Ohlin in 1920. and sellers. easy entry and exit
D- Adam (iii) Absolute Advantage theory from the market.
Smith was introduced by Adam smith in • It is a price taker.
1776 in the context of international
• thus in perfect competition, it is
trade. using labour as the only
input. easier to increase the market size.
67. Match List I with List II B- Monopoly (iv) It is a single seller selling a
List I List II unique product in the market
(A) Standard Costing (i) Financial • It is a price maker and thus
forecasting and known for the Intimation of a
planning product or service.
(B) Margin of Safety (ii) Sales minus break- C- (ii) It is a type of imperfect
even sales Monopolistic competition such that there are
(C) Ratio Analysis (iii) Control of , Competition many producers competing against
inventory each other, but selling product that
(D) JIT System (iv) Management by are differentiated from one another
exception and hence are not perfect
Choose the correct answer from the options substitutes.
given below: • It influens the buying behaviour
(a) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii) of the consumer.
(b) (A)-(iii), (B)-(i), (C)-(ii), (D)-(iv) D- Oligopoly (i) when a market is shared by only
(c) (A)-(ii), (B)-(iii), (C)-(i), (D)-(iv) a few firms, it is said to be highly
(d) (A)-(i), (B)-(ii), (C)-(iv), (D)-(iii) concentrated and it helps in the
Ans. (a) : survival of the firm.
List-I List-II 69. Match List I with List II
A- Standard costing (iv) The aim is to find the List I List II
problem and eliminate it, this (A) Mezzanine Capital (i) It is the speedy
process is known as source of finance
management by exception. less regulated by
B- Margin of safety (ii) IN accounting, a margin the regulatory
of safety refers to the different environment of
between sales and break-even debt and capital
sales. markets.
C- Ratio Analysis (i) In other words it helps in (B) Private Equity (ii) It is long term
financial fore casting and capital embraced
planning by the high
D- JIT system (iii) It is useful for the control net worth and high
of inventory. risk appetite
68. Match List I with List II investors.
List I List II (C) Global Depository (iii) It is an equity
Market Forms Role of selling costs instrument issued
(A) Perfect Competition (i) Sustained survival in overseas markets
of firm and is listed and
(B) Monopoly (ii) Influencing buying traded on bourses
behaviour on an OTC basis.
UGC NTA NET Commerce IInd Paper June, 2020 351 YCT
 (D) Venture Capital (iv) It refers to B- Conditional (iii) The conditional probability
subordinated debt probability of event E2 is the probability
or preferred equity that the event will occur given
that allows firms to the knowledge that event E1 has
borrow additional already occurred.
capital beyond the • P (E)
levels lenders are
willing to finance C- theorem of (i) They are mutually exclusive
through the bank complementary as the two events cannot occur
loans. at the same time and they are
Choose the correct answer from the options also exhaustive because the sum
given below: of their probabilities and its
(a) (A)-(ii), (B)-(iv), (C)-(i), (D)-(iii) complement must equal
(b) (A)-(i), (B)-(iii), (C)-(iv), (D)-(ii) P ( E1 + E 2 )
(c) (A)-(iv), (B)-(i), (C)-(iii), (D)-(ii) • P ( E2 / E1) =
P(E1 )
(d) (A)-(iii), (B)-(ii), (C)-(i), (D)-(iv)
D- Theorem of (ii) The addition theorem refers
Ans. (c) : addition to the happening of at least one
List-I List-II of the events from the given two
A- (iv) It refers to subordinated debt or events.
Mezzanine preferred equity that allows firms to • P ( E1 ∪ E 2 ) = P ( E1 ) + P ( E 2 )
capital borrow additional capital beyond the
levels lenders are willing to finance 71. Match List I with List II
through the bank loans. List I List II
B- Private (i) It is the speedy source of finance (A) I am Not OK, you (i) Dependent
equity less regulated by the regulatory are Not OK,
environment of depot and capital. (B) I am OK, you are (ii) Confronting
C- Global (iii) It is an equity in strument issued Not OK
Depository in overseas markets and is listed and (C) I am OK, you (iii) With drawn
traded on bourses on an OTC basis. are OK
D- Venture (ii) It is long term capital embraced (D) I am Not OK, (iv) Task obsessive
capital by the high net worth and high risk you are OK
appetite investors. Choose the correct answer from the options
70. Match List I with List II given below:
List I List II
(a) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i)
(A) Bayes' Theorem/ (i) P(E) = 1 − P(E) (b) (A)-(iii), (B)-(ii), (C)-(iv), (D)-(i)
(B) Conditional (ii) P (E1 ∪ E2) (c) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv)
Probability = P (E1)+P(E2) (d) (A)-(ii), (B)-(i), (C)-(iii), (D)-(iv)
P(H1 ∩ E Ans. (a) : Eric Berne Initated the principle with in
(C) Theorem of (iii) P (E2/E1) =
P(E) transactional Analysis that everyone is born 'ok' in other
complementary words good and worthy. Later, frank ernst developed
events these into the 'ok' matrix. These are also known as 'life
(D) Theorem of (iv) P (H1/E) positions'.
P(H1 ∩ E) List-I List-II
= (A)- I am Not ok, (iii) It is a rare case, where
P(E)
You are not ok people unsuccessfully try to
Choose the correct answer from the options project their bad objects onto
given below:
(a) (A)-(i), (B)-(iv), (C)-(iii), (D)-(ii) others.
(b) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i) • As a result, they remain
(c) (A)-(iii), (B)-(iv), (C)-(i), (D)-(ii) feeling bad whilst perceiving
(d) (A)-(iv), (B)-(iii), (C)-(i), (D)-(ii) other as bad.
Ans. (d) : (B)- I am ok, (iv) People in this position feel
Theorem Formula You are not ok that they are superior in some or
A- Bayes (iv) It describes the probability the other way and others are
Theorem of an event based on the prior inferior and not ok.
knowledge of the conditions • The people in this position are
that might be related to the trapped assuming that their
event. position makes them better then
P ( Mi ∩ E ) other.
• P ( Mi / E ) = • They are task obsessive in
P (E) nature.
UGC NTA NET Commerce IInd Paper June, 2020 352 YCT
 (C)- I am ok, (ii) This is the ideal position (C)- Cost of financial (ii) It refers to the perceived
You are ok person can be in; the people distress costs due to an increased
who are comfortable with others ratio of debt in the firm.
and with themselves- (D)- MM preposition (i) The expected yield on
• They are confident happy and -II the equity capital is equal to
get along with everyone even the pure equity return plus a
there are disagreements. premium for financial risk.
• They are confronting in
nature. 73. Match List I with List II
(D)- I am not ok, (i) The people think inferior of List I List II
You are ok, themselves as compared to (Authors) (Ideas)
others. (A) Bill Bishop (i) Managing in the
• The people in this position Market Space
have low self-esteem and will (B) D. Bird (ii) Commonsense
put others before them. Direct Marketing
• They are dependent in nature. (C) Daniel S. Jonal (iii) Strategic Marketing
72. Match List I with List II for the Digital Age
List I List II
Capital Structure Descriptions(s) (D) Jeffery F. Rayport (iv) On-line Marketing
Preposition(s) Choose the correct answer from the options
(A) Target Capital (i) Expected yield on given below:
the equity capital is (a) (A)-(iii), (B)-(ii), (C)-(iv), (D)-(i)
equal to the pure (b) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv)
equity return plus a (c) (A)-(ii), (B)-(i), (C)-(iv), (D)-(iii)
premium for (d) (A)-(iv), (B)-(iii), (C)-(ii), (D)-(i)
financial risk.
(B) Optimum Capital (ii) It refers to the Ans. (a) :
perceived costs due List-I (Authors) List-II (Ideas)
to increased ratio (A)- Bill Bishop (iii) He snows how to build a
of debt in the firm. digital marketing strategy,
(C) Cost of financial (iii) It is the debt ratio develop a plan and execute it
distress the firm strives to in. "Strutegic marketing for
achieve. the Digital Age".
(D) MM preposition-II (iv) It is the debt-equity (B)- D. Bird (ii)- Drayton Bird's Book,
ratio that "Common sense Direct
maximizes the marketing" is packed with
value of the firm. international case studies
Choose the correct answer from the options
given below: that show how companies
(a) (A)-(ii), (B)-(iii), (C)-(i), (D)-(iv) worldwide have
(b) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i) implemented his ideas.
(c) (A)-(iv), (B)-(ii), (C)-(iii), (D)-(i) (C)- Daniel S. Jonal (iv) One of the most
(d) (A)-(i), (B)-(iii), (C)-(ii), (D)-(iv) respected internet marketing
Ans. (b) : experts, he has helped
Capital structure Description thousands of small business
preposition and entrepreneurs set up
(A)- Target capital (iii) The target capital shop on the Internet with the
structure refers to the mix help of this book.
debt, preferred stock, and Online marketing"
common equity that the (D)- Jeffery F. (i) "managing in the market
company is striving to attain. Rayport space" article was first
• In other words, It is the introduced by Jeffery F.
debt ratio the firm strives to Rayport and John sviokla in
achieve. 1994 that appeared in
(B)- Optimum capital (iv) It refers to the best mix Harvard Business Review.
structure of debt-equity financing
that maximizes the 74. Match List I with List II
company's overall market List I List II
value while minimizing its (A) Limited Liability (i) It can be formed
cost of capital. Partnership with a minimum of
• In other words, It is the two individuals or
debt-equity ratio that body corporate
maximizes the value of the through their
firm. nominees

UGC NTA NET Commerce IInd Paper June, 2020 353 YCT
 (B) Particular (ii) It is formed for a (B)- 80 GGA (iii) Deduction in respect of
Partnership specific venture or scientific research or rural
for a particular development. It is allowed to all
period. assesses except those who have
(C) Partnership (iii) It is an association income from business or profession
of two or more (C)- 80 GGB (i) Deduction in respect of
individuals.
(D) Mutual Agency (iv) A partner is both an contribution given by Indian
agent and a companies to political parties or an
principal in a electoral trust.
partnership firm. • There is no limit U/S 80 GGB
Choose the correct answer from the options specified. So any amount
given below: contributed to a political party. Can
(a) (A)-(i), (B)-(ii), (C)-(iii), (D)-(iv) be claimed as a deduction.
(b) (A)-(ii), (B)-(iii), (C)-(i), (D)-(iv) (D)- 80 GGC (ii)- Deduction in respect of
(c) (A)-(ii), (B)-(i), (C)-(iii), (D)-(iv) contribution given by an individual
(d) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii) person to political parties or an
Ans. (a) : electoral trust.
List-I List-II • Under this section, individuals
(A)- Limited Liability (i) It can be formed with a can avail deduction that ranges
partnership minimum of two from 50%-100% of the contribution
individuals or body amount.
corporate through their
76. Arrange the following legal enactments in India
nominess
(B)- Particular (ii)- It is formed for a in the chronological sequence from the first to
partnership specific venture or for a the last.
particular period. A. The Mines Act
(C)- Partnership (iii) It is an association of B. The Minimum Wages Act
two or more individuals C. The Payment of Gratuity Act
(D)- Mutual Agency (iv) A partner is both an D. The Child Labour (Prohibition and
agent and a principle in a Regulation) Act
partnership firm. E. The Apprentices Act
75. Match List I with List II Choose the correct answer from the options
List I List II given below:
(A) 80 GG (i) Deduction in (a) B, D, C, A, E (b) B, A, E, C, D
respect of (c) A, E, B, C, D (d) E, B, A, C, D
contribution given Ans. (b) : The following legal enactments in India in
by companies to chronological sequence from the first to the last-
political parties. • The minimum wages Act, 1948 :- The objective is to
(B) 80 GGA (ii) Deduction in
respect of ensure that the employee can have basic physical needs,
contribution given good health, and a level of comfort.
by any person to • The Mines Act, 1952:- was enacted to enforce for
political parties. measures of safety and welfare of laborers working in
(C) 80 GGB (iii) Deduction in coal, metallic, ferrous and oil mines.
respect of scientific • The Apprentices Act 1961:- An Act to provide for the
research. regulation and control of training of apprentices and for
(D) 80 GGC (iv) Deduction in matters connected there with.
respect of rent • The payment of Gratuity Act 1972 :- An act that
paid. provides a scheme for the payment of gratuity to
Choose the correct answer from the options employees working in railways, ports, factories, oil
given below: field, plantations, mines, shops or other establishments
(a) (A)-(iv), (B)-(iii), (C)-(i), (D)-(ii)
and for matters connected there with or incidental there
(b) (A)-(iii), (B)-(iv), (C)-(ii), (D)-(i)
(c) (A)-(iv), (B)-(iii), (C)-(ii), (D)-(i) to.
(d) (A)-(iv), (B)-(ii), (C)-(i), (D)-(iii) • The child labour (Prohibition and Regulation) Act
Ans. (a) : 1986:-
Section Dedution The main object of the child labour (Prohibition and
(A)- 80 GG (iv) It is introduced to provide relief Regulation) Act 1986 is to Address the social concern
for those individual who do not and prohibit the engagement of children who have not
receive any have rent allowance but completed the '14th' year of age in certain employments
are paying rent to stay. and to regulate the conditions of work of children has
• Deduction in respect of rent paid. been prohibited in occupation.
UGC NTA NET Commerce IInd Paper June, 2020 354 YCT
77. Arrange in the sequence of decisions in Ans. (b) : The packing order theory states that a
manufacturing enterprises: company should prefer to finance itself first internally
A. Making of forecasts through retained earnings if this source of financing is
B. Determination of key factors unavailable, a company should then finance itself
C. Consideration of alternative combination of through debt. finally, and as a last resort, a company
forecasts should finance itself through the issuing of new equity.
D. Preparation of budgets • This pecking order is important because it signals to
the public how the company is performing-
E. Combination of factors
• If a company finances itself internally, that means it is
Choose the correct answer from the options strong.
given below: • If a company finances itself through debt, it is a signal
(a) A, B, C, E, D (b) C, A, E, B, D that management is confident the company can meet its
(c) B, A, C, E, D (d) A, C, B, E, D monthly obligations.
Ans. (c) : The following are the sequence of decisions • If a company finance itself through issuing new stock,
in manufacturing enterprises- it is normally a negative signal, as the company thinks
(B)- Determination of key factors its stock is overvalued and it sacks to make money prior
(A)- Making of forecasts to its share price falling.
(C)- Consideration of Alternative combination of 80. Arrange the following stages of research in a
forecasts. proper sequence
(E)- Combination of factors A. Report Writing
B. Budgeting
(D)- Preparation of budgets. C. Data Collection
78. Arrange the following products in the D. Field Work
increasing order of price elasticity E. Research outcomes
A. Homogeneous products Choose the correct answer from the options
B. Differentiated products given below:
C. Necessities (a) B, D, C, E, A (b) D, A, B, C, E
D. Durable goods (c) D, C, B, E, A (d) B, E, D, C, A
Choose the correct answer from the options Ans. (a) : The following stages of research are in a
given below: proper sequence:-
(a) C, B, D and A (b) A, B, C and D (1) Budgeting- Having a budget allows you to establish
the main objective of a project.
(c) A, C, B and D (d) C, A, B and D (2) Field work- refers to the collection of primary data
Ans. (a) : The following products in the increasing from consumer.
order of price elasticity's: (3) Data collection- is the process of gathering and
(C)- Necessities-/Normal goods- Whose income measuring information on variables of interest.
elasticity of demand is between zero and one are (4) Research outcomes- seeks to understand the end
typically referred to as necessary goods which are result of particular health care practices and
products and services that consumers will buy interventions
regardless of changes in their income levels- (5) Research writing - is a reliable source to recount
details about a conducted research and is most often
(B)- Differentiated product- It is the process of
considered to be a true testimony of all the work done to
distinguishing a product or service from other. garner specificities of research.
(D)- Durable goods- A durable goods or a hard good or 81. Arrange the following steps of creating a
consumer durable is good that does not quickly wear market competitive pay in a sequence from the
out, or more specifically, one that yields utility over first to the last
time rather than being completely consumed in one use. A. Choose benchmark jobs and select
(A)- Homogenous product- Product are considered to be compensable factors
homogenous when they are perfect substitutes and B. Define each compensable factor and
buyers perceive no actual or real difference between the determine its degree in each job
offered by different firms. C. Establish rate change
D. Develop pay grades
79. Arrange the following financing choices in
E. Compare and adjust current and market wage
order of preference suggested by the pecking rates for jobs
order theory Choose the correct answer from the options
A. Reinvestment of earnings given below:
B. New issue of equity (a) B, A, E, D, C (b) A, C, B, D, E
C. Issue of debt (c) A, B, E, D, C (d) A, B, C, E, D
Choose the correct answer from the options Ans. (c) : Therefore following are the steps of creating
given below: a market competitive pay plan-
(a) A, B, C (b) A, C, B (i) Choose benchmark jobs and select compensable
(c) B, C, A (d) B, A, C factors
UGC NTA NET Commerce IInd Paper June, 2020 355 YCT
(ii) Define each compensable factor and determine its Ans. (d) : The correct sequence of marketing process:
degree in each job. (1) Understand the market place and customer needs
(iii) Compare and adjust current and market wage rates and wants.
for job. (2) Design a customer value-driven marketing strategy.
(iv) Develop pay grades. (3) Construct an integrated marketing program that
(v) Establish rate changes. delivers superior value
82. Arrange the following initiatives taken by the (4) Engage customer, build profitable relationship and
Government of India to tackle the Non create customer delight.
performing assets in their ascending order of (5) Capture value from customer to create profit and
chronology: customer equity.
A. Corporate Debt Restructuring 84. Which one is the correct sequence implied in
B. Compromise Settlement the India Contract Act 1872?
C. The Debt Recovery Tribunals (DRTs) A. Offer of proposal B. Contract
D. Credit Information Bureau C. Promise D. Agreement
E. SARFAESI Act E. Agreement
Choose the correct answer from the options Choose the correct answer from the options
given below: given below:
(a) C, D, A, B, E (b) A, B, E, C, D (a) C, E, A, D, B (b) D, B, C, A, E
(c) C, D, B, E, A (d) D, C, B, E, A (c) B, D, C, E, A (d) A, E, C, D, B
Ans. (a) : A non-performing Asset (NPA) is a loan or Ans. (d) : The act contains total 238 section out of
advance for which the principal or interest payment which 49 section are repealed (for sales of goods Act
remained overdue for a period of 90 days. 1930) .
• The following initiatives are taken by the government The following are the correct sequence:-
of India to tackle the non-performing assets in their (1) Offer- (U/S (2A))-
ascending order of chronology:- (2) Agreement- U/S (2(e))
(C) Debt Recovery Tribunal (DRT) – 1993- (3) Promise- U/S 2
to decrease the time required for settling cases (4) Acceptance- U/S 2(b)
• They are governed by the provisions of the recovery 85. Arrange the following procedure of Income
of debt due to banks and financial institution act 1993. Tax return e-Filling in India
(D) Credit information Bureau – 2000 A. Login
• A good information system is required to prevent B. Register
loans from falling into bad hands and therefore C. Verification
prevention of NPAs. D. Downloading utility and preparing return
(A) Corporate Debt Restructuring Act – 2001 E. e-filing Income Tax Return
It is for reducing the burden of the debts on the Choose the correct answer from the options
company by decreasing the rates paid and increasing the given below:
time the company has to pay the obligation back. (a) A, B, C, D, E (b) A, C, B, E, D
(B) Compromise & settlement – 2001 (c) B, A, E, D, C (d) B, A, D, E, C
It provides a simple mechanism for recovery of NPA
for the advance below Rs. 10 crores. Ans. (d) : According to section 139 (1) of the Income
(E) SARFAESI Act 2002- tax Act 1961 of India,
The securitization and reconstruction of financial Assets • While every year the due date for filling tax return in
and enforcement of security assets (SARFAESI) act, the 'July 31' the government may offer a grace period of 15-
permits bank/financial institution to recover their NPAs 30 days to file the return online or physically.
without the involvement of the court, through acquiring • The basic procedure of Income tax return e-filling in
and disposing of the secured assets in NPA accounts India is
with an outstanding amount of Rs. 1 Lakh and above. (1) Register: visit the 'e-filing' portal www. income tax
83. Arrange the following steps of marketing India e filing.gov.in. and register yourself by
process in proper sequence providing basic details.
A. Construct an integrated marketing programme (2) Login: Once the registration process is complete
that delivers superior value login into your Account by providing the
B. Capture value from customers to create credentials.
profits and customer equity (3) The next step is to download the utility and
C. Understand the market place and customer preparing returns.
needs and wants (4) Next step enter your bank account details and
D. Engage customers, build profitable proceed towards e-filing.
relationships, and create customer delight (5) Once your return is filed e-verify your Income tax
E. Design a customer value-driven marketing return.
strategy 86. Given below are two statements.
Choose the correct answer from the options Statement (I) : Monetary policy causes a
given below: deliberate change in government revenue and
(a) C, A, E, D, B (b) B, E, A, C, D expenditure with a view to influencing the price
(c) D, A, B, C, E (d) C, E, A, D, B level and the quantum of national output.
UGC NTA NET Commerce IInd Paper June, 2020 356 YCT
 Statement (II) : Fiscal Policy regulates the Reason (R) : Under the 'two factor theory', job
money supply and the cost and availability of satisfaction and dissatisfaction are the two
credit. different aspects of work motivation.
In the light of the above statements, choose the In the light of the above statements, choose the
most appropriate answer from the options correct answer from the options given below:
given below: (a) Both (A) and (R) are true and (R) is the
(a) Both Statement (I) and Statement (II) are correct explanation of (A)
correct (b) Both (A) and (R) are true but (R) is NOT the
(b) Both Statement (I) and Statement (II) are correct explanation of (A)
incorrect (c) (A) is true but (R) is false
(c) Statement (I) is correct but Statement (II) in (d) (A) is false but (R) is true
incorrect Ans. (a) : The two-factor theory (also known as
(d) Statement (I) is incorrect but Statement (II) is Herzberg's motivation hygiene theory or dual-factor
correct theory)
Ans. (b) : Monetary policy and fiscal policy are two notes that some factors in the workplace trigger job
different tools that have an impact on the economic satisfaction while another set of factors job satisfaction
activity of a country. while another set of factor causes job dissatisfaction.
Monetary policies are formed and managed by the Both sets of factors function independently of one
central banks of a country and such a policy is another. Frederick Herzberg a psychologist.
concerned with the management of money supply and 89. Given below are two statements: One is
interest rates in an economy. Fiscal policy is related to labelled as Assertion (A) and the other is
the way a government is managing the respects of labelled as Reason (R).
spending and taxation. It is the government's way of Assertion (A): Trade mark registration gives
establishing the economy and helping the economy and exclusive proprietary rights to the trademark
helping in the growth of the economy. owner.
87. Given below are two statements: One is Reason (R): A trademark is a recognizable sign,
labelled as Assertion (A) and the other is design or expression which identifies products or
labelled as Reason (R). services of a particular source from those of
Assertion (A): Firms opt for buying an asset if the others, and are used to claim exclusive proprietary
equivalent annual cost of ownership and operation rights of products or services.
is less than the best lease rate it can get. In the light of the above statements, choose the
Reason (R): Operating leases are attractive to correct answer from the options given below:
equipment users if the lease payment is less than (a) Both (A) and (R) are true and (R) is the
the user's equivalent annual cost of buying the correct explanation of (A)
equipment. (b) Both (A) and (R) are true but (R) is NOT the
In the light of the above statements, choose the correct explanation of (A)
most appropriate answer from the options (c) (A) is true but (R) is false
given below (d) (A) is false but (R) is true
(a) Both (A) and (R) are correct and (R) is the Ans. (a) : A trademark is a unique symbol or word used
correct explanation of (A) to represent a business or its products. Once registered,
(b) Both (A) and (R) are correct but (R) is NOT that same symbol or series of words cannot be used by
the correct explanation of (A) any other organization, forever as, long as it remains in
(c) (A) is correct but (R) is not correct use and proper paperwork and frees are paid. unlike
(d) (A) is not correct but (R) is correct patents, which are granted for a period of 20 year.
Ans. (b) : A make-or-buy decision is an act of choosing trademarks never end.
between manufacturing a product in-house or 90. Given below are two statements.
purchasing it from an external supplier make-or-buy Statement (I) : Gratuity received by Government
decisions, like outsourcing decisions, speak to a employee is exempted from tax under Section
comparison of the costs and advantages of producing in- 10(10)(i) of the Indian Income Tax Act, 1961.
house verus buying it else where. There are many Statement (II) : Gratuity received by local
factors at play that may tilt a company from making an authority employee is exempted from tax.
item-in-house or outsourcing it, such as labour costs. In the light of the above statements, choose the
lack of expertise, storage-costs, supplier contracts, and correct answer from the options given below:
lack of sufficient volume. (a) Both Statement (I) and Statement (II) are true
88. Given below are two statements: One is (b) Both Statement (I) and Statement (II) are
labelled as Assertion (A) and the other is false
labelled as Reason (R). (c) Statement (I) is correct but Statement (II) is
Assertion (A) : According to Herzberg, false
preventing or reducing dissatisfaction at work is (d) Statement (I) is incorrect but Statement (II) is
not the same as providing satisfaction. ture
UGC NTA NET Commerce IInd Paper June, 2020 357 YCT
 Ans. (a) : Gratuity received by Government employees person-job imbalances, or mismatches, but identifies six
is exempted from tax under section 10(10)(i) of the key areas in which these imbalances take place: work-
Indian Income tax act 1961 and gratuity received by land, control, reward, community, fairness and values.
local authority employees is exempted from tax both the Mismatches in these areas affect an individual's level of
statements are correct. experienced burnout, which in turn determines various
• Any Gratuity received by an employee of the central outcomes, such as job performance, social behaviors, and
government, state government or local authority on personal wellbeing.
death or retirement is fully exempt from tax. 91. Which of the following has the correct
In case of Gratuity received by an employee where the sequence of the stages of burnout?
employer is covered by the payment of gratuity Act. (a) Fatigue due to excessive work, dislike for
• The least of the following is exempt from tax- work, failure to achieve targets
1. Last drawn salary X number of year in employment (b) Negative feelings about work, dislike for
X 15/26. work, effort to quit work
2. The Actual amount received. (c) Initial good interpersonal relations,
3. Rs. 20,00,000. depersonalization, loss of idealism
(d) Cynicism, inadequacy, inefficiency
Answer Question No. 91 to 95 on the basis of the
following passage: Ans. (a) : The correct answer is fatigue due to excessive
Burnout is a psychological syndrome emerging as a work, dislike for work, failure to achieve targets.
prolonged response to chronic interpersonal stressors on 92. Given below are two statements.
the job. The three key dimensions of this response are an Statement (I) : Cynicism stage of Burnout is
overwhelming exhaustion, feelings of cynicism and often experienced by employees, engaged in
detachment from the job, and a sense of ineffectiveness production activity, due to excessive work
and lack of accomplishment. The significance of this pressure.
three-dimensional model is that is clearly places the Statement (II) : In Cynicism stage of burnout,
individual stress experience within a social context and person withdraws from others and shows lack of
involves the person's conception of both self and others. interest towards them.
The exhaustion dimension was also described as wearing In the light of the above statements, choose the
correct answer from the options given below:
out, loss of energy, depletion, debilitation, and fatigue.
(a) Both Statement (I) and Statement (II) are true
The cynicism dimension was originally called (b) Both Statement (I) and Statement (II) are
depersonalization (given the nature of human services false
occupations), but was also described as negative or (c) Statement (I) is correct but Statement (II) is
inappropriate attitudes towards clients, irritability, loss of false
idealism, and withdrawal. The inefficacy dimension was (d) Statement (I) is incorrect but Statement (II) is
originally called reduced personal accomplishment, and true
was also described as reduced productivity or capability,
Ans. (d) :
low morale, and an inability to cope.
• Statement I: Cyhicism stage of Burnout is often
There have been various conceptual models about the
experienced by employees, engaged in production
development of burnout and its subsequent impact. At
activity, due to excessive work pressure this
first, the focus was on the relationship between the three
statement are the false.
dimensions of burnout, which was often described in
• Statement II: In cynicism stage of burnout, person
sequential stages. Exhaustion was assumed to develop
with draws from other and shows lack of interest
first, in response to high demands and overload, and then
towards them. This statement are the true.
this would precipitate detachment and negative reactions
to people and the job (depersonalization or cynicism). If 93. Match List I with List II
this continued, then the next stage would be feelings of List I List II
inadequacy and failure (reduced personal (A) Exhaustion (i) Not able to
accomplishment or professional inefficacy). complete work
More recently, burnout models have been based on (B) Cynicism (ii) No energy for work
(C) Inefficiency (iii) No interest in
theories about job stress, and the notion of imbalances
customer
leading to strain. Its Three stages are : (a) Job stressors,
Choose the correct answer from the options
(b) individual strain, and (c) defensive coping.
given below:
Subsequently, two developmental models of the demands (a) (A)-(i), (B)-(ii), (C)-(iii)
resources imbalance have emerged: the Job Demands- (b) (A)-(iii), (B)-(ii), (C)-(i)
Resources (JD-R) model and the conservation of (c) (A)-(ii), (B)-(iii), (C)-(i)
Resources (COR) model. The JD-R model focuses on the (d) (A)-(ii), (B)-(i), (C)-(iii)
notion that burnout arises when individuals experience
Ans. (c) : Correct match-
incessant job demands and have inadequate resources
available to address and to reduce those demands. The List-I List-II
COR model follows a basic motivational theory (A) Exhaustion (ii) No energy for work
assuming that burnout arises as a result of persistent (B) Cynicism (iii) No interest in
threats to available resources. A different variation of an customer
imbalance model of burnout is the Areas of Work-life (C) Inefficiency (i) Not able to
(AW) model, which frames job stressors in terms of complete work.

UGC NTA NET Commerce IInd Paper June, 2020 358 YCT
94. Which of the following is not a resource- 97. Which among the following is a correct
imbalance model of Burnout? statement based on the passage?
(a) Job Demands-Resources Model (a) Consumers in India are aware of their rights
(b) Conservation of Resources Model (b) Consumers in India exercise their rights
(c) Three Dimensional Model responsibly
(d) Areas of Work-life Model (c) Consumers in India are unaware of their
Ans. (c) : JD-R Model, (JOB Demand) rights and hence, they do not exercise them
COR Model (Conservation of resource (d) None of the above could be ascertained on the
AW Model (Areas of work life)- model are mentioned basis of paragraph given here above
but three- Dimensional model is not mentioned.
Ans. (d) : Explanation:- We cannot say consumer are
95. Which of the following are caused by Burnout? not at all aware about their rights, also not fully aware
A. Concern for clients so 1st, 3rd wrong 2nd not mentioned in passage.
B. Negative Social Behaviour
C. Physical and Mental Strain 98. Which among the following is a correct
Choose the most appropriate answer from the statement based on the passage?
options given below: (a) The Government of India has enacted
(a) (A) only (b) (A) and (B) only sufficient number of laws for protection of
(c) (B) and (C) only (d) (A) and (C) only consumer interests
Ans. (c) : The correct answers- (b) The paragraph does not give comprehensive
(i) Negative social behavior list of laws in favour of consumers
(ii) Physical and mental strain. (c) Legal environment for consumers in India is
not conducive
Answer Question No. 96 to 100 on the basis of the
following passage: (d) Legal environment for consumers in India is
It is desirable for consumers to be aware of their rights, conducive
and to exercise those rights responsibly and intelligently. Ans. (b) : Many acts are mentioned in para but the main
In these days of audio-video publicity on the public and consumer protection act is not mentioned.
private media, it is indeed very difficult, if not 99. Who among the followings could be considered
impossible, to verify the exaggerated or false claims at the center point in the passage?
made by producers, manufacturers,, distributors and (a) Consumers (b) Judicial Process
dealers of various goods and services. The all-pervasive, (c) Manufacturers (d) Government
exaggerated and often false claims, made for services Ans. (a) :
and goods, emphasize the imperative need for Consumer • The consumer are the center point in the passage, as
Protection Legislation and creation of awareness about it the author is talking about the right of the consumer and
among the general public. how producers (including manufacturers, distributors
In this connection, there are a number of enactments, in
and dealers of various goods and service) use a flowed
India such as the prevention of Food Adulteration Act,
system to their advantage to lure the customers
1954, the Essential Commodities Act, 1955, the Hire
(consumer). Even after the various enactments; lengthy,
Purchases Act, 1972, the Standards Weight and Measure
tedious and expensive remedies make consumer trust
Act, 1976 etc. However, the remedies prescribed there
under are time-consuming, inadequate and expensive. As rated. Consumer get nothing from the judicial process
in other areas of Judicial Processes the offenders are either.
hardly caught, proceeded against and rarely, if ever, got (A) From all these points we can deduce that the
convicted. When violators go scot-free, the victims have consumer are the center points of the passage and others
no remedy and gets frustrated. are part of consumerism.
96. Which among the following is a correct 100. Which among the following is a correct
statement based on the passage? statement based on the passage?
(a) Consumer's laws are not explained well in (a) Producers and manufacturers are sensitive
India about consumers' rights.
(b) Indian Judiciary System needs a drastic (b) Producers and manufacturers are insensitive
reform to facilitate consumers' welfare about consumers' rights.
(c) Indian manufacturers are clever (c) Producers and manufacturers are neutral
(d) The Indian Consumers have no remedy and about consumers' rights.
get frustrated (d) Producers and manufacturers are basically
Ans. (b) : The correct answers is- governed by ethics and values.
Indian judiciary system needs a drastic return to Ans. (b) : The correct is producers and manufactures
facilitate consumers welfare. are insensitive about consumers right.

UGC NTA NET Commerce IInd Paper June, 2020 359 YCT
 NTA UGC NET/JRF Exam, June 2020
COMMERCE
Solved Paper
Exam Date: 17.10.2020 Shift-II

1. Meaning of unpaid seller is • Discount store retailers buy merchandies that doesn't
(a) The person who has not paid the price have an expiry limit like clothes, shoes etc in large
(b) The person who has sold the goods and quantities from manufacturers to get a massive discount.
received the price • As the discount stores directly buy from the
(c) The person who has sold the goods and has manufacturers, they skip the middle men's expense so
not yet received the price the cost of doing business is reduced too.
(d) The person who has not sold the goods 5. Tele- Marketing is a part of
Ans. (c) : The sale of goods act, 1930 defines an unpaid (a) Viral marketing
seller as a seller that has not been paid the full price of (b) Social marketing
the goods that have been sold or that has received a bill (c) Direct marketing
of exchange or other negotiable instrument, as
conditional payment and the condition on which it was (d) Relationship marketing
received has not been fulfilled. Ans. (c) : Direct Marketing:
2. Swachh Bharat Abhiyan is an example of • Direct marketing gives the opportunity of promoting
(a) Sustainable Marketing goods or services directly to the customers who need
(b) Social Marketing them the most.
(c) Service Marketing • Direct marketing helps in building relationship with
(d) Relationship Marketing new customers.
Ans. (b) : Swachh Bharat Abhiyan or Clean India • All promotional information is relayed without
Mission is a country wide intitiative taken by the intermediaries and any third parties.
Government of India in 2014 to eliminate open • Emails, newspapers, outdoor advertising, sms
defecation and improve solid waste mangaget. The main marketing
aim of this project is to create sanitation facilities for all Tele-marketing , websites, etc are various type of
and provide every rural family with a toilet by 2019. direct marketing strategies.
3. Which type of studies would be most 6. After concept testing, a firm would engage in
appropriate to use in order to measure changed which of the following stage in developing and
opinions of consumers repeatedly? marketing a new product?
(a) Focus group studies (a) Test marketing
(b) Shadowing studies (b) Marketing strategy development
(c) Longitudinal studies (c) Business analysis
(d) Experimental studies (d) Product development
Ans. (c) : Longitudinal Studies:
Ans. (b) : Product Development Process:-
• A longitudinal studies is a research design that
involves repeated observation of the same variables i.e. (1) Idea generating
people over a short or long period of time. (2) Idea screening
• It is a type of observational study, although they can (3) Concept development and testing
be structured as longitudinal randomized experiments. (4) Development of marketing strtegy
• The huge disadvantage of any longitudinal study is the (5) Business Analysis
time, as it typically takes a subtantial time to collect. (6) Product development
The data that is required. (7) Test marketing
4. Which type of retailers involve in (8) Commercialization
comparatively low prices as a major selling (9) Research
point combined with the reduced costs of doing (10) Computer aided design
business? (11) Computer-aided manufacturing and protype
(a) Convenience stores evaluation
(b) Discount retailers (12) Manufacturing and assembly
(c) Limited line retailers
(d) Category killer stores 7. A marketer needs to be aware of the criteria by
which the effectiveness of their segmentation
Ans. (b) : Discount retailers: procedures can be assessed. Which of the
• Discount stores are a category of retail store where following is NOT a criterion for evaluating the
retailers sell merchandies at a discount price. resulting market segments?
UGC NTA NET Commerce IInd Paper June, 2020 360 YCT
 (a) Perishability • Every person carrying on a business is entitled to get
(b) Size of the resulting segment his accounts audited, if his turnover, total sales, or gross
(c) Measurability receipts in business exceeds Rs. 1 crore in the previous
(d) Accessibility year.
Ans. (a) : These four are important criteria for • Every person carrying on a profession is entitled to
effectively evaluating the resulting market segment. get his accounts audited if his gross receipts in
Therefore, perishability is NOT a criterion for profession exceed Rs. 50 Lakh in the previous year.
evaluating the resulting market segment. • With effect 1st April 2020 that is from the assessment
Perishability- It is used in marketing to describe the year 2020-21, the above provision is as follows:
way in which a service cannot be stored for sale in the The threshold limit has been revised to increase it for a
future. person carrying on business from Rs. 1 crore to 5 crore.
8. "Skimming" in e-banking refers to 11. Mx. X is entitled to transport allowance of Rs.
(a) Identifying fraudsters copying vital 1800 p.m. for commuting from his residence to
information from credit cards office and back and he spends Rs. 1,400 p.m.
(b) Multiple transactions by one credit card The exemption shall be allowed of
(c) Conversion of debit card into credit card (a) Rs. 1,800 p.m. (b) Rs. 1,400 p.m.
(d) Excessive charge for online services (c) Rs. 1,600 p.m. (d) Nil
Ans. (a) : "Skimming" in e-banking refers to Ans. (c) : Section 10(14) read with Rule 2 BB
identifying fradusters copying vital information from provides for exemption of transport allowance.
credit cards. Skimming is an illegal practice used by The amount of exemption is as follows:-
identity thieves to capture credit card information from Particulars Exemption limit
a cardholder surreptitiously. (A) Transport allowance for Rs. 1600 per
• Fraudsters- often use a device called a skimmer that commuting from place of month or
can be installed at gas pumps or ATM machines to residence to place of duty Rs. 19,200 per
collect card data. (with effect from FY 2018- annum
• Some machines act like point-of-sale technology. An 19 no such seperate
acquired card is swiped, and a touchpad allows the user transport allowance is
to enter a security code. allowed)
• Card users are warned to keep their card in their sign (B) Transport allowance for Rs. 32,00 per
at all times and to cover the pin pad when inputting commuting from place of month or
security codes at ATMs. residence to place of duty Rs. 38, 400 per
9. Belated return u/s 139(4) can be filled at any for an employee who is month
time physically challenged such
(a) Before the expiry of relevant assessment year as blind/deaf/dumb or
(b) Before the expiry of one year from relevant orthopaedically,
assessment year handicapped with disability
(c) Before the expiry of relevant assessment year of lower extremities
or before the assessment is compete, (C) Transport allowance for Exemption
whichever is earlier employee of transport amount shall be
(d) Before the expiry of one year from end of the business for meeting lower of
relevant assessment year or before the personal expenditure following:
assessment year, whichever is earlier during running of such (a) 70% of such
Ans. (c) : If an individual fails to file an ITR before the transport allowance or
due date, then as per section 139 (4) of the incom tax (b) Rs. 10,000
act, he can file a belated return: per month
Deadline to file belated return: 12. Beliefs, attitudes, traditions and expectations
• A belated return can be filed anytime before the which are shared by group members is called
expiry of the relevant assessment year or before the (a) Group norms
assessment is complete, whichever is earlier. (b) Group communication
• The relevant assessment year for the financial year is (c) Group cohesiveness
the immediately succeeding financial year. (d) Group structure
• It means that an individual can file a belated return for Ans. (a) : Group norms:- Group norms develops and
FY 2020-21 by March, 31, 2022. follow its own beliefs, attitudes, traditions, and
10. Tax audit is compulsory in case of a person is expectations for now the things in the group will be
caring on business whose gross turnover done.
exceeds • This pattern and expectations of the group are known
(a) Rs. 60 Lakhs (b) Rs. 1 Crore as Group norms.
(c) Rs. 40 Lakhs (d) Rs. Crore • Group norms are nothing but ground rules that
Ans. (b) : As per section 44AB of the income tax act encourages group members to work efficiently and
1961: discourage behavior that hinders its effectiveness.

UGC NTA NET Commerce IInd Paper June, 2020 361 YCT
13. Which of the following method of training is • The Chi-square test is used exclusievely for data put
NOT a part of the off- the job training method? into classes (bins), and it requires a sufficient sample
(a) Sensitivity training size in order to produce accurate result.
(b) Transitional analysis • Goodness-of-fit tests are commonly used to test for
(c) Apprenticeship the normality of residuals or to determine whether two
(d) Conference method samples are gathered from identical distortions.
Ans. (c) : Two types of the traning method- 17. In a survey people are choosed from class
On the job training Off the job training friends or neighbors for the purpose of
method method knowing their preference for a certain brand of
soft drink is an example of
• Coaching • Lectures, conferences (a) Convenience sampling
and case studies (b) Judgement sampling
• Mentoring • Vestibule training (c) Cluster sampling
• Job Rotation • Simulation exercies (d) Stratified sampling
• Job instructional • Sensitivity training Ans. (a) : A convenience sample is a type of non-
technique probability sampling method where the sample is taken
• Appernticeship • Transactional training from a group of people easy to contract or to reach. This
type of sampling is also known as grab sampling or
• Under study • Business games availability sampling. There are no other criteria to the
• Internship • Role-playing sampling method except that people be available and
14. In a moderately skewed distribution which of willing to participate.
following equation indicates the relationship 18. The following information is available for Ravi
among mean, median and mode? corporation
(a) Mean = 2 Mode – 3 Median EPS – Rs 4
(b) Mode = 3 Median – 2 Mean ROI – 18%
(c) Median = 3 Mean – 2 mode Rate of return required by shareholders – 15%
(d) Mode = 3 Mean – 2 Median What will the price per share as per Walter
Ans. (b) : The relationship between mean, median and model if the payout ratio is 40%?
mode can be defined in four different cases: (a) Rs. 29.87 (b) Rs. 29.33
In the case of a moderately skewed distribution. (c) Rs. 28.80 (d) Rs. 30.63
• The empirical relationship can be written as: Ans. (a) : Walter model
mean-mode = 3 (mean-median) r
D + (E − D)
∴ mean-mode = 3 mean –3 median P= k
∴ mean - 3 mean = –3 median + mode k
∴ –2 mean = –3 median + mode Where
∴ Mode = 3 median –2 mean P = Price per share
15. If on an average, 2 customers arrive at D = Dividend Per share
shopping mall per minute, what is the r = Internal Rate of Return
probability that in a given minute, exactly 3 K= Cost of Capital/Capitalisation Rate
customers will arrive? (e-2 = 0.1353) E = Earning per share
(a) 0.1804 (b) 0.3532  18 
(c) 0.2352 (d) 0.1404 1.6 + 15 (4 − 1.6) 
Ans. (a) : By poison distribution P= 
 15 
e −λ λ x  
P(x) = ,
x! = 0.298667 or
where x = Variable P = 29.8667
λ = Mean number of occurrence
e = Euler's constant 19. Suppose that a firm has 20% debts and 80%
equity in its capital structure. The cost of debts
0.1353 × 23 0.1353 × 8 and cost of equity are assumed to be 10% and
= = 15% respectively. What is the overall cost of
3! 6
capital?
P(x) = 0.1804 (a) 11% (b) 12%
16. Goodness of fit of a distribution is tested by (c) 13% (d) 14%
(a) t - test (b) F - test Ans. (d) : Given –
(c) Chi - square test (d) Z - test Debt = 20%,
Ans. (c) : Equity = 80%,
• The most common goodness-of-fit test the chi-square Debt = 10%
test, typically used for discrete distributions. Cost of equity = 15%

UGC NTA NET Commerce IInd Paper June, 2020 362 YCT
Weighted Average Cost Capital = 23. A company purchased a machinery on 01-01-
(Debt × Cost of Debt) + (Equity × Cost of Equity) 2015 for a sum of Rs. 60,000. The retail price
index on that date was 150. What is the value of
= (20% × 10%) + (80% × 15%) machinery according to CPP method on 31st
= 2% + 12% December 2015. When the price index was 200.
WACC = 14% (a) Rs. 1,00,000 (b) Rs. 90,000
(c) Rs. 80,000 (d) Rs. 70,000
20. A Ltd. has a share capital of 5,000 equity
Ans. (c) : Current purchasing power value =
shares of Rs. 100 each having a market value of
Rs. 150 per share. The company wants to raise Current Price Index
Value×
additional funds of Rs. 1,20,000 and offers to Previos Price Indix
the existing shareholders the right to apply for ^= Value of Machine on 1-Jan 15 = 60000
a new share at Rs. 120 for every five share held. Retail Price Index on 1-Jan 15 = 150
What would be the value of right? Retail Price Index on 31 Dec. 15 = 200
(a) Rs. 5 (b) Rs. 6 200
(c) Rs. 6.5 (d) Rs. 5.5 So CPP = 60000 × = 80,000
150
Ans. (a) : No. of Right shares: 1 Value of Machine by CPP = 80000
Total shares = Existing + New share = 5 + 1 = 6 24. X and Y are partners in a business sharing
Value of right = (No. of right share/total share)× profit and losses in the ratio of 3:2. They admit
(market value – issue price) Z as a new partner with 1/5 share in the profits.
Value of right = (1/6) × (150–120) Calculate the new profit sharing ratio of
∴Value of right = 0.166667×30 partners.
(a) 12:8:5 (b) 12:8:6
Value of Right = 5 Rs.
(c) 12:7:6 (d) 12:3:7
21. Which one of the following is the most Ans. (a) : Old profit sharing ratio (X and Y) = 3 : 2
pervasive and sustaining objectives of financial
decision making? Z is admitted for a 1 th share.
5
(a) Profit maximization
New profit sharing Ratio (X and Y) = 1 – 1 = 4 : 5
(b) Earnings maximization 5
(c) Value maximization 3  4  12
(d) Cost minimization As new profit sharing ratio = ×   =
5  5  25
Ans. (a) : Profit maximization is the most perasive and 2 4 8
sustaining objectives of financial decision making. B.S New profit sharing ratio = × =
5 5 25
• Conventionally, profit maximization is believed as the
12 8 1
altimate objective of business entity. A:B:C = : :
• Profit maximization, in financial management 25 25 5
Using the L.C.M. method to make denominates
represents the proves or the approach by which profit
common.
earning per shear (EPS) is increased
New profit sharing ratio A : B : C is 12 : 8 : 5
• In simple word, all the decision whether investment or
financing etc are focused on maximizing the profits to 25. If Activity Ratio of a firm is 80% and capacity
ratio is 120% find out its efficiency ratio.
optimium levels.
(a) 150% (b) 100%
22. Political risk management comes in the ambit (c) 80% (d) 66.67%
of which of the following financial decisions?
Ans. (d) : Activity Ratio = Capacity ratio × efficiency
(a) Non-conventional capital budgeting ratio
(b) International currency arbitrage efficiency ratio = activity ratio/capacity ratio
(c) Foreign exchange market ∴ Efficiency ratio = 80/120
(d) Multinational capital budgeting
Efficiency Ratio = 66.67%
Ans. (d) : Multinational capital budgeting, like
traditional domestic capital budgeting, focuses on the 26. When current ratio is 2:1 and if equal increase
cash inflow and outflow associated with prospective in current assets and current liabilities would
long-term investment projects. result in
(a) No change in current ratio
• Multination capital budgeting is capital budgeting for
(b) Increase in current ratio
a foreign project using the same theoretical framwork as
(c) Decrease in current ratio
domestic capital budgeting.
(d) Current ratio will double
• Political risk management comes in the ambit of
Ans. (c) : When the current ratio is 2:1, an equal
multinational capital budgeting. increase in current assets and current liabilities would.
• The political stability of a country directly impacts Decrease the current ratio-
borrowing costs, taxes, and regulation for business. Let us understand this through an example:
UGC NTA NET Commerce IInd Paper June, 2020 363 YCT
Current assets = Rs. 2,00,000 and current liabilities = Marginal Revenue- is the additional revenue gained
Rs. 1,00,000, current ratio = current assets/current from selling one more unit of output.
200000 Profit- is the difference between total revenues and
liabilities = = 2 :1 total costs.
100000
Now let us increase the current assets and current The profit maximizing rules for a perfectly competitive
liabilities by Rs. 10,00,000 and calculate the new firm is to produce the level of output where marginal
current ratio. Current Ratio = 3,00,000/2,000,00 = 1.5:1 revenue equals marginal cost.
27. Which one of the following is a correct 31. A price ceiling below the equilibrium price
equation? often leads to.................
(a) Opening capital = Closing capital + (a) Commodity glut
Additional capital – Drawings - Profit (b) Tax Burdon on consumer
(b) Opening capital = Closing capital + Drawings (c) Shortage of the commodity and black
– Additional capital - Losses marketing
(c) Opening capital = Closing capital + Drawings (d) Export of commodity
– Additional capital - Profit
(d) Opening capital = Closing capital – Drawings Ans. (c) : When a price ceilling is set below the
– Additional capital - Profit equilibrium price, quantity demanded will exceed
quantity supplied, and excess demand or shortages will
Ans. (c) : Correct formula of opening capital- result when a price floor is set above the equilibrium
Closing capital XXXX price, the quantity supplied will exceed the quantity
Add: Drawing XXXX demanded, and excess supply or surpulses will result.
Less: Additional capital XXXX The shortage of the commodity and black marketing
Less: Profit XXXX economy drives out legitimate industry that can't
Opening capital ⇒ XXXX compete with the lower costs of illegal operations.
28. In penetration pricing a business firm seeks to Some black market players deliberately create shortages
access deeper market penetration by keeping in legal goods to force people to purchase from them.
prices................... The tax-free nature of the black market means the
(a) Higher (b) Competitive government losses revenue.
(c) Low (d) Flexible 32. For a decline in price, Total Revenue (TR)
Ans. (c) : increases if demand is.................
• Penetration pricing is a marketing strategy used by (a) Elastic (b) Inelastic
businesses to attract customers to a new product or (c) Unitary elastic (d) Zero elastic
service by offering a lower price during its initial Ans. (a) : Total revenue is price multiplied by quantity
offering. demanded (TR = P × Qd) if demand is elastic at a given
• The lower price helps a new product or service price level, than a compay should cut its price, the
penetrate the market and attract customers away from percentage drop in price will result in an even larger
competitors. percentage increase in the quantity sold thus raising
29. Sub- optimal allocation of resources under total revenue.
monopoly to cause social welfare loss is often However, if demand is inelastic at the original quantity
inferred as level, then the company raises its prices the percentage
(a) Deadweight loss (b) Allocation drift increase in price will result in a smaller percentage
(c) Monopoly loss (d) Opportunity loss decrease in the quantity sold and total revenue will rise.
Ans. (a) : The deadweight loss is the potential gains 33. When consumers seeks to be different and
that did not go to the producer or consumer. As a result exclusive by demanding less of a commodity as
of the dead weight loss, the combined surplus (welth) of
the monopoly and the consumer is loss than that more people consumes it. This phenomenon is
obtained by consumers in a competitive market. known as
(a) Bandwagon effect (b) Snob effect
30. Which of the following is the first order
conditions to profit maximisation? (c) Substitution effect (d) Price effect
(a) TR - TC Ans. (b) : When consumers seek to be different and
(b) MR = MC exclusive by demanding less of a commodity as more
(c) MR cuts MC from below people consume it. This phenomenon is known as the
(d) Slope of MC curve must be higher than that Snob effect.
of MR curve It is a phenomenon described in micro economics as a
Ans. (b) : The profit-maximizing choice for a perform situation where the demand for a certain good by
competitive firm will occur at the level of output where individuals of a higher income level is inversely related
marginal revenue is equal to marginal cost, that is, to its demand by those of a lower income level.
where mR = m.c. 34. Which of the following policy has lost its sheen
Profit- maximization is assumed to be the dominant consequent to implementation of the GST Laws
goal of a typical firm. This means selling a quantity of a in India?
good or service or fixing a price, where total revenue (a) Monetary policy (b) Fiscal policy
(TR) is at its greatest above total (TC) (c) Trade policy (d) Exim Policy
UGC NTA NET Commerce IInd Paper June, 2020 364 YCT
Ans. (b) : Fiscal policy has lost its sheen consequent to 39. Uppasala model for internationalisation of
the implementation of the GST laws in India. business operations is not valid for..............
Fiscal policy, measures employed by governments to (a) Manufacturing organisations
stabilize the economy, specifically by manipulating the (b) Services organisations
levels and allocations of taxes and government (c) Agribusiness enterprises
expenditures. (d) Trading enterprises
35. Reverse Repo Rate is a tool used by the Ans. (b) : The Uppsala model is one of the theories
Reserve Bank of India primarily to................. describing the Internationalization process of firms. The
(a) Inject liquidity (b) Absorb liquidity model states that firms first choose to enter nearby
(c) Protect bank credit (d) Build reserve markets with low market commitment.
Ans. (b) : The reverse repo rate is an important • The Uppsala model is based on four core concept:
monetary policy tool used by the Reserve Bank of India market commitment, market knowledge, current
(RBI) to control liquidity and inflation in the economy. activities and commitment decision.
Under the Reserve Repo Rate, banks deposit excess • The 1977 model is grounded in the broader research
fund with the RBI and earn interest for it. program on International business, led by professor
In case the RBI is falling short on money, they always sune carison which was launched following the
ask commercial banks to pitch in with funds and offer establishment of the institute of business studies at the
them great reverse repo rates in return. university of Uppsala in the late 1950.
36. A multinational firm is the one which............... 40. Who coined the metaphor "Invisible hand" in
(a) Source supplies from multiple countries the Theory of Moral Sentiments?
(b) Exports production to multiple countries (a) Milton Friedman (b) David Ricardo
(c) Control and operates production facilities in (c) Michael Porter (d) Adam Smith
multiple countries
Ans. (d) : The invisible hand, metaphor introduced by
(d) Has consular access in multiple countries the 18th century Scottish philosopher and economist
Ans. (c) : Adam Smith in 1759 characterizes the mechanisms
• A multinational corporation (MNC) or multinational through which beneficial social and economic outcomes
enterprise (MNE) a corporation registered in more than may arise from the accumulated self-interested actions
one country or has operations in more than one country. of individuals none of whom intends to bring about
• It is a large corporation which both produces and sells such outcomes.
goods or services in various countries. • In his first book, "The theory of moral sentiments".
• These are large companies with operations in several Smith proposed the idea of an invisible hand the
countries across the world. Thus multinational tendency of free markets to regulate themselves by
corporation are an important source of foreign direct means of competition supply and demand and self-
investment (FDI). interest.
37. Grouping of countries committed to remove all 41. The defenders of the sustainability approach
barriers to the free flow of goods and service toward Corporate Social Responsibility (CSR)
between themselves and also pursue point out that..............
independent external trade policies is called A. All economic activity exists within a
(a) Free trade area (b) Custom union biosphere that support all life
(c) Common market (d) Economic union B. The success of business must be judged only
Ans. (a) : Free trade area: This is the most basic form against profitability
of economic cooperation member countries remove all C. People have a strong ethical duty to cause no
barriers to trade between themselves but are free to harm and only a prime facie duty to prevent
independently determine trade policies with nonmember harm
nations. An example is the North American free trade D. Business sole responsibility is to fulfill the
agreement (NAFTA) economic functions they were designed to
38. Intellectual Property Rights (IPRs) protect the serve
use of information and ideas that are of E. Customer service is most important
(a) Social value (b) Moral value Choose the most appropriate answer from the
(c) Commercial value (d) Ethical value options given below:
Ans. (c) : The four type of intellectual property rights (a) A and B only (b) B, C, D only
include- (c) A and C only (d) A only
1. Trade Secrets Ans. (d) : Corporate social responsibility (CSR) is a self
2. Trademarks regulating business model that helps a company be
3. Copyrights socially accountable to itself, its stakeholders and the
4. Patents public.
• The economic and commercial value of IPRs: IPRs • By practicing corporate citizenship, companies can be
means of protecting business interests, encouraging conscious of the kind of impact they are having on all
innovation and technology transfer and promoting trade aspect of society including economic, social and
and investment. environmental.

UGC NTA NET Commerce IInd Paper June, 2020 365 YCT
42. Objective of energy management and audit A. Acquisition of work skills and ability
invariably includes which of the following in a B. Adoption of appropriate role behaviour
business enterprises? C. Adjustment to the norm and values of the
A. Minimising cost of energy consumption work group
B. Minimising waste in energy consumption D. Filling a vacant position
C. Scaling harmful impacts of pollution on Choose the most appropriate answer from the
health of the natives options given below:
D. Minimising environmental degradation (a) A and B only (b) B and C only
Choose the most appropriate answer from the (c) C and D only (d) D only
options given below: Ans. (d) : Organizational socialization is one very
(a) A, B and C only important aspect of orientation, the introduction of a
(b) B, C and D only new employee to the enterprise filling a vacant position
(c) A, B and D only is not designed for the socialization of new managers.
(d) A, B, C and D only • Organizational socialization is the process by which
Ans. (c) : The objective of energy management and people learn about and adjust to the knowledge, skills,
audit invariable includes following in business attitudes, expectations and behaviours needed for a new
enterprises or changing role within an organisation. The
(A) Minimising cost of energy consumption. socialization process truly begins when a future
employee simply considers working for a company. The
(B) Minimising waste in energy consumption. candidate forms expectations of what the daily realities
(C) Minimising environment degradation. and culture of a work place will be.
• Energy management is the process of monitoring, 45. Which of the following are true of the Goods
controlling and conserving energy in a building or and Services Tax (GST) introduced in India in
organisation. The energy management process starts recent times?
with an energy audit of given location. Just as started A. It is destination tax
above, the goal is to find opportunities to improve
B. It benefits producing states more
efficiency.
C. It benefits consuming states more
43. Which of the following aptly aims to alleviate D. It is a progressive taxation
financial stress of the borrowers at bottom of
E. it is an umbrella tax to improve ease of doing
the pyramid by reducing their cost of credit in business
new of covid-19 pandemic?
Choose the most appropriate answer from the
A. A generic loan moratorium to the borrowers
options given below:
B. Two percent interest subvention on Sishu (a) B, D and E only (b) A, C and D only
loans under the Pradhan Mantri Mudra
Yojana (c) A, D and E only (d) A, C and E only
C. Provisioning Rs.1,500 Crore for Animal Ans. (d) :
Husbandry Infrastructure Fund (AHIDF) to • The goods and service tax or (GST) is a major indirect
help investment dairy, meat processing and tax reform introduced in India by integrating the major
animal feed plants. indirect taxes of the centre and states it is a
D. Financial incentives to Farmer Producer comprehensive tax levied on the manufactures, sale and
Organistions (FPOs) and Micro, Small and consumption of goods and services. The GST is a
Medium Enterprises (MSMEs) destination based consumption tax made on value
addition.
Choose the most appropriate answer from the
options given below: • The GST is destination tax, it is expected to favour
(a) A, B and C only (b) A, B and D only 'consuming states' as opposed to the richer 'producing
states' which supply goods and services to consumers in
(c) B and C only (d) D only other states besides their own. Even the IGST collected
Ans. (*) : All option are the correct- by the center is shared with the state where the good or
(A) A generic loan moratorium to the borrowers service concerned is sold, not the one in which it was
(B) Two percent interest subvention on sishu loans produced.
under the pradhan mantri mudra yojna. • This is a not a progressive taxation this is fixed
(C) Providing Rs. 1,500 crore for animal husbandry taxation.
infrastructure fund (AHIDF) to help investment dairy, 46. Which of the following truly describe govt.
meat processing and animal feed plants. intervention in the MSME space in view of
(D) Financial incentives to former producer Covid-19 pandemic?
organisations (FPOs) and micro, small and medium A. Provisioning of collateral free automatic loans
enterprise (MSMEs) worth Rs. 3 lakh crores
44. Organizational socialization is one very B. Provision of 100% credit guarantee coverage
important aspect of orientation, the to banks and NBFCs on principal and interest
introduction of new employee to the enterprise. for loans to NBFCs
Which of the following is/are not designed for C. Redefined MSMEs to include both
the socialization of new managers? investment and turnover criteria
UGC NTA NET Commerce IInd Paper June, 2020 366 YCT
 D. Created a war chest of Rs. 3,00,000 crores for • Price sensitivity is the degree to which demand
the MSME loans and employment protection changes when the cost of a product or service changes.
E. Allocated Rs. 3,00,000 crores for the MSME
loan moratorium and waiver
Choose the correct answer from the options
given below:
(a) A, B and C (b) B, C and D
(c) C, D and E (d) A, C and D
Ans. (a) :
(A) Provising of collateral free automatic loans worth
Rs. '3' Lakh crores.
(B) Provising of 100% credit guarantee coverage to
banks and NBFCs on principle and interest for loans 48. Which of these are readily accepted
distinguishing characteristics of the services
NBFCs. that create unique strategic challenges?
(C) Redefined MSMEs to include both investment and A. Inflexibility B. Perishability
turnover criteria. C. Inseparability D. Intangibility
• The package announced by the government includes E. Inscrutability
INR '3' trillion for collateral free loans to MSMEs of Choose the most appropriate answer from the
four year tenure with no payments due for one year. options given below:
• The government will offer a 100% credit guarantee (a) B, C, D only (b) A, B, C, D only
cover on Rs. 3 Lakh crore worth loans that banks and (c) C, D, E only (d) B and D only
non-banking finance companies (NBFCs) are Ans. (a) : A service is a transation in which there is no
expectation to give to businesses, including micro, physical transfer of goods from the seller to the buyer.
small and medium enterprises (MSMEs), which have The benefits of such a service are held to be
been badly hit due to the pandemic. demonstrated by a buyer's willingness to make the
exchange.
• Union cabinet has approved the revised new definition
Readily accepted characteristics of the services are as
of the MSME. The MSMEs have been redefined on the follows:-
basis of investment limit and turnover size. The medium
• Perishability
units will now be defined as companies with upto Rs.
• Inseparability
50 crore investment and turnover of 250 crore.
• Intangibility
• The government has informed the supreme court that
• Heterogeneity
loans upto Rs. 2 crores taken by individuals and micro,
• Ownership
small and medium enterprises (MSMEs) will be eligible
for a waiver of compound interest during the six-month • Simultaneity
moratorium period. • Quality measurement
• Nature of demand
47. The consumer's price sensitivity is/are
influenced by 49. Suppose a customer who purchases only two
goods is making a utility- maximizing choice
A. Who bears the cost and then the price of one of the goods
B. What percentage of total expenditure does the decreases. What will happen?
product represent A. The consumer's purchasing power will
C. Who bears the cost and type of retailer from increase
where customer purchases B. The consumer's total utility will increase
D. Consumption of product by the customer C. The consumer's money income will increase
D. Knowledge about the product Choose the most appropriate answer from the
Choose the most appropriate answer from the options given below:
options given below: (a) A and C only (b) A and B only
(c) B and C only (d) A, B and C only
(a) A, B, E only (b) B and D only
Ans. (b) : The change in a consumer's consumption of a
(c) A, B, D only (d) A, B, D, E only
good in response to an income-compensated price
Ans. (d) : Price sensitive customers are those who view change is called the Substitution effect. The
price as a serious factor in a purchase. Some customer substitution effect always involves a change in
view extremely low price as too good to be true and consumption in a direction opposite that of the price
may assign a poor value to a product without having change.
tried it. These types of prestige price customers of ten • When a consumers is maximizing utility, the ratio of
refusee to purchase a product of lower cost. marginal utility to price is the same for all goods

UGC NTA NET Commerce IInd Paper June, 2020 367 YCT
• For a consumers who purchases only two goods, price (a) A and C only (b) A and B only
reduction increase the extra utility per rupee available (c) B and C only (d) A, B and C only
from the good whose price has fallen; a consumer's Ans. (d) : Banks are required to consider credit risk,
purchasing power will increase and thus purchase more market risk, and functional risk for capital adequacy
it. ratio (CAR). is the ratio of a banks capital to its risk-
• When the price of goods decreases, the rate of bearing assets and current liabilities. It is also known as
consumption will increase. the capital to risk assets ratio.
50. Which of the following could be problems with 53. Identify on which of the three mutually
consumer interviews?
reinforcing pillars Basel-III capital regulations
A. A non-random sample
are based?
B. The identification problem
A. Minimum capital standards
C. Response bias
Choose the most appropriate answer from the B. Supervisory review of capital adequacy
options given below: C. Credit risk management
(a) A and B only (b) B and C only D. Management control
(c) A and C only (d) B only Choose the most appropriate answer from the
Ans. (c) : Customer interviews are a common options given below:
mechanism for gathering the voice of customer (VOC) (a) A, B and C only (b) A, B and D only
customer interviews are usually conducted one-to-one (c) C, D and E only (d) A, C and D only
with individual customers or with a small no. of people Ans. (b) : Phillar of Basel-III accord:
from the same business or family group.
• Pillar-1- Enhanced minimum capital and liquidity
Problems with customer interview-
requirements.
A non-random sample- is a sampling technique where
the sample selection is based on some factors other than • Pillar-2 - Enhanced supervisory review process of
some random chance. firm-wide risk management and capital planning.
Response bias: also known as survey bias, is the • Pillar-3 - Enhanced risk disclosure and market
tendency of a person to untruthfullly or misleadingly discipline.
answer questions of a survey. 54. Which of the following are sufficient to
51. Process Costing is appropriate for which of the determine shutdown point of multi commodity
following firms? firm in the short-run?
A. Logistic and Transportation firms A. Variable cost of operations
B. Pharmaceutical and healthcare firms B. Marginal revenue received
C. Tourism and hospitality firms C. Average variable cost of operations
D. Oil refining firms D. Average marginal revenue received
Choose the correct answer from the options
Choose the most appropriate answer from the
given below:
options given below:
(a) A and C (b) B and C
(c) A, B and C (d) D only (a) A and B only (b) C and D only
(c) A, B and C only (d) B, C and D only
Ans. (d) : Process costing- Process costing is an
accounting methodology used when there is mass Ans. (b) : A shutdown point is a concept in managerial
production of similar products, where the cost economics that suggests that a business should at least
associated with individual units of output cannot be stop production temporarily and close its door because
differentiated from each other. its no longer profitable to sustain its operations.
• Under this concept, costs are calculated over a fixed • The three main factor that help in determining a
period of time, summarized, and then allocated to all the shutdown point of a business.
units produced during that period of time on a • How much variable cost of operations goes into
consistent basis. producing a good or service.
• Process costing is the only reasonable approach in • The marginal revenue received from that good or
many industries to determine product costs.
service.
• Examples of industries where this type of production
occurs include oil refining, food production and • The type of goods and services provided by the firm.
chemical processing. 55. Survey instruments used to assess customer
52. In order to calculate capital adequacy ratio, the perception of service quality are called
banks are required to take into consideration, A. CETSCALE B. SERVQUAL
which of the following risks? C. SERVPREF D. DINESERV
A. Credit risk E. RSQS
B. Market risk Choose the most appropriate answer from the
C. Operational risk options given below:
Choose the most appropriate answer from the (a) A and B only (b) B and C only
options given below: (c) A, B, C and D only (d) B, C, D and E only
UGC NTA NET Commerce IInd Paper June, 2020 368 YCT
Ans. (d) : Therefore, survey instrument used to assess D. Exchange rate differential between two
customer perception of service quality are called- currencies is explained by comparative cost
(1) SERVQUAL – (Service Quality) advantage and purchasing power parity
(2) SERVPREF – (Service Performance) Choose the most appropriate answer from the
(3) DINESERV – (Design Services) options given below:
(4) RSQS – (Retail Service Quality Scale) (a) A, B and C only (b) A and B only
(c) C and D only (d) B, C and D only
56. Channel Conflicts can be
A. Vertical B. Horizontal Ans. (a) : The fisher effect-
C. Diagonal D. Circular • The fisher effect refers to the relationship between
E. Triangular both the nominal interest rate, real interest rate and
inflation expectations.
Choose the most appropriate answer from the
options given below: • It is an economic theory described by Irving fisher in
(a) A and C only (b) B and C only 1930.
(c) A and B only (d) A, B and C only • The fisher effect states that the real interest rate equals
the nominal interest rate minus the expected rate of
Ans. (c) : Channel conflict refers to any dispute, inflation.
difference arising between two or more partners, where
i.e. real interest rate = Nominal interest rate- An
one partner's activity effects the business or goal
expected rate inflation.
accomplishment of other channel partner. In the process
of regular supply of goods in the market several • Therefore, the nominal rate is equal to a real interest
intermediaries join the channel, any clash among these rate plus an expected inflation.
channel intermediaries is considered as channel conflict. 59. Which of the following include problems in
Type of channel conflict: forecasting?
(i) Vertical marketing system A. estimates becoming more reliable the further
(ii) Horizontal marketing system you forecast into the future
(iii) Multi-channel/hybrid marketing system. B. specification error
C. cyclical variation
57. Which of the following retail analytic
applications involve(s) the use of search D. Stationarity in data series
techniques to gain insights into customer's E. consistency in data series
buying pattern? Choose the most appropriate answer from the
A. Factor analysis B. Regression analysis options given below:
C. Data mining D. Data scrapping (a) A and B only (b) B, C and D only
E. Data cloning (c) B and C only (d) A and C only
Choose the most appropriate answer from the Ans. (c) : Forecasting is a technique that uses
options given below: historical data as inputs to make informed estimates
(a) A and B only (b) B and C only that are predictive in determining the direction of
(c) A, C and D only (d) C only future trends.
Ans. (d) : Retail analytics focuses on providing insights • Cyclical Variation: are long-term movements that
related to sales, inventory, customers and of the represent consistently recurring rises and declines in
important aspects crucial for a merchant's decision- the activity.
making process. It is used to help make better choices, • Specification error: Specification errors means that
run a business more efficiently, and deliver improved at least one of the key features or assumptions of the
customer service analytics. models is incorrect.
Data Mining:- Data mining is a concept of computer • Stationary in data series: refers to a process that
science but has played a significant role in the retail has a property that the mean, variance, and
industry as it helps retailers to learn the buying autocorrelation structure do not change over time.
behaviour and pattern of their customers.
• Consistency in data series: Consistency refers to
• Retailers keep on collecting information about the quality of fat of remaining the same at different
seasonal product sale transactional data, and time.
demographics, etc the collected data is of no use if it is
not converted into useful knowledge and converting 60. Which one of the following is/are hold(s) true to
data into knowledge requires a proper mechanism. successfully practice price discrimination?
58. Which of the following narratives describe A. The firm must be a pure monopoly
Fisher (Irving) effect? B. The firm must possess market power
A. Nominal, interest rate is equal to a real C. It must be difficult for consumers in one
interest rate plus an expected interest rate market to sell to consumers in the other
B. Real interest rate is equal to nominal interest market
rate minus expected rate of inflation Choose the most appropriate answer from the
C. Exchange rate differential between two options given below:
currencies is explained by interest- inflation (a) A and B only (b) B and C only
rate differential (c) A and C only (d) C only
UGC NTA NET Commerce IInd Paper June, 2020 369 YCT
Ans. (b) : Price discrimination is a selling strategy that (iii) Shifting of business from one place to another
charge different prices for the same product or service place
from different customers. In price discrimination, the (iv) Assets to be sold or disposed off
seller places different customers into groups based on (v) Returning capital to owners
certain attributes and then charges each group a (a) (i), (ii), (iv), (v) (b) (i), (ii), (iii), (iv)
different price. (c) (i), (ii), (iii), (v) (d) (i), (iii), (iv), (v)
• Three factor to successfully practice price Ans. (a) : The closure is the term used when a business
discrimination :- decides to discontinue or shut down its activities of the
1. The firm must process market power. organization. A closure may be a result of bankrupted,
2. The firm must be able to recognize difference in where the business has fewer funds to continue its
demand or must be able to control supply. operations, or when some other organization (or a
3. The firm must have the ability to prevent the resale of competitor) decides to take over the firm and shut down
the product from one buyer to another. as superfluous. Closure can be two types, voluntary or
61. In a monopolistically competitive market, involuntary where voluntary closure of organizations
which of the following hold true? are much rare as compared to involuntary closures of
A. firms are small relative to the total market organization.
B. No firm has any market power Closing down of the business and it involves:
C. there is easy entry and exit in the market • No buying or selling of goods and services.
D. few firms have market power • No manufacturing of products.
E. there is no easy entry and exit in the market • Assets to be sold or disposed of to pay the debt of the
Choose the most appropriate answer the organization.
options given below: • Returning capital to the owners after the organization
(a) A, C and E only (b) B and C only decides to liquidate assets.
(c) A and B only (d) A and C only 64. Which of the following are false?
Ans. (d) : Monopolistically competitive market- it A. Partners are not bound to carry on the
refers market situation in which there are large no. of business of the firm to the greatest common
firm which sell closely related but different product. advantage
Features- B. Where a partner is entitled to interest on
• A large no. of sellers. capital subscribed by him, such interest shall
• Differential product. be payable whether or not there are profits
• Unrestricted entry and exit. C. An outgoing partner has a right to claim a
• The firm are small relative to the total market. share in the profits of the firm till his account
is finally settled
• Incomplete knowledge of the market.
D. A partner may be expelled from the firm only
62. Span of management is determined by with the consent of all other partners
(i) manager's training Choose the correct answer from the options given
(ii) manager's personal qualities below:
(iii) subordinates training (a) A, B, D only (b) A, C, D only
(a) (ii), (iii) and (iv) (b) (i), (ii) and (iii) (c) B, C, D only (d) C, D only
(c) (i), (iii) and (iv) (d) (i), (ii) and (iv)
Ans. (a) : According to the partnership act, 1932:
Ans. (b) : The span of management, also called the span
1. All partners are bound the carry on the business of
of control refers to the ability of a superior to efficiently
the firm to the greatest common advantage and shall not
manage a number of subordinates. In other words, the
manager has a group of subordinates who report directly obtain a private advantage at the expense of the firm
to firm is called a span of management. and if a partner carries on a rival business in
competition with the partnership, the other partners are
– Span of management are determined by various entitled to restrain him.
factors like:
2. Where a partner is entitled to interest on the capital
• Manager's training subscribed by him, such interest on capital is an
• Manager's personal qualities appropriation and shall be payable only out of the
• Subordinates training profits of the firm.
• Nature of work 3. Every outgoing partner or the estate of any partner
• The degree of planning who ceased to be a partner has the right to claim either a
• Staff assistance share in the profits of the firm till his account is finally
• Centralization of authority settled or an interest rate property till his account is
finally settled.
• Delegation of authority 4. Expulsion of partner- section 33 of the partnership
63. The shut down refers to complete cessation or act, 1932:
closing down of the business. It involves which 65. Which of the following are related to vouching
of the following? of sales?
(i) No buying or selling A. Dispatch of goods B. Sales Book
(ii) No manufacturing C. Direct notes D. Credit notes
UGC NTA NET Commerce IInd Paper June, 2020 370 YCT
 Choose the correct answer from the options (D) Digital or (i) A virtual organization
given below: dot-com refers to a collection
(a) B and D only (b) A and D only organization of geographically
(c) B and A only (d) B and C only spread individuals,
Ans. (c) : Vouching refers to reviewing documentary groups, or
evidence to see if it properly supports entries made in organization that
the accounting records while vouching and the auditor depend on electronic
is looking for any errors in the amount recorded in the linking in order to
accounting records as well as ensuring that the produce a service or a
transactions are recorded in the correct accounts. product.
Vouching of sales includes: 67. Match the items of Units (I) With those of Units
• Sales book. • Dispatch of good. (II) and choose the correct code of
combination:
• Debit notes. • Credit notes. List-I List-II
66. Match the items of List-I with those of List-II A. P(H i / E) = P (HP(E) ∩ E)i
(i) Theorem of
and choose the correct code of combination
List-I List-II addition
(E ∩ E )
A. Ad-hoc team (i) Virtual B. P(E 2 / E1 ) = P P(E ) (ii)
1
1
Theorem of
2

formed to solve organization multiplication

unusual problem C. P(E1 ∩ E 2 ) = P(E1 ) × P(E 2 ) (iii) Conditional
B. Suitable when (ii) Task force probability
there are large D. P(E1 ∪ E 2 ) = P(E1 ) + P(E 2 ) (iv) Baye's theorem
number of small (a) A-(i), B-(iv), C-(ii), D-(iii)
Projects (b) A-(iv), B-(iii), C-(ii), D-(i)
C. Status-free and (iii) Free from (c) A-(iii), B-(iv), C-(ii), D-(i)
hierarchy free organization (d) A-(iv), B-(iii), C-(i), D-(ii)
organization
Ans. (b) :
D. Digital or dot
com organization (iv) Matrix organization Theorem Formula
(a) A-(iii), B-(i), C-(iv), D-(ii) (A) P(H i / E) = P
(H ∩ E)
P(E)
i (iv) Bayes theorem-
(b) A-(i), B-(ii), C-(iv), D-(iii) describes the
probability of an
(c) A-(ii), B-(iv), C-(iii), D-(i) event based on
(d) A-(iv), B-(i), C-(ii), D-(iii) the prior
Ans. (c) : knowledge of the
List-I List-II conditions that
(A) Ad-hoc team (ii) A task force is an ad- might be related
formed to solve hoc team formed to the event.
unusual people who come (B) (E ∩ E )
P(E 2 / E1 ) = P P(E ) 1 2 (iii) The conditional
problem together from diverse
1
probability of
branches, positions, event E2 is the
and points of view to probability that
work on a single the event will
defined task like occur given the
solving an unusual knowledge that
problem, developing event E1 has
ideas, answer already occurred.
questions etc. (C) P(E1 ∩ E 2 ) = P(E1 ) × P(E 2 ) (ii) A theorem of
(B) Suitable when (iv) A matrix organization multiplication
there are large is a structure that has states that "the
number of small more than one line of probability of
project reporting managers. happening given
'2' events or in
• It breaks the different words
monotony and the probability of
provides more the intersection of
flexibility to the '2' given event is
organization. equivalent to the
(C) Status free and (iii) Free form- product achived
hierarchy free organization has no by finding out the
organization boundaries i.e. it is product of the
said to be states free probability of
and hierarchy free happening of both
organization. events"
UGC NTA NET Commerce IInd Paper June, 2020 371 YCT
 (D) P(E1 ∪ E 2 ) = P(E1 ) + P(E 2 ) (i)
The addition Ans. (c) :
theorem refers to List-I List-II
the happening of (A) Percent (iii) All firms sell an
at least one of competition identical product (the
the events from product is a
the given two 'commodity' or
events 'homogenous')
68. Match the items of List-I with those of List-II • All firms are price
and choose the correct code of combination takers
List-I List-II • Large no. of firm
A. Inability to pay (i) Current Ratio • No control on price
interest (B) Monopoly (iv) Competitors are not
B. Liquidity crisis (ii) Debtor Turnover able to enter the
Ratio market as there are
high barriers to entry
C. Inefficient collection (iii) Interest coverage
• There is only one
of receivable ratio seller in the market
D. Return of share- (iv) Debts-Equity ratio • The company that
holder's fund being operates the
much higher than monopoly decides the
the overall return on price of the product
that it will sell
investment without any
(a) A-(iii), B-(i), C-(ii), D-(iv) competition keeping
(b) A-(iii), B-(ii), C-(i), D-(iv) its prices in check.
(c) A-(ii), B-(iii), C-(i), D-(iv) As a reset monopolies
(d) A-(i), B-(ii), C-(iii), D-(iv) can rise price at will.
(C) Monopolistic (ii) It occurs when an
Ans. (a) : Therefore, the correct match is:- industry has many
competition
List-I List-II firms offering
(A) Inability to pay (iii) Interest coverage products that are
interest ratio similar but not
identical
(B) Liquidity crisis (i) Current ratio • Unlike a monopoly,
(C) Inefficient (ii) Debtor turnover these firm have little
collection of ratio power to set curtail
receivable supply or raise price
to increase profits.
(D) Return of share (iv) Debts equity ratio
• Firm in
holders fund
monopolistic
being much competition typically
higher than the try to differentiate
overall return on their products in order
investment to achieve above
69. Match List-I with List-II market returns.
List-I List-II (D) Oligopoly (i) Oligopoly is when a
small number of firms
(Market Forms) (Distinctive collude, either
featured) explicitly or tacitly, to
A. Perfect competition (i) Price rigidity restrict output and/or
B. Monopoly (ii) Product improve- fix prices
ments • Price rigidity
C. Monopolistic (iii) Homogeneous 70. Match the cost concepts in List-I and their
competition products description in List II
D. Oligopoly (iv) Price discrimination List-I List-II
(Cost concepts) (Description)
Choose the correct answer from the options
A. Sunk cost (i) Change in total cost
given below: for a unit change in
(a) A-(ii), B-(i), C-(iv), D-(iii) output
(b) A-(iv), B-(iii), C-(i), D-(ii) B. Marginal cost (ii) Value of inputs
(c) A-(iii), B-(iv), C-(ii), D-(i) owned and used in
(d) A-(i), B-(ii), C-(iii), D-(iv) production
UGC NTA NET Commerce IInd Paper June, 2020 372 YCT
 C. Investment cost (iii) Costs that are (C) National (i) Michael parter's
unaffected by firm competitive diamond model (also
decision advantage known as the theory of
D. Implicit cost (iv) Total increase in National competitive
costs resulting from advantage of industry)
a decision is a diamond shaped
Choose the correct answer from the options frame work that focuses
given below: on explaining why
(a) A-(ii), B-(i), C-(iv), D-(iii) certain industries within
(b) A-(i), B-(iii), C-(iv), D-(ii) a particular nation are
(c) A-(iv), B-(ii), C-(iii), D-(i) competitive
(d) A-(i), B-(ii), C-(iii), D-(iv) internationally, whereas
other might not
Ans. (a) :
List-I List-II (D) Comparative (ii) The law of comparative
cost advantage advantage is popularly
(Cost concept) (Description)
attributed to English
(A) Sunk cost (ii) Value of inputs owned political, economist
and used in production David Ricard and his
(B) Marginal cost (i) Change in total cost book "On the principle
for a unit change in of political economy
output and taxation
(C) Investment (iv) Total increase in costs 72. Match the items of List-I with those of List-II
cost resulting in from a and choose the correct code of combination
decision List-I/ List-II
(D) Implicit cost (iii) Costs that are A. Indian Contract Act (i) 2002
unaffected by firm B. Right to Information (ii) 1872
decision
C. Information (iii) 2005
71. Match the items in List-I with economists
propounded the same from List-II Technology Act
List-I List-II D. Competition Act (iv) 2000
(Theoretical Foundations (Economists) (a) A-(i), B-(ii), C-(iii), D-(iv)
of Global Trade) (b) A-(ii), B-(iv), C-(i), D-(iii)
A. Absolute cost (i) Michael Porter (c) A-(iii), B-(iv), C-(ii), D-(i)
advantage (d) A-(ii), B-(iii), C-(iv), D-(i)
B. Factor endowment (ii) David Ricardo
theory Ans. (d) : Therefore the correct match is-
C. National competitive (iii) Hecksher and Ohlin List-I List-II
advantage (A) Indian contracl act (ii) 1872
D. Comparative cost (iv) Adam smith (B) Right to information act (iii) 2005
advantage (C) Information technology act (iv) 2000
Identify correct match from the following:
(a) A-(iv), B-(iii), C-(i), D-(ii) (D) Competition act (i) 2002
(b) A-(iii), B-(ii), C-(i), D-(iv) 73. Match the items of List-I with the items of List-
(c) A-(i), B-(iv), C-(iii), D-(ii) II and suggest the correct code:
(d) A-(iii), B-(iv), C-(ii), D-(i) List-I/ List-II
Ans. (a) : A. Relationship Banking (i) Dealing in hundies
and acceptance of
List-I List-II deposits
(A) Absolute cost (iv) The concept of absolute B. Merchant Banking (ii) Widening the
advantage advantage was
developed by Adam entrepreneurial base
Smith in his book and assist in a rapid
"wealth of nation" rate of industrial
(B) Factor (iii) That theory is growth
endowment associated with C. Indigenous Banking (iii) Engaged in the
theory international trade by business of capital
Hecksher-Ohlin it issue management
comments of the
relationship between D. Development (iv) Creating,
international and Banking maintaining and
interregional production enhancing strong
costs and the supply of relationship with
production factors. customers
UGC NTA NET Commerce IInd Paper June, 2020 373 YCT
 (a) A-(iv), B-(ii), C-(i), D-(iii) 75. Match List-I with List-II
(b) A-(ii), B-(iii), C-(i), D-(iv) List-I List-II
(c) A-(iv), B-(iii), C-(i), D-(ii) (International product (International
(d) A-(ii), B-(i), C-(iv), D-(iii) lifecycle stage) competition)
A. Introduction (i) Companies from
Ans. (c) : other high-income
List-I List-II countries increase
(A) Relationship (iv) Creating maintaining and exports to the
banking enhancing strong innovating country
relationship with customer B. Growth (ii) Competitors from
other high-income
(B) Merchant (iii) Engaged in the business of countries may begin
banking capital issue management production in
(C) Indigenous (i) Dealing in hundies and developing
banking acceptance of deposits countries
(D) Development (ii) Widening the C. Maturity (iii) A few competitors
banking entrepreneurial base and at home
assist in a rapid rate of D. Decline (iv) Competitors in
industrial growth other high-income
countries begin
74. Match the items of List-I with those of List-II production for their
and choose the correct code of combination domestic markets
List-I List-II Choose the correct answer from the options
A. 80 GGC (i) Deduction in given below:
respect of rent paid (a) A-(iii), B-(iv), C-(i), D-(ii)
B. 80 GG (ii) Deduction in (b) A-(iii), B-(i), C-(iv), D-(ii)
respect of (c) A-(ii), B-(iv), C-(i), D-(iii)
contribution given (d) A-(iv), B-(ii), C-(i), D-(iii)
by company to Ans. (a) :
political parties List-I List-II
C. 80 GGA (iii) Deduction in (A) Introduction (iii) A few competitors at
respect of home
contribution given (B) Growth (iv) Competitors in other
by any person to high-income countries
political parties begin production for their
domestic market
D. 80 GGB (iv) Deduction in
(C) Maturity (i) Companies from other
respect of certain
high income countries
donations for increase exports to the
scientific research innovating country
(a) A-(iii), B-(i), C-(ii), D-(iv) (D) Decline (ii) Competitors from
(b) A-(iii), B-(ii), C-(iv), D-(i) other high income
(c) A-(iii), B-(i), C-(iv), D-(ii) countries may begin
(d) A-(i), B-(ii), C-(iii), D-(iv) production in developing
countries
Ans. (c) :
76. What is the correct sequence of distribution of
List-I List-II amount realised under section 154 of CGST
(A) 80 GGC (iii) Deduction in respect of rules?
contribution given by any A. Appropriated against the administrative cost
person to political parties of the recovery process.
(B) 80 GG (i) Deduction in respect of rent B. Appropriated against any other amount due
paid from defaulter under the Act or IGST Act,
2017
(C) 80 GGA (iv) Deduction in respect of certain C. Appropriated against the amount due to be
donations for scientific recovered from defaulter.
research D. Balance amount, if any shall be refunded to
(D) 80 GGB (ii) Deduction in respect of the defaulter
contribution given by company (a) A, B, D, C (b) A, C, B, D
to political parties (c) C, A, B, D (d) C, B, A, D

UGC NTA NET Commerce IInd Paper June, 2020 374 YCT
Ans. (b) : Section 154 of CGST rules: Choose the most appropriate answer from the
Disposal of proceeds of the sale of goods and movable options given below:
or immovable property the amounts so realized from the (a) A, B and D only (b) A, C and E only
sale of goods, movable or immovable property for the (c) A, B and C only (d) C, D and E only
recovery of dues from a defaulter shall- Ans. (c) : For business across verticals, COVID-19 has
(A) First, be appropriated against the administrative led to an unprecedented downfall in revenues and
cost of the recovery process. operations with extended lockdown in several countries.
(B) Next, be appropriated against the amount to be • Some industries such as travel and aviation, retail, and
recovered. hospitdity have taken the worst hit due to lockdowns,
(C) Next, be appropriated against any of the amount travel restrictions and significant slump in consumer
due from the defaulter order the act or the spending.
integrated GST act 2017 • However, even amidst this economic crisis, some of
77. Arrange the following in correct sequence: the niche sectors have not only managed to stay afloat
A. Income under the different heads of Income but also witness trend-defying growth.
B. Deduction from gross total income. 79. Arrange the following management functions
C. Adjustment of losses of the current year and in a logical sequence of getting things done.
earlier years. A. Planning B. Staffing
D. Rounding off. C. Organizing D. Coordinating
Choose the correct answer from the options E. Controlling
given below: F. Directing
(a) A, C, B, D (b) A, B, C, D Choose the correct answer from the options
(c) A, B, D, C (d) A, D, B, C given below:
(a) A, B, C, D, F and E (b) A, C, B, F, D and E
Ans. (a) : Step-1 Compute the income of an individual (c) A, C, B, D, F and E (d) A, C, B, D, E and F
under '5' heads of income on the basis of his residential
status. Ans. (b) : Function of management-
Step-2 The income of any other person, if including (1) Planning
under section 60 to 65, will be included under (2) Organising
respective heads. (3) Stuffing
Step-3 Set off of the losses if permissible, while (4) Directing
aggregating the income under '5' heads of income. (5) Co-ordinating
Step-4 Carry forward and set off the losses of past (6) Controlling
years, if permissible from such income. 80. Sequence the following CSR eligibility criteria
Step-5 The incomputed steps 1 to 4 is known as gross and spending as per the provisions of the
total income from which deductions under section '80C' Indian Companies Act 2013.
to '80U' (Chapter VIA) will be allowed. A. Positive net-worth of Rs.500 crores or more
Step-6 The balance income after allowing the deduction B. Two percent of average profit spend on CSR
is known as total income which will be rounded off to C. Net profit of Rs.5 crore or more in given
the nearest Rs. '10'. financial year
Step-7 Compute tax on such total income at the D. Turnover of Rs.1,000 crore or more
prescribed rates of tax. E. Penal action for non compliance
Step-8 Allow rebate of maximum Rs. 2500 under Choose the correct answer from the options
section '87A' in case of a resident individual having given below:
total income upto Rs. 3,50,000 for details see below. (a) E, B, D, C and A (b) B, E, A, C and D
Step-9 Add surcharge @ 10% on total income (c) A, D, C, B and E (d) C, B, A, D and E
exceeding Rs. 50,00,000 and upto Rs. 1 Crore and 15% Ans. (c) : Corporate Social Responsibility is a
of such income tax in case of an individual having a management concept whereby companies integrate
total income exceeding Rs. 1 Crore. social and environment concerns in their business
Step-10 Add deduction cess @ 20% and SHEC @ 1% operations and interaction with their stake holders.
on the tax (including surcharges if applicable). CSR eligibility criteria and spending as per the
Step-11 Allow relief under section '89' if any provisions of the Indian Companies Act 2013.
Step-12 Deduct the TDS, advance tax paid for the • Every company having a Net worth of rupees '500'
relevant assessment year and double taxation relief crores or more.
under section '90', 90A or 91. • Or the turnover of rupees '1000' crores or more.
78. Which of the following industry verticals • A net profit of rupees '5' crore or more during any
received boost amid covid-19 pandemic financial year.
lockdown? • '2' % of average of profit spend on CSR
A. Online education, gaming and entertainment • Penal action for non-compliance.
B. E-Commerce and E-Payment infrastructure Shall constitute a corporate social responsibility
C. Retailing and pharmaceuticals committee of the board consisting of three or more
D. Hospitality and healthcare services directors, out which at least one director shall be an
E. Manufacturing and MSMEs independent director.
UGC NTA NET Commerce IInd Paper June, 2020 375 YCT
81. Sequence the steps in CRM process? 83. Sequence the following activities in the process
A. Developing CRM programes of accounting
B. Collection of customer data A. Journalising the business transaction in the
C. Analyzing customer data books of entry
D. Identify the target customers B. Recording the business transaction in the
E. Implementing programs books of entry
Choose the correct answer from the options C. Preparation of Annual Financial statements
given below: D. Preparation of the Trial Balance
(a) A, B, C, E, D (b) B, C, D, A, E E. Deriving meaningful inferences for business
(c) B, C, A, E, D (d) C, D, E, A, B decisions
Ans. (b) : Customer relationship management (CRM) is Choose the correct answer from the options
the process of managing interactions with existing as given below:
well as past and potential customers it is one of many (a) A, B, C, D and E (b) A, B, D, E and C
different approaches that allow a company to manage (c) D, C, E, B and A (d) B, A, D, C and E
and analyze its own interactions with its past, current Ans. (d) : The accounting cycle is a process designed to
and potential customer. It uses data analysis about make financial accounting of the business activities
customers' history with a company to improve business easier for the business owners. It provides clear
relationship with customers, specifically focusing on guideline for recording, analyzing and final reporting a
customer retention and ultimately driving sales growth. business's financial activities. Process of accounting-
CRM process involves the activities and strategies that (i) Recording the business transaction in the books of
companies use to manage their interaction with current entry.
and potential customers. Successfully collecting (ii) Journalising the transaction in the ledger accounts.
information about your customers allows you to (iii) Preparation of the trial balance.
understand them more. In turn, you can improve your (iv) Preparation of annual financial statements.
protects and service based on their demands. (v) Deriving meaningful inferences for business
Steps in the CRM process- decision.
(i) Collecting of customer data 84. Sequence the following in the capital budgeting
(ii) Analyzing customer data process
(iii) Identify the target customers A. Cash flow estimation
(iv) Developing CRM programs B. Identify discounting rate
(v) Implementing programs C. Project selection decision
82. Sequence the following activities in the process D. Determination of NPV
of standard costing. Choose the correct answer from the options
A. Establishing standard costs given below:
B. Measurement of actual costs (a) A, B, C and D (b) A, B, D and C
C. Identifying variances and causes of variance (c) D, A, B and C (d) B, A, D and C
D. Disposing the variances to cost and profit Ans. (b) : Capital budgeting capital budgeting, also
centers known as an "Investment appraisal" is a financial
E. Comparison of actual and standard costs management tool to measure a projects potential risk
Choose the correct answer from the options and expected long-term return on investment.
given below: Companies may have limited resources for now projects
(a) A, B, E, C and D (b) A, B, C, D and F so they carefully consider the capital investment a
(c) A, B, E, D and C (d) A, B, D, C and E project requires and the amount of value they expect to
receive.
Ans. (a) : Standard costing is the practice of
substituting an expected cost for an actual cost in the Capital budgeting process sequence:
accounting records. Standard costing are assigned to (a) Cash flow estimation
production units rather than actual cost; after total costs (b) Identify discount rate
are accumulated using standard cost, these total are (c) Determination of NPV
compared to actual accumulated costs, and the (d) Project solution decision
difference is charged to a variance account 85. Which two of the following are correct about
Process of standard costing:- TDS certificates?
A. TDS on salary payment –Form 16
B. TDS on non-salary payment – Form 16A
C. TDS on rent – Form 16B
D. TDS on sale of property –Form 16C
Choose the correct option:
(a) A and B (b) A and C
(c) A and D (d) B and C
UGC NTA NET Commerce IInd Paper June, 2020 376 YCT
 Ans. (a) : The term 'TDS' refers to "Tax Deduction at Worker participation in management:
Source" it is a mechanism wherein a person who is • It refers to the participation of non-managerial
responsible to pay a sum of specified nature shall employees in the decision making process of the
deduct an amount towards 'TDS' and pay it to the organization.
credit of the central government. • It refers to the involvement of worker's only in such
Form No. TDS certificate areas of activities of the enterprises where they can
Form 16 – From 16 is a TDS on salary make some positive contribution.
payment • Workers may not be competent enough to understand
Form 16A – Form 16A is a TDS on non-salary and appreciate the managerial aspects of the enterprise.
payment So only those workers should be selected who possess
the ability, intelligence, and knowledge so as to
Form 16B Form 16B is a TDS on sale of participate effectively in the management.
property Therefore, both statement A and R are correct but 'R' is
Form 16C Form 16C is the TDS on rent the correct explanation of A.
86. Statement I: Contracts whose objects or 88. Assertion A : Credit flows to agriculture and
consideration are unlawful are void. SME sector have increased in recent years.
Statement II: Contracts in restraint of legal Reasoning R : Reserve Bank of India has
proceedings are void. gradually relaxed various controls in credit
Code: market.
(a) Both Statements are correct Code:
(b) Both Statements are incorrect (a) A and R both are correct and R is the right
(c) Statement I is correct but II is incorrect explanation of A
(d) Statement I is incorrect but II is correct (b) A and R both are correct but R is NOT the
Ans. (a) : A void contract under section 2 (J) A contract right explanation of A
which ceases to be enforceable by law becomes void (c) A is correct but R is incorrect
when it ceases to be enforceable. (d) Both A and R are incorrect
Features of Void contract: Ans. (a) : Credit Market: The credit market was
• A contract made by incompetent parties is void characterized by credit controls and direct lending.
• Any contract with bilateral mistakes is void • Credit markets in developing countries, in particular,
play an important role, where apart from the industry,
• Any contract with bilateral mistakes is void
agriculture is also an important segment of the economy
• Contracts that have unlawful object or consideration
• Besides, there are also a large no. of small and
or void. medium enterprises in the industrial and service sectors,
• Contract in restraint of trade is void. which are not above to access the capital market and
• Contracts in restraint of legal proceedings are void. have depend on the credit market for their funding
• Contract the term of which is uncertain is void requirements.
• A contract by way of wager (gambling/betting) is • Later, various leans and restrictions were gradually
void. phased out and the Reserve Bank of India has gradually
• A contract contingent upon the happening of an relaxed various controls in the credit market.
impossible event is void. • The agricultural credit flow has increased consistently
• A contract to do impossible acts is void. over the year exceeding the target set for each fiscal.
87. Assertion A : Workers participation in • Thus, credit flows to SME sectors have increased as
management is involvement of workers only in well in recent year.
such areas of activities of the enterprises where Therefore, statement A and R both are correct and R is
they can make some positive contribution. the right explanation of A.
Reasoning R : Workers may not be competent 89. Assertion A: TRIMs and TRIPs provisions
enough to understand and appreciate the facilitates and promotes FDI.
managerial aspects of the enterprise. Reason R: TRIMs and TRIPs provisions
Code: remove restrictions and address capital flow
(a) Both A and R are correct but R is not the right sensitivities.
explanation of A Choose the correct response from following:
(b) Both A and R are correct and R is the correct (a) Both A and R are correct and R is the right
explanation of A explanation of A
(c) A is correct but R is incorrect (b) Both A and R are correct and R is NOT the
right explanation of A
(d) Both A and R are incorrect
(c) A is correct and R is not correct
Ans. (b) : Keith Davis defined worker's participation in
(d) Both A and R are incorrect
management as "as an individual's mental and
emotional involvement in a group situation that Ans. (a) : TRIM'S (Trade Related Investment
encourages him to contribute to group goals and to Measures) recognize that certain investment measures
share responsibility for them. can restrict trade.

UGC NTA NET Commerce IInd Paper June, 2020 377 YCT
• TRIMs and TRIPs provisions facilitate and promote (AMC) and (iv) custodian. The trust is established by the
FDI. sponsor who is like promoter of a company. The trustees
• The TRIPs (Trade Related Aspects of intellectual of the mutual fund hold its property for the benefit of
property rights) is a minimum standard agreement unit-holders. The trustees are vested with the general
that allows more extensive protection of intellectual power of superintendence and direction over AMC. They
property to the member nations of WTO. monitor the performance and compliance of the SEBI
regulations by the mutual fund. The AMC manages the
• The agreement on TRIMs calls for introducing funds by making investment in various types of
national treatment of foreign investment and removal securities. The Custodian holds the securities of the
of quantitative restrictions. various schemes of the mutual fund in its safe custody.
• Collective, TRIMs and TRIPs provisions remove As an investment intermediary, mutual funds offer a
restrictions and address capital flow statement: variety of services/ advantages to the relatively small
Therefore both A and R are correct and R is the right investors who, on their own, cannot successfully
explanation of A. construct and manage an investment portfolio mainly due
90. Assertion A: Equilibrium price of a commodity to their own, cannot successfully construct and manage
is the price at which the quantity demanded of an investment portfolio mainly due to the small size of
the commodity equals the quantity supplied. their funds, lack of expertize/experience and so on.
Reason R: Equilibrium, is the condition, once These inter-alia, include convenience in terms of lower
determined tends to persists in time. denomination of investment and liquidity, lower risk
Choose the right options: through diversification, export management and reduced
transaction cost due to economies of scale.
(a) Both A and R are correct and R is the right
explanation of A 91. Who among the following monitors the
(b) Both A and R are correct and R is NOT the compliance of SEBI regulations by the mutual
correct explanation of A fund?
(c) A is correct and R is not correct (a) Sponsor (b) Trustee
(d) Both A and R are incorrect (c) AMC (d) Custodian
Ans. (b) : Equilibrium Ans. (b) : From the passage 'The trustees of the mutual
• In the above diagram, when the price of a commodity fund hold its property for the benefit of unit-holders.
is above equilibrium price then the supply will be more The trustees are vested with the general power of
then demand and when the price of a commodity is
below equilibrium price than the demand will be more superintendence and direction over AMC. They monitor
then supply. the performance and compliance of the SEBI regulation
• These both are disequilibrium prices of a commodity. by the mutual funds it is clear that trustees monitor the
• The equilibrium price of a commodity is the price at compliance with SEBI regulation.
which the quantity demanded of the commodity equals 92. The sponsor of a mutual fund is similar to
the quantity supplied i.e. (a) Sole proprietor of a firm
• Equilibrium is the condition, once determined tends to (b) Partner of a partnership firm
persist in time only when the behavior of agents is
consistent, a dynamic process governs equilibrium (c) Promoter of a company
outcome and there is no incentive for agents to change (d) Director of company
behavior. Ans. (c) : From the passage 'The trust is established by
Therefore, both A and R are correct and R is NOT the the sponsor who is like promoter of a company; clearly
correct explanation of A says that a sponsor is someone who is a promoter of the
company.
93. AMC manages funds by investing in
(a) Stock market securities only
(b) Credit instruments only
(c) Government bonds only
(d) Various types of securities
Question Numbers: (91 to 95) Comprehension Ans. (d) : From the passage 'The AMC manages the
A mutual fund is a special type of investment institution funds by making an investment in various types of
which acts as an investment conduit. It pools the savings
of relatively small investors in a well- diversified securities' it is clear that asset management company
portfolio of sound investment. Mutual funds issue (AMC) manages the funds by investing funds in various
securities (known as units) to the investors (known as types of securities.
unit-holders) in accordance with the quantum of money 94. Which Among the following is not a part of
invested by them. The profit (or losses) are shared by the mutual fund trust?
investors in proportion to their investments. A mutual
fund is set up in the form of a trust which has (i) a (a) Sponsor (b) Custodian
sponsor, (ii) trustee, (iii) Asset Management Company (c) Depository (d) Trustees

UGC NTA NET Commerce IInd Paper June, 2020 378 YCT
 Ans. (c) : From the passage 'A mutual fund is set up in 97. Developing the employees to provide service
the form of trust which has- quality does require which of the following?
(i) A sponsor A. Training of employees
(ii) Trustee B. Continuous interaction with employee
(iii) Assets management company (AMC) C. Setting standard for employees
(iv) Custodian. D. Recognize and reward the employees across
The 'Depository' is not mentioned in the passage, Hence all levels
it cannot be a part of the trust. Choose the correct option:
95. Mutual fund is (a) A and B (b) C and D
(a) Investment intermediary (c) Only A (d) A, B, C and D
(b) Venture capitalist Ans. (d) : Developing the employees to provide service
(c) NBFC quality does require which of the following-
(d) Non-profit organization (i) Training of employees
Ans. (a) : From the first sentence of the passage 'A (ii) Continuous interaction with employer
mutual fund is a special type of investment institution (iii) Setting standard for employees
which acts as an investment conduit. Which indicates (iv) Recognize and reward the employees across all
that a mutual fund is an investment intermediary. levels.
Conduit channel, intermediary.
98. Providing necessary support system for
Question Numbers: (96 to 100) Comprehension employees require which of the following?
Read the case and answer the mentioned questions A. Friendly environment
The famous Taj palace hotel and towers became the B. Providing all the equipment and system
centre of one of the most deadly terrorist attacks in the needed by employees to deliver service
Indian- Sub Continent on 26 Nov. 2018. The employee's
behaviour during the crisis saved the lives of nearly 300 C. Internal controls
guests. The condition of Taj after this was so disastrous D. Service oriented process
that it would have been profit profitable to leave the Choose the correct option:
hotel as it was rather than reopening it. (a) Only A (b) B and C
However, Taj made remarkable effort of recovering not (c) A, B and C (d) B, C and D
just to restore its damaged installations but also to ensure Ans. (d) : Providing necessary support system for
customer satisfaction as well as to uplift the spirit of all employees require which of the following.
employees and staff. (i) Providing all the equipment and system needed by
The employee at Taj is viewed as an asset and is the real employees to deliver service
profit centre. "The criterion of the Taj people philosophy (ii) Internal controls
displays our commitment to and belief in our people"
says Bernard Martyris, is former senior VP, HR, In it is (iii) Service oriented process
"Special Thanks and Recognition System" (STARS) it 99. Retaining the best people by Taj did not
aims at rewarding employees across all levels. The include
employee can earn points on the recommendation of (a) Making them as a part of vision
colleagues of colleagues or guests. Taj People (b) Promoting them out of turn
Philosophy (TPP) covered all the aspects of and (c) Rewarding the employees
employee career planning from his joining till the death. (d) Treating employees as customers
Taj also implemented the popular performance
management system called Balance Score Card in which Ans. (b) : Retaining the best people by Taj did include-
employee could reviews his performance and make (i) Make the employees a part of your vision.
improvements./ (ii) Consistently rewarding employees.
96. Hiring the right people for organization like (iii) Treating employees as customers so that their
Taj hotel requires which of the following? satisfaction can be taken care of.
A. Compete to get best employees 100. Which approach did not help Taj to restore its
B. Hire for competency and inclination glory?
C. Be the most preferred employer (a) Collective bargaining
D. Choose the most talented (b) Customer retention
Choose the correct option: (c) Treating employee as customer
(a) A and B (b) B and C (d) Implementation of performance management
(c) A, B and C (d) B, C and D system
Ans. (c) : Hiring the right people for organization like Ans. (a) : Help for the Taj to maintain its pride came
Taj hotel requires which of the following- from the following-
(i) Compete to get best employees (i) Customer retention
(ii) Hire for competency and inclination (ii) Treating employee as customer
(iii) Be the most preferred employer (iii) Implementation of performance management

UGC NTA NET Commerce IInd Paper June, 2020 379 YCT
 NTA UGC NET/JRF Exam, Dec. 2020/June 2021
COMMERCE
Solved Paper
Exam Date: 25.11.2021 Shift-I

1. Which is the most potent driver of business • This is done after some controversy was raised over
transformation during Covid-19 pandemic? chineis central bank buying a minority stake (less than 1
(a) Ethical consciousness per cent) in HDFC, a large Indian mortgage lender.
(b) Scale economies and pricing power 4. Factor conditions in Michael Porter's
(c) Technology adoption and innovation competitive advantage of Nations include
(d) Supply chain logistics and government (a) Market size
interventions (b) Demand conditions
Ans. (c) : Technology adoption and innovation (c) International competitive suppliers
• The most potent driver of business transformation (d) Skilled labour and scientific knowledge
during-19 pandemic is Technology adoption and Ans. (d) : Skilled labour and scientific knowledge
innovation. • Factor conditions in Michael porter's competitive
• The covid-19 crisis has bought about years of charge advantage of Nations include Skilled labour and
in the way companies do business. To stay competitive scientific knowledge.
during the pandemic, because consumers have moved • National competitive theory or porter's diamond
dramatically forwards online channels. Companies theory was given by Micheal porter.
adopted various digital technology diver changes. The • This theory states that the equalities of home country
are vital for the triumph of a corporation.
pandemic- has re-written three rules of engagement for
everyone. Now compemics are ready to use key • There are six model factors in this theory which are
also known as the determinants.
technological tools in most of their HR process almost
over night.
2. Counter Vailing Duties (CVD) are often
imposed on imports to offset the impact of
(a) Predatory pricing (b) Export subsidies
(c) Dumping (d) Low cost financing
Ans. (b) : Export subsidies
• Counter vailing Duties (CVD) are often of imposed on
imports to offset the impact of Export Subsidies.
• Countervailing Duties (DVDs) are tariffs levied on • Jactor conditions
imported goods to offset subsidies made to producers of • This is the situation in a country relating to production
these goods in exporting country. factors like knowledge and infrastructure.
• For example – Export subsidies given by the Chinese • These factors can be grouped into material resources-
government will make the Chinese products low priced human resources (labour costs, qualifications and
in the Indian market. This will be a disadvantage for the commitment).
competing Indian product. 5. In case the purchasing company agrees to act
• To overcome this situation government of India can as the agent of the vendor for collection of the
impose a countervailing duty on Chinese imports. book debts, in the books of the purchasing
3. To prevent opportunistic takeover of domestic company, the amount of debtors should be
firms amid Covid-19 pandemic, Foreign Direct credited to
Investment (FDI) from countries that share (a) Vendor's debtors account
borders with India is allowed through (b) Vendor's suspense account
(a) Automatic route (b) Government route (c) Debtors account
(c) FIPB route (d) DPIIT route (d) Creditors account
Ans. (b) : To prevent opportunistic takeover of Ans. (b) : Vendor's suspense account
domestic firms amid covid-19 pandemic. Foreign direct • In case the purchasing company agrees to act as the
Investment (FDI) from countries that borders with India agent of the vendor for collection of the book debts in
is allowed through government route. the books of the purchasing company the amount of
• FDI in India is allowed under two modes - the debtors should be credited to vendor's suspense account.
automatic route. For which companies don’t need • A suspense account is an account used temporarily to
government approval, or through the government route, carry doubtful entries and the need for a suspense
for which companies need a go-ahead from the centre account arises due to the inability to identify the
and need government approval . appropriate ledger account for record transaction.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 380 YCT
6. When the value of "Investment in subsidiary" 9. The value of the firm in wealth maximisation
in the holding company's balance sheet is more objective is measured by
than the book value of the net assets acquired, (a) Present value of all expected future cash
the difference represents flows
(a) Capital reserve on consolidation (b) All expected future cash flows
(b) Goodwill on consolidation (c) Present value of all expected future profits
(c) Minority interest (d) All expected future profits
(d) Post acquisition profit Ans. (c) : Present value of all expected future profits
Ans. (b) : Goodwill on consolidation • The value of the firm in ……… maximization
• When the value of 'Investment in subsidiary' in the objective is measured by present value of all expected
holding company's balance sheet is more than the book future profits.
value of the net assets acquired the difference represents • Value of the firm is measured by calculating present
is Goodwill on consolidation. value of cost flows of profits of the firm over a number
• The goodwill on consolidation represents the excess of years in the future.
of the cost of acquisition over the group's share in the • To do so projects of future years must be discounted
market value of the identifiable assets and liabilities of a money value a rupee of profit in a future year is worth
subsidiary. less than a rupee of profit in a future year is worth less
• The share of a subsidiary company are purchased than a rupee of profit in the present.
either as a premium or at a discount by a holding • The value of a firm may be expressed as follows :-
company, that is the main cause of difference in the value of the firm = present value of expected future
value. profit.
• Goodwill = cost of Investment – parent's share in the
equity of the subsidiary on date of investment. π1 π2 πn
PV = + ..........
(1 + i ) (1 + i ) (1 + i )
1 2 n
7. The basic method of valuing human assets is
(a) Adjustment (b) Amortization n
πt
(c) Capitalization (d) Quasi equity =∑ .............(1)
(1 + i )
t
Ans. (b) : Amortization - t =1

• According to Historical cost Approach - actual cost 10. For a decline in price, total revenue declines if
incurred on recruiting, hiring training and development the demand of the product is
the human resources of the organisation are Capitalized (a) Inelastic (b) Elastic
and amortized over the expected useful life of the (c) Unitary elastic (d) Zero elastic
human resources. Ans. (a) : Inelastic-
8. X and y are partners, sharing profits and losses • For decline in press, total revenue decline, if the
in the ratio of 4 : 3. They admit Z into the demon of the product is Inelastic.
1 If demand of the product is inelastic at given price level,
partnership for th share. X and Y decide to
5 then a company should raise the price.
share future profits in the ratio of 2 : 1. What is The percentage increase in price will result in a smaller
the sacrificing ratio of X and Y? percentage decrease in the quantity sold and total
(a) 4 : 3 (b) 13 : 8 revenue will rise.
(c) 8 : 13 (d) 4 : 17 •Total revenue is price multiplied by quantity
Ans. (d) 4 : 17 demanded (TR = P× Qd).
• Old Ratio = 4 : 3
1 11. In Cobb-Douglas production function, Q =
Z admits for th share of profit in the new firm AKaLb increasing returns to scale occurs when
5 (a) a + b > 1 (b) K + L > 1
Let New firm profit be 1
Combined share of X & Y in the new firm is = (c) a + b < 1 (d) K + L < 1
1 4 Ans. (a) : (1) a + b > 1
1– ,= • In Cobb-Douglas production function Q = AKaLb
5 5 increasing returns to scale occurs when a + b > 1
New Ratio = combined share of X & Y is 2 : 1
• The Cobb-Douglas production function is based on
4 2 8
= X' 5 = × = the empirical study of the American manufacturing
5 3 15 industry made by Paul H Douglas and C.W. Cobb.
4 1 4 It is a linear homogenous production function which
= Y' 5 = × = takes into account only two inputs labour and capital for
5 3 15
Sacrificing Ratio = old Ratio – New Ratio the entre output of the manufacturing industry.
4 8 60 – 56 • Cobb - Douglas production function is :-
Y' 5 = – = =4 Q = AKα Lβ
7 15 105
3 4 45 – 28 Where,
Y' 5 = – = = 17 Q = Output
7 15 105
K = Capital
= 4 :17 L = Labour
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 381 YCT
 A. α, β = Positive constrants. Ans. (a) : Asymmetric information between managers
• If a + b < 1 we get decreasing returns to scale and investors
• If a + b = 1 we get constant returns to scale. • Pecking order theory in finance is based on the
assertion of Asymmetric information between managers
12. The extreme case of non-price competition in
an Oligopoly is and investors.
(a) Formation of cartels • Asymmetric information is used to describe a
(b) Interdependent decision-making situation between two parties in an economic
(c) Attaining economies of scale transaction where one party has more or better
(d) Formation of duopoly information than the other.
Ans. (a) : Formation of cartels • Pecking order theory is popularized by Myers &
• The extreme case of non- price completion in on majluf (1984) where they argue that equity is less
oligopoly is formation of cartels. preferred means to raise capital because when managers
• Non-price competition is an approach in oligopoly (who are assumed to know better about true condition
market where major players of the same-or ……… of the firm than investors) issue new equity, investors
entiated good opt. for other marketing strategies other believe that managers think that the firm is overvalued
than price competition to gain the market share. and managers are taking advantage of this over-
• Cartels -A formal agreement among forms producing valuation.
homogenous good in mutual interest on various • It results investors will place a lower value to the new
accounts such as price market share or production equity issuance.
output etc.
14. If a project cost is Rs. 40,000. Its stream of
13. Pecking order theory in finance is based on the earning before depreciation and tax during
assertion of
(a) Asymmetric information between managers first year through five years is expected to be
and investors Rs. 10,000, Rs. 12,000 Rs. 14,000, Rs. 16,000
(b) Symmetric information between managers and Rs. 20,000. Assume a 50% tax rate and
and investors depreciation on straight line basis; project's
(c) Outside information ARR is
(d) Asymmetric information among investors (a) 14.40% (b) 72%
only (c) 16% (d) 55.56%
Ans. (c) : 16%
Period 1 2 3 4 5 Average
Earning before depreciation, 10,000 12,000 14,000 16,000 20,000 14,400
interest & terms (EBDIT)
Depreciation 8000 8000 8000 8000 8000 8,000
Earning before interest &
fanes (EBIT) 2000 4000 6000 8000 12,000 6400
Taxes at 50% 1000 2000 3000 4000 6000 3200
Earning before interest and
after Taxes 1000 2000 3000 4000 6000 3200
Book value of investment
Beginning 40,000 32,000 24000 16,000 8000
Ending 32,000 24,000 16000 8000 -
Average 36,000 28,000 20000 12,000 4000 20,000
3200
Project's ARR is × 100 = 16%
20,000
15. According to the theory of dividend, the firm • A residual dividend policy is the tenet that a firm's
should follow its investment policy of accepting investment, financing and dividend policies should
all positive NPV projects and paying out
dividends if and only if, funds are available : be interrelated, even in the short run.
(a) Bird in hand theory • With such a policy the cash flow remaining after the
(b) Investor rationality theory firm makes its new investments determine the
(c) 100 percent retention theory dividend size.
(d) Residual theory • In theory, value- maximizing managers will invest
Ans. (d) : Residual theory only to the degree that positive net present value
•According to Residual theory of dividend the firm (NPV) investments are available.
should follow its investment policy of accepting all
positive NPV projects and paying out dividends if and • When managers exhaust all such opportunities, the
only if, funds are available. firm pays the residual cash flow as the dividend.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 382 YCT
16. In Securitisation when no assets are acquired Ans. (a) : The correct statement is co-efficient of
and the collateral is fixed for the life of the σ
asset, the type of a structure is called as variance = × 100
X
(a) Revolving structure • The coefficient of variation is a measure of relative
(b) Amortized structure variability. It is the ratio of the standard deviation to the
(c) Collateralized structure mean (average)
(d) Self-liquidating structure 20. For a poisson distribution variable X, P(X = 0)
Ans. (d) : Self-liquidating structure = 2P (X = 1), its standard deviation would be :
• In securitisation when no assets are acquired and the (a) 2 (b) 0.5
collateral is fixed for the life of the asset, the type of a (c) 0.5 (d) 2
structure is called as self-liquidating structure.
•Securitization refers to the process of converting debt Ans. (c) : 0.5
(assets, usually illiquid assets) into securities, which are • In apoission distribution
when bought & sold in the financial markets. P ( x = 0 ) 2p ( x = 1) than
17. For a very large sample size the ratio between e– λλ x
SE x and σ is 8 : 40, Determine the sample size the s tan dard deviation = p ( x ) =
x!
n: p (x = 0) = 2p (x = 1)
(a) 25 (b) 5 e −λ λ φ z × e −λ λ1
(c) 4 (d) 16 ⇒ =
0! 1!
Ans. (a) : 25 1 2× λ
σ =
Formula : δE X = 1 1
n 2λ = 1 we know
σ 1
Therefore , n = λ=
δE X 2
40 1
n= S.D. of poission distribution λ= = 0.5
8 2
n =5 21. A test that contains a fair sample of the tasks
n = 25 and skills actually needed for the job in
Therefore, for a very large population the ratio between question is :
(a) Construct validity (b) Content validity
δE x and σ is 8 : 40
(c) Test validity (d) Criterion validity
The sample size n will be 25.
Ans. (b) : Content validity
18. For a given set of paired data, the correlation • A test that contains a fair sample of the tasks and
and regression coefficients have been skills actually needed for the job in question is content
calculated as being equal to r, bxy and byx validity.
respectively. Now, each of the values of the x • Content validity reffers to how to how accurately an
series is divided by 5. What effect does it have assessment or measurement tool taps into the various
on each of these co-efficients? aspects of the specific construct in question.
(a) The three co-efficients remain unchanged • Content validity is most often measured by relying on
(b) There is no change in r but by x changes to the knowledge of people who are familiar with the
byx/5 and bxy changes to 5xy/ construct being measured.
(c) Each of the co-efficients will be reduced to 22. Which among the following is not a primary
one fourth of its value determinant of organizational structure?
(d) There is no change in r but byx changes to (a) Chain and span
5byx and bxy changes to bxy/5 (b) Capacity and lower needs
Ans. (d) : There is no change in r but byx changes to (c) Power and control
5byx and bxy changes to bxy/5. (d) Differentiation and integration
19. Which of the following statement is correct? Ans. (b) : Capacity and lower needs are a primary
σ determent of organisational structure.
(a) Co-efficient of variance = × 100 • Capacity refferce to all components that takes for an
X organisation to achieve its mission from physical
(b) If value in a series are negative, the standard resources to people to ideas.
deviation is also negative • Lower Needs - Here, related with Maslow's Hierarchy
(c) If value in a series multiplied by σ, the of Needs Theory. Which means the physiological and
variance would be multiplied by 36 the safety needs constitute lower-order needs.
(d) Standard deviation is equal to square of 23. An act in a way that results in the greatest good
variance for the greatest number is :
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 383 YCT
 (a) The golden rule (d) The decrease in statutory liquidity ratio
(b) The utilitarian principle contracts the credit creation
(c) The four way test Ans. (b) : Monetary control is exercised through cash
(d) Kant's categorical imperative reserve ratio and statutory liquidity ratio.
Ans. (b) : An act ina way that result in the greatest good • RBI is the main body that controls the monitory
for the greatest number is the utilitarian principle. policy in India
• Utilitarianism hold that the most ethical choice is the • Cash reserve Ratio & statutory liquidity ratio are the
one that will produce the greatest good for the greatest instruments of monetary policy by which RBI control
number. As such it is only moral frame work that justify the supply of money in the economy
war. • Cash reserve Ration CRR is a specified amount of
• Moreover, It is the most common approach to bank deposits which banks are required to keep with the
business ethics because of the way that is accounts for RBI in the form of reserves or balances. The higher the
casts and benefits. CRR with the RBI the lower will be the liquidity in the
• The four way test - The four way test of the things we system and vice versa.
think, say or do is a test used by Rotarians world-wide • Statutory Liquidity Ratio (SLR) - All financial
as a moral code for personal and business relationships. intuition have to maintain a certain quantity of liquid
• Kant's categorical imperative :- contains two major assets with themselves at any point in time of their total
suppositions -1- We must act on the basis of goodwill time and demand liabilities.
rather than purely on self interested motives.
2. We must never treat others as means to wards ends 27. Which one of the following is not one of the
benefitting ourselves without consideration of them also advantages of Derivatives market?
as ends in themselves. (a) Leveraging increase risk
• The Golden rule - Is the principle of treating others as (b) They enhance liquidity in the market for
one wants to be treated. underlying assets
24. People repeat behaviours that bring them (c) They represent a form of insurance against
satisfaction and pleasure and stop those that risks
bring them dissatisfaction or pain is known as : (d) They reduce price volatility
(a) Law of exercise (b) Law of redo Ans. (a) : The Derivatives market is the financial
(c) Law of effect (d) Law of readiness market for derivatives, financial instruments like futures
Ans. (c) : People repeat behaviours that bring the contracts or options, which are derived from other
satisfaction and pleasure and stop those that bring them forms of assets (underlying assets)
dissatisfaction or pain is known as Law of effect Advantages of Derivatives arch
• Law of exercise - Means that drill or practice helps in • Derivative contracts are used for hedging risk arising
increasing efficiency and durability of craning. out of fluctuation in price movements.
• Law of Readiness - When any conduction unit is • Derivative contracts helps in ascertaining the price of
ready to conduct (An individual ready to learn underlying assets.
something) jor it to do so is satisfying. • Trading of these instruments involves low transaction
cost which is beneficial for investors.
25. Which one of the following statements is true
about under the Basel I Accord, BCBS, fixed • It provides access to unavailable market and assets to
the minimum requirement of capital fund for peoples.
banks at? • Derivatives plays an efficient role in improving the
(a) 8 percent of the total risk weighted assets financial market's efficiency.
(b) 9 percent of the total risk weighted assets 28. Which of the following statements is not true
(c) 10 percent of the total risk weighted assets about Indian Money Market?
(d) 1000 crore (a) Non-Banking Finance Companies (NBFCs)
Ans. (a) : Basel 1 is a set of international banking are financial institutions that constitute
regulations established by the Basel committee on organized component of money market
banking supervision (BSBS) (b) Money market mutual funds are allowed to
• It prescribes minimum capital requirement for sell units to corporates and individuals
financial institution, with the goal of minimizing credit (c) A Well-developed money market is essential
risk. for a modern economy
• Under Basel I, banks that operate internationally were (d) In the Indian Money Market, the predominant
required to maintain at least a minimum amount of place is enjoyed by government ad semi-
capital (8%) based on their risk weighted assets. government securities
26. Which of the following statements is correct Ans. (a) : Indian money market is a segment of the
relating to Indian Financial System? financial market in India where borrowing and lending
(a) RBI has direct supervision over depositories of short form funds takes place. The maturity of money
and mutual funds market instruments is from one day to ope year.
(b) Monetary control is exercised through cash • This market is regulated by both RBI (Reserve bank
reserve ratio and statutory liquidity ratio of India) and SEBI (The security and exchange Board
(c) Primary dealers mainly deal in shares, mutual of India).
fund units • Segments of the India money market
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- Unorganized money market is an old and ancient • SBU (Strategic Business unit) is a unit of the
market, mainly it made of indigenous bankers & money company that has a separate mission and objectives that
lenders, etc. can be planned independently from other company
• Organised money market is that part which comes busiress.
under the regulatory ambit of RBI & SEBI.
• Instruments of organised money markets
• Call money or notice money
• Treasury bills
• Commercial bill
• Certificate of deposits
• Commercial paper
• Money market mutual funds
• Repo and reverse repo market.
29. Which of the following is not true while 32. Which of the following is not a valid basis for
determining length of distribution channel? market segmentation?
(a) The larger the market size, the longer the (a) Customer Based Segmentation
channel (b) Technology Oriented Segmentation
(b) If the average lot size is large, it is better to (c) Competition Related Segmentation
have a longer channel (d) Product Related Segmentation
(c) If the product and the market require a high Ans. (b) : Technology oriented segmentation is not a
level of service, it is advisable to keep a valid basis for market segmentation.
shorter channel • Market segmentation is a marketing concept which
(d) If customers shop for an assortment of …… the a broad consumer or business market,
normally consisting of existing and potential customers
products, it demands for a water channel of , into subgroups of consumers based based on some
distribution type of shared characteristics.
Ans. (b) : While determining length of distribution • Basis of market segmentation are :-
channel it is not true when the average lot size is large, - Demographic segmentation
it is better to have a longer channel. -Geographical segmentation
• Size - weight of product like coal food grains etc are -Psychographic segmentation
directly distributed to the users involve heavy -Behavioral segmentation
transportation costs, In order to minimize these costs a -Product- value segmentation
short and direct distribution channel is suitable. 33. Which one of the following statements is a
30. Which of the following can be categorized as promissory note?
people processing services? (a) I promise to pay Q Rs. 7,000, 7 days after my
(a) Health care (b) Legal services marriage.
(c) Education (d) Transportation (b) On demand, I promise to pay B or bearer Rs.
5,000
Ans. (a) : Health care can be categorized as people (c) I promise to pay Rs. 5,000 on C's death
processing services. provided C leaves with me enough money to
• People processing services, as the name suggests, pay that sum
people processing services are directly targeted at (d) I acknowledge to be indebted to you for Rs.
individuals. Here, the customers need to physically 10,000 to be paid on demand for value
enter the service environment to avail the service that he received.
desires. Ans. (d) : I acknowledge to be indebted to you for
Erg :- Banking services, passenger transportation, Hair `10,000 to be paid on demand for value received, is a
cut services. statement of promissory note:
31. SBUs or products that have lost their position • A promissory note is a legal financial tool declared by
of leadership and are in the low growth a party, promising another party to pay the debt. on the
particular day.
markets, are known as
• It is a written agreement signed by drawer with a
(a) Star (b) Problem child promise to pay the money on specific date or whenever
(c) Dog (d) Cash cow demanded.
Ans. (c) : SBUs or products that have lost their position 34. A claim for 'quantum meruit' cannot succeed :
of leadership and are in the low growth markets are (a) When a divisible contract is partly performed
known as Dog. (b) When an indivisible contract for a lumpsum is
• BCG Matrix stands for Boston consulting group it is partly performed
useful tool for analyzing a diversified companys (c) When a contract is discovered to be
business portfolio. unenforceable due to some technical defect.

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 (d) In the case of breach of contract, the 37. If assessee is engaged in the business of growing
aggrieved party can claim reasonable and manufacturing tea in India, the non-
compensation for what he has done under the agricultural income in that case be :
contract (a) 40% the income from such business
Ans. (b) : A claim for 'quantum mertuit' cannot succeed (b) 25% the income from such business
when a indivisible contract for a lumpsum is partly (c) 60% the income from such business
performed. (d) 75% the income from such business
• Quantum Meruit - Under Indian contract act 1872, Ans. (a) : It assessee is engaged in the business of
what one has earned" or as much as he has earned hears growing and manufacturing tea in India. The non-
a reasonable sum of money to be paid for services agricultural income in that case be 40% the income
rendered or work done when the amount due is not from such business.
stipulated in a legally enforceable contract ." Nature of Income Amount Amount of
It is only an obligation created by law not a contractual business tax Rule of non
remedy. applicable agriculture agriculture
• On obligation a person claim payment in following Income income
cases :- work done & goods supplied without contract: Income from 60% of 40% of
-When original contract has been terminated breach of sale of tea Rule 8 such such
contract by one party. manufactured Income Income
-Work don’t and accepted under void agreement. or grown in
35. The first offence for infringement of copyright India
can be for a maximum of imprisonment for a 38. AMT provisions are applicable on :
term of (a) Corporate assessee
(a) 6 month and a fine of Rs. 20,000 (b) Non Corporate assessee
(b) 3 years and a fine of Rs. 50,000 (c) HUF
(c) 3 years and a fine of Rs. 2,00,000 (d) An Individual
(d) 1 year and a fine of Rs. 3,00,000 Ans. (b) : AMT provisions are applicable on Non -
Ans. (c) : The offence of infringement of copyright can corporate assessee alternate minimum tax [15 JC]
be for a maximum of imprisonment of term of 3 year The provisions of section 115JC are applicable both to
and a fine of ` 2,00,000. firm and LLP where the regular income tax payable for
• Section 63 in copyright Act 1957 states that the a previous year is less than the alternate minimum tax
imprisonment for a term which shall not be less than six payable for such previous year.
months but which may extend to three years and with 39. X, an employee of the private company, gets
fine which shall not be less than fifty thousand rupees Rs. 30,000 p.m. basic salary and entitled to Rs.
but which may extend to two lakh rupee. 1,500 p.m. as entertainment allowance. What
36. Which one of the following conditions does not are the deductions u/s 16 (ii) from gross salary
constitute a valid agency by necessity? in respect of entertainment allowance?
(a) There should have been actual and definite (a) Rs. 5,000 (b) Rs. 18,000
commercial necessity for the agent to act (c) Rs. 72,000 (d) Nil
promptly Ans. (d) : Here, X is an employee of the private
(b) The agent should have acted bonafide and for company so, he will not get deduction on entertainment
the benefit of the principal allowance.
(c) The agent should have adopted the most • Entertainment Allowance [section 16 (ii)] : Deduction
reasonable and practicable course under the of the least of the 20% of basic salary, `5000 & actual
circumstances allowance shall be allowed to the government
(d) Destruction of the subject matter of the employees only.
contract of agency 40. Which of the following provident fund is
Ans. (d) : Destruction of the subject matter of the approved by the provident fund commissioner?
contract of agency does not constitute a valid agency by (a) Statutory provident fund
necessity. (b) Recognized provident fund
• Agency of necessity - arises where there is no express (c) Unrecognized provident fund
or implied appointment of a person as agent for another (d) Public provident fund
but he is forced to act on behalf of a particular person. Ans. (b) : Recognised provident fund is approved by
Example :- The master of ship which is in distress and the fund commissioner.
requires heavy and urgent repairs can pledge the shop or •Recognised provident fund (RPF) means a provident
cargo (without express or implied authority) and arise fund recognised by the commissioner of income tax for
money in order to execute the voyage'. He will be purpose of income -tax. A fund constituted under the
considered as the agent of the owner by necessity. emplyees' provident fund and misceclaneous provisions
• When does agency end or terminate? Act 1952 will also be a Recognised providint fund.
(b) By the destruction of the subject matter, (section 41. Which of the following institutions are included
56). in the 'World Bank Group'?
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 (a) International Finance Corporation • Potential access to coide variety of markets.
(b) International Monetary Fund • Significantly contribute to the perceived customer
(c) World Trade Organization benefits.
(d) Multilateral Investment Guarantee Agency • Distinctive and difficult for competitors to imitate.
(e) International Development Association • A core competency is a concept in management
Choose the correct answer from the theory introduced by C.K. prahalad and gary hamel.
options given below "A harmonized combination of multiple resources and
(a) A, B and C only (b) A, B and D only skills that distinguish a firm in the 'market place' &
(c) A, B, D and E only (d) A, D and E only there gore are the youndation of companics competities
Ans. (d) : The world Bank group consists of five eness.
orgarisations 44. Which of the following distinction (s) is/are not
• The International Bank for Reconstruction and correct between public issue and rights issue?
development. (IBRD) (a) In public issue, applications for shares are
•The International development Association (IDA) invited from the general public and in rights
To gether, IBRD and IDA make up the world Bank issue, the shares are offered to existing
• The International finance corporation. shareholders
• Multitateral centre for settlement of Inuistment (b) In public issue there is no question of any over-
Disputes. subscription and in rights issue the shares may
42. Corporate social responsibility is the be under subscribed or over subscribed leading
continuing commitment by business to behave to prorata allotment.
ethically and contribute to (c) The price of public issue is generally less than
(i) Political awareness social security and the market price and in rights issue, the price is
inclusion deliberately made less than the market price.
(ii) Public health, education and literacy (d) In a public issue, the communication of the
(iii) Maintaining ecological balances and protecting issue is through prospects or advertisements
environment and in rights issue the communication is
(iv) Gender diversity, profiteering and market between the company and the existing
controlling members of the company.
(v) Rendering, sponsoring and donating to social Choose the most appropriate answer from the
charitable activities options given below :
Choose the correct answer from the options (a) B only (b) D only
given below : (c) A and C only (d) C and D only
(a) A, B and D only (b) B, C and E only Ans. (a) : In public issue - when company offers its
(c) C, D and E only (d) A, B and C only share to the general public or investors that is called
Ans. (b) : Corporate social responsibility is the public issue and when an issue of share in which
continuing commitment by business to behave ethically demand enceeds the availiable supply is over-
and contribute to :- subscription of share :
(i) Public helth education and literacy. • Over - subscription case is occuce in publie issue also.
(ii) Maintaining ecological balances and protecting • Right shares means the shares where the existing
environment. sharholders have the first right to subscribe the shares.
(iv) Rendering sponsoring and donating to social & These are usually issued at the discount as compared to
charitable activities. prevailing share price.
• Corporate social responsibility is a concept used in 45. According to AS-2, which of the following costs
managemetn science is that business should maximise should be included in valuing the inventories of
their projits subject to their working in a socially a manufacturing company?
responsible manner to promote the interests of the (i) Freight and insurance
society. (ii) Carriage outwards
43. Firm characteristics that help managers (iii) Depreciation of factory plant
identify core compentencies include : (iv) General administrative overheads
(i) Potential access to wide variety of markets Choose the most appropriate answer from the
(ii) Significantly contribute to the perceived options given below :
customer benefits (a) A and D only (b) A, B and D only
(iii) Value accretive and non competitive (c) B and C only (d) A and C only
(iv) Distinctive and difficult for competitors to Ans. (d) : According to AS-2 freight and insurance,
imitate Depreciation of factory plant costs should be included
Choose the most appropriate answer from the in valuing the inventories of a manufacturing company.
options given below : • Accounting standard -2 (valuation of inventories )
(a) A, B and C only (b) B, C and D only The cost of inventories should comprise of all costs of
(c) A, B and D only (d) A, C and D only purchase Costs of conversion and other costs incurred
Ans. (c) : Firm characteristics that help manaqers in bringing the inventories to their present location
identify core compentmcies include :- and condition.

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46. Which of the following rules stands true while • Slope is nothing but marginal Rate of substation
preparing schedule of changes in working which means the number of units of the good on the y
capital? axis the consumer is willing to sacrifice to obtain one
(i) An increase in current assets increases working more unit of the good on the x -axis.
capital • So convexity means MRS declining as consumer
(ii) An increase in current assets decreases obtains more and more of the good on the x-axis.
working capital This is due to the law of diminishing marginal utility.
(iii) An increase in current liabilities decreases 49. Financial crises takes the form of
working capital (a) Currency crisis
(iv) An increase in current liabilities increase (b) Banking crisis
working capital (c) Systematic financial crisis
Choose the most appropriate answer from the (d) Foreign debt crisis
options given below : Choose the correct answer from the options
(a) A and C only (b) A and D only given below :
(c) B and D only (d) A, B and C only (a) A, B, C only (b) A, B, D only
Ans. (a) : Following rules stands true while preparing (c) B, C, D only (d) A, B, C, D only
schedule of changes in working capital :- Ans. (b) : Financial crises takes the form of currency
• An increase in current assets, increases working crises Banking crisis, foreign debt crisis.
capital • According to Eichengreen and portes - "A disturbance to
↓ financial markets, associated typically with falling assets
• A decrease in current assets decreases working prices and insolvency amongst debtors and intermediaries
capital. which ramifies through the financial system disrupting the
↓ market's capacity to allocate capital".
• An increase in current liabilities, decreases working 50. Following are the problems that mar an
capital. optimal international diversification :
↓ (a) Unfavourable exchange rate movements
• A decrease in current liabilities increase working (b) Frictions in international markets
capital. (c) Manipulation of security prices
47. Characteristics constituting the core of (d) Unequal access to information
consumers rationality includes : Choose the most appropriate answer from the
(a) Homogeneous expectations option given below :
(a) A, B, C only (b) B, C, D only
(b) Non- satiation
(c) A, C, D only (d) A, B, C, D only
(c) Selfish motive
(d) Clarity of preferences Ans. (d) : The problems than man an optimal
international diversification, are :
(e) Possession of information
→ Unfavorable exchange rate movements.
Choose the correct answer from the options
given below : → Frictions in international markets
(a) A, B and C only (b) B, C and D only → Manipulation of security prices
(c) A, B, C and D only (d) B, C, D and E only → Unequal access to information.
→ The attempt to reduce risk by investing in more than
Ans. (d) : Characteristic constituting the core of
one nation is called international diversification.
consumers rationality includes :- Non-satiation, selfish
motive clarity of preference possession of information. 51. Which of the following statement is correct
The concept of rational consumer describes the about Mann-Whitney U-test?
individual acting out of self-interest with the main aim (a) It is non parametric test
of maximizing their private benefits through (b) It requires that samples are independent
consumption. (c) it can be used when populations involved
48. Why is indifference curve convex to the origin? are normally distributed
(d) It is used to test the null hypothesis that the
(a) Indifference curve slope downward to the right two populations are involved are identical
(b) Two commodities are imprefect substitutes (e) It is always a two tailed test.
(c) Declining marginal rate of substitution between Choose the correct answer from the options
commodities given below :
(d) Diminishing marginal utilities (a) A, B, D only (b) A, C, D only
Choose the most appropriate answer from the (c) A, D, E only (d) A, B, E only
options given below :
Ans. (a) : Mann- Whitney U- test also called Mann-
(a) A and B only (b) B and C only Whitney wilcoxon (mww/mwu) is a non parametric test
(c) C and D only (d) A and D only of the null hypothesis. It is used to compare differences
Ans. (b) : An indifference curve being convex towards between two independent groups when the dependent
origin means that slope of the curve declines as the variable is either ordinal or continuous, but not
consumer moves along the curve from lift to right . normally distributed.

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Calculation of the Mann- Whitney :- (iii) Principles are relative not absolute
n ( n + 1) n 2 (iv) Based on situation
U = n1n 2 + 2 2 – ∑ R1 Choose the most appropriate answer from the
2 i = n1 +1 options given below :
Where, (a) A, B only (b) B, C only
U = Man – Whitney U test. (c) A, C, D only (d) A, B, C, D
N1 = Sample size one. Ans. (d) : The principles of management have the
N2= Sample size two. following distinct features :-
R1=Rank of the sample size. Flexibility -Means that it is not rigid, can be modified
52. Which of the following are correct about by the manger as per situation.
complementary events Universal application - They are applicable to all level
of management.
(i) Mutually exclusive
Principles are relative, not absolute and they should
(ii) Independent be applied according to the need of the organisation or
(iii) Such that their probabilities add up to 1. business
(iv) Collective exhaustive 55. Use of the interviews as a training needs
Choose the most appropriate answer from the assessment technique has the following
options given below : advantages :
(a) A, B, C only (b) A, B, D only (i) Questions can be modified
(c) B, C, D only (d) A, C, D only (ii) Easy to analyze
Ans. (d) : Complementary events are mutually (iii) Can explore unanticipated issues that come up
exclusive, such that their probabilities add up to 1 and (iv) Less time consuming
collective exhalation. Choose the most appropriate answer from the
• Complementary events are mutually exclusive events options given below :
since they cannot occur at the same time. (a) A, B only (b) B, C only
• The two events are said to be complementary when (c) A, C only (d) B, C, D only
one event occurs if and only if the other does not. The Ans. (c) : Use of interviews as a training needs
probabilities of two complimentary events add up to 1. assessment technique has the following advantage:
• They are exhaustive because the sum of their • Questions can be modified according to the
probabilities must add to 100%. requirement.
53. Which of the following statements are correct • Can explore unanticipated issues that came up during
about Chi-Square test? the time of interview.
(i) The only parameter of a Chi-Square Training needs assessment technique is the process to
distribution is its number of degrees of freedom identify "gaps" between current performance and
(ii) The null hypothesis in given Chi-Square test is department/organizational objectives. This concept
rejected when calculated value of variable helps to know the difference and determine training
exceed its critical value needs.
(iii) The rejection region in a goodness of fit test lies 56. The advantage of incentive payments are
only in the right tail of the distribution. (i) Ease in the introduction of new machines
(iv) The Chi-Square test is a parametric test (ii) Better utilization of equipment
(v) At α = .05 and V = 1 the critical value of x2 is (iii) Reduced absenteeism and turnover
equal to Z– value at the same level of (iv) Increased scrap
significance Choose the most appropriate answer from the
Choose the most appropriate answer from the option given below :
options given below : (a) A, B only (b) B, C only
(a) B, D, E only (b) A, C, E only (c) B, C, D only (d) A, B, C only
(c) A, B, C only (d) B, C, D only Ans. (b) : The advantages of incentive payment are :-
Ans. (c) : There are the correct statement :- • Better utilization of equipment - Incentive plants
Chi-square test motivates workers for higher efficiency and
• The chi-squared distribution has one parameter : a productivity by improving work-flow and work
positive integer K that specifies the number of degree methods which results in better utilization of
of freedom. equipments.
• The null hypothesis is given chi-square test is • Reduced absenteeism and turnover by keeping
rejected when calculated value of variable exceed its employees to be motivated and increase both morale
critical value. and job satisfaction.
• The rejection region in a goodness of fit test lies only 57. Which of the following forms may not result in
in the right tail of the distribution. credit risk?
Note :- The chi-squre test is a non- parametric test :- (i) Principle and/or interest amount may not be
54. The principles of management have the repaid in the case of direct lending.
following distinct features : (ii) In case of guarantees or letter of credit, fund
(i) Flexibility may not be forth coming from the constituents
(ii) Universal application upon crystallisation of the liability.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 389 YCT
 (iii) Funds/Securities settlement may not be Choose the most appropriate answer from the
effected, in case of securities trading business. options given below :
(iv) Provide information for determining adequacy (a) B, C only (b) A, D only
of loan loss provision. (c) A, C, D only (d) A, B, C only
Choose the correct answer from the options Ans. (c) : Penetration pricing strategy delivers results :
given below : • Where price quality association is weak.
(a) A, B and C only (b) A, C and D only • When the market is characterised by intensive
(c) B, and C only (d) D only competition.
Ans. (d) : Provide information for determining adequacy • When the firm uses its as an entry strategy.
of loan loss provision is not result in credit risk. Penetration pricing :-
Credit Risk - Failure to repay the money back, by a • This is a strategy used by business to attract customer
borrower to the creditor for a borrower it is only a loan to new product or services by offering a lower price
but for a Bank it is an asset. Credit loss rise results in initially.
NPA (or non-performing assets).
•The lower price helps a new product or service
58. Which of the following statements are false penetrate the market and attract customers away from
regarding electronic purse? Indicate the competitors.
correct code.
(i) Retinal pattern verification 61. Which of the following represents traditional
logistics management approach?
(ii) Visual recognition
(i) Independent inventory management efforts
(iii) No risk of bad payment
(ii) Minimise firm costs
(iv) Method of accepting payments with no
cash float to manage and no risk of theft. (iii) Amount of information sharing and monitoring
limited to current processes
Choose the correct answer from the options
given below : (iv) Small breadth of supplier base to increase
coordination
(a) A, B and C only (b) B, C and D only
Choose the correct answer from the options
(c) A and B only (d) C and D only given below :
Ans. (c) : Regarding electronic purse following (a) A, B only (b) B, C only
statements are false :- Retinal pattern verification, visual (c) A, C, D only (d) B, C D only
recognition because during the process of payment no
one of above permission involve. Ans. (a) : Following represents traditional logistics
Mobile wallet - management approach :-
A mobile wallet is a way to cary cash in digital •Independent inventory management efforts-In
format, you can link your credit card or debit card traditional approach, there was independent operations
information in mobile device to mobile wallet the works were done segmented way not in integrated
application or you can transfer money online to mobile way.
wallet. Minimise firms costs -In traditional, approach the
focus on to maximise profit by minimising the firms
59. Which of the following statements are the costs.
defects of Indian Money Market?
(i) Profitable Investment 62. Which of the following statements are false?
Indicate the correct code.
(ii) Dichotomy in Indian Money market
(i) No company has to file any prescribed
(iii) Financing Industry declaration before commencement of business.
(iv) Diversity in interest rates (ii) A company can ratify the contract entered into
Choose the correct answer from the options by the promoters with third parties on behalf
given below : of the company before its formation.
(a) A, B and C only (b) B and C only (iii) The date mentioned in the certificate for
(c) A, B and D only (d) B and D only commencement of business is taken as the date
Ans. (d) : The defects of Indian money market are:- of birth of a public company.
• Dichotomy in Indian Money market :- The (iv) A private company has to file a "Settlement in
existence of unorganised segment. The segment lieu of prospectus" with the registrar.
undermines the role of the RBI in the money market. Choose the correct answer from the options
• Diversity in interest rates :- Another defect of Indian given below :
money market is the multiplicity and disparity of (a) A, B and D only (b) A and B only
interstates. Example :- difference in borrowing rates of (c) B, C and D only (d) C and D only
government the lending rates of commercial banks, Rate
of co-operative banks etc. Ans. (c) : Following statements are false :-
• A company can ratify the contract entered into by the
60. Penetration pricing strategy delivers results : promoters with third parties on behold of the company
(i) Where price quality association is weak before its formation.
(ii) When the product is perceived as a 'High • The date mentioned in the certificate for
technology' product commencements of business is taken as the date of birth
(iii) When the market is characterised by intensive of a public company.
competition • A private company has to file a 'settlement in ……. of
(iv) When the firm uses it as an entry strategy prospectus '' with the registrar.
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63. Which of the following are not the objectives of • A loss which is not incidental to the carrying on of the
competition act, 2002? business of the assesses.
(i) Insure freedom of trade for other participants • Loss due to the sale of securities held as investments
in incidental and connected markets. as it will be a capital loss and not the business loss.
(ii) Provide a reasonable level of reliability and • Loss caused by forfeiture of advance given for the
connect operation. purchase of capital assets.
(iii) Adhere to generally accepted security • Violation of the law is not a normal incident of trade
procedures and an expense incurred by way of penalty for
(iv) Protect the interests of consumers infraction of laws is not allowed for destruction as a
Choose the correct answer from the options business loss.
given below : • Trading loss due to loss of goods in transit in the
(a) A, C, D only (b) B, C, D only normal course of business.
(c) A, C only (d) B, C only 66. Match List I with List II :
Ans. (d) : Objectives of competition Act, 2002 List-I List-II
• To prevent practices having adverse effect (International Trade
competition Theories)
• To promote and sustain competition markets.
(a) David Ricardo (i) Theory of
• To protect the interests of consumers absolute
(1817)
• To ensure freedom of trade carried on by ether advantage
participants in markets in India and for- matters
connected there with or incidental thereto. (b) Michael Porter (ii) Factor Of
64. Which of the following persons cannot use (1990) Endowment
ITR- 4? Theory
(i) Who is director of a company (c) Adam Smith (iii) Theory of
(ii) Who has held any unlisted equity shares (1776) comparative
(iii) Who has any asset located outside India advantage
(iv) A firm (other than LLP) if assessee is a (d) Heckscher (iv) Theory of
Resident (1919- Ohlin competitive
(v) Who has income from other sources (1933) advantage.
Choose the most appropriate answer from the Choose the correct answer from the options
options given below : given below :
(a) A, B, C only (b) A, B, D only a b c d
(c) B, D, E only (d) C, D, E only (a) i ii iii iv
Ans. (a) : Persons use ITR -4 (b) iii iv i ii
• For individuals and HUFs, firms (other than LLP) (c) iv iii ii i
being a Resident having Total income upto 50 lakhs and (d) iii iv ii i
having income from business and profession which is
computed under section 44AD, 44AE, 44DA. Ans. (b) : David Ricardo (1817) -Theory of
comparative advantage
Note :- (Not for individual who is either Director in a
company or has invented in unlisted equity shares).  According to Ricardo countries should specialize in 
 producing those goods of which they are relatively 
65. Which of the following losses are not deductible  
from business income?  more efficient producers. 
(i) Loss sustained before the business is
commenced. • Michael porter (1990)- Theory of competitive
(ii) Lossess incurred in the closing down of the advantage.
business  According to this theory that everyone is better off 
(iii) Loss incurred due to damage, destruction, etc if decisions are made based on the competivive 
.... of capital assets  
(iv) Loss of raw material and finished goods in  advantage at all levels. 
transit • Adam Smith (1776)- Theory of absolute advantage.
(v) Loss of stock-in-trade due to enemy action According to this theory every country will be
Choose the correct answer from the options specialized in producing a product in which it has more
given below : advantage than other country.
(a) A, B, C only (b) B, C, D only • Heckscher (1919 - ohlin (1933)- Factor Of
(c) A, D, E only (d) A, B, D only Endowment Theory
Ans. (a) : Following types of business loss are not According to this theory, A nation will export the
deductible form business income:- commodity whose production requires the intensive use
• Losses sustained before the business is commenced. of the nation's relatively abundant and cheap factor and
• Losses incurred in the closing down of a business. import the commodity whose production requires the
• Losses incurred due to damage destruction etc of intensive use of the nation's relatively scare and
capital assets. expensive factor.

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67. Match List I with List II : Net payment method Calculated by adding up the
List I List-II (Purchase total amount (money) value
(Method) consideration) of existing shares Preference
shares and cash received
(a) Lump-sum (i) Calculated by
from the purchasing company
payment method adding up the
for the shareholders of the
total amount
vendor company
(money value) Swap Ratio method On the basis of ratio in which
of existing the shares of the transferee
shares, company are to be exchanged
preference for share of the transfer
shares and cash company.
received from
the purchasing 68. Match List I with List II :
company for the List-I (Pricing List-II
shareholders of Strategies) (Description)
the vendor (a) Ramsay pricing (i) Setting a high
company price when a
(b) Net Assets (ii) On the basis of product is first
Method ratio in which introduced and
the shares of the gradually
transferee lowering price
company are to as it gains scale
be exchanged (b) Price skimming (ii) Firm charges
for the shares of lower price
the transferor (than the
company ongoing price)
(c) Net Payment (iii) The amount to to gain market
Method be paid by the entry
transferee (c) Cost plus pricing (iii) Price deviations
company to from marginal
transferor cost should be
company for inversely
amalgamation proportional to
of its business price elasticity
(d) Swap Ratio (iv) Arrived at by of the product
method adding the (d) Penetration (iv) It is full cost
agreed value of pricing pricing strategy
assets taken that also
over and includes mark
deducting there up for target
from the agreed return, degree
values of of competition,
liabilities price elasticity
Choose the correct answer from the options and availability
given below : of substitutes.
a b c d Choose the correct answer from the options
(a) iii ii i iv given below :
(b) iii iv i ii a b c d
(c) iv i ii iii (a) iii iv i ii
(d) iv iii ii i (b) ii i iii iv
(c) iii i iv ii
Ans. (b) :
List-I List-II (d) i iv ii iii
(Method) (Purchase consideration) Ans. (c) :
Lump-sum payment method- The amount to be List-I List-II
paid by the transfers (Pricing strategies) (Description)
company for Ramsay pricing Price deviations from
amalgamation of its marginal cast should be
business. inversely proportional to
Net assets method - Arrived at by adding the price elasticity of the product.
agreed value of asset taken Price skiming Setting a high price when a
over and deducting there product is fist introduced and
from the agreed values of gradually lowering price as it
liabilities gains scale.

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Cost plus pricing It is full cost pricing strategy 70. Logically sequence the following in the process
that also includes mark up for of entering international markets outlined in
target return degree of the uppsala model
competition price ………. (i) Sporadic (Ad hoc) exports
and availability of substitutes. (ii) Foreign production and manufacturing
Penetration pricing Firm charges lower price (iii) Establishing a foreign sales subsidiary
(than the ongoing price to (iv) Domestic operations and production
gain market entry. (v) Exporting via independent representative
69. Match List I with List II : Choose the correct answer from the options
List-I List-II given below :
(a) Market risk (i) Associated with (a) (a), (b), (d) and (e)
the efficiency (b) (c), (b), (d), (a) and (e)
with which a firm (c) (d), (a), (e), (c) and (b)
conduct its (d) (e), (b), (d), (c) and (a)
operations within Ans. (c) :The process of entering international markets
the broader outlined in the uppsala model, in logically sequence
environment
are:-
imposed upon it.
1. Domestic operations and production :- company
(b) Financial risk (ii) Arises due to first should gain domestic market knowledge and
change in production advancement & gain enough experiences to
operating exports.
conditions caused 2. Sporadic (Adhoc) exports :- No regular export
by conditions activities
thrust upon the 3. Exporting via independent representative:- The
firm which are company exports systematical through agents.
beyond its control 4. Establishing a forcing sale subsidiary :- If a
(c) External (iii) Variations in company is willing to commit its to more export it will
business risk price sparked off take over the middleman's operation and try on its own.
due to real, 5. Foreign production and manufacturing :- As the
social, political company gains enough market knowledge and wants to
and economic gain locational advantages. It can starts production
events there.
(d) Internal (iv) Associated with 71. Match List I with List II :
business risk the capital List-I (Personality List-II (Individual
structure of a Dimensions) Traits)
firm
(a) Extroversion (i) Calm, happy
Choose the correct answer from the options and secure
given below :
a b c d (b) Conscientiousne (ii) Talkative,
ss assertive,
(a) i ii iii iv
sociable and
(b) iii iv ii i outgoing
(c) iii i ii iv
(c) Emotional (iii) Creative,
(d) iv iii i ii
stability curious,
Ans. (b) : intellectual,
List-I List-II imaginative and
Market risk Variations in price sparked artistically
off due to real social, political sensitive
and economic events. (d) Openess to (iv) Self-disciplined,
Financial risk Associated with the capital experience hardworking,
structure of a firm. organized,
Enternal business risk Arises due to change in dependable and
operating conditions caused persistent
by conditions thrust upon the
firm which are beyond its Choose the correct answer from the options
control. given below :
Internal business risk Associated with the a b c d
efficiency with which a firm (a) ii iv iii i
conducts its operations within (b) ii iv i iii
the broader environment (c) iii ii i iv
imposed upon it. (d) iv i ii iii
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 393 YCT
Ans. (b) : Ans. (b) :
List -I List -II List -I List -II
(Personality dimensions) (Individual traints) Books Author (s)
(A) Extroversion Talkative assertive sociable (A) Wealth of Nations, 1776 Adam Smith
and outgoing (B) Principles of political David Ricardo
(B) Conscientiousness Self-disciplined Economy and taxation,1817
hardworking, organised, (C) Principle of population,1798 Thomas Malthus
dependable and (D) Das capital, 1867 Karl Marx
persistent.
74. Match List I with List II :
(C)Emotional stability Calm happy and secure.
(D) Openess to experience Creative, curious, List-I List-II
intellectual imaginative and (a) Ordinary (i) Never granted by
artistically sensitive damages way of
compensation for
72. Match List I with List II : the loss
List-I List-II (b) Special (ii) They are quite
(a) Insurance Act (i) 1988 damages heavy in amount
(b) Life Insurance (ii) 1963 and are awarded by
Corporation Act way of punishment
only
(c) Motor Vehicles (iii) 1938
Act (c) Exemplary (iii) Arise in the
damage ordinary course of
events from the
(d) Marine Insurance (iv) 1956 breach of contract
Act (d) Nominal (iv) The constitute
Choose the correct answer from the options damages indirect loss
given below : suffered by the
a b c d aggrieved party on
account of breach of
(a) iv iii i ii contract
(b) i ii iii iv
Choose the correct answer from the options
(c) iii iv i ii given below :
(d) iv iii ii i a b c d
Ans. (c) : (a) iii iv ii i
List-I List -II (b) iv iii ii i
(A) Insurance Act 1938 (c) i ii iv iii
(B) Life Insurance corporation Act 1956 (d) ii i iii iv
(C) Motor vehicles Act 1988 Ans. (a) :
(D) marine Insurance Act 1963 List-I List -II
73. Match List I with List II : (A) Ordinary damages Arise in the ordinary course
List-I (Books) List-II of events from the breach of
contract
Author (s) (B) Special damages The constitute indirect loss
(a) Wealth of (i) Thomas suffered by the aggrieved
nations, 1776 Malthus party on account of breach of
(b) Principles of (ii) Karl Marx contract.
Political (C) Exemplary Damages They are quite heavy in
Economy and amount and are awarded by
Taxation, 1817 way of punishment oply
(D) Nominal damages Never granted by way of
(c) Principle of (iii) Adam Smith compensation for the loss
Population, 1798
75. Match List I with List II :
(d) Das Capital, 1867 (iv) David Ricardo List-I List-II
Choose the correct answer from the options (a) Section 35 (i) Payment made to
given below : (2AA) certain institutions
a b c d for scientific research
(a) i iii iv ii (b) Section 35 (ii) Payment made to
(b) iii iv i ii (1) (ii a) certain istitutions for
(c) ii iii i iv research in social
(d) iii i iv ii sciences

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 (c) Section 35 (iii) Payment made to a (iii) Workman's due and claims of the secured
(1) (iii) company to be used creditors
for scientific research (iv) Preferential creditors and creditors secured by
(d) Section 35 (iv) Payment made to floating charge
(1) (ii) Indian Institute of (v) Unsecured creditors
Technology for Choose the correct answer from the options
Scientific Research given below :
Choose the correct answer from the options i ii iii iv v
given below : (a) b c a d e
a b c d (b) d c b a e
(a) iv ii iii i (c) a b c d e
(b) iv iii ii i (d) b c e a d
(c) i ii iii iv Ans. (c) : The liquidator after realizing the assets of the
(d) i ii iv iii company should distribute the proceeds among below
mentioned claimants and the following order :-
Ans. (b) : (a) Legal charges.
List-I List-II (b) Liquidators remuneration and cost of expenses of
Section 35(2AA) Payment mode to Indian Institute of wending up.
Technology for cientific Risearch. (c) Workman's dues and claims of the secured creditors
Section 35(1)(iia) Payment made to a company to be (d) Preferential creditors and creditors secured by
used for scientific research. flowing charge
Section 35(1)(iii) Payment made to certain institution (e) Unseated creditors.
for research in social sciences. Note : Sections 53 (1) of Insolvency code applies to
Section 35(1)(ii) Payment made to certain institutions statutory dues of Government and local. Authority &
for scientific research. prescribed priority of distribution of assets in
76. Sequence the following in increasing order of liquidation .
integration of member economics 78. Arrange the following market structures in the
(i) Free Trade Area increasing order of pricing power to firms.
(ii) Economic Union (i) Monopolistic competition
(iii) Custom Union (ii) Perfect competition
(iv) Preferential Trade Agreements (iii) Duopoly
(v) Common Market (iv) Monopoly
Choose the correct answer from the options (v) Oligopoly
given below : Choose the correct answer from the options
a b c d e given below :
(a) i iii v ii iv i ii iii iv v
(b) ii v iii i iv (a) b d a e c
(c) iv i iii v ii (b) b a e c d
(d) iii v ii iv i (c) a c b d e
Ans. (c) : 1. Preferential trade Agreements by the (d) d c e a b
countries to give preference to access certain products Ans. (b) : Pricing power of firms in Increasing order of
from participating countries. different market structure.
2. Frees-Trade Arco- Remove barriers trade among • Perfect competition - Producers have little pricing
members but each country has own policies for non- power.
members. • Monopolistic competition- By making consumers
3. Custom Union - Remove barriers to trade among aware of product differences, sellers excerpt some
members, and set a common trade policy against control over price.
nonmembers. • depending on the size, information a chess and other
4. Common Market - Remove barriers to trade labour characteristics of their competitors firms have some
& capital among members and set a common trade power to set prices without losing significant market
policy against nonmembers. share.
5. Economic Union - Remove barriers to trade, labour, • Duopoly- In a duopoly the firms may collude and use
& capital among members and set a common trade their power to inflate prices.
policy against nonmembers and coordinate members • Monopoly- It has given firm absolute market power
economic policies. and can set a price above the firm's marginal cost.
77. The liquidator after realizing the assets of the 79. Arrange the following items, i.e. stages of
company should distribute the proceeds among capital budgeting in correct sequence :
below mentioned claimants in the following (i) Identification of potential investment
order. opportunities
(i) Legal charges (ii) Assembling of proposed investments
(ii) Liquidators remuneration and cost of expenses (iii) Decision making
of winding up (iv) Implementation and performance review
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 395 YCT
 (v) Preparation of capital budget and Ans. (c) : Following are the characteristics of stages of
appropriations group development in the increasing order :-
Choose the correct answer from the options • Members are moderately eager, have positive
given below : expectations anxious about why they are there, and
i ii iii iv v who other member are.
(a) b a e c d • Conflicts start arising due to the differences of
(b) e c a b d opinion among members.
(c) c e d b a • Members begin to resolve differences and clarify the
(d) a b c e d purpose of the group and the roles of group members.
Ans. (d) : The stages of capital budgeting in correct • Members are highly task- oriented and there is unity
sequences is :- in the group.
Step -I - Identification of potential investment • It includes recognition for participation and
opportunities. achievement.
↓ 82. Arrange the following steps in logical sequence
Step II- Assembling of proposed investments of operation of the registration of portfolio
↓ managers :
Step II- Decision Making (a) Prior approval of the SEBI
↓ (b) Adequate steps for redressal of investors
Step IV- Preparation of capital budget and grievances
appropriations (c) Maintenance of the specified capital adequacy
↓ requirements
Step V- Implementation & performance review. (d) Payment of fee
80. Arrange the following stages of processing of (e) Abide by the regulations under the SEBI act
data in a correct sequence : Choose the correct from the options given
below :
(i) Coding
i ii iii iv v
(ii) Editing
(a) c e a b d
(iii) Tabulation
(b) d a b e c
(iv) Classification
(c) a d b c e
(v) Using percentages
(d) d e a c b
Choose the correct answer from the options
given below : Ans. (c) : The following are the steps in logical
i ii iii iv v sequence of operation of the registration of portfolio
managers :-
(a) a b c d e • Prior approval of the SEBI
(b) d a b c e • Payment of Fee
(c) c d a b e • Adequate steps for redressed of investors grievances.
(d) b a d c e • Maintenance of the specified capital adequacy
Ans. (d) : The stages of processing of data in a correct requirements.
sequence are :- • Abide by the regulations under the SEBI act.
Editing →Coding →Tabulation →Using percentages. 83. Arrange the following stages of consumer
81. Arrange the following characteristics of stages decision making process in a sequential order
development in the increasing order : with regard to a young Divya :
(a) Members begin to resolve differences and (a) looks for a specific colour and showroom
clarify the purpose of the group and the roles delivery as she does not want to wait.
of group members (b) narrows down to a dark car of a specific brand.
(b) It includes recognition for participation and (c) belongs to an executive group and all her
achievement colleagues have their own vehicles
(c) Members are highly task-oriented and there is (d) uses media and other social channels to collect
unity in the group information about different models.
(d) Conflicts start arising due to the differences of (e) feels that fuel efficiency should be the most
opinion among members critical factor while making a choice.
(e) Members are moderately eager, have positive Choose the correct answer from the options
expectations, anxious about why they are there, given below :
and who other members are a b c d e
Choose the correct answer from the options (a) i iii ii iv v
given below : (b) iii v iv i ii
i ii iii iv v (c) iii i iv v ii
(a) e d a b c (d) v iii i iv ii
(b) d e c a b Ans. (b) : Following are the stages of consuming
(c) e d a c b decision making process in a sequential order with
(d) d b a e c regard to a young person Divya.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 396 YCT
First - Belongs to an executive group and all her (A) Find out the reasonable expected rent of the
colleagues have their own vehicles. property.
Second - Feels that fuel efficiency should be the most (B) Find out the rent actually received or receivable
critical factor while making a choice. after excluding unrealised rent before deducting
Thirst - Uses media and other social channels to collect loss due to vacancy.
information about different models. (C) Find out the which one is the higher amount
Fourth -Looks for a specific colour and showroom computed in (B) & (A) as above.
delivery as she does not want to wait. (D) Find out the loss because of vacancy.
Fifth -Narrow down to a dark grey car of a specific (E) (C)- (D) is gross annual value.
brand.
84. Arrange the following stages of formation of
companies in a proper sequence :
(a) Promotion stage
(b) Raising of share capital stage
(c) Incorporation stage
(d) Commencement stage
(e) Selection of name
Choose the correct answer from the options Property vacant during the year - Where let out
given below : property is vacant for part of the year and owing to
vacancy, the actual rent is lower than the ER, then the
i ii iii iv v actual rent received or receivable will be the GAV of
(a) c a e d b the property.
(b) b e a c d
86. Given below are two statements :
(c) a e c b d
Statement I : Deferred Tax Liabilities (Net) is
(d) d a b c e the amount of tax on the temporary difference
Ans. (c) : Following are the stages of formation of between the accounting income and taxable
companies in a proper sequence : income. It arises when the accounting income is
1. Promotion stage - It is first step in formation of a more than the taxable income.
company where idea of starting business is converted Statement II : Deferred Tax Liabilities (Net)
into reality by promoters. and Deferred Tax Assets (Net) are only book
2. Selection of name - Registration of the selected entires i. e. they are neither actual liability nor
name of company. actual asset.
3. Incorporation stage - When all documentation is In the light of the above statements, choose the
done the registrar issued certificate of incorporation. correct answer from the options given below :
4. Raising of share capital stage- After the company is (a) Both Statement I and Statement II are true
incorporated the next stage is to raise the necessary (b) Both statement I and statement II are false
capital. (c) Statement I is true but Statement II is false
5. commencement stage- The certificate of (d) Statement I is false but Statement II is true
commencement of business is required for public
company to start business private company can start Ans. (a) : Both statement I and statement II are true.
business after incorporation. Statement I :- Deferred Tax liability (Net) is the
amount of tax on the temporary difference between the
85. Sequence the steps for computing gross annual accounting income and taxable income. It arises when
value of income from house property : the accounting income is more than the taxable income.
(a) Find out the rent actually received or Statement II :- Deferred Tax liabilities (Net) and
receivable after excluding unrealized Rent deferred Tax Assets (Net) are only book entries i.e. they
before deducting loss due to vacancy. are neither actual liability not actual asset.
(b) Find out the less because of vacancy 87. Given below are two statements :
(c) Find out the reasonable expected rent of the Statement I : Modified Internal rate of return
property. is based on reinvestment assumption.
(d) Find out which one is the higher amount Statement II : Value - additivity principle is not
computed in (C) or (A). applicable in NPV
(e) (D) – (B) is gross annual value In the light of the above statements, choose the
Choose the correct from the options given most appropriate answer from the options
below : given below :
i ii iii iv v (a) Both Statement I and Statement II are correct
(a) c a d b e (b) Both Statement I and Statement II are
(b) a d c b e incorrect
(c) d a c b e (c) Statement I is correct but Statement II is
(d) a b c d e incorrect
Ans. (a) : The steps for computing gross annual value (d) Statement I is incorrect but Statement II is
of income from house property is :- correct
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 397 YCT
Ans. (c) : Statement I is correct but statement II is 90. Given below are two statements : one is
incorrect. labelled as Assertion A and the other is labelled
• Statement -I - Modified Internal rate of return is based as Reason R.
on reinvestment assumption. Assertion A : ITR- 1 can be an individual
• Statement -II value - additively principle is not whose total income does not use by exceed Rs. 1
applicable in NPV. Crore.
Note :- Value additively principle is applicable in NPV. Reason R : ITR- 1 cannot be used by an
According to this principle the value of the total NPV of individual who is director in a company
a bigger project is equal to the summation of all smaller In the light of the above statements, choose the
NPVs. projects. most appropriate answer from the options
given, below
88. Given below are two statements :
(a) Both A and R are correct and R is the correct
Statement I : Delegation is an interpersonal explanation of A
transactions based on behaviour analysis. (b) Both A and R are correct But R is NOT the
Statement II : Delegation is an evalutionary correct explanation of A
and development process which needs (c) A is correct but R is not correct
encouragement and reinforcement. (d) A is not correct but R is correct
In the light of the above statements, choose the
most appropriate answer from the options Ans. (d) : A is not correct but R is correct
given below : • Assertion A :- ITR -1 can be used by an individual
(a) Both Statement I and Statement II are correct whose total income does not exceed Rs. 1 crore.
• Reason R :- ITR -1 cannot be used by an individual
(b) Both Statement I and Statement II are who is director in a company.
incorrect Note :- ITR -1 can be used by the individual whose total
(c) Statement I is correct but Statement II is income does not exceed ` 50 Lakh.
incorrect
Passage
(d) Statement I is incorrect but Statement II is
In 2019, India's ten largest trading partners
correct
were USA, China, UAE, Saudi Arabia, Hong
Ans. (d) : Statement I is incorrect but statement II is Kong, Iraq. Singapore, Germany, South Korea
correct. and Switzerland. In 2018 - 19, the Foreign
• Statement -I - Delegation is an interpersonal Direct Investment (FDI) in India was $64.4
transactions based on behaviour analysis. (Incorrect) billion with service sector, computer and
Note :- Delegation is not an interpersonal transactions telecom industry remains leading sectors for
delegation is an administrative process of getting things FDI inflows. India has free trade agreements
done by others by giving them responsibility. with several nations, including ASEAN,
• Statement -II - Delegation is a evolutionary and SAFTA, Mercosur, South Korea, Japan and
development process which needs encouragement and few other which are in effect or under
reinforcement. negotiating stage. The service sector makes up
89. Given below are two statements : 55.6% of GDP and remains the fastest growing
sector, while the industrial sector and the
Statement I : Only low priced products will sell agricultural sector employs a majority of the
in rural india. labor force. The Bombay Stock Exchange and
Statement II : Rural consumers are a National Stock Exchange are one of the
homogenous lot World's largest stock exchanges by market
In the light of the above statements, choose the capitalization. India is the world's sixt-largest
most appropriate answer from the options manufacturer, representing 3% of global
given below : manufacturing output and employs over 57
(a) Both Statement I and Statement II are correct million people. Nearly 66% of India's
(b) Both Statement I and Statement II are population is rural whose primary source of
incorrect livelihood is agriculture and contributes less
(c) Statement I is correct but Statement II is than 50% of India's GDP. It has the world's
incorrect fifth-largest foreign-exchange reserves worth
Rs. 38,832.21 billion (US $540 billion). India
(d) Statement I is incorrect but Statement II is
has a high national debt with 68% of GDP,
correct while its fiscal deficit remained at 3.4% of
Ans. (b) : Both Statement -I and Statement -II are GDP. However, as per 2019 CAG report, the
incorrect. actual fiscal deficit is 5.85% of GDP. India's
• Statement -I - Only low priced products will sell in government-owned banks faced mounting bad
rural India. debt, resulting in low credit growth;
Note :- In rural market both low well as high price simultaneously the NBFC sector has been
products will sell also. engulfed in a liquidity crisis. India faces high
• Statement -II- Rural consumers are a homogenous lot unemployment, rising income inequality and
Note. In rural consumers are both homogenous and major slump in aggregate demand.
heterogeneous because needs and wants of consumer On the basis of the above passage, given
are different. answers to question
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 398 YCT
91. India has significant trading partners from 95. Which of the following has not been articulated
which of the following regions : in the passage?
(a) Europe (i) GDP Growth
(b) America (ii) Currency flows
(c) Asia (iii) Liquidity
(d) Africa (iv) Demographics
Choose the correct answer from the options Choose the correct answer from the options
given below :
given below :
(a) (a) and (b) only (b) (b) and (c) only
(a) (a), (b), (c) only (b) (b), (c), (d) only
(c) (b) only (d) (c) and (d) only
(c) (a), (b), (d) only (d) (a) and (d) only
Ans. (c) : Currency flows
Ans. (a) : (a), (b), (c) only In this passage, currency flows has not been articulated.
• India has significant trading partners from the 96. Read the following passage carefully and
following regions like Europe (Germany, switzerl and), answer the question
America (USA), Asia, (China, UAE, Saudi Arabia, XYZ Ltd. furnished you with the following
Hongkong, Irag, Singapur, South Korea etc.) according information :
to the passage.
Budget Actual (in a
92. Which of the following sectors have significant particular
Foreign Direct Investment (FDI) in India? month)
(a) Service Sector No. of 25 27
(b) Secondary Sector working days
(c) Primary Sector Production (in 20,000 22,000
(d) Fisheries and Animal Husbandry units)
Choose the correct answer from the options Fixed 30,000 31,000
given below : overhead (in
(a) (a) and (b) only (b) (b) and (c) only Rupees)
(c) (c) ad (d) only (d) (a) and (d) only Budgeted overhead rate is Rs. 1 per unit. In a
Ans. (a) : (a) and (b) only particular month the actual hours worked were
31,500
• According to passage, In 2018-19 the FDI in India What is the total overhead variance in the
was $64.4 bullion with service sector, computer and given month experienced by the XYZ Ltd?
telecom industry the secondary, sector with highest (a) Rs. 4,000 (Favourable)
among all sectors. (b) Rs. 2,000 (Adverse)
93. Which among the following statements is the (c) Rs. 1,000 (Adverse)
correct one? (Choose the most appropriate (d) Rs. 2,000 (Favourable)
one)? Ans. (d) : 2000 (Favourable)
(a) India has a better trade relations with Total overhead variance = Overhead absorbed for actual
European countries production – Actual overhead incurred.
(b) MSE is the largest stock exchange in the
world  30,000 
⇒ × 22,000  – 31,000
(c) Indian primary sector is contributing less as  20,000 
compared to other sectors = ( 3000 ×11) – 31,000
(d) India attracts highest FDI from USA
= 33,000 – 31,000
Ans. (c) : Indian primary sector is contributing less as
compared to other sectors as 66% of population of India = 2000 ( Favourable )
is working in agriculture sector (Primary sector) and it 97. Read the following passage carefully and
contributes less than 50% of India's GDP. answer the questions
94. The comptroller and Auditor General has XYZ Ltd. furnished you with following
reported a different estimate than of information :
governments, in terms of : Budget Actual (in a
(a) GDP particular
(b) Fiscal Deficit month)
(c) FDI No. of 25 27
(d) Liquidity of private banks working days
Ans. (b) : The comptroller and Aditor general has Production 20,000 22,000
reported a different estimates than of governments in (in units)
terms of fiscal deficit. According to passage - As per Fixed 30,000 31,000
2019 CAG report, the actual fiscal deficit is 5.85% of overhead (in
GDP. Rupees)

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 399 YCT
 Budgeted overhead rate is Rs. 1per unit. In a Budget Actual (in a
particular month the actual hours worked were particular
31,500 month)
What is the expenditure variance of XYZ Ltd No. of 25 27
as on given month? working days
(a) Rs. 1,000 (Adverse) Production (in 20,000 22,000
(b) Rs. 1,500 (Adverse) units)
(c) Rs. 2,000 (Favourable) Fixed 30,000 31,000
(d) Rs. 1,500 (Favourable) overhead (in
Rupees)
Ans. (a) : 1000 (Adverse)
Budgeted overhead rate is Rs. 1 per unit. In a
Expenditure overhead variance ⇒ Budgeted overheads particular month the actual hours worked were
– Actual overheads 31,500
⇒ 30000 – 31000 Find the capacity variance for the month from
`1000 (Adverse) the information given in the passage.
(a) Rs. 1,000 (Favourable)
98. Read the following passage carefully and
(b) Rs. 900 (Adverse)
answer the questions
(c) Rs. 1,500 (Favourable)
XYZ Ltd. furnished you with the following
(d) Rs. 1,000 (Adverse)
information :
Ans. (c) : Rs. 1,500 (Favourable)
yepeš Actual (in a Capacity variance
particular = SR (Actual hours – budgeted hours)
month) = 1 (31,500 – 33,000)
No. of 25 27 = `1500 (Favourable)
working days 100. Read the following passage carefully and
Production (in 20,000 22,000 answer the question :
units) XYZ Ltd. furnished you with the following
information :
Fixed 30,000 31,000
overhead (in Budget Actual (in a
particular
Rupees)
month)
Budgeted overhead rate is Rs. 1 per unit. In a
No. of 25 27
particular month the actual hours worked were working days
31,500
Production (in 20,000 22,000
From given information in the passage, what is units)
the volume variance of XYZ ltd is given Fixed 30,000 31,000
month? overhead (in
(a) Rs. 3,000 (Favourable) Rupees)
(b) Rs. 2,000 (Adverse) Budgeted overhead rate is Rs. 1 per unit. In a
(c) Rs. 1,500 (Favourable) particular month the actual hours worked were
(d) Rs. 1,500 (Adverse) 31,500
Ans. (a) : Rs. 3,000 (Favourable) Given the information in the passage, what is
the calendar variance for the month?
Volume variance ⇒ Absorbed overhead– Budgeted
(a) Rs. 2,000 (Favourable)
overheads
(b) Rs. 3,000 (Adverse)
 30,000 
⇒  × 22,000  – 30,000 (c) Rs. 2,4000 (Favourable)
 20,000  (d) Rs. 1,000 (Adverse)
= ( 3,000 × 11) – 30,000 Ans. (c) : Rs. 2,4000 (Favourable)
⇒ 33,000 – 30,000 Calendar variance ⇒ Std. fixed overhead rate/day
(Actual working days) – Budgeted working days)
⇒ 3000(favaurable)
30,000
99. Read the following passage carefully and ⇒ × (27 day – 25 day)
25day
answer the question :
⇒ 1200 × 2
XYZ Ltd, furnished you with the following
information : ⇒ 2400 (favaurable)

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 400 YCT
 NTA UGC NET/JRF Exam, Dec. 2020/June 2021
COMMERCE
Solved Paper
Exam Date: 25.11.2021 Shift-II

1. FDI in Indian manufacturing has largely been 4. Which of the following entity has recently been
(a) Resource seeking (b) Efficiency seeking negotiated to replace NAFTA with effect from
(c) Market seeking (d) Export – oriented July 2020?
(a) Quad group of countries
Ans. (c) : FDI in Indian manufacturing has Largely
been market seeking. (b) USMCA
(c) Shanghai cooperation organisation
• Market seeking- FDI Means to identify and exploit
new markets for the firm's finished products. And (d) Trans Altlantic organisation
secure market share and sales growth in target foreign Ans. (b) : USMCA has recently been negotiated to
market. replace NAFTA with effect from july 2020.
• India has become one of the most attractive • United States- Mexico Canada Agreement (USMCA)
destinations for investment in the manufacturing sector entered into force on Jyly 1, 2020.
due to it's large market size as per latest report of • It is a free trade agreement between Canada, Mexico,
Appliances and consumer electronics (ACE) market in and the United States.
India is expected to grow to US $ 21.18 billion by 2025 • It is replaced the North American free Trade
and other Robust demand like in Defence Agreement (NAFTA) implemented in 1994.
manufacturing etc. 5. Amalgamation adjustment account is used for
2. Occasional sale of a commodity at a lower price recoding:
abroad in order to unload and unforessen and (a) Capital Reserve in the books of the
temporary surplus of the commodity without transference company
reducing domestic prices is called: (b) General Reserve in the books of the transfer
(a) Persistent dumping (b) Predatory dumping company
(c) Export subsidies (d) Sporadic dumping (c) Statutory Reserve in the books of the transfer
Ans. (d) : Occasional sale of a commodity at a lower company
price abroad in order to unload an unforeseen and (d) Revenue Reserve in the book of the transferee
temporary surplus of the commodity without reducing company
domestic price is called. Sporadic dumping. Ans. (c) : Amalgamation adjustment account is used for
• Sporadic dumping is the practice of occasional recording Statutory Reserve in the books of the
dumping. It means that the when company produce in transferee company.
excess and is not able to sell in domestic market, it • Amalgamation Adjustment Account is created when
export the same at a lower price to liquidate excess there is an amalgamation of companies under purchased
inventory. method.
For Example:- • This account is used when there is not other
Asian farmers dumped small chickens into the sea. adjustment account available and used for recording the
3. Which of the following countries/territoties is transaction for legal compliance during amalgamation.
not a member of the WTO? • Journal Entry
(a) China (b) Russia Amalgamation Adjustment Reserve A/C Dr to Statutory
(c) Iran (d) Taiwan Reserve.
Ans. (c) : 6. The accounting standard AS3 (Revised) has
become mandatory w.e.f accounting periods
• WTO (World Trade Organisation) was established in beginning from 01-04-2001 for which of the
1995. It is the global international organisation dealing following enterprise
with the rules of trade between nations. (a) Commercial, industrial and business reporting
• WTO has over 160 members and over 20 countries enterprises whose turnover for the accounting
seeking to join the WTO. period exceeds `50 crores.
China- 11 December 2001. (b) Enterprises whose debt or equity securities
Russia- 22 August 2022. are not listed on a recognised stock exchange
Taiwan- 1 January 2002. (c) All enterprises whose turnover exceeds ` 2
Iran- It has an observer status at the world trade crores.
organisation since 2005. (d) only banking and
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 401 YCT
Ans. (a) : the accounting standard AS3 (Revised) has rate of return is 10% the value of goodwill on
become mandatory w.e.f. accounting periods beginning the basis of the annuity method; taking the
from 01-04-2001 for the commercial, industrial and present value of the annuity of Re 1 for 5 years
business reporting enterprises whose turnover for the at 10% is 3.7907 (approx): will be
accounting period exceeds `50 Crores. (a) ` 2,500 (approx)
• Cash flow statement are to be prepared by all (b) ` 79,225(approx)
companies but act also specifics a certain category of (c) ` 94,770(approx)
companies which are exempted such companies are one (d) ` 2,25,000 (approx)
person company (OPC). Small company & Dormat Ans. (c) : Normal Profit = Capital Employed ×
company.
Noraml Rate of return
• It is mandatory for the Enterprises whose equity or
debt securities are listed wheather in India or outside 100
India. 10
= 1000000 × = 100000 `
• mandatory for Enterprises which are in the process of 100
listing their equity or debt securities as evidenced by the Super Profit = Avg. Profit – Normal Profit
boards of directors 'resolution in this regard. Average profit = 1,00,000
• Banks including co-operative banks. Average profit =
• Financial institutions. 80, 000 + 1, 00, 000 + 1, 20, 000 + 1, 25, 000 + 2, 00, 000
• Enterprises carrying on insurance business.
5
• AU Commercial, industrial and business reporting Average profit = 1,25,000
enterprises hawing borrowings, including public
Super profit = 1,25,000 – 1,00,000 = 25,000
deposits, in excess of `10 crore.
Goodwill = Super profit × Annuity Rates
• Holding and subsidiary enterprises of any one of the
above at any time during the accounting period. = 25000 × 3.7907
= 94767.5
7. CCA method of inflation accounting is as a
result of the recommendation of ? = ` 94.770 Approx.
(a) Wandilands Committee 9. The cross elasticity of demand between the
(b) Tandlelands Committee complementary products is:
(c) Sandilands Committee (a) Positive (b) Zero
(d) Marrylands Committee (c) Negative (d) Infinite
Ans. (c) : ‘A method of inflation accounting is as a Ans. (c) : The cross elasticity of demand between the
complementary products is Negative.
result of the recommendation of Sandilands committee.
• As the price for one item increases, an item closely
• Inflation accounting uses two primary methods i.e.
associated with that item and necessary for its
current purchasing power (CPP) and current cost
consumption decreases because the demand for the
accounting (CCA).
main goods has also dropped.
• Current cost Accounting (CCA) method values assets
• for Example if the price of coffee increases, the
at their fair market value (FMV) rather than at historical
quantity demanded for coffee stir sticks drops to
cost, the price paid when the fixed asset was purchased.
purchase fewer sticks.
Note:- Sandilands committee chaired by Sir Francis
Sand I lands, set up is 1975 by the UK government to 10. Income effect of a price rise is greater than its
consider the most appropriate way to account for the substitution effect in case of.
effects of inflation in the published accounts of (a) Inferior goods
companies. (b) Giffen goods
8. The net profits of partnership business, after (c) Status symbol goods
providing for income tax for the last five years (d) Perishable goods
were: ` 80,000; ` 1,00,000; `1,20,000; `
1,25000 and ` 2,00,000. The capital employed
in the business is ` 10,00,000 and the normal
Ans. (b) : Income effect of a price rise is greater than its substitution effect in case of Giffen goods.
• Impact of a fall in the price of goods 'X'.
Nature of Substitution Effect Income Effect Substitution & Price Effect
Good X Income Effects
Normal Good Increase in quantity Increase in quantity ----- Positive
demanded of good X demanded of good X
Inferior Good Increase in quantity Decrease in quantity SE > IE Positive
demanded of good X demanded of good X
Giffen Good Increase in quantity Decrease in quantity SE < IE Negative
demanded of good X demanded of good X

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 402 YCT
11. If the scale parameter (r) is greater than one (r • Value of levered firm 'L' is (Vn + tD)
>1) the CES production function exhibits: V1 = Vn+tD
(a) Decreasing returns to scale = 700 + 200 (0.35)
(b) Constant returns to scale = 700 + 70
(c) Negative returns to scale = 770 lac.
(d) Increasing returns to scale 14. ___________ is a percentage discount rate used
Ans. (d) : If the scale parameter (r) is greater than one in capital investment appraisals which brings
(r > 1) the CES production function exibibits in In the cost of a project and its future cash inflows
crossing returns to scale. into equality.
• The two factor (Capital, labour) CES [constant (a) Accounting rate of return
elasticity of substitution] production function (b) Internal rate of return
introduced by solow, and later made popular by Arrow, (c) Profitability Index
Chenery, minhas, and solow is:- (d) Net present value
U
P
Q = F.(a.kp + (1 – a). L P Ans. (b) : Internal rate of Return is percentage discount
rate used in capital in capital investment appraisals
Where,
which brings the cost of a project and its future cash
• Q = Quantity of output inflows into equality.
• F = Factor productivity. Internal Rate of Return-
• a = Share parameter • It is the rate at which net present value of the
• K,L = Quantities of primary production factors investment is zero.
(Capital & Labour) PV of cash inflows = PV of cash outflows
σ −1 15. The theory which explains the effect of
•P= = Substitution parameter
σ devaluation on balance of trade is known as:
1 (a) Philips Curve theory
• σ= = Elasticity of substitution. (b) Mundell- Tobin Hypothesis
1− p
(c) J curve Theory
• V = degree of homogeneity of the production (d) K Curve Theory
function. Where V = 1 (Constant return to scale), V< 1
Ans. (b) : J-curve theory explains the effect of
(Decreasing return to scale), V > 1 (Increasing return to
devaluation on balance of trade.
scale).
• In economics it refers to the trend of a country's trade
12. When demand is slack and market is balance following a devaluation or depreciation under a
competitive, firms follow which of the following certain set of assumptions.
pricing methods?
• A J-Curve demonstration is a representation of any
(a) Penetration pricing (b) Peak load pricing
value that initially falls before recovering and ultimately
(c) Marginal cost pricing (d) Skimming pricing rising.
Ans. (c) : When demand is slack and market is • The J-curve shows how a currency depreciation
competitive firms follow Marginal cost pricing method. causes a severe worsening of a trade imbalance
key points:- followed by a substantial improvement.
• The primary aim of the company adopting this pricing 16. The annual demand for an item is 3,200 units.
method is to meet its marginal cost & over heads. The unit cost is ` 6 and inventory carrying
• The marginal costing method is suitable for entering charges 25% p.a. If the cost of one
the industries which are dominated by giant players, procurement is ` 150, determine number of
posing a fierce competition for the organisation to orders per year.
sustain in the business. (a) 3 (b) 4
13. What is the value of levered firm “L” if it has (c) 6 (d) 500
the same EBIT as an unlevered firm “U”, (with Ans. (b) : The number of orders per year will be 4.
value of ` lac), has a debt of ` 200 lac, tax rate
is 35% under MM approach? Annual Demand
Number of order per year =
(a) ` 950 lac (b) ` 630 lac EOQ
(c) ` 770 lac (d) ` 525 lac 3200
=
Ans. (c) : The value of covered firm 'L' is `770 Lac. EOQ
Key points with solution.
2× D×S
• V1 = Vn + tD EOQ = ,
V1 = Value of the levered firm H
Vn = Value of unlevered firm D = Annual demand (Units)
t = Rate of corporate tax S = Cost / Order
D = Amout of Debt. H = Holding cost

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 403 YCT
 (c) The lower and upper quartile values each
2 × 3200 × 150
EOQ = H = {25% of `6 is 1.5} increase by K
1.5 (d) The quartile coefficient of dispersion rises
EOQ = 2 × 3200 × 100 Ans. (b) : The co-efficient of quartile deviation remain
EOQ = 640000 unchanged.
EOQ = 800 Units 20. For Binomial distribution with
n = 30, q = 0.7, the mean and variance will be
3200
Number of order per year will be is 4. equal to:
800
(a) 21 and 6.3 (b) 9 and 6.3
17. If each value in a given set of data is divided by
4, how will it affect Karl Pearson’s coefficient (c) 9 and 6.3 (d) 21 and 6.3
of Skewness? Ans. (c) :
(a) It will reduce the value of co-efficient to one The mean and variance will be equal bo 9 & 6.3
fourth n = 30 , q = 0.7
(b) It will increase the value of co-efficient to P = (q – 1) (p = Probability of success in
four times = 1 – 0.7 single experiment)
(c) It will not affect the co-efficient of Skewness = 0.30 (q = Probability of failture in
value a single experiment = (1 – P)
(d) Nothing can be said about the change mean = np = 0.30 × 30
Ans. (c) : If each value in a given set of data is divided =9
by 4. It will not affect the co-efficient of skewness Variance = npq
value. = 30 × 0.30 × 0.7
Karl Pearson’s coefficient of Skewness = 6.3
Mean − Mode 21. A type of validity based on showing that scores
=
S.D on the test (Predictors) are related to job
Mean Mode performance is:
− (a) Test validity (b) Criterion validity
 Divided 4 as per 
= 4 4
 Question asked  (c) Content validity (d) Construct validity
SD  
Ans. (b) : Criterion validity is a type of validity based
4
on showing that scores on the test (Predictors) are
1
( mean − mode ) related to job performance.
= 4 • Criterion validity is divided into three types:-
1
( SD ) → Predictive validity, concurrent validity &
4 retrospective validity.
mean − mod e
• Example:- If a measure of criminal behaviour is
SD valid, then it should be possible to use it to predict
There will be no change. wheather an individual
18. A coin and pair of dice are tossed together, the (a) Will be arrested in the future for a criminal
total number of possible outcome for an violation.
experiment is: (b) Is currently breaking the law, and.
(a) 12 (b) 72 (c) Has a previous criminal record.
(c) 36 (d) 24 22. Which among the following is not a
Ans. (b) : characteristics of transactional leaders?
A coin and pair of dice are tossed together, the total (a) Gives personal attention, treats each
number of possible outcome for an experiment is 72. employee individually
• When a coin tossed, Total cases occurred = 2 (b) Abdicates responsibilities, avoid making
• When two dices were rolled, total case occurred decisions
= 62 = 36 (c) Intervens only when standards are not met
• When both cases happen together simultaneously, (d) Contracts exchanges of rewards for efforts
then total cases will be – Ans. (a) : Gives personal attention, treats each
62 × 2 = 36 × 2 = 72 employee individually is not a characteristics of
19. Each of the values of a series is decreased by K. transactional Leaders.
Which of the following does not hold in the • A transactional leader is someone who values order,
context? structure. They are Likely to command military
(a) The quartile deviation does not change. operations, manage Large corporations, or lead
(b) The co-efficient of quartile deviation remain international projects that require rules and regulations
unchanged to complete objectives on time or move people and
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 404 YCT
supplies in an organized way. Many high-level
members of the military, CEO's of large international
• The guidelines were based on three parameters,
companies, and NFL coaches are the Examples of which the committee calls it as pillars.
transactional Leadership. • Capital Adcquacy Requirements:- Bank should
23. Stretch goals that challenge people to achieve maintain a minimum capital adequacy requirement of
levels of success in current activities is known 8% of risk assets.
as: • Supervisory Review:- According to this, banks were
(a) Control stretch goals needed to develop and use better risk management
(b) Cluster stretch goals techniques in monitoring and managing all the three
(c) Vertical stretch goals types of risks that a bank Jaces, Viz credit, market and
(d) Horizontal stretch goals operational risks.
Ans. (c) : Stretch goals that challenge people to achieve • Market Discipline:- This needs increased disclosure
higher levels of success in current activities is known requirements. Banks need to mandatorily disclose their
as:- CAR, risk exposure etc to the central bank.
Vertical Stretch goals- 26. Which one of the following is not the character
• Ex- Setting your fundraising goal of 5,00,000 Rupee tics of mutual funds?
and adding a stretch goal of an additional 1 Lakh (a) Consistent Investment process
Rupee. (b) Strong fund management
24. Usually in which one of the following (c) Diversity in interest rates
performance appraisal technique, subject self- (d) Differences from the benchmark
ratings are negatively correlated with their
subsequent performance in an assessment Ans. (c) : Diversity in interest rates is not the
center? characteristics of mutual funds.
(a) Appraisal by subordinates • Diversity in interest rates is relate with money market.
(b) 360- Degree feedback • features of mutual funds are:-
(c) Self –ratings → Money pooled from various individuals (investors)
(d) Peer Appraisals → Will regulated by (SEBI)
Ans. (c) : Usually in, Self-ratings, performance → Professionally managed.
appraisal technique, subjects self-ratings are negatively → High returns than conventional investing.
correlated with their subsequent performance in an
→ Access to large portfolios.
assessment center.
→ Expert money management.
• peer Apprisals→ is usually done by colleagues who → Diversification & safe & secure.
are a part of the same team.
→ Systematic investment planning.
• Appriasal by subordinates→ is an apprisal system
→ Allows to invest in small amounts.
where by managerial employees are evaluated by their
subordinates. 27. Which one of the following statement is false?
• 360-Degree Feedback→ is an apprisal that (a) Capital market is a market for medium and
incorporates feed back from all who observe and are long term funds
affected by the performance of a candidate. (b) GDR is a negotiable instrument issued by a
Note:- The Self-rating were negatively and non linearly US bank
related to performance with some of those who gave (c) Many publicly listed companies in India
themselves the highest rating having the lowest trades their shares through Bombay stock
performance on the assessment center. exchange or national stock exchange
25. Which one of the following statements is true (d) Securities that are listed on various stock
about the risk considered for capital exchange eligible for being traded there are
requirements under Basal II? called listed securities
(a) Credit risk, interest rate risk and foreign Ans. (b) : Among the following statements, GDR is a
exchange risk negotiable instrument issued by a US banks is false.
(b) Credit risk, market risk and operational risk • GDR Stands for Global Depository Receipt (GDR)
(c) Credit risk, political risk and country risk also known as IDR (International depository bank,
(d) Credit risk, interest rate risk and political risk which purchases shares of foreign companies and
Ans. (b) : Credit risk, market risk and operational risk is deposits it on the account.
true about the risk considered for capital requirements • American depositary Receipt (ADR) refers to a
under Basel II. negotiable certificate issued by a US depositary bank
• In 2004, Basel II guidelines were published by representing a specified number of shares usually one
BCBS. share- of a foreign company's stock.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 405 YCT
28. Which one of the following is not the services Ans. (a) : "Print media is not necessarily impactful in
provided under NBFCs? rural markets'' is not true about rural markets.
(a) Leasing services • Traditional media is more effective with rural
(b) Implementing modernisation audience as Interpersonal communication (IPC) was
(c) Asset management services ranked most effective, which includes print media.
(d) Mutual benefit finance services bank • Examples of print media used in rural markets are,
Ans. (b) : Implementing modernization is not the cards with religious impression, visual advertisements
service provided under NBFCS. in Local magazines & newspapers in their regional
Types of NBFC's Activity or Services language etc.
1. Asset Finance Asset financing, 31. Which of the following is not true for supply
Company supporting productive chain management approach?
/economic activity. (a) Joint reduction in channel inventories
2. Loan Company Providing finance by (b) Large breadth of supplier base to increase
extending loans. competition and spread risk
3. Investment Acquiring securities for (c) Risk and rewards are shared over long term
Company the purposes of selling. (d) Companies use intermodal transportation ro
4. Infrastucture Providing infrastructure reached to their markets
finance company loans.
Ans. (b) : "Large breadth of supplier base to increase
5. Systemically Acquiring shares and competition and spread risk" is not true regarding
Important core securities for investment supply chain management approach.
Investment in mainly equity shares.
company Element Traditional Supply chain
management management
6. Infrastructure Debt faciliteting long term
fund debt into infrastructure. Breadth of Large to increase Small to
supplier competition and increase co-
• A non-Banking financial company (NBFC) is a
company registered under the companies Act engaged base spread risk ordination
in the business of loans and advances, acquisition of SCM-Benefits
shares/stocks/bonds/debentures/securities issued by • Enhances inventory management supporting the
Government or Local authority or other marketable successful execution of just-in time stock models.
securities of a like nature, leasing, hire-purchase, • Minimizes warehouse and transportation costs
insurance business, shit business but does not includes
any institution whoes principle business is that of • Assists in achieving, shipping of right products to
agriculture activity, industrial activity purchase & sale right place at the right time.
of goods (other than securities). 32. Which one of the following is true for
29. Which of the following can be categorised consumers?
processing services? (a) Consumers are rational and think in a linerar
(a) Legal services manner
(b) Health care (b) Culture and society have relationship to
(c) Education consumers thougths and feelings
(d) Management consultancy (c) Consumers can be motivated to believe and
Ans. (a) : Legal services can be categorised as internalise messages the way the marketer
information processing services. desires
• Examples of information processing services includes (d) Consumers can explain their thought and
insurance, banking and consulting. behaviour
• In marketing, Information processing services are a Ans. (b) : "Culture and society have relationship to
unique form of intangible products where the consumers thoughts and feelings" is true for
information acts as a products or information consumers".
technology is used. • Cultural factors have significant effect on an
• In this, Little direct involvement with the customer individual's buying decision. Every individual has
may be needed once the request for service has been different sets of habits, beliefs and principles which
initiated. he/she develops from his family status & background.
30. Which of the following is not true markets? What they see from their childhood becomes their
(a) Print media is not necessarily impactful in culture.
rural markets For Example:- In India, people still value joint family
(b) Rural customer is price sensitive system and family ties. Children in India are
(c) No significant change may be required in the conditioned to stay with their parents till they get
advertising copy married as compared to foreign countries where
(d) Products should be simpler, easy to use, children are more independent and leave their parents
service and maintain once they start earning a living for temselves.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 406 YCT
33. The amount of penalty for making a false 36. Which one of the following is not included in
statement to the “Competition Commission” by the term “Work” under copyright Act 1957?
a person who is a party to combination shall be (a) A Cinematographic film
between (b) Layout designs of integrated circuits
(a) 20 lakhs to 50 lakhs (b) 50 lakhs to 1 crore (c) A sound recording
(c) 8 lakhs to 10 lakhs (d) 70 lakhs to 1 crore (d) A dramatic work
Ans. (b) : The amount of penalty for making a false Ans. (B) : "Layout designs of integrated circuits" is not
statement to the "competition commission" by a person included in the term work under copyright Act 1957.
who is a party to a combination shall be between 50 • Copyright is a bundle of rights given by the law to the
lakhs to 1 crore. creators of literary (book, poems, blogs etc) dramatic
• Section 44 of the competition Act 2002. States that. (plays, TV scripts), musical & artistic (paintings,
sculptures, graphics etc).
(b) If a person, being a party to the combination, fails to
make a particular statement or makes the false statement works and the producers of cinematograph films and
sound recordings.
to his knowledge, then he is punishable with a fine of 50
lakh, as penalty which may be extended to 100 lakh. 37. Tax audit is compulsory in case of a person in
profession whose gross receipts from the
34. ‘A’ Minor takes a loan Rs. 4,000/- from ‘B’ profession exceed:
during his minority, on attaining majority. he (a) Rs. 1 crore (b) Rs. 40 lakh
applies to ‘Be’ for a further loan of Rs. 3,000/-
(c) Rs. 60 Lakh (d) Rs. 50 Lakh
‘B’ gives this loan and obtains from ‘A’ a
combined promissory note of Rs. 7,000/- for the Ans. (d) : Tax audit is compulsory in case of a person
two loans. This is considered as: in a profession whose gross receipts from the profession
exceeds 50 Lakh.
(a) Void Contract (b) Valid Contract
• Compulsory Audit of Books of Accounts (Section 44
(c) Illegal Contract (d) Unilateral Contract AB) Section 44 AB makes it obligatory for a person to
Ans. (b) : This is considered as 'Valid contract'. get his accounts audited before the "specified date" by a
• Ratification of minor's contract- "chartered Accountant", if the total sales, turnover or
→ A minor's agreement or contract cannot be ratified gross receipts in business for the previous year exceeds
by him when he becomes a major. A consideration JNR 1 crore or if his gross receipts in profession for the
given by a person when he was a minor is no previous year exceeds JNR 50 lakhs.
consideration in the eyes of law and therefore a 38. Maximum tax-free limit for payment received
consideration given under earlier contract cannot be under voluntary retirement scheme is:
implied into the contract which the minor enters on (a) Rs. 4,00,000 (b) Rs. 5,00,000
attaining majority. (c) Rs. 8,00,000 (d) Rs. 10,00,000
→ However a minor can enter into the fresh contract. If Ans. (b) : Maximum tax-free limit for payment
it is necessary, on attaining majority if supported by a received under voluntary retirement scheme is 5,00,000.
fresh consideration and not by past consideration. • As per section 10(10), any compensation received at
35. Which among the following essence of the the time of voluntary retirement or termination of
information technology act is not a correct service is exempt from tax, if certain conditions are
statement? satisfied maximum exemption limit is `5,00,000.
(a) Legal Recognition of Electronic documents • Conditions for claiming exemption (Rule 2BA)
(b) Any contract for the sale or conveyance of → It applies to an employee who has completed 10
immovable property or any Interest in such years of service or completed 40 years of age.
property → Deduction U/S 10(10C) can be taken once only.
(c) Legal Recognition of Digital signatures 39. A is Resident in India aged 60 years earned
(d) Justice Dispensation system for cyber crimes agricultural income of Rs. 5,00,000 and non-
agricultural income Rs. 3,00,000 during the
Ans. (b) : "Any contract for the sale or conveyance of previous year 2019-20. What is tax liability of
immovable property or any Interest in such property" is A?
not correct statement regarding information technology (a) Rs. 72,000 (b) Rs. 72,100
act. (c) Rs. 2,600 (d) Nil
It Act 2000 does not apply to:-
Ans. (d) : The tax liability of A will be Nill
• A negotiable instrument as defined in Negotiable • The partial integration scheme is applicable if the tax
instruments Act 1881. payer ......... non-agricultural income exceeding the
• A power of attorney as defined in powers of attorney amount of exemption limit.
Act 1882. → A is a senior citizen and his exemption limit will be
• A trust as defined in Indian succession Act 1925. 3,00,000 in year 2019-2020.
• Any contract for the sale or conveyance of immovable A's non-agricultural income is 3,00,000 which is not
property. exceeding the amount of exemption limit.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 407 YCT
40. Any planning of tax which aims at reducing tax Choose the correct answer from the option
liability in legally recognised permissible way given below:
can be termed as an instance of: (a) 1, 2 and 3 only (b) 2, 3 and 4 only
(a) Tax planning (b) Tax avoidance (c) 3, 4 and 5 only (d) 1, 3 and 4 only
(c) Tax evasion (d) Tax management Ans. (d) : The rights of the consumer as enunciated
Ans. (b) : Any planning of tax which aims at reducing under section 6 of the consumer protection Act. 1989
tax liability in legally recognised permissible way can includes:-
be termed as an instance of Tax avoidance. • Right to be protected against the marketing of goods,
• Tax avoidance is reducing or negating tank liability in products or services which are hazardous to life and
legally permissible ways and has legal sanction. property.
41. Identify the principles of trade policy • Right to be assured, wherever possible, assess to a
framework from the following under the WTO: variety of goods, products or services at competitive
1. Reciprocity and transparent prices.
2. Benefactory and resilient • Right to be informed about the equality. quantity,
3. Non- discriminatory potency, purity, standard and price of goods, products
4. Binding and enforceable commitments or services.
5. Protective and benevolent • Right to be heard and bo be assured that consumer's
Chose the correct answer from the option given interests will receive due consideration at appropriate
below: for a.
(a) 1, 2 and 3 only (b) 2, 3 and 5 only • Right to consumer awareness.
(c) 1, 3 and 4 only (d) 2, 4 and 5 only • Right to seck redressed against unfair trade practice
Ans. (c) : The principles of trade policy framework or restrictive trade practices or unscrupulous
under the WTO are reciprocity and transparent, Non- exploitation of consumers.
discriminatory, binding and enforceable commitments. 43. Which of the following events after the balance
sheet date would normally qualify as adjusting
Freer Trade events according to AS-4 (Events after balance
Non − Discrimination − Gradually sheet date)?
Most favored through 1. The insolvency of a customer on the balance
sheet data
Nation megotiation
2. A decline in the market value of investments
National Pr omoting fair 3. The declaration of an ordinary dividend
competition 4. The determination of the cost of assets
Treatment purchased before the balance sheet date
Choose the most appropriate answer from the
Pr edictability options given below
Binding agree (a) 1, 3 and 4 only (b) 1 and 2 only
−ments and (c) 2 and 3 only (d) 1 and 4 only
Transparency Ans. (d) : Adjusting events according to As-4 (Events
after balance sheet date are the in solvency of a
Encouraging customer on the balance sheet date, the determination of
Development the cost assets purchased before the balance sheet date.
As-4 Events occurring after the balance sheet date
and Economic
Reforms
42. The right of the consumer as enunciated under
section 6 of the consumer protection Act, 1986
includes:
1. To be protected against the marketing of goods
and services which are hazardous to life and
property
2. To be assured the competitive price and low
cost quality products, profits, diversity and
equity
3. To protected for multiple use of products,
profits, diversity and equity
4. To be protected for multiple use of products,
profits, diversity and equity
5. To be informed about the quality, potency,
purity and price of goods or service
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 408 YCT
44. Management According information is used for 3. Differentiated products and interdependence
which of the following distinctive purposes between firms
1. Measurement 4. Elasticity of demand must be different in
2. Control different markets
3. Recording transactions Choose the most appropriate answer from the
4. Alternative choices option given below:
Choose the most appropriate answer form the (a) 1, 2 and 3 only (b) 1, 3 and 4 only
option given below: (c) 2, 3 and 4 only (d) 1, 2 and 4 only
(a) 1, 2 and 3 only (b) 2, 3 and 4 only Ans. (d) : The necessary conditions for price
(c) 1, 2 and 4 only (d) 1 and 3 only discrimination are:-
Ans. (c) : Management accounting information is used • There should be imperfect competition in market.
for the purpose of measurement, control, Alternative • Markets must be separable.
choices. • Differentiated products and interdependence between
• Management accounting helps the managements in firms.
controlling the performance of the business. with Conditions for price Discirimination:-
various accounting methods like Budgetary control, cost • Existence of monopoly.
variance etc. • Separate market.
• With the helps of various accounting tools like • No contact between Buyers.
marginal costing, Break-even analysis etc. Management
can finds various alternatives • Different elasticity of demand.
• It also helps in measuring performance with • Artificial differences between goods.
standardized performance and a report of deviation • Production of commodity to order.
from the standard performance. 47. Which of the following explains downward
45. A U-shaped long-run average cost curve is slope of an ordinary demand curve?
based on the assumptions that: 1. Income effect of price change
1. Greater division of labour and specialisation 2. Substitution effect of price change
accure to larger firms 3. Utility Maximising behaviour of consumer
2. Minimum cost of production at various level of 4. Risk averse behaviour of consumer
output Choose the most appropriate answer from the
3. Economies of scale prevail at small levels of options given below:
output (a) 1 and 2 only (b) 2, 3 and 4 only
4. It become more difficult to manage the firm (c) 1, 2 and 3 only (d) 1, 3 and 4 only
effectively as it grows bigger Ans. (c) : The downward slope of an ordinary demand
5. Diseconomies of scale prevail at larger level of curve is explained by the following statements:-
output • Income effect of price change.
Choose the correct answer from the options • Substitution effect of price change.
given below • Utility maximising behaviour of consumer.
(a) 1, 2 and 3 only (b) 2, 3 and 4 only • Law of diminishing marginal utility.
(c) 2,3,4 and 5 only (d) 1,3,4 and 5 only
• Size of Consumer Group.
Ans. (d) : A U- shaped long-run average cost curve is Downward sloping of demand curve-
base on the assumptions that are:-
• When the price of commodity increases, its demand
• Greater division of labour and specialisation accure to decreases.
larger firms. Similarly, when the price of a commodity decreases its
• Economics of scale prevail at small levels of output. demand increases. The law of demand assumes that the
• It becomes more difficult to manage the firm otherr jactors affecting the demand of a commodity
effectively as it grows bigger. remin the same.
• Diseconomics of scale prevail at large level of ouput. Thus, the demand curve is downward sloping from left
Note:- Long run Average Cost (LAC) per unit cost to right.
incurred by a firm ie. long run total costs divided by the 48. The reasons put forth for the control over the
level of output. LAC curve is derived as an envelop activities of the international banks are:
tangent of all SAC curves U-Shaped curve due to the 1. These banks encourage inflation by adding
operation of law of returns to scale. Also known as stock of money supply through credit creation
envelop and planning curve. 2. These banks some times are responsible for
46. Identify the necessary conditions for price bank failures that mar the interest of the
discrimination: depositors
1. There should be imperfect competition in 3. They cause unmanageable indebtedness among
markets the barrowing governments by charging high
2. Markets must be separable interest rates
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 409 YCT
 4. They do not adhere to the credit allocation Note:- Securitization is the process in which certain
policy of the host government types of assets are pooled so that they can be
Choose the most appropriate answer from repackaged into interest-bearing securities. The interest
options given below: and principal payments from the assets are passed
(a) 1, 2, 3 only (b) 1, 3, 4 only through to the purchasers of the securities.
(c) 2, 3, 4 only (d) 1, 2, 3, 4 51. Non-sampling errors because of:
A. Vague definitions used in data collection
Ans. (d) : The reasons put forth for the control over the
activities of the international banks are:- B. Defective method of data collection
C. Incomplete coverage of the population
• These banks encourage inflation by adding stock of
D. Wrong entry made in the questionnaire
money supply through credit creation.
E. Only part of the population is observed and
• These banks some times are responsible for bank expected to avoid census study
failure that mar the interest of the depositors. Choose the most appropriate answer from the
• They cause unmanageable indebtedness among the options given below:
borrowing governments by charging high interest rates. (a) (A),(B)(C),(D) only
• They do not adhere to the credit allocation policy of (b) (A),(C),(D),(E) only
the host government. (c) (B),(C),(D),(E) only
49. A new issue debt or shares will invariably (d) (A),(B),(D),(E) only
involve floatation costs in the form of: Ans. (d) : Non- sampling errors may arise because of
A. Legal fees • Vague definitions used in data collection.
B. Administrative expenses • Defective method of data collection.
C. Brokerage • Wrong entry made in the questionnaire.
D. Underwriting • Only a part of the population is observed and expected
E. Risk Premium to avoid census study.
Choose the most appropriate answer from the Note:- An error that occurs during data collection
option given belwo: causing the data to differ from the true values is called
(a) (A), (B), (D), (E) only Non-sampling errors.
(b) (A), (C) only Non-sampling errors are caused by external factors
(c) (A),(B),(C),(D) only rather than an issue within a survey, study or census.
(d) (A),(B),(C),(D),(E) 52. Which of the following are the correct
statement with regard to positive skewed
Ans. (c) : A new issue debt or shares will invariably distribution?
involve. Floation costs in the form of legal fees, A. Mean>Median>Mode
Administrative expenses, Brokerage, underwriting, risk
B. Mean<Median<Mode
premium.
C. Q3 – Median<Median– Q1
• Floading cost are incurred when the funds are raised. D. Q3 – Median>Median- Q1
Generally, the cost of floating a debt is less than the cost
E. Mean = Median = Mod
of floating an equity issue.
Choose the correct from the options given
This may encourage a company to use debt is less than below:
issue ordinary shares. If the owner's capital is increased (a) (A),(D) only
by retaining the earnings no fluatation cost are incurred. (b) (A),(C) only
50. Which of the following are the reasons for (c) (B),(C),(D) only
raising funds via securitization? (d) (B),(C),(D),(E) only
A. To raise capital using non-conventional sources Ans. (a) : The correct statements with regard to positive
B. To accelerate earnings for financial reporting skewed distribution are:-
purposes → Mean > Median > Mode
C. The diversify funding resources → Q3 – Median > Median – Q1
D. The potential for reducing cost Note:- The presence of extreme observations on the
Choose the most appropriate answer from the right hand side of a distribution makes it positive by
options given below: skewed and the three averages, VIZ, Mean, Median and
(a) (A),(B),(D) only (b) (B),(C),(D) only Mode, will no longer be equal. We shall in fact have
(c) (C), (D) only (d) (A) (B) (D) only Mean > Median > Mode when a distribution is
Ans. (b) : The reasons for raising funds via positivity skewed.
securitization are:- • Positive skewness:- A distribution in which more than
half of the area under the curve is to the right side of the
• To accelerate earnings for financial reporting mode, it is said to be a positively skewed distribution. In
purposes. this type of skewness the right tail is longer than the left
• To diversity funding resources. tail. In this case, mean is greather than median and the
• The potential for reducing funding cost. median is greather than the mode and Q3 – M > M – Q1.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 410 YCT
53. Use of Focus Groups and collaboration tools as (C) Housing finance simply refers to providing
a training needs assessment technique has the finance for venture capital
following disadvantages (D) Financial instruments may also be divided
A. Time consuming or organize according to asset class, which depends on
B. Unuseful with complex or controversial issues whether they are debt-based or equity based
that one person may be unable or unwilling to Choose the correct answer from the option
explore given below:
C. Questions cannot be modified to explore (a) (A), (C) and (D) only
unanticipated issues (b) (B) and (D) only
D. Group members provide only information they (c) (C) only
think you want to hear (d) (A) and (C) only
Choose the most appropriate answer from the Ans. (c) : "Housing finance simply refers to providing
option given below: finance for venture capital" is not an approach to the
(a) (A), (B) only (b) (B), (C) only structure of Indian financial system.
(c) (A), (D) only (d) (C), (D) only • "Housing finance" mean financing for
Ans. (c) : Use of focus Groups and collaboration tools purchase/construction/reconstruction/renovation/repairs
as a training needs assessment technique has the of residential dwelling units.
following disadvantages:- which includes:- Loans to individual or group of
• Time consuming for organize. individuals including co-operative societies for
• Group member provide only information they think construction/purchase of new dwelling units.
you want to hear. 56. Which of the following statements is/are
Note:- "Training Needs assessment" (TNA) is the correct regarding application of data mining
method of determining if a training need exists and, if it techniques?
does, what training is required to fill the gap. (A) Predicting future trends based on information
Focus groups is an interactive discussion among the available
people involved in the discussion. (B) Electronic data interchange
54. Principles of management are important and (C) Analysing demographic information about
useful on account of the following reasons: customers
A. To increase managerial efficiency (D) Credit risk analysis
B. To attain social objectives Choose the correct answer from the option
C. To train managers given below:
D. To improve research (a) (B) and (D) only
E. To coordinate material and human resources (b) (A), (B), (C) and (D) only
Choose the most appropriate answer from the (c) (A),(B) and (D) only
option given below: (d) (A), (C) and (D) only
(a) (A), (E) only Ans. (d) : The correct statements regarding application
(b) (B), (D) only of data mining techniques are:-
(c) (B),(C), (D) only • Predicting future trends based on information's
(d) (A),(B),(C),(D),(E) vavailiable.
Ans. (d) : Principles of management are important and • Analysing demographic information about
useful on account of the following reasons:- customers.
- To increase managerial efficiency. • Credit risk analysis.
- To attain social objectives. Note:-
- To train managers. Data mining is a process of extracting and discovering
- To improve research. patterns in large data sets involving methods at the
- To coordinate material and human resources. intersection of machine learning, statistics and data base
Note:- The principles of management are general systems.
guidelines for managerial decision making. These are Data mining techniques are classification, clustering
broad guidelines which are used in understanding Regression, Outer, sequential, patterns, prediction,
behaviour and the decision-making process as a whole. Association Rules.
55. Which of the followings is not an approach to 57. Skimming pricingstrategy delivers results:
the structure of Indian Financial system? A. When the size of the market is large and it is a
(A) A brokerage can be either full service or growing market
discount B. When the product is perceived as enhancing
(B) The financial system is concerned about the customer’s status in society
money, credit and finance, the three terms are C. Whenthe firm uses it as an entry strategy
intimately related yet are some what different D. When the target market associates quality of
from other the products with its price
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 411 YCT
 Choose the most appropriate answer from the 60. Which of the following statement are regarding
options given below: the objectives of Right to Information Act?
(a) (A), (B) only (b) (B), (D) only Indicate the correct code:
(c) (B), (C) only (d) (A), (C), (D) only (A) To operationalise the fundamental right to
Ans. (b) : Skimming pricing strategy delivers results, information right to information
when the product is perceived as enhancing the (B) To set up system and mechanisms that
customer's status in society and when the firm uses it as facilitate people’s easy access to information
an entry strategy. (C) To promote transparency and accountability in
• In skimming pricing strategy, company avails the governance
profit opportunity in the initial stage of marketing by (D) To promote transparency and accountability in
selling the products at a high price in a non-price- governance
sensitive market segment. Choose the correct answer from the options
• The skimming method is usually implemented in the given below:
case of specialty, luxury or innovative products. (a) (B),(C) and (D) only
58. Requirements for effective market (b) (A), (B), (C) and (D) all
segmentation are: (c) (A), (B), and (C) only
A. Accessibility (d) (A), (B) and (D) only
B. Differentiation Ans. (b) : Followings are the statements true regarding
C. Measurable the objectives of Right to Information Act:-
D. Vioble • To operationalise the fundamental right to
E. Intensity in competition information.
Choose the most appropriate answer from the • To set up system and mechanisms that facilitate
option given below: people's easy access to information.
(a) (A), (B) only • To promote transparency and accountability in
(b) (B),(C),(E) only governance.
(c) (A),(C),(D) only • To minimize corruption and inefficiency in public
(d) (A),(C),(D),(E) only offices and ensure people participation in governance
Ans. (d) : Requirements for effective market and decision making.
segmentation are Accessibility, Measurable, viable, Note:- Right to Information Act came into force on 12th
intensity in competition. October 2005
(1) Accessible:- Segments must be traceable and with in 61. Which of the following taxes have been
reach with the help of media. replaced by the GST? Indicate the correct
(2) Measurable:- Size and profile of the segments can code:
be established. A. Central Excise duty
(3) Viable:- The segments are big and profitable enough B. Service tax
59. Environmentalcharacteristics/factors C. Taxes on advertisements
influencing distribution decisions are D. Duties of Excise-Medicinal and toilet
A. Government policy Choose the correct answer from the option
B. State of economy given below:
C. Social activistism (a) (A), (B),(D) only (b) (A), (B) only
D. Technological and infrastructure developments (c) (B), (C), (D) only (d) (C), (D) only
E. Statutory provisions
Ans. (*) : Following are the taxes have been replaced
Choose the most appropriate answer from the by the GST:-
option given below:
(a) (A), (D) only → Central Taxes Replaced by GST
(b) (B),(C),(E) only • Additional duties of excise
(c) (A),(C), (D) only • Central Exise Duty.
(d) (A), (B), (D), (E) only • Excise duty levied under medicinal & Toiletries
Ans. (d) : Environmental characteristics/factors preparation Act.
influencing distribution decisions are Government • Additional duties of Excise levied under Textiles &
policy. State of economy, Technological and Textile products.
infrastructure developments, statutory provisions. • Additional duties of customs (CVD & SAD)
Note: - The environmental factors, affect the decision • Service Tax
of choosing channels of distribution, Here, Environment • Surcharges & Cesses.
in this context means the environment with in the firm, • Central sales tax
the channels of distribution, the customers etc. are
present. The factors are Economic situation in country, → State Level Taxes Replaced By GST
policies which affects business, infrastructure • State VAT/Sales Tax.
developments etc. • Central Sales Tax.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 412 YCT
• Purchase Tax. Ans. (d) : Following are the income generally
• Entertainment Tax chargeable under the head of income from other
• Luxury Tax. sources:-
• Entry Tax. • Income from subletting house property
• Taxes on lottery, betting & gambling. • Director fee
• Surcharges & cesses • Ground rent
• Taxes on advertisements. • Agriculture Income from outside India.
62. On which of the following grounds. The • Insurance commission.
Tribunal may order for the winding-up of a Note:- Income from sale of securities will be chargeable
company or a petition submitted to it, Indicate under the head of income from capital gain.
the correct code 64. Which of the following are included in person
A. Passing of Special resolution for the winding under section 17(1)?
up (A) A Hindu Undivided Family (HUF)
B. Conducting affairs in a fraudulent manner (B) A firm
C. Reductions in membership (C) An individual
D. Inability to pay debts (D) An individual
Choose the correct answer from the option (E) A local authority
given below: (F) An association of persons
(a) (A), (B) and (C) only Choose the most appropriate answer from the
(b) (A),(B) and (D) only option given below:
(c) (A), (B), (C) and (D) only (a) (A),(B),(D),(F) only
(d) (B), (C) and (D) only (b) (C),(D),(E),(F) only
Ans. (c) : On the following grounds, the Tribunal may (c) (B),(D),(E), (F) only
order for the winding-up-of a company or a petition (d) (A),(B),(C),(D) and (F)
submitted to it:-
Ans. (d) : Person under section (17)1 includes:-
• Passing of special resolution for winding up. Note:- According to Income tax Act 1961 person
• Conducting affairs in a fraudulent manner. (Section 2 (31)]
• Reduction in membership. Person includes:-
• Inability to pay debts. • An Individual
• Default in delivering the statutory report. • A Hindu undivided family (HUF):
• If company does not commence its business with in a • A company:
year from its incorporation or suspends its business • A firm:
for a whole year. • A association of person or a body of individuals,
• If company acted against the interests of the whether incorporated or not:
sovereignty and integrity of India. • A Local authority and
• If the company has made a default in filing with • Artificial juridical person.
registrar its balance sheet and profit and loss account
65. The exemption with respect to HRA is based
or annual return for any five consecutive financial upon the following factors?
years. (A) Rent paid
63. Which of the following income is generally (B) Place of Residence
chargeable under the head of income from (C) Salary
other sources?
(D) HRA Received
(A) Income for subletting house property (E) Fair Rent
(B) Director fee (F) Market Rent
(C) Ground Rent Choose the most appropriate answer form the
(D) Agricultural Income from outside India option given below:
(E) Insurance commission (a) (A),(B),(C),(D) only
(F) Income from sale of securities (b) (A),(C),(D), (F) only
Choose the most appropriate answer form the (c) (A),(B),(C),(F) only
option given below: (d) (A),(B),(E),(F) only
(a) (A),(B),(D),(E) only Ans. (a) : The exemption with respect to HRA is based
(b) (B),(C),(D),(E),(F) only upon the following factors;-
(c) (A),(B),(C),(E),(F) only • Rent paid
(d) (A),(B),(C),(D),(E) • Place of Residence.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 413 YCT
• Salary 67. Match List I with List II.
• HRA Received. List – I List – II
House Rent allowance [Section 10 (13A)] metÛeer- I metÛeer- I
(A) Bouns shares (I) Invitatiaon to
existing shares
holders to
purchase
additional new
shares
(B) Demat shares (II) Issue is made to
existing members
66. Match List- I with List II: free of charge
List -I List II (C) Right issue (III) Shares issues by a
(A) Internaitona finance (I) 1944 company to its
corporation (D) Sweat equity (IV) Shares in
(B) International (II) 1967 share electronic form
Development Choose the correct answer from the option
Association given below:
(C) World Intellectural (III) 1956 (a) (A)- (II), (B) – (IV), (C) – (I), (D) – (III)
property organisation (b) (A)- (II), (B) – (I), (C) – (III), (D) – (IV)
(c) (A)- (IV), (B) – (III), (C) – (II), (D) – (I)
(D) International bame for (IV) 1960
(d) (A)- (IV), (B) – (I), (C) – (III), (D) – (III)
reconstruction and
Ans. (d) :
Development
List-I List-II
Choose the correct answer from the options
A. Bonus shares II. Issue is made to existing
given below:
members free of charge.
(a) (A)- (IV), B - (I), (C) - (III), D – (II)
B. Demat shares IV. Shares in electronic
(b) (A)- (I), B - (IV), (C) - (I), D – (III) form.
(c) (A)- (III), B - (II), (C) - (IV), D – (I) C. Right issue I. Invitation to existing
(d) (A)- (III), B - (IV), (C) - (II), D – (I) share holders to
Ans. (d) : purchase additional new
List-I List-II shares.
D. Sweat equity III. Shares issues by a
A. International Finance - 1956 {A sister
share company to its
Corporation (IFC) organisation of the employees/directors at a
world bank and discount for providing
member of world know-how
bank group.} 68. Match List I with List II:
B. International - 1960 {One of the List – I List – II
Development largest and most Objectives of Economists
Association (IDA) effective platforms business firms
for fighting extreme (A) Long Run (I) Marris, Robin
poverty in world's Surviaval
poorest countries.} (B) Sales Revenue (II) Williamson,
C. World Intellectual - 1967 {Promote maximisation D.E.
property organisation world wide (C) Firms’s Growth (III) Rothschild,
(WIPO) protection of both Rate K.W.
industrial property & maximisation
copyrighted (D) Managerial (IV) Baumol, W.J.
materials. utility Function
D. International bank for - 1944 {That is Choose the correct answer from the option
Reconstruction & lending arm of world given below:
Development (IBRD) bank group. It offers (a) (A)- (II), (B) – (III), (C) – (IV), (D) – (I)
loans to middle- (b) (A)- (III), (B) – (IV), (C) – (I), (D) – (II)
income developing (c) (A)- (III), (B) – (IV), (C) – (I), (D) – (II)
countries.} (d) (A)- (II), (B) – (III), (C) – (I), (D) – (IV)
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 414 YCT
 Ans. (c) : 70. Match List I with List II:
List-I List-II List – I List –II
Objectives of business Economists (A) Probability (I)
(b − q) 2
firms distribution σ=
12
A. Long Run survival - Rothschild. K.W.
(B) Binomial (II)
B. Sales Revenue - Baumal W.J. σ = ∑ p(x − µ) 2
distribution
maximisation-
C. firm's Growth Rate - Marris. Robin. (C) Hyper (III) σ = npq
maximisation geometric
distribution
D. Managerial utility - Williamson D.E.
(D) Uniform (IV)
function Maximisation  N  N   N − n 
69. Match List I with List II:
distribution σ = n  1  2   
 N  N   N − 1 
List – I List – II
(Method of Choose the correct answer from the option
(Explanation)
Inoventory given below:
Control) (a) (A)- (II), (B) – (III), (C) – (IV), (D) – (I)
(A) JIT system (I) Divided the items (b) (A)- (II), (B) – (III), (C) – (I), (D) – (IV)
into the categories (c) (A)- (II), (B) – (I), (C) – (III), (D) – (IV)
in the descending (d) (A)- (I), (B) – (II), (C) – (III), (D) – (IV)
order of their Ans. (a):
usuage rate.
List – I List –II
(B) ABC Analysis (II) Divides items into
(A) Probability -
categories in the σ = ∑ p(x − µ) 2
descenting order distribution
their critical use (B) Binomial - σ = npq
(C) FSND (III) Inventory arrive distribution
Analysis to the (C) Hyper geometric -  N  N  N − n 
manufacturing distribution σ = n  1  2   
sites just few  N   N   N −1 
hourse before (D) Uniform -
(b − q) 2
they are put to use distribution σ=
(D) VED Analysis (IV) The items of 12
inventory are 71. Match List I with List II:
classified List-I List –II
according to (Organisati (Features)
value of usage. onal Design)
(A) Learning (I) Flexibility in the
Choose the correct answer from the option organization structure of Lack of
given below: structure
(a) (A)- (I), (B) – (II), (C) – (III), (D) – (IV)
(B) Spaghetti (II) Linking of separate
(b) (A)- (II), (B) – (III), (C) – (IV), (D) – (I) organization parts of the same
(c) (A)- (III), (B) – (IV), (C) – (I), (D) – (II) organisation of
(d) (A)- (IV), (B) – (III), (C) – (II), (D) – (I) networking of
Ans. (c) : separate
List-I List-II organisations to
A. JIT System - Inventory arrive to the accomplish a
manufacturing sites just common goal
few house before they are (D) Fishnet (III) The ability to
put to use. organization cotinually change
B. ABC analysis - The items of inventory structure and
are classified according to internal process to
value of usage. conform to
C. FSND Analysis - Divide the items into the feedback with the
categories in the environment
descending order of their (D) Network (IV) Flexible, adaptable
usage rate structure rearranges itself
D. VED Analysis - Divides items into quickly while
categories in descending retaining its
order of their critical use. inherent strength
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 415 YCT
 Choose the correct answer from the option 73. Match List I with List II
given below: List-I List –II
(a) (A)- (III), (B) – (II), (C) – (IV), (D) – (I) (Advertising (Brand)
(b) (A)- (III), (B) – (I), (C) – (IV), (D) – (II) Agency in
2020)
(c) (A)- (I), (B) – (IV), (C) – (III), (D) – (II)
(A) O&M (Ogilvy (I) Mastercard
(d) (A)- (II), (B) – (I), (C) – (IV), (D) – (III) and Mather)
Ans. (a):
List-I List- II (B) Mc Cann (II) Nestle
Erickson
(A) Learning - The ability to continually (C) Trikaya Grey (III) Cadbury
Organisation change structure and internal
processes to conform to
(D) JWT Hindustan (IV) Proctor and
feedback with the
Thompson Gamble
environment Associates
(B) Spaghetti - Linking of separate parts of Choose the correct answer from the option
Organisation the same organisation or given below:
networking of separate (a) (A)- (III), (B) – (II), (C) – (IV), (D) – (I)
organisations to accomplish a (b) (A)- (III), (B) – (I), (C) – (IV), (D) – (II)
common goal. (c) (A)- (II), (B) – (IV), (C) – (I), (D) – (III)
(d) (A)- (II), (B) – (III), (C) – (I), (D) – (IV)
(C) Fishnet - Flexible, adaptable,
organisation rearranges itself quickly Ans. (b):
while retaining its inherent List-I List-II
strength. (A) O & M (Ogilvy and - Cadbury
Mather)
(D) Network - Flexibility in the structure or
(B) MC Cann Erickson - Marstercard
structure lack of structure.
(C) Trikaya Grey - Proctor & Gamble
72. Match List I with List II: (D) JWT Hindustan - Nestle
List-I List –II Thompson Associates
(A) Hedgers (I) Osaka 74. Match List I with List II:
(B) Financial (II) Increased List-I List –II
derivatives in volatility (A) Actual (I) Delivery of
India Delivery means of
obtaining
(C) Arbitrageurs (III) Commercial possession of
products goods by the
(D) Commodity (IV) Riskless profit sellear to buyer
furture in origin (B) Constructive (II) Physical handing
Delivery over of the
Choose the correct answer from the option possession of the
given below: goods by the
(a) (A)- (I), (B) – (IV), (C) – (II), (D) – (III) seller to the
(b) (A)- (III), (B) – (II), (C) – (IV), (D) – (I) buyer
(c) (A)- (IV), (B) – (III), (C) – (I), (D) – (II) (C) Symbolic (III) Voluntary
Delivery transfer of
(d) (A)- (II), (B) – (I), (C) – (III), (D) – (IV) possession of
Ans. (b): goods from seller
List-I List- II to buyer
(D) Delivery (IV) Acknowledgeme
(A) Hedgers - Commercial producers. nt by a third
(B) financial - Increased volatility person in
derivatives in possession of
India goods to hold
them on behalf
(C) Arbitrageurs - Riskless profit of and at the
(D) Commodity - Osaka disposal of the
future in origin buyers

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 416 YCT
 Choose the correct answer form the options (D) Section 80 E - Deduction in respect of
given below: payment of Interest on
(a) (A)- (IV), (B) – (I), (C) – (III), (D) – (II) loan taken for higher
(b) (A)- (II), (B) – (IV), (C) – (I), (D) – (III) education
(c) (A)- (I), (B) – (III), (C) – (IV), (D) – (II) 76. Arrange the following countries in the
(d) (A)- (III), (B) – (II), (C) – (IV), (D) – (I) ascending order of their contribution to the
Ans. (b): WTO budget 2020:
List-I List-II (A) China
(B) Japan
(A) Actual - Physical handing over of the
Delivery possession of the goods by the (C) Germany
seller to the buyer. (D) United states of America
(B) Constructive - Acknowledgement by a third (E) United kingdom
delivery person in possession of goods Choose the correct answer form the option
to hold them on behalf of and at given below:
the disposal of the buyers. (a) (A),(B),(D),(E) and (C)
(C) Symbolic - Delivery of means of obtaining (b) (D),(A),(B),(E) and (C)
Delivery possession of goods by the (c) (E),(B),(C),(A) and (D)
seller to the buyer. (d) (D),(A),(B),(C) and (E)
(D) Delivery - Voluntary transfer of Ans. (c) : Following are the countries in the ascending
possession of goods from seller order of their contribution to the WTO budget 2020:-
to buyer. • United kingdom (3.785)%
75. Match List I with List II : • Japan (3.955%)
List-I List –II • Germany (7.149%)
(A) Section 80 (I) Deduction i • China (10.3.3%)
EE respect of rent • United States of America (11.691%)
paid Note:- The WTO derives most of the income for its
(B) Section 80 (II) Deduction in annual budget from contributions by its members.
GG respect of certian These are established according to a formula based on
donations for their share of international trade.
scientific 77. The assists of the Partnership firm, including
researches any sums contributed by the partners to make-
(C) Section 80 (III) Deduction in up deficiencies of capital at the time of
GGA respect of intrest dissolution, shall be applied in the following
on loan taken for manner and order.
residential house (A) In paying each partner rateably what is
(D) Section 80 E (IV) Deduction in due to him for advances as distinguished
respect of from capital.
payment of (B) In paying to each partner rateably what is
Interest on loan due to him on account of capital.
taken for Higher (C) In paying the debts of the firm to third
Education parties
Choose the correct answer form the option (D) Dividing among the partners in the
given below: proportion in which they were entitled to
(a) (A)- (II), (B) – (IV), (C) – (I), (D) – (III) share profits.
(b) (A)- (III), (B) – (I), (C) – (II), (D) – (IV) Choose the correct answer form the options
given below:
(c) (A)- (III), (B) – (I), (C) – (IV), (D) – (II)
(a) (C),(A),(B),(D) (b) (C),(B),(A),(D)
(d) (A)- (II), (B) – (IV), (C) – (III), (D) – (I)
(c) (A),(B),(C),(D) (d) (B),(C),(A),(D)
Ans. (b): Ans. (a) : The assets of the partnership firm including
List-I List-II any sums contributed by the partners to make up
(A) Section 80 EE - Deduction in respect of deficiencies of capital at the time of dissolution. Shall
interest on loan taken for be applied in the following manner and order.
residential house • In paying the debts of the firm to third parties.
(B) Section 80 GG - Deduction in respect of • (first secured creditors : then unsecured creditors)
rent paid. • In paying each partner rateably what is due to him
(C) Section 80 GGA - Deduction in respect of for advances as distinguished from capital.
certain donation for • In paying to each partner rateably what is due to him
scientific researches. on account of capital.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 417 YCT
• dividing among the partners in the proportion in Choose the correct answer from the option
which they were entitled to share profit. given below:
(Residue to be divided among partners in PSR. (a) (A),(B),(C),(D),(E) (b) (A),(E),(B),(C),(D)
78. Arrange the following market structures in the (c) (A),(E),(C),(D),(B) (d) (A),(C),(B),(E),(D)
increasing order of the price elasticity of Ans. (d) : Following are the steps of formulating
products: research proposal in a logical sequential order:-
(A) Perfect competition • Defining Research problem
(B) Monopoly • Review of literature
(C) Monopolistic competition • Formulation of Hypothesis
(D) Oligopoly • Research Design
(E) Duopoly • Collection of data
Choose the correct answer form the options Problem definition
given below:
(a) (C),(D),(E),(B),(A) (b) (B),(E),(D),(C),(A)
↓
Review concepts AND THEORIES
(c) (C),(E),(D),(A),(B) (d) (A),(C),(D),(E),(B)
Ans. (b) : Following are the market structures in the ↓
increasing order of the price elasticity of products:- REVIEW PREVIOUS RESEARCH FINDINGS
• Monopoly (Total control over price) ↓
• Duopoly (Significant) Hypothesis generation
• Oligopoly (Some control) ↓
• Monopolistic competition (Some control) Design research (Including sample design)
• Perfect competition (None) ↓
79. The cash flow approach to assessing debt Data collection
capacity involves the following steps; arrange ↓
these steps in a correct sequence:
Analyse Data
(A) Specify the tolerance limit on the probability
of default. ↓
(B) Estimate the probability distribution of INTERPRET AND REPORT
cash flows, taking into account the 81. Arrange the following stages of the process of
projected performance of the firm. organizational change in the sequential
(C) Calculate the fixed charges by way of interest order:
payment and principal repayment associated (A) Detailed consideration of the proposed change
with various level of debt. (B) Collection of detailed information and
(D) Estimate the debt capacity of the firm as the development of alternative approaches in
highest level of debt which is acceptable. relation to the problem or issues
Choose the correct answer from the option (C) Evaluation of various alternatives and framing
given below: a proposal
(a) (D),(C),(A),(B) (b) (A),(B),(C),(D) (D) Vocalization of the need to change
(c) (B),(C),(D),(A) (d) (D),(A),(C),(B) (E) Search for the main cause underlying the
Ans. (b) : The cash flow approach to assessing debt symptoms encountered
capacity involves the following steps:- Choose the correct answer from the option
• Specify the tolerance limit on the probability of given below:
default. (a) (D),(E),(B),(A),(C) (b) (D),(A),(E),(B),(C)
• Estimate the probability distribution of cash flows, (c) (A),(E),(D),(C),(B) (d) (B),(E),(D),(A),(C)
taking into account the projected performance of the Ans. (b) : Following are the stages of the process of
firm. organisational change in the sequential order:-
• Calculate the fixed charges by way of interest • Vocalization of the need to change
payment and principal repayment associated • Detailed consideration of the proposed change
with various levels of debts. • Search for the main cause underlying the symptoms
• Estimate the debt capacity of the firm as the highest encountered
level of debt which is acceptable. • Collection of detailed information and development
80. Arrange the following steps of formulating of alternative approaches in relation to the problem
research proposal in a logical sequential order. or issues.
(A) Defining Research problem • Evaluation of various alternatives and framing a
(B) Formulation of Hypothesis proposal.
(C) Review of literature Note:- Organizational change is the process by which
(D) Collection of data organization move from their present state to some
(E) Research design desired future state to increase effectiveness.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 418 YCT
82. Arrange the following steps, in a logical 84. Arrange the following for the grant of patent in
sequence of debt recovery by financial a proper sequence:
institutions through Debt Recovery Tribunals (A) The true and first owner shall apply in from I
(DRTs)? and legal representative of true owner shall
(A) Restrain him from dealing with/disposing of apply in from II
the concerned assets/properties pending at the
(B) A complete specification shall be filled with fee
hearing of the application.
of 50/- within 12 months from the date of filing
(B) Direct him to disclose particulars of properties
other than those specified by the applicant of application
bank. (C) The first inventor of the work who claims to be
(C) Show cause within 30 days as to why the relief true and first owner or his legal representative
should not be granted to the bank. (D) For each invention separate application for a
Choose the correct answer the option given patent shall be made
below. Choose the correct answer form he option
(a) (B),(A),(C) (b) (A),(B),(C) given below
(c) (B),(C),(A) (d) (C),(B),(A) (a) (A),(B),(C),(D) (b) (C),(D),(A),(B)
Ans. (d) : following are the steps in logical sequence of (c) (B),(A),(D),(C) (d) (B),(D),(C),(A)
debt recovery by financial institutions through Debt Ans. (b) : following are the procedure for the grant of
Recovery Tribunals (DRTs):- patent in a propr sequence:-
• Show cause with in 30 days as to why the relief
• The first inventor of the work who claims to be true
should not be granted to the bank.
and first owner or his legal representative.
• Direct him (Defendant) to disclose particulars of
properties other than those specified by the applicant • For each invention seperate application for a patent
bank. shall be made.
• Restrain him (Defendant) from dealing with • The true and first owner shall apply in form I and
/disposing of the concerned assets/ properties legal representative of true owner shall apply in form
pending at the hearing of the application. II.
Note:- [The steps breifly explained in The recovery of • A complete specification shall be filled with a fee of
debts dueto banks and financial institutions Act 1993.] `50/- with in 12 months from from the date of filing
83. Arrange the following steps of market of application.
feasibility study in the sequential order: Note:- A patent is an exclusive right granted for an
(A) Based on the cost and anticipated sales invention which is a product or a process that provides,
revenue, calculating the break-even price and in general a new way of doing something, or offer a
the sales volume. new technical solution to a problem.
(B) Forecasting sales, based on demand estimation The patents Act 1970 is the legislation that till date
and competitive analysis.
governs patents in India.
(C) Estimation of demand in the target market, of
different price levels. 85. Sequence the steps for computing depreciation
(D) Estimating the cost of serving the market in income from Business and Business and
segment. Profession:
Choose the correct answer from the option (A) The written down value of each block as on the
given below: last day of previous year
(a) (B),(C),(D),(A) (b) (C),(B),(D),(A) (B) Find the value of each block at the beginning of
(c) (B),(D),(A),(C) (d) (C),(B),(A),(D) each year
Ans. (b) : Following are the steps of market feasibility (C) The money received along with scrap value, if
study in the sequential order:- any in respect of the same blocks, which are
• Extimation of demand in the target market of sold/discarded during the year
different price levels. (D) Assets required during the year in the
• Forecasting sales based on demand estimation and respective blocks to which the new assets
competitive analysis. belong
• Extimatiing the cost of serving the market segment Choose the correct from the option given
• Based on the cost and anticipated sales revenue below:
calculating the break-even price and sales volume. (a) (A),(B),(C),(D) (b) (B),(D),(C),(A)
Note:- Market feasibility study is a study that identify (c) (A),(B),(D),(C) (d) (D),(B),(C),(A)
the success of a product in a particular market. It helps
to identify the potential markets, competition, potential Ans. (b) : The steps for computing depreciation in
development in the market, and market analysis to income from business and profession are:-
evaluate the business idea or new product development • Find the value of each block at the beginning of each
idea. year.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 419 YCT
• Assets required during the year in the respective Statement II : Oligopolistic firms do better by
blocks to which the new assets belong. cooperating than following its dominant
• The money received along with scrap value. If any in strategy.
respect of the same blocks which are sold/discarded In the light of the above statements, choose the
during the year. most appropriate answer from the options
given
Written Down value (WDV) of Block of Assets.
(a) Both Statement I and Statement II are correct
1. W.D.V. of the block of asets on 1 April (b) Both Statement I and Statement II are
of the previous year. incorrect
2. Add(+) Actual cost of assets acquired (c) Statement I is correct but statement II is
during the previous year incorrect
3. Total (1) + (2) (d) Statement I is incorrect but Statement II is
4. Less (–) Money received inrespect of correct
any asset falling with in the block Ans. (a) : Both statement I and Statement II are corect
which is sold, discarded, demolished or (Basic conceptual question)
destroyed during that previous year 88. Given below are two statements. One is labelled
togather with scrap value. However, as Assertion A and the other is labelled as
such amount cannot exced the amount Reason R:
in (3) Assertion A : Mean deviation is about 80% of
5. W.D.V. at the end of the year (on Standard Deviation.
which depreciation is allowable) Reason R : The quartile deviation is about 2/3
[(3).(4)] of the Standard Deviation.
6. Depreciation at the prescribed rate In the light of the above statements, choose the
(Rate of Depreciation × WDV arrived correct answer from the option given below:
at in (5) above) (a) Both A and R are true and R is the correct
explanation of A
7. WDV of the block of assets as on Ist
(b) Both A and R are true and R is NOT the
april of the next year [(5) – (6)]
correct expiation of A
86. Given below are two statements. One is labelled (c) A is true but R is false
as Assertion A and the other is labelled as (d) A is false but R is true
Reason R.
Ans. (a) : Both a and R are true & R is not the correct
Assertion A: Foreign investment is playing and explaintation of A
increasing role in economic development and
(Basic conceptual question)
contributes to a significant share of the
domestic investment, employment generation 89. Given below are two statements:
and exports. Statement I : Capital market plays an
Reason R: Substantial increase in the important role in mobilizing resources and
magnitude of capital inflows have remarkably diverting them in productive channels.
improved the balance of payment and foreign Statement II: Capital market is a market
exchange reserve position. where buyers and sellers engage in trade of
financial securities like bonds, stocks, etc.
In the light of the above statements, choose the
most appropriate answer from the option given In the light of the above statements. choose the
correct answer from the option given below:
below:
(a) Both Statement I and Statement II are true
(a) Both A and R are correct and R is the correct
(b) Both Statement I and Statement Ii are false
explanation of A
(c) Statement I is true but Statement II is false
(b) Both A and R are correct and R is NOT the
(d) Statement I is false but statement II is true
correct explanation of A
(c) A is correct but R is not correct Ans. (a) : Both Statement I and Statement II are true
(Basic conceptual question)
(d) A is not correct but R is correct
90. Given below are two statement: One is labelled
Ans. (b) : Both A and B are correct and R is not the
as Assertion A and the other is labelled as
correct explanation of A. Reason R.
(Basic conceptual questions) Assertion A : A, the owner of a ship by
87. Given below are two statements: fraudulently representing her to be seaworthy
Statements I : If firms are disproportionately induces B, on underwriter to insure the ship.
powerful, the market leader maker the first Reason R : B can obtain cancellation of the
move and captures two-thirds of the market policy, as it is a fraud on account of
share, while the follower firm gets only a third fraudulent misrepresentation under the
of the market share. contract act.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 420 YCT
 In the light of the above statements, choose the 92. The author opines in the paragraph that which
correct answer from the option given below: of the followiong has helped to acquire assets in
(a) Both A and R are true and R is the correct overseas markets for expansion.
explanation of A (a) Low interest rates and increasing market
(b) Both A and R are true and R is NOT correct values
explanation of A (b) low per capita incomes and high resources
(c) A is true but R is false (c) Attractie markets and overseas valuations
(d) Governmental support and incentivization to
(d) A is false but R is true
promote cross border trade
Ans. (a) : Both A and R are true and R is the correct Ans. (a) : Low interest rates and increasing market
explaination of A. values has helped to acquire assets in overseas markets
91. Read the passage and answer the question for expantion.
Recuperating of the impact of Covid-19, India 93. Annual increase/decrease in India’s annual
attained 13% growth boosted by investements FDI inflows and Global flows, respectively are :
in the digitial sector. Infrastructure and energy (a) USD 27 billion and USD 163 billion
deals also proppped up M&A deals in India. As (b) +13% and –42%
a result India could achieve 13% growth in (c) –4% and +11%
Foreign Direct Investement (FDI) in 2020 (d) Data not available
Amidst global collapse, China is the only other Ans. (b) : India achieved 13% growth in foreign direct
country that has shown remarkably high FDI investmen (FDI) in 2020.
growth. A per 'Investment trends monitor' Report issued by
An ‘investement trends monitor’ issued by the UNCTAD, global FDI collapsed in 2020 by 42%
United Nations Conference on Trade and 94. India and Turkey are attracting record
Development (UNCTAD) pointed out, global numbers of deals in
FDI collapsed in 2020 by 42% to an estimated (a) Overall production
USD 859 billion from USD 1.5 trillion in 2019. (b) IT consulting and digital sectors
China and India were two major outliners in a (c) Pharmaceutical and allied sectors
gloomy year for foreign direct investment. (d) GDP and Per Capita Income
India achieved positive growth (13%), boosted
Ans. (b) : India & turkey are attracting record number
by investments in the digital sector where the of deals in It consulting and digital sectors.
investments continued, particularly through
acquisition. Cross border M&A grew 83% to 95. Which statements is not true about China?
$27 billion. Infrastructure and energy deals (a) FDI inflows increase by 4%
also propped up M&A deals in India. India and (b) International M&A increase by 54%
Turkey are attracting good numbers of deals in (c) Highest FDI in ICT and Pharmaceutical
IT consulting and digital sectors, including e - sector
commerce platforms, data processing services (d) USD 1.5 Trillion sized economy
and digital payments. In terms of individual Ans. (d) : USD 1.5 Trillion Sized economy is not true
nations in ICT and pharmaceutical sector, about china according to the passage, global FDI
China was the world’s largest FDI recipient, collabpsed in 2020 by 42% to an estimated USD 859
with flows to the Asian giant rising by 4% to billion from USD 1.5 trillion in 2019.
$163 billion. High-tech industries saw an 96. Read the following passage and answer
increase of 11% in 2020, and cross-border question in the most appropriate manner.
M&As rose by 54%. Management theories help organizations to
“Although their investment activity slowed focus, communicate, and evolve. Using
management theory in the workplace allows
down initially in 2020, they are now set to take
leadership to focus on their goals. When a
advanatge of low interest rates and increasing management style or theory is implemented, it
market values to acquire assets in overseas automatically streamlines the top priorities for
markets for expansion, as well as rivals and the organization. Management theory also
smaller innovative companies affected by the allows us to better communicate with people we
crisis. work with which in turn allows us to work
Which countryoutlined in the world in terms of more efficiently. By understanding
FDI inflows in ICT and pharmaceutical sector? management theory, basic assumptions about
(a) India (b) USA management style or theory is implemented, it
(c) Israel (d) China automatically streamlines the top priorities for
the organization. Management theory also
Ans. (d) : According to the passage, china is the allows us to better communicate with people we
country that outlined in the world in terms of FDI work with which in turn allows us to work
inflows in ICT and pharmaceuticals. more efficiently. By understanding
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 421 YCT
 management theory, basic assumptions about Ans. (d) : Management theories helps leadeership to
management styles and goals can be assumed focuus on their main goal.
and can save time during daily interactions and
meetings within an organization. 98. In the paragraph, what is meant by “There is
Theories can only reach so far, and no such thing as a non-size fits all managmenet
management theories are no exception. There theory”
is no such thing as a one-size-fits-all (A) Management theories keeps on changing
management theory. What may work for one (B) There are different theories for different
organization may not be relevant for another. situations
Therefore, when one theory does not fit a
particular situation, it is important to explore (C) A business can’t grow without
the option of developing a new theory that management theories
would lead in a new, more applicable direction. (D) Management theories are non-scientific
While some theories can stand the test of time, Choose the correct answer from the options
other theories may grow to be irrelevant and given below :
new theories will develop in their place.
(a) (A), (B), (C) only (b) (B), (C), (D) only
From the late 1700s through the early 1900s,
(c) (C), (D) only (d) (A), (B) only
the Industrial Revolution brought
Ans. (d) : In the paragraph, "There is no such thing as a
extraordinary change to the workplace and
non size fits all management theory" means that
forever transformed the way companies
management theories keeps on changing and There are
operate. The Industrial Revolution brought
different theories for different situations.
better and faster technology allowing
99. Given below are two statements : One is
companies to perform more efficiently than
labelled as Assertion A and the other is labelled
ever before and gave them the ability to
as Reason R :
dramatically inrease their output. In order to
Assertion A : The industrial revolution brought
meet demand, company leadership had to better and faster technology allowing
ensure their employees were productive. companies to perform more efficiently than
Given below are two statements : ever before and gave them ability to
Statement I : Management is the ultimate tool dramatically increase their output.
for achieving business goals. Reason R : In order to meet demand, company
Statement II : It was management only which leadership had to ensure their employees were
initiated industrial revolution. productive.
In the light of the above statements, choose the In the light of the above statements, choose the
correct answer from the options given below : most appropriate answer from the options
given below :
(a) Both Statement I and Statement II are true
(a) Both A and R are correct and R is the correct
(b) Both Statement I and Statement II are false explanation of A
(c) Statement I is true but Statement II is false (b) Both A and R are correct and R is NOT the
(d) Statement I is flase but Statement Ii is true correct explanation of A
Ans. (c) : Statement I is true but statemnt II is false. (c) A is correct but R is not correct
Due to new technology, which allows compainies to (d) A is not correct but R is correct
perform more effciently and incrase their, output has Ans. (b) : Both a and are correct and R is not the correct
initiated revolution. explanation of A.
97. What helps leadership to focus on their main 100. Which among the following is NOT a correct
goal ? statement ?
(A) Management theories (a) Industrial revolution was a turning point in
(B) Organizational structure Business operations
(b) Management theories are ever changing
(C) Effective HR policies
(c) Good management makes communication
(D) Government Directives
flow better
(C) Government Directives (d) Management always moves in a straight line
Choose the correct answer from the options Ans. (d) : "Management always moves in a straight
given below : line" is Not a correct statement. (Management is
(a) (A), (B), (C) only (b) (B), (C), (D) only dynamic process because it keeps on changing with the
(c) (A), (B) only (d) (A) only changes that takes places in environment.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 422 YCT
 NTA UGC NET/JRF Exam, Dec. 2020/June 2021
COMMERCE
Solved Paper
Exam Date: 26.11.2021 Shift-I

1. Given below are two statements, one is labelled Ans. (b) : Match the List-I & List-II -
as Assertion A and the other is labelled as List-I (Nature of List-II (Income Elasticities
Reason R
commodities of Demand)
Assertion A: Quick ratio is a more penetrating
test of liquidity than the current ratio, yet a A. Ind-AS : 1 presentation of financial
high quick ratio does not necessarily imply statements
sound liquidity. B. Ind-AS : 29 Financial reporting in
Reason R: A company with a high value of hyperinflationary Economics
quick ratio can suffer from a shortage of funds C. Ind-As : 37 provisions, contingent
if it has slow-paying, doubtful and long liabilities and contingent
duration outstanding debtors Assets
In light of the above statements, choose the D. Ind-AS : 110 Consolidated financial
most appropriate answer from the options statement
given below 3. Arrange the following steps in the process of
(a) A is correct but R is not correct hypothesis testing in proper sequence:
(b) A is not correct but R is correct A. Select the level of significance
(c) Both A and R are correct and R is the correct B. Setup null and alternative hypothesis
explanation of A C. Establish the decision rule
(d) Both A and R are correct but R is NOT the D. Performance computations
correct explanation of A E. Select test statistics
ns. (c) : Both A and R are correct and R is the correct F. Draw conclusion
explanation of A. Choose the correct answer from the options
Key Points : given below
Quick Ratio is a much more conseruatie measure of (a) A, B, C, D, E, F (b) A, B, E, D, C, F
short-term liquidity than the current Ratio. (c) B, A, C, D, E, F (d) B, A,E, C, D, F
Quick Assets Ans. (d) : following are the steps in the process of
Quick Ratio or Acid test Ratio = hypothesis testing in proper sequence :
Current Liabilities
Setup null and alternative hypothesis
Quick Assets = Current Assets – Inventories –
Prepaid – Expenses Select the level of significance
Select test statistics
2. Match List-I with List-II
Establish the decision rule
List-I List-II performance computations
A. Ind - AS: 1 I. Provisions, Contingent Draw conclusion
Liabilities and
Contingent Assets ⇒ Hypothesis Testing precedure
B. Ind- AS: 29 II. Consolidated Financial Set the Null hypothesis & alternate hypothesis
Statements ↓
C. Ind-AS: 37 III. Presentation of Set the criteria for the decision i.e. level of significanse
Financial Statements ↓
D. Ind-AS: 110 IV. Financial reporting in Collect the data (Select your sample)
Hyperinflationary ↓
Economies Decide which test is to be performed
Choose the correct answer from the options ↓
given below Compute the test statistic/observed value
A B C D ↓
(a) III I II IV Compared the critical value with the test statistic value
(b) III IV I II ↓
(c) IV III I II Make a decision to either reject or not reject the null
(d) IV III II I hypothesis
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 423 YCT
4. Fill in the blanks Segment profitability and Segment positioning
For a holding company, all pre-acquisition Segment "Acid- Test
profits/losses of the subsidiary company are Notes : Market Segmentation is a marketing concept
____________, while all post-acquisition which divides the complete market set up into smaller
profits/losses of the subsidiary company are subsets comprising of consumers with a similar taste,
________.
demand and preference. According to philip Kotler,
(a) capital profits, capital losses
"Market segmentation is the sub dividing of market into
(b) capital profits/losses, revenue profit/losses homogeneous sub section of customer, where any sub-
(c) revenue profits, revenue losses section may conceivably be selected as a market target
(d) revenue profits/losses, capital profits/losses to be reached with a distant marketing mix."
Ans. (b) : Capital profit/losses, revenue profit/losses 7. 'A', 'B' and 'C' are partners sharing profits in
For a holding company, allare ecquisition profits
losses of the subsidiary company are capital 1th
the ratio of 3 : 2 : 1. 'D' is admitted for
profits/losses of the subsidiary company are capital 6
profit/losses. While all post-acquisition profit/losses of share and 'C' should retain his original share.
the subsidiary company are reveue profit/losses. The sacrificing ratio of A and B will be:
Note : Pre-acquisition profit is the profit earned by the (a) 2:1 (b) 1:2
company before it is being acquired. It is treated as
(c) 3:2 (d) 2:3
capital profit and not revenue profit & is not available
for distribution of divided. Ans. (c) : Calculation of new profit sharing ratio :-
5. Which one of the following statements are 1 1
D’s share = , C’s share =
TRUE about the contract of Bailment? 6 6
(a) A contract of Bailment does not result when a 1 1 4
person leaves some goods with his friend for Remaining share for A and B = 1 –  +  =
being looked after 6 6 6
(b) Bailee has a right of the general lien This will be divided between A and B in their old ratio
(c) Hiring of bank locker is a contract of =3:2
Bailment 3 4 12
Hence, the new share of A = × =
(d) Money deposited in fixed deposit with a bank 5 6 30
is a contract of Bailment 2 4 8
Ans. (c) : Hiring of bank locker is a contract of New share of B = × =
Bailment. 5 6 30
Key points : 12 8 1 1
New Ratio of A, B, C and D = : : : =12:8:5:5
Section 148 of Indian Contract Act, 1872 30 30 6 6
A bailment is the delivery of goods by one person to Calculation of Sacrificing Ratio =
another for some purpose, upon a contract that they 3 12 3
shall, when the purpose is accomplished, be returned or Sacrifice by A = – =
6 30 30
otherwise disposed of according to the directions of the
person delivering them. 2 8 2
Sacrifice by B = – =
The person delivering the goods is called the 'baitor'. 6 30 30
The person to whom they are delivered is called the Sacrifice Ratio = A & B = 3 : 2
bailee." 8. If each value in a given set is increased by K, it
6. Arrange the steps of market segmentation will:
process in the proper sequence (a) Increase the Pearson's coefficient of skewness
A. Segment "Acid Test" value
B. Segment Attractiveness (b) No change in Pearson's coefficient of
C. Need Based Segmentation skewness value
D.Segment Profitability and Segment (c) No change in Bowley's coefficient of
Positioning skewness value
E. Segment Identification (d) Reduce the value of Pearson's coefficient of
Choose the correct answer from the options skewness
given below
(a) A, B, C, E, D (b) A, E, C, D, B Ans. (b) : If each value in a given group is increased by
(c) C, E, B, D, A (d) E, C, D, B, A a rate of K, then there will be no change in the Pearson's
coefficient of heterogeneity.
Ans. (c) : Following are the steps of market
segmentation process in the proper sequence. Karl Pearson’s coefficient of Skewness =
Need based Segmentation Mean – Mode
J=
Segment Identification S.D.
Segment Attractiveness Hence, S.D. = Standard Deviation

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 424 YCT
9. The technique of marginal costing is based Ans. (d) : Following are the steps in theprocedure of e-
upon which of the following assumptions: filling an Income tax return :
A. Fixed cost will tend to remain constant or Register
unchanged for the entire volume of Logon
production Downloading utility andpreparing the return
B. Variable cost remains constant per unit of e-filling
output irrespective of the level of output verification
C. There will not be any change in pricing Note : E-filing is the short form of electronic filling of
policy due to change in volume, income taxes. E-filling is when you electronically file
competition, etc. your income tax return online for a particular year.
D. Operating efficiency of the firm may 12. Given below are two statements:
increase or decrease Statement l: The aim of marketing is to make
Choose the correct answer from the options selling superfluous
given below: Statement ll: Marketing should result in a
(a) A and B only (b) A, B and D only customer who is ready to buy
(c) A, B, and C only (d) A, B, C and D In light of the above statements, choose the
most appropriate answer from the options
Ans. (c) : The technique of marginnal costing is based given below
upon the following assumptions : (a) Both Statement l and Statement ll are correct
Fixed cost will tend to remain constant or unchanged (b) Both Statement l and Statement ll are
for the entire volume oof production. incorrect
Variable cost remains constant per unit of output (c) Statement l is correct but Statement ll is
irrespective of the level of output. incorrect
There will not be any change in pricing policy due to (d) Statement l is incorrect but Statement ll is
change in volume, competion etc. correct
All elements of cost-production, admiistration and Ans. (a) : Both statement I and statement II are correct
selling and distribution can be segregated into fixed and Key points :
variable components. According to peter Drucker, "The aim of marketing is
The volume of production or output is the only to make selling uncessary".
factors which influence the cost. The aim of marketing is to know and understood the
customer so well that the product or service fits him and
10. Fill in the blanks sells itself-Idcally, marketing should result in a
The collapse of Eastern Europe in __________ customer who is ready to buy.
and USSR in _________ lead to emergence of 13. What is the sustainable growth rate of the
the transitory economies. company that enjoys return on equity = 30
(a) 1980, 1987 (b) 1988, 1995 percent and a dividend payout ratio of 40
(c) 1989, 1991 (d) 1997, 1991 percent?
Ans. (c) : The collapse of Eastern Europe in 1989 and (a) 12 per cent (b) 18 per cent
USSR in 1991 lead to emergence of the transitory (c) 30 per cent (d) 40 per cent
economies. Ans. (b) : Return of Investment = 30%
A transition economy is an economy whichis Dividend Payout Ratio = 40%
changing from a centrally planned economy to a market Growth Rate = Return on Investment × (1 – D)
economy. Transition economies undergo a set of = 30 × (1 – 0.40)
structural transformations intended to develop market- = 30 × 0.60 = 18%
based institutions. These include economic 14. The mode of joint venturing in international
liberalization, where prices are set by market forces business that allows a company to conduct
rather than by a central planning organisation removal business in another country whose laws
of trade barriers, push to privatizc state-owned discourage foreign ownership is known as:
enterprises etc. (a) Contract manufacturing
11. Arrange in sequence the steps in the procedure (b) International Franchising
of e-filing of an Income Tax Return (c) Joint ownership
A. Login (d) Licensing
B. Register Ans. (d) : Key points :
C. Verification The mode of joint venturing in international business
D. e-filing that allows a company to conduct business in another
E. Downloading utility and preparing the return country whose lows discuorage foreign ownership is
known as 'Licensing'.
Choose the correct answer from the options Under International Licensing, a firm in one country
given below permits a firm in another country to use its inteuctual
(a) A, B, C, D, E (b) A, B, C, E, D property (potents, trade marks etc). For a predetermined
(c) A, B, E, C, D (d) B, A, E, D, C fee.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 425 YCT
15. An economy grows at 5%, 12%, and 7% over Note : Indian GAAP means generally accepted
the last three years. The average annual accounting principles applicable in India, as
increase over this period would be: promuglated by the Indian Institute of chartered
(a) 8% or less (b) At least 8% accountants, companies Act 1956 or such other body or
(c) Equal to 8% (d) Less than 8% perso havig a right under applicable laws to tissue such
accounting standards and other authoritative
Ans. (d) : In the above question an economy grows at pronuncement.
the rate of 5%, 12% and 17% in the last 3 years. Annual 18. A certain bivariate data byx and bxy have been
growth during the period = calculated which is equal to 2.4 and 0.4,
Average Annual Growth Rate respectively. If the value of the x series are all
GR A + GR B + .........GR n multiplied by 5 and all values of y series are
= divided by 2, how would it affect the value of
N
the two coefficients?
5 + 12 + 17
= (a) Both the coefficients get multiplied so byx =
3 6.0 and bxy = 4.0
24 (b) Both the coefficients remains unchanged
= = 8%
3 (c) The coefficients are revised by byx = 0.24
Note : uses for the Geometric mean : and bxy = 4.0
Anytime, when we are trying to calculate overage rates (d) The coefficients are revised by byx = 24 and
of growth where growth is determined by multiplication bxy = 0.04
not addition, we need the geometric mean. Ans. (c) : The coefficients are revised by byx =024,
bxy= 4.0
16. An ITR-1 can be used by an individual having
→Here, byx= 2.4, bxy = 0.4
an income from
A. One house property ( x − x ) = bxy ( y − y )
B. Pension
C. Intrest on Fixed Deposits in Banks x − x × 5  x series are multiplied by 0.5 
1 
bxy = and valueof y series
D. Winnings from lottery y − y ×  are divided by 2 
Choose the correct answer from the options 2
given below bxy = 4.0
(a) A, B and C only (b) A, B and D only 1
y − y×  x series are multiplied 
(c) A, C and D only (d) B, C and D only 2 ........... by x and value of yseries 
byx =  
Ans. (a) : An ITR-1 can be used by an individual x − x ×5 and divided by 2 
nawing an income from one house properly, pension,
1
intrest on fixed deposits in banks. byx = 2.4 ×
Note : ITR-1 For Individuals being a resident (other 10
than not ordinarily resident) having total income upto byx = 0.24
250 lakhs, howing Income from salaries, one house 19. Match List-I with List-II relating to The Sale of
property, other sources, (Interest etc) and agriculture Goods Act
Income upto Rs. 5,000
List-I List-II
Note : Nof for an Individual who is either director in a
company on has invested in unlisted equity shares. A. Actionable I. Goods to be
claim manufactured after
17. The sources of the Indian GAAP (IGAAP) the making of the
include: contract
A. Indian Companies Act, 2013 B. Appropriation II. Goods owned by the
B. Notifications issued by Ministry of Finance of goods seller at the time of
C. Accounting standards the making of the
D. ICAI's pronouncements contract of sale
Choose the correct answer from the options C. Existing goods III. Separating the goods
given below: sold from other goods
so as to determine
(a) A and C only (b) A and C only
and identify the
(c) A, C, and D only (d) B, C, and D only actual goods to be
Ans. (c) : The source of the Indian GAAP (IGAAP) delivered
includes : D. Future goods IV. Recovered only by
Indian Companies Act 2013 means of a suit or an
Accounting standards action in a court of
ICAL1s pronuncements law

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 426 YCT
 Choose the correct answer from the options (a) Black marketing
given below (b) Commodity glut
A B C D (c) Increased consumption
(a) I II III IV (d) Price manipulations
(b) II IV I III Ans. (a) : black marketing
(c) III I IV II A price ceiling below the equilibrium price often
(d) IV III II I leads to a shortage of commodity and black marketing.
Ans. (d) : Match the list-I & List-II Key points :
List-I List-II When a price ceiling is set below the equilibrium
price, quality demanded will exceed quantity supplied,
A. Actionable claim Recovered only by means of and excess demond or shortage will result.
a suit or an action in a court
The shortage of the commodity and black marketing
of low
economy drives out tegitimate industries that can't
B. Appropriation of Separating the goods sold compete with the lower costs of illigal operations.
goods from other goods so as to Someb black market players dediberately create
determine and identify the shortages in legal goods to force people to purchase
actual goods to be delivered from them.
C. Existing goods Goods owned by the seller 22. Match List-I with List-II
at the time of the making of
List-I List-II
the contract of sale.
A. Dispersion I. Involving
D. Future goods Goods to be manufactured relationship between
after the making of the the median and
contract
quartile
20. Which one of the following is the most suitable
B. Karl Pearson's II. Based on the
coping mechanism if 'fear of overload' is the measures of relationship between
source of resistance to change?
skewness the averages
(a) Participation and involvement
(b) Role clarity and definition C. Bowley's III. Using percentile
measures of
(c) Role redefinition and re-orientation
skewness
(d) Support of resources
D. Kelly's measure IV. Amount of variation
Ans. (b) : Key points : of skewness in given data
Resistance to change is a natural human response.
Choose the correct answer from the options
Resistance and change go together. The most-suitable
given below
coping mechanism if 'fear of overload' is the source of
resistance to change is Role clarity and definition. A B C D
(a) I II III IV
Source of Resistance Coping Mechanisms
(b) IV I II III
(i) perceived participation in diagnosis (c) IV II I III
peripherality of
(d) IV III II I
change
Ans. (c) : Match the list-I & List-II
(ii) perception of participation and
imposition involvement List-I List-II
(iii) Indifference of Active support from the A. Dispersion Amount of variation in
the top top given data
management B. Karl pearson's based on the relationship
(iv) Fear of large phasing of change measures of skewness between the averages
scale disturbance C. Bowley's measures of Involving relationship
(v) Fear of phasing of change skewness between tye median and
inadequate quastile
resource D. Kelly's measure of Using percentile
(vi) fear of Support of resources skewness
obsolescence Note : This topic is extensively discussed by sigmund
(vii) fear of Development of skills freud in his psychoanalytic theories.
obsolescence 23. Arrange the following economic regions in
(viii) Fear of loss of Role of redefinition and increasing order of FDI inflows, as per the
power reorientation UNCTAD Report, 2020?
21. A price ceiling below the equilibrium price A. Developing economies
often leads to a shortage of the commodity and B. Transition economies
possibly C. North America
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 427 YCT
 D. Developed economies 26. Which one of the following is NOT true
E. Europe regarding input tax credit to avoid cascading
Choose the correct answer from the options effect?
given below (a) Input Tax credit of CGST can be utilised for
(a) A, B, C, E, D (b) B, A, C, E, D payment of CGST first and balance for
(c) B, A, D, E, C (d) E, B, D, C, A payment of IGST on outward supply
Ans. (d) : Following are the economic regions in (b) Input Tax credit of SGST/UTGST can be
increasing order of FDI inflows, as per the UNCTAD utilised for payment of CGST
report, 2020 :
(c) Input Tax credit of UTGST can be utilised for
Europe
payment of UTGST first and balance for
Transition economies
payment of IGST on outward supply
Developed economies
(d) Input Tax credits of SGST can be utilised for
North America
payment of SGST first and balance for
Developing economies
payment of IGST on outward supply
24. Which one of the following generations is more
pragmatic and individualistic? Ans. (b) : Input Tax Credit of SGST/UTGST can be
(a) Baby Boomers (b) Gen X utilized for payment of CGST is not true regarding
(c) Gen Y (d) Silent generation input tax credit to avoid cascading effect.
Ans. (b) : Gen X is more pragmatic & individualistic Note : Cross-Utilization of ITC : IGST Credit can be
Key Points : use for payment of all taxes. CGST credit can be used
Generation x (born between 1965 and 1980) currently only for paying CGST or IGST, SGST Credit can be
has 51 million members. used only for paying SGST, ITC of CGST cannot be
Most members of generation X are the children of the used for payment of SGST/UTGST and vice versa.
silent Generation and early boomers. Credit of To be utilized May be utilized
Gen Xers are autonomous & Individualistic. They first for further for
learned to live and rely on themselves after being left payment of payment of
alone for long periods of time due to single parenting or
CGST CGST IGST
being latch key kids where both parents work. Hence,
they are efficient alone and are comfortable working SGST/UTGST SGST/UTGST IGST
solo. IGST IGST CGST, then
Pragmatists focus on how to get things done as Gen SGST/UTGST
Xers, as children, received little or no supervision from
27. Match List-I with List-II
then parents, they developed skills to get things done
individually. List-I List-II
25. The functions of lower management are: Hedging Concepts Description
A. Executing plans in accordance with the A. European I. Option contract
policies and directives of the top option exercised on any date
management up to maturity
B. Maintaining discipline among the workers
B. Option II. When the immediate
C. Selecting suitable operative and
premium exercise of an option
supervisory personnel
yields positive value
D. Providing training to the workers
to its holder
E. Maintaining good human relations
Choose the correct answer from the options C. In-money III. Option contract
given below: option exercised only on the
(a) A and B only (b) A, B and C only maturity date
(c) B, D and E only (d) C and D only D. American IV. It is paid by the
Ans. (c) : The function of lower management are : option buyer of the options
Maintaining discipline among the workers. upfront to the option
providing training to the workers seller
Maintaining good human relations. Choose the correct answer from the options
Lower management of operating managmen is the given below
lowest level of managment. The managers at this level A B C D
are in direct contant with the operative employees. They
are more concerned with day to day direction and (a) I II III IV
control function as compared to planning and (b) I II IV III
organizing functions of the management. They directly (c) I IV II III
guide and controlthe performance of the workers. (d) III IV II I
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 428 YCT
Ans. (d) : Match the list-I & List-II 31. Logically sequence the following steps in the
List-I List-II managerial decision-making process
(Hedging Concepts) (Description) A. Determining the objective
A. European option option contract exercised B. Selecting the best solution
only on the maturity date C. Implementing the decision
B. Option premium It is paid by the buyer of D. Defining the problem
the options up front to the E. Identifing possible solutions
option seller Choose the correct answer from the options
C. In-money option When the immediate given below
exercise of an option yields (a) A, E, B, C, D (b) A, E, D, B, C
positive value to its holder (c) D, A, C, E, B (d) D, A, E, B, C
D. American option Option contract exercised Ans. (d) : Following are the logically sequence of
on any date up to maturity manageerial decision-making process :
28. The practice of delaying receipts from the Defining the problem
foreign currency designated receivables whose Determining the objective
currencies are likely to appreciate and delaying Identifying possible solutions
foreign currency designated payables whose Selecting the best solution
currencies are likely to depreciate is known as:
Implementing the decision
(a) Lagging (b) Leading
(c) Netting (d) Risk hedging
Ans. (a) : The practice of delaying receipts from the
foreign currency designated receivables whose
currencies are likely to appreciate and delaying foreign
currency designated payables whose currencies are
likely to depreciate is known as hagging.
Note : Leads and lags refer to the timing of payments on
international agreements to take advantage of exchange
rate changes. The premature payment is called a 'lead',
while the delayed payment is called a 'leg'.
29. Companies strive to stockpile internally
generated cash. Such a cash reserve is called
(a) Financial Float (b) Financial slack
(c) Margin of safety (d) Reserve float
Ans. (b) : Companies strive to stockpile internally
generated cash. Such cash reserve is called Financial
slack.
Financial slack is the untapped debt potential of a 32. The characteristics of different levels of leaders
company. It may be availed from unused debt capacity, are given below. Arrange these in an increasing
unutilized lines of credit, excess liquid assets, and order of levels
various other sources of cash. A. He contributes to the achievement of group
Simply it is a cash reserve that a company used when objectives and works effectively with others
their is downturn in soles, revenue or profit. in a group
30. Which of the following are the limitations in B. He builds enduring greatness through a
the creation of credit of commercial banks? paradoxical combination of professional
A. The amount of cash that commercial banks will and personal humanity
possess C. He makes a productive contribution
B. Supply of collateral security through talent, knowledge, skills, and good
C. Monetary policy of the central bank work habits
D. Allied deposits scheme D. He catalyses commitment to and vigorous
E. Deposits linked with special benefits pursuit of a clear and compelling vision and
Choose the correct answer from the stimulates the group to high-performance
options given below: standards
(a) A, C and E only (b) A, D and E only E. He organises people and resources towards
(c) C and D only (d) D and E only the effective and efficient pursuit of
Ans. (d) : The limitations in the creation of credit of predetermined objectives
commercial banks are : Choose the correct answer from the options
Auied deposits scheme given below
Deposits linked with special benefits (worng in (a) A, C, E, B, D (b) A, E, D, B, C
answer key) (c) C, A, E, D, B (d) C, E, D, A, B
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 429 YCT
Ans. (c) : The characteristics of different levels of Ans. (a) : Key pionts:
leaders in an increasing order : Capital market is a crucial link between sewing and
He makes a productuvie contribution through talent, investment process.
knowledge, skills, and good work habits. Capital market provides funds for long and medium
He organises people and resources towards the term.
effective and efficient pursuit of predetermined It makes use of different intermediaries such as
objectives.
brokers, underwriters, depositories etc.
He catelyses committment to and vagorous pursuit
These markets functions within the framework of
of a clear and complelling vision and stimulates the
group to high performance standards. government rules and regulations eg; stock,
He builds enduring greatness through a paradoxical exchange, regulated by SEBI.
combination of professional will and personal 35. Match List-I with List-II
humanity. List-I List-II
Key points : A. Section 10 (1) I. Amount received
The concept of level 5 leadership was created by involuntary
business consultant, jim collins. He wrote about it in retirement
a well-respected 2001 Harvard Business Review
article, and published his research in his popular B. Section 10 (10 II. Agricultural Income
book. "Good to Great". C)
Level 1 Highly capable Individual C. Section 10 (13A) III. Leave Encashment
Level 2 Contributing Team Member D. Section 10 (10 IV. House Rent
Level 3 Competent Manager AA) Allowance
Level 4 Effective Leader Choose the correct answer from the options
Level 5 Level 5 Executive given below
33. Which of the following statements are TRUE in A B C D
a contractual capacity? (a) II I III IV
A. Law presumes that every person is (b) II I IV III
competent to contract unless otherwise (c) IV III I II
proved
(d) IV III II I
B. That a minor can make a contract for
necessities of life Ans. (b) : Match the list-I & List-II
C. That a person of unsound mind can enter List-I List-II
into the family contracts
A. Section 10 (1) Agricultural Income
D. A convict cannot enter into a valid contract
nor can sue B. Section 10 (10 C) Amount received
E. That a wife can always make valid business involuntory retirement
contracts and bind her husband C. Section 10 (13 A) House Rent allowance
Choose the correct answer from the options D. Section10 (10 AA) Leave Encashment
given below: Key points :
(a) A and E only (b) A, C and E only
As per section 10 (1) income tax act, agriculture
(c) B and D only (d) B, D and E only
income earned by the tax payer in India is exempt
Ans. (c) : The following statements are true in a from tax.
contractual capacity : Under Section 10 (10C) of J.T. Act any amount
That a minor can make a contract for necessities of received receivable by a specified category of an
life. employee under the voluntry retirement scheme or
A convict cannot enter into a valid contract or can under the voluntary separation scheme is exempted.
sue.
Note : According to section 11 of Indian contract act 36. Which of the following are required to be
1872. "Every person is competent to contract who is of studied for a deep understanding of Income
the age of majority according to the law to which he is Tax procedures?
subjected and who is of sound mind and is not A. The Income Tax Act, 1961
disquilified from contracting by any low to which he is B. The Income Tax Rules, 1962
subjected." C. Notifications, circulars and classification
34. Which of the following is NOT the feature of issued from time to time by the CBDT.
the Indian capital market? D. Judicial decisions
(a) Co-promotes state-level venture funds E. Companies Act, 2013
(b) Government rules and regulations Choose the correct answer from the options
(c) Link between savers and investment given below:
opportunities (a) A, B and Only (b) A, B, C and D only
(d) Utilises intermediaries (c) A, C, D and E only (d) B, C, D and E
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 430 YCT
Ans. (b) : The following are required to be studied for a Ans. (d) : Match the list-I & List-II
deep understanding of income tax procedures : List-I List-II
The Income Tax Act 1961 A. Value added by channel becline stage
This act is a comprehensive statute that focuses on the members-low; market
different rules and regulations that govern taxation in growth rate-low
the country. B. Value added by channel Introductory stage
The Income Tax Rule 1962 members-high : market
It contain the set of Rules which helps in the growth Rate-low
enforcement and application law constituted in the Act. C. Value added by channel Mature stage
Notifications, cm colours, classifications issued from members low; market
time to time by the CBDT and judied decisions. growth Rate-High
37. Tax Audit is compulsory in case a person is D. Value added by channel Growth stage
Members-High : Market
carrying on a business whose gross turn
Growth Rate high
over/receipts exceeds:
Characteristics of the product life cycle-
(a) Rs. 1 crore (b) Rs. 40 lakh
Stages Introducti Growth Maturity Decline
(c) 50 lakh (d) 60 lakh
on
Ans. (a) : Tax Audit is compulsory in case a person is 1. Sales Low sales Rapidly peak sales Declining
carrying a business whose gross turn over/receips Increasing sales
exceeds 1 crore. sales
Note : Section 44B (Compulsory Audit of books of 2. Costs High Cost Average Low cost low cost
accounts) per cost per per per
Section 44AB makes it obligatory for a person to get customer customer customer customer
his accounts audited before the "Specified date" by 3. Profit Negative More High Declining
"Chartered Accountant". If the total sales, turnover in profit Profit profit
business for the previous year exceeds JNR 1 crore or if 4. Innovators Early Early Laggards
his gross receipts in profession for the previous year Customer Adopters Majority
exceeds INR 50 lakhs. late
38. Match List-I with List-II majority
5.Competi few more in stable declining
List-I List-II
tor number number, number
A. Value added by I. Introductory beginning
Channel Members- stage to decline
Low; Market 39. The term current account transaction is
Growth Rate-Low defined as a transaction other than a capital
B. Value added by II. Growth stage account transaction and without prejudice to
Channel Members- the generality of the foregoing, such
High; Market transaction includes:
Growth Rate-Low A. Overseas direct investment, (ODIs) from
India
C. Value added by III Mature stage B. Payment due as interest on loans and as
Channel Members- . net income from investments
Low; Market C. Remittances for living expenses of parents,
Growth Rate-High spouse, and children residing abroad
D. Value added by IV Decline stage D. Borrowing or lending in foreign exchange
Channel Members- . and in Indian rupees
High; Market Choose the correct answer from the
Growth Rate-High options given below:
(a) A and B only (b) A and C only
Choose the correct answer from the options
(c) B and C only (d) D only
given below
Ans. (c) : B and C only
A B C D
Key points :
(a) I IV III II
Current Account transaction :
(b) II I III IV Any person may sell or draw foreign enchange to or
(c) III I IV II from an authorized person if such sae or drawal is a
(d) IV I III II current account transaction.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 431 YCT
Examples of current account transaction : 43. Match List-I with List-II
Payments due in connection with foreign trade, other List-I List-II
current business, services, and short-term banking and
Ego Defence Description
credit facilities in the ordinary course of business.
Mechanism
Remittances for living expensis of parents, spours
and children residing abroad. A. Projection I. Returning to a
Expenses in connection with foreign travel, education previous stage of
and medical care of parents, spouse, and children. development
40. Which one of the following is CORRECT? B. Regression II. Acting out
.6475 (1 − r ) .6745 (1 − r )
2 2 unacceptable
(a) PE = (b) PE = impulses in a socially
n n acceptable way
.6475 n .6475(1 − r )
2 C. Repression III. Placing unacceptable
(c) PE = (d) PE = impulses in yourself
1− r2 n
onto someone else
Ans. (b) : P.E. =
( )
.6745 1 – r 2 D. Sublimation IV. Pulling into the
n unconscious
Hence, P.E. = Probable Error Choose the correct answer from the options
r = Correlation coefficient of ‘n’ pairs of observation for given below
any random sample A B C D
N = Total Number of observations. (a) I III II IV
41. Which one of the following statements are the (b) III I IV II
advantages of the Decision Support System (c) III IV I II
(DSS)? (d) III IV I II
(a) Difficulty in quantifying all the data
(b) Generates new evidence in support of a Ans. (b) : Match the list-I & List-II
decision List-I List-II
(c) System design failure Ego Defence Discription
(d) Unaware of Assumptions Mechanism
Ans. (b) : "Generalis new evidence in support of a A. Projection Placing unaccetable impulse in
Decision." is the advantage of (DSS) Decision Support
yourself into someone else
System.
Key point : B. Regression returning to a previous stage of
(DSS) decision support system is a computerized development
program used to support determinations, judgments, and C. Repression Pulling into the unconscious
courses of action in an organization or a business D. Sublimation Acting out unacceptable impulses in
Advantages : a socially acceptable way
Improves efficiency & speed- of decision making.
44. Which of the following are objectives of the
Increases the control, competitiveness and capability
of futuristic decision-making Competition Act, 2002?
Encourage learning or training A. To prevent practices having an adverse
Facilitates interpersonal, communication. effect on competition
Help automates, managerial processes B. To impede and torment competition in the
42. The resource seeking FDI moves to a country market
where: C. To protect the interests of sellers
(a) Financial resources help MNCs improve their D. To ensure freedom of trade carried on by
efficiency other participants in markets
(b) Per capita income and size of the market are Choose the correct answer from the
large options given below:
(c) Raw materials and manpower are in (a) A and D only (b) A, B and D only
abundance (c) A, B and D only (d) B, C and D only
(d) Technologies are available to improve
Ans. (a) : Objectives of competition Act 2002 are :
productivity
To prevent practices having adverse effect on
Ans. (c) : Raw materials and manpower are in
abundance. competition.
Resource seeking FDI moves to a country where Raw To promote and sustain competition in markets
materials and manpower are in abundance. To protect the interests of consumers
Resource seeking FDI-To seek and secure natural To ensure freedom of trade carried on by other
resources e.g. minerals, raw materials, or lower labour participants in markets in India and for matters
costs for the investing company. connected therewith or incidental thereto.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 432 YCT
45. Which of the following is INCORRECT about Ans. (a) : Match the list-I & list-II
ways, the RBI can affect the structure of List-I List-II
interest rates?
A. By changing the treasury bill rate A. Role of commercial Help to consumers
B. Blending of leading and trading activities bank
C. By changing the Bank rate B. NBFC service Hire purchase
D. Fixing the maximum interest on time C. Non-depository Mutual fund
deposits with the bank Institutions
E. Ineffective tapping and mobilization of D. Depository Mutual Saving bank
savings Institutions
Choose the correct answer from the Key points :
options given below: Functions of NBFC are Retail financing, Trade
(a) A and D only (b) A,C, D and E only finance, Infrastructural funding, Leasing Services
(c) B and E only (d) D and E only venture capital service etc.
Ans. (c) : The following is incorrect abouot ways, the Non-depository Institution don't take deposits. They
RBI can effect the structure of interest rates : are mutual funds, insurance companies, provident funds,
Blending of leading and trading activities finance companies.
infective tapping and mobilization of savings. 48. Which one of the following State Taxes have
Above, both points are not the function of RBI which NOT been replaced by GST?
can affect the structure of interest rates. (a) Luxury Tax
46. In which of the following cases, the Doctrine of (b) Purchase Tax
Supervening impossibility will apply? (c) Special additional duty of customs
(a) Commercial Impossibility (d) Taxes on lotteries, betting, and gambling
(b) Difficulty in performance Ans. (c) :Special additional duty of customer
(c) Impossibility known to the parties at the time Key point :
of making of the contract The central Taxes Replaced by GST :
(d) Strikes, Locks-outs, and civil disturbances Central excise duty
Ans. (c) : Impossibility known to the parties at the time Central sales tax
of making of the contract. Service Tax
Key points : Additional duties of customs
A contract, which of the time was entered into was Additional duties of excise
capable of being performed may subsequently become Excise duty levied under the textiles and textile
impossible to perform or unlawful. In such cases the products.
contract becomes void. State-Level Taxes Replaced by GST
Exceptions to Doctrine of supervising impossibility Purchase Tax
Difficulty of performance Central Solar Tax
Commercial impossibility VAT
Impossibility due to failure of a third party Surcharge and CESS
Strikes, lock-outs, and civil disturbances. Entry tax
Failure of one of the objects Taxes on lottery, gambling and betting
47. Match List-I with List-II Taxes on advertisements
List-I List-II 49. Which of the following statements are
A. Role of I. Help to consumers CORRECT?
Commercial A. The critical value of Z for two tailed test
Bank with α = 0.5 is 1.96
B. The critical value of Z for a two tailed test
B. NBFC service II. Mutual saving bank
with α = 0.01 is 2.575
C. Non-depository III. Hire purchase C. The critical value of Z for one tailed test
Institution with α = 0.05 is 1.96
D. Depository IV. Mutual fund D. The critical value of Z for a left-tailed test
Institution with α = 0.01 is -2.33
Choose the correct answer from the options Choose the correct answer from the options
given below given below:
A B C D (a) A and B only (b) A, B, and C only
(a) I III IV II (c) A, B and D only (d) B, C and D only
(b) II I III IV Ans. (c) : following statements are correct :
(c) III IV II I The critical value of z for two tailed test with d = 0.5
(d) IV II I III is 1.96
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 433 YCT
 The critical value of z for a two tailed test with d = Reason R: The discounted value of near
0.01 is 2.33 dividends is higher than the present worth of
Note : Critical value is that value of statistic which distant dividends
separate the critical region from the acceptance region. In light of the above statements, choose the
In other words, it divides the graph into two sections : most appropriate answer from the options
Rejection region and acceptance region. given below
50. Section 80GGC of Income tax is: (a) A is correct but R is not correct
(a) Deduction in respect of certain donation for (b) A is not correct but R is correct
scientific research (c) Both A and R are correct and R is the correct
(b) Deduction in respect of contribution given by explanation of A
any company to political parties (d) Both A and R are correct but R is NOT the
(c) Deduction in respect of contribution given by correct explanation of A
any person to political parties Ans. (c) : Both A and R correct and R is the correct
(d) Deduction in respect of rent paid explanation of A.
Ans. (c) : Deduction in respect of contribution given by Note : Graham and dodd Model (also known as the 'bird
any person to political parties. in hand approach')
Note : The section BOGGC of the Income Tax Act Investors look to an immediate divided as 'a bird in
allows the deductions from the total income of an hand' and at the distart dividend as 'two in the bush'.
individual tax paper for his/her contributions made
towards electoral trust or political part. According to this theory shareholders are risk overse
and prefer to receive dividends in the present time
The complete contribution amount made in section
period rather than fiture capital gains.
BOCCG is eligible for a deduction amount allowed
should not be more than the total income that is taxable. The dividend discount model is used for predicting
the price of a company's stock based on the theory that
51. The basic premise of the MM-approach is
its present-day price is worth the sum of all of its future
based on which of the following assumptions?
divided payments when discounted back to their present
A. Asymmetrical information
value
B. Efficient capital markets
C. Investor rationality 53. Which of the following order is followed in the
issue of shares under the "Fixed Price Offer
D. Diverse business risk profile
Method"?
E. 100% dividend payout ratio
A. Issue of a prospectus
Choose the correct answer from the options
given below: B. Receipt by the company of application for
(a) A, B and C only (b) A, C and E only share
(c) B, C and E only (d) C, D, and E only C. Selection of merchant banker
Ans. (c) : The basic premise of the MM approach is D. Issue of share certificates
based on the following assumptins : E. Allotment of shares to the applicant
Efficient capital market Choose the correct answer from the options
Investor capital market given below
100% dividend payment ratio (a) A, D, E, C, B (b) C, A, B, E, D
Note : There is a perfect capital market when investors (c) C, B, A, D, E (d) E, B, A, C, D
are free to buy and sell securities they can berrow funds Ans. (b) : Following order is followed in the issue of
without restriction at the same terms as the firms do, shares under the "fixed price offer method" :
they behave rationally and there are no transaction Selection of marchant bankar
costs. Issue of a prospectus
Firms can be classified into homogenous risk classes Receipt by the company of application for share
: All the firms in the same risk class will have the same Allotment of shares to the applicant
degree of financial risk.
Issue of share certificates
All ivestors have the same expectation of a firms net
operating income (EBIT) Under fixed price offer method the company going,
The divided payout ratio is 100% which means there public (the process of selling shares) determines a fixed
are no retained earning. price at which its shares are offered to investors. The
investors know the share price before the company goes
52. Given below are two statements, one is labelled public. Demand from the market is only known once the
as Assertion A and the other is labelled as issue is closed.
Reason R
Assertion A: Two companies with the same 54. Which one of the following vehicles is used
general earning power and same general when traffic building is the consumer
position in an industry, the one paying larger promotion objective?
dividend will almost always sell at a higher (a) Catalogue offers (b) Coupons
price (c) Discount sales (d) Special events
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 434 YCT
Ans. (d) : Special events 58. Arrange the following levels of economic
Companies used 'Special events' as their promotional integration, from least integrated to the most
strategy to build consumer traffic. integrated
In Special events, companies used to demonstrate A. Customs Union
their latest products and services, brands through B. Free Trade Area
memorable experiences. C. Economic Union
Some other traffic building vehicles are Annual sales, D. Common Market
festival sales, Retail, Coupons. E. Political Union
55. Which market form leads to more Choose the correct answer from the options
technological change and product given below
improvements than alternative forms of
(a) A, B, C, D, E (b) B, A, D, C, E
market structure?
(a) Monopolistic competition (c) D, C, A, B, E (d) E, D, C, A, B
(b) Monopoly Ans. (b) : Levels of economic integration from least
(c) Oligopoly integrate to the most integrated
(d) Perfect competition Free Trade Area
Ans. (c) : Oligopoly leads to more technological change Customs Union
and product improvements than alternative forms of Common Market
market structure. Economic Union
The perfect examples of Oligopoly market are Political Union
markets for automobiles, airlines, telecom, mass media, Economic integration is an agreement among nations
which needs technological change and product to reduce or eliminate trade barriers and agree on fiscal
improvements continiously to get improvement in thier policies.
services & products. European Union is the perfect example of economic
56. In Banking Technologies, Star Topology completely integration.
involves: 59. The partial integration of agricultural with
(a) Devices are connected in a close loop non-agricultural income is done in case of:
(b) Devices on the network are connected to a (a) AOP/BOI (b) Company
single continuous cable
(c) Co-operative society (d) Firm
(c) Each node is joined to the central node by a
separate medium Ans. (a) : AOP/BOI
(d) Information is passed from one node to The partial integration of agricultural with non-
another in series cultural income is done in case of AOP/BOI.
Ans. (c) : Each node is joined to the central node by a Key points :
separate medium. The scheme of partial integration is applicable is :
In Banking technologies, star topology is used to case (i) The taxpayer is an individual, a HUF, a body of
the probabilitics of network failure by connecting all of individual, an association of persons or an artificial
the systems to control node. The star topology allows juridical person.
each machine on the network to have a point to point (ii) The taxpayer has non, agricultural income
connection to the central hub and there is no single exceeding the amount of exemption limit.
point of failure. (iii) The agricultural income of the taxpayer exceeds
57. When the sum of exponents exceeds one (a + b Rs. 5,000
> 1) in the Cobb - Douglas production function, 60. Match List-I with List-II
it causes which one of the following?
(a) Constant returns to scale List-I (Events) List-II (Year)
(b) Decreasing returns to scale A. Bretton Woods I. 1948
(c) Increasing returns to scale Conference
(d) Variable returns to scale B. GATT established II. 1974
Ans. (c) : Increasing returns to scale. C. Multi-fibre III. 1944
When the sum of exponent exceedsone (a +b > 1) in Agreement
the cobb-Douglus production function, it couses D. WTO replaced GATT IV. 1995
'increasing returns to scale."
Choose the correct answer from the options
Properties of cobb-Douglas production function given below
Homogeneous of Degree A B C D
If (a + b)> 1, increasing return to scale (IRS) (a) II IV III I
If (a + b) = 1, constant return to scale (CRS) (b) III I II IV
If (a + b) < 1, decreasing return to scale (DRS) (c) III I IV II
(a + b) = 1, it is lenearly homogenous of degree one : (d) IV II I III
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 435 YCT
Ans. (b) : Match the List-I & List-II Ans. (d) : The characteristics of onlinne and social
List-I (Events) List-II (Years) media marketing are :
Rich
A. Bretton woods Conference III. 1944
Interactive
B. GATT established I. 1948 Up to date
C. Multi-fibre Agreement II. 1974 Note : Social media marketing is the use of social media
D. WTO replaced GATT IV. 1995 platforms and websites to promote a product on service.
61. The cross-price elasticity of demand for It allows companies to engage with existing customers
complementary commodities is and reach new ones as they promote their culture,
(a) Greater than one (b) Negative mission etc. Sites like facebook, Twitter, and Instagram
(c) Positive (d) Zero are commonly used to execute social media marketing.
Ans. (b) : The cross price elasticity of demand for 64. Which one of the following statement is FALSE
complementory commodities is negative. regarding transactions of Internet Banking?
Key Points : (a) Balance inquiry
Complementory goods havea negative cross-price (b) Statement of account is for specific period
elasticity ; as the price of one good increases, the (c) Transfer of funds from one account to another
demand for the second good decrease. account
Example : It the price of coffee increases, the quantity (d) Withdrawal of cash anywhere in India
demanded for coffee sticks dropsas consumers are Ans. (d) : Withdrawal of cash anywhere in India.
drinking less coffee and need to purchase fewer sticks. Internet Banking, is a virtual banking or online banking
62. Buoyancy is basic principle of taxation which and an electronic payment system that enables customer
means: of a bank to conduct a range of financial transaction
A. The system should be such that cost of online. Not Internet Banking, but ATM allows
collection is least withdrawal of cash from one's bank account by using
B. Tax obligation of the payers should be well the debit card up to a certain extent anywhere in India
determined or world.
C. They system should be such that tax revenue 65. Cash flows are presumably reinvested in
has the tendency to increase as the economy capital budgeting decisions at
grows A. Discount rate
D. Tax base should be fairly diversified so that tax B. Market rate
burden is widely spread C. Cost of capital
Choose the correct answer from the option D. Riskless rate
given below: E. Internal rate of return
(a) A and B only (b) A only Choose the correct answer from the option
(c) C only (d) D only given below:
Ans. (c) : Buoyancy is a basic principles of taxation (a) A, C and D only (b) A, C and E only
which means the system should be such that the tax (c) B, C and D only (d) C, D and E only
revenue has the inherent tendency to increase as the Ans. (b) : Cash flows are presumably reinversted in
economy grows. capital budgeting decision at Discount rate, cost of
Note : In simple, words when a tax collects greater capital and Internal rate of return.
revenue without changing the rate of taxing, it is said to Key points :
be buoyant. There are different discounted cash flow methods for
Tax buoyancy is the relationship among variations in evaluation capital investment propsals :
the goverment's tax income change and the potential in Net present value Methed :
GDP. It has to do with the sensitivity of tax revenue The NPV relies on a discount rate that may be derived
growth to change in GDP. from the cost of capital required to invest.
63. The characteristics of online and social media Internal Rate of Return is the rate of which net
marketing are: present value of the investment is zero.
A. Personal 66. With reference to product hierarchy, life
B. Rich insurance is an example of:
C. Timely (a) Product class (b) Product family
D. Interactive (c) Product line (d) Product type
E. Up to date Ans. (c) : Product line
Choose the correct answer from the option Life insurance is an example of product line.
given below: Each product is related to certain other product. The
(a) A, C and D only (b) A, D and E only product hierarchy stretches from basic needs to
(c) B and E only (d) B, D and E only particular items that satisfy those needs.
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 There are 7 levels of the product hierarchy 70. Given below are two statements:
Need Farrily Statements I : Assessee in always a person but
Product family a person may or may not be an assessee
Product class Statements II: The term ‘person’ includes an
Product line individual, a HUF, a company, a firm, an
Product type association of persons, local authority and
every artificial juridical person
Brand
In light of the above statements, choose the
Item/stock-keeping unit/product variant
most appropriate answer from the option given
67. According to Plutchik, which one of the below
following is NOT a secondary emotion? (a) Both Statements I and Statement II are correct
(a) Distrust (b) Fear (b) Both Statements I and Statement II are
(c) Hostility (d) Insecurity incorrect
Ans. (b) : According to plutchik fear is not a secondary (c) Statement I is correct but Statements II is
emotion. incorrect
Robert Plutchik was a psychologist who created an (d) Statements I is incorrect but Statements II is
evolutionary theory of emotion known as the wheel of correct
emotion. He considered there to be eight primary Ans. (a) : Statement I : Assessee is always a person but
emotions-anger, fear, sadness, disgust, surprise, a person may or may not be an assessee.
anticipation, trust and joy. Note : Assessee (Section 2 (7) 'Assessee' means a
68. Arrange the following steps in a logical person by whom tax or any other sum of money is
sequence of the claim settlement procedure in payable under this act)
the Insurance Statement II : The term 'person' include an
A. Scrutinisation individual, HUF, a company, a firm, an association of
B. Investigation of an assessment persons, local authority and every artificial juridical
C. Claim form person. (Note : person (section 2 (31) includes an :
D. Notice of loss Individual, HUF, company, firm, AOP, BOI, Local
E. Settlement and Arbitration authority; and every artificial juridical person.)
Choose the correct answer from the options 71. Which among the following are generally
given below accepted methods of accounting for price level
(a) A, B, C, D, E (b) C, A, D, B, E changes?
(c) C, B, A, E, D (d) D, C, A, B, E A. Replacement Cost Method
Ans. (d) : Following are the steps of claim settlement B. Current Purchasing Power Method
procedure in the Insurance : C. Opportunity Cost Method
Notice of loss D. Current Cost Accounting Method
Claim form E. Standard Cost Method
Scrutmisation Choose the correct answer from the options
Investigation of an assessment given below:
Settlement and Arbitration (a) A and C only (b) A, B and C only
(c) B and d only (d) C, D and E only
69. Which one of the following is a structured
review of the system and procedures of an Ans. (c) : The generally accepted methods of
organisation in oreder to evaluate whether they accounting for price level changes are :
are being conducted efficiently and effectively? Current purchasing power method
(a) Cost audit (b) Financial audit Current purchasing power technique of accounting
(c) Management audit (d) Safety audit requres the companies to keep their records and present
the financial statements on conventional historical cost
Ans. (c) : Management Audit
basis.
Management Audit is a structured review of the systems
Current cost Accouting Method
and procedures of an organization in order to evaluate
whether they are being conducted efficiently and Current cost accounting is avaluation approach,
effectively. recognizes the changes in the price of individual due to
the change in general price level. In includes the process
As per Taylor and perry : "Management auditing is a
of preparing and interpreting financial statement in such
method to evaluate the efficiency of management of all
a way that relevant change in price is considered
levels throughout the organisaton, or more specifically,
significantly. The assets are valued inn current cost
it comprises the investigation of a business by an
basis.
independent body from the highest enecutive level
downwords, in order to ascertain weather sound 72. In which one of the following services price
management prevails through and to report as to its sensitivity is high?
efficienncy or otherwise with recommendations to (a) Airlines (b) Car rentals
ensure its effectiveness where such is not the case." (c) Retailing (d) Sea Transport
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Ans. (a) : Airlines Inferior goods have a negative incme elasticity of
In Airlines Industry price sensitivity is high demand; as consumer's income rises, they buy
Note : In economies, price sensitivity is commonly fewer inferir goods.
measured using the price elasticity of demand, or the Luxurious goods are a type of normal goods
measure of the change in demand based on its price asssociated with income elasticities of demand
change. greater than one
Customers will often change the airline or even the 75. Identify three conditions that a firm must meet
destination for a small change in the price of the ticket. to practice price discrimination:
This means they are highly elastic. A. The firm must have some control over the price
73. Which one of the following training methods is and the product
most suitable for developing problem-solving B. The firm must operate in the growth phase of
skills? its product life cycle
(a) Case study (b) Lecture C. The markets in which products are sold must
(c) Role playing (d) Sensitivity training be separable
Ans. (a) : Case study training method is most suitable D. Price elasticity of demand for the product must
for developing problem-solving skills. differ
The case study is a method which provides E. The firm operates its plant at full capacity
descriptive situations which stimulate trainees to made Choose the correct answer from the options
decisions. The purpose of the case method is to make given below:
trainees apply what why know. develop new ideas to (a) A, B and C only (b) A, C and D only
manage a situation or solve a problem. (c) B, C and D only (d) B, D and E only
74. Match List-I with List-II Ans. (b) : The conditions that a firm must meet to
List –I List –II practice price discrimination are :
Nature of commodities Income Elasticities The firm must have some control over the price & the
of Demand product.
The markets in which products are sold must be
A. Normal goods I Greater than
separable
one
price elasticity of demand for the product must differ
B. Inferior goods II. Between zero
Note : Price discrimination exists when a producer sells
and one
the exact same product to different customers at
C. Luxurious III. Greater than different prices.
commodities zero (positive)
76. Constituents of Integrated marketing are:
D Necessities IV. Less than zero A. Customers
(negative)
B. Price
Choose the correct answer from the options C. Communications
given below:
D. Products and services
(a) A- II, B- IV, C- I, D- III
E. Channels
(b) A- II, B- IV, C- III, D- I
Choose the correct answer from the options
(c) A-II, B- I, C- IV, D- II given below:
(d) A-III, B- IV, C- I, D- II (a) A, B and C only (b) A, B, D and E only
Ans. (d) : Match the list-I & List-II (c) B, C, D and E only (d) C, D and E only
List- I List–II Ans. (c) : Costituents of Integrated marketing are :
(Nature of commodities) (Income Elasticities of price
Demand) communications
A. Normal goods Greater than zero (positive) products and services
B. Inferior goods Less than zero (negative) channels
Note : According to integrated marketing concept all
C. Lunurious Greater than one
variables of marketing mix are dynamic in nature. If
commodities
you change the product and the price, place and
D. Necessities Between zero and one promotions will change. If you change one variable, the
Key points : will change automatically.
Normal goods have a positive income elasticity of 77. Which of the following losses are NOT
demand; as incme rise, more goods are demanded deductible from business Income?
of each price level A. Loss incurred in closing down the business
Normal goods whose income elasticity of demand B. Loss incurred due to damage destruction etc. of
is between zero and one are typically refferred to capital assets
as necessity goods C. Loss of stock-in-trade due to enemy action
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 D. Loss sustained before the business is Choose the correct answer from the options
commenced given below:
E. Loss of raw material finished good-in-transit (a) A, C and D only (b) A, D and E only
Choose the correct answer from the options (c) B, C and D only (d) C, D and E only
given below: Ans. (b) : Following are the components of the credit
(a) A, B, C only (b) A, B, D only policy of a business firms :
(c) A, D, E only (d) C, D, E only Collection policy :
Ans. (b) : Following losses are not deductible from It includes written guidlies that set the terms and
business income : conditions for making collections frm Debtors.
Losses sustained before the business is commened Credit analysis :
Loss incurred in closing down the business It involves evaluating customers qualification or
Loss incurred due to damage destruction etc of creditourthiness to which products have to sale on
capital assets credit.
A loss which is not incidental to the carrying on of Terms of sale :
the assessee
Loss due to the sale of securities held as investments In this policy, firm is to decide condition like credit
as it will be a capital loss and not the business loss period, cash discount ad discount period, Types of
credit instruments for supplying of goods on credit.
Loss caused by forfeiture of advance given for the
purchase of capital assets. 80. From the following information about a firm,
Violation of the law is not a normal incident of trade what will be the contribution to sales (c/s) ratio
and an expense incurred by way of penalty for and the profit?
infraction of laws is not allowed for deduction as a Sales = ₹ 100,000
business loss. Fixed Cost = ₹ 20,000
Trading loss due to loss of goods in transit in the Break-even Point = ₹ 40,000
normal course of business. (a) C/S = 25% and Profit = ` 60,000
78. Factors that reduce price sensitivity are: (b) C/S = 50% and Profit = ` 30,000
A. Buyers cannot store the product (c) C/S = 50% and Profit = ` 60,000
B. The expenditure is a larger part of the buyer's (d) C/S = 60% and Profit = ` 30,000
total income
C. Buyer are aware of substitutes Fixed cos t
Ans. (b) : Break Even Point =
D. The product is used in conjunction with assets Contribution
previously bought 20000
E. Part of the cost is borne by another party 4000 =
contribution
Choose the correct answer from the options
20000
given below: Contribution = × 100
(a) A and B only (b) A, D and E only 40000
(c) B, D and E only (d) C, D and E only = 50%
Ans. (b) : factors that reduce price sensitivity are : Sales = 100000 `
Buyers cannot store the product. Variable cost = 50000 `
The product is used in conjunection with assets Contribution = Sales – V.C.
previously buoght. = 100000 – 50000
part of the cost is borne by another party. = 50000
Note : price sensitivity refers to the degree or entent to Profit = Contrinution – Fixed cost
which the consumer's buying behaviour varies with the = 50000 – 20000
change in the price of the product or services. = 30000 `
Influences on price sensitivity : Dele: efJekeâuhe (C) mener nw~ ***
Consumers have lower price sensitive if a product or
service is unique. 81. Given below are two statements:
When expenses is shared consumers have less price Statement l: patents are defined as monopoly
sensitivity. rights which one granted by the government,
Consumers have less price sensitivity when the for
product or service is viewed as prestigious, enclusive, or full disclosure of invention for a limited period
possessing high quality. of time, that is for 20 years
79. Identify the components of the credit policy of Statement ll: The purpose of granting patents
a business firm from the following: is to encourage inventions by promoting their
A. Collection policy protection and utilization so as to contribute to
B. Factoring the development of Industries
C. Credit rating In light of the above statements, choose the
D. Credit analysis most appropriate answer from the options
E. Terms of sale given below
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 439 YCT
 (a) Both Statements I and Statement II are correct Key points :
(b) Both Statement I and Statements II are For all other categories of taxpayers earning income
incorrect from any source (Egl salary, Rent,
(c) Statement I is incorrect but Statements II is Business/profession, capital gains, interest etc.
correct Due Date Advance Tax payable
(d) Statements I is correct but Statement II is on or before 15th June 15% of advance tax
incorrect
85. A U- shaped long-run average cost curve is
Ans. (a) : Both statement I and statement II are correct. based on the assumptions that
Key points : A. Economies of scale prevails at small levels of
As per Indian patent Act, 1970. A patent is granted output
on a product process or on invention for a limited period B. Diseconomies of scale prevails at larger levels
of 20 years. For disclosing full details of the invention. of output
The main purpose of patent system is to incourage C. Benefits of the division of labour and
innovation and eventually results in technological specialisation accrue more at the lower scale of
development, which results in development of production
Industries. D. Managerial inefficiencies are prone to a higher
scale of operations
82. Which one of the following is considered a
Choose the correct answer from the options
necessary precondition by Richard Roll for given below:
markets to become efficient? (a) A, B and C only (b) A, B, C and D
(a) Costless trading (c) A, C and D only (d) B, C and D only
(b) Free access to and flow of information Ans. (b) : The assumptions that U-shaped long-run age
(c) Prices approximate a random walk cost curve is based :
(d) Trades who make a living by ‘beating the Economies of scale prevails at small levels of
market’ through trading output.
Ans. (d) : Traders who make a living by 'beating the Diseconomies of scale prevails at larger levels of
market' through trading. output.
Richard roll on market efficiency Benefits of the division of labour and specialization
The concept of an efficient market is a special accure more at the lower scale of production.
application of the "no free lunch'' principle. In an Management inefficiencies are prone to a higher
efficient financial market, costless trading policies will scale of operations.
not generals 'excess' returns. Thus, if costless trading Note : Long run Average Cost (LAC) per unit cost
incurred by a firm i.e. long run total costs divided by the
policies are ineffective, there must exist some traders
level of output. LAC curve is derived as an
who make living by 'beating the market." They cover envelop/tangent of all SAC curves. U-shaped curve, due
their costs (including the opportunity cost of their to the operation of law of Return to scale. Also known
time)by trading. The existence of such traders is as envelop and planning curve.
actually a necessary precondition for markets to become 86. The values in one of the series in a bivariate
efficient. data set are multiplied by a constant K, which
83. Bretton Woods resolutions led to the formation of the following would change as a result of
of: this?
(a) GATT (b) IMF A. Karl Pearson's coefficient of correlation
(c) UNCTAD (d) WTO B. Standard deviation
Ans. (b) : Bretton woods resolution led to the formation C. Covariance between the variables
of: IMF D. Rank correlation coefficient
Key points : Choose the correct answer from the options
given below:
International monctaryfund (IMF) and the (a) A, and D only (b) A, B and C only
International Reconstruction & Development BANK
(c) A, B and D only (d) B and C only
(IBRD) were established in July1944 to gether on the
basis of Bretton woods conference (U.S.) Ans. (d) : The value is one of the series in a bivariate
data set are multipled by a constant K.
84. The due date of the first instalment of advance The following would change as a result of this :
tax paid by an assessee other than the company Standard deviation
is: SD is the independet of the change of origin but
(a) 15th April (b) 15th December dependent on the change of scale
th
(c) 15 June (d) 15th September i.e. If y = a + bx, SD (y) = [b] ×S(0.4)
Ans. : (c) The due date of the first installment of Covariance between the variables :
advance tax paid by an assessee other than the The change in scale of the variables effects the value of
company is 15 June. covariance.

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87. A contract is said to be discharged by 89. Which one of the following is NOT true for the
rescission: functional organization?
A. When terms of a contract are altered (a) Functional managers are specialists in their
B. When a party makes novation of a contract respective areas
C. When an aggrieved party exercises his option (b) It is based on the principle of unity of
to avoid the contract command
D. When a party to a contract waives his rights (c) It is useful for large-scale business
under the contract (d) The discipline tends to become loose
E. Where none of the parties has performed its Ans. (b) : It is based on the principle of unity of
part for a long time and no other party has command.
objected against it Functional organization is a type of organizational
Choose the correct answer from the options structure that uses the principle of specialization
given below: based on function or role.
(a) A, D and E only (b) B and D only The entire organizational activities are divided into
(c) B, C and E only (d) C and E only specific functions such as operations, finance,
marketing and personal relations.
Ans. (d) A contract is said to be discharged by
rescission. Three authoritics exist- bine, staff and function.
When an aggrieved party exercises his option to Each functional area is put under the change of
functional specialist and he has got the authority to
avoid the contract.
give all decisions regarding the functions when-ever
Where none of the parties has performed its part for a the function is performed.
long time and no other party has objected against it.
principle of unity of command does not apply to
Note : Rescission (Sec. 62) Indian contract Act 1872 such organization as it is present in line
Rescission of a contract takes place when the parties to organization.
a contract may decide that they will forget the contract
and will not bring a new contract into existence to 90. Incentives schemes where earnings differ at
replace it. A promise not to demand performance from different levels of output are:
each other becomes the mutual consideration for A. Gantt Task System
discharge of contract. B. Halsey Plan
C. Rowan Plan
88. Arrange in the sequence, steps in the procedure
for calling a statutory meeting of the company D. Bedaux Plan
A. Contents of the statutory report E. Emerson's Efficiency Plan
B. A list of members must be produced at the Choose the correct answer from the options
commencement given below:
(a) A and E only (b) A, C and D only
C. Twenty-one days notice
(c) A, C and E only (d) B and E only
D. Certification of the statutory report by not less
than two directors, one of whom must be the Ans. (a) : Incentives schemes where earnings differ at
managing director different levels of output are :
E. A certified copy of the statutory report must be Gantt Task System :
delivered to the Registrar Under this system, standard time is fixed for the
Choose the correct answer from the options competition of a task based on a careful time and
motion study, the worker's actual performance is
given below
compared against the standard time to determine his
(a) A, D, E, B, C (b) B, E, C, A, D efficiency and make the payments accordingly.
(c) C, A, D. E, B (d) D, C, B, A, E Emersons Efficiency plan
Ans. (c) : The procedure for calling a statutory meeting Under this plan, the wages are paid at the standard rate
of the company are : and the amount of bonus paid to the worker's depends
Twenty-one days notice on the individual efficiency of the workers.
Contents of the statutory report Earnings differing at different levels of output. Some
Certification of the statutory report by not less than other schemes fall under this category are Taylor's
two directors, one of whom must be the managing differential piece-Rate system, the Merrick Differential
director. piece-rate system.
A certified copy of the statutory report must be Direction (91-95)
delivered to the registrar. Read the given paragraph carefully and answer
A list of members must be prodoced of the the questions that follow
commencement. For a developing economic nation, its industrial
Note: The provisions regarding, statutory meeting was policy requires regular updation to meet the
mentioned in companies Act 1956, but not mentioned in growing demands of the industry as well as to
companies Act 2013. increase the share of manufacturing in overall
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 GDP As India's GDP has been dominated by The use of services and related products which
services rather than agriculture or respond to basic needs and bring a better quality of
manufacturing, thereare structural life.
modifications always required so that Minimizing the use of natural resources and toxic
manufacturing activity be increased materials. As well as the emission of waste as
substantially to meet the global market pollutants.
requirements. This requires legal amendments, Planned cities with a lower cost of production
with the new laws aimed to facilitate better minimizing the retail inflation.
manufacturing and exports. 93. The credit appraisal process by a bank does
Actually, India faces two challenges, rather NOT involve evaluation if the borrower on :
opportunities that the bullishness on the Indian (a) Bank ability or credit worthiness
economy is to be export-oriented as well as to (b) Economic viability
feed its ever-growing domestic consumption. (c) Loan off takes and paying ability of related
Also, no economy can only be consumption companies in the geographical area
oriented as its people should also save and invest (d) Technical feasibility
actively. This brings to an important direction of
Ans. (d) : The credit apprisal process by bank does not
banking system which plays a critically
involve technical feasibility of the borrower.
important role in achieving the above two
objectives. The public sector banks require to 94. The Indian banking sector requires that it :
build on to the capabilities and expertise on the (a) be more technology dependent
due diligence methods for the credit appraisal (b) build more manpower and ICT resources
for the loan requirements. Worth mentioning (c) evaluate loan disbursals
here is the data that the non-performing assets (d) increase the frequency of change of the bank
valuing Rs. 7.7 lakh crore (as on December rates
2017) as per the latest figures of the Finance Ans. (b) : The public sector bank require to build on to
Ministry. Nevertheless, given their large the capabilities and expertise on the due diligence
structure and geographic percolation, the public methods for the credit apprisal for the loan requirements
sector banks must be recognized in India's
development and that there is "no country in the 95. What problem is highlighted in the above
world where banks have not had a problem." passage?
(a) Balance of payments issue
91. Which of the following is not a feature of the
consumption economy? (b) High fiscal deficit
(a) Increasing population with increasing (c) Low growth in GDP
consumption (d) Role of banking sector
(b) It also prompts more exports than imports Ans. (b) : High fiscal deficit
(c) More contribution taxes Direction (96-100)
(d) The unsold goods create problems Read the paragraph carefully and give an
Ans. (b) : It also prompts more exports than imports. answer to the question
(The consumption economy, is consuming more so, it The Economic Survey cautions against
should import more and export less). extended forbearance of credit default,
92. Which of the following set defines Sustainable drawing the
Consumption and Production (SCP)? lessons that extended forbearance in the wake
A. The use of services and related products which of the 2007-08 global financial crisis led to the
respond to basic needs and bring a better build-up of bad loans and dragged down
quality of life. investment rates and economic growth.
B. Minimizing the use of natural resources and If followed through, this would mean a major
toxic materials as well as the emission of waste squeeze on company finances, as they scramble
as pollutants. for resources to service loans to avoid
bankruptcy, and a big demand on the
C. Pertinent use of service or product so as not to
government to recapitalize the banks it owns,
jeopardise the needs of future generations.
after they recognize and provide for a mass of
D. Planned cities with a lower cost of production bad loans
minimizing the retail inflation.
Regulatory forbearance must be an emergency
Choose the correct answer from the options medicine, not a staple diet, is sound advice. A
given below
moratorium by banks on debt service by
(a) A, B and C only (b) A, B and D only borrowers has been a part of the COVID
(c) A, B, C and D (d) B, C and D only cushioning to corporates. Many of these firms
Ans. (b) : Following are the set defines sustainable would face acute liquidity problems when the
consumption and production (SCP) : moratorium ends
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 Fast growth that embraces all businesses would Ans. (b) : As the whole passage is dicussing about
avert a crisis. Such Goldilocks perfection rarely credit default during crises wheather it was 2007-08
materializes in real life. many companies that global financial crisis or Covid-19 pendamic. Its
dicussion is all about forbearance and coporate funding
could survive with access to liquidity could go
in crises times.
under when banks think it is time to do their
98. Given below are two statements, one is labelled
asset quality reviews. The solution is to provide as Assertion A and the other is labelled as
such companies with capital that does not need Reason R
to be serviced when they do not make a profit Assertion A: The government had promised a
on fund of funds that would mobilize large
equity volumes of capital to invest in micro, small and
medium enterprises
Companies would need a whole lot of capital, to
Reason R: Companies would need a whole lot
service existing loans and to invest in new of capital, to service existing loans and to invest
production, to cater to the demand thrown up in
by economic revival. The government had new production, to cater to the demand thrown
promised a fund to funds that would mobilize up by economic revival.
large volumes of capital to invest in micro, In light of the above statements, choose the
small and medium enterprises. most appropriate answer from the options
given below.
This is the time to walk the talk. The equity
(a) A is correct but R is not correct
stakes can be sold later, hopefully at a profit. (b) A is not correct but R is correct
Special situation funds, private equity, and (c) Both A and R correct R is the correct
allocations from retirement savings can be explanation of A
tapped for the needed capital. Managing the (d) Both A and R are correct but R is NOT the
investment is the challenge. correct explanation of A
96. Given below are two statements: Ans. (c) : Assertion A : A moratorium by banks on
Statement l: Forbearance of credit default is a debt service by borrowers has been a part of the covid
common phenomenon in Indian banking cushioning to corporates.
Reason R : Regulatory forbearance must be an
system
emergency medicine but not a staple diet.
Statement ll: Global financial crisis influences
99. What is the theme of the paragraph narrated
the quantum of bad loans in India In light of above?
the above statements, choose the correct (a) Crisis of corporate funding during crisis times
answer from the options given below (b) Forbearance of credit default
(a) Both statement I and statement II are false (c) Liquidity and survival of companies
(b) Both statement I and statement II are true (d) Moratorium by banks on debt service
(c) Statement I is false but statement II is true Ans. (a) : Criss of corporate funding during crises
(d) Statement I is true but statement II is false times. It is the best theme of the paragraph narrated
above because this passage is mostly disscued about the
Ans. (b) : Both statement I and statement II are true. crises and the corporate funding.
Statment I : forbearance of credit defualt is a common 100. Given below are two statements, one is labelled as
phenomenon in Indian banking system. (Forbearance Assertion A and the other is labelled Reason R
gives borrowers a chance to pause payments for loans, Assertion A: A moratorium by banks on debt
which results in accrual of interest will be added to service by borrowers has been a part of the
existing balance and build financial hardship due to this COVID cushioning to corporates
it converts in NPA for banks and credit default accurce) Reason R: Regulatory forbearance must be an
emergency medicine but not a staple diet
Statement II : Global financial crisis influences to In light of the above statements, choose the
quntum of bad loans in India. (2007-08 global financial most appropriate answer from the options
crisis led to the buid-up of bad loans) given below
97. Which could be suitable title for the above (a) A is correct but R is not correct
paragraph? (b) A is not correct but R is correct
(c) Both A and R are correct and R is the correct
(a) Bad loans and Indian corporates
explanation of A
(b) Forbearance and Corporate Funding in Crisis (d) Both A and R correct but R is Not The correct
Times explanation of A
(c) Funding crisis and Covid-19 Ans. (c) : Both A and R are correct and R is the correct
(d) Funding during crisis explanation of A.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 443 YCT
 NTA UGC NET/JRF Exam, Dec. 2021/June 2022
COMMERCE
Solved Paper
Exam Date: 29.09.2022 Shift-I

1. Match List I with List II Choose the correct answer from the options
List-I List-II given below :
Tarriff/Subsidy Explanation (a) C, E, B, A, D (b) A, D, E, C, B
A. Tariffication i They have (c) B, D, C, A, E (d) E, B, A, C, D
demonstrably Ans. (a) : A valid contract have such essential element's
adverse effects onagreement's promise offer proposal acceptance.
other member
The correct sequence of making of a contract:-
countries. Offer or proposal - section 2 (a)
B. Prohibited II They act on goods ⇓
subsidies which are
Acceptance - section 2 (b)
contingent upon ⇓
export
performance Promise - section 2 (c)
C. Actionable III Replacement of ⇓
subsidies Agreement
existing non-tariff - section 2 (e)
restrictions ⇓
D. Non-actionable IV For Contract
industrial - section 2 (h)
subsidies research 3.
in Which among the following information shall
disadvantaged be disclosed for all public issues of shares
regions irrespective of their issue price?
Choose the correct answer from the options A. Earning per share
given below: B. Dividend payout ratio
(A) (B) (C) (D) C. Pre-issue P/E ratio
(a) ii iii i iv D. Average return on net worth in last 3 years
(b) iv i ii iii E. Net asset value per share based on last
(c) iii ii i iv balance sheet
(d) ii iv iii i Choose the correct answer from the options
Ans.(c): given below :
List-I List-II (a) A, B, D and E only (b) A, C, D and E only
Tarriff/Subsidy Explanation (c) B, C, D and E only (d) A, B, C and D only
A. Tariffication (iii) Replacement of existing Ans. (b) : Earning per share, pre-issue P/E ratio,
Non-tariff restrictions Average return on net worth in last 3 year's, Net asset
value per share based on last balance sheet are the
B. Prohibited (ii) They act on goods which relevant information shall be disclosed for all public
subsidies are contingent upon issues of shares on their price.
export performance
4. The MM hypothesis of the irrelevance of
C. Actionable (i) They have demonstrably dividends is based on which of the following
subsidies adverse effects on other critical assumptions?
member countries. A. Investors are able to forecast future prices and
D. Non- (iv) For industrial research in dividends with certainty
actionable disadvantaged regions B. The firm has a given investment policy which
subsidies does not change
2. Arrange the following process of making of a C. All financing is done through retained earnings
contract in the chronological sequence from the D. There are no taxes
first to the last E. Perfect capital markets in which all investors
A. Agreement are rational
B. Promise Choose the correct answer from the options
C. Offer or proposal given below :
D. Contract (a) A, B and C only (b) C, D and E only
E. Acceptance (c) A, B, D and E only (d) B, C, D and E only
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 444 YCT
Ans. (c) : Miller & Modigliani's dividend irrelevance (a) Zero (b) Equal to one
theory is sometimes known as homemade dividend (c) More than one (d) Less than one
theory. Ans. (d) : If the price increase of a commodity is
Following are the Critical assumptions of MM followed by increased total revenue (total expenditure),
hypothesis :- it shows direct relation so demand will be inelastic
1. MM model is perfect capital market. hence it is less than one (E < 1)
2. Investor's behave rationally because investors are 8. Which of the following cannot use ITR-1 form
able to forecast future prices. to file return under the Indian Income Tax
3. The firm has Inflexible Investment Policy. Act?
4. In MM hypothesis no floatation & transaction costs. (A) An Individual who is a director in a company.
5. Information about the company is available to all (B) An individual who has any asset located outside
without any cost. India.
(C) An individual whose total income does not
5. Which of the following statements regarding exceed Rs. 50,00,000
the short- term theory of production and cost (D) An individual who has income from any source
analysis are false? outside India
(A) Economic rent is the same as economic profit. (E) An individual who has any unlisted shares at
(B) Imputed cost is the rent of a hired building any time during the previous year
(C) When AC = MC, AC is minimum Choose the correct answer from the options
(D) When MC is rising, AC > MC given below :
(E) Output is optimum when AC = MC (a) A, B, C and D only (b) A, B, D and E only
Choose the correct answer from the options (c) A, C and E only (d) B, C and E only
given below: Ans. (b) : Form ITR 1 is known as "Sahaj"
(a) A and E only (b) B and D only following are not eligible to file ITR- I for AY 2022-23-
(c) A, B and C only (d) C, D and E only • ITR - 1 cannot be filed by any individual who is a
Ans. (b) : Imputed cost is a cost that is incurred based Resident not ordinarily Resident (RNOR) and Not
on the costing arise from an alternative way of using an ordinary Resident (NRI).
asset or taking action instead of investing it. Hence • has total income exceeding ` 50 lakh.
building on rent is an imputed cost. • has agricultural income exceeding ` 5000 /-.
Average cost is always higher than marginal cost even • has income from lottery, racehorses, legal gambling
MC increases if MC is higher than AC then the firm etc.
will face loss hence option b & d are false statement • has taxable capital gains (short term and long term).
regarding the short -term theory of production and cost • has invested in unlisted equity shares.
analysis .
• has income from business or profession.
6. Which one of the following statements is false? • is a Director in a company.
(a) Arithmetic mean is used to measure the • has tax deduction under section 194 N of Income Tax
deviations in calculating standard deviation Act.
due to its least squares property
• has deferred income tax on ESOP received from
(b) Z- Score value of 'X' is the ratio between 'X' employer being an eligible start - up.
divided by mean
• Owns and has income from more than one house
(c) The coefficient of variation is calculated as property.
X • Is not covered under the eligibility conditions for
follow : ×100 ITR-1.
σ
(d) Standard deviation can be equal to zero in 9. Given below are two statements
some situations Statement I : The probable error (P.E) of the
Ans. (b) : Coefficient of variation is an important coefficient of correlation (r) is defined
concept that allows you to predict variables with in &
as: PE =
(ℓ − r2 )
outside data sets
Coefficient of variation (C.V.) n
Statement II : When a null hypothesis is true
Standard deviation but the test statistic rejects it, this known as
= × 100
Mean Type-I error in hypothesis testing
Z score indicate how much a given value differs from In light of the above statements choose the most
x−u appropriate answer from the options given
the standard deviation Z = below
σ (a) Both Statement I and Statement II are correct
So, Z score value of x is the ratio between X is not (b) Both Statement I and Statement II are
divided by mean. incorrect
7. When the price increase of a commodity is (c) Statement I is correct but Statement II is
followed by increased total revenue, which one incorrect
of the following is the price elasticity (d) Statement I is incorrect but Statement II is
coefficient? correct
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 445 YCT
Ans. (d) : Statement I is incorrect because probable According to the Porter's Generic strategies model,
error formula is- these are three basic strategic options available to
1− r2 organizations for joining competitive advantage.
PE = 0.6745 These are :- Cost Leadership, differentiation and Focus.
N Hence, Market penetration is not a genetic strategy as
& II statement is correct. per the generic strategies identified by Porter.
10. Which of the following statements regarding 13. Which one of the following distributions
price and output determination under describes the ownership of income and
monopoly are correct? property in a capitalist economy?
(A) A monopoly firm can fix its price anywhere (a) Normal distribution
along its demand curve (b) Poisson distribution
(B) Even during short run when a monoploy firm (c) F- distribution
earns normal profit, it produces less than its (d) Pareto distribution
optimum capacity Ans. (d) : Pareto distribution describes the ownership of
(C) The slope of monopoly's MR curve is twice the income & property in capitalistic economy.
slope of its AR curve Pareto distribution is a skewed, heavy trailed
(D) Price discrimination is possible only when distribution that is sometimes used to model that
demand curves are identical in two markets distribution of incomes. The basis of the distribution is
(E) Equilibrium price of a monopolist is always that a high proportion of a population has low income
higher than that of a perfectly competitive firm while only a few people have very high income.
Choose the correct answer from the options 14. Which section of the Indian Companies Act,
given below : 2013 among the following provides for the
(a) A, D and E only (b) A, B and E only appointment of first auditors by the Board of
(c) B, C and D only (d) B, C and E only Directors within one month of the date of
Ans. (d) : In the short run, the monopolist operates in registration of the company?
all the three condition of profit normal profit & loss it is (a) 139 (2) (b) 139 (6)
a misconception that a monopolist always earn profit in (c) 142 (1) (d) 142 (2)
the short run whether the monopoly will make profit, Ans. (b) : • Section 139(6) of the Companies Act
normal profit, loss in the short run depends on the describes that appointment of first Auditors by the
demand curve of the market & the cost condition of the Board of Director's within one month of the date of
market. A monopoly firm must reduce the price or AR registration of the company.
of the product in order to sell more of it. Also if AR • Section 139(2) of the Companies Act describes that
falls. MR will also fall, but foster then AR as MR < AR. an individual auditor cannot act as auditor more
11. Which of the following are the parameters in than 5 consecutive years.
the financial Inclusion Index in India? • Section 142(1) of the Companies Act, 2013, The
(A) Affordability remuneration of the auditor of a company shall be
(B) Availability and usage fixed in its general meeting.
(C) Ease of access • Section 142(2) of the Companies Act, 2013,
(D) Transparency and disclosure payment of fee & expenses included in
(E) Quality of financial inclusion remuneration of auditors.
Choose the correct answer from the options 15. Currency depreciation in the Indian Rupee in
given below: recent times has largely been attributed to :
(a) A, B and C only (b) C, D and E only (A) Declining domestic savings
(c) A, B and D only (d) B, C and E only (B) Increasing FDI flows
Ans. (d) : The FI-Index constructed by the Reserve (C) Portfolio outflows
Bank is based in the three dimension of financial (D) Higher currency circulation
inclusion, viz 'Access, usages and Quality with weights (E) Higher imports and debt servicing
as 35, 45 and 20 percent respectively. Choose the correct answer from the options
• The annual FI-index for period ending March 2022 is given below :
56.4 vis-a-vis 53.9 in March 2021. (a) A, B and C only (b) B, C and D only
• The FI-index will be published annually in July every (c) A and D only (d) C and E only
year. Ans. (d) : Major Causes of Rupee Depreciation in
12. Which one from among the following is not a recent times due to:-
genetic strategy as per the generic strategies • Portfolio outflows.
identified by Porter? • Higher imports & debt servicing.
(a) Market Penetration (b) Cost Leadership • Indians sell rupees to buy dollars.
(c) Focus (d) Differentiation • India consumes more crude oil than it produces.
Ans. (a) : Market penetration can relates number of 16. Which is the single most important driver of
customer's use Goods or services of a particular innovation (Gerard. J. Tellis 2013) in a
company instead of other competitors company. business firm?
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 446 YCT
 (a) Labour (b) Capital (C) Feeling (iii) Likes a flexible,
(c) Government (d) Culture spontaneous way
Ans. (d) : Culture of a firm is the most important driver rather than a
of innovation in a business firm. planned and
Gerard. J. Tellis expert on innovation, advertising, & orderly way of
Global Market's his new book is titled, "How life
transformative innovation shaped the Rise of Nations" (D) Perceiving (iv) Relies more on
17. Concentration of all marketing efforts on a interpersonal
small but specific and well defined segment of analysis and logic
the population is called : than on personal
(a) Niche marketing (b) Franchising values
(c) Ambush marketing (d) Viral marketing Choose the correct answer from the options
given below :
Ans. (a) : Niche Marketing:- Niche Marketing is a
(A) (B) (C) (D)
special area of demand for a product or service it's
concentrates on Niche areas of any segment with (a) ii i iv ii
selective product & service. (b) ii iv i iii
• Franchising is the agreement between two parties (c) iii iv i ii
where the first party is franchiser & second party is (d) ii i iii iv
franchisee. Ans. (b) :
• Ambush Marketing is the process of hijacking the List-I List-II
advertising campaign of some other marketer's to MBTI Characteristics
compete & get more exposure to your product or Framework-
service. Jungian Aspects
• Viral Marketing is a Marketing in which products are A. Sensing (ii) Would work with known
promoted through internet on e-mail, from person to facts than look for
person by word of mouth etc. possibilities and
18. Which one of the following rights is usually not relationships
available to a partner consequent to the B. Thinking (iv) Relies more on
dissolution of a firm? interpersonal analysis and
(a) Right of equitable distribution of firm's logic than on personal
property values
(b) Right to return of premium on premature C. Feeling (i) Relies more on personal
winding up values than on
(c) Right to be consulted impersonal analysis and
(d) Right to restrain any partner or his logic
representative from the use of firm name or D. Perceiving (iii) Likes a flexible,
firm property spontaneous way rather
Ans. (c) : Following Right's are available for partner's than a planned and
on dissolution of a firm:- orderly way of life
• Right to an equitable lien 20. Match List I with List II
• Right to return of premium List-I List-II
• Right against fraud Objective of business Suggested by
• Right to restrain the use of firm name or property firms
• Right to earn personal profit's by using the name of (A) Sales Revenue (i) K.W.
maximization Rothschild
the firm.
(B) Maximization of (ii) Cyert and
19. Match List I with List II Firm's growth March
List-I List-II rate
MBTI Framework- Characteristics (C) Long-term (iii) W.J. Bournal
Jungian Aspects survival
A. Sensing (i) Relies more on (D) Satisfying (iv) Robin Marris
personal values behaviour
than on
impersonal Choose the correct answer from the options
analysis and logic given below :
B. Thinking (ii) Would work with (A) (B) (C) (D)
known facts than (a) iii iv i ii
look for (b) iv iii ii i
possibilities and (c) ii i iv iii
relationships (d) i ii iii iv
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 447 YCT
 Ans. (a) : (D) Market (i) The maximum possible
List-I List-II Potential demand for a product
Objective of business Suggested by when marketing
firms expenditure in the
industry is infinite
(A) Sales Revenue (iii) W.J. Bournal
maximization 22. Given below are two statements
(B) Maximization of (iv) Robin Marris Statement I : In the case of Life Insurance, the
Firm's growth rate insurable interest must be present in the person
insured at the time when the event happened.
(C) Long-term survival (i) K.W. Rothschild
Statement II : In the case of Fire Insurance, the
(D) Satisfying (ii) Cyert and March insurable interest must be present in the object
behaviour insured at the time when the policy is taken
21. Match List I with List II and the event has happened.
List I List II In light of the above statements, choose the
Marketing Description correct answer from the options given below
Concept (a) Both Statement I and Statement II are true
(A) Brand (i) The maximum (b) Both Statement I and Statement II are false
Equity possible demand for (c) Statement I is true but Statement II is false
a product when (d) Statement I is false but Statement II is true
marketing Ans. (d) : In the case of life insurance, insurable interest
expenditure in the must be present at the time the life insurance policy is
industry is infinite purchased, not in the person insured at the time when
(B) Brand (ii) The mental the event happened.
Identity perception and Statement II is correct.
associations of 23. Which of the following approaches of capital
consumers related to structure pleads that debt financing initially
a brand increase the value of the firm : however excess
(C) Brand (iii) The peciliar debt financing beyond a particular point
Image distinguishing color, reduces the value of the firm?
design, label of a (a) Net Income Approach
brand which (b) Net Operating Income Approach
distinguish brand of (c) Traditional Approach
a firm
(d) Modigliani-Miller Approach
(D) Market (iv) A pool of goodwill
Potential consumers have Ans. (c) : Traditional Approach favour that as a result
related to a brand of financial leverage up to some point, cost of capital
comes down and value of firm increases. However,
Choose the correct answer from the options beyond that point reverse trends emerge.
given below :
• The principle implication of this approach is that the
(A) (B) (C) (D) cost of capital is dependent on the capital structure and
(a) iv iii ii i there is an optimal capital structure which minimize
(b) i ii iv iii cost of capital.
(c) iii i iv ii 24. Which of the following are the essential
(d) ii iii i iv elements for defining a business?
Ans. (a) : (A) Dealers
List I List II (B) Products
Marketing Description (C) Markets
Concept (D) Competitors
(A) Brand Equity (iv) A pool of goodwill (E) Functions
consumers have related Choose the correct answer from the options
to a brand given below :
(B) Brand (iii) The peciliar (a) B, C and E only (b) A, B and E only
Identity distinguishing color, (c) B, C and D only (d) B and D only
design, label of a brand Ans. (a) : Essential elements for defining a business:-
which distinguish
brand of a firm • Products
• Markets
(C) Brand Image (ii) The mental perception
and associations of • Functions
consumers related to a • People
brand • Money

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 448 YCT
25. Given below are two statements, one is labelled (a) A, D, E, C B (b) A, E, D, B, C
as Assertion A and the other is labelled as (c) A, B, E, D, C (d) D, B, A, E, C
Reason R. Ans. (d) : Management audit is a process in which
Assertion A : By switching to long-term auditor evaluates company's overall activities &
government bonds, the investor acquires an performances.
asset whose price fluctuates as interest rates
vary Following steps in a logical sequence of the process of
Reason R : Bonds prices fall when interest management audit.
rates rise and rise when interest rates fall. (i) Identifying & segregating the objectives of business
In light of the above statements, choose the ↓
correct answer from the options given below. (ii) Review of organizational structure
(a) Both A and R are ture and R is the correct ↓
explanation of A (iii) Identification of responsibility centers
(b) Both A and R are true but R is NOT the ↓
correct explanation of A (iv) Review of performance of each responsibility centre
(c) A is true but R is false
↓
(d) A is false but R is true
(v) Reporting
Ans. (a) : In order to protect against risk every investor
wanted to earn those asset from government bonds, 28. SEBI's 'Skin in the game' rule is applicable to
whose value would keep on decreasing according to the which of the following financial
change in interest rates. Every investor starts selling the intermediaries?
bond in order to make profit from the rising interest (a) Merchant bankers (b) Financial Advisors
rate, due to which the value of bond starts falling due to (c) Mutual funds (d) Brokerages
excess supply of the bond on the contrary; a fall in the Ans. (c) : SEBI's 'skin in the game' rule is applicable to
interest rate increases the purchase of the bonds, that is, Mutual funds. It is a phrase which is popularized by
due to more demand, their value increases. "Warren Buffet.' It is a situation in which high ranking
26. Given below are two statements, one is labelld insiders use their own fund to buy stock in the company
as Assertion A and the other is labelled as they are running.
Reason R. Skin-in-the- game rules would be effective form
Assertion A : R2 tends to be smaller for cross October 1, 2021.
sectional data than for the time series data
In the, SEBI's rule junior employees (below the age of
Reason R : Wider fluctuations in the cross 35 & not head of any department, fund managers and
sectional data cause smaller value of R2
CEO's) must invest 10% of their compensation in MF
In light of the above statements, choose the schemes in the first year. And share will increase to
correct answer from the options given below :
15% in the second year.
(a) Both A and R are true and R is the correct
explanation of A • And the key employees of asset management
(b) Both A and R are true but R is NOT the companies must invest a minimum of 20% of their
correct explanation of A gross annual CTC from October 1, 2021.
(c) A is true but R is false 29. Which one of the following aims at the Task
(d) A is false but R is true Dimension of organizational change?
Ans. (a) : Time series data is data that is recorded over (a) Broadening or narrowing span of control
consistent intervals of time. Cross sectional data (b) Diversifying into additional businesses
consists of several variables recorded at the same time. (c) Improving the efficiency of machines
Pooled data is a combination of both time series data & (d) Reallocating authority
cross sectional data R2 is the percent of variance Ans. (b) : Diversifying into additional business is the
explained by the model that is R2 is the function by aims at the task Dimension of organizational change.
which the variance of the errors is less than variance of
dependent variables. 30. Sweezy's kinked demand curve model to
So, A and R is true & R is the correct explanation of A. explain the price and output determination
relates to which type of market structure?
27. Arrange the following steps in a logical
sequence of the process of management audit (a) Perfect Competition
(A) Identification of responsibility centers (b) Monopolistic Competition
(B) Review of organizational structure (c) Monopoly
(C) Reporting (d) Oligopoly
(D) Identifying and segregating the objectives of Ans. (d) : Kinked demand curve of oligopoly was
business developed by pawl M. Sweezy in 1939 this model
(E) Review of performance of each responsibility explains the price & output determination relates to
centre oligopoly Market. The Kinked demand curve model
Chooset the correct answer from the options seeks to explain the reason of price rigidity under
given below oligopolistic market situations.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 449 YCT
31. Sequence the procedure for e-filing of ITR-1 Ans. (b) :
and ITR-2
(A) Login
(B) Register
(C) Verification
(D) Downloading utility and preparing the Return
(E) e-Filing Income Tax Return
Choose the correct answer from the options An industry is in state of equilibrium in the long run
given below : when both the long-run demand & the long run supply
(a) A, B, E D, C (b) B, A, D, E, C of the industry are equal.
(c) B, A, C, D, E (d) A, B, C, D, E Therefore, at equilibrium point, the long run Marginal
Ans. (b) : Sequence the procedure for e-filing of ITR- 1 cost of each firm should be equal to the long run
& ITR-2 is:- marginal revenue of the firm & it should also be equal
1. Register to the average cost. Ex - LMC = LMR = LAR = LAC
In perfect competition price is determined by the
↓ industry on the basis of demand & supply that price is
2. Login accepted by all the firm.
↓ 34. Match List I with List-II
3. Downloading utility & preparing the return
List-I List-II
↓
Characterst Description
4. E-filing Income tax return ic Business
↓ A. Cash (i) The most valuable
5. Verification Cows segments of a company;
32. The information with respect to a company is : the parts most wanted
EBIT = Rs. 35 Lakh by an acquirer
15% Term loan = Rs. 50 Lakh B. Crown (ii) A third party friendly to
Working capital term loan from bank @ 20% Jewels management who helps
= Rs. 30 lakhs a company avoid an
10% Preference share capital = Rs. 10 lakhs unwanted takeover with
Public deposits accepted @ 14% = 15 lakhs taking over the company
Which one among the following is the interest on its own
Coverage Ratio for the company C. Fallen (iii) A BCG term for
(a) 0.45 (b) 1.98 Angles business segment which
(c) 2.24 (d) 2.59 have a high market
share in low growth
Ans. (c) : Interest Coverage Ratio
markets
EBIT D. White (iv) A bond issued at
=
Total Interest Expense Squire investment grade whose
Total Interest Expense rating is subsequently
35,00,000 dropped to below the
15% of 50 lakh = 7,50,000 ICR = investment grade
15,60,000 Choose the correct answer from the options
+20% of 30 lakh = 6,00,000 given below :
350 (A) (B) (C) (D)
+14% of 15 lakh = 2,10,000 = = 2.24
156 (a) ii iv i iii
15,60,000 (b) i iv iii ii
33. Which of the following statements are true (c) iv iii ii i
regarding price and output determination (d) iii i iv ii
under perfect competition? Ans. (d) :
A. A firm is a price taker List-I List-II
B. In the long run, a firm is in equilibrium Characterstic Description
when its AR = MR = LAC = LMC Business
C. A firm is in equilibium in the short run only A. Cash Cows (iii) A BCG term for
when price goes below its AC business segment which
E. A firm fixes the price of its products when have a high market share
AR = MR in low growth markets
Choose the correct answer from the options B. Crown Jewels (i) The most valuable
given below : segments of a company;
(a) C and E only (b) A and B only the parts most wanted by
(c) A, C and E only (d) B, C and D only an acquirer
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 450 YCT
 C. Fallen Angles (iv) A bond issued at (a) Rs. 200 p.m (b) Rs. 160 p.m
investment grade whose (c) Rs. 240 p.m (d) Rs. 300 p.m.
rating is subsequently Ans. (b) : According to Indian Income tax Act 1961
dropped to below the following tax benefits on children education allowance
investment grade
& hostel expenditure:-
D. White Squire (ii) A third party friendly to • Children's Education Allowance:- INR 100 per
management who helps a
company avoid an month per child up to a maximum of 2 children.
unwanted takeover with • Hostel expenditure allowance:- INR 300 per month
taking over the company per child up to a maximum of 2 children.
on its own 38. Match List I with List II
35. Given below are two statements, one is labelled List-I List-II
as Assertion A and the other is labelled as Entrepreneurial Description
Reason R Theory
Assertion A : An export processing zone is
different from free trade zone as it promotes A. Thomas (i) Highlight the self-
units primarily devoted to exports. Cochran's confidence of a
Reason R : Goods imported to free tade zone Theory person and the
may be re-exported without any processing, in dependency on
the same form. But goods exported by units in fortune and
an EPZ are expected to have undergone some external
value addition by manufacturing. environment for
In light of the above statements, choose the becoming an
most appropriate answer from the options entrepreneur
given below B. Rotter's (ii) Religious beliefs
(a) Both A and R are correct and R is the correct Locus of are the driving or
explanation of A Control restraining forces
(b) Both A and R are correct but R is NOT the Theory for
correct explanation of A entrepreneurial
(c) A is correct but R is not correct activity
(d) A is not correct but R is correct (C) McLelland's (iii) The environment
Ans. (a) : No tax is imposed on the import & export of Theory in which an
goods in the free trade zone & the goods are imported & individual is
exported in their original farm, whereas in the export brought up
processing zone, the exported goods are processed & determines his
value added after which distribution is done. Hence,
Both A and R are correct and R is the correct entrepreneurial
explanation of A. urge
36. Which of the following are included in Salary (D) Max (iv) The need for
as per Section 17 (1) of the Income Tax Act? Webber's achievement
(A) Wages Theory (nAch) drives and
(B) Any pension or annuity stimulate
(C) Any interest from Government securities entrepreneurship
(D) Any gratuity Choose the correct answer from the options
(E) Any advance of salary given below :
Choose the correct answer from the option (A) (B) (C) (D)
given below (a) iii i iv ii
(a) A, B, C and D only (b) A, B, C, D and E (b) ii iii iv i
(c) A, B, D, and E only (d) C and E only (c) i iv ii iii
Ans. (c) : Salary as per section 17(1) of the Income Tax (d) ii i iii iv
act included:- Ans. (a) :
• Wages
List-I List-II
• Any pension or annuity
Entrepreneurial Description
• Any Gratuity
Theory
• Any advance of salary
A. Thomas Cochran's (iii) The environment
• Any fees, commissions, perquisites or profits in lieu
or in addition to any salary or wages etc. Theory in which an
individual is
37. A is entitled to children education allowance @ brought up
Rs. 80 p.m. per child, for three children, it determines his
amount to Rs. 240 pm. It will be exempted to
the extent to which one of the following under entrepreneurial
the Indian Income Tax Act? urge

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 451 YCT
 B. Rotter's Locus of (i) Highlight the self- Ans. (c) :
Control Theory confidence of a List-I List-II
person and the
PLC Stage Pricing Strategy
dependency on
fortune and (A) Decline (iii) Price Reduction
external (B) Maturity (i) Price to match or beat
environment for competitors price
becoming an (C) Growth (iv) Price to penetrate
entrepreneur market
(D) Introduction (ii) Charge cost-plus price
C. McLelland's (iv) The need for
Theory achievement
(nAch) drives and
stimulate
entrepreneurship
D. Max Webber's (ii) Religious beliefs
Theory are the driving or
restraining forces
for entrepreneurial
activity 41. Which one of the following is not the
assumption for consumer behaviour based on
39. Which of the following issue are covered in the Ordinal Utility Theory?
Social Marketing?
(a) Rationality of the consumer
(A) Tobacco
(B) Family planning (b) Utility only ordinally measurable
(C) Public health (c) Satiety of demand
(D) Financial well-being (d) Diminishing marginal rate of substitution
(E) Social good Ans. (c) : Ordinal utility is introduced in 1930 by John
Choose the correct answer from the options Hicks & R.J. Allen
given below : Assumption of ordinal utility
(a) A and B only (b) A, B and C only • Rationality of the Consumer.
(c) C, D and E only (d) A, B, C, D and E • Utility only ordinally measurable.
Ans. (d) : Following are the issues covered in social • Diminishing Marginal rate of substitution.
marketing:- • Transitivity or consistency optimality.
• Tobacco/Smoking
42. Multicollinearity in the regression analysis is
• Family planning measured by
• Public Health (a) Tolerance (1– R2)
• Financial well being (b) Homoscedasticity
• Social good (c) Partial F-test
Societal issue can be challenge for marketers because (d) Durbin-Whatson statistic
they are not always in the control of marketer.
Ans. (a) : Multicollinearity is a high degree of
40. Match List I with List II
correlation amongst the explanatory variables.
List-I List-II Multicollinearity in the regression analysis is measured
PLC Stage Pricing Strategy by Tolerance (1-R2)
(A) Decline (i) Price to match or 43. Arrange the following steps in the design
beat competitors
thinking process for an innovative solution to a
price
problem:
(B) Maturity (ii) Charge cost-plus (A) Ideate
price
(B) Test
(C) Growth (iii) Price reduction
(C) Empathize
(D) Introduction (iv) Price to penetrate (D) Define
market
(E) Prototype
Choose the correct answer from the options Choose the correct answer from the options
given below :
given below
(A) (B) (C) (D)
(a) A, D, C, B, E (b) B, C, A, D, E
(a) iii iv i ii
(c) C, D, A, E, B (d) C, B, A, E, D
(b) iii i i iv
(c) iii i iv ii Ans. (c) : Following steps in the design thinking
(d) ii i iii iv process for an innovative solution to a problem:-

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 452 YCT
 Empathize 46. Which one of the following categories of
↓ customers are opening leaders who carefully
Define search for new technologies that might give
them a dramatic competitive advantage?
↓ (a) Early Adopters (b) Innovators
Ideate (c) The early majority (d) The late majority
↓ Ans. (a) : Customers are classified into five categories:-
Prototype 1. Innovators 2. Early Adopter's 3. Early Majority
↓ 4. Lake Majority 5. Laggards
Test • Innovators-try new product in market they take risk.
44. If the assessee is engaged in the business of • Early adopter- try new product but carefully.
growing and manufacturing tea in India, the • Early Majority- Try product after innovator's &
agriculture income in that case shall be : early adopter they are price sensitive.
(a) 25% of the income of such business • Late Majority- Late majority are skeptical they
(b) 40% of the income of such business adopt an innovation only after a majority of people
(c) 60% of the income of such business have tried it.
(d) 75% of the income of such business • Laggards are tradition-bound they are suspicious
Ans. (c) : If the assessee is engaged in the business of only when it has become something of a tradition
growing & manufacturing tea in India, the agriculture itself.
income in that case shall be 60% of the income of
such business:-
• Particulars Agricultural Non-
of business portion agricultural
(exempt) portion
(Taxable)
• Growing & 60% 40%
manufacturing
47. Which one of the following is used for
of tea international money transfer?
• Growing & 65% 35% (a) RTGS (b) NEFT
manufacturing (c) SWIFT (d) IMPS
of rubber
Ans. (c) : SWIFT is used for international money
• Growing & 75% 25% transfer (SWIFT) Society for Worldwide Interbank
manufacturing Financial Telecommunications that provides safe &
of coffee secure financial transactions for its member.
• Growing & 60% 40% Today international payment & settlement's mostly
manufacturing done through SWIFT method.
of coffee 48. Which one of the following is not true for
grown, cured, Authority?
roosted & (a) It is the legitimate right of a superior to
grounded command and compel his subordinates to
45. Which one of the following duties is not a perform a certain act
general duty of directors of a company? (b) It is mostly well-defined, conspicuous and
(a) Duty of good faith in order to promote the finite
object of the company (c) It can be delegated
(b) Duty of due and reasonable care, skill and (d) It serves as a basis of both formal and
diligence and shall exercise independent informal organizations
judgment Ans. (d) : Authority is the legitimate right of a
(c) Duty to attend Board Meetings superior to command and compel his subordinates to
(d) Duty not to delegate or assign his office perform a certain act. In informal organization, there is
assignment no typical hierarchies for authority as compared to
formal organization. So, It serves as a basis of only
Ans. (c) : General duty of Directors of a Company are:-
formal organization.
• Duty of good faith in order to promote the object of
the company. 49. Which one of the following is not coordinated
in the Vertical Integration of Integrated
• Duty of due & reasonable care, skill & diligence & Marketing Communications?
shall exercise, independent judgment. (a) Pricing
• Duty not to delegate or assign his office assignment. (b) Sales
• Duty to disclose interest. (c) Product development
• Personal Attendance. (d) Customer service
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 453 YCT
Ans. (a) : A unique feature of the (RBI- FI) Index is 53. Match list I with List II
the Quality parameter which captures the quality aspect List-I List-II
of financial inclusion as reflected by financial literacy, Statistical Description
consumer protection, and inequalities and deficiencies identitiy
in services. (A) Power of (i) Maximum level of
50. RBI financial inclusion index (FI-Index) test significance at which
quality parameter capture information on the null hypothesis
which of the following : would be accepted
(A) Financial literacy (B) Standard (ii) Test for significance of
(B) Consumer protection error regression equation
(C) Ease of access (C) P-Value (iii) Standard deviation of
(D) Availability and usage an estimate from a
(E) Inequality and deficiency in service sample
Choose the correct answer from the options (D) F-test (iv) The probability that
given below : test will lead of
(a) A, B and C only (b) C, D and E only rejection of null
(c) A, D and E only (d) A, B and E only hypothesis when it is
Ans. (d) : RBI financial inclusion index quality false
parameter not capture following information:- Choose the correct answer from the options
• Financial literacy given below :
• Consumer Protection (A) (B) (C) (D)
• Inequality & deficiency in service. (a) iii ii iv i
51. Which of the following factors restrain Glob (b) iv iii i ii
alization? (c) ii iv i iii
(A) International economic integration (d) i iv ii iii
(B) Nationalism Ans. (b) :
(C) Emerging trade barriers List-I List-II
(D) Regulatory controls Statistical Description
(E) Move towards free marketing system identity
Choose the correct answer from the options (A) Power of (iv) The probability that test
given below: test will lead of rejection of null
(a) A and E only (b) C, D and E only hypothesis when it is false.
(c) B, C and D only (d) A, B and D only
(B) Standard (iii) Standard deviation of an
Ans. (c) : Following are the factor restrain error estimate from a sample.
Globalization:-
1. Regulatory controls (C) P-Value (i) Maximum level of
significance at which the
2. Emerging trade barriers null hypothesis would be
3. Cultural factors accepted.
4. Nationalism
(D) F-test (ii) Test for significance of
5. War and Civil disturbances regression equation.
6. Management Myopia
52. The contribution margin can be increased by 54. Which one of the following is not a marketing
which of the following? tactic used for designing customer value?
(A) Increasing the selling price per unit (a) Service (b) Communication
(B) Changing the sales mixture and selling more (c) Brand (d) Incentives
profitable products for which the P/V ratio is Ans. (b) : Communicating is not a marketing tactic used
higher for designing customer value.
(C) Keeping the marginal cost unchanged • Service, Brand & incentives are marketing tactic
(D) Increase the amount of fixed assets used for designing customer value.
(E) Decreasing the selling price per unit 55. Portfolio approach to investing is primarily
Choose the correct answer from the options focused on which of the following :
given below : (a) Diversification (b) Value protection
(a) B, C and E only (b) A, C and D only (c) Return appreciation (d) Risk optimisation
(c) A and B only (d) D and E only Ans. (d) : Portfolio approach to investing is primarily
Ans. (c) : Company contribution margin can be focused on risk optimisation.
increased by:- 56. Which one of the following production
• Increasing the selling price per unit. functions is a long-term production function?
• Changing the sales mixture & selling more (a) Q= a + bL – cL2
profitable products for which the P/V ratio is higher. (b) Q = AKaLb
• Reduce the variable cost of product it's also help in (c) Q = a + bL + CL2 – dL3
increase the product's contribution margin. (d) Q = a + bL
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 454 YCT
Ans. (b) : Long run production function is a Choose the correct answer from the options
relationships between inputs & output of a commodity given below :
for a longer period of time. (a) A, B and C only (b) C, D and E only
Cobb - Douglas production function = (c) A, D and E only (d) B, C and E only
( Q ( L, K ) = AK a Lb ) Ans. (d) : Following properties of a good point
estimator includes:-
57. Which of the following are correctly needed to
• Most efficiency
claim exemptions in respect of HRA?
(A) Salary • Unbiasedness
(B) Place of residence • Consistency
(C) Standard rent 61. Match List I with List II
(D) Rent paid List-I List-II
(E) HRA received Formula for test statistic Test
Choose the correct answer from the options (A) (i)
(0 - E) Z-test
2
given below :
(a) B, C, D and E only (b) A, C, D and E only
∑ E
(c) A, B, D and E only (d) A, B and C only (B) 12 R2j (ii) H-test
Ans. (c) : Salary, place of residence, rent paid, HRA ∑
n ( n +1) nj
- 3 ( n +1) (Kruskal-
received are correctly needed to claim. Wallis test)
Exemptions in respect of HRA. (C)
X-µ
(iii) F-test
58. Which of the following companies cannot be a (ANOVA)
SE
'Small Company'?
A. A holding company or a subsidiary company (D) (iv) Chi-square
SS between
B. A company registered under Section 8 test
C. A company or body corporate governed by any SS within
Special Act Choose the correct answer from the options
D. One Person Company (OPC) given below:
Choose the correct answer from the options (A) (B) (C) (D)
given below : (a) i ii iii iv
(a) B and C only (b) A, B and C only (b) iii iv ii i
(c) B, C and D only (d) A and D only (c) iv ii i iii
Ans. (b) : Following companies cannot be fill criteria of (d) iv ii iii i
small company:-
Ans. (c) :
A. A holding company or a subsidiary company.
B. A company registered under section 8. List-I List-II
C. A company or body corporate governed by any Formula for Test
special Act. test statistic
59. Which one of the following is not the guiding (A) (0 - E )
2 (iv) Chi-square test
principle of World Bank regarding its lending ∑ E
operation?
(a) Proper assessment of the repayment prospects (B) 12 (ii) H-test
of loans n ( n +1) (Kruskal-Wallis test)
(b) Lending should be only for specific projects R 2

which are economically and technically sound ∑ n j - 3 ( n +1)

and of a high priority nature j

(c) The lending should be to enable a country to (C) X -µ (i) Z-test

meet foreign exchange content of the project
cost. SE
(d) The bank does expect the borrowing country (D) SS between (iii) F-test (ANOVA)
to spend the loan in a particular country SS within
Ans. (d) : The bank does expect the borrowing country 62. Arrange the following ratios in the increasing
to spend the loan in a particular country is not the
order of their significance in the prediction of
guiding principle of World Bank regarding its lending
operation. industrial sickness (Altman, 1966) :
60. Properties of a good point estimator includes Working Capital
(i)
which of the following? Total Assets
(A) Stationary (B) Efficiency
Retained Earnings
(C) Consistency (D) Neutrality (ii)
(E) Unbiasedness Total Assets

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 455 YCT
 Earnings Before Interest and Taxes (B) ABC (ii) The amount of
(iii)
Total Assets any given volume
of output by
which the
Market Value of Equity
(iv) aggregate costs
Book Value of Total Debt are changed if the
volume of output
Sales is increased by
(e) one unit.
Total Assets
Choose the correct answer from the options (C) Target (iii) Used when
given below: Costing identical units are
(a) D, E, A, B, C (b) C, E, B, D, A produced
(c) B, D, C, A, E (d) E, B, D, C, A through an on-
Ans. (a) : Following ratios in the increasing order of going series of
their significance in the proportion of industrial sickness production steps
(Altman, 1966):-
(D) Process (iv) Costing system in
Market value of equity Costing which costs being
(i)
Book value of total debt with tracing of
Sales activities and
(ii)
Total Asset 's then to producing
Working Capital the product
(iii)
Total Assets Choose the correct answer from the options
Retained earnings given below:
(iv) (A) (B) (C) (D)
Total Assets
Earning Before Interest & Taxes (a) ii iv i iii
(v) (b) i iv iii ii
Total Assets
63. Which one of the following represents (c) ii iii iv i
empirical generalizations relating to GDP (d) i iii ii iv
growth and changes in unemployment? Ans. (a) :
(a) Phillips curve (b) Misery index
(c) Pereto distribution (d) Okun's law List I List II
Ans. (d) : Okun's law represents empirical Type of Description
generalisations relating to GDP growth & changes in Costing
unemployment. (A) Marginal (ii) The amount of any given
Y − Y* volume of output by which
Okun's law formula = = β ( u − u *) Costing
Y* the aggregate costs are
Y = Actual GDP changed if the volume of
Y* = Potential GDP output is increased by one
β = Okun coefficient unit.
u = Unemployment rate of current year (B) ABC (iv) Costing system in which
u* = Unemployment rate of the previous year
costs being with tracing of
64. Match List I with List II activities and then to
List I List II producing the product
Type of Costing Description
(C) Target (i) Integrated approach to
(A) Marginal (i) Integrated determine product features,
Costing approach to Costing
determine product price, product costs
product features, and product design that
product price, helps ensure a company to
product costs and earn reasonable profit on
product design new products
that helps ensure
a company to (D) Process (iii) Used when identical units
earn reasonable Costing are produced through as on-
profit on new going series of production
products steps
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 456 YCT
65. Match List I with List II (B) Nash (ii) A situation in which
List-I List-II equilibrium each player has
Economic Description chosen his/her
Framework optional strategy
given the strategy
(A) Stackelberg (i) The situation in chosen by the other
model which each player player
in an oligopolistic (C) Peter's strategic (iii) Conceptualization
markets adopts its Frameworks for identifying the
dominant strategy structural
but could do by determinant of the
cooperating intensity of
(B) Nash (ii) Conceptualisation competition and the
equilibrium for identifying the probability of firms
structural in oligopolistic
determinants of industries
the intensity of (D) Prisoner's (iv) The situation in
competition and delima which each player in
the probability of an oligopolistic
firms in markets adopts its
oligopolistic dominant strategy
industries but could do by
(C) Peter's (iii) if firms are cooperating
strategic disproportiionately 66. When the incoming partner cannot bring
Frameworks powerful the premium for goodwill, then the necessary
market leader adjustment for goodwill is done through which
makes the first one of the following?
move and captures (a) Goodwill account of the partners
two-third of (b) Capital account of the new partners
market share, (c) Balance sheet of the new partnership firm
while follower (d) Profit & loss Appropriation account
firm gets only a Ans. (b) : When the incoming partner cannot bring
third of the market premium for goodwill, then the necessary adjustment
share for goodwill is done through capital account of the
(D) Prisoner's (iv) A situation in new partners.
delima which each player 67. A company does not include the value of skills
has chosen his/her gained by its employees from training
optional strategy programmes in its annual financial statements.
given the strategy Which one of the following accounting concepts
chosen by the is being applied in this case?
other player (a) Going concern concept
(b) Money measurement concept
Choose the correct answer from the options
(c) Revenue recognition concept
given below :
(d) Business entity concept
(A) (B) (C) (D)
(a) ii iv i iii Ans. (b) : Money measurement concept are used when
a company does not include the value of skill's gained
(b) iii iv ii i by its employees from training programmes in its
(c) iii i iv ii annual financial statements.
(d) ii iii i iv Money measurement concept in accounting, we record
Ans. (b) : only those transactions which are expressed in terms of
List-I List-II money.
Economic Description 68. Arrange the following stages in the marketing
Framework process of an enterprise :
(A) Stackelberg (i) if firms are (A) Marketing Mix
model disproportionately (B) Marketing program implementation
powerful the market (C) Marketing Planning
leader makes the first (D) Market research
move and captures (E) Control and evaluation of marketing programs
two-third of market Choose the correct answer from the options
share, while follower given below :
firm gets only a third (a) D, C, A, B, E (b) C, B, A, E, D
of the market share. (c) B, A D, C, E (d) C, A, D, B, E
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 457 YCT
Ans. (a) : Following are the stages in the marketing 72. The share capital of an RRB is subscribed by
process of an enterprise:- the Central Government, State Government
1. Market research and the Sponsoring Bank in which one of the
2. Marketing planning following ratios?
3. Marketing mix (a) 40 : 40 : 20 (b) 50 : 15 : 35
4. Marketing Program Implementation (c) 50 : 35 : 15 (d) 60 : 30 : 10
5. Control & Evaluation of Marketing Programs Ans. (b) : The share capital of an RRB is:-
69. According to the Contingency Approach, the 50% shall be held by the central government
factors governing the Span of Management are: 15% shall be held by the state government
(A) Type of work & remaining 35% shall be held by the sponsoring bank
(B) Ability of the manager 73. Who are not eligible to get information under
(C) Ability of the employees the RTI Act from the following?
(D) Level of management (A) Corporations (B) Associations
(E) Geographic location (C) Companies (D) Citizens
Choose the correct answer from the options (E) Legal entities
given below: Choose the correct answer from the options
(a) B and C only (b) B, C and D only given below:
(c) A, D and E only (d) A, B, C, D and E (a) A, B, D and E only (b) A, B, C and E only
Ans. (d) : Factors governing the span of management (c) B and D only (d) A, D and E only
are [contingency approach] Ans. (b) : Section 3 in The Right to Information Act
• Ability of Manager • Level of management 2005, subject of the provisions of this Act, all Citizens
• Ability of the employees • Economic considerations shall have the right to information, Hence corporations,
• Type of work • Geographic location Associations , companies and Legal entities are not
• Information & control • Authority & responsibility eligible to get information under the RTI Act.
system 74. On which of the following bases buyers are
70. Amount unutilised in the capital gain scheme divided in psychographic segmentation?
for which exemption was claimed under section (A) Loyalty status
54 shall be treated as long-term capital in the (B) Life style
previous year? (C) Buyer-readiness stage
(a) In which period of 2 years has expered from (D) Values
the date of deposit (E) User status
(b) In which period of 2 year has expired from Choose the correct answer from the options
the date of transfer given below :
(c) In which period of 3 years has expired from
(a) B and D only (b) A, B and D only
date of deposit
(d) In which period of 3 years has expired from (c) B, C and E only (d) A, C, D and E only
the date of transfer Ans. (a) : Following bases buyers are divided in
Ans. (d) : Amount unutilised in the capital gain scheme psychographic segmentation:-
for which exemption claimed u/s 54 shall be treated as • Lifestyle
long-term capital gain if 3 years have expired from the • Personality traits
date of transfer. • Values & Attitude
71. What is the correct sequence in 'Hierarchy of • Activities, Interests & opinions
Effect" model in a communication situation : • Social status
(A) Preference 75. Out of the following statements, which are not
(B) Purchase true is respect of a Limited Liability
(C) Awareness and Knowledge Partnership?
(D) Conviction (A) There must be at least one 'Designated
(E) Linking member' at all times.
Choose the correct answer from the options (B) Designated members do not have the same
given below : rights and duties as any other member
(a) A, D, B, C, E (b) D, B, E, C, A (C) There is no specific requirement to have any
(c) B, A, D, C, E (d) C, E, A, D, B non- designated members
Ans. (d) : Correct sequence in "Hierarchy of Effect" (D) A Limited Liability Partnership may be
model in communication situation is:- established such that all member are
1. Awareness & knowledge considered to be designated members
2. Linking Choose the correct answer from the options
3. Preference given below :
4. Conviction (a) A, C and D only (b) A and B only
5. Purchase (c) B and D only (d) B, C and D only

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 458 YCT
Ans. (b) : Every LLP at least 2 designated partners who Conservative Approach:- This approach suggest that
are individual at least 1 of them must be resident in the entire requirement of current assets should be
India. financed through long term sources and short term
• Designated partners are also accountable & sources should be used only in case of emergency.
responsible for legal compliances same as any other 79. While wandering in jungle, King Dushyant
member. married Shankuntala as narrated in the
76. Which of the following are the components of "Abhigyan Shankuntalam". He gave her royal
Mc Kinsey's 7-S framework? ring which could serve her identity when she
would come to meet him, in future. Howver, she
(A) Shared values
had lost the ring while going to meet him. When
(B) Procurement she arrived at Dushyant's palace, he failed to
(C) Strategy recognize her as she did not had the ring.
(D) Technology Development Which of the following statistical error King
(E) System Dushyant had committed in this narrative?
Choose the correct answer from the options (a) Type I error (b) Type II error
given below : (c) Sampling error (d) Non-Sampling error
(a) A, C and E only (b) B, C and E only Ans. (a) : Type I Error- When the Null hypothesis is
(c) A, B and E only (d) B, D and E only true but rejected it is denoted by Ho.
Ans. (a) : Mckinsey 7s framework is developed by • Here, Shankuntala is the wife of Dushyant Kumar this
Robert H. waterman, Jr. & Tom Peters in 1980. is true but she had lost the ring while going to meet him
Following are the components of Mc kinsey's 7-s then King Dushyant failed to recognize her as she did
framework:- not had the ring.
1. Strategy Type I error is representative of false positive.
2. Skills Type II error (False negative) failing to reject the null
3. Structure hypothesis when it's actually false.
4. Style 80. The purpose (aim) of stock split is to
5. System (A) Increase the number of shares
6. Staff (B) Reduce market price per share
7. Shared values (Super-ordinate goals) (C) Arrest share price decline
77. Pricing practice of setting a price target and (D) Encourage wider public ownership
then developing a product that would allow the (E) Reduce impact cost
firm to maximum total profit at that price is Choose the correct answer from the options
called: given below :
(a) Price ceiling (b) Price matching (a) A, B and C only (b) B and D only
(c) Price lining (d) Pricing power (c) B, C and E only (d) A, D and E only
Ans. (c) : Price lining:- Pricing practice of setting a Ans. (b) : • Stock split is a process in which company
price target & then developing a product that would directors divide the company's outstanding shares into
allow the firm to maximum total profit at that price is multiple shares.
called price lining. The purpose of stock split is to-
• Price Ceilings:- A maximum price set by a top • Reduce market price per share.
authority. [help buyers] • Encourage wider public ownership.
• Price Floors:- A minimum price set by the 81. Which one of the following expressions is not
government [Help sellers] correct to calculate the coefficient of
• Price matching is a strategy used by retailers in correlation between two variables?
order to provide the best price for customers in a
certain competitive market. (a)
∑ xy (b) ( byx )( bxy )
• Pricing power means if firms product price charge N.ox.σy
then how much quantity/demanded of the product Cov ( x, y ) Cov ( x, y )
effect. (c) (d)
78. As per which one of the following approaches a σ .σ2
x
2
y σx , σ y
firm finances a part of its permanent working Σ xy
capital with short term financing? Ans. (c) :
(a) Matching Approach N.ox.σy
(b) Conservative Approach ( byx )( bxy )
(c) Aggressive Approach
(d) Traditional Approach Cov ( x, y )
Ans. (c) : Aggressive Approach:- In Aggressive σx, σy
approach a firm finances a part of its permanent All these statistical formula used to calculate the
working capital with short term financing. coefficient of correlation between two variables.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 459 YCT
82. Which one of the following statistical identities Ans. (b) : [1 (1-T)/ (Nominal Price - discount or +
are useful in comparing the two regression premium)] × 100
equations based on different sample sizes? 6.5
(a) Coefficient of determination (r2) × 100 = 5.91%
(b) Coefficient of multiple determination (R2) 110
86. Which of the following business would most
(c) Adjusted R2 ( R 2 ) likely use job order costing?
(d) Logistic regression (a) A brewery
Ans. (c) : Adjusted R ( R ) are useful in comparing
2 2 (b) An oil refinery
(c) A company that makes frozen pizzas
the two regression equations based on different sample (d) A print shop that specializes in wedding
sizes. invitations
83. Which one of the tests measures the applicant's Ans. (d) : A print shop that specializes in wedding
level of knowledge and skill in a particular job invitations is one of the example for the job order
in which one he will be appointed? costing.
(a) Personality test (b) Achievement test
(c) Interest test (d) Aptitude test 87. Which of the following forces push up the
productivity of employees in an organization?
Ans. (b) : Achievement test:- is one of the tests (A) Difficulty of work
measures the applicants level of knowledge & skill in a
particular job in which one he will be appointed. (B) Fear of working self out of job
Personality test:- It diagnoses potential, intersect, (C) Egoistic drive to accomplish
preferences of the candidate. (D) Desire for promotion
Aptitude test:- These test are used to test an individual (E) Motive towards doing work
skill level, problem solving abilities, decision making. Choose the correct answer from the options
Interest test:- It is a test used to know the interests or given below:
involvement of a person in their activity. (a) A and B only (b) B, C and D only
84. Arrange the procedure followed for (c) A, D and E only (d) C, D and E only
disbursement of export credit in a sequence Ans. (d) : Following are the forces use to increase
from the first to the last productivity of employees in an organization:-
(A) The bank releases the funds debiting to the • Egoist drive to accomplish
packing credit amount and credit to the • Desire for Promotion
exporter's account • Motive towards doing work
(B) The Bank calculates the amount of packing
• Work environment
credit to be granted
(C) The exporter would be required to send the • Training & career development
goods through approved transport and • Pay structure
forwarding agency • Employee Wellness
(D) The exporter is required to take adequate 88. Logically sequence the following stage in the
insurance organizational life cycle of a business firm:
(E) Submit an evidence of export (A) Expansion (B) Survival
Choose the correct answer from the options (C) Consolidation (D) Start-up
given below (E) Decline
(a) B, A, E, D, C (b) A, C B, D, E Choose the correct answer from the options
(c) A, B, C, D, E (d) E, B, A, C, D given below
Ans. (d) : The procedure followed for disbursement of (a) D, A, C, B, E (b) B, C, A, D, E
export credit in a sequence from the first to the last:- (c) D, B, C, A, E (d) D, B, A, C, E
(A) Submit an evidence of export. Ans. (d) : Every business have 5 organizational life
(B) The bank calculates the amount of packing credit to cycle stages:-
be granted. 1. Start-up
(C) The bank releases the funds debiting to the packing
2. Survival
credit & credit to the exporters account.
3. Expansion
(D) The exporter would be required to send the goods
through approved transport & forwarding agency. 4. Consolidation
(E) The exporter is required to take adequate insurance. 5. Decline
85. A company has 10% perpetual debt of Rs 89. Which of the following are the properties of
1,00,000. The tax rate is 35%. Which one of the Binomial distribution?
following is the after-tax cost of capital (A) May be symmetrical or skewed
assuming that the debt is issued at 10% (B) Uni-modal, bell-shaped and symmetrical
premium? (C) Asymptotic to the x-axis
(a) 10% (b) 5.91% (D) n and σ are the two parameters
(c) 6.5% (d) 7.22% (E) µ and σ are the two parameters
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 460 YCT
 Choose the correct answer from the options common ground on bringing energy under the
given below : goods and services tax. The government also
(a) B and E only (b) A and D only has the cushion of relatively high import duties
(c) C and E only (d) B, C and D only that can be pared, to lower prices. Stepping up
Ans. (b) : When we toss the coin then probability of production to increase supplies is another part
flipping a coin is 0.5 for every trial there are only two of supply-constrained inflaton.
possible outcomes. There are measures the RBI can take to
Properties of binomial distribution:- increase access to credit by micro, small and
(A) May be symmetrical or skewed. medium enterprises, other than enhancing
(B) n & σ are the two parameters. liquidity in general in the hope that some would
(C) Trials are independent. find its way to the small sector. The RBI can do
its bit to realise the government mandate for all
(D) Two mutually exclusive categories- success or
failure. large companies to purchase their inputs from
the Trade Receivables Discounting System
(E) Constant trial probability.
(TReDS), for example, if that improves trade
90. Which one of the following pricing method is finance significantly, some reduction in
used in regulated industries? liquidity would not matter.
(a) Mark-up Pricing
91. Given below are two statements, one is labelled
(b) Target-Rate-of-Return-Pricing as Assertion A and the other is labelled as
(c) Economic-Value-to-Customer Pricing Reason r.
(d) Competitive Pricing
Assertion A : The policy response appropriate
Ans. (b) : Target Rate of Return Pricing is a method for inflation caused by excess demand would be
used in regulated industries. wholly suited for inflation caused by a spike in
• Mark-up Pricing is expressed to the difference energy prices.
between selling price of product & the production Reason R: The right way to combat elevated
of cost.
inflation right now is to reduce the burden of
• Competitive Pricing means pricing your product taxes that energy bears in India
relative to a competitor's product on a market.
In light of the above statements, choose the
• Economic-value to customer pricing is based on most appropriate answer from the options
customer in that understanding of the value to the
given below
customers after that keep product price.
(a) Both A and R are correct and R is the correct
Read the given passage and answer the explanation of A
questions that follow : (b) Both A and R are correct but R is NOT the
The Monetary Policy Committee of the RBI correct explanation of A
should neither raise police rates nor wind up its
(c) A is correct but R is not correct
accommodative policy stance. Yes, inflation has
been on the rise, and growth has been setting (d) A is not correct but R is correct
in. This is the time to consolidate growth, not to Ans. (d) : The policy response appropriate for inflation
be spooked by transient, supply-constrained caused by excess demand would be wholly unsuited for
inflation. Choking off supply-side price shocks inflation caused by supply disruptions & a spike in
is self- defeating. Higher prices will curb energy prices.
demand and stimulate additional supplies, if Hence, Statement I assertion is not true, II statement
the price are allowed to work their way reason is true.
through the system, instead of being chocked
off through demand suppression. It is only the 92. Which of the following measures the RBI can
second-order effect of price shocks in energy, take to consolidate growth?
logistics and labour that call for curtailment of (a) Reduce tax on fuel price
demand via higher interest rates. (b) Reduce import duty
Far from there being any sign of excess (c) Increase access to credit by MSMEs
demand, the latest available national income (d) Absorb price increase by providing subsides
figures suggest squeezed consumption and
constrained investment. GDP this fiscal would Ans. (c) : The RBI increase access to credit by
struggle to recover the size attained at the end MSMEs to consolidate growth.
of 2019-20. The policy response appropriate for 93. Which one of the following is the cause of
inflation caused by excess demand would be inflation as per the passage?
wholly unsuited for inflation caused by supply (a) Reduction in interest rate
disruptions and a spike in energy prices. The (b) Increase in cost
right way to combat elevated inflation right (c) Supply disruptions
now is to reduce the burden of taxes that
energy bears in India. Both the Centre and the (d) Increase in demand
states should share the tax cuts. They should Ans. (c) : Supply disruptions is the cause of inflation as
take this action, even as they strive to find per the passage.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 461 YCT
94. Which one of the following is most desirable to 97. Which one of the following is desired sales
consolidate growth? volume in units to earn a profit of Rs. 60,000?
(a) Reduce interest rate (a) 93,667 units (b) 2,64,000 units
(b) Increase interest rate (c) 1,32,000 units (d) 1,42,000 units
(c) Suppression of demand Fixed cost + Profit
(d) Stimulate additional supply Ans. (d) : Desired sales (units) =
Contribution
Ans. (d) : Stimulate additional supply for stepping up Contribution = Sales - Variable cost
production is most desirable to consolidate growth. = 20 – (11 + 3)
95. Which one of the following statements is not =6
true? Fixed cost = 540000 + 252000
(a) Both the Centre and the State should share the = 792000
tax cuts equally
792000 + 60000
(b) GDP this fiscal would find it difficult to Desired sales (units) =
recover the size attained at the end of 2019-20 6
(c) Curtailment of demand via higher interest = 142000 units
rates can be used in a limited way 98. Which one of the following is the break-even
(d) Choking off supply-price shocks will affect point in units for the company?
growth adversely (a) 1,32,000 units (b) 38,576 units
Ans. (a) : Centre & the states should share the tax cuts (c) 84,000 units (d) 72,000 units
for the right way to combat elevated inflation. Fixed cost
Ans. (a) : Breakeven point (units) =
Study the given table and answer the five Contribution
questions that follow Fixed cost = 540000 + 252000
The following information is available with = 792000
respect to a company manufacturing a Contribution = Sales - Variable cost
particular product. = 20 – (11 + 3)
Sale price (per unit) Rs. 20 =6
Variable Rs. 11 792000
manufacturing cost Breakeven point (units) = = 132000 units
6
per unit
99. Which one of the following is desired sales
Variable selling cost Rs. 3
(rupees) to earn a profit of Rs. 1,20,000?
per unit
(a) Rs. 26,40,000 (b) Rs. 30,40,000
Fixed factory Rs. 5,40,000 (c) Rs. 15,20,000 (d) Rs. 26,40,000
overheads (per year)
Ans. (b) : Desired sales (`)
Fixed selling costs (per Rs. 2,52,000
Fixed cost + profit
year) = × Sales
On the basis of the above information answers Contribution
the questions that follow : Contribution = Sales - Variable cost
96 . Which one of the following is the break-even = 20 – (11 + 3)
point in terms of rupees? =6
(a) Rs. 18,00,000 (b) Rs. 26,40,000 Fixed cost = 540000 + 252000
(c) Rs. 38,57,000 (d) Rs. 13,20,000 = 792000
Fixed cost Desired sales (units) = 792000 + 120000/ 6 × 20
Ans. (b) : Breakeven point (`) = 912000
PV ratio = × 20 = 3040000 `
Fixed cost = 540000 + 252000 6
= 792000 100. Which one of the following is PV ratio for the
Contribution company?
P.V. Ratio = × 100 (a) 1.82% (b) 1.43%
Sales
Contribution = Sales - variable cost (c) 30% (d) 33%
= 20 – (11+3) Contribution
Ans. (c) : P.V. Ratio = × 100
=6 Sales
6 Contribution = Sales - Variable cost
P.V. Ratio = × 100 = 30%
20 = 20 – (11+3) = 6
100 6
Breakeven point (`) = 7,92,000 × = 26, 40, 000 P.V. Ratio = × 100 = 30%
30 20
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 462 YCT
 NTA UGC NET/JRF Exam, Dec. 2021/June 2022
COMMERCE
Solved Paper
Exam Date: 29.09.2022 Shift-II

1. Economists adjustment to reality limited by 3. Under Indian Income Tax Act, allowances
individual consumers preferences, intelligence which are non-taxable for the individual
and environmental factor is called: assessee are:
(a) Rationality A. Sumptuary allowances
(b) Homo economics B. Compensatory allowance paid to judges.
(c) Bounded rationality C. Overtime allowance
(d) Consumer sovereignity D. Allowances paid to Govt. employees posted
abroad
Ans. (c) : Economist adjustment to reality limited by E. Non-practising allowance
individual consumers preference, intelligence and Choose the most appropriate answer from the
environmental factor is called bounded rationality It is a options given below:
concept proposed by 'Herbert Simon'. The definition of (a) A, B, D, E only (b) A, C, D, E only
bounded rationality involves the idea that the capacity of (c) A, B, D only (d) A, B, C, D, E
human beings' decision-making is not fully rational Ans. (c) : A, B, D only.
because it faces various limits. These limits includes Under Indian Income Tax Act, Following are the non-
information failure, time taken to make a decision, and taxable allowances for the individual assessee:-
the limitations of human brain in processing information
• Sumptuary allowances
consumers are most likely to be affected by mental
• Compensatory allowance paid to judges.
shortcuts. and individual preferences and environmental
factor which limit their decision making process. • Allowances paid to Govt. Employees posted abroad.
• Salary and allowances received by a teacher/professor
2. Match List-I with List-II from SAARC member state.
List-I List-II • Allowances paid by the UNO to its employees.
(Nature of goods) Income Elasticity (Ei) of 4. Which of the following decision choices are
demand valid in relation to marginal costing?
A. Normal goods I. Ei is greater than one A. Costing 'special' or one off opportunities.
B. Inferior goods II. Ei is greater than B. Deciding whether to make or buy a product.
zero C. Most appropriate technique because of
application of more automation in the industry.
C. Luxury goods III. Ei is between zero
D. Choosing between competing alternative
and one actions
D. Necessities IV. Ei is less than zero E. Employing a penetration or destroyer pricing
Choose the correct answer from the options strategy
given below: Choose the correct answer from the options
(a) A-II, B-IV, C-I, D-III given below:
(b) A-III, B-I, C-IV, D-II (a) A, B, D and E only (b) A, B, C and D only
(c) A-II, B-I, C-III, D-IV (c) B, C, D and E only (d) A, D and E only
(d) A-I, B-III, C-II, D-IV Ans. (a) : A, B, D and E only.
Following decision choices are valid in relation to
Ans. (a) : A-II, B - IV, C - I, D - III marginal costing :-
List-I List-II • Costing 'special' or one off opportunities.
(Nature of goods) Income Elasticity (Ei) of • Deciding whether to make or buy a product.
demand • Choosing between competing alternative actions.
(A) Normal goods (II) Ei is greater than • Employing a penetration or destroyer pricing strategy.
zero Marginal costing is very helpful in managerial decision
(B) Inferior goods (IV) Ei is less than zero making. Management's production and cost and sales
decision's may be easily affected from marginal costing.
(C) Luxury goods (I) Ei is greater than Profitable product mix, problem of limiting factors,
one make or buy decision, diversification of production,:
(D) Necessities (III) Ei is between zero fixation of selling price etc are the applications of
and one marginal costing.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 463 YCT
5. Answer the correct material usage variance Ans. (b) : The discharge of the contract takes place
from the information given below: when the obligations of the contract between the parties
Standard material cost for manufacturing 1000 of the contract come to an end. It is termed as the
units of an output is 400 kgs of material at Rs. termination of the contract. A contract can be
2.50 per kg. When 2000 units are produced, it
is found that actual consumption was of 825 discharged by various ways and 'supervening
kgs material at a price of Rs. 2.70 per kg : impossibility' is one of them. In it, provisions which
(a) Rs. 67.50 Favourable were possible at the establishment of the contract would
(b) Rs. 67.50 Adverse become impossible in the course of time. Following are
(c) Rs. 62.50 Favourable the situations:-
(d) Rs. 62.50 Adverse • Physical (Destruction of subject matter.).
Ans. (d) : Given : Standard material cost for • Practical (Death or disablement of parties).
manufacturing 1000 units of an output is 400 kgs at Rs. • Legal (changes in law)
2.50/kg.
•When Unit produced 2000 units standard Quantity 8. Which one of the following is a Trade related
should be 400 × 2 = 800 kgs entry mode in international markets?
• Actual consumption is 825 kgs (a) Management Contract
• Standard price is 2.70/kg (b) International Licensing
So, putting values on formula, (c) International Leasing
Material usage Variance (d) Portfolio Investments
= (Standard quantity–Actual quantity) × Standerd Price Ans. (a) :
= (SQ – AQ)× SP
= (800 – 825)×2.5 = (–62.5)
= 62.50 (Adverse)
6. Pricing of housing loan by a commercial bank
may follow the following steps in a logical
sequence
A. Competitive price determination
B. Specification of spread
C. Application of MCLR ♦ Management contract :- in essence, a corporation
D. Conduct of Credit Assessment rents out its knowledge or know - how to a government
E. Quoting to prospective borrower or business in the form of personnel who go to a foreign
Choose the correct answer from the options country, manage the business there under management
given below: contract, and perform contract manufacturing.
(a) C, B, A, D, E (b) A, B, D, C, E
9. Match List-I with List-II
(c) B, A, D, E, C (d) D, C, B, A, E
Ans. (d) : Following are the steps followed by List-I List-II
commercial Bank for pricing of housing loans :- Statistical Characteristical
• Conduct of credit Assessment. Distribution Expression
• Application of MCLR A. Negatively I. Mean = Mode. P(x ≤
• Specification of spread. Skewed µ) = 0.50
• Competitive price determination. Distribution
• Quoting to prospective borrower.
B. Positively II. x > Median >
MCLR (Marginal Cost of Funds Based Landing Rate) is
Skewed Mode; P > 0.5
the minimum interest rate a bank can charge for a loan.
Distribution
7. A contract is discharged by supervening
impossibility under which of the following C. Binomial III. x < Median <
situations? Distribution Mode
A. Destruction of subject matter
D. Normal IV. x > Median >
B. Death or disablement of parties
Distribution Mode
C. Rescission
D. Remission Choose the correct answer from the options
E. Accord and satisfaction given below:
Choose the most appropriate answer from the (a) A-III, B-I, C-II, D-IV
options given below: (b) A-I, B-II, C-III, D-IV
(a) A, C and D only (b) A and B only (c) A-II, B-III, C-IV, D-I
(c) A, B and E only (d) C and D only (d) A-III, B-IV, C-II, D-I
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 464 YCT
 Ans. (d) : A - III, B - IV, C - II, D - I. Ans. (a) : Gap between consumer expectation and
List-I List-II management perception.
Statistical Distribution Characteristical • Here, According to the question, the hospital
Expression Administration unable to perceive correctly what the
customers wants or needs.
A. Negatively III. x < Median <
Skewed Mode • Factors that affect the size of the knowledge gap
Distribution includes insufficient research, lack of customer
interaction, not listening to customers. etc.
B. Positively Skewed IV. x > Median >
Distribution Mode • This Gap arises due to the differences in
C. Binomial II. x > Median > managements perception of customer needs and
Distribution Mode; P > 0.5 customer's actual expectations.
D. Normal I. Mean = Mode. P(x ≤ 12. Banker sale of a mortgage portfolio by setting
up a mortgage pass-through securities is an
Distribution µ) = 0.50
example of:
10. Given below are two statements: One is (a) Credit enhancement (b) Unbundling
labelled as Assertion (A) and the other is (c) Derivatives (d) Securitisation
labelled as Reason (R)
Ans. (d) : Securitisation.
Assertion (A) : Substitution effect is usually
much larger than the income effect. • Banker sale of a mortgage portfolio by setting up a
Reason (R) : Consumer usually spends only a mortgage pass - through securities is an example of
small portion of her/his income on any one securitisation.
commodity. • Securitisation is the conversion of an asset, especially
In the light of the above statements, choose the a loan, into marketable securities, typically for the
correct answer from the options given below: purpose of raising cash by selling them to the investors.
(a) Both (A) and (R) are correct and (R) is the 13. Which one of the following tools is not used for
correct explanation of (A) forecasting personnel needs (Labour Demand)
(b) Both (A) and (R) are correct and (R) is not by an organization?
the correct explanation of (A) (a) Trend Analysis (b) Markov Analysis
(c) (A) is correct but (R) is not correct (c) Ratio Analysis (d) Scatter Plot
(d) (A) is not correct but (R) is correct Ans. (b) : Markov Analysis :- Transition probability
Ans. (a) : Both (A) and (R) correct and (R) is the matrix is developed to determine the probabilities of job
correct explanation (A). incumbents remaining. In their jobs for the foresting
• The substitution effect is caused by a change in the period.
price of a product in relation to the prices of similar • The technique is named after Russian mathematician
products. 'Andre : Andreyevich Markor:
• Markov Analysis, can be used to model the internal
• Buyers choose to replace a higher - priced product flow of human resources. These matrics simply show as
with a similar, lower priced substitute.
probabilities the average rate of historical movement
• Substitution effect is usually much larger than the from one job to another.
income effect because consumer usually spends only 14. Match List-I with List-II
a small portion of her/his income on any one
List-I List-II
commodity.
(Ind AS) (Topic)
11. "Hospital administration may think that
A. Ind AS 1 I. Income Taxes
patients want better food, but patients may be
more concerned with nurse responsiveness" B. Ind AS 12 II. Related Party
Above statement pertains to which one of the Disclosures
following service gap? C. Ind AS 24 III. Intangible Assets
(a) Gap between consumer expectation and D. Ind AS 38 IV. Presentation of
management perception Financial Statements
(b) Gap between management perception and Choose the correct answer from the options
service-quality specification given below:
(c) Gap between service delivery and external (a) A-I, B-II, C-III, D-IV
communication (b) A-IV, B-I, C-II, D-III
(d) Gap between service-quality specification and (c) A-IV, B-III, C-II, D-I
service delivery (d) A-II, B-IV, C-I, D-III
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 465 YCT
 Ans. (b) : 17. Who among the following are identified as the
List-I (Ind AS) List-II (Topic) Key managerial personnel in the Indian
Companies Act, 2013?
A. Ind AS 1 IV. Presentation of Financial A. Chief Executive Officer
Statements
B. Whole Time Director
B. Ind AS 12 I. Income Taxes C. Company Secretary
C. Ind AS 24 II. Related Party D. Chief Risk Officer
Disclosures E. Manager
D. Ind AS 38 III. Intangible Assets Choose the most appropriate answer from the
15. Total revenue of a business firm increases as options given below:
long as: (a) A, B and D only (b) A and B only
(a) |Ep| > 1 (b) |Ep| = 1 (c) A, B, C and D only (d) A, B, C and E only
(c) |Ep| < 1 (d) |Ep| < 0 Ans. (d) : A, B, C and E only
Ans. (a) : |Ep| > 1 The Companies Act, 2013 has used the term Key
Total Revenue increases as the price of product Managerial Personnel to define the executive
decreases and the TR decreases as the price increases. management. The executive management of a company
As a result the Price Elasticity of Demand is greater is responsible for the day to day functioning of the
then one. company and are responsible for not just laying down
the strategies as well as its implementation. According
16. What will be the sequence of steps involved in
to section 2(51) " of companies Act, 'Key Managerial
'Net Benefit Model' of Human Resource
Personnel" in relation to a company means -
Accounting?
(i) The Chief Executive Officer or the Managing
A. The gross value of services to be rendered in Director or Manager.
future by the employee in their individual as
(ii) The Company Secretary.
well as their collective capacity is determined.
(iii) The Full - Time Director.
B. The excess of the value of future human
resources over the value of future payments is (iv) The Chief Financial Officer.
ascertained. 18. Under which one of the following the Basel
C. The present value of the net benefit is framework places restrictions on participation
determined by applying a pre-determined by banks in system wide credit booms with the
discount rate. aim of reducing their losses in credit bust?
D. The value of future payments to the employees (a) Catastrophic Reserve Capital
is determined. (b) Countercyclical Capital Buffer
E. The amount calculated under 'C' will be the (c) Deferred Capital
value of human resources to the organization. (d) Conservative Preference Capital
Choose the correct sequence from the options Ans. (b) : Countercyclical Capital Buffer.
given below: Most of the reforms are being phased in between 2013
(a) A, D, B, C, E (b) A, B, C, D, E and 2019. Countercyclical capital Buffer, is a Basel
(c) A, C, D, B, E (d) B, A, C, D, E frame work, which places restriction on participation by
Ans. (a) : Net Benefit Model :- The proponent of this way of banks in system - wide credit booms to reduce
their losses in Credit Score Busts.
model is Pekin Ogan. This model provide the means for
determining the net present value of the human 19. From the following, select the right option with
resource. According to this model, the net benefit is the reference to the working capital:
difference between the total investment, made by the (a) Higher net working capital leads to higher
organisation in acquiring, training, developing, liquidity and higher profitability
integrating & maintaining the employees & the total (b) According to hedging approach, current assets
benefits received out of the skill, ability & knowledge should be financed from long-term sources
of those employees. (c) There is an inverse relationship between the
The correct sequence from the options are given below:- length of operating cycle of a firm and its
working capital requirements
• The gross value of services to be rendered in future
by the employee in their individual as well as their (d) Trade-off plan, in general, is considered an
collective capacity is determined. appropriate financing strategy for working
capital
• The value of future payments to the employees is
determined. Ans. (d) : Trade - off plan, in general, is considered as
appropriate financing strategy for working capital.
• The excess of the value of future human resources
The Finanance Manager has to pay particular attention
over the value of future payments is ascertained.
to the levels of current assets and their financing. To
• The present value of the net benefit is determined by decide the levels and financing of current assets, the risk
applying a pre-determined discount rate. return trade off must be taken into account.
• The amount calculate under 'C' will be the value of The concept of risk - return trade off represents a
human resource to the organisation. balance between low - risk and high potential return.

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20. A co-efficient of correlation having a value of • It prevents profits from being overstated.
+0.87 implies that
(a) Co-efficient of correlation is strong and • It prevents trader from more withdrawing from the
positive business than is wise.
(b) Co-efficient of determination is extremely The concept of conservatism (also called 'prudence')
weak provides guidance for recording transactions in the book
(c) The relationship between two variables is of accounts and is based on the policy of playing safe.
weak, but positive 23. Choose the correct options regarding banking:
(d) The relationship between two variables is A. Chain banking indicate the form of bank cartel
strong that occurs when a small group of people
Ans. (a) : Co - efficient of correlation is strong and control atleast three banks that are
positive. independently chartered
A co - efficinet of correlation having a value of a B. PAN number is required for deposits in a
+0.87 implies that co-efficient of correlation is strong commercial bank for Rs. 50,000 and above.
and positive.
C. Upon detection of counterfeit notes at the
Rule of Thumb for Interpreting the size of a
correlation coefficients :- counter, the bank can impound the note and
issue receipt
Size of correlation Interpretation
D. The interest rates on bank's contribution to
0.90 to 1.00 (– 0.90 to –1.00) Very high positive Rural Infrastructure Development Fund is
(negative) correlation fixed by NABARD
0.70 to 0.90 (–0.70 to –0.90) High positive (negative) E. RBI Act, 1934 prohibits the making or issuing
correlation of a promissory note expressed to be payable to
0.50 to 0.70 (–0.50 to –0.70) Moderate positive the bearers thereof
(negative) correlation Choose the most appropriate answer from the
0.30 to 0.50 (–0.30 to –0.50) Low positive (negative) options given below:
correlation (a) B, D, E only (b) B, C only
0.00 to 0.30 (–0.00 to –0.30) Negligible correlation. (c) A, D, E only (d) A, B, C only
21. The banks wherein a majority of depositors are Ans. (b) : B, C only.
non-residents are called
The correct options regarding banking are :-
(a) Cross Payment Banks
(b) Currency Banks (B) PAN number is required for deposits in a
(c) Foreign Banks commercial bank for ` 50,000 and above.
(d) Offshore Banks (C) Upon detection of counterfeit notes at the counter,
the bank can impound the note and issue receipt.
Ans. (d) : Off shore Banks
24. Given below are two statements:
• Offshore Banks refer to the banks located outside of Statement I : Display of goods by a shopkeeper
its home country, and handling transactions made in
foreign currency. It is regulated under International with prices marked on them is not an offer but an
Banking License (often called offshore license). invitation to the public to make an offer to buy the
goods.
• It make easier for individuals and business to bank Statement II : Price quotations, catalogues and
internationally and establish offshore accounts.
advertisements in newspaper for sale of an article
• The majority of depositors are non-residents do constitute a valid offer.
22. Which of the following are key features of In the light of the above statements, choose the
prudent accounting concepts and conventions? correct answer from the options given below:
A. It includes revenues and profits in the accounts (a) Both Statement I and Statement II are true
when they are realised
(b) Both Statement I and Statement II are false
B. It prevents profits from being overstated.
(c) Statement I is true and Statement II is false
C. It prevents a trader from more withdrawing
from the business than is wise (d) Statement I is false and Statement II is true
D. Managerial efficiency and expertise. Ans. (c) : Statement I is true and statement II is false.
E. Good customer relations • Display of goods by a shopkeeper with prices
Choose the most appropriate answer from the marketed on them is not an offer but an invitation to the
options given below: public to make an after to buy the goods.
(a) C, D and E only (b) A, D and E only • An offer is a proposal while an invitation to offer is
(c) B, C and D only (d) A, B and C only inviting someone to make a proposal.
Ans. (d) : Following are the key features of prudent • Price quotations, catalogues and advertisements in
accounting concepts and conventions :- newspaper for sale of an article do not constitute a valid
• It includes revenues and profits in the accounts when offer. Actually, they are considered to be invitations to
they are realised. make a deal or offers.
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25. Which of the following factors favour product 27. Steps involved in computation of Book Profit
standardization in the international markets? under MAT regime are as follows:
A. High cost of adaptation A. Arrive NP as per statement of P/L A/C of the
B. Variations in conditions of use company
C. Country of origin effect B. Specific adjustments in case of merger.
D. Economies in R and D C. Make adjustments pertaining to OCI items.
E. Differences in technical standards. D. Adjust the book profit with stipulated exclusion
Choose the most appropriate answer from the and inclusion
options given below: E. Net amount of Book Profit for application of
(a) A and E only (b) A, C and D only MAT rate
(c) A, B, C and D only (d) C and D only Choose the correct sequence from the options
Ans. (b) : A, C and D only given below:
• Following are the factors favour product (a) A, D, B, C, E (b) A, B, D, C, E
standardization in the international markets :- (c) A, C, B, D, E (d) A, B, C, D, E
• High cost of adaptation :- As compare to adaptation Ans. (a) : A, D, B, C, E
(standardization) is more economical in. International
markets. Following are the steps involved in computation of
Book profit under MAT regime :-
• Country of origin effect :- Country of origin effect
refers to the practice of marketers and consumers • Arrive NP as per statement of P/L A/C of the
associating brands with countries and making buying company.
decisions made on the country of origin of the products. • Adjust the book profit with stipulated exclusion and
• Economics in R and D :- Economics of scales in R & inclusion.
D, production and marketing favours product
standardisation. • Specific adjustments in case of merger.
26. As per the Agency Theory of Corporate • Make adjustments pertaining to OCI items.
Governance, which of the following statements • Net amount of Book profit for application of MAT
are relevant? rate.
A. Governance approach is materialistic. MAT stands for Minimum Alternate Tax, As per
B. Managers are motivated by the principal's section 115 JB, every taxpayer being a company is
objectives liable to pay MAT, if the Income tax (including
C. Interests of the managers and principals surcharge and cess) payable on the total income,
converge computed as per the provisions of the Income tax Act in
D. Behaviour pattern is opportunities. respect of any year is less than 15% of its book - profit
E. Owner's attitude is to avoid risks. + surcharge (SC) + health & education cess.
Choose the most appropriate answer from the
options given below: 28. Which of the following are thinly veiled
disguises that essentially restrict imports?
(a) A, C, E only (b) B, C, D only
(c) B, D, E only (d) A, D, E only A. Voluntary import restrictions
B. Labeling requirements showing origin and
Ans. (d) : A, D, E only.
contents
Agency theory defines the relationship between the
principals (such as shareholders of company) and agents C. Import tarrifs and quotas
(such as directors of company). According to this D. Safety regulations for automobile and electrical
theory, the principals of the company hire the agents to equipments
perform work. The principals delegate the work of E. Health regulations for hygiene production and
running the business to the directors or managers, who packaging of imported food production
are agents of shareholders. The shareholders expect the Choose the most appropriate answer from the
agents to act and make decisions in the best interest of options given below:
principals. (a) A, B and C only (b) B, C and D only
• The agent may be succumbed to self - interest; (c) C, D and E only (d) B, D and E only
opportunistic, behaviour and fall short of expectations
of the principal. Ans. (d) : B, D and E only
Following are thinly veiled disguises that essentially
• This theory is separation of ownership and control.
restrict imports
• Owner's or principals attitude is to avoid risks.
• Governance approach is materialistic. • Labeling requirements showing origin and contents.
• Safety regulations for automobile and electrical
equipments.
• Health regulations for hygiene production and
packaging in of imported food productions.
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29. Sequence the following in copyright ecosystem Ans. (c) : Number of units sold.
for literary creation under the Indian
Copyright Act, 1957
A. Public communication
B. Copyright assignment
C. Content development
D. Relinquish copyright
E. Copyright transmission
Choose the correct answer from the options
given below:
(a) A → E → B → D → C
(b) C → A → B → E → D
(c) E → C → B → D → A
(d) B → C → E → A → D
Ans. (b) : Sequence as follows- Break - even - point is not affected with the changes in
number of units sold.
The break even - point represents the sales point where
all costs are covered but not profit or loss is realized by
the firm. It is used to calculate the number of units
where the total cost is equal to the total revenue.
32. The current market price per share of New Age
Limited is Rs. 80. The dividend expected a year
from now is Rs. 4 and it is expected to grow at
a constant rate of 10 percent. The floatation
(issue) cost for the new issue will be 8 percent.
30. According to Herzberg's Two Factor Theory What is the cost of new equity?
which one of the following is not a maintenance (a) 15.43 percent (b) 15.00 percent
factor?
(c) 5.00 percent (d) 5.43 percent
(a) Affiliation or Acceptance
(b) Esteem or Status Ans. (a) : 15.43 percent.
(c) Security or Safety Given, current Market price/share = 80
(d) Physiological Needs dividend a year after = 4
Ans. (b) : Esteem or Status expected growth rate = 10%
According to Herzbergs two factor theory 'Esteem or floating cost for issue of share = 8%
Status' is not maintenance factor- D1
According to this theory of motivation, there are some Cost of equity (Ke) = P 1 − F + g
job factors that result in satisfaction while there are 0 ( )
other job factors that prevent dissatisfaction. Here,
• Herzberg classified these motivating factors into two D1 = expected dividend.
categories. P0 = current market price per share.
1. Hygiene factors :-These factors are also called as g = constant growth Rate of Dividend.
dissatisfiers or maintenance factors. These are those job F = Flotation cost per share.
factors which are essential for existence of motivation at
workplace. It includes pay, fringe benefits, status, On putting the value on formula :-
physical working conditions, job securities, etc. 4
Ke = + 10%
2. Motivational factors :- According to Herzberg, the 80 (1 − 8% )
hygiene factors cannot be regarded as motivators. These
factors yield positive satisfaction. They are inherent to 4
= + 10%
work. These factors motivate the employees for a 80 (1 − .08 )
superior performance. These factors are called satisfiers.
It includes - Recognition, Responsibility, 4
= + 0.1
meaningfulness of the work etc. 80 ( 0.92 )
31. Break-even point is not affected with the
4
changes in which one of the following? = + 0.1
(a) Sale price per unit 73.6
(b) Variable cost per unit = 0.0543 + 0.1
(c) Number of units sold = 0.1543
(d) Total fixed costs = 15.43%
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33. From which of the following employees derive A.
Economic selfish motives
authority? B.
Risk-return optimiser
A. Position C.
Clarity of preferences
B. Experience D.
Possession of information
C. Moral worth E.
Non-satiation of needs
D. Past service Choose the most appropriate answer from the
E. Intelligence options given below:
Choose the most appropriate answer from the (a) A, B and C only (b) C, D and E only
options given below: (c) A, B, C and D only (d) A, C, D and E only
(a) A, B only (b) A, E only Ans. (d) : A, C, D and E only.
(c) B, C, E only (d) A, B, C, D, E Consumer rationality is an assumption made that people
Ans. (d) : A, B, C, D, E seek to maximise their own welfare from consuming
goods and services. They choose those products that
As the management consists of getting the work done
will provide them with the maximum utility and
through others, it implies that the employee as a
satisfaction.
manager should have the right to give orders and power
Characteristics which determine consumer ' rationality'
to exact obedience. An employee as manager may
includes Non - satiation of needs (benefit from
exercise formal authority and also personal power.
additional consumption), economic selfish motives,
Formal authority is derived from his official position,
clarity of preferences (logically, selections between
while personal power is the result of intelligences, goods are rational) possession of information (consumer
experience, moral worth, ability to lead, past services.
makes choices based on this information).
34. A company should undergo a step-wise process 36. The pricing practice to extract all of the
before selecting a final price. Accordingly, consumer surplus from consumers to maximize
arrange the following steps of pricing policy the total revenue and profits from the sale of a
process to help 'XYZ' company to decide the particular quantity of product is called:
final price of its product (a) First-degree price discrimination
A. Selecting the pricing method. (b) Second-degree price discrimination
B. Examining competitor's costs, prices and (c) Third-degree price discrimination
offers. (d) Penetration pricing
C. Estimating the demand curve and the probable Ans. (a) : First - degree price discrimination :- The
quantities company will sell at each possible
price pricing practice to extract all of the consumer surplus
from consumers to maximize the total revenue and
D. Selecting the pricing objective of the company. profits from the sale of a particular quantity of product
E. Estimating costs for different levels of output,
is called First - degree price discrimination.
for different levels of accumulated production It involves selling a product at the exact price that each
experience, and for differentiated marketing customer is willing to pay.
offers
37. Which one of the following is not an advantage
Choose the correct answer from the options of organization structure by territory?
given below: (a) Makes control easy for top management
(a) D, B, E, C, A (b) D, C, E, B, A (b) Places responsibility at a lower level
(c) A, B, C, E, D (d) A, D, E, C, B (c) Improves coordination in a region
Ans. (b) : D, C, E, B, A (d) Takes advantage of economies of local
Following is the step-wise process a company should operations
undergo before selecting a final price of a product. Ans. (a) : Makes control easy for top management.
Organization structure by territory means an
organisation structure in which units are divided on the
basis of territory or geographical region.
Followings are the advantages of organization structure
by territory.
• places responsibility at a lower level.
• Improves co-ordination in a region.
• Takes advantage of economics of local operations.
This structure makes problem for effective control so,
'makes control easy for top management is not the
advantage of organisation structure by territory.
35. The qualified characteristics determining 38. A spot sale of a currency combined with a
(constituting) consumer 'rationality' includes forward repurchase of the same currency is
which of the following? called which one of the following?
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 (a) Forex swap (b) Swap rate 4. Geneva II Round (Japan admitted) - January 1956
(c) Forward rate (d) Spot rate 5. Dillion round (Tariff concessions) - September 1960.
Ans. (a) : Forex swap is also known as foreign 6. Kennedy Round (Anti - Dumping Covered)-
exchange swap or Fx swap. It is a spot sale of a May 1964
currency combined with forward repurchase of the same 7. Tokyo Round (Tariff and non Tariff measures
currency. discussed) - September 1973
In simple words, It is an agreement between parties 8. Uruguay Round (WTO created) - September 1986
which involves lending one currency and borrowing
another simultaneously at an initial date. 9. Doha Round - November 2001.
Finally, both of the parties swap the amount that 41. "If you known the enemy and know yourself,
includes interest as well as principal payments of the you need not fear the result of a hundred
involved currencies at maturity. battles".
39. Written plan containing the details regarding Above statement of Sun Tzu corresponds to
the conduct of a particular audit is called: which one of the following components of
(a) Audit Memorandum Porter's Five Forces Model?
(b) Audit Planning Procedure (a) Threat of substitutes
(c) Audit Notebook (b) Threat of Competitor
(d) Audit Programme (c) Bargain Power of Supplier
Ans. (d) : Audit programme is a written plan containing (d) Threat of New Entrants
the details regarding the conduct of a particular audit. Ans. (b) : Threat of Competitor
Audit notebook is a diary or register maintained by Statement of Sun Tzu given in question corresponds to
auditor to note errors, doubtful querries, problems found 'Threat of competitor a component of porter's give
out during the course of Auditing. forces model.
Audit planning procedure involves establishing the
Porter's Five force Framwork is a method of analysing
overall audit strategy for engagement and develping an
the operating environment of a competition of a
audit plan.
business.
42. In Fund Flow Statement, which one of the
following is not a valid statement?
(a) It is prepared to know the total sources and
their uses in a year
(b) Dividend received is a source of funds
(c) Its preparation is at the discretion of the
management
(d) It is useful for external financial managment
Ans. (d) : It is useful for external financial
management.
Funds flow statement is also called as statement of
40. Arrange the following negotiation rounds of changes in financial position or statement of sources
WTO (World Trade Organization) in reverse and applications of funds or where got, where gone
chronological order statement.
A. Uruguay Round It is a report on the movement of funds or working
B. Geneva Round capital. It explains how working capital raised and used
C. Kennedy Round during an accounting period.
D. Doha Round It is useful for external financial management.
E. Tokyo Round 43. Match List-I with List-II
Choose the correct answer from the options List-II List-II
given below:
Promotional Company
(a) A, C, D, B, E (b) D, A, E, C, B Campaign
(c) B, A, C, E, D (d) D, E, A, C, B
A. #StayStrongMoms I. Pepsico India
Ans. (b) : D, A, E, C, B.
There have been nine rounds of trade negotiations since B. #JeetKiOre II. Hindustan
the second world war :- Uniliver (HUL)
1. Geneva Round (GATT) was signed - April 1947 C. #Lets III. Indian Tobacco
2. Annecy Round (Tariff concessions) - April 1949 unstereotypeIndia Company (ITC)
3. Torquay Round (Cut in tariff levels) - D. #Freedomtolove IV. Brooke Bond
September 1950 India

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 Choose the correct answer from the options 46. Which one of the following is not an
given below: assumption of simple linear regression model?
(a) A-III, B-I, C-IV, D-II (a) The set of expected values of the dependent
(b) A-II, B-IV, C-I, D-III variable y for given values of independent
(c) A-II, B-I, C-III, D-IV variable x, are normally distributed
(d) A-I, B-III, C-IV, D-II (b) The standard deviation and variance of
Ans. (a) : expected values of the dependent variable
List-I List-II about the regression line are constant for all
Promotional Company values of the independent variable x for the
Campaign set of observations in a sample
A. #StayStrongMoms III. Indian Tobacco (c) The dependent variable y is a continuous
Company (ITC) random variable
B. #JeetKiOre I. Pepsico India (d) The error in the value of y are identical in
successive observations
C. #Lets IV. Brooke Bond
unstereotypeIndia India Ans. (d) : The errors in the value of y are identicals in
successive observations.
D. #Freedomtolove II. Hindustan
Uniliver (HUL) Following are the assumption of simple linear
regression model :-
44. The standard error is a statistical measure of:
(a) The normal distribution of scores around the • The relationship between the variables is linear.
sample mean. • The residuals (errors) have the same variance for all
(b) The extent to which a sample mean is likely values of the independent variable.
to differ from the population mean. • The residuals (errors) are independent i.e. not
(c) The clustering of scores at each end of a correlated from one case to the next.
survey scale • The residual (errors) are normally distributed.
(d) The degree to which the sample has been • We will defer the evaluation of assumptions untill the
accurately stratified next class.
Ans. (b) : The extent to which a sample mean is likely 47. In a statistical experiment, an effect size is
to differ from the population mean. described as:
The standard error is a statistical measure of the extent
(a) Effective testing of hypothesis
to which a sample mean is likely to differ from the
population mean. (b) Probable success of an experimental
The standard error is a statistical term that measures the manipulation
accuracy with which a sample distribution represents a (c) Quantitative measurement of the magnitude
population by using standard deviation. of the experimental effect
45. Which of the following are key assumptions of (d) Standarised measure of the magnitude of the
Gordon's Dividend Model? effect observed in an experiment
A. Ke > br Ans. (c) : Quantitative measurement of the magnitude
B. r and Ke are changing of the experimental effect.
C. The firm is not all-equity firm An effect size is a value measuring the strength of the
D. The firm has perpetual life relationship between two variables in a population, or a
E. The retention ratio, once decided, is constant sample - based estimate of that quantity. It can refer to
Choose the correct answer from the options the value of a statistic calculated from a sample of data,
given below: the value of a parameter for a hypothetical population,
(a) A, D, E only (b) B, C, E only or to the equation that operationalizes how statistics or
(c) A, B, D only (d) C, D, E only parameters. Lead to the effect size value.
Ans. (a) A, D, E. 48. Which of the following are essentially anti-
Following are the Key assumptions of Gordon's competitive agreements as per the Competition
dividend Model:- Act, 2002 in India?
• The firm is an equity firm. A. Exclusive distribution agreement
• No external financing is available. B. Resale price maintenance
• The internal rate of return (r) of the firm is constant. C. Exclusive supply agreement
• The appropriate discount rate (k) of the firm remains D. Non-compete agreement
constant. E. Tie-in agreement
• The firm and its stream of earnings are perpetual. Choose the correct answer from the options
• The corporate tax is do not exist. given below:
• k > br = g if this condition is not fulfilled we cannot (a) A, B and C only (b) C, D and E only
get a meaningful value for the share. (c) A, B, C and D only (d) A, B, C and E only
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 472 YCT
Ans. (d) : A, B, C, E Ans. (a) : The use of indirect methods to calculate tax
Agreement under Section 3(1) of the Competition Act liability, which differ from the usual sales based on the
states about anti - competitive agreements there are two tax payers accounts.
kinds of agreement under the Act : As per the Income tax Act a person engaged in business
• Vertical Agreements. or profession is required to maintain regular books of
• Horizontal Agreements. account and further, he has to get his accounts audited.
Section 3(4) states that any agreement amongst To give relief to small taxpayers from this tedious work,
enterprises or persons at different stages or levels of the the Income tax Act has framed the presumptive taxation
production chain in different markets; in respect of scheme under section 44 AD, 44ADA, and 44AE.
production, supply, distribution, storage, sale price of, A person adopting the presumptive taxation scheme can
or trade in goods or provision of services, including :- declare income at a prescribed rate and in turn, is
• Tie - in arrangement relieved from tedious job of maintenance of books of
• Exclusive supply agreement account and also from getting the accounts audited.
•Exclusive distribution agreement. 50. Rates of Income Tax under new regime
•Refusal to deal. applicable for financial year 2021-22 in India
are:
• Resale price maintenance.
A. 5%
49. Presumptive taxation involves which one of the
B. 10%
following?
C. 12%
(a) The use of indirect methods to calculate tax
liability, which differ from the usual sales D. 15%
based on the tax payers accounts E. 20%
(b) Transfer of tax liability from State to the Choose the correct answer from the options
Centre given below:
(c) Calculation of short term capital gain (a) A, B, C only (b) A, B, D only
(d) Calculation of rebate U/S 89 (c) A, B, D, E only (d) B, C, D, E only
Ans. (c) : A, B, D, E only
Tax slabs for A.Y. 2022 - 2023
Existing Tax Regime New Tax Regime U/S 115 BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to Rs. 2,50,000 Nil Up to 2,50,000 Nil
Rs. 2,50,001 - 5% above Rs. 2, 50,001 - 5% above
Rs. 5,00,000 Rs. 2,50,000 Rs. 5,00,000 Rs. 2,50,000
Rs. 5,00,001- Rs.12,500 + 20% Rs. 5,00,001 - Rs. 12,500 + 10%
Rs. 10,00,000 above Rs. 5,00,000 Rs. 7,50,000 above Rs. 5,00,000
Above Rs. 1,12,500 + 30% Rs. 7,50,001/ Rs. 37,500 + 15%
Rs. 10,00,000 above 10,00,000 Rs. 10,00,000 above Rs. 7,50,000
Nil Nil Rs. 10,00,001 - Rs. 75,000 + 20%
Rs. 12,50,000 above Rs. 10,00,000
Nil Nil Rs. 12,50,001- Rs. 1,25,000 + 25%
Rs. 15,00,0000 above Rs. 12,50,000
Nil Nil Above Rs. 15,00,000 Rs. 1,87,500 + 30%
above Rs. 15,00,000
51. Dimensions of VALSTM framework to include VALS (Values and Lifestyles) is an approach to market
which one of the following? segmentation whereby consumers are segmented into
(a) Consumer motivation and consumer mutually exclusive groups based on their
resources psychographics.
(b) Consumer personality and consumer VALS groups consumer segments based upon two
dimension primary motivation (ideals, achievement: and
resources
self expression) and resources (energy, Self-confidence,
(c) Consumer motivation and consumer intellectualism, novelty seeking, innovativeness,
preferences impulsiveness, leadership and vanity)
(d) Consumer needs and consumer resources The current eight VALS types are 1- Innovators,
Ans. (a) : Consumer motivation and consumer Thinkers, Achievers, Experiences, Believers, strivers,
resources. makers, and survivors.

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52. Which of the following are the main platforms Commercial paper is short - term money market
for social media? instrument (maturity period of about 270 days) issued
A. Search Engines by big corporations for meeting short term liabilities.
B. Online communities and forums Secondary Reserves are near - cash ; interest earning
C. Blogs assets that banks maintain in addition to the primary
D. Social Networks reserves to satisfy their liquidity requirements with bank
E. Web 1.0 regulators.
Choose the correct answer from the options 55. In order to maintain its market share, a market
given below: follower can employ:
(a) B, C and D only (b) B and D only (a) Counter feiting strategy
(c) B, C, D and E only (d) A, B, C and D only (b) Specialization strategy
Ans. (a) : B, C, D. (c) Counter offensive strategy
Social media refers to the means of interactions among (d) Preemptive strategy
people in which they create, share, and /or exchange Ans. (a) : Counter feiting strategy.
information and ideas in virtual communities and A market follower is a company that follows the foot
networks. Online communities and forums, Blogs, and step of the market leader. In order to maintain its market
social Networks are the main platforms for social share; a market follower can employ counterfeiting
media. strategy.
53. Given below are two statements : One is In counterfeiting strategy, the followers manufacture a
labelled as Assertion A and the other is labelled slightly different copy of the original product and sell it
as Reason R in the market as original.
Assertion (A) : Capital structure is determined 56. Sequentially arrange the following themes
within debt capacity of a company and it should related to globalization of Indian businesses
not be exceeded. since independence:
Reason (R) : Debt capacity of a company depends A. FDI in various sectors opened along with a
on its ability to generate cash flows. It should slashing of custom duties
generate cash enough to pay lenders fixed charges B. Partial opening of economy to external trade
and principal sum. and de-licensing of some key sectors.
In the light of the above statements, choose the C. Govt. - led investments in large public sector
most appropriate answer from the options Units in steel, chemicals and power.
given below: D. Indian businesses became competitive and
(a) Both (A) and (R) are correct and (R) is the started to reap rewards of various phases of
correct explanation of (A) development learning
(b) Both (A) and (R) are correct and (R) is not E. Increased government involvement in industry
the correct explanation of (A) with sustained focus on import substitution.
(c) (A) is correct but (R) is not correct Choose the correct answer from the options
(d) (A) is not correct but (R) is correct given below:
Ans. (b) : Both (A) and (B) are correct but (R) is not the (a) C, E, B, D, A (b) E, C, B, A, D
correct explanation of (A). (c) C, E, B, A, D (d) A, C, E, B, D
Capital structure is determined within the debt capacity Ans. (c) : C, E, B, A, D
of a company and it should not be exceeded.
Following are the sequentially arrange themes related to
Debt capacity refers to the amount of debt a business globalization of Indian businesses since independence.
can incur and repay according to the terms of a debt
agreement. • Govt. - led investments in large public sectors units in
steel, chemicals and power.
Debt capacity should be taken as a measure of the
capability to pay back the debt rather than a debt ratio. • Increased government involvement in industry with
That is, debt capacity symbolizes the ability of a firm to sustained focus on import substitution.
meet its debt obligation in time. • Partial opening of economy to internal trade and de -
54. Which one of the following is an example of licensing of some key sectors.
Secondary Reserves? • FDI in various sectors opened along with slashing of
(a) Cash in hand and balances with other banks custom duties.
in current account • Indian businesses became competitive and started to
(b) Balances with RBI and CRR reep rewards of various phases of development learning.
(c) Investment in Commercial Paper 57. In case of a warranty, the buyer can:
(d) Investment in Government Securities for SLR (a) Repudiate the contract
Ans. (c) : Investment in commercial paper. (b) Claim damages only
Investment in commercial paper is an example of (c) Return the goods
Secondary Reserves. (d) Refuse to pay the price

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 474 YCT
Ans. (b) : Claim damages only 61. Which one of the following is false with respect
A warranty is a contract between the seller and the buyer to interest rate structure in the Indian money
where the seller promises the consumer of the products market
that if the product faces certain problems which are (a) A very tight liquidity position will increase
already mentioned in the contract the seller is bound to the call rates while excess liquidity will give
replace or repair the product without any extra cost. fairly low and stable rates
Once the warranty is breached or about to be breached
you can buy the extended warranty from the seller or (b) If the liquidity crunch of the banks is passed
also from any other third party agents. on to the system, it may lead to high volatility
in the call rates
58. Tax holiday under the Income Tax Act 1961
has been used in the context of which one of the (c) Call rates under normal liquidity conditions
following? are the cap rate for the term money market
(a) Section 80 IA (b) Section 80 D (d) In a volatile call market situation, lending will
(c) Section 80 CCC (d) Section 10(5) yield high return and by selling Inter-bank
Ans. (a) : Section 80 IA participation, the bank will have more money
Tax Holiday - Deduction [Section - 80 IA] : to play in the call market
(Deductions in Respect of profits and Gains From Ans. (c) : Call rates under normal liquidity conditions
Industrial Undertaking or Enterprises Engaged in are the call rate for the term money market.
Infrastructure Development.) Call money rate is the rate at which short - term funds
Under this section eligible assesses will get tax are borrowed and lent in the money market.
deduction on profits under business head for specified
period of time. Call money is a short - term; interest paying loan from
one to 14 days made by a financial institution to another
59. Arrange the following stages of delegation in
correct sequence: financial institution.
A. Establish proper controls. 62. Under Indian Income Tax Act, in order to
B. Select the person in light of the job to be done. claim deduction of interest on home loan for
C. Reward effective delegation and successful house property, which of the following things
assumption of authority. need to be taken care of?
D. Define assignments and delegate authority in A. The home loan must be used for the purchase/
light of results expected. construction of the house property
E. Maintain open lines of communication. B. The loan must be taken on or after 1st April,
Choose the correct answer from the options 2019
given below: C. The amount of loan must be used within 10
(a) A, B, C, E, D (b) B, D, E, A, C days from the date of loan taken
(c) D, B, E, A, C (d) C, D, B, E, A
D. The purchase or construction must be
Ans. (c) : D, B, E, A, C. completed within 5 years from the end of
Following are the stages of delegation. Financial Year in which the loan was taken
• Define assignments and delegate authority in light of E. The rate of interest on loan cannot exceed 22%.
results expected.
Choose the most appropriate answer from the
• Select the person in light of the job to be done.
options given below:
• Maintain open lines of communication.
(a) A, B, D only (b) A, C, D, E only
• Establish proper controls.
(c) B, C, D, E only (d) A, D only
• Reward effective delegation and successful
assumption of authority. Ans. (d) : Deduction of interest on Home Loan for the
60. Which one of the following theories describes property.
FDI flows in ecosystems? • Homeowners can claim a deduction of up to Rs. 2
(a) Product Life Cycle Theory lakh on their home loan interest if the owner or his
(b) Factor Endowment Theory family reside in the house properly. The same treatment
(c) Waterfall Theory applies when the house is vacant. If you have rented out
(d) New Trade Theory the property. the entire interest on the home loan is
Ans. (a) : According to the FDI theory there are three allowed as a deduction.
stages in the life of a product; these are, new product stage, • The deduction on interest is limited to Rs. 30,000 if
maturing product stage and standardized product stage. you fail to meet any of the conditions given below for
• FDI occurs in the later two stages. In maturing stage the Rs.2 lakh rebate :-
product picks up in consumer acceptance and ♦ The home loan must be for the purchase and
popularity, demand for it rises both in domestic as well construction of a property.
as in foreign markets. The firm sets up manufacturing
facilities abroad to expand production capacity to meet ♦ The loan must be taken on or - after 1 April 1999.
growing demand from domestic and foreign consumers. ♦ The purchase or construction must be completed
• In this stages firm directly invests in production within 5 years from the end of the financial year in
facilities in countries where demand is high. which the loan was taken.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 475 YCT
63. Which of the following statements are correct? 65.
Match List-I with List-II
A. Internal reliability is described as the List-I List-II
consistency of a measure taken at two different (Income Tax (Particular/Section)
points of time Disposition)
B. A distribution is random walk if it has a mean A. Donation to I. Section 140(A)
of 0 and variance of 1 National
C. Increase and decrease in scores measured Defence Fund
overtime that produce a variance of less than B. Hedging of Tax II. Tax Management
50% is reliable C. Compliance III. Tax Avidance
D. Normal distribution cannot be applied to real with Legal
Formalities
life situations
D. Permanent IV. 100% Deduction
E. Factor Analysis supersedes multiple
Account
discriminant analysis Number (PAN
Choose the most appropriate answer from the Choose the correct answer from the options
options given below: given below:
(a) A, B, E only (b) C, D, E only (a) A-III, B-II, C-I, D-IV
(c) B, C, D only (d) B, D, E only (b) A-IV, B-III, C-II, D-I
Ans. (a) : A, B, E only. (c) A-II, B-I, C-III, D-IV
Following statements are correct :- (d) A-I, B-IV, C-II, D-III
Ans. (b) : A - (IV), B - (III), C - (II), D - (I)
• Internal reliability is described as the consistency of a
measure taken at two different. List-I List-II
• A distribution is random walk if it has a mean of 0 and (Income Tax Disposition) (Particular/Section)
variance of 1. A. Donation to National IV. 100% Deduction
Defence Fund
• Factor Analysis supersedes multiple discriminant
analysis. B. Hedging of Tax III. Tax Avidance
C. Compliance with II. Tax
64. Match List-I with List-II
Legal Formalities Management
List-I List-II D. D. Permanent I. Section 140(A)
(Legal Latin (Description) Account Number
Phrase) (PAN)
A. Consensus ad I. Something in return 66. Preference share in India is issued by a
idem company for a maximum period of:
B. Quid pro quo II. As much as earned (a) 10 years (b) 15 years
(c) 20 years (d) unlimited period
C. Quantum III. Buyer beware
Ans. (c) : Preference share in India is issued by a
meruit company for a maximum period of 20 years.
Preference shares also known as preferred stock, is an
D. Caveate emptor IV. Meeting of minds exclusive share option which enables shareholders to
receive dividends announced by the company before the
Choose the correct answer from the options equity shareholders.
given below:
67. Why do Central Bank intervene to affect
(a) A-I, B-III, C-IV, D-II exchange rates?
(b) A-IV, B-I, C-II, D-III A. To influence domestic production
(c) A-II, B-I, C-III, D-IV B. To influence trade flows
(d) A-I, B-IV, C-II, D-III C. To influence domestic interest rates
Ans. (b) : A - IV, B - I, C - II, D - III D. To inject liquidity in domestic markets
E. To smoothen fluctuations in exchange rates.
List-I List-II
Choose the most appropriate answer from the
(Legal Latin Phrase) (Description)
options given below:
A. Consensus ad IV. Meeting of minds (a) A, B and C only (b) C, D and E only
item (c) B, C and D only (d) A, B and E only
B. Quid pro quo I. Something in return Ans. (d) : The Reserve Bank's exchange rate policy
C. Quantum meruit II. As much as earned focuses on ensuring orderly conditions in the foreign
exchange market. For the purpose, it closely monitors
D. Caveate emptor III. Buyer beware the developments in the financial market at home and
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 476 YCT
abroad. When necessary, it intervenes in the market by C. Transaction III. It arises when a
buying or selling foreign currencies. Exposure firm's contract
• To influence domestic production. obligations are
exposed to
• To influence trade flows unanticipated
• To smoothen fluctuations in exchange rates. changes in exchange
68. Which are the major factors that lead to capital rate.
rationing? D. Operating IV. When a firm's real
A. Imperfection of capital market. Exposure assets are exposed to
unanticipated
B. Reluctance of broaden the equity share-base changes in exchange
for the fear of losing control rates
C. Inability to manage Choose the correct answer from the options
D. Deficiencies in market information which given below:
might affect the availability of capital (a) A-III, B-IV, C-II, D-I
E. Efficiency of Capital Market (b) A-I, B-II, C-III, D-IV
Choose the correct answer from the options (c) A-IV, B-III, C-II, D-I
given below: (d) A-I, B-IV, C-III, D-II
(a) A, B, D only (b) C, D, E only Ans. (b) : A - I, B- II, C - III, D - IV
(c) A, B, C, E only (d) A, B, C, D only List-I List-II
Ans. (d) : Capital Rationing :- Capital Rationing is (Type of Exposure) (Description)
the process through which companies decide how to A. Economic I. Potential changes in all
allocate their capital among different projects, given Exposure future cash flows of a
that their resources are not limitless. firm that result from
• Factors leading to Capital Rationing : unanticipated changes
(i) External constraints in exchange rates
(ii) Internal constraints imposed by management. B. Translation II. It arises when items of
Exposure financial statements that
(i) External Factors :- External capital rationing arises
are stated in foreign
out of the inability of the firm to raise sufficient funds currencies are restated
from the market at a given cost of capital. Capital in the home currency of
rationing may arise to external factors like. an MNC
(a) Imperfections of capital market. C. Transaction III. It arises when a firm's
(b) Deficiencies in market information which might Exposure contract obligations are
have for the availability of capital. exposed to
(ii) Internal Factors :- Internal capital rationing is unanticipated changes
caused by self - imposed restriction by management to in exchange rate.
its capital expenditure outlays. D. Operating IV. When a firm's real
1. Reluctance to take resort to financing by external Exposure assets are exposed to
equities in order to avoid assumption of further risk. unanticipated changes
2. Reluctance to broaden the equlity share base for fear in exchange rates
of losing control. 70. Match List-I with List-II
3. Inability to manage the firm. List-I List-II
69. Match List-I with List-II (Personality (Bipolar Dimension)
Factor)
List-I List-II
A. Warmth I. Imaginative vs
(Type of Exposure) (Description)
practical
A. Economic I. Potential changes in B. Abstractedness II. Controlled vs casual
Exposure all future cash flows
of a firm that result C. Openness to III. Outgoing vs
from unanticipated change reserved
changes in exchange
rates D. Perfectionism IV. Experimental vs
B. Translation II. It arises when items conservative
Exposure of financial Choose the correct answer from the options
statements that are given below:
stated in foreign (a) A-II, B-I, C-IV, D-III
currencies are (b) A-III, B-I, C-IV, D-II
restated in the home (c) A-I, B-IV, C-III, D-II
currency of an MNC (d) A-III, B-II, C-IV, D-I
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 477 YCT
 Ans. (b) : 73. Given below are two statements:
List-I List-II Statement I : Policies are guides to action, rather
(Personality Factor) (Bipolar Dimension) than to thinking.
A. Warmth iii. Outgoing vs reserved Statement II : Policies define an area within
B. Abstractedness i. Imaginative vs practical which a decision is to be made.
C. Openness to iv. Experimental vs In the light of the above statements, choose the
change conservative correct answer from the options given below:
D. Perfectionism ii. Controlled vs casual (a) Both Statement I and Statement II are true
71. Under the Vivad se Vishwas Act, 2020 the (b) Both Statement I and Statement II are false
amount payable by the declarant U/S 3 on or (c) Statement I is true and Statement II is false
after January 1, 2021 is: (d) Statement I is false and Statement II is true
(a) Amount of disputed tax Ans. (d) : According to Koontz & O 'Donnel were
(b) The aggregate of the amount of disputed tax identified as guides to thinking in decision - making.
and 10% of disputed tax
They assume that when decisions are made, these will
(c) Amount of penalty and amount computed by
CBDT fall within certain boundaries. "Policies do not require
(d) Average of tax arrears for last three action, but are intended to guide managers in their
assessment years decision commitments when they do not make
Ans. (b) : Amount payable under this Act on or after decisions.
the (Ist day of January, 2021 or such later date as may be Therefore statement I is false and statement II is true.
notified) but on or before the last date. Hence, option (D) correct.
• The aggregate of the amount of disputed tax and 10% 74. As per Section 68 of the Indian Companies Act,
of disputed tax. a company may purchase its own shares out of
♦Direct Tax VIVAD SE VISHWAS ACT, 2020 - An which of the following?
act to provide for resolution of disputed tax and for A. Free reserves
matters connected there with or incidental there to. B. Securities premium account
♦ Be it enacted by parliament in the 71st year of the C. General reserve
Republic of India as follows.
♦ This Act may be called the direct Tax Vivad se D. Proceeds of any other shares
Vishwas Act, 2020. E. Proceeds of same kind of shares
72. Match List-I with List-II Choose the correct answer from the options
List-I List-II given below:
(Description) (Conceptualisation) (a) A, B, C and E only (b) A, B, C and D only
A. Net Stable 1. Asset Liability (c) B, C, D and E only (d) A, C, D and E only
Funding Ratio Management Ans. (b) : In some instances, the companies act
B. Innovative 2. Tier - I capital authorizes a company to purchase its own shares or
Perpetual Debt other securities. According to the companies act, section
Instrument 68 deals with the power of the company to purchase its
C. Times Maturity 3. Tier - II capital security.
Gap Company purchases its own shares from the following
D. Risk Weighted 4. Basel - III norms reserves :
Assets • Free reserves
Choose the correct answer from the options • Security premium account
given below:
(a) A-IV, B-II, C-I, D-III • General reserve
(b) A-I, B-IV, C-III, D-II • Proceeds of any other shares.
(c) A-II, B-III, C-IV, D-I 75. Which of the following constructs hold true for
(d) A-IV, B-III, C-II, D-I research analysis and design?
Ans. (a) : A - (IV), B- (II), C - (I), D - (III) - A. Research design is a framework for every stage
List-I List-II of the collection and analysis of data
(Description) (Conceptualisation) B. The choice between qualitative and
A. Net Stable Funding IV. Basel - III norms quantitative methods in a research experiment
Ratio depends upon Cronbach alpha
B. Innovative Perpetual II. Tier - I capital C. Experiments as source of data is not
Debt Instrument appropriate for a qualitative study
C. Times Maturity Gap I. Asset Liability D. Plagiarism is the failure of researcher to
Management acknowledge the borrowed material in his
D. Risk Weighted III. Tier - II capital E. Content Analysis is a method commonly used
Assets in qualitative research to aid data collection.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 478 YCT
 Choose the most appropriate answer from the (a) D → E → A → B → C
options gives below: (b) B → D → A → E → C
(a) A, B, E only (b) B, C, D only (c) B → C → D → A → E
(c) A, C, D, E only (d) B, E only (d) B → D → A → C → E
Ans. (c) : A, C, D, E correct options. Ans. (b) : Consumer theory is the study of how people
♦ Research design is a framework for every stage of decide to spend their money based on their individual
collection and analysis of data. Statement A is true. preferences and budget constraints.
♦ Cronbach's alpha is a measure used to assess the Logical way to understand consumer theory :
reliability, or internal consistency of a set of scale or (B) Utility analysis
test items. In quantitative studies, use certain statistical (D) Indifference curve analysis
techniques such as ' cronbach Alpha' values for a (A) Budget line
reliability index, while in quantitative studies these (E) Consumer equilibrium
types of measures are not widely available, and appear
(C) Demand curve analysis.
to be predominantly subjective. Statement B is false.
♦ Experiments as source of data is not appropriate for a 79. Match List-I with List-II
qualitative study. Statement c is True. List-I List-II
♦ Plagiarism is the failure of researcher to acknowledge (International (Expounders)
the borrowed material in his/her publication. Statement Trade Theories)
D is true. A. Absolute 1. David Ricardo
♦ Content analysis is a research tool used to determine Advantage
the presence of certain words, themes, or concepts B. Factor 2. Minhas, Leontief
within some given qualitative data. Statement E is Endowments etc.
true. C. Factor - 3. Adam Smith
76. A price ceiling below the equilibrium price Intensity
possibly leads to which of the following? Reversal
A. Black marketing D. Comparative 4. Heckscher - Ohlin
B. Commodity glut Advantage
C. Shortage of commodity Choose the correct answer from the options
D. Commodity export given below:
E. Price decline (a) A-III, B-II, C-IV, D-I
Choose the correct answer from the options (b) A-III, B-IV, C-II, D-I
given below: (c) A-I, B-IV, C-II, D-III
(a) A and B only (b) D and E only (d) A-III, B-I, C-II, D-IV
(c) A and C only (d) A, B and C only
Ans. (b) : A (III), B - (IV), C - (II), D - (I)
Ans. (c) : A price ceilling below the equilibrium price
List-I List-II
possibly lead to shortage of commodity and black
marketing Price ceilling refers to the mechanism by (International Trade (Expounders)
which the price for a good is prevented from rising to a Theories)
certain level. A. Absolute 3. Adam Smith
77. Which one of the following motives Advantage
characterizes dominant organizational climate B. Factor 4. Heckscher - ohlin
of university teaching departments/scientific Endowments
organizations? C. Factor - Intensity 2. Minhas, Leontief
(a) Affiliation (b) Extension Reversal etc.
(c) Expert power (d) Achievement D. Comparative 1. David Ricardo
Ans. (c) : Expert capability/power characterizes the Advantage
major organizational environment of the university 80. Arrange the following steps in the process of
teaching departments/scientific organizations. GDR Issues:
78. Logically sequence the following economic A. Registration with prescribed authority
entities/identities in understanding the theory B. Appointment and vesting of shares with the
of consumer choice: custodian
A. Budget line C. Approval of the regulatory authorities
B. Utility analysis D. Listing of GDR
C. Demand curve analysis E. GDR allotment
D. Indifference curve analysis Choose the correct answer from the options
E. Consumer equilibrium given below:
Choose the correct answer from the options (a) C, A, B, E, D (b) A, B, C, D, E
given below: (c) A, C, B, E, D (d) B, A, C, D, E
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 479 YCT
Ans. (c) : Following steps in the process of GDR 83. Which one of the following is not valid as per
Issues: the Limited Liability Partnership Act, 2008?
(A) Registration with prescribed authority (a) LLP shall maintain its books of accounts on
⇓ double entry system and on cash or accrual
(C) Approval of the regulatory authorities. basis
(b) LLP shall prepare a Statement of Account and
⇓
Solvency for each financial year
(B) Appointment and vesting of shares with the
custodian. (c) Every LLP shall file an annual return with the
Registrar of Companies
⇓ (d) Every LLP is a separate legal entity
(E) GDR allotment independent of its partners
⇓ Ans. (d) : Concept of "limited liability partnership"
(D) Listing of GDR (i) LLP shall maintain its books of accounts on
81. If the subject matter of insurance is the ship, double entry system and on each or accrual basis.
the marine insurance is called: (ii) LLP shall prepare a statement of Account and
(a) Cargo insurance (b) Hull insurance solvency for cash financial year.
(c) Freight insurance (d) Voyage insurance (iii) Every LLP shall file an annual return with the
Ans. (b) : If the subject matter of insurance is the ship, Registrar of Companies.
the marine insurance is called Hull insurance. (iv) Every LLP is not a separate legal entity
Marine hull insurance allows boat owners to insure their independent of its partners.
vehicles against damage and destruction of hull, 84. If the information sought has been supplied by
machinery, fitting and freight, as well as protection third party or is treated as confidential by that
against construction and ship - breaking rick, liabilities, third party, the third party must give a
disbursement losses, oil, and energy - related risks. etc. representation before the PIO in reply to the
82. Which of the following statements are correct? notice issued to it within how many days from
A. The difference between sample variance and the date of receipt of such notice?
population variance computation is µ replaced (a) 5 days (b) 15 days
by x (c) 10 days (d) 7 days
B. Cronbach alpha value less than 0.30 indicates Ans. (c) : If the information sought has been supplied
reliability of research instrument by third party or is treated as confidential by that third
C. The value of R2 = 1 may imply that regression party, the third party must give a representation before
is spurious the PIO in reply to the notice issued to it within 10 days
D. The identical observation of sample and from the date of receipt of such notice.
population parameters shows that every 85. A prudent financial policy suggested by Marris
sample can be substituted as population Hypothesis to maximise balanced growth of the
E. Randomise control trial is a qualitative firm is based on which of following financial
approach to research ratios?
Choose the correct answer from the options A. Return on investment ratio
given below: B. Debt equity ratio
(a) C, D, E only (b) A, B, C, D only C. Return on capital employed ratio
(c) A, C, D, E only (d) B, C, D only D. Liquidity ratio
Ans. (c) : E. Retention ratio
♦The difference between sample variance and Choose the most appropriate answer from the
population variance computation is µ replaced by x . options given below:
Statement A is true. (a) A, B and C only (b) B, C and D only
♦ If the cronbach Alpha value is at 0.60 and below, it (c) A, C and D only (d) B, D and E only
would mean that the instrument has a low reliability and Ans. (d) : A prudent financial policy suggested by
its's unacceptable. If the value of cronbach Alpha is Marris Hypothesis to maximise balanced growth of the
within the range of 0.60 to 0.80, it means that the value firm is based on retention ration, liquidity ratio and debt
of cronbach Alpha is moderate and acceptable. equity financial ratio.
Statement B is false.
86. Michael Porter has identified five forces that
♦ The value of R2 = 1 may imply that regression is
determine the intrinsic long-term attractiveness
spurious R2 = 1 statement C is true.
of a market. According to the model, which of
♦ The identical observation of sample and population the following are true?
parameters shows that every sample can be substituted A. A segment is unattractive if it already contains
as population. Statement D is true. numerous aggressive competitors
♦ Randomise control trial is a qualitative approach to B. A segment is unattractive if it is stable or
research. Statement E is true. declining
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 480 YCT
 C. A segment is unattractive if it has high entry Ans. (c) : Perfect price discrimination, occurs when a
barriers and low exit barriers business charges the maximum possible price for each
D. A segment is unattractive if the company's unit consumed. Because prices vary among units, the
supplies are able to raise prices firm captures all available consumer surplus for itself or
E. A segment is unattractive when there are the economic surplus.
actual or potent substitutes for the product 90. Given below are two statements:
Choose the most appropriate answer from the Statement I : Marketing managers must calculate
options given below: customer lifetime values of their customer base to
(a) A and B only (b) B and C only understand their profit implications.
(c) A, C and D only (d) A, B, D and E only Statement II : Activity - based costing, an
Ans. (d) : Michael proter's has identified Five Forces of accounting technique, is very useful for
competitive Position Analysis were developed in 1979. conducting customer profitability analysis.
It is a simple framework for assessing and evaluating In the light of the above statements, choose the
the competitive strength and position of a business correct answer from the options given below:
organisation. The five forces are (a) Both Statement I and Statement II are true
(1) supplier power (2) Buyer power (3) Threat of (b) Both Statement I and Statement II are false
substitution (4) Competitive rivalry (5) Threat of (c) Statement I is true and Statement II is false
new entry. Hence includes its - (d) Statement I is false and Statement II is true
(i) A segment is unattractive if it already contains Ans. (a) : Statement I - Marketing managers must
numerous aggressive calculate customer lifetime values of their customer
(ii) A segment is unattractive if it is stable or declining. base to understand their profit implications.
(iii) A segment is unattractive when there are actual or Statement II - Activity based costing, an accounting
potent substitutes for the product. technique, is very useful for conducting customer profit
(iv) A segment is unattractive if the company supplies ability analysis. This casting system is used in target
are able to raise prices. casting, product costing, product line, profitability analysis,
87. Which one of the following is a myth about customer profitability analysis and service pricing.
rural markets? Hence, Both statement are correct.
(a) All villages are not equally populated 91. Read the following passage and answer the
(b) Rural buyers are a heterogenous lot question.
(c) Rural buyers are able to discriminate between GOI has reaffirmed its intent in amendments
products and brands. to the Finance Bill to use tax as a deterrent to
(d) Only low priced products sell in rural markets speculation in virtual digital assets. The
Ans. (d) : Different research studies proves that today amendments disallow losses on the sale of one
Rural buyers purchase branded products which are crypto asset to be set off against gains or
available at high price So, it is a myth that only low another. No deduction is permitted for any
price products sell in rural markets. expenditure other than the cost of acquisition
88. Arm's length price computation method under for computation of income from sale of crypto
92(C) of the Income Tax Act, 1961 does not and non-fungible tokens (NFTs). Every
include which one of the following? transfer of crypto assets will be taxed at the
(a) Comparable uncontrolled price proposed 30% rate, irrespective of whether
(b) Transaction net margin they are a capital asset or not. Only the
proposed 1% rate of tax deducted at source
(c) Resale price will apply to transactions in digital assets.
(d) Slum sale price method Penalties have been imposed for taxpayers who
Ans. (d) : Under Income Tax Act, 1961 define Arm have claimed a deduction of surcharge and cess
length price is the price applied when two unrelated from their taxable income, but have not on
persons entered into a transaction in uncontrolled their own accord, paid the tax and interest on
conditions. Methods of computation of Arm's length the deduction they have claimed.
price under section 92 C are - The inability to set off losses will skew the risk-
(i) Cost plus method reward profile of digital assets and crypto
(ii) Profit split method exchanges fear it could push trading activity
(iii) Comparable uncontrolled price method. beyond Indian jurisdiction to decentralized
(iv) Resale price method exchanges and foreign platforms accessed
(v) Transaction Net margin method. through virtual private networks. The industry
feels not allowing tax deduction on the cost of
89. When a monopolist switches from charging a
mining cryptos will eventually force blockchain
single price to perfect price discrimination, it
companies and the talent they hire to operate
reduces:
outside the country. To the extent that the
(a) The quantity produced proposed tax regime drives users from
(b) The firm's profit exchangers compliant with know your customer
(c) Consumer surplus (KYC) rules towards underground peer-to-peer
(d) Total surplus platforms, deterrence would be diluted.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 481 YCT
 Nirmala Sitharaman in her statement while Nirmala Sitharaman in her statement while
moving the amendments has clarified the tax moving the amendments has clarified the tax
on private digital assets does not indicate GoI's on private digital assets does not indicate GoI's
stance on their legitimacy. The regulatory stance on their legitimacy. The regulatory
position could become clearer once the Reserve position could become clearer once the Reserve
Bank of India (RBI) is ready with its digital Bank of India (RBI) is ready with its digital
currency. Fiat digital currencies, which make
currency. Fiat digital currencies, which make
transactions and monetary transmission more
efficient, are inevitable as the use of cash transactions and monetary transmission more
plateaus in several countries. Speculation, and efficient, are inevitable as the use of cash
a reflex to curb it, must not draw attention plateaus in several countries. Speculation, and
away from the inherent superiority of digital a reflex to curb it, must not draw attention
currencies. This is the future of money. away from the inherent superiority of digital
Digital currency regulations will result into currencies. This is the future of money.
which one of the following? Given below are two statements:
(a) Scare digital currencies away Statement I : Non-fungible tokens cannot be
(b) Permit deduction of any expenditure other splitted.
than the cost of acquisition for computation Statement II : Non-fungible tokens can be
(c) Impose penalties for tax payers who have replicated at convenience.
claimed a deduction of surcharge and cess In the light of the above statements, choose the
from their taxable income. correct answer from the options given below:
(d) Attract 30% tax on every transfer of crypto (a) Both Statement I and Statement II are true
asset (b) Both Statement I and Statement II are false
Ans. (d) : According to the passage every transfer of (c) Statement I is true and Statement II is false
crypto assets is to be taxed at 30%. (d) Statement I is false and Statement II is true
92. Read the following passage and answer the Ans. (c) : A non - fungible token is unique digital
question.
identifier that cannot be copied, substituted, or
GOI has reaffirmed its intent in amendments
subdivided, that is recorded in a blockchain, and that is
to the Finance Bill to use tax as a deterrent to
speculation in virtual digital assets. The used to certify authenticity and ownership.
amendments disallow losses on the sale of one Non - fungible tokens are unique cryptographic tokens
crypto asset to be set off against gains or that exist on a block chain and cannot be replicated.
another. No deduction is permitted for any Hence, statement I is true and statement II is false.
expenditure other than the cost of acquisition 93. Read the following passage and answer the
for computation of income from sale of cryptos question.
and non-fungible tokens (NFTs). Every
GOI has reaffirmed its intent in amendments
transfer of crypto assets will be taxed at the
proposed 30% rate, irrespective of whether to the Finance Bill to use tax as a deterrent to
they are a capital asset or not. Only the speculation in virtual digital assets. The
proposed 1% rate of tax deducted at source amendments disallow losses on the sale of one
will apply to transactions in digital assets. crypto asset to be set off against gains or
Penalties have been imposed for taxpayers who another. No deduction is permitted for any
have claimed a deduction of surcharge and cess expenditure other than the cost of acquisition
from their taxable income, but have not on for computation of income from sale of cryptos
their own accord, paid the tax and interest on and non-fungible tokens (NFTs). Every
the deduction they have claimed. transfer of crypto assets will be taxed at the
The inability to set off losses will skew the risk- proposed 30% rate, irrespective of whether
reward profile of digital assets and crypto they are a capital asset or not. Only the
exchanges fear it could push trading activity proposed 1% rate of tax deducted at source
beyond Indian jurisdiction to decentralized will apply to transactions in digital assets.
exchanges and foreign platforms accessed Penalties have been imposed for taxpayers who
through virtual private networks. The industry
have claimed a deduction of surcharge and cess
feels not allowing tax deduction on the cost of
mining cryptos will eventually force blockchain from their taxable income, but have not on
companies and the talent they hire to operate their own accord, paid the tax and interest on
outside the country. To the extent that the the deduction they have claimed.
proposed tax regime drives users from The inability to set off losses will skew the risk-
exchangers compliant with know your reward profile of digital assets and crypto
customer (KYC) rules towards underground exchanges fear it could push trading activity
peer-to-peer platforms, deterrence would be beyond Indian jurisdiction to decentralized
diluted. exchanges and foreign platforms accessed
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 482 YCT
 through virtual private networks. The industry outside the country. To the extent that the
feels not allowing tax deduction on the cost of proposed tax regime drives users from
mining cryptos will eventually force blockchain exchangers compliant with know your
companies and the talent they hire to operate customer (KYC) rules towards underground
outside the country. To the extent that the peer-to-peer platforms, deterrence would be
proposed tax regime drives users from diluted.
exchangers compliant with know your Nirmala Sitharaman in her statement while
customer (KYC) rules towards underground moving the amendments has clarified the tax
peer-to-peer platforms, deterrence would be on private digital assets does not indicate GoI's
diluted. stance on their legitimacy. The regulatory
Nirmala Sitharaman in her statement while position could become clearer once the Reserve
moving the amendments has clarified the tax Bank of India (RBI) is ready with its digital
on private digital assets does not indicate GoI's currency. Fiat digital currencies, which make
stance on their legitimacy. The regulatory transactions and monetary transmission more
position could become clearer once the Reserve efficient, are inevitable as the use of cash
Bank of India (RBI) is ready with its digital plateaus in several countries. Speculation, and
currency. Fiat digital currencies, which make a reflex to curb it, must not draw attention
transactions and monetary transmission more away from the inherent superiority of digital
efficient, are inevitable as the use of cash currencies. This is the future of money.
plateaus in several countries. Speculation, and Given below are two statements : One is
a reflex to curb it, must not draw attention labelled as Assertion A and the other is labelled
away from the inherent superiority of digital as Reason R
currencies. This is the future of money. Assertion (A) : Crypto exchanges fear that the
Government of India's intent towards virtual new amendments could push trading activity
digital assets is which one of the following? beyond Indian jurisdiction to decentralized
(a) To promote speculation exchanges.
(b) To be silent on speculation Reason (R) : The new amendments disallow
(c) To discourage speculation losses on the sale of new crypto asset to be set off
(d) To stop speculation against gains on another.
Ans. (c) : According to the passage government intent In the light of the above statements, choose the
is to discourage speculation is virtual digital assets. most appropriate answer from the options
given below:
94. Read the following passage and answer the
(a) Both (A) and (R) are correct and (R) is the
question.
correct explanation of (A)
GOI has reaffirmed its intent in amendments
(b) Both (A) and (R) are correct and (R) is not
to the Finance Bill to use tax as a deterrent to
the correct explanation of (A)
speculation in virtual digital assets. The
amendments disallow losses on the sale of one (c) (A) is correct but (R) is not correct
crypto asset to be set off against gains or (d) (A) is not correct but (R) is correct
another. No deduction is permitted for any Ans. (a) : The inability to set off losses will skew the
expenditure other than the cost of acquisition risk reward profile of digital assets, and crypto
for computation of income from sale of cryptos exhanges and foreign platforms accussed through
and non-fungible tokens (NFTs). Every virtual private networks, Hence both (A) and (R) are
transfer of crypto assets will be taxed at the correct and R) is the correct explanation of (A).
proposed 30% rate, irrespective of whether 95. Read the following passage and answer the
they are a capital asset or not. Only the question.
proposed 1% rate of tax deducted at source GOI has reaffirmed its intent in amendments
will apply to transactions in digital assets. to the Finance Bill to use tax as a deterrent to
Penalties have been imposed for taxpayers who speculation in virtual digital assets. The
have claimed a deduction of surcharge and cess amendments disallow losses on the sale of one
from their taxable income, but have not on crypto asset to be set off against gains or
their own accord, paid the tax and interest on another. No deduction is permitted for any
the deduction they have claimed. expenditure other than the cost of acquisition
The inability to set off losses will skew the risk- for computation of income from sale of cryptos
reward profile of digital assets and crypto and non-fungible tokens (NFTs). Every
exchanges fear it could push trading activity transfer of crypto assets will be taxed at the
beyond Indian jurisdiction to decentralized proposed 30% rate, irrespective of whether
exchanges and foreign platforms accessed they are a capital asset or not. Only the
through virtual private networks. The industry proposed 1% rate of tax deducted at source
feels not allowing tax deduction on the cost of will apply to transactions in digital assets.
mining cryptos will eventually force blockchain Penalties have been imposed for taxpayers who
companies and the talent they hire to operate have claimed a deduction of surcharge and cess
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 483 YCT
 from their taxable income, but have not on The year was 2021 when Naik quit the
their own accord, paid the tax and interest on prestigious SAIL plant at Vishakhapatnam. As
the deduction they have claimed. a manager materials, Naik enjoyed powers - he
The inability to set off losses will skew the risk- could even place an order for materials worth
reward profile of digital assets and crypto Rs. 25 lakh. He needed nobody's prior
exchanges fear it could push trading activity approval.
Naik joined a pulp-making plant located at
beyond Indian jurisdiction to decentralized
Harihar in Karnataka, as AGM Materials. The
exchanges and foreign platforms accessed plant is a part of the multi-product and
through virtual private networks. The industry multiplant-conglomerate owned by a
feels not allowing tax deduction on the cost of prestigious business house in India.
mining cryptos will eventually force blockchain Obviously, perks, designation and reputation of
companies and the talent they hire to operate the conglomerate lured Naik away from the
outside the country. To the extent that the public sector steel monolith.
proposed tax regime drives users from When he joined the eucalyptus pulp making
exchangers compliant with know your company, little did Naik realise that he needed
customer (KYC) rules towards underground prior approval to place an order for materials
worth Rs. 12 lakh. He had presumed that he
peer-to-peer platforms, deterrence would be
had the authority to place an order by himself
diluted. worth half the amount of what he used to do at
Nirmala Sitharaman in her statement while the mega steel maker. He placed the order,
moving the amendments has clarified the tax materials arrived, were received, accepted and
on private digital assets does not indicate GoI's used up in the plant.
stance on their legitimacy. The regulatory Trouble started when the bill for Rs. 12 lakh
position could become clearer once the Reserve came from the vendor. The accounts
Bank of India (RBI) is ready with its digital department withheld payment for the reason
currency. Fiat digital currencies, which make that the bill was not endosed by Kamath.
Kamath refused to sign on the bill as his
transactions and monetary transmission more approval was not taken by Naik before placing
efficient, are inevitable as the use of cash the order.
plateaus in several countries. Speculation, and Naik felt fumigated and cheated. A brief
a reflex to curb it, must not draw attention encounter with Kamath only aggravated the
away from the inherent superiority of digital problem. Naik was curtly told that he should
currencies. This is the future of money. have known company rules before venturing.
Which one of the following is done by the Naik decided to quit.
Digital Currency Regulatory Framework? The job of AGM material is to
(a) Eventually force blockchain companies to (a) Place order (b) Receive material
operate from outside (c) Inspect material (d) Issue material
(b) Attract users towards exchanges which are Ans. (a) : AGM's job is the to place an order.
compliant with know your customer rules 97. Read the given passage and answer the
question.
(c) Motivate the operators to operate outside the
Naik, AGM Materials, is fuming and fretting.
country He bumped into Kamath, GM (Materials)
(d) Promote underground peer to peer crypto threw the resignation letter on his table,
platforms shouted and walked out of the room swiftly.
Ans. (b) : Attract users towards exchanges which are Naik has reason for his sudden outburst. He
compliant with know your customers rules is the most has been driven to the wall. Perhaps, details of
favorable expected outcome. the story will tell the reasons for Naik's bile
and why he put in his papers, barely four
96. Read the given passage and answer the months after he took up his present
question. assignment.
Naik, AGM Materials, is fuming and fretting. The year was 2021 when Naik quit the
He bumped into Kamath, GM (Materials) prestigious SAIL plant at Vishakhapatnam. As
threw the resignation letter on his table, a manager materials, Naik enjoyed powers - he
shouted and walked out of the room swiftly. could even place an order for materials worth
Rs. 25 lakh. He needed nobody's prior
Naik has reason for his sudden outburst. He approval.
has been driven to the wall. Perhaps, details of Naik joined a pulp-making plant located at
the story will tell the reasons for Naik's bile Harihar in Karnataka, as AGM Materials. The
and why he put in his papers, barely four plant is a part of the multi-product and
months after he took up his present multiplant-conglomerate owned by a
assignment. prestigious business house in India.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 484 YCT
 Obviously, perks, designation and reputation of Naik joined a pulp-making plant located at
the conglomerate lured Naik away from the Harihar in Karnataka, as AGM Materials. The
public sector steel monolith. plant is a part of the multi-product and
When he joined the eucalyptus pulp making multiplant-conglomerate owned by a
company, little did Naik realise that he needed prestigious business house in India.
prior approval to place an order for materials Obviously, perks, designation and reputation of
worth Rs. 12 lakh. He had presumed that he the conglomerate lured Naik away from the
had the authority to place an order by himself public sector steel monolith.
worth half the amount of what he used to do at When he joined the eucalyptus pulp making
the mega steel maker. He placed the order, company, little did Naik realise that he needed
materials arrived, were received, accepted and
prior approval to place an order for materials
used up in the plant.
worth Rs. 12 lakh. He had presumed that he
Trouble started when the bill for Rs. 12 lakh had the authority to place an order by himself
came from the vendor. The accounts
worth half the amount of what he used to do at
department withheld payment for the reason
that the bill was not endosed by Kamath. the mega steel maker. He placed the order,
Kamath refused to sign on the bill as his materials arrived, were received, accepted and
approval was not taken by Naik before placing used up in the plant.
the order. Trouble started when the bill for Rs. 12 lakh
Naik felt fumigated and cheated. A brief came from the vendor. The accounts
encounter with Kamath only aggravated the department withheld payment for the reason
problem. Naik was curtly told that he should that the bill was not endosed by Kamath.
have known company rules before venturing. Kamath refused to sign on the bill as his
Naik decided to quit. approval was not taken by Naik before placing
Given below are two statements: the order.
Statement I : Mr. Naik's presumption that he Naik felt fumigated and cheated. A brief
could place an order for materials with Rs. 25 lakh encounter with Kamath only aggravated the
was right. problem. Naik was curtly told that he should
Statement II : Perks and reputation of the have known company rules before venturing.
conglomerate were the reasons for Mr. Naik Naik decided to quit.
joining the eucalyptus pulp making company. As per the passage, who is at fault?
In the light of the above statements, choose the (a) Mr. Naik
correct answer from the options given below: (b) Mr. Kamath
(a) Both Statement I and Statement II are true (c) Both Mr. Naik and Mr. Kamath
(b) Both Statement I and Statement II are false (d) Human Resource Department
(c) Statement I is true and Statement II is false Ans. (d) : As per the passage HR department is at fault
(d) Statement I is false and Statement II is true because of faulty induction programme.
Ans. (d) : Statement I is incorrect - Naik's presumption 99. Read the given passage and answer the
was incorrect as he got into trouble even with an order question.
of Rs. 12 lacs. Statement II is correct because perks,
designation and reputation of the conglomerate lured Naik, AGM Materials, is fuming and fretting.
Naik away from the public sector steel monolith. He bumped into Kamath, GM (Materials)
threw the resignation letter on his table,
Hence, Both statement I and Statement II are incorrect.
shouted and walked out of the room swiftly.
98. Read the given passage and answer the Naik has reason for his sudden outburst. He
question.
has been driven to the wall. Perhaps, details of
Naik, AGM Materials, is fuming and fretting. the story will tell the reasons for Naik's bile
He bumped into Kamath, GM (Materials)
and why he put in his papers, barely four
threw the resignation letter on his table,
months after he took up his present
shouted and walked out of the room swiftly.
assignment.
Naik has reason for his sudden outburst. He
has been driven to the wall. Perhaps, details of The year was 2021 when Naik quit the
the story will tell the reasons for Naik's bile prestigious SAIL plant at Vishakhapatnam. As
and why he put in his papers, barely four a manager materials, Naik enjoyed powers - he
months after he took up his present could even place an order for materials worth
assignment. Rs. 25 lakh. He needed nobody's prior
The year was 2021 when Naik quit the approval.
prestigious SAIL plant at Vishakhapatnam. As Naik joined a pulp-making plant located at
a manager materials, Naik enjoyed powers - he Harihar in Karnataka, as AGM Materials. The
could even place an order for materials worth plant is a part of the multi-product and
Rs. 25 lakh. He needed nobody's prior multiplant-conglomerate owned by a
approval. prestigious business house in India.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 485 YCT
 Obviously, perks, designation and reputation of Naik has reason for his sudden outburst. He
the conglomerate lured Naik away from the has been driven to the wall. Perhaps, details of
public sector steel monolith. the story will tell the reasons for Naik's bile
When he joined the eucalyptus pulp making and why he put in his papers, barely four
company, little did Naik realise that he needed months after he took up his present
prior approval to place an order for materials assignment.
worth Rs. 12 lakh. He had presumed that he The year was 2021 when Naik quit the
had the authority to place an order by himself prestigious SAIL plant at Vishakhapatnam. As
worth half the amount of what he used to do at a manager materials, Naik enjoyed powers - he
the mega steel maker. He placed the order, could even place an order for materials worth
materials arrived, were received, accepted and Rs. 25 lakh. He needed nobody's prior
used up in the plant. approval.
Trouble started when the bill for Rs. 12 lakh Naik joined a pulp-making plant located at
came from the vendor. The accounts Harihar in Karnataka, as AGM Materials. The
plant is a part of the multi-product and
department withheld payment for the reason
multiplant-conglomerate owned by a
that the bill was not endosed by Kamath.
prestigious business house in India.
Kamath refused to sign on the bill as his
Obviously, perks, designation and reputation of
approval was not taken by Naik before placing
the conglomerate lured Naik away from the
the order.
public sector steel monolith.
Naik felt fumigated and cheated. A brief
When he joined the eucalyptus pulp making
encounter with Kamath only aggravated the
company, little did Naik realise that he needed
problem. Naik was curtly told that he should prior approval to place an order for materials
have known company rules before venturing. worth Rs. 12 lakh. He had presumed that he
Naik decided to quit. had the authority to place an order by himself
Given below are two statements : One is worth half the amount of what he used to do at
labelled as Assertion A and the other is labelled the mega steel maker. He placed the order,
as Reason R materials arrived, were received, accepted and
Assertion (A) : It was right on the part of used up in the plant.
accounts department to withheld payment. Trouble started when the bill for Rs. 12 lakh
Reason (R) : Mr. Naik had the authority to place came from the vendor. The accounts
the order for materials with Rs. 25 lakh. department withheld payment for the reason
In the light of the above statements, choose the that the bill was not endosed by Kamath.
most appropriate answer from the options Kamath refused to sign on the bill as his
given below: approval was not taken by Naik before placing
(a) Both (A) and (R) are correct and (R) is the the order.
correct explanation of (A) Naik felt fumigated and cheated. A brief
(b) Both (A) and (R) are correct and (R) is not encounter with Kamath only aggravated the
problem. Naik was curtly told that he should
the correct explanation of (A)
have known company rules before venturing.
(c) (A) is correct but (R) is not correct
Naik decided to quit.
(d) (A) is not correct but (R) is correct What is the most ineffective in the
Ans. (c) : Assertion is correct it was the on the part of organization?
accounts department to withheld payment. (a) Recruitment policy
Reason is false when Mr. Naik joined the eucalyptus (b) Selection policy
pulp making company, little did he realize that he (c) Induction programme
needed prior approval to place an order for materials (d) Promotion policy
worth Rs. 12 lakh. Hence , (A) is correct but (R) not
Ans. (c) : Research indicates that a poor induction
correct. programme has a significant negative impact upon a
100. Read the given passage and answer the new employees perceptism of their skills and ability to
question. meet expectations, and how they feel about their job and
Naik, AGM Materials, is fuming and fretting. their relationship with their fellow workers and
He bumped into Kamath, GM (Materials) employer. To achieve effectiveness the induction
threw the resignation letter on his table, programme needs to be comprehensive, systematic,
shouted and walked out of the room swiftly. relevant and clear.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 486 YCT
 NTA UGC NET/JRF Exam, Dec. 2021/June 2022
COMMERCE
Solved Paper
Exam Date: 14.10.2022 Shift-I

1. Which of the following products would require 3. Arrange the following in the winding up
intensive modification in the international process of a company by tribunal in
arena? chronological sequence from the first to the
(a) Tennis racket (b) Cosmetics last.
(c) Notebook computer (d) Camera (A) Settlement of list of contributories and
Ans. (b) : A "cosmetic product" shall mean any application of assets
substance or mixture intended to be placed in contact (B) Submission of report by company liquidator
with the various external parts of the human body
(epidermis, hair system, nails, lips and external genital (C) Petition for winding up
organs) or with the teeth and the mucous membranes of (D) Direction of Tribunal on report of company
the oral cavity with a view exclusively or mainly to liquidator
cleaning them, Perfuming them, changing their (E) Appointment of company liquidator
appearance and/or correcting body odours and/or Choose the correct answer from the options
protecting them or keeping them in good condition. given below :
– Cosmetics require intensive modification in the (a) (E), (B), (A), (C), (D)
international arena.
(b) (A), (E), (B), (C), (D)
2. Match List I with List II : (c) (C), (E), (B), (D), (A)
List-I List-I (d) (B), (D), (C), (A), (E)
Management style Approach
Ans. (c) : Chronological sequence from the first to the
(a) Task (i) Love conquers all
last of a winding up process of a company by tribunal :
Management s approach
(C) Petition for winding up
(b) Country Club (ii) One plus one can
Management add upto three ↓
approach (E) Appointment of company liquidator
(C) Impoverished (iii) Authority- ↓
Management obedience approach (B) Submission of report by company liquidator
(D) Team (iv) Speak no evil, hear ↓
Management no evil, see no evil (D) Direction of Tribunal on report of company
approach liquidator
Choose the correct answer from the options ↓
given below : (A) Settlement of list of contributories and application
(A) (B) (C) (D) of assets.
(a) i iii iv ii Therefore option (c) is the correct Answer.
(b) i iv ii iii
(c) iii i iv ii 4. Which of the following statements are false
regarding price and output determination
(d) iii iv ii i
under perfect competition?
Ans. (c) : The code of correct matching List-I with
List-II: (A) A firm is a price taker
(B) In the long run, a firm is in equilibrium when
List-I List-II
its AR = MR = LAC = LMC
Management style Approach
(C) A firm is in equilibrium in the short run only
(a) Task (iii) Authority obedience
when its AC = AR = MR = MC
Managements approach
(D) A firm reaches its shut-down point when price
(b) Country club (iv) Love conquers all
Managements goes below its AC
(E) A firm fixes the price of its products when AR
(C) Impoverished (ii) Speak no evil, hear
Management no evil, see no evil = MR
approach Choose the most appropriate answer from the
(D) Team (i) One plus one can options given below :
Management add up to three (a) (A), (B), (C) only (b) (C), (D), (E) only
approach (c) (B), (C), (D) only (d) (A), (E) only
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 487 YCT
Ans. (b) : Following are the characteristics of perfect 7. Which of the following provident funds is set
competition: up under Provident Fund Act, 1952?
• A firm is a price taker. (a) Statutory Provident Fund
• In the long run, a firm is in equilibrium when its (b) Recognized Provident Fund
=AR + MR = LAC = LMC (c) Public Provident Fund
• Large numbers of buyers and sellers in the market (d) Unrecognized provident Fund
• Free entry and exit of firms in the market Ans. (b) : Recognized provident Fund is set up under
• Buyers and sellers should possess complete provident fund Act, 1952. It is a provident fund which
knowledge of the market is recognized by the commissioner of income-tax
under the Income Tax Act.
• No Price control
To be recognized , an organization of 20 or more
• Perfect competition among buyers and sellers. members shall invest fund as per the guidelines of PF
Therefore, option (c) (d) and (e) not are characteristics Act, 1952 , and can get an approval from the PF
of perfect competition. commissioner of Income tax.
5. Who among the following Economists 8. Which one of the following measures of central
suggested the Sales Revenue Maximization as tendency is not affected by the presence of
an alternative objective of a business firm? extreme values in the data of the distribution?
(a) K.W. Rothschild (b) Cyert and March (a) Arithmetic average (b) Geometric average
(c) Robin Marris (d) W.J. Baumol (c) Positional average (d) Harmonic average
Ans. (d) : W.J. Baumol Suggested:- Ans. (c) : "Positional Averages determine the position
Sales Revenue Maximization as an alternative goal to of variables in a given sets of data." Median and mode
profit maximization. are positional averages. These are calculated by
Managers only ensure acceptable level of profit, observation of a series and not through the extreme
pursuing a goal which enhances their own utility. values of the series which. Therefore, positional
6. Match List-I with List-II Average not affected by the extreme values of a series.
List-I List-II 9. In comparison to domestic equity investment
Shape of revenue Market structure foreign equity investment would be preferred if
curve of the firm it offers in which of the following situations?
(A) Kinked revenue (i) Monopolistic (a) Higher dividend yield and high rate of capital
curve competition appreciation
(b) Lower dividend yield and lower rate of
(B) Infinitely elastic (ii) Perfect capital appreciation
straight line competition
(c) Higher dividend yield and lower rate of
curve
capital appreciation
(C) Relatively less (iii) Oligopoly (d) Lower dividend yield and high rate of capital
elastic curve appreciation
(D) Relatiely high (iv) Monopoly Ans. (b) : In comparison to domestic equity investment
elastic curve foreign equity investment would be preferred if it
Choose the correct answer from the options offers lower dividend yield and lower rate of capital
given below : appreciation.
(A) (B) (C) (D) 10. Which of the following may be the reasons for
(a) iii ii iv i a material usage variance?
(b) iv iii ii i (A) Negligence in the use of materials
(c) i ii iv iii (B) Changes in basic process of materials
(d) iii ii i iv (C) Poor or improper machine handling
Ans. (a) : The code of correct Matching of List-I with (D) Wastage due to inefficient production methods
List-II (E) Change in product design requiring usuage
List-I List-II different from the standard
Shape of revenue curve of Market structure Choose the correct answer from the options
the firm given below :
(a) (A), (B), (C), (D) only
(A) Kinked revenue (iii) Oligopoly
curve (b) (B), (C), (D), (E) only
(c) (A), (C), (D) (E) only
(B) Infinitely elastic (ii) Perfect
(d) (A),(B), (D), (E) only
straight line curve competition
Ans. (c) : Reason for material usage variance:
(C) Relatively less (iv) Monopoly
elastic curve • Negligence in the use of material
(D) Relatively high (i) Monopolistic • Poor or improper machine handling
elastic curve competition • Wastage due to inefficient production methods.

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 488 YCT
• Change in product design requiring usuage different Ans. (c) : Measures of skewness is the degree of
from the standard lopsidedness (tiltness) in a distribution.
• Careless handling of materials by employees A positive skewness means a longer right tail.
• Wrong mixture of materials and other. A negative skewness means a longer left tail.
11. Which of the following are the properties of Zero skewness means the distribution is symmetric
normal distribution? about its mean.
(A) May be symmetrical or skewed 14. The potential that a firm's consolidated
(B) Uni-modal, bell-shaped and symmetrical financial statements be affected as a result of
changes in exchange rates in called as :
(C) Asymptotic to the x-axis
(a) Transaction exposure
(D) n and p are the two parameters
(b) Economic exposure
(E) µ and σ are the two parameters
(c) Translation exposure
Choose the correct answer from the options
(d) Operating exposure
given below :
(a) (B), (D) only (b) (B), (C), (E) only Ans. (c) : Translation exposure is the risk of having
changes in foreign exchange rates trigger losses on
(c) (A), (D) only (d) (A), (C), (E) only
business transactions or balance sheet holdings.
Ans. (b) : Properties of Normal Distribution: Therefore, the potential that a firm's consolidated
• The mean, median, and mode are equal financial statements be affected as a result of changes in
• The normal curve is bell-Shaped and is symmetric exchange rates is called as Translation Exposure.
about the mean. 15. Arrange the following stages in successive
• Asymptotic to the X-axis order of new product development process.
• µ and σ are the two parameters. (A) Concept Development and Testing
• The curve is continuous. (B) Marketing Strategy Development
• The total area under the normal distribution curve is (C) Idea Screening
equal to 1 or 100% (D) Product Development
12. Rearrange the steps followed in evaluating an (E) Test Marketing
investment proposal using NPV method : Choose the correct answer from the options
(A) Calculated the present value of cash flows given below :
(B) Identify an appropriate discount rate (a) (A), (C), (D), (E), (B)
(C) Forecasting cash flows (b) (C), (A), (B), (D), (E)
(D) Rank the projects as per NPV (c) (C), (A), (D), (E), (B)
(E) Compute the net present value (d) (C), (A), (B), (D), (E)
Choose the correct answer from the options Ans. (b) : Successive order of new product
given below : development process:
(a) (B), (E), (A), (D), (C) (C) Idea screening
(b) (A), (B), (C), (D), (E) ↓
(c) (C), (B), (A), (E), (D) (A) Concept Development and Testing
(d) (D), (A), (C), (B), (E) ↓
Ans. (c) : Rearrange steps of evaluating an Investment (B) Marketing strategy Development
proposal using NPV method: ↓
(C) Forecasting cash flows (D) Product Development
↓ ↓
(B) Identify an appropriate discount rate (E) Test Marketing
↓ 16. Which one of the following approaches of
(A) Calculated the present value of cash flows human resource accounting was suggested by
↓ Brummet, Flamholtz and Pyle?
(E) Compute the net present value (a) Replacement Cost Approach
(b) Historical Cost Approach
↓
(c) Opportunity Cost Approach
(D) Rank the projects as per NPV
(d) Standard Cost Approach
Therefore option (c) is the correct answer.
Ans. (b) : Historical cost Approach was developed by
13. Which one of the following summary measures William C.Pyle (and assisted by R. Lee Brummet &
denotes the degree of lopsidedness in a Eric G. Flamholz) and R.G. Barry corporation, a leisure
distribution? footwear manufacturer based on Columbus, Ohio
(a) Measures of central tendency (USA) in 1967. In this approach, actual cost incurred on
(b) Measure of variation recruiting, hiring, training and development the human
(c) Measures of skewness resources of the organisation are capitalised and
(d) Measures of Kurtosis amortised over the expected useful life human resource.
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 489 YCT
17. Arrange the time spent in administration in the Ans. (a) : According to section 13 (a) of the Negotiable
increasing order by the following personnel : Instrument Act, "Negotiable Instrument means a
(A) Works Manager promissory note, bill of exchange or cheque payable,
(B) President either to ordered or to bearer, whether the word 'order'
(C) Foreman or bearer appear on the instrument or not".
(D) Board of Directors Characteristics of Negotiable Instrument:
(E) General Manager • Negotiable instrument are easily transferable.
Choose the correct answer from the options • A cheque is always drawn on a banker.
given below :
(a) (C), (A), (E), (B), (D) • They are payable either to order or bearer.
(b) (D), (B), (E), (A), (C) • Liability of the negotiable Instrument in Law
(c) (D), (E), (B), (A), (C) extensive.
(d) (E), (C), (A), (D), (B) • By usage Bank Notes, Bank Drafts, Treasury Bill etc.
Ans. (a) : Time spent in administration in the increasing 20. Which of the following inputs are considered
order by the following personal: while deciding economic value-to-customer
(C) Fore man pricing?
↓ (A) Buyer's image of the product performance
(A) Works Manager (B) Warranty quality
↓ (C) Desired rate of return
(E) General Manager (D) Customer demand
↓ (E) Customer support
(B) President Choose the correct answer from the options
↓ given below :
(D) Board of Directors. (a) (A), (B), (E) only
(b) (A), (C), (D) only
18. Which of the following assumptions form the
basis of the MM Hypothesis in stating irrelavance (c) (B), (D), (E) only/
of capital structure regarding weighted average (d) (A), (B), (C), (D) only
cost of capital remaining constant? Ans. (a) : Following inputs are considered while
(A) Perfect capital markets deciding economic value to customer pricing:
(B) Heterogenous risk class • Buyer's image of the product performance
(C) Absence of taxes • warranty quality
(D) Full dividend payout • Customer demand.
(E) Same expectation of firm's EBIT with which to 21. Match List-I with List-II :
evaluate the value of a firm
Choose the correct answer from the options List-I List-II (Explanation)
given below : (Type of
(a) (B), (C), (D), (E) only Agreement)
(b) (A), (C), (D), (E) only (A) NAMA (i) Liberation of
(c) (A), (B), (C), (D) only International
(d) (A), (B) (D), (E) only Investments
Ans. (b) : The assumptions of M.M Hypothesis: (B) GATTs (ii) Includes industrial
• Perfect Capital Markets goods, textile,
• Homogenous Risk Classes jewellery, fish and
fisheries products
• Business Risks and manufacturing
• Absence of Taxes indstries
• Full Dividend Payout (C) TRIMs (iii) Liberalization of
• Same expectation of firm's EBIT with which to trade in goods and
evaluate the value of a firm services
Therefore, option (b) is the correct answers.
(D) TRIPs (iv) Provides monopoly
19. Which one of the following statements is power to owners of
correct regarding the Negotiable Instruments intellectual property
Act in India?
Choose the correct answer from the options
(a) A cheque is always drawn on a banker
given below :
(b) A cheque requires the acceptance by the
drawee (A) (B) (C) (D)
(c) A bill of exchange can be drawn payable to (a) ii i iv iii
bearer on demand (b) iv ii iii i
(d) A promissory note containing a conditional (c) ii iii i iv
promise to pay is a valid promissory note (d) iii ii iv i
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 490 YCT
 Ans. (c) : The code of correct matching of List-I with (D) Deposit Insurance and Credit Guarantee
List-II: Corporation of India (DICGC)
List-I List-II (E) Bhartiya Reserve Bank Note Mudran Private
(A) NAMA (ii) Includes industrial goods, Limited (BRBNMPL)
textile, jewellery, fish and Choose the correct answer from the options
fisheries products and given below :
manufacturing indstries (a) (A), (B), (C), (D) only
(B) GATTs (iii) Liberalization of trade in (b) (A), (B), (D), (E) only
goods and services (c) (B), (C), (D), (E) only
(C) TRIMs (i) Liberation of (d) (A), (C), (E) only
International Investments Ans. (*) : Subsidiaries of RBI:
(D) TRIPs (iv) Provides monopoly power The Reserve Bank of India has three fully owned
to owners of intellectual subsidiaries i.e. the entire paid-up capital is contributed
property by the RBI. They are:
22. Through which one of the following influences • Deposit Insurance and Credit Guarantee
of workers' participation in management Corporation of India (DICGC)
regarding 'safety and welfare and work- • National Housing Bank (NHB)
related' issues are resolved? • Bharatiya Reserve Bank Note Mudran Private
(a) Information sharing (b) Bargaining Limited (BRBNMPL),
(c) Consultation (d) Co-determination 25. What has been the primary motive of central
Ans. (d) : Co-determination (also "copartnership" or banks raising interest rates in recent times?
worker participation) is a practice where workers of an (a) Gaining competitivenes
enterprise have the right to share their views on
proposal of BOD, vote for representatives on the (b) Taming inflation
resolution of BOD in a company. It also refers to staff (c) Raising employment levels
having binding rights in work councils on issues in their (d) Currency depreciation
workplace. Ans. (b) : Central bank lends money to commercial
Therefore, through Co-determination safety and welfare bunks. It has power to set its own interest rates. These
and work-related issues are resolved. are the benchmark rates that central banks are currently
23. Which of the following statements are true in raising to Tame inflation. The logic is based on a
case of delegation of authority? cascading effect; if central banks charge higher rates to
(A) It shows down decision-making commercial banks, commercial banks in turn increase
(B) It leads to better decisions the rates they offer to households and businesses for
(C) It relieves the manager of his heavy work load borrowing.
(D) It helps create an informal organization Therefore, Taming inflation is primary motive of central
structure banks raising interest rates in recent times.
(E) It helps train subordinates 26. Which of the following are the tax categories
Choose the correct answer from the options under the GST?
given below : (A) 5% (B) 10%
(a) (A), (D), (E) only (C) 12% (D) 20%
(b) (A), (B), (C) only
(E) 28%
(c) (B), (C), (E) only
Choose the correct answer from the options
(d) (B), (C), (D), (E) only
given below :
Ans. (c) : The Delegation of Authority is an (a) (A), (D), (E) only (b) (B), (C), (D) only
organizational process wherein, the manager divides his
work among the subordinates and give them the (c) (A), (C), (E) only (d) (B), (D), (E) only
responsibility to accomplish the respective task. Ans. (c) : GST is multi-stage tax system which is
Characteristics of Delegation of Authority: comprehensive in nature and applied on the sale of
• It leads to better decision. goods and services. The main object of this taxation
system is to reduce the cascading effect of other
• It relieves the manager from his heavy work load.
numerous Indirect taxes and it is applicable throughout
• It helps to train subordinates. India. It reduced the number of indirect taxes to only
• No Delegation of Responsibility. one nation wide tax.
24. Which of the following are subsidiaries of RBI?
(A) National Housing Bank (NHB)
(B) National Bank for Agriculture and Rural
Development (NABARD)
(C) Export Import Bank (EXIM Bank)
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 491 YCT
27. Which of the following economic identities Ans. (c) : Following common difficulties are faced in
measure degree of monopoly in an industry? making decisions and implementing:
(A) Stackelberg model • Non-actionable information
(B) Concentration ratio • Unsupporting environment
(C) Diffusion index • Ineffective communication
(D) Herfindahle index
• Incorrect timing
(E) Elasticity reciprocol
Choose the most appropriate answer from the • Lack of reliable data
options given below : • Diversity of thought
(a) (A), (B) and (C) only 31. Which of the following is a determinant of
(b) (B), (C) and (D) only Orginisational Climate or Culture (OC)?
(c) (A), (C) and (E) only (a) Leadership style
(d) (B) (D) and (E) only (b) Decision-making
Ans. (d) : Measures of monopoly power: (c) Innovation and change
Any firm that can alter its price, through the adjustment (d) Trust
of its output, is supposed to have monopoly power. The Ans. (a) : Organisational climate is a multidimensional
ability to charge a price higher than marginal cost is concept. The various dimension of the organizational
characteristic of monopoly. climate are individual autonomy, authority structure,
• 1st Measure : Based on price Elasticity of Demand leadership style, the pattern of communication, degree
• 2nd Measure : Based on price Discrimination of conflicts and cooperation.
• 3rd Measure : Based on profit Rates 32. Sequence correctly the following steps in
• 4th Measure : Based on concentration Ratios PERT/CPM analysis :
• 5th Measure : The Herfindahle Index (A) Identify the critical path
Therefore option (d) is correct answer. (B) Draw the network diagram
28. Which of the following tests measures the (C) Establish dependencies across activities
applicant's capacity to learn the skill required (D) Estimate the completion time of an activity
for a job? (E) Define the activitites in the network
(a) Aptitude test (b) Interest test (a) (B), (C), (D), (E), (A)
(c) Intelligence test (d) Personality test (b) (E), (C), (B), (D), (A)
Ans. (a) : Aptitude test measures the applicant's (c) (C), (B), (E), (A), (D)
capacity to learn the skill and is conducted to find out (d) (A), (B), (D), (E), (C)
how quickly the candidate can learn new skills and new Ans. (b) : The correct Sequence steps in PERT/CPM
methods. Analysis are:-
29. Which is the most appropriate mode of entry in (E) Define the activities in the network.
international business to an enterprise with ↓
little experience of International Markets?
(C) Establish dependencies across activities.
(a) Acquisition (b) Exporting
↓
(c) Strategic Alliance (d) Joint Venture
(B) Draw the network diagram.
Ans. (b) : Exporting is the most appropriate mode of
entry in international business to an enterprise with little ↓
experience of International Markets. (D) Estimate the completion time of an activity.
Exporting is the simplest way to get started in foreign ↓
business. As a result most businesses begin their global (A) Identify the critical path.
expansion in this manner. 33. Which of the following statements regarding
30. Which of the following common difficulties are short-term theory of production and cost
faced in making decisions and implementing? analysis are true?
(A) Non-actionable information (A) Economic rent is the same as economic profit
(B) Unsupporting environment (B) Imputed cost is the rent of hired building
(C) Easy acceptance by subordinates (C) When AC =MC, AC is minimum
(D) Ineffective communication (D) When MC is rising, AC > MC
(E) Incorrect timing (E) Output is optimum when AC = MC
Choose the correct answer from the options Choose the most appropriate answer from the
given below : options given below :
(a) (A), (B) only (a) (A), (D), (E) only
(b) (C), (D), (E) only (b) (A), (C), (E) only
(c) (A), (B), (D), (E) only (c) (B), (C), (D) only
(d) (A), (B), (C), (D) only (d) (A), (B), (D), (E) only
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 492 YCT
Ans. (b) : Features of short-term theory of Production Choose the correct answer from the options
and cost Analysis are:- given below :
(A) (B) (C) (D)
• Economic rent is the same as economic profit.
(a) ii iii i iv
• When AC is minimum, AC = MC (b) ii iv i iii
• Output is optimum when AC = MC (c) iii ii iv i
• Returns to a factor is used to explain the short-run (d) iii iv i ii
Production function. Ans. (b) : The code of correct matching of List-I with
34. The Central Bank can significantly influence List-II:
the savings, investments and consumer List-I List-II
spending in the economy through which one of Accounting Standard Description
the following policies? (A) Ind–AS : 1 (ii) Presentation of
(a) Fiscal policy Financial Statements
(b) Monetary policy (B) Ind – AS : 8 (iv) Accounting policies,
(c) Industrial policy changes in
Accounting
(d) Foreign exchange policy Estimates and Errors
Ans. (b) : The Central Bank can significantly influence (C) Ind - AS : 28 (i) Investments in
the saving, investments and consumer spending in the Associates and Joint
economy through monetary tools like Cash Reserve ventures
Ratio, Statutory Liquidity Ratio, Margin Requirements, (D) Ind-AS : 34 (iii) Interim Financial
Ceiling on amount of credit, open market operations, Reporting
etc. 37. Match List-I with List-II ::
35. Which one of the following statements is false? List-I List-II
(a) Regression coefficients are independent of Mode/Delivery Explanation
change of origin but not of change of scale (A) Actual (i) Seller hands over
(b) Both the regression coefficients cannot delivery to the buyer the
assume a value (ignoring algebraic sign) key of the godown
greater than one where the goods
(c) Regression coefficient of the two variables are stored
may have different algebraic symbols for real (B) Constructive (ii) Physical handing
life situations delivery over of the
possession of
(d) Coefficient of correlation is independent of goods by the seller
the origin and scale of data to the buyer
Ans. (c) : Regression coefficient must not have (C) Symbolic (III) Voluntary transfer
different signs for them. Regression coefficients and delivery of possession of
correlation coefficient, all of the three must have similar goods from seller
signs. Is any of them not have similar sign then we can to buyer
say that there is a calculation error in the process. (D) Delivery (iv) Acknowledgement
by third person on
36. Match List-I with List-II : behalf of and at
List-I List-II the disposal of the
Accounting Description buyer
Standard Choose the correct answer from the options
(A) Ind–AS : 1 (i) Investments in given below :
Associates and (A) (B) (C) (D)
Joint ventures (a) iv ii iii i
(b) ii iv i iii
(B) Ind – AS : 8 (ii) Presentation of (c) iii i ii iv
Financial (d) i ii iv iii
Statements
Ans. (b) : The code of correct matching of List-I with
(C) Ind - AS : 28 (iii) Interim Financial List-II:
Reporting
List-I List-II
(D) Ind-AS : 34 (iv) Accounting Mode/Delivery Explanation
policies, change in (A) Actual delivery (ii) Physical handing over
Accounting of the possession of
Estimates and goods by the seller to
Errors the buyer

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 493 YCT
 (B) Constructive (iv) Acknowledgement by 40. Which one of the following statements is true?
delivery third person on behalf (a) The sum of absolute deviations measured
of and at the disposal from Median is the least
of the buyer (b) If each value in a given series is multiplied by
(C) Symbolic (i) Seller hands over to a constant, K, the variance of the new series
delivery the buyer the key of would be equal to the variance of the given
the godown where the series
goods are stored (c) The variance is the square of the value of the
(D) Delivery (III) Voluntary transfer of standard deviation divided by mean
possession of goods (d) Z-score value of 'X' is the ratio between 'X'
from seller to buyer divided by mean
38. Which of the following losses are allowed to be Ans. (a) : Minimum Deviation (MD) from Mean
carried forward and set off in the subsequent X−X
assessment years? ∑ n
(A) House property loss
X − median
(B) Business loss
(C) Speculation loss
MD from Median = ∑ n
(D) Capital loss X − mod e
(E) Loss on account of owning and maintaining
MD from Mode = ∑ n
race horses
Choose the correct answer from the options
( )
since Median > Mean X and Median > Mode.
given below : So, the sum of absolute deviations measured from
(a) (A), (B), (C), (D) only median is the least is a true statement.
(b) (B), (C), (D), (E) only 41. Tax audit is compulsory in the case of a person
(c) (A), (E) only carrying on profession and whose gross
(d) (A), (B), (C), (D), (E) only receipts exceeds which one of the following?
(a) Rs. 60 lakh (b) Rs. 1 Crore
Ans. (d) : Following are the losses allowed to be carried (c) Rs. 40 lakh (d) Rs. 50 lakh
forward and setoff in the subsequent assessment years:-
Ans. (d) : Tax audit is complulsory if total Income from
• House property loss business is over Rs. 1 crore or from profession is over
• Business loss Rs. 50 lakh. (Section 44 AB)
• Speculation loss 42. Which one of the following customers are risk
• Capital loss averse, technology shy, and price sensitive?
• Loss on account of owning and maintaining race (a) Early adopters (b) Early majority
horses. (c) Late majority (d) Laggards
39. Which of the following samples are non- Ans. (c) : Late majority customers are risk averse,
random or non-probability samples? technology shy and price sensitive. This groups
comprises primarily of the conservatives. It is 34% of
(A) Systematic sample
the total population. They are typically older, less
(B) Quota sample affluent and less educated than the early segments.
(C) Cluster or area sample 43. The examination of documentary evidence in
(D) Purposive sample support of transactions contained in the books
(E) Replicated sample of accounts is termed as which one of the
Choose the correct answer from the options following?
given below : (a) Verification (b) Vouching
(a) (A), (C) only (b) (B), (C) (D) only (c) Valuation (d) Validation
(c) (A), (D), (E) only (d) (B), (D) only Ans. (b) : Vouching is the act of reviewing
Ans. (d) : Non random or non-probability sampling documentary evidence to see if it properly supports
refers to the sampling process in which, the samples are entries made in the accounting records. For example, an
selected for a specific purpose with a pre-determined auditor is engaged in vouching when examining a
basis of selection. shipping document to see if it supports the amount of a
sale recorded in the sales Journal.
types of Non-probability sampling:
44. Sequence the following steps to compute tax
• Quota sampling
where there is agriculture income also
• Purposive sampling included.
• Judgment sampling (A) Add agricultural income and non agricultural
• Snowball or network sampling income and calculate tax on aggregate as if
• Crowd sourcing such aggregate income is the total income.
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 494 YCT
 (B) Add agricultural income to the maximum (A) Business Environment Risk Intelligence (BERI)
exception limit available in the case of assessee Index
and compute tax on such amount as if it is total (B) Economist Intelligence Unit (EIU) Indices
income (C) National Centre for Trade Information (NCTI)
(C) Deduct the amount of Income tax as computed (D) India Trade Promotion Organization (ITPO)
(D) from the tax computed from (A) (E) PRS Group's International Country Risk
(D) Claim rebate u/s 87(A) if applicable Guide
(E) Add surcharge if applicable along with the Choose the correct answer from the options
Health and Education cess @ 4% given below :
Choose the correct answer from the options (a) (A), (C) only
given below : (b) (A), (B) and (E) only
(a) (B), (A), (C), (D), (E) (c) (A), (D), (E) only
(b) (B), (A), (D), (C), (E) (d) (C), (D), (E) only
(c) (A), (B), (D), (C), (E) Ans. (b) : Risk rating in International Business Risks
(d) (A), (B), (C), (D), (E) are given by:
• Business Environment Risk Intelligence (BERI)
Ans. (d) : Following are the steps to compute tax where
Index
the agricultural income is also included
• Economist Intelligence Unit (EIU) Indices
(A) Add agricultural income and non agricultural
income and calculate Tax on aggregate as if such • PRS Groups International Country Risk Guide.
aggregate income is the total income. 47. Given below are two statements : One is
labelled as Assertion A and the other is labelled
↓
as Reason R.
(B) Add Agricultural income to the maximum
Assertion (A) : 'Lien' is the right to retain
exemption limit available in the case of assesses and possession of goods and refuse to deliver them
compute tax on such amount as if it is total Income to the buyer until the price due in respect of
↓ them is paid or tendered.
(C) Deduct the amount of Income Tax as computed (D) Reason (R) : An unpaid seller in possession of
from the tax computed from (A) goods sold is entiled to exercise his lien on the
↓ goods where the goods have been sold without
(D) Claim rebate U/s 87 (A) if applicable any stipulation as to credit.
↓ In the light of the above statements, choose the
most appropriate answer from the options
(E) Add surcharge if applicable along with the Health given below :
and Education cess @4% (a) Both (A) and (R) are correct and (R) is the
45. Which one among the following is not a correct explanation of (A)
privilege or right of a holder-in-due course (b) Both (A) and (R) are correct but (R) is NOT
under Negotiable Instruments Act? the correct explanation of (A)
(a) Estoppel against denying signature or (c) (A) is correct but (R) is not correct
capacity of prior party (d) (A) is not correct but (R) is correct
(b) Estoppel against denying original validity of Ans. (a) : Assertion (A) : 'Lien' is the right to retain
the instrument possession of goods and refuse to deliver then to the
(c) Estoppel against denying capacity of the buyer until the price due in respect of them is paid or
payee to endore tendered is the correct statement.
(d) Estoppel against denying the genuineness or Reason (R) : An unpaid seller in possession of goods
validity of payee's endorsement sold is entitled to exercise his lien on the goods where
Ans. (d) : "Holder in due course"- means any person the goods have been sold without any stipulation as to
who for consideration become the possessor of a credit is the also correct statement and (R) is the correct
promissory note, bill of exchange or cheque if payable explanation of (A).
to bearer, or the payee or endorsee thereof, if (payable 48. The profit for the year before appropriation in
to order), before the amount mentioned in it become a partnership firm was Rs. 50,000. Shagun, one
payable, and without having sufficient cause to believe of the partners, receives a salary of Rs. 4,000
that any defect existed in the title of the person from and interest at ten percent per annum on his
whom he derived his title. capital of Rs. 1,00,000. Amir, the other partner,
receives interest on capital at the same rate as
Estoppels against denying the genuineness or validity of Shagun, Amir's capital was Rs. 89,000. They
payee's endorsement is not a privilege or right of a share profits and losses equally. What was the
holder-in-due course under Negotiable Instrument Act. total share of profits credited to Amir's current
46. The most significant and widely-used country account?
risk ratings in International Business Risks are (a) Rs. 13,550 (b) Rs. 15,350
given by which of the following? (c) Rs. 22,450 (d) Rs. 24,350
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 495 YCT
Ans. (c) : Profit = 50,000 Ans. (c) : Banks are not required to deduct the TDS
(-) Shagun's Salary = 4,000 from depositions who have submitted declaration in
46,000 form 15 (G) under the Income Tax Rule, 1962.
(-) Interest 10% of 1,00,000 10,000 52. The safety margin that insurers must maintain
(Shagun's) 36,000 in order to protect the interest of the policy
(-) Interest 10% of 89,000 8900 holders is called :
(Amir's) 27,100 (Profit) (a) Protection margin (b) Solvency margin
They will shares profit and loss equally 27,100 Amir's (c) Profit margin (d) Cost of risk bearing
profit share will be - 13,550 Ans. (b) : The safety margin that insurers must maintain
Shagun's Profit Share will be - 13,550 in order to protect the interest of the policy holders is
The total share of profit credited to Amir's current called solvency margin.
account will be 13,550+8900 = 22,450 Solvency margin is the extent to which an insurance
49. Which of the following are the complete company's assets exceed its liabilities. IRDAIs
experimental research designs? imminent revision of the solvency margin threshold of
(A) Factorial design 150% could be crucial because the solvency ratio of
(B) One group after-only design many life and general insurers has been deteriorating
and are close to the regulatory minimum of 15.
(C) Before-after design with one experiment and
two control groups 53. Match List I with List-II
(D) Latin square design List-I List-II
(E) One-group before-after design Type of test Testing situation
Choose the correct answer from the options (A) ANOVA (i) Testing whether a
given below : Test standard
(a) (A), (C), (D) only (b) (A), (D), (E) only probabilitydistribution
(c) (B), (C), (D) only (d) (B), (C), (E) only fits well to a given
Ans. (a) : Experimental research designs are those frequency distribution
where researchers have complete control over the (B) Z-Test (ii) Parametric test to test
extraneous variables & can predict confidently that the the hypothesis of
observed effect on the dependable variable is only due differences in more
to the manipulation of the independent variable. than two sample
Complete experimental research designs are means
• Factorial design (c) Chi- (iii) Non-parametric test to
• Before-after design with one experiment and two square test the hypothesis of
controls groups Test differences in more
• Latin square design than two samples
means
50. Which of the following variables are considered
relevant in behavioural segmentation of (D) Kruskal- (iv) Hypothesis testing for
consumers? Wallis mean for large
Test samples when σ is
(A) Life Style
known or unknown
(B) User status
(C) Occasions Choose the correct answer from the options
given below :
(D) Values
(A) (B) (C) (D)
(E) Loyalty status
(a) iv iii i ii
Choose the correct answer from the options
given below : (b) i iv ii iii
(a) (A), (B), (C) only (b) (A), (D),(E) only (c) ii iv i iii
(c) (B), (C), (E) only (d) (A), (B), (E) only (d) iii ii iv i
Ans. (c) : Following are the variables considered Ans. (c) : The code of correct matching of List-I with
relevant in Behavioral segmentation of consumers: List-II
• User status List-I List-II
• Time-Based and Occasion Type of test Testing situation
• Benefit Driven (A) ANOVA (ii) Parametric test to test the
• Customer Loyalty etc. Test hypothesis of differences
in more than two sample
51. Banks are not required to deduct the TDS from means
depositors who have submited declaration in
which one of the following forms under the (B) Z-Test (iv) Hypothesis testing for
Income Tax Rule, 1962. mean for large samples
(a) Form 16 (A) (b) Form 16 (H) when σ is known or
(c) Form 15 (G) (d) Form 15 (A) unknown

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 496 YCT
 (c) Chi-square (i) Testing whether a coefficient with change is price and change in total
Test standard probability revenue is -
distribution fits well to a elasticity change in changein
given frequency
distribution coefficient price Total Revenue
(D) Kruskal- (iii) Non-parametric test to test e >1 Increase Decrease
Wallis Test the hypothesis of decrease Increase
differences in more than 56. Which one of the following is not coordinated
two samples means in the horizontal of Integrated Marketing
54. Arrange the following steps in the process of Communications?
concluding an export deal. (a) Packaging (b) Customer Service
(A) Confirm the export deal (c) Sales Promotion (d) Distribution
(B) Receive letter of credit Ans. (b) : Coordination in the horizontal of integrated
(C) Identify and negotiate with importer marketing communications is packaging, sales
(D) Receive an export order promotion, and distribution. Customer service is not
(E) Examine thoroughly and ask for amendment coordinated in the horizontal integrated marketing
Choose the correct answer from the options communication.
given below : Customer service is the assistance and advice by a
(a) (A), (C), (E), (D), (B) company to those people who buy or use its products or
(b) (C), (A), (D), (E), (B) services.
(c) (B), (E), (A), (C), (D) 57. Which one of the following does not fall in the
(d) (D), (A), (B), (C), (E) ambit of the objectives of the Competition Act,
Ans. (b) : Steps in process of concluding an export 2002 in India?
deal: (a) Encourage competition
(C) Identify and negotiate with importer (b) Prevent abuse of dominant position
↓ (c) Prevent monopolistic rights arising out of
(A) Confirm the export deal intellectual property
(d) Regulate mergers and acquisitions
↓
(D) Receive an export order Ans. (c) : Objectives of the Competition Act, 2002 in
India:
↓
• Encourage competition
(E) Examine thoroughly and ask for amendment
• Prevent abuse of dominant position
↓
(B) Receive letter of credit • Regulate mergers and acquisitions
• To promote and sustain competition in market
55. Which of the following relationships regarding
price elasticity coefficient with change in price • To protect the interest of consumers.
and change in total revenue is incorrect? 58. Limited liability partnership may be wound up
by which one of the following
Elasticitycoefficient Changein Change in (a) Voluntarily
Pr ice totalrevenue
(a) (b) By the Registrar, if the firm fails to file
Increase Increase
e=0 annual return in the prescribed form with the
Decrease Decrease Registrar of Companies within 60 days of
closer of the financial year
Elasticity coefficient Change in Change in
Price total revenue (c) By the Tribunal established under the
(b)
Increase Increase Companies Act, 2013
e >1
Decrease Decrease (d) Either voluntarily or by the tribunal
established under the Companies Act, 2013
Elasticity coefficient Changein Change in
Ans. (d) : The winding up of a limited liability
Price total revenue
(c) partnership may be either voluntary or by the tribunal
Increase No change
e =1 established under the companies Act, 2013.
Decrease No change
• Section-63, 64 and 65 of LLP Act, 2008 regulates
the process of wound up of an LLP.
Elasticity coefficient Change in Change in
Price total revenue 59. Which of the following measures inflation in
(d)
Increase Increase ecosystem?
e <1
Decrease Decrease (A) Phillips curve
Ans. (b) : Price elasticity of demand depending on the (B) Cunsumer Price Index
change in price and total revenue states that as the price (C) Misery Index
decreases the total revenue increases and vise versa. (D) GDP deflator
The correct relationship regarding price elasticity (E) Fisher effect
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 497 YCT
 Choose the most appropriate answer from the Ans. (c) : The code of correct Matching of List-I with
options given below : List-II:
(a) (A), (B) and (E) only List-I List-II
(b) (B), (C) and (D) only
(A) Appointment of (i) Section 139
(c) (B), (C) and (E) only
auditors by CAG (5)
(d) (B) and (D) only
(B) Qualifications and (ii) Section 141
Ans. (d) : Inflation measured by calculating the
percentage rate of change of a price index is called the disqualifications of
inflation rate. auditors
Following are the price Indexes, measures inflation in (C) Powers and duties of (iii) Section 142
ecosystem:- auditors
• Consumer Price Index (CPI) (D) Remuneration of (iv) Section 143
• Harmonized Index of Consumer Prices (HICP) auditors
• The GDP deflator 62. According to the Stewardship Theory of
• Producer price Index Corporate Governance, which of the following
• Core inflation statements are relevant?
• Purchasing power Index (A) Governance approach is sociological and
60. Which of the following are three pillars of psychological
BASEL-II? (B) Behaviour pattern is trustworthy
(A) Minimum Capital Requirements (C) The role of management is to monitor and
(B) Supervisory Review control
(C) Leverage (D) Owner's attitude is to take risks
(D) Market Discipline (E) Interests of the managers and principals
(E) Capital Conservation Buffer converge
Choose the correct answer from the options Choose the most appropriate answer from the
given below : options given below :
(a) (A), (C), (D) only (b) (A), (D), (E) only (a) (A), (D), (E) only
(c) (A), (B), (D) only (d) (B), (C), (E) only (b) (A), (B), (D), (E) only
Ans. (c) : BASEL-II is the set of international banking (c) (B), (C), (D) only
regulations defined by the Basel Committee on Bank (d) (A), (B), (C), (D), (E)
Supervision (BCBS). It is an extension of the Ans. (b) : The stewardship theory supports the view
regulations for minimum capital requirements as that the managers consider about their personal
defined under Basel-I. The Basel II framework operates reputation and value their integrity.
under three pillars;
According to the Stewardship Theory of Corporate
• Capital Adequacy Requirements/Minimum capital Governance, following statements are relevant:
Requirements.
• Governance approach is sociological and
• Supervisory review
psychological
• Market Discipline
• Behaviour pattern is trustworthy
61. Match List I with List-II
• Owner's attitude is take risks
List-I List-II
• Interests of the managers and principals converge
(A) Appointment of (i) Section 139
auditors by CAG (5) 63. According to FEMA foreign exchange does not
include which one of the following?
(B) Qualifications (ii) Section 141
and (a) Deposit payable in any foreign currency
disqualifications (b) Bills of exchange drawn in Indian currency
of auditors but payable in any foreign currency
(C) Powers and (iv) Section 143 (c) Travellers cheques drawn by institutions
duties of auditors outside India but payable in Indian currency
(D) Remuneration of (iii) Section 142 (d) Draft drawn by banks outside India and
auditors payable in foreign currency
Choose the correct answer from the options Ans. (d) : According to FEMA, foreign exchange
given below : include:
(A) (B) (C) (D) • Deposit payable in any foreign currency
(a) ii iii i iv • Bill of exchange drawn in Indian currency but
(b) ii i iv iii payable in any, foreign currency
(c) i ii iv iii • Travellers cheques drawn by institutions outside
(d) i iii ii iv India but payable in Indian currency.
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 498 YCT
• Deposits, credits and balances payable in any Choose the correct answer from the options
foreign currency. given below :
• FEMA foreign exchange does not include draft (a) (A), (B), (D), (E) only
drawn by banks outside India and payable in foreign (b) (B), (C), (D), (E) only
currency (c) (A), (B), (C), (D) only
64. Arrange the following steps in a proper (d) (C), (D), (E) only
sequence to develop successful market offering: Ans. (c) : Translation Exposure is a kind of accounting
(A) The specifics of the market offering risk that arises due to fluctuations in currency exchange
(B) Monitoring goal progress rates.
(C) The ultimate criterion for success • Converting the values of a foreign subsidiary's
(D) The logistics of creating the offering holdings into the parent company's domestic
currency can lead to in consistencies if exchange
(E) The value created in the target market rates change continuously.
Choose the correct answer from the options • There are four methods of measuring translation
given below : exposure i.e.:
(a) (A), (D), (E), (C), (B) – Current/Non - Current Method
(b) (C), (E), (A), (B), (D) – Monetary/Non - Monetary Method
(c) (D), (A), (C), (E), (B) – Current Rate Method
(d) (C), (E), (A), (D), (B) – Temporal Method
Ans. (d) : Steps in a proper sequence to develop 67. Match List I with List-II :
successful market offering:
List-I List-II
(C) The ultimate criterion for success
(Type of lease) (Description)
↓
(A) Leveraged (i) Mix of operating and
(E) The value created in the target market
lease finance lease on full
↓ payout basis and
(A) The specifics of the market offering provides for the
↓ purchase option to
(D) The logistics of creating the offering the lessee
↓ (B) Direct (ii) Financing for
(B) Monitoring goal progress lease servicing and fuel in
65. Which one of the following is not the the aircraft industry
assumption for consumer behaviour based on (C) Wet lease (iii) Protects lessee
the cardinal utility approach? against the rate of
(a) Maximization of satisfaction obsolescence
(b) Utility cardinally measurable (D) Update (iv) Involves lessor,
(c) Diminishing marginal utility of money lease lessee and financer,
(d) Utility is additive lessor provides
equity and major
Ans. (c) : Assumption for consumer behaviour based on amount is provided
the cardinal utility approach are: by the financer as
• Maximization of satisfaction loan
• Utility cardinally measurable Choose the correct answer from the option
• Utility is additive given below :
• Consumer's income is limited to buying (A) (B) (C) (D)
good/services (a) i ii iii iv
• Marginal utility of money doesn't change (b) iv i ii iii
Diminishing marginal utility of money is not the (c) ii iv i iii
assumption of cardinal utility approach (d) iv iii i ii
66. A firm is exposed to translation loss if it uses Ans. (b) : The code of correct matching of List-I with
current exchange rate to translate its assets and List-II:
liabilities. Which among the following are List-I List-II
methods use in translating assets and (Type of lease) (Description)
liabilities?
(A) Leveraged (iv) Involves lessor, lessee
(A) Current/Non-Current method lease and financer, lessor
(B) Temporal method provides equity and
(C) Monetary/Non-monetary method major amount is
(D) Current Rate method provided by the
(E) Transaction/Non-transaction method financer as loan

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 499 YCT
 (B) Direct lease (i) Mix of operating and (C) Undisclosed reserves are included in capital of Bank
finance lease on full (Tier-II) if they represent accumulation of post-tax
payout basis and profits
provides for the (E) Hybrid debt capital instruments may be included in
purchase option to the tier II capital
lessee Option (B) and (D) is not correct statement
(C) Wet lease (ii) Financing for servicing 70. Which one of the following is not an advantage
and fuel in the aircraft in case of product-based departmentalization?
industry (a) It leads to continuous and undivided attention
(D) Update lease (iii) Protects lessee against to the product
the rate of obsolescence (b) Requires less number of managerial personnel
to be employed
68. Arrange the following processes in a proper (c) It enables top management to compare the
sequence to conduct scientific research : performances of different products
(A) Induction (d) It motivates departmental head to improve his
(B) Making prediction performance
(C) Observation of facts Ans. (b) : Advantage in case of product-based
(D) Testing of prediction departmentalization:
(E) Development of explanations • It leads to continuous and undivided attention to the
Choose the correct answer from the options product
given below : • It enables top management to compare the
(a) (A), (B), (C), (E), (D) performances of different products.
(b) (C), (A), (E), (B), (D) • It motivates departmental head to improve his
(c) (E), (A), (B), (C), (D) performance
(d) (A), (D), (B), (C), (E) • Ensures Better Quality
Ans. (b) : Processes of scientific research in proper " Requires less number of managerial personnel to be
sequence are : employed" is not correct advantage in case of product-
(C) Observation of facts based Departmentalization
↓ 71. Given below are two statements :
(A) Induction Statement I : Distribution channels are sets of
↓ interdependent organizations participating in
(E) Development of explanations the process of making a product available for
consumption.
↓ Statement II : All marketing channels have the
(B) Making prediction potential for conflict and competition resulting
↓ from goal incompatibility
(D) Testing of prediction In the light of the above statements, choose the
69. Which of the following statement (s) are correct answer from the options given below :
correct? (a) Both Statement I and Statement II are true
(A) Asset liability management is a mechanism to (b) Both Statement I and Statement II are false
address the risk arising due to mismatch of (c) Statement I is true but Statement II is false
assets and liabilities (d) Statement I is false but Statement II is true
(B) Non-performing assets (PNA) must be written Ans. (a) : "Distribution channels are sets of
off as loss in the financial year in which NPA Interdependent organizations participating in the
has been identified process of making a product available for consumption"
(C) Undisclosed reserves are included in capital of is true statement .
banks (Tier II) if they represent accumulation "All marketing channels have the potential for conflict
of post-tax profits and competition resulting from goal incompatibility" is
(D) Bank cannot accept deposits from the public also true statement.
for a period exceeding five years 72. The following information with respect to a
(E) Hybrid debt capital instruments may be company is given below :
included in Tier II capital Net Profit before tax = Rs. 1,00,000
Choose the correct answer from the options 10% Preference share capital (Rs. 10 each) =
given below : Equity share capital (Rs. 10 each) = Rs.
(a) (A), (C), (D) Only (b) (C), (D),(E) Only 1,00,000
(c) (B), (C), (D) Only (d) (A), (C), (E) Only Taxation at 50% of Net Profit
Ans. (d) : The following are correct statement: Which one among the following is the earning
(A) Asset liability management is a mechanism to per share?
address the risk arising due to mismatch of assets (a) Zero (b) Rs. 4
and liabilities. (c) Rs. 10 (d) Rs. 40

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 500 YCT
Ans. (b) : 74. In case of two production-inputs, which one of
Net Income − Preferred Dividend the following is not a property of Isoquants (the
EPS = production indifference curves)?
Weighted Average of common share outstanding
(a) Negative slope
Net Income = PBIT – Tax (b) Concave to the point of origin
= 1,00,000 – 50% of Income (50,000) (c) Non-intersecting and non-tangential
= 50,000 (d) Upper isoquants represent higher level of
Preferred dividends = 10% of, 1,00,000 output
= 10,000 Ans. (b) : Property of Isoquants (The production IC):
So, outstanding share will be 10,000 • An Isoquant curve, slopes downward, or is
Putting the value in formula negatively sloped.
50,000 − 10,000 • An Isoquant curve, because of the MRTS effect, is
EPS =
10,000 convex to its origin.
40,000 • Isoquant curves cannot be tangent or intersect on
EPS = another.
10,000 • Isoquant curves in the upper portions of the chart
EPS = 4 /-share yield higher outputs.
73. Match List I with List II : • Isoquant curve should not touch the X or Y axis on
List-I List-II the graph.
Earnings-Valuation Underlying • Non-Intersecting and non-tangential
ratios Description (s) Therefore, concave to the point of origin is not a
(A) Price-Earnings (i) Stock price property of Isoquant.
(P-E) ratio divided by 75. Arrange the following pricing strategies and
accounting net other practices as per the life-cycle of a new
worth product of which no close substitues are
(B) Earnings Yield (ii) Firm's P/E ratio available
Ratio divided by an (A) Gradual rise in price
index P/E ratio (B) Product improvement and market
segmentation
(C) Price-Book (iii) Stock price
(P/B) ratio divided by the (C) Gradual reduction in price to retain sales
earnings per (D) Skimming pricing
share (E) Large price cuts
(D) Relative P/E (iv) Earning per Choose the correct answer from the options
ratio share divided by given below :
stock price (a) (D), (A), (B), (E), (C)
(b) (E), (C), (A), (B), (D)
Choose the correct answer from the options
(c) (B), (D), (C), (A),(E)
given below :
(d) (D), (A), (B), (C), (E)
(A) (B) (C) (D)
(a) ii iv i iii Ans. (d) : Pricing strategies as per the Life-Cycle of a
new product in arranged order:-
(b) i iv iii ii
(D) Skimming pricing
(c) ii iii iv i
↓
(d) iii iv i ii
(A) Gradual rise in price
Ans. (d) : The code of correct matching of List-I with
↓
List-II:
(B) Product improvement and market segmentation
List-I List-II
↓
Earnings-Valuation Underlying Description (s) (C) Gradual reduction in price to retain sales
ratios
↓
(A) Price-Earnings (iii) Stock price divided by (E) Large price cuts.
(P-E) Ratio the earnings per share
76. Heckscher-Ohlin Theory of factor endowment
(B) Earnings Yield (iv) Earning per share suggest which of the following types of
Ratio divided by stock price relationships?
(C) Price-Book (i) Stock price divided by (A) Production-Marketing relationship
(P/B) ratio accounting net worth (B) Land-Labour relationship
(D) Relative P/E (ii) Firm's P/E ratio (C) Marketing-Capital relationships
ratio divided by an index (D) Labour-Capital relationships
P/E ratio (E) Technological complexities

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 501 YCT
 Choose the correct answer from the options • Defines cyber crimes and prescribed penalties for
given below : them established a cyber appellate tribunal to
(a) (A), (B) Only (b) (B), (C) only resolve disputes arising from this new law.
(c) (B), (D), (E) only (d) (A), (C), (E) only • offenses and contraventions.
Ans. (c) : The Heckscher-Ohlin theorem says that • Justice dispensation systems for cybercrimes.
countries will export products that are presnt in 79. Given below are two statements : One is
abundance in the nation and have cheap factor of labelled as Assertion A and the other is labelled
production. They import products that use the countries as Reason R.
scarce factor and not present in the nation itself. Assertion (A) ; There is a change in the profit
Heckscher-ohlin theory of factor end comment suggest sharing ratio of the old partners when a new
different types of relationship i.e. : partner gets his share of profit from all the
• Land-Labour relationship partners
• Labour-capital relationship Reasons (R) : When a new partner is admitted
• Technological complexities into the partnership for a certain share of
profit, the combined shares of the old partners
77. Given below are two statements : One is will be reduced
labelled as Assertion A and the other is labelled In the light of the above statements, choose the
as Reason R. most appropriate answer from the options
Assertion (A) : Every perfectly competitive given below :
firm in the long run earns normal profits only. (a) Both (A) and (R) are correct and (R) is the
Reasons (R) : Market price gets fully adjusted, correct explanation of (A)
due to change in the demand and the supply (b) Both (A) and (R) are correct but (R) is NOT
conditions and the resultant free entry and exit the correct explanation of (A)
of the firms in the perfectly competitive (c) (A) is true but (R) is false
market, so as only the normal profit persists. (d) (A) is false but (R) is true
In the light of the above statements, chose the
Ans. (a) : Assertion (A): There is a change in the profit
most appropriate answer from the options
sharing ratio of the old partners when a new partner gets
given below :
his share of profit from all the partners.
(a) Both (A) and (R) are correct and (R) is the
Assertion (A) is the correct statement.
correct explanation of (A)
Reason(R): When a new partner is admitted into the
(b) Both (A) and (R) are correct but (R) is NOT partnership for a certain share of profit, the combined
the correct explanation of (A) shares of the old partners will be reduced.
(c) (A) is correct but (R) is not correct Reason (R) is the also correct statement and (R) is the
(d) (A) is not correct but (R) is correct correct explanation of (A).
Ans. (a) : Assertion (A): 'Every perfectly competitive 80. Match List I with List II :
firm in the long run earns normal profit only' is the
List-I List-II
correct statement.
PLC Stage Communication
Reason(R): Market price gets fully adjusted, due to
Strategy
change in the demand and the supply conditions and the
resultant free entry and exit of the firms in the Perfectly (A) Introduction (i) Stress, brand
competitive market, so as only the normal profit differences and
persists. benefits and
Reason (R) is the also correct statement and (R) is the encourage brand
correct explanation of (A). switching
(B) Maturity (ii) Build awareness
78. Which of the following issues are addressed by
and interest in the
the Information Technology Act, 2000?
mass market
(A) Legal recognition of electronic documents
(C) Growth (iii) Reduce to minimal
(B) Redressal of grievances
level needed to
(C) Offenses and contraventions retain customers
(D) Disputes settlements
(D) Decline (IV) Build product
(E) Justice dispensation system for cyber crimes awareness and trial
Choose the correct answer from the options among dealers
given below :
Choose the correct answer from the options
(a) (A), (C), (D) only (b) (C), (D), (E) only
given below :
(c) (B), (D), (E) only (d) (A), (C), (E) only (A) (B) (C) (D)
Ans. (d) : Information Technology Act, 2000 addressed (a) iv iii i ii
the following issues: (b) iv i ii iii
• Legal recognition of electronic documents (c) ii i iv iii
• Legal recognition of digital signatures (d) ii iv i iii
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 502 YCT
 Ans. (b) : The code of correct matching of List-I with Ans. (b) :
List-II: (A) Fair Rent 4,00,000
List-I List-II (B) Municipal Value 3,60,000
PLC Stage Communication Strategy (C) Higher of A or B 4,00,000
(D) Standard Rent 5,00,000
(A) Introduction (IV) Build product (E) Expected Rent
awareness and trial (Lower of C or D) 4,00,000
among dealers
(F) Actual Rent
(B) Maturity (i) Stress, brand
Gross Annual value (GAV)
differences and benefits
and encourage brand (Higher of E or F) 4,80,000
switching Less ; Municipal Tax - Not paid
(C) Growth (ii) Build awareness and Net Annual value (NAV) 4,80,000
interest in the mass 84. Which one of the following is an example of
market hybrid service offering?
(D) Decline (iii) Reduce to minimal level (a) Consulting
needed to retain (b) Massage
customers (c) Restaurant meal
81. Residential status in Indian Income Tax Act is (d) Car with a warranty
determined for which one of the following?
Ans. (c) : Hybrid business are companies which will be
(a) Previous year
classified in addition to one sort of business. A
(b) Assessment year
restaurant, for instance, combines ingredients in making
(c) Accounting year
a fine meal (manufacturing), sells a chilled bottle of
(d) Both previous and assessment year
wine (merchandising), and fills customer orders
Ans. (a) : Under 6(1), and individual is said to be (service).
resident in India in any previous year, if he satisfies any
one of the following Basic conditions: 85. Given below are two statements :
(i) He has been in India during the previous year for a Statement I : Tax planning promotes
total period 182 days or more, professionalism and strengthens economic and
or political situation of the country
(ii) He has been in India during the 4 years immediately Statement II : Tax evasion is an act within the
preceding the previous year for a total period of 365 permissible range of the Act to achieve social
days or more and has been in India for at least 60 and economic benefits
days in the previous year. In the light of the above statements, choose the
82. Which one of the following is a method of correct answer from the options given below :
converting a non-productive, inactive asset (i.e. (a) Both Statement I and Statement II are true
receivable) into a productive asset (viz, cash) by (b) Both Statement I and Statement II are false
selling receivables to a company that specializes (c) Statement I is true but Statement II is false
in their collection and administration?
(d) Statement I is false but Statement II is true
(a) Bills discounting (b) Underwriting
(c) Guaranteeing (d) Factoring Ans. (c) : Statement-I: Tax planning promotes
Ans. (d) : Factoring is a unique financial innovation. It professionalis and strengthens economic and political
is both a financial as well as a management support to a situation of the country, is the true.
client. It is a method of converting a non-productive, Statement-II: Tax evasion is an act within the
inactive asset (i.e. receivable) into a productive asset permissible range of the act to achieve social and
(viz, cash) by selling receivables to a company that economic benefits.
specializes in their collection and administration. Statement (II) is false because "Tax evasion is an illegal
83. Which one of the following is the Net Annual activity in which a person or entity deliberately avoids
Value (NAV) of house for the given details? paying a true tax liability. It is a punishable offence
Municipal value = Rs.3,60,000 which involves imprisonment & penalty.
Fair Rental value = Rs. 4,00,000 86. If the firms are competitive and profit
Standard Rent = Rs. 5,00,000 maximizing, the demand curve for labour is
Actual Rent (Annual Rent) = Rs. 4,80,000 determined by which one of the following?
Municipal Tax = Rs. 12,000 (a) the opportunity cost of labour time
(Due but not paid) (b) the value of the marginal product of labour
(a) 4,00,000 (b) 4,80,000 (c) offsetting income and substitution effects
(c) 4,68,000 (d) 5,00,000 (d) the value of the marginal product of capital
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 503 YCT
Ans. (b) : If firms are competitive and profit Choose the correct answer from the options
maximizing, the demand curve for labour is determined given below :
by the value of the marginal product of labour. (a) (B), (C), (D), (E) only
To maximize profit, firms hire labour until the marginal (b) (A), (C), (D), (E) only
revenue product of labour is equal to the marginal cost. (c) (A), (B), (C), (E) only
87. In which one of the following modes of entry (d) (A), (B), (D), (E) only
into foreign markets risk and profit potential Ans. (c) : Currency option or FX option contract is a
are the highest? financial instrument that gives the holder the right, but
(a) Indirect exporting (b) Joint venture not the obligation, to sell or buy currencies at a set price
(c) Direct investment (d) Direct exporting either on a specific date or before some expiration date.
Affected the pricing of a currency option:
Ans. (c): Direct Investment- Foreign Direct
Investment (FDI's) risk and profit potential are the • Spot exchange rate
highest in the Foreign markets. • Exercise rate
FDI- • Foreign risk-free rate of return
Advantages Disadvantages • Time to expiration
Directly invest in High cost, high risk due 90. Quotas which are the quantitative restrictions
facilities in a foreign to unknowns, slow entry on exports/imports intended at protecting local
market. It requires a lot due to setup time industries and conserving foreign exchange,
of capital to cover costs include which of the following?
such as premises, (A) Single stage quota
technology and staff. (B) Absolute quota
(C) Tariff quotas
88. A project requires an initial investment of Rs.
56,125 and its estimated salvage value is Rs. (D) Value added quotas
3,000. The annual estimated income after (E) Voluntary quotas
depreciation and tax for its entire life of 5 years Choose the correct answer from the options
are Rs. 3,375, Rs. 5,375, Rs. 7,375, Rs. 9,375 given below :
and Rs. 11,375 respectively. Which one of the (a) (B), (C), (E) only
following is its average rate of return? (b) (A), (B), (C) only
(a) 26.28% (b) 124.74% (c) (A), (D),(E) only
(c) 29.94% (d) 60.88% (d) (A), (C), (D), (E) only
Ans. (c) : Average rate of return Ans. (a) : Quotas on imports or exports represent a type
Average annual profit after taxes of Quantitative or Direct Trade restrictions. Quotas are
= × 100 restrictions imposed by one country on the volume and
Average investment kind of goods that may be allowed to enter or leave that
Average annual profit after taxes = Total of profit after country while quotas are imposed on exports, their use
taxes of all years/No. of years is not common unlike Quota on imports.
3375 + 5375 + 7375 + 9375 + 11375 Quotas are the quantitative restrictions on
= exports/imports:
5
= 7,375 • Absolute quota
Average investment • Tariff quotas
Initial investment +salvage value • Voluntary Quotas
= Read the following paragraph and answer the
2
five questions that follow :
53175 + 3000
= The Cabinet approval for seven integrated
2 mega textile and apparel parks pan-India
= 29587.5 makes eminent sense. It would boost value
7375 addition on-site, reaping economies of scale and
Average rate of return = × 100
29587.5 scope, reduce logistical and sourcing expenses,
= 29.92% and generally step up sector-specific
89. Which of the following affect the pricing of a competitive advantage across the board.
currency option? The value chain in yarn fabrics and ready-
(A) Spot exchange rate mades is scattered and quite fragmented
nation-wide. So, for instance, while cotton is
(B) Exercise rate
grown in Gujarat and Maharashtra, spinning
(C) Foreign risk-free rate of return takes place in Tamil Nadu, processing gets
(D) Domestic risk-adjusted rate done in Rajasthan and Gujarat, and garment-
(E) Time to expiration making happens mostly in the National Capital
UGC NTA NET Commerce Paper Dec. 2020-June, 2021 504 YCT
 Region, Bengaluru and Kolkata. The proposed Statement-II: The performance of textiles in India's
mega parks, spread over 1,000 acre and more, export basket has improved.
would provide facilities for weaving, dyeing, statement (II) is the false
printing, fashion designing and garment- According to the para, the share of textiles in India's
making in one location. They would have core export basket has declined.
infrastructure such as incubation centre, plug- 93. Which one of the following will not be a part of
and-play facility, and skill development units so value chain in the proposed integrated mega
as to keep abreast of the latest trends in textiles textile and apparel parks?
and apparel. The export potential in textiles is
(a) Garment making (b) Yarn weaving
large. We need to build a conductive and
innovative ecosystem with proactive policy. (c) Cotton production (d) Yarn spinning
The Centre has recently announced Rs. 10,683 Ans. (c) : Cotton production will not be a part of value
crore production-linked incentive scheme for chain in the proposed integrated mega textile and
textiles. The textiles parks scheme would have apparels parks.
an outlay of Rs. 4,445 crore, and is slated to 94. Which of the following states does not
provide support for project development in the contribute to Indian textile industry?
cluster mode. The recent move to provide (a) West Bengal (b) Rajasthan
export- oriented units rebate on state and (c) Punjab (d) Tamil Nadu
central taxes and levies would also help. But Ans. (c) : According to the paragraph, Punjab does not
the fact remains that the share of textiles in contribute to Indian textile industry.
India's export basket has declined, and is now 95. Given below are two statements : One is
barely in the double digits. A recent Crisil labeled as Assertion A and the other is labeled
study says that absent free trade agreements as Reason R.
(FTAs) hurt out export performance. Decent Assertion (A) : Indian textiles can regain their
work in the textile parks would gain custom, in shine with the setting up of integrated mega
today's world. textile and apparel parks.
91. Which one of the following will be the most Reason (R) : The value chain in yarn, fabrics
and ready-mades is scattered nation-wide.
critical to the export performance of Indian
In the light of the above statements, choose the
textiles?
most appropriate answer from the options
(a) Integrated mega textile and apparel parks given below :
(b) Free trade agreements (a) Both (A) and (R) are correct and (R) is the
(c) Centre's production linked incentive schemes correct explanation of (A)
(d) Rebate on state and central taxes and levies to (b) Both (A) and (R) are correct but (R) is NOT
export-oriented units the correct explanation of (A)
Ans. (b) : Free trade agreement is a pact between two or (c) (A) is correct but (R) is not correct
more nations to reduce barriers for imports and exports (d) (A) is not correct but (R) is correct
among them. Ans. (a) :
Free trade agreement will be the most critical to the Assertion (A): Indian textile can regain their sheen with
export performance of Indian textiles. the setting up of integrated mega textile and apparel
parts.
92. Given below are two statements :
Assertion (A) is the correct statement
Statement I : Both central and state
Reason (R): The value chain in yarn, fabrics and ready-
governments want to promote the units mades is scattered nation-wide.
exporting textiles. Reason (R) is the also correct statement and (R) is the
Statement II : The performance of textiles in correct explanation of (A)
India's export basket has improved. Read the following paragraph and answer the
In the light of the above statements, chose the five questions that follow :
correct answer from the options given below : Section 455 of Indian Companies Act, 2013
(a) Both Statement I and Statement II are true talks about a New Provision Calls 'DORMANT
(b) Both Statement I and Statement II are false COMPANY'. This concept was not there in
(c) Statement I is true but Statement II is false Companies Act, 1956.
(d) Statement I is false but Statement II is true A Dormant Company offers excellent
Ans. (c) : advantage to the promoters who want to hold
an asset or intellectual property under the
Statement-I: Both central and state governments want to corporate shield for its usage at a later stage.
promote the units exporting textiles. For instance: if a promoter wants to buy lands
statement (I) is the true now for its future project at a comparatively

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 505 YCT
 lesser price, he may do the same through Ans. (d) : A Dormant company offers excellent
dormant company so that he can use the land advantage to the promoters.
for its future project. Thus, dormant company
98. Given below are two statements : One is
status is a new phenomenon in the Companies
labelled as Assertion A and the other is labelled
Act 2013 and is an excellent tool for keeping
assets in the company for its future usage. A as Reason R.
dormant company may be either a public Assertion (A) : If a company gets status of a
company or a private company or a one person dormant company, then it is subject to less
company. compliance in comparison to active company.
Certain companies, due to the nature of their Reason (R) : It will help to save of compliances
business, may not be able to start any business, for Inactive companies when they become
for a long time from the date of incorporation dormant company under section 455 of the
as for instance any business for creation Companies Act, 2013 as compared to the
intellectual property or for a future project and Companies Act, 1956.
has no significant accounting transaction. Such In the light of the above statements, choose the
a company may be an "Inactive company". most appropriate answer from the options
Construction Companies/Real Estate given below :
Companies/Incorporate New Companies to (a) Both (A) and (R) are correct and (R) is the
hold land/properties for future projects. This correct explanation of (A)
concept is beneficial for them. By this concept, (b) Both (A) and (R) are correct but (R) is NOT
they can Incorporate Company and purchase the correrct explanation of (A)
property/land in that company and get status (c) (A) is correct but (R) is not correct
of Dormant company in comparison of active (d) (A) is not correct but (R) is correct
company. It will help to save cost of Ans. (a) :
compliances for inactive companies. Assertion (A): If a company gets status of a dormant
96. Given below are statements : One is labelled as company, then it is subject to less compliance in
Assertion A and the other is labelled as Reason comparison to active company.
R: Assertion (A) is the correct statement.
Assertion (A) : Provision is made to obtain the Reason (R): It will help to save of compliances for
status of a 'dormant company' for a inactive inactive companies when they become dormant
company that doesn't trade company under section 455 of the companies Act, 2013
Reason (R) : Dormant company doesn't trade as compared to the companies Act, 1956.
but has significant accounting transaction. Reason (R) is the also correct statement and (R) is the
In the high of the above statements, choose the correct explanation of (A).
most appropriate answer from the options 99. Which of the following companies do not fall
given below : under a purview of Dormant company?
(a) Both (A) and (R) are correct and (R) is the (A) Private company
correct explanation of (A) (B) One person company
(b) Both (A) and (R) are correct but (R) is NOT (C) Limited and unlimited liability companies
the correct explanation of (A) (D) Public company
(c) (A) is correct but (R) is not correctt (E) Government company
(d) (A) is not correct but (R) is correct Choose the most appropriate answer from the
Ans. (c) : options given below :
Assertion (A): Provision is made to obtain the status of (a) (B), (D), (E) only (b) (A), (C), (D) only
a 'dormant company' for a inactive company that doesn't (c) (A), (B), (D) only (d) (B), (C), (E) only
trade Ans. (*) : As per the paragraph, dormant company
Assertion (A) is the correct statement. either can be a public or private or one person company.
Reason (R): Dormant company doesn't trade but has 100. Which one of the following nature of business is
significant accounting transaction. suitable to a Dormant company?
Reason (R) is the not correct statement. The correct (a) Shipping business
statement is Dormant company doesn't have significant (b) Manufacturing business
accounting transaction. (c) Real Estate business
97. Dormant company offers excellent advantage (d) Pharmaceutical business
to which of the following? Ans. (c) : The meaning emerges from the paragraph that
(a) Bankers (b) Creditors Real Estate business nature of business is suitable to a
(c) Shareholders (d) Promoters Dormant company.

UGC NTA NET Commerce Paper Dec. 2020-June, 2021 506 YCT
 NTA UGC NET/JRF Exam, December 2022
COMMERCE
Solved Paper
Exam Date: 04.03.2023 Shift-I

1. Which one of the following non-tariff barriers Ans. (b) : India-UAE comprehensive Economic
is to be adequately addressed by India while Partnership Agreement (CEPA):-
signing FTA with any country that has • It is a kind of free trade pact that covers negotiations
potential to import fruits, vegetables and other on the trade in services and investment, and other
plant based products from India? areas of economic partnership.
(a) Phyto sanitary regulations • It may even consider negotiation in areas such as trade
(b) Sanitary regulations facilitation and customs operation, competition and IPR.
(c) Complex Registrations • Partnership agreements or co-operation agreements
(d) Restrictive customs procedure are more comprehensive than free Trade Agreements.
Ans. (a) : • A non-tariff barrier is a trade restriction • CEPA also looks into the regulatory aspect of trade
such as a quota, embargo or sanction that countries use and encompasses an agreement covering the
to further their political and economical goals. regulatory issues.
• Countries usually opt for non-tariff barriers (rather • India has signed CEPAs with South Korea and Japan.
than traditional tariff-s) in international trade. 4. The Government of India on 27-9-22 extended
• Non-tariff barriers include quotas, embargoes, the existing Foreign Trade Policy (2015-20) up
sanctions, and levies. to which one of the following on account of
• Phyto sanitary regulations is to be adequately volatile global economic and geo-political
addressed by India while signing FTA with any situation and currency fluctuations?
country that has potential to import fruits, vegetables (a) December, 2022 (b) March, 2022
and other plant based products from India. (c) September, 2023 (d) December, 2023
2. According to the Heckscher Ohlin theory, Ans. (*) : The Government of India on 27-09-2022
which one of the following statements is correct? extended the existing Foreign Trade Policy (2015-20)
(a) Trade should take place among countries that upto March 2023 on account of volatile global economic
have greater differences in their factor and geo-political situation and currency fluctuates.
endowments. 5. Which one of the following Ind AS is related to
(b) A country with a relatively cheaper cost of "The Effects of changes in Foreign Exchange
labour would export labour-intensive products Rates"?
(c) Country benefits from international trade (a) Ind AS 19 (b) Ind AS 115
even if it is less efficient than other nations. (c) Ind AS 103 (d) Ind AS 21
(d) Countries with the proximity of geographical Ans. (d) : 'Ind AS 21' is related to 'The Effects of
locations would have greater trade compared changes in Foreign Exchange Rates'. Ind AS 21 requires
to the distant ones. each entity to determine its functional currency and
Ans. (*) : • The Heckscher-Ohlin theory evaluates the translate foreign currency items into functional currency
equilibrium of trade between two countries that have and report effects of such translation in the financial
varying specialties and natural resources. statements.
• The theory explains how a nation should operate and 6. Policy of 'Playing safe' followed by the
trade when resources are imbalanced throughout the accountant is based on which one of the
world. following concepts?
• The theory isn't limited to commodities, but also (a) Dual Aspect Concept
incorporates other production factors such as labor. (b) Conservation Conventions
According to this theory following statements are correct : (c) Money Measurement Concept
(i) Trade should take place among countries that have (d) Realization Concept
greater differences in their factor endowments. Ans. (b) : The concept of conservatism (also called
(ii) A country with a relatively cheaper cost of labour prudence) provider guidance for recording transactions
would export labour-intensive products. in the book of accounts and is based on the policy of
3. Which of the following FTA was signed in playing safe. This concept states that accept all losses
February, 2022 and came into force in May, and expenses and ignore all profits and incomes until
2022? they are realised.
(a) Al -ECTA Australia India Economic 7. X and Y are partners in a firm sharing profits
Cooperation and Trade Agreement in the ratio 4 : 5 X surrenders 1/4 of his share
(b) India-UAE comprehensive Economic and Y surrenders 1/5 of his share in favor of Z,
partnership Agreement (CEPA) the new partner, What will be the new profit
(c) India-Nepal Treaty of Trade sharing ratio of the firm's partners?
(d) India-Singapore Comprehensive Economic (a) 3 : 4 : 2 (b) 55 : 44 : 81
Cooperation Agreement (CECA) (c) 4 : 5 : 2 (d) 44 : 55 : 81
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 507 YCT
 4 5 12. Which of the following statements is correct
Ans. (a) : Old Ratio of X & Y = : regarding the slope and the point elasticity on
9 9 all the points on a rectangular hyperbola
New Ratio of X after surrender shaped demands curve of a product?
4 1 4 1 4 1 3 (a) Slope remains the same while point elasticity
= × = = = − =
9 4 36 9 9 9 9 goes on changing.
New Ratio of Y after surrender (b) Slope goes on changing while point elasticity
5 1 5 1 5 1 4 remains the same
= × = = = − = (c) Both slope and point elasticity remain the same
9 5 45 9 9 9 9
1 1 2 (d) Both slope and point elasticity go on changing
Ratio of Z = + = Ans. (b) : A Rectangular hyperbola is a curve under
9 9 9 which all rectangular areas are equal. When the elasticity
3 4 2 of demand is equal to unity (ed =1) at all points of the
Now PSR of X:Y:2 = : : = 3 : 4 : 2
9 9 9 demand curve, then the demand curve is a rectangular
8. Net profit after taxes of a firm is Rs. 1,00,000 hyperbola. Slope goes on changing while point elasticity
and its fixed interest charges on long term debt remains the same is the correct statement regarding the
are Rs. 20,000. What is the interest coverage slope and the point elasticity on all the points on a
ratio if the rate of Income tax is 60%? rectangular hyperbola shaped demand curve of a product.
(a) 13 times (b) 13.5 times 13. The current market price of a company's
(c) 12.5 times (d) 5 times share is Rs. 90 and the expected dividend per
Ans. (b) : Profit after tax = 100000 share next year is Rs. 4. 50. If the dividends are
Tax Rates = 60% expected to grow at a constant rate of 8 per cent,
100000 the shareholders required rate of return is:
∴ Profit before tax = × 100 = 250,000 (a) 5% (b) 8%
40
EBT = 250000 (c) 13% (d) 20%
EBIT = 250000 + 20000 Ans. (c) :
EBIT = 270000 Shareholder's Required Return = (D1/P0×100) +G
EBIT 270,000 Where, D1 = Expect Dividend for next year
Interest converge Ratio = = P0 = Current market price of share
Interest 20000
= 13.5 times. G = Growth Rate
9. The study of unemployment is the subject Shareholder's Required Return = (4.5/90×100)+8
matter which one of the following Economics? = 5 + 8 = 13% Ans.
(a) Descriptive Economics 14. The Kinked-shaped revenue curve of a firm
(b) Normative Economics relates to which one type of the market structure?
(c) Micro Economics (a) Perfect Competition
(d) Macro Economics (b) Oligopoly
Ans. (d) : The subject matter of macroeconomics is (c) Monopoly
income, unemployment, inflation, money supply, price (d) Monopolistic Competition
level, investment and economic growth and development. Ans. (b) : The Kinked- shaped revenue curve of a firm
The purpose of macroeconomics is to present a logical relates to oligopoly type of market structure. The term
framework for the analysis of these phenomena. "oligopoly" refers to a small number of producers
10. Which one of the following commodities has working, either explicitly or tacitly, to restrict output
the most inelastic demand? and/or Fix prices, in order to achieve above normal
(a) Cigarette (b) Soap market returns.
(c) Ice-cream (d) Salt
15. 'Value-additivity principle' implies in which
Ans. (d) : The most common goods with most inelastic one of the following methods of capital budgeting?
demand are utilities, salt, prescription drugs and tobacco (a) Pay back period method (b) NPV method
products. In general, necessities and medical treatments
tend to be inelastic, while luxury goods tend, to be most (c) IRR method (d) ARR method
elastic. Ans. (b) : 'Value-additivity principle' implies in NPV
11. 'Sales Revenue Maximization' as an alternate method of capital budgeting. According to the value
objective of business firms was postulated by Additivity principle in NPV, the value of the entire
whom of the following? NPV of a larger project is equal to the sum of all
(a) O.E. Willianmson (b) Cyert and March smaller NPVs of projects.
(c) W.J. Baumol (d) K.W. Rothschild In other words, the larger NPV of an investment project
Ans. (c) : Baumol's Hypothesis of Sales Revenue is the sum of all smaller NPVs. The NPV of a collection
Maximisation: According to Baumol, "maximisation of of independent projects will equal the NPV of all
sales revenue is an alternative to profit maximisation independent projects.
objective". The reason behind this objective is to clearly • NPV (A+B) = NPV (A) + NPV (B)
distinct ownership and management in large business 16. The risk free rate is 6 per cent, the market risk
firms. This distinction helps the managers to set their goals premium is 9 per cent and the beta of share is
other than profit maximisation goal. Under this situation,
managers maximise their own utility function. According 1.54, then what is cost of equity?
to Baumol, the most reasonable factor in managers utility (a) 23% (b) 19%
functions maximisation of the sales revenue. (c) 13% (d) 20%
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 508 YCT
Ans. (d) : As per the data given in Question: Ans. (b) : Following statements are correct:
• Beta = 1.54 (i) Algebraic sum of deviations taken from Arithmetic
• Market risk premium = 9% mean is zero.
• Current risk-free return = 6% (ii) Standard deviation is always less than range.
• Cost of equity, Ke = ? (iii) The sum of the squares of deviations of a given set
As per the CAPM model : of observations is minimum, when taken about the
arithmetic mean.
Ke = Risk-free return + (Beta × Market Risk Premium)
Ke = 6 + (1.54×9) 21. Which one of the following is referent source of
power?
= 6 + 13.86 (a) Perception or belief that the manager has
Ke = 20% (Approx). some special knowledge
17. While averaging rate and ratios where times (b) Manager's desire to identify with or imitate
factors is variable and the act being performed the subordinate
is constant, which one of the following (c) Ability of the manager to reward the
measures of Central Tendency is appropriate? subordinate for obeying orders
(a) Arithmetic average (b) Mode (d) Ability of the manager to punish the
(c) Harmonic mean (d) Geometric mean subordinate for not obeying orders
Ans. (c) : The Harmonic Mean (HM) is defined as the Ans. (b) : Manger's desire to identify with or imitate the
reciprocal of the average of the reciprocals of the data subordinate is referent source of power.
values. It is based on all the observations, and it is • Referent power is power that is a resultant of the
rigidly defined. Harmonic mean gives less weightage to personality of a person. The relationships that a person
the large values and large weightage to small values to develops with co-workers and the charisma with
balance the values correctly. In general, the harmonic which a person is liable to present himself/herself to
mean is used when there is a necessary to give greater others results in a certain level of respect and
weight to the smaller items. It is applied in the case of approachability towards that person. Referent power
times and average rates. can also be a result of closely knowing senior, people
While averaging rates and Ratios where time factor is in the organisation or those who are at a position of
variable and the act being performed is constant leadership and authority of any kind.
Harmonic Mean (HM) is appropriate measure of 22. Which one of the following is not an advantage
Central Tendency. of the line organization?
18. If two regression coefficients are 0.8 and 1.2 (a) It ensures excellent discipline
which one of the following is the value of (b) It fixes responsibility for the performance of
coefficient of correlation? tasks
(a) 0.9 (b) 0.96 (c) It is suitable for big organizations
(c) 1.00 (d) 0.80 (d) It is not expensive
Ans. (a) : Let rx = 0.8, ry = 1.2 Ans. (c) : Following are the advantages of the line
Coefficient of correlation = Geometric Mean of organisation:
Regression coefficient (i) It ensures excellent discipline.
= rx ⋅ ry (ii) It fixes responsibility for the performance of tasks
(iii) It is not expensive
= 0.8 × 1.2 (iv) Simple to work & it is stable from of organisation
= 0.96 23. A scale that measures a fair sample of the tasks
= 0.97 and skills actually needed for the job in
19. Which one of the following statements is true? questions is known as:
(a) For a symmetrical distribution β 1 = 0 (a) Test validity (b) Criterion validity
(b) Kurtosis means 'lack of symmetry' (c) Content validity (d) Construct validity
(c) β2 can be negative Ans. (c) :
(d) Skewness studies the flatness or peakedness • A scale that measures a fair sample of the tasks and
of the distribution skills actually needed for the job in question is known
as content validity.
Ans. (a) : Following statements are true:
• Construct validity refers to how well the measure
(i) For a symmetrical distribution β 1 = 0 'behaves' in accordance with theoretical hypothesis,
(ii) Skewness is a measure of symmetry or more and it measure how well the instrument's results
precisely, the lack of symmetry. reflect the theoretical construct.
(iii) β2 can not be negative. • The degree to which a test (such as a chemical,
(iv) Kurtosis describes the 'Fatness' of the tails found in physical, or scholastic test) accurately measures what
probability distributions. it is designed to assess is known as test validity.
20. Which one of the following statements is • A measure's criterion validity is an estimate of how
incorrect? well it agrees with a gold standard (i.e., an external
(a) Algebraic sum of deviations taken criterion of phenomenon being measured The lack of
(b) The sum of absolute deviations taken from gold standards in criterion validity assessment for
Median is the largest questionnaire-based measure is a key issue.
(c) Standard deviation is always less than range 24. Training technique which teaches the
(d) The sum of the squares of deviations of a importance of resolving matters is known as:
given set of observations is minimum, when (a) Built-in-Tension (b) Shadowing
taken about the arithmetic mean. (c) Tag Teams (d) Mirroring
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 509 YCT
Ans. (a) : Training technique which teaches the Ans. (c) :
importance of resolving matters is known as Built-in- • Price sensitivity is the degree to which demand
Tension technique. changes when the cost of a product or service
25. When Central Bank Conducts a sale of changes.
securities, the cash reserve of commercial • Price sensitivity is commonly measured using the
banks shall: price elasticity of demand, which states that some
(a) Increase at slow rate (b) Decrease consumers won't pay more if a lower-priced option is
(c) Remain Constant (d) Increase at fast rate available.
Ans. (b) : If RBI conducts a sale of securities, it absorbs • The importance of price sensitivity varies relative to
liquidity in the economy thereby reducing cash reserves other purchasing criteria; quality may rank higher than
in commercial banks.
price, making consumers less susceptible to price
In other words, when Central Bank conducts a sale of
securities, the cash reserves of commercial banks shall sensitivity.
decrease. • In medical services price sensitivity of the customers
26. 'Average clause' in insurance is applicable for is low.
which one of the following cases? 30. Which one of the following is true while
(a) Double Insurance (b) Re-insurance segmenting consumer markets on demographic
(c) Over insurance (d) Under insurance basis?
Ans. (d) : 'Average clause' in insurance is applicable in (a) Low predictability of consumer choice
case of under insurance. behavior and high cost of measurement
27. ABC Ventures is private equity investor (b) Low predictability of consumer choice
considering investing `1000 million in the behavior and low cost of measurement
equity of XYZ ltd. ABC Ventures requires a (c) High predictability of consumer choice
return of 30% on investment with planned behavior and low cost of measurement
holding period of 5 years. The likely debt of (d) High predictability of consumer choice
XYZ ltd. will be `1000 million and cash behavior and high cost of measurement
balance of ` 300 million with a projected
EBITDA of ` 1500 million for the year 5. The Ans. (b) :
desired ownership share of ABC Ventures in • Market segmentation is a marketing term that refers to
XYZ ltd. given FVF 0.30,5 = 3.713, will be aggregating prospective buyers into groups or
(a) 37.13% (b) 30.00% segments with common needs and who respond
(c) 37.90% (d) 7.13% similarly to a marketing action. Market segmentation
Ans. (c) : Required rate of return = 30% enables companies to target different categories of
Required value PE Investments = 1000 × 3.713 consumers who perceive the full value of certain
= 3713 million products and services differently from one another.
Estimated Equity value • Demographic segmentation is one of the simple,
= EBITDA × Multiple + Cash – Debt common methods of market segmentation. It involves
Estimated Equity Value = 1500 × 7 + 300 – 1000 breaking the market into customer demographics as
= 9800 million age, income, gender, race, education or occupation.
This market segmentation strategy assumes that
Required valueof PE investment individuals with similar demographics will have
Ownership share =
Estimated Equity value similar needs.
3713 • The statement, 'Low predictability of consumer choice
= = 37.88% or 37.90% behavior and low cost of measurement is true while
9800 segmenting consumer markets on demographic basis.
28. One of the assumptions in Black-Scholes option
pricing model is that underlying asset prices are– 31. Which one of the following is not a market
(a) Equi-distributed oriented definition
(b) Marginally distributed (a) We run a railroad
(c) log-normally distributed (b) We help improve office productivity
(d) Normally distributed (c) We supply energy
Ans. (c) : The Black-Scholes model assumes that the (d) We distribute information
option is a European-style option and can only be Ans. (a) : Following are the market oriented definition
exercised at expiration. It also assumes that no of a business :
dividends are paid out during the life of the option; that (i) We help improve office productivity.
market movements cannot be predicted; that there are
no transaction costs in buying option; that the risk-free (ii) We supply energy.
rate and volatility of the underlying are known and (iii) We distribute information.
constant; and that the prices of the underlying asset 32. In which one of the following concepts, a buyer
follow a log-normal distribution. is passively involved in an exchange transaction
29. In which one of the following service products, and he accepts whatever is offered to him by a
price sensitivity of the customers is low? marketer?
(a) Car rentals (b) Transport (a) Production concept (b) Product concept
(c) Medical services (d) Retailing (c) Selling concept (d) Marketing concept
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 510 YCT
Ans. (a) : Production concept: This concept was based 36. 1, 2022 which body handles all complaints
on the assumption that customers are primarily related to profiteering under Goods and
interested in products which are accessible and Services Tax (GST)?
affordable. This concept was introduced at a time when (a) National Anti-Profiteering Authority (NAA)
business was focused mainly on production. It says that (b) Niti-Aayog
a business will be able to lower costs by producing (c) Competition Commission of India (CCI)
more quantity or mass production & good solely (d) GST Council
focusing on producing goods may lead to the firm Ans. (c) : National antitrust watchdog competition
deviating from its objective. commission of India (CCI) from December 1, 2022
Hence in production concept, a buyer is passively shall manage complaints with regard to profiteering and
involved in an exchange transaction and he accepts goods and services tax (GST) in place of the National
whatever is offered to him by a marketer. Anti-Profiteering Authority (NAA).
33. If invoice discounting is not confidential in 37. Section 80 GGC of Income Tax Act is related
nature, the customers of the client are advised with which one of the following?
to make payment directly to the factor. This (a) Deduction in respect of contribution given by
facility, when offered with a non-recourse, is any company to political parties
known as– (b) Deduction in respect of contribution given by
(a) Agency Factoring any person to political parties
(b) Protected invoice discounting (c) Deduction in respect of rent paid
(c) Full factoring (d) Deduction in respect of certain donation for
(d) Odd line factoring scientific research
Ans. (a) : If invoice discounting is not confidential in Ans. (b) : Section 80GGC provides for tax deductions
nature, the customers of the client are advised to make with respect to donations made by taxpayers towards
payment directly to the factor. This facility, when political parties or any electoral trusts. Section 80GGC
offered with a non-recourse, is known as agency of the Income Tax Act was introduced to bring about
factoring. transparency in electoral funding and free it from
Agency factoring : In this type of factoring the factor corruption.
and the client share the works between themselves, like, 38. Which one of the following is not correct for
the client would look after sales ledger administration & Tonnage Tax System?
collection work and factor would provide finance & (a) It is a scheme of presumptive taxation
assume credit risk. (b) It is applicable for the taxation of income
34. The practice of forging a return address on an derived from shipping activities
e-mail so that the recipient is fooled into (c) It is applicable for both Indian as well as
revealing private information is termed as: foreign companies
(a) Hacking (b) Cracking (d) Computation of tonnage income is covered
(c) Dumpstordiving (d) Spoofing U/S 115 VG
Ans. (d) : Spoofing is the act & disguising a Ans. (c) : Tonnage Tax Scheme: The government has
communication from an unknown source as being from introduced tonnage tax system (TTS) for taxation of
a known, trusted source. Spoofing can apply to emails, income derived from shipping activities by an Indian
phone calls, and websites, or can be more technical, company. The Tonnage Tax Scheme is an optional
such as a computer spoofing an IP address, Address scheme for qualifying Indian shipping company, only
Resolution Protocol (ARP), or Domain Name system after satisfying certain conditions a company is eligible
(DNS) server. to be enrolled under the scheme.
The practice of forging a return address on an e-mail so Following statements are correct about Tonnage Tax
that the recipient is fooled into revealing private System:
information is termed as spoofing. (i) It is a scheme of presumptive taxation.
35. If any one fraudulently or dishonestly makes (ii) It is applicable for the taxation of income derived
use of the electronic signature, password or any from shipping activities.
other unique identification feature of any other (iii) Computation of tonnage income is covered U/S
person then under which section of It Act 2000, 115 VG.
punishment shall be given? 39. Tax on declared dividend is paid by whom?
(a) Section 63 (b) Section 66B (a) Shareholders (b) Manager
(c) Section 66C (d) Section 67B (c) Receiver of the dividend (d) Company
Ans. (c) : As per section 66C of IT Act 2000 Ans. (d) : In India, a company which has declared,
(Punishment for identity theft) — whoever, fraudulently distributed or paid any amount as a dividend, is required
or dishonestly make use of the electronic signature, to pay a dividend distribution tax at 15%. The Finance
password or any other unique identification feature of Act, 1997 introduced the provisions of DDT.
any other person, shall be punished with imprisonment Only a domestic company is liable for the tax. Domestic
of either description for a term which may extend to companies have to pay the tax even if the company is
three years and shall also be liable to fine with may not liable to pay any tax on their income. The DDT
extend to rupees one lakh. stands withdrawn w.e.f. 1 April 2020.
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 511 YCT
40. Which one of the following is not related to Ans. (b) : Following are the assumptions of marginal
Income Tax in India? costing :
(a) Taxpayer Identification Number (TIN) (i) The total cost can be segregated into fixed and
(b) Dearness Allowance (DA) variable components.
(c) Leave Travel Allowance (L.T.A) (ii) Variable cost remains constant per unit of output.
(d) Tax Deduction and Collection Account (iii) The selling price per unit remains unchanged.
Number (TAN)
44. Which of the following transactions are related
Ans. (a) : Following are related to Income Tax Act to Financing Activities?
1961. A. Share issued for cash
(i) Dearness Allowance (DA) B. Dividend distributed to shareholders
(ii) Leave Travel Allowance (L.T.A.)
C. Sale of machinery
(iii) Tax Deduction and collection Account Number
(TAN) D. Redemption of debentures
While Taxpayers Identification Number (TIN) is not E. Provision for depreciation
related to Income Tax in India. Choose the correct answer from the options
41. After COVID-19, which of the following are the given below :
up skilling enablers for women in India? (a) A and E only (b) A and C only
A. Introduction of electric vehicles (c) A, B and D only (d) A, B, C and D only
B. Flexible work opportunities Ans. (c) : Following transactions are related to
C. Work from home financing Activities :
D. Need to stay relevant, especially in (i) Share issued for cash
technology (ii) Dividend distributed to shareholders
E. Willingness to return to work. (iii) Redemption of debentures.
Choose the most appropriate answer from the 45. Which of the following statements are correct?
options given below: (a) A monopolist can charge any price to
(a) A and B only (b) C and D only maximize profits.
(c) C, D and E only (d) B, C, D and E only (b) The slope of monopoly's MR curve is twice
Ans. (d) : Following are the up skilling enablers for that of AR. curve.
women in India: (c) A necessary conditions for monopoly's long-
(i) Flexible work opportunities run equilibrium is AC = MC = MR
(ii) Work from home (d) A monopolist is in equilibrium where MC =
(iii) Need to stay relevant, especially in technology. MR
(iv) Willingness to return to work. (e) Equilibrium price of a monopolist is always
While Introduction of electric vehicles is not the up higher than that of a competitive firm
skilling enabler for women in India. Choose the correct answer from the options
42. E-commerce and large retailers in India bet big given below
on mega consumption events on which of the (a) A, B and C only (b) B, C and D only
following days? (c) B, D and E only (d) C, D and E only
A. Republic Day B. Independence Day Ans. (c) : Following statements are correct:
C. Black Friday D. Cyber Monday (i) The slope of monopoly's MR curve is twice that of
E. Akshya Tritiya AR curve.
Choose the most appropriate answer from the (ii) A monopolist is in equilibrium where MC = MR
options given below: (iii) Equilibrium price of a monopolist is always higher
(a) A and B only (b) C and D only than that of a competitive firm.
(c) A, B and E only (d) A, B, C, D and E 46. Which of the following factors hinder the
Ans. (d) : E-commerce and large retailers in India bet formation and sustainability of Cartels?
big on mega consumption events on following days. A. Less number of firms in the industry
(i) Republic Day (ii) Independence Day B. Presence of differentiated products
(iii) Black Friday (iv) Cyber Monday C. Different cost structures
(v) Akshya Tritiya D. Low frequency sale coupled with huge
43. Which of the following are not assumptions of amounts of output.
Marginal Costing ? E. Absence of monopolies and restrictive trade
A. The total cost can be segregated into fixed practices.
and variable components. Choose the most appropriate answer from the
B. Fixed costs per unit of production remains options given below:
constant (a) B, C and D only (b) A, D and E only
C. Variable cost remains constant per unit of (c) C, D and E only (d) B, C and E only
output
D. The selling price per unit remains unchanged. Ans. (a) : Following factors hinder the formation and
E. Variable cost is variable per unit sustainability of cartels:
Choose the correct answer from the (i) Presence of differentiated products.
options given below: (ii) Different cost structures
(a) A and B only (b) B and E only (iii) Low frequency sales coupled with huge amounts of
(c) C and D only (d) B and C only output.
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47. Which of the following factors determine the Ans. (b) : In following Practical situations, Poisson
requirements of working capital of a firm? Distribution can be used:
(a) Nature of Business (i) Number of customers arriving at the super markets
(b) Technology and Manufacturing policy per hour.
(c) Management skills (ii) Number of topographical errors per page in a typed
(d) Credit policy material.
(e) Market and Demand Conditions (iii) Number of accidents taking place per day on a
Choose the correct answer from the options busy road.
given below : (iv) Number of defective material say, blades, etc. in a
(a) A, B, C, D (b) A, B, D, E packing manufactured by a good concern.
(c) C, D, E (d) A, B, E
51. Which of the following attributes are true in
Ans. (b) : Following factor determine the requirement systems approach to performance appraisal?
of working capital of a firm:
(i) Nature of Business A. Low degree of formality
(ii) Technology and manufacturing policy. B. Occasional appraisal frequency
(iii) Credit Policy. C. Individual-oriented reward practices
(iv) Market and Demand conditions. D. Facilitative leadership practices
48. Which of the following are related to primary E. Problem solving as primary goal
capital market? Choose the most appropriate answer from the
A. IPO options given below:
B. Long Term Loans (a) A, D and E only (b) A, B and D only
C. Venture Capital (c) B, C and E only (d) A, C, D and E only
D. Letters of Credit Ans. (a) : Explanation:-
E. Participation Certificates The true attributes in system approach to performance
Choose the most appropriate answer from the appraisal are:-
options given below: • Low degree of formality
(a) A, B and E only (b) C, D and E only • Facilitative leadership practices
(c) A, B and C only (d) A, D and E only
• Problem solving as primary goal
Ans. (c) : Following are related to primary capital
market: 52. Which of the following are the distinct features
(i) Initial Public Offer (IPO). of the Principles of Management?
(ii) Long Term Loans. A. Flexibility
(iii) Venture Capital. B. Universal application
49. Which among the following are the measures of C. Principles are absolute, not relative
Central Tendency or Measures of Location? D. Based on situation
A. Mean B. Range E. Derived out of experience
C. Mode D. Median Choose the correct answer from the options
E. Variance given below:
Choose the most appropriate answer from the (a) A, C and E only (b) A, B and D only
options given below: (c) B, C, D and E only (d) A, B, D and E only
(a) A, B, C and E only (b) C, D and E only Ans. (d) : The features of the principles of management
(c) A, C and D only (d) B, C and D only are :-
Ans. (c) : Following are the measures of central • Flexibility.
tendency or measures of location: • Universal application.
(i) Mean (ii) Median
• Based on situation.
(iii) Mode (iv) Geometric Mean (GN)
(v) Harmonic Mean (HN) • Derived out of experience.
• Based on cause and effect relationship.
50. In which of following practical situations.
Poisson Distribution can be used? • General guidelines.
A. Number of customers arriving at the super • Principles are relative, not absolute.
markets per hour. 53. According to Henri Fayol, which of the
B. Number of typographical errors per page in a following are the Principles of Management?
typed material (A) Discipline
C. Number of accidents taking place per day on (B) Decentralization
a busy road
(C) Unity of Command
D. Dice throwing problems
(D) Equity
E. Number of defective material say, blades, etc.
in a packing manufactured by a good concern (E) Instability of Tenure
Choose the most appropriate answer from the Choose the correct answer from the options
options given below: given below:
(a) B, D and E only (b) A, B, C and E only (a) A, C, D only (b) A, B C, E only
(c) A, C, D and E only (d) A, B, C and D only (c) A, B, C, E only (d) B, C, E only
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 513 YCT
Ans. (a) : According to Henri Fayol, the principle of Choose the most appropriate answer from the
management are:- options given below:
• Division of work. (a) B, C and E only (b) A, B and D only
• Authority and responsibility. (c) C, D and E only (d) B, D and E only
• Discipline. Ans. (a) : Mobile banking is the practise of accessing
and managing one's bank accounts and carrying out
• Unity of Command. different financial transactions via a mobile device, such
• Unity of Direction. as a Smartphone or tablet.
• Subordination of Individual Interest. The advantages of mobile Banking are fraud reduction
• Remuneration. time saving and increased efficiency.
• Centralization. 57. Which of the following are to be determined to
estimate current market demand?
• Scalar chain. (A) Total Market Potential
• Order. (B) Area Market Potential
• Equity. (C) Analyze past sales
• Stability. (D) Sales force's input
• Initiative. (E) Market share
• Esprit de corps. Choose the most appropriate answer from the
Henri Fayol, is known as the father of modern options given below:
management. He suggested the 14 principles of (a) A, C and E only (b) B, D and E only
management stated above. (c) A, C and D only (d) A, B and E only
54. Which of the following are the functions of Ans. (d) : There are several methods of estimating
Reserve Bank of India? current demand They are: estimation of total market
(A) Issue of Currency potential, estimation of area market potential, and
(B) Accepting Deposits
estimation of industry sales and market shares.
(C) Banker of Government (D) Banders Bank
(E) Credit Control 58. Which of the following are social factors
influencing consumer's behavior?
Choose the correct answer from the options A. Culture B. Social class
given below: C. Groups D. Family
(a) B and C only (b) A and D only E. Roles and Status
(c) A, B, C and D only (d) A, C, D, and E only Choose the most appropriate answer from the
Ans. (d) : The functions of Reserve Bank of India are:- options given below:
• Issue of currency. • Banker of Government. (a) A, D and E only (b) B, C, D and E only
• Bankers Bank. • Credit Control. (c) C, D and E only (d) B and C only
• Exchange Rate management Ans. (c) : → Social factors influencing consumer's
55. For ongoing maintenance of regulatory capital, behaviour include:-
which of the following risks were covered by • Family → An individual tends to have similar buying
Pillar-1 Minimum Capital Requirement? habits and similar taste and consumption patterns as
he gets within the family.
(a) Credit Risk (b) Financial risk
(c) Operation Risk (d) Market Risk • Groups → It includes co-workers, relatives, friends
which inference the buying decisions of consumers.
(a) Reputational Risk • Role and status→ The social status of an individual
Choose the correct answer from the options influences his consumption pattern. An individual
given below: from an upper middle class would spend on laxurious
(a) A, B and C only (b) A, B and D only items and an individual from lower class would buy
(c) B, C and D only (d) A, C and D only items required for survival.
Ans. (d) : There are three pillars under based-II. 59. Which of the following are true when an
The first pillar deals with maintenance of regulatory organization uses intensive distribution of its
capital calculated for three major components of risk products?
that a bank faces: Credit risk, operational risk, and A. Customers are moderate in number
market risk. B. Widespread market coverage
The second pillar deals with Supervisory Review and C. Customers are brand- Conscious
Evaluation process. D. Mass advertising
The third pillar deals with market discipline and E. Pleasant shopping conditions
disclosure Choose the most appropriate answer from the
options given below:
(a) B, D and E only (b) A, B and C only
(c) B and D only (d) B, C and D only
Ans. (c) : Intensive distribution is a marketing strategy
in which businesses. Sell their products in a large
number of retail locations to ensure widespread
availability. It is done with the help of mass advertising.
56. Which of the following are the advantage of It insures brand loyalty, Improves sales and increase the
Mobile Banking? presence of the product. Some example of intensive
(A) Insecure (B) Fraud reduction distribution are:-
(C) Time saving (D) Separate internet required biscuits, wheat, chocolates, shaving cream, soaps, soft
drinks etc.
(E) Increased efficiency
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 514 YCT
60. As per RTI Act, 2005, Which of the following Ans. (d) : "The worth of a company's employees
are exempted from disclosure [U/S 8 (1)]? knowledge's, skills, business training, or other private
A. Information, the disclosure of which cause a information that might provide the organisation a
breach of privilege of parliament or the state competitive advantage is known as intellectual capital".
Legislature. If includes, processes, Designs, Relationship developed
B. The monthly remuneration received by with its customers and suppliers, Internet domain names
employee and copyrights etc.
C. Information received in confidence from 63. Income received and accrued or arisen outside
foreign government India from a business controlled in or a
D. Information which relates to personal profession set upon in India, is taxed in the
information the disclosure of which has no hands of which of the following?
relationship to any public activity or interest. A. Every citizen of India
E. A statement of the categories of documents B. Domicile of India
that are held by public authority or under its C. Ordinary Resident
control.
D. Non-Ordinarily Resident
Choose the correct answer from the options
given below. E. Non-Resident
(a) A, B and E only (b) A, C and D only Choose the correct answer from the options
(c) C, D and E only (d) B, C and D only given below:
(a) A and C only (b) A and B only
Ans. (b) : As per RTI Act, 2005, section 8(i) (c) C and D only (d) C, D and E only
Exemption from Disclosure are:-
• Information, the disclosure of which cause a breach Ans. (c) : Residential status and income to be taxed in
of privilege of parliament or the state legislature. India:-
• Information received in confidence from a foreign (1) Non Resident-
government. (a) Liable to pay tax only on the income earned in India.
• Information which would lead to commission of an (b) 'Not taxed' on any income earned outside India 'nor'
offence. on the income earned outside India out of business
• Information which relates to personal information the controlled from India or a profession set-up in India.
disclosure of which has no relationship to any public (2) Non-ordinarily resident-
activity or interest. (a) Liable to pay tax on the income earned in India on
• Personal or private information, subject to larger the income earned outside India out of a business
public interest, to be decided by the public controlled from India or a profession set-up in India
information officer. (b) 'Not taxed' on any income earned outside India.
61. An instrument is to be called 'Negotiable' as (3) Resident and ordinarily resident-
per Negotiable Instruments Act, 1881, if it → Liable to pay tax on all types of incomes i.e.
possesses which of the following (a) Income earn in India.
characteristics? (b) Earnings outside India out of a business controlled
A. Can be transferred infinitum from India or a profession set-up in India.
B. Having minimum lock-in period (c) and also on all other incomes earned outside India.
C. Freely transferable 64. Which of the following are related to tax-evasion?
D. The holder con not sure in A. Claiming bogus expenses and losses
E. Holder's title free from defects B. Hiding capital nature of profits
Choose the correct answer from the options C. Showing sales transactions
given below: D. Showing excess transactions
(a) A, C and E only (b) A, B and E only E. Showing real income and expenses
(c) B, D and E only (d) A, B, C and E only Choose the correct answer from the options
Ans. (a) : An instrument is to be called 'Negotiable' as given below:
per Negotiable instruments Act, 1881, if it possesses the (a) A and B only (b) A, B and D only
following characteristics i.e. (c) A, B and C only (d) C and E only
• Freely transferable. Ans. (b) : Tax evasion is an illegal activity in which a
• Holder's title free from defects. person deliberately makes an underpayment or non-
• The holder can sue in his own Name. payment of tax. It means deliberately hiding and
• A negotiable instrument can be transferred infinitum. misrepresenting their income from the authorities to
reduce their Tax liability. Claiming bogus expenses and
• A negotiable instrument is subject to certain losses, Hiding capital nature of profits and sowing
presumptions. excess transactions are related to tax evasion.
62. Intellectual Capital of an enterprise includes its : Note:- Tax evasion and tax avoidance are often
A. Processes confused by the people. Tax avoidance means using
B. Designs legal methods to decrease the percentage of tax payable.
C. Relationships developed with its customers Tax avoidance is legal whereas tax evasion is illegal.
and suppliers 65. Which of the following conditions should be
D. Internet domain names fulfilled by an Assessee to avail deduction u/s.
E. Copyrights 91 of Income Tax Act, 1961?
Choose the correct answer from the options A. The Assessee is a tax resident in India during
given below: the relevant previous year
(a) A, B C and D only (b) B, C and E only B. The income accrues or arises to him/her
(c) C, D and E only (d) A, B, C, D and E outside India
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 515 YCT
 C. There is an agreement for relief from double C. Occurrence III. Whether all assets
taxation between India and the other country and liabilities are
when the income has accrued or arisen. reported in the
D. The Assessee has paid tax on his/her foreign appropriate
income in the foreign country
D. Existence IV. Transactions
E. Indian does not have any agreement for relief recognized in the
from double taxation with the country. financial statements
Choose the most appropriate answer from the have occurred and
options given below: relate to the entity
(a) A and E only (b) B and C only
(c) A, B, D and E only (d) A, B and E only Choose the correct answer from the options given
below:
Ans. (c) : The following are the conditions should be
fulfilled by an assessee to avail deduction U/S 91 of (a) A-II, B-I, C-III, D-IV
Income Tax Act, 1961. (b) A-IV, B-III, C-II, D-I
• The assessee is a tax resident in India during the (c) A-I, B-III, C-II, D-IV
relevant previous year. (d) A-III, B-II, C-IV, D-I
• The income accrues or arises to him/her outside India. Ans. (d) :
• The assessee has paid tax on his/her foreign income in List I (Issue) LIST II (Descriptions)
the foreign country. A. Cut-off III. Whether all assets and
• India does not have any agreement for relief from liabilities are reported in
double taxation with the country. the appropriate period.
66. Match List I with List II B. Classification II. Transactions and events
List I (COP 27) LIST II have been recorded in
(COP 27 Action plan) proper accounts.
A. Mitigation I. Promote climate C. Occurrence IV. Transactions recognized
know-how solutions in the financial statements
B. Capitalize II. Empowering all have occurred and relate
stakeholders to to the entity.
engage in climate D. Existence I. Assets, liabilities and
action Equity balances exist at
C. Technology III. Phase down the end of the period.
unabated coal power 68. Match List I with List II
D. Capacity IV. Creation of "loss and
Building damage fund" List I LIST II
Choose the correct answer from the options given A. Margin of I. Profit X sale/ PV
below : Safety Ratio
(a) A-II, B-III, C-IV, D-I B. Break Even II. Difference between
(b) A-IV, B-III, C-II, D-I Point total revenue and total
(c) A-III, B-IV, C-I, D-II variable costs
(d) A-IV, B-III, C-I, D-II C. PV Ratio III. Total Sales – Total
Ans. (c) : Variable Cost/ Total
Sales
List-I LIST-II
(COP 27) (COP 27 Action plan) D. Contribution IV. Equality between
contribution and total
A. Mitigation III. Phase down fixed costs
unabated coal power
B. Capitalize IV. Creation of "loss and Choose the correct answer from the options given
damage fund" below:
(a) A-I, B-II, C-III, D-IV
C. Technology I. Promote climate
know-how solutions (b) A-I, B-IV, C-III, D-II
D. Capacity Building II. Empowering all (c) A-III, B-I, C-II, D-IV
stakeholders to (d) A-IV, B-I, C-II, D-III
engage in climate Ans. (b) :
action List I LIST II
67. Match List-I with List- II A. Margin of Safety I. Profit X sale/ PV Ratio
List-I LIST-II B. Break Even Point IV. Equality between
(Issue) (Descriptions) contribution and total
A. Cut-off I. Assets, liabilities and fixed costs
Equity balances exist C. PV Ratio III. Total Sales – Total
at the end of the Variable Cost/ Total
period Sales
B. Classification II. Transactions and
D. Contribution II. Difference between
events have been
recorded in proper total revenue and total
accounts variable costs
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 516 YCT
69. Match List I with List II C. Anova test III. Non-parametric test
List I LIST II to test the goodness
A. Finance I. The lessee and the of fit
Lease owner of the D. Chi-square IV. Testing the
equipment are two test difference between
different entities. means of two sample
B. Operating II. Lessee sells an asset groups
Lease for cash to a Choose the correct answer from the options given
prospective lessor below:
and then leases back (a) A-II, B-IV, C-I, D-III
the same assets (b) A-II, B-III, C-IV, D-I
C. Sale and III. The lessor does not (c) A-III, B-I, C-II, D-IV
Lease back transfer all the risk (d) A-I, B-II, C-III, D-IV
and rewards Ans. (a) :
incidental to the List I LIST II
ownership of the (Type of Test) (Subject matter of the
assets problem)
D. Direct lease IV. The lessor transfers A. Kruskal- Wallis II. Non-parametric test to
substantially all the test compare means of more
risks and rewards than two population
incidental to the groups.
ownership of the
assets to the lessee. B. Z- test IV. Testing the difference
between means of two
Choose the correct answer from the options given sample groups.
below:
C. Anova test I. Parametric test to
(a) A-IV, B-III, C-II, D-I compare means of more
(b) A-IV, B-III, C-I, D-II than two population
(c) A-I, B-II, C-III, D-IV groups.
(d) A-I, B-II, C-IV, D-III D. Chi-square test III. Non-parametric test to
Ans. (a) : test the goodness of fit.
List I LIST II 71. Match List I with List II
A. Finance Lease IV. The lessor transfers List I LIST II
substantially all the (Characteristic) (Leadership Mode )
risks and rewards A. Source of I. Power extension
incidental to the power
ownership of the
assets to the lessee. B. Concept of II. Empowerment
power
B. Operating Lease III. The lessor does not
transfer all the risk C. Dominant III. Bulding culture
and rewards need
incidental to the D. Managing IV. Multiplying
ownership of the style
assets Choose the correct answer from the options
C. Sale and Lease II. Lessee sells an asset given below:
back for cash to a (a) A-II, B-IV, C-I, D-III
prospective lessor (b) A-IV, B-II, C-I, D-III
and then leases back (c) A-II, B-IV, C-III, D-I
the same assets (d) A-II, B-III, C-I, D-IV
D. Direct lease I. The lessee and the Ans. (a) :
owner of the List I LIST II
equipment are two (Characteristic) (Leadership Mode )
different entities.
A. Source of power II. Empowerment
70. Match List with List II
B. Concept of power IV. Multiplying
List I LIST II
(Type of Test) (Subject matter of the C. Dominant need I. Power extension
problem) D. Managing style III. Building culture
72. Match List I with List II
A. Kruskal- I. Parametric test to
Wallis test compare means of List I LIST II
more than two (Application narratives) (Statistical
population groups distributions)
B. Z- test II. Non-parametric test A. Time interval I. Pareto
to compare means of between successive distribution
more than two arrival of customers
population groups in a queue
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 517 YCT
 B. Distribution of II. Poisson Ans. (a) :
income, property distribution List I LIST II
and certain human
abilities in a (Sales Promotion (Goal)
capitalistic society Method)
C. Movement of stock III. Exponential A. Stock II. To incentivize stores to
prices and distribution allowances try a new product
distributing of
income in a
socialistic society B. Premiums IV. To incentivize customers
D. Distribution of rare IV. Lognormal to increase their
events i.e. the distribution consumption.
probability of C. Sampling I. To incentivize customers
occurrence is very to try a new product
small but the D. Advertising III. To incentivize stores to
number of trials are keep selling a product
very large
Choose the correct answer from the options given 74. Match List I with List II
below : List I LIST II
(a) A-II, B-IV, C-III, D-I (The sale of Goods Act, (Section)
(b) A-III, B-I, C-IV, D-II 1930 Condition)
(c) A-I, B-IV, C-II, D-III A. Sale by Auction I. 15
(d) A-I, B-II, C-III, D-IV
B. Breach of Warranty II. 27
Ans. (b) :
List I LIST II C. Sale by Description III. 13
(Application narratives) (Statistical D. Transfer of Title IV. 64
distributions) Choose the correct answer from the options given
A. Time interval between III. Exponential below:
successive arrival of distribution (a) A-IV, B-III, C-I, D-II
customers in a queue (b) A-IV, B-I, C-III, D-II
B. Distribution of I. Pareto (c) A-III, B-IV, C-II, D-I
income, property and distribution (d) A-III, B-I, C-II, D-IV
certain human abilities
in a capitalistic society Ans. (a) :
C. Movement of stock IV. Lognormal List I LIST II
prices and distributing distribution (The sale of Goods Act, 1930 (Section)
of income in a Condition)
socialistic society A. Sale by Auction IV. 64
D. Distribution of rare II. Poisson B. Breach of Warranty III. 13
events i.e. the distribution
probability of C. Sale by Description I. 15
occurrence is very D. Transfer of Title II. 27
small but the number 75. Match List I with List II
of trials are very large List I LIST II
73. Match List I with List II (Income Tax (Relationship with)
List I LIST II Return)
(Sales Promotion (Goal) A. ITR -2 I. For a company other
Method) than a company
A. Stock I. To incentivize claiming exemption
allowances customers to try a under section 11
new product B. ITR-6 II. For presumptive
B. Premiums II. To incentivize stores business income
to try a new product covered u/s 44 AD
and 44 AE
C. Sampling III. To incentivize stores
to keep selling a C. ITR-7 III. For a person
product (including a
D. Advertising IV. To incentivize company who are
customers to increase required to furnish
their consumption. return u/s 139 (4A)
or 139 (4B) or 139
Choose the correct answer from the options (4C) or 139 (4D)
given below :
(a) A-II, B-IV, C-I, D-III D. ITR-4 IV. For individual and
(b) A-IV, B-II, C-I, D-III (Sugam) HUF not having
(c) A-II, B-IV,C-III, D-I income for business
(d) A-III, B-IV, C-I, D-II and profession.

UGC NTA NET Commerce Paper Dec. 2022 Shift-I 518 YCT
 Choose the correct answer from the options given Ans. (c) : Information system Audit is an examination
below : of the management controls within an information
(a) A-IV, B-I, C-II, D-III technology infrastructure and business applications.
(b) A-IV, B-I, C-III, D-II These type of Audit is done by information system
(c) A-III, B-II, C-IV, D-I Auditors.
(d) A-II, B-I, C-IV, D-III CATT stands for computer-assisted audit tools and
Ans. (b) : techniques (CAATTs) is the practice of using
computers to automate the IT audit process. The
List I LIST II benefits available to information system Auditor who
(Income Tax (Relationship with) uses CATT are:-
Return) • Check susceptibility to threat. Much of the accounting
A. ITR -2 IV. For individual and HUF not is done through cloud accounts or other online system.
having income for business • Evaluating the system.
and profession. • Data security.
B. ITR-6 I. For a company other than a • Bolsters controls.
company claiming
exemption under section 11 • Develop IT Governance.
C. ITR-7 III. For a person (including a 78. Arrange the following steps in a proper
company who are required sequence to forecast the demand for a product
to furnish return u/s 139 systematically and scientifically.
(4A) or 139 (4B) or 139 A. Making choice of method for demand
(4C) or 139 (4D) forecasting
B. Estimations and interpretation of results
D. ITR-4 II. For presumptive business
(Sugam) income covered u/s 44 AD C. Specifying the objectives
and 44 AE D. Determining the time perspective
76. Sequence the following different settlement E. Collection of data and data adjustment
stages of the WTO dispute settlement System. Choose the correct answer from the options
A. Retaliation B. Implementation given below:
C. Panel Review D. Appellate (a) C, A, E, D, B (b) C, D,A, E, B
E. Consultations (c) A, C, D, B, E (d) E, D, C, A, B
Choose the correct answer from the options Ans. (b) : Following steps are taken to facilitate a
given below: systematic demand forecasting of a product:
(a) D, E, A, C, B (b) E, D, C, A, B
(c) E, C, D, B, A (d) D, E, C, A, B
Ans. (c) : Stages of the WTO dispute settlement system
are:-

79.
Arrange the following steps involved in the
budgeting in a proper sequence:
A. Screening the proposal
B. Evaluation of various proposals
C. Identification of Investment proposal
D. Performance review
E. Implementing the proposal.
Choose the correct answer from the options
given below:
77. Arrange in proper sequence the following (a) A, C, B, D, E (b) C, A, D, B, E
benefits available to Information system (c) C, A, B, E, D (d) A, B, C, D, E
Auditor who uses CATT: Ans. (c) : Following steps are involved in the budgeting :
A. Check susceptibility to threat. Much of the
accounting is done through cloud accounts or
other online system
B. Evaluating the system
C. Data security
D. Bolsters controls
E. Develop IT Governance
Choose the correct answer from the options
given below:
(a) E, D, C, B, A (b) C, B, A, D, E
(c) A, B, C, D, E (d) B, A, E, C, D
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 519 YCT
80. Arrange the following steps involved in a Choose the correct answer from the options
research process to carry out orderly and given below:
systematic research : (a) A, C, D, B, E (b) E, B, D, A, C
A. Formulating hypothesis (c) B, A, E, D, C (d) B, E, D, C, A
B. Collection and analysis of data Ans. (c) : Index of eight core Industries (ICI) is
C. Defining research problem production volume index that measures the collective
D. Prepare research design and individual production performances of eight
E. Interpretation and report writing selected core industries.
Choose the correct answer from the options Current figures of weightage of eight core industries
given below : are :-
(a) D, A, C, E, B (b) C, A, D, B, E Industry Weightage of eight core
(c) A, B, C, D, E (d) C, B, A, E, D Refinery products industry 28.04%
Ans. (b) : The steps involved in a research process to Electricity industry 19.85%
carry out orderly and systematic research are :- Steel Industry 17.92%
Coal industry 10.33%
Crude oil industry 8.98%
Natural gas industry 6.88%
Cement industry 5.37%
Fertilizers Industry 2.63%
83. Arrange the following stages of buying decision
process in the logical sequence.
A. Comprehension B. Adoption
C. Need recognitions D. Legitimization
E. Attitude forming
Choose the correct answer from the options
given below :
81. Arrange the following examples of human needs (a) A, C, D, E, B (b) C, A, B, D, E
in the hierarchy of their increasing importance. (c) C, A, E, D, B (d) C, E, D, A, B
A. Insurance for accidents Ans. (c) : Stage of buying decision process in the logical
B. Recognitions and respect from others sequence are :
C. Food and shelter provisions Need recognition
D. Accomplishing distinction in chosen area by ↓
maximizing potential Comprehension
E. Developing meaningful relations with others. ↓
Choose the correct answer from the options Attitude forming
given below : ↓
(a) A, C, E, B, D (b) C, A, B, E, D Legitimization
(c) A, C, E, D, B (d) C, A, E, B, D ↓
Adoption
Ans. (d) : Maslow's hierarchy of needs with examples
of human needs in the hierarchy of their importance:- 84. Arrange the Intellectual Capital Management
Process Flow Stages in a proper sequential
order :
A. Index B. Capture C. Replicate
D. Identify E. Store
Choose the correct answer from the options
given below :
(a) B, D, A, E, C (b) B, D, A, C, E
(c) D, B, A, E, C (d) D, A, B, E, C
Ans. (c) : "Intellectual capital is defined as all
knowledge within an organisation which has the
potential to create value when applied in line with the
mission, vision and goals of the organisation. It refers to
the intangible capital other than financial capital.
Intellectual capital management process in a proper
sequential order are :-
Identify
↓
Capture
82. Arrange the following industry verticals in the ↓
ascending order of their weightages in the Index
index of core industries in India. ↓
A. Coal B. Cement Store
C. Refinery products D. Electricity ↓
E. Steel Replicate
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 520 YCT
85. Computation of income from house property (a) Both A and R are true and R is the correct
for let-out house, the following items are explanation of A
deducted. Arrange them in a proper sequence: (b) Both A and R are true but R is not the correct
A. Local taxes/Municipal Taxes explanation of A
B. Standard deductions (c) A is true but R is false
C. Unrealized Rent (d) A is false but R is true
D. Interest on loan for the period the prior to Ans. (c) : Assertion A : When holding company holds
previous year in which the house is completed more than 50% (but not whole) shares of a company,
(in five equal annual installments) then the holders of the rest of shares will be known as
E. Interest on loan taken for purchase, 'minority' is correct.
construction or repair of the house, relating to Reason R : 'Minority interest is calculated by
the previous year considering proportionate shares and reserves of
Choose the correct answer from the options holding company" is false.
given below : The correct statement will be "The value of the minority
(a) A, B, E, D, C (b) C, A, B, E, D ownership portion of the subsidiary is determined by
multiplying its book value by the percentage of
(c) A, C, B, E, D (d) D, A, B, E, C ownership hold by non controlling interest or minority
Ans. (b) : Computation of income from house property interest.
for let out house, the following items are deducted. : So, A is true but R is false.
Unrealized rent 88. Given below are two statements: one is labelled
Local taxes/Municipal taxes. as Assertion A and the other is labelled as
Statement deductions. Reason R.
Interest on loan taken for purchase, construction or Assertion-A The theories of price determination
repair of the house, relating to the previous year. under oligopoly are found to be inapplicable to
Interest on loan for the period the prior to previous life market conditions.
year in which the house is completed (in five equal Reason-R : Real life oligopoly market situation is
annual installments). characterized by small number of sellers.
86. Given below are two statements: interdependence of decision making, barriers to
Statement I : Monetary policy on its own cannot entry. indeterminate price and output; all leading
influence economic growth but can only support it to wide variety of situations.
by creating congenial factors. In the light of the above statements, choose the
Statement I : Monetary policy rates change get most appropriate answer from the options
transmitted across the markets and eventually get given below
reflected in lending rates, mortgage rates and (a) Both A and R are correct and R is the correct
yields. Hence, monetary policy can address the explanation of A
current inflation. (b) Both A and R are correct but R is not the
In the light of the above statements, choose the correct explanation of A
most appropriate answer from the options (c) A is correct but R is not correct
given below. (d) A is not correct but R is correct
(a) Both Statement I and Statement II are true Ans. (a) : Assertion A : "The theories of price
(b) Both statement I and Statement II are false determination under oligopoly are found to be
(c) Statement I is true Statement II is false inapplicable to real life market conditions because real
life oligopoly market situation is characterized by small
(d) Statement I is false but Statement II is truew number of sellers, interdependence of decision making,
Ans. (c) : Statement- I "Monetary policy on its own barriers to entry, indeterminate price and output, all
cannot influence economic growth but can only support leading to wide variety of situations.
it by creating congenial factors is correct. So, Both A and R are correct and R is the correct
Statement- II "Monetary policy rates changes get explanation of A.
transmitted across the market and eventually get 89. Given below are two statements:
reflected in lending rates, mortgage rates and yields. Statement I : Translation exposure refers to the
Hence, monetary policy can address the current exchange gain or loss occurring from the
inflation is incorrect so, statement I is true statement II difference in the exchange rate at the beginning
is false. and the end of the accounting period.
87. Given below are two statement: One is labelled Statement II: Transaction exposure refers to the
as Assertion A and the other is labelled as change in the value of the firm caused by the
Reason R. unexpected changes in the exchange rate.
Assertion A : When holding company holds more In the light of the above statements, choose the
than 50% (but not whole) shares of a company, most appropriate answer from the options
then the holders of the rest of shares will be given below:
known as "Minority" (a) Both Statement I and Statement II are correct
Reason R : Minority interest is calculated by (b) Both Statement I and Statement II are
considering proportionate shares and reserves of incorrect
Holding Company. (c) Statement I is correct but Statement II is
In the light of the above statements, choose the incorrect
most appropriate answer from the options (d) Statement I is incorrect but Statement II is
given below : correct
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 521 YCT
 Ans. (c) : Statement-I : Translation exposure refers to since 1 January 1995. It ranks 37 the on the Ease of
the exchange gain or loss occurring from the difference Doing Business Index and 37the on the Global
in the exchange rate at the beginning and the end of the Competitiveness Report. Due to extreme rupee/dollar
accounting period is correct. rate fluctuations, India's nominal GDP too fluctuates
Statement-II : Transaction exposure refers to the change significantly. With 50 crore (500 million) workers, the
in the value of the firm caused by the unexpected Indian labour force is the world's second-largest. India
changes in the exchange rate is incorrect. has one of the world's highest number of billionaires and
So, statement I is correct but statement II is incorrect. extreme income inequality. Because of several
exemptions, barely 2% of Indians pay income taxes.
90. Given below are two statements: 91. Given below are two statements :
Statement I : If a population from which a Statement I : India has one of the world's highest
sample is to be drawn does not constitute a number of billionaires and extreme income
homogenous group, stratified sampling technique inequality. Because of several exemptions, barely
is generally applied in order to obtain a 5% of Indians pay income taxes.
representative sample.
Statement II : With 50 crore (500 million)
Statement II : In the case of small samples, z- workers, the Indian labour force is the world's
test is applied even if the population standard second-largest.
deviation is not available (given).
In the light of the above statements, choose the
In the light of the above statements, choose the most appropriate answer from the options
most appropriate answer from the options given below :
given below.
(a) Both Statement I and Statement II are correct (a) Both Statement I and Statement II are correct
(b) Both Statement I and Statement II are (b) Both Statement I and Statement II are
incorrect
incorrect
(c) Statement I is correct but Statement II is
(c) Statement I is correct but Statement II is incorrect
incorrect
(d) Statement I is incorrect but Statement II is
(d) Statement I is incorrect but Statement II is correct
correct
Ans. (c) : Statement I "If a population from which a Ans. (d) : Statement I : India has one of the world's
highest number of billionaires and extreme income
sample is to be drawn does not constitute a homogenous inequality. Because of several exemptions, barely 5% of
group. stratified sampling technique is generally applied Indians pay income taxes is incorrect.
in order to obtain a representative sample is correct.
The correct statement will be "India has one of the
Statement II : In the case of small samples, z-test is world's highest number of billionaires and extreme
applied even if the population standard deviation is not income inequality because of several exemptions,
available (given) is incorrect. The correct statement will barely 2% of Indians pay income taxes.
be "A z-test can only be used if the population standard
deviation is known and the sample size is 30 data point Statement II With 50 core (500 million) workers, the
or larger. Indian labour force is the world's second largest is
correct.
So statement I is correct but statement II is incorrect.
92. Which of the following is not a correct
Direction (91-95) : statement?
The economy of India is a mixed, middle-income, (a) The economy of India is a mixed, middle-
developing social market economy. It is the world's fifth- income, developing social market economy
largest economy by nominal GDP and the third-largest
by Purchasing power Parity (PPP), According to the (b) India's GDP is also fuelled by government
International Monetary Fund (IMF), on a per capita spending, investments, and exports
income basis, India, ranked 142nd by GDP (nominal) (c) India has been a member of the World Trade
and 125th by GDP (PPP). From Independence in Organization since 1 January 1996
economic regulation. This is characterized as dirigisme, (d) Economy of the Indian subcontinent was the
in the form of the Licence Raj. The end of the cold war largest in the world for most of the recorded
and an acute balance of payments crisis in 1991 led to history until the onset of colonialism in early
the adoption of a broad economic liberalization in India. 19th century
Since the start of the 21st century, annual average GDP Ans. (c) : 'India has been member of the world trade
growth has been 6% to 7% and from 2013 to 2018, India organization since 1 January 1996' is incorrect
was the world's fastest growing major economy, statement. The correct statement will be India has been
surpassing China. Economy of the Indian subcontinent a member of the world trade organization since 'January
was the largest in the world for most of the recorded 1995. '
history until the onset of colonialism in early 19th 93. Which one of the following is not a supportive
century. share of Indian economy is 7.5% of world factor to the Indian economy's long-term
economy by PPP terms. The long-term growth growth perspective?
perspective of the Indian economy remains positive due (a) Young population and corresponding low
to its young population and corresponding low dependency ratio
dependency ratio, healthy savings, and investment rates,
increasing globalization in India and integration into the (b) Healthy savings and investment rates
global economy Nearly 70% of India's GDP is driven by (c) Increasing globalization in India and
domestic private consumption. The country remains the integration into the global economy
world's sixth-largest consumer market. Apart from (d) Continuous increasing defence expenditure
private consumption, India's GDP is also fuelled by Ans. (d) : "Continuous increasing defence expenditure'
government spending, investments, and exports, India is not a supportive factor to the Indian economy's long-
has been a member of the World Trade Organization term growth perspective.

UGC NTA NET Commerce Paper Dec. 2022 Shift-I 522 YCT
94. Given below are two statements : Choose the correct answer from the options
Statement I: Since the start of the 21st century, given below :
annual average GDP growth rate of India has been (a) (A), (B) and (C) only
6% to 7% (b) (B), (C) and (D) only
Statement II: From 2013 to 2018, India was the (c) (A), (B) and (D) only
world's fastest growing major economy. (d) (A), (C) and (D) only
surpassing china. Ans. (a) : Following describes India stack better which
In the light of the above statements, choose the are
most appropriate answer from the options A decentralized public utility offering a low-cost
given below : comprehensive digital identity.
(a) Both Statement I and Statement II are correct Payment and data management system.
(b) Both Statement I and Statement II are A network for towering credit costs.
incorrect
98. Given below are two statements :
(c) Statement I is correct but Statement II is
incorrect Statement I : Credit availability is an important
component of economic growth.
(d) Statement I is incorrect but Statement II is
correct Statement II: India is currently one of the most
under leveraged countries in the world.
Ans. (a) : Statement-I: since the start of the 21 century, In the light of the above statements, choose the
annual average GDP growth rate of India has been 6% most appropriate answer from the options
to 7% is correct. given below.
Statement-II: from 2013 to 2018 India was the world's (a) Both Statement I and Statement II are true
fastest growing major economy, surpassing China is (b) Both Statement I and Statement II are false
correct.
(c) Statement I is true but Statement II is false
So, both statement I and statement II are correct.
(d) Statement I is false but Statement II is true
95. Given below are two statements: One is Ans. (a) : Statement I "Credit availability is an
labelled as Assertion A and the other is labelled important component of economic growth" is true.
as Reason R.
Statement II "India is currently one of the most under
Assertion-A : Nearly 70% of India's GDP is leveraged countries in the world is true.
driven by domestic private consumption.
So, Both statement I and statement II are true.
Reason-R : The country (India) remains the
world's sixth-largest consumer market. 99. "The system creates biometric IDs to establish
In the light of the above statements, choose the proof of residence and has been instrumental in
most appropriate answer from the options digitizing financial transactions, among other
given below benefits. "The above statement talks about
which one of the following?
(a) Both A and R are correct and R is the correct
explanation of A (a) PAN (b) DIN
(b) Both A and R are correction but R is not the (c) Aadhaar (d) GST
correct explanation of A Ans. (c) : "The system creates biometric IDs to
(c) A is correct but R is not correct establish proof of residence and has been instrumental
(d) A is not correct but R is correct in digitizing financial transactions, among other
benefits" The above statement talks about Aadhaar.
Ans. (b) : Assertion A : Nearly 70% of India's GDP is
driver by domestic private consumption is correct. 100. Given below are two statements: one is labelled as
Assertion A and the other is labelled as Reason R.
Reason R : The country (India) remains the world's
sixth largest consumer market is correct but the correct Assertion A : Indian's income distribution could
explanation of A : flip over the next decade.
So, Both A and R are correct but R is not the correct Reason R : Overall consumption is the country
could be more than double from $2 trillion is 2022
explanation of A. to $ 4.9 trillion by the end of the decade.
96. Which one of the following explains Aadhaar? In the light of the above statements, choose the
(a) National Identification program most appropriate answer from the options
(b) National Citizenship program given below.
(c) Unified Identification program (a) Both A and R are true and R is the correct
(d) Unified census program explanation of A
Ans. (a) : National identification program explains (b) Both A and R are true but R is not the correct
Aadhaar. Addhaar is 12 digit individual identification explanation of A
number serves as a proof of identity and address. (c) A is true but R is false
97. Which one of the following describe India (d) A is false but R is true
Stack better? Ans. (a) : Assertion A : India's income distribution
(a) A decentralzied public utility offering a low- could flip over the next decade is true statement.
cost comprehensive digital identity. Reason R : overall consumption in the country could be
(b) Payment and data-management system more than double from $2 trillion in 2022 to $4.9
(c) A network for lowering credit costs trillion by the end of the decade is true and correct
(d) A trading platform explanation of a (assertion).
UGC NTA NET Commerce Paper Dec. 2022 Shift-I 523 YCT
 NTA UGC NET/JRF Exam, December 2022
COMMERCE
Solved Paper
Exam Date: 04.03.2023 Shift-II

1. Which of the following is the right description produce work which is of an adequate quality.
of the "Duty Free Import Authorization There are two types of Reinforcement :
(DFIA)" Scheme? (i) Positive Reinforcement
(a) Duty free imports of inputs required for (ii) Negative Reinforcement
export production subject to certain export Hence, Reinforcement theory of attitude change states
obligations, as stipulated in the foreign trade that changes in opinion can result into an attitude
policy. change.
(b) Exemption in respect of custom duty, 4. According to Porter's diamond, which of the
additional duty, education cess and anti- following is NOT a factor of national
dumping or safeguard duties for inputs used competitive advantage?
in exports (a) Relating and supporting industry
(c) Import of capital goods at concessional rate of (b) Firm strategy, structure and rivalry
duty subject to an appropriate export (c) Bargaining power of buyers
obligation accepted by the importer (d) Demand conditions
(d) Grant of credit on post-export basis as Ans. (c) :
specified percentage of F.o.B. value of • Porter's Diamond is an economic model describing
exports made in a freely convertible currency the factors that give a business an edge over its
Ans. (b) : Duty Free Import Authorization (DFIA): competitors in a particular region.
A duty Free Import Authorization (DFIA) is issued to • Amarican academician Michael Eugene Porter
allow duty free import of inputs which are used in the developed the Porter Diamond model.
manufacture of an export product, making normal • It explains how companies with a national
allowance for wastage, and energy, fuel, catalyst etc. competitive advantage continue to enjoy the same in
many are utilized in the course of their use to obtain the the international markets too.
export product. • The model is based on a unique framework
The Director General of Foreign Trade (DGFT), by consisting of four factors - company strategy,
means of Public Notice and also public interest, can structure and Rivalry; factor condition; Related and
exclude any product(s)
st
from the scheme. This scheme supporting Industries; and demand conditions.
was in force from 1 May, 2006. • The role of government and chance also impact the
2. An Indian company receiving investment from competitive advantage of a business.
outside India for issuing share/convertible According to porter's diamond model, following are the
debentures/preference shares under the FDI factors of national competitive advantage :
Scheme should report the details of the inflow (i) Relating and supporting industry.
to the RBI. What is the time for reporting these (ii) Firm strategy, structure and rivalry.
details to RBI? (iii) Demand conditions.
(a) Within 10 days from the date of receipt 5. X and Y are partners sharing profits and losses
(b) Within 15 days from the date of receipt in the ratio of 3 : 2. They admit Z as a new
(c) Within 30 days from the date of receipt partner with 1/5 share in the profits. Calculate
(d) Within 45 days from the date of receipt the new profit sharing ratio of the partners.
Ans. (c) : An Indian company receiving investment (a) 12 : 8 : 5 (b) 12 : 8 : 6
from outside India for issuing shares/convertible (c) 12 : 7 : 6 (d) 12 : 3 : 7
debentures/preference shares under the FDI scheme
should report the details of the inflow to the RBI within Ans. (a) : Old PSR ⇒ x = 3 , y = 2
the 30 days from the receipt of such investment. 5 5
3. Which one of the following theories of attitude 1
change states that changes in opinions can Z's share =
result in to an attitude change? 5
(a) Balance Theory 1 4
(b) Cognitive Consistency Theory Reaming share after z = 1 − =
(c) Reinforcement Theory 5 5
(d) Cognitive Dissonance Theory 4 3 12
Ans. (c) : Reinforcement Theory : The main aspect of X's New share = × =
5 5 25
the reinforcement theory is that when behaviour is
reinforced, then it will be repeated and used again 4 2 8
Y's New share = × =
when if the behaviour is not reinforced, then that 5 5 25
behaviour will continue the same and not change 1 5 5
therefore if this behaviour is currently bad, it will stay Z's share = × =
that way, unless something is done. 5 5 25
The Reinforcement Theory stats to look into 12 8 5
punishment and reward for behaviour. This is what Hence, New PSR = : : ⇒ 12 : 8 : 5
skinner started to go into, saying that punishment was 25 25 25
needed to make sure people stay on the right track and
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 524 YCT
6. At the break-even point, contribution is equal to 10. In the extreme case of perfect price
(a) Variable cost (b) Profit discrimination, the entire consumer surplus in
(c) Fixed cost (d) Sales the market goes:
Ans. (c) : At the break-even point, the contribution (a) to consumers (b) to monopoly producer
margin equals the total fixed cost. The break-even (c) as deadweight loss (d) to capital
margin is a ratio that shows the gross-margin factor for Ans. (b) : Price discrimination is a selling strategy that
a break-even condition. The formula is total expenses charges customers different prices for the same product
divided by net revenues multiplied by 100 to get a or services based on what the seller thinks they can get
parentage. Net revenues are the difference between the the customer to agree to. In the extreme case of perfect
unit price and variable costs per unit. price discrimination, the entire consumer surplus in the
Hence option (c) is correct answer. market goes to monopoly producer.
7. Which one of the following is NOT true? 11. A situation, in which economic actors
(a) Capital expenditure results in extra capacity interacting with one another, each choose their
(b) Capital expenditure results in a benefit which best strategy, given the strategies that all the
will last for a long time other actors have chosen, is called
(c) Capital expenditure results in the acquisition (a) Nash equilibrium (b) Prisoners' dilemma
of a permanent asset (c) Dominant strategy (d) Predatory strategy
(d) Heavy expenditure on advertisement Ans. (a) :
campaigns in order to introduce a new • The nash equilibrium is a decision making theorem
product in the market within game theory that states a player can achieve
Ans. (d) : Capital Expenditure are funds used by a the desired outcome by not deviating from their
initial strategy.
company to acquire, upgrade and maintain physical • In the nash equilibrium, each player's strategy is
assets such as property, plants, building's, technology optimal when considering the decisions of other
or equipment. Making capital expenditure on fixed players. Even player wins because everyone gets the
assets can include repairing a roof (if the useful life of outcome that they desire.
the roof is extended), purchasing a piece of equipment, • The prisoners dilemma is a common game theory
or building a new factory etc. example and one that adequately showcases the
While Heavy advertisement expenditure in order to effect of the Nash equilibrium.
introduce a new product in the market is deferred • The Nash equilibrium is often discussed in conjunction
revenue expenditure. with dominant strategy, which state that the chosen
8. As per the information given below, what is the strategy of an actor will lead to better results out of all
correct material yield variance? the possible strategies that can be used, regardless of
Standard input = 100 kg the strategy that the opponent uses.
Standard yield = 90 kg • The Nash equilibrium does not always mean that the
Standard cost per kg of output = Rs. 20 most optimal strategy is chosen.
Actual input = 200 kg 12. In the Cobb - Douglas production function, Q =
Actual yield = 182 kg AKaLb, where ‘a’ and ‘b’ are output elasticities
Actual cost per kg of output = Rs. 19 of capital and labour, respectively. If a + b > 1,
(a) Rs. 40 (Favourable) the underlying return to scale will be
(b) Rs. 400 (Favourable) (a) increasing (b) decreasing
(c) Rs. 400 (Unfavourable) (c) constant (d) linear
(d) Rs. 38 (Favourable) Ans. (a) : The Cobb - Douglas production function,
Ans. (a) : Given, Standard input = 100 kg. named after Paul H. Douglas and C.W. Cobb, is a
Standard yield = 90 kg famous statistical production function. It was derived to
Standard cost per kg of output = Rs.20. study the whole of American manufacturing industries.
Actual input = 200 kg. In the Cobb - Douglas production function, Q = AKaLb,
Actual yield = 182 kg where ‘a’ and ‘b’ are output elasticity of capital and
Actual cost per kg of output = Rs.19 labour, respectively. If a + b > 1, the underlying return
Material yield variance = (Actual yield – Standard to scale will be increasing.
yield) × Standard output price. 13. Which one of the following institutions is not a
part of the World Bank Group?
MYV = (AY – SY) × SOP (a) International Bank for Reconstruction and
So, MYV = (182 kg – 180 kg) × 20/kg = (2 kg × 20) Development (IBRD)
MYV = 40 (Favourable) (b) International Development Association (IDA)
9. When the negative income effect overwhelms (c) Multilateral Investment Guarantee Agency
the positive substitution effect so much that the (MIGA)
demand curve is positively sloped, the (d) The Bank for International Settlements (BIS)
commodity in consumption is described as; Ans. (d) : Following institutions are part of World
(a) Normal good (b) Inferior good Bank Group :
(c) Giffen good (d) Luxury good 1. The International Bank for Reconstruction and
Ans. (c) : When the negative income effect overwhelms Development (IBRD)
the positive substitution effect so much that the demand 2. The International Development Association (IDA)
curve is positively sloped, the commodity in consumption 3. The International Finance Corporation (IFC)
is described as giffen goods. 4. The Multilateral Investment Guarantee Agency
• A Giffen good is a low income, a non-luxury product (MIGA)
that defines standard economic and consumer 5. The International Centre for Settlement of
demand theory. Investment Disputes (ICSID)
• Demand for Giffen goods rises when the price rises Whereas the Bank for International Settlement (BIS) is
and falls when the price falls. not a part of the world Bank Group.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 525 YCT
14. According to the traditional approach, what is
e -5 ( 5 )
2
the effect of increase in degree of leverage on 18. For a Poisson distribution P ( x ) = the
the valuation of a firm? 2!
(a) Increases mean value is
(b) Decreases (a) 2 (b) 5
(c) Remains unaffected (c) 10 (d) 25
(d) Increases first and then decreases Ans. (b) : In Poisson distribution, mean is denoted 'm'
Ans. (d) : The Net Income Approach Suggests that or 'λ', the numerical formula for Poisson distribution
with the increase in leverage (proportion of debt), the is:-
WACC decreases and the value of firm increases. On
the other land, if there is a decrease in the leverage, the  e ^ λ×λ ^ K   e ^ -m × m ^ K 
  or  
WACC increases and thereby the value of the firm  K!   K! 
decreases. Here as per the given equation, the value of mean or
15. An economic enterprise requires 90,000 units m or λ = 5.
of certain item annually. The cost per unit is 19. Which of the following is used to assess the
Rs. 3. The cost per purchase order is Rs. 300 relationship between two ordinal variables?
and the inventory carrying cost is Rs. 6 per unit (a) Spearman's rho (b) Phi
per year. What is EOQ? (c) Cramer's V (d) Chi-square
(a) 3000 units (b) 1500 units Ans. (a) : Spearman's rho is a non-parametric statistical
(c) 6000 units (d) 4500 units test of correlation that allows a researcher to determine
2CO of the significance of their investigation. It is used in
Ans. (a) : EOQ = studies that are looking for a relationship, where the
I data is at least ordinal.
Where, C = Annual Consumption 20. A "Spurious" relationship between two
O = Ordering Cost, I = Inventory Cost variables is expressed as:
2 × 90,000 × 300 5,40,00,000 (a) An apparent relationship that is so curious
EOQ = = = 9000, 000 that it demands further attention.
6 6 (b) A relationship that appears to be true because
EOQ = 3000 Units each variable is related to a third one.
16. Dell Ltd. has Rs. 100 preference shares (c) One that is so ridiculously illogical that it
redeemable at a premium of 10% with 15 years cannot be possibly true.
maturity. The coupon rate is 12%; the flotation (d) One that produces a perfect negative
cost is 5% and the sale price is Rs. 95. correlation on a scatter diagram.
Calculate the cost of preference shares and Ans. (b) : An apparent relationship between two
select the correct option. variables that is actually caused by a third variable
(a) 12% (b) 12.67% (c) 13% (d) 13.33% affecting both of the others.
Ans. (d) : Kp cost of redeemable preference shares is When two variables are statistically correlated, but not
calculated as causally linked, a third variable creates the spurious
relationship. A spurious correlation, or spurious
D + ( R V - SV /N ) relationship, is one in which a third variable -
Kp =
( R V + SV /2 ) sometimes identified, at other times unknown is
influencing the variables tasted.
Where,
D = Coupon rate i.e. 12% 21. Which one of the following motives characterizes
N = Years to Redemption i.e. 15 years. dominant organizational climate of clubs?
RV = Redeemable value with 10% premium i.e. Rs. 110. (a) Extension (b) Affiliation
SV = Sale value (Nominal value – Discount – Floatation cost) (c) Dependency (d) Achievement
i.e. (Rs. 100 – Rs. 5 – Rs. 5 = Rs. 90) Ans. (b) : Organization climate (Sometimes known as
corporate climate) is the process of quantifying the
12 + (110 - 90/15 ) culture of an organization, it precedes the nation of
KP = = 12 + 1.33/100 = 13.33/100
(110 + 90/2 ) organizational culture.
Affiliation is the motive that characterizes dominant
= 0.1333 or 13.33% organizational climate of clubs.
17. Which of the following is not a characteristic of 22. Which one of the following is the description of
normal distribution? Ego Regression Mechanism?
(a) The mean of the normal distribution may be (a) Returning to a previous stage of psyche
negative or positive development
(b) For any normal random variable x, P (x ≤ µ) (b) Avoiding unacceptable emotions by focusing
= P (x ≥ µ) = 0.50 on the intellectual aspects
(c) For every pair of values µ and σ, the curve of (c) Taking out impulses on a less threatening
the distribution is bell-shaped and symmetric target
(d) The kurtosis of the distribution is always less (d) Pulling into the unconscious situation
than 3 Ans. (a) : Returning to a previous stage of psyche
Ans. (d) : Following are the characteristic of normal development is the description of Ego Regression
distribution : Mechanism.
(i) The mean of the normal distribution may be 23. Which one of the following is not an advantage
negative or positive. of organization structure by product in a
(ii) For any normal random variable x, P (x ≤ µ) = P (x manufacturing company?
≥ µ) = 0.50 (a) Places attention and effort on product line
(iii) For every pair of values µ and σ, the curve of the (b) Requires less persons with general managerial
distribution is bell-shaped and symmetric. abilities
While ‘The Kurtosis of the distribution is always less (c) Improves coordination of functional activities
than 3’ is not the characteristic of normal distribution. (d) Permits growth and diversity of products
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 526 YCT
 Ans. (b) : Following are the advantages of organisation 28. Which of the following refers to default-risk
structure by product in a manufacturing company : intermediation?
(i) Places attention and effort on product line (a) Borrowing short-term funds from savers and
(ii) Improves coordination of functional activities making long-term loans to borrowers
(iii) Permits growth and diversity of products. (b) Making loans to risky borrowers by attracting
24. Which one of the following is not an savings from the savers who are risk-averse
assumption under the McGregor's Theory Y? (c) Using information gathering skills of the
(a) The degree of commitment to objectives is in intermediary
proportion to the size rewards associated with (d) Pooling small amounts of savings from
their achievement. individuals to give loans to others
(b) Under the conditions of modern industrial Ans. (b) : Default-risk intermediation refers to making
life, the intellectual potentialities of the loans to risky borrowers by attracting savings from the
average human being are only partially savers who are risk-averse.
utilized. 29. The knowledge and courtesy of employees and
(c) External control and the threat of punishment their ability to convey trust and confidence
are the only means for producing effort indicates which of the following?
towards organizational objectives. (a) responsiveness (b) Assurance
(d) Average human beings learn, under proper (c) Empathy (d) Reliability
conditions, not only to accept responsibility Ans. (b) : The element of service quality assurance is
but to seek it. defined as the knowledge and courtesy of employees
Ans. (c) : Following are the assumption under the and their ability to convey trust and confidence :
McGregor's Theory Y : Assurance refers to financial coverage that provides
(i) The degree of commitment to objectives is in remuneration for an event that is certain to happen.
proportion to the size of the reward associated 30. Which of the following is not true about rural
with their achievement. markets?
(ii) Under the conditions of modern industrial life, the (a) Growth opportunities in rural markets are
intellectual potentialities of the average human driving companies to them.
being are only partially utilized. (b) Information and communication technology
(iii) Average human being learn, under proper are the drivers of change in rural markets.
conditions, not only to accept responsibility but (c) Socio-economic changes are yet to happen to
also to seek it. rural markets.
25. The minimum capital requirement for a life (d) Rural consumers shop for grocery, apparels,
insurance company in India is: consumer durables of agri-inputs in nearby
(a) Rs. 300 crores (b) Rs. 200 crores urban shops.
(c) Rs. 500 crores (d) Rs. 100 crores
Ans. (d) : The minimum capital requirement for a life Ans. (c) : Following are the true statements about rural
insurance company in India is ` 100 crores. This markets :
minimum capital requirement is determined by the (i) Growth opportunities in rural markets are driving
supervisory authority i.e. (IRDAI). companies to them.
26. Universal banks that function as investment (ii) Information and communication technology are
banks in India are regulated by: the drivers of change in rural markets.
(a) SEBI (b) RBI (iii) Rural consumers shop for grocery, apparels,
(c) Ministry of Finance (d) IRDA consumer durables of agri-inputs in nearby urban
Ans. (a) : shops.
• Universal Banking is a name given to bank engaged So, option (c) Socio-economic changes are yet to
in diverse kind of banking activities. happen to rural markets is not ture about the rural
• Under the universal banking system, the banks do markets.
broad-based and comprehensive activities. 31. "Manufacturers of razors and cameras often
• The term universal banking, in general refers to the price theses products low and set high mark
combination of commercial banking and Investment ups on razor blades and films." As per the
banking. above statement, manufacturers of razors and
• Universal banks that function as investment banks cameras are using which one of the following
in India are regulated by Securities and Exchange (a) Captive-product pricing
Board of India. (b) Two-part pricing
27. When the RBI desires to restrict expansion of (c) Product-bundling pricing
credit, it: (d) By-product pricing
(a) Increases the bank rate Ans. (a) : As per the statement in the Question,
(b) Decreases the bank rate manufacturers of razors and cameras are using captive
(c) Decreases the CRR for banks product pricing.
(d) Decrease the SLR for banks The captive product pricing is the pricing strategy
Ans. (a) : When the RBI desires to restrict expansion adopted by the marketers wherein, the price of the core
of credit, it increases the bank Rate. product is generally kept low, when as the captive
Bank Rate is a rate at which the Reserve Bank of India products are highly priced. The captive products are the
(RBI) provides the loan to commercial banks without products that are specifically designed to be used with
keeping any security. There is no agreement on the core products, or these products are necessary for
repurchase that will be drawn up or agreed upon with the functioning of the core product.
no collateral as well. The RBI allows short-term loans 32. A vertical marketing system (VMS) combining
with the presence of collateral. This is known as Repo successive stages of production and distribution
Rate. Bank Rates in India is determined by the RBI. It under single ownership, is known as:
is usually higher than a Repo Rate on account of its (a) Corporate VMS (b) Administered VMS
ability to regulate liquidity. (c) contractual VMS (d) Conventional VMS
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 527 YCT
Ans. (a) : A vertical marketing system (VMS) (a) an assessment year in respect of which
combining successive stages of production and prosecution has been instituted on or before
distribution under single ownership, is known as the date of filing of declaration
Corporate VMS : (b) any income from agricultural land in India
Corporate VMS : In this one channel, members own (c) Section 10(3) dealing with tax deductions
the marketing intermediaries. It combines the (d) assessments under Section 80 GI of the Act
successive levels of production and distribution under Ans. (a) : Provisions of the Vivad se Vishwas Act,
one ownership. Popularly, we know it as vertical 2020 does apply in respect of tax arrears relating to−
integration. It is possible through forward and (i) any income from agricultural land in India.
backward integration. In this, the achievement of co- (ii) Section 10(3) dealing with tax deductions.
ordination and channel conflict management is possible (iii) Assessments under Section 80 GI of the Act.
by way of regular organisational channels. 38. Under Section 80TTB of the Income Tax Act,
Example : Amul and Asian Paints not only produce the which amount of benefits is available to senior
product but also own a number of retail outlets for citizens on account of interest income from
distribution and sales. deposits with banks or post-office or
33. The act of throwing on board cargo and other cooperative banks?
things from the ship to safeguard it from total (a) Rs. 50,000 (b) Rs. 1,00,000
loss in times of peril is called: (c) Rs. 75,000 (d) Rs. 1,50,000
(a) Jettisoning (b) Moral hazards Ans. (a) : As per section 80TTB, a resident Tax paying
(c) Consequential peril (d) Reverse indemnity senior citizen, who is 60 years of age and above during
Ans. (a) : The act of throwing on board cargo and other the financial year, can make tax deduction claims of
things from the ship to safeguard it from total loss in upto ` 50,000. The 80TTB deduction for senior citizens
times of peril is called Jettisoning. gives senior citizens an avenue to save up on taxes and
In other words Jettison is an intentional act of throwing become financially secure.
overboard a ship parts of shipment or dropping out 39. Provisional Input Tax Credit can be utilised
some body part of a vessel in order to save the rest of against
the shipment or the whole vessel from complete damage. (a) Any tax liability
34. The right to ‘stoppage in transit’ exercised by (b) Self-assessed tax liability
an unpaid seller is to (c) Differential income tax gains
(a) recover price (b) retain possession (d) Fine
(c) regain possession (d) recover damages Ans. (b) : Provisional Input Tax Credit (ITC) means
Ans. (c) : The right to ‘stoppage in transit’ exercised by ITC that is claimed by buyers in their GST returns for
an unpaid seller is to regain possession. It is a right of which the invoice is not reported or yet to be reported
stopping the goods while in transit after the unpaid by their renders or suppliers with the government. The
seller has lost possession of goods. This right enables ITC claims on a provisional basis have been removed
the seller to regain possession. Such a right is available from the revised Rule 36(4) from 1st January, 2022.
to the unpaid seller when the buyer becomes insolvent Provisional Input tax credit can be utilised against Self-
and when the goods are in transit. assessed tax liability.
35. Which on among the following is the duty of the 40. Penalty for late filing of the Income Tax Return
for individuals under the Income Tax Act, 1961
Central Assistant Public Information Officer or is up to a maximum of amount of:
a State Assistant Public Information Officer? (a) Rs. 10,000
(a) To receive the applications for information or (b) Rs. 25,00,000
appeals under the RTI Act for forwarding the (c) 10% of Gross Total Income
same forthwith to the CPIO/SPIO/ (d) 2% of Tax liability
(b) To receive the fee for the RTI applications Ans. (a) : As per the changed rules notified under
(c) To assist the CPIO/SPIO in furnishing the section 234F of the Income tax Act, Filing your ITR
reply to the applicant post the deadline, can make you liable to pay a
(d) To ensure that RTI applications are replied maximum penalty of ` 5,000.
within the prescribed period From the financial year 2021 onwards, the Income Tax
Ans. (a) : To receive the applications for information department has reduced the maximum amount of
or appeals under the RTI Act for forwarding the same penalty for late filing of returns to ` 5,000 from `
forthwith to the CPIO/SPIO is the duty of the Central 10,000.
Assistant Public Information Officer or a State 41. Revenue expenditure of the Central government
Assistant Public Information Officer. includes?
36. The relationship between a bank and its A. Debt relief to farmers
customers is basically that of: B. Subsidy for fertilizers
(a) Debtor and Creditor C. Grants to states
(b) Trustee and Beneficiary D. Central plan allocations for rural
(c) Principal and Agent development
(d) Drawer and Payee E. Central plan allocation for irrigation and
Ans. (b) : The relationship between a bank and its flood control
customers is basically that of Trustee and Beneficiary. Choose the correct answer from the options
When a bank receives money or other valuable given below:
securities, then the banker's position is of a trustee. On (a) A, B and E only (b) A, C and D only
the other hand, when a customer receives interest and (c) C, D and E only (d) A, B and C only
other benefits along with security of his money the Ans. (d) : Revenue expenditure of the Central
customer becomes beneficiary. government includes :
37. Provisions of the Vivad se Vishwas Act, 2020 (i) Debt relief to Farmers (ii) Subsidy for Fertilizers
does not apply in respect of tax arrears relating (iii) Grants to States (iv) Salaries of Employees
to which one of the following? (v) Pension of Employees (vi) Interest Payments etc.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 528 YCT
42. Exchange depreciation rate of one currency in Choose the correct answer from the options
relation to another currency is, approximately, given below:
equal to their (a) A, B and C only (b) C, D and E only
A. Inflation rate differential (c) A, B, C and D only (d) A, B, C and E only
B. Interest rate differential Ans. (d) : Increasing returns to scale arise because as
C. Growth rate differential the scale of operation increases it causes :
D. Fiscal deficit differential (i) More division of labour and specialisation.
E. Forex reserve differential (ii) Productive utilisation of machinery.
Choose the correct answer from the options (iii) Lower procurement and logistic costs.
given below : (iv) More economies in advertising.
(a) A, B and C only (b) C, D and E only 46. Consumer rationality implies which of the
(c) A and B only (d) D and E only following assumptions?
Ans. (c) : Exchange depreciation rate of one currency A. Non-satiety of needs
in relation to another currency is, approximately, equal B. Transitivity of preferences
to their Inflation rate differential and Interest rate C. Cardinal measurement
differential. D. Selfish economic motive
43. Which of the following activities are included E. Ordinal measurement
under investing activities in the Cash Flow Choose the correct answer from the options
Statement? given below:
A. Cash receipts from disposal of fixed assets (a) A and B only (b) C and D only
(including intangible) (c) A, C and E only (d) A, B and D only
B. Cash advance and loans made to third Ans. (d) : Consumer rationality implies the following
parties (other than advanced and loans assumptions :
made by a financial enterprise) (i) Non-satiety of needs
C. Cash receipts from repayment of advances (ii) Transitivity of preferences
and loans made to third parties (other than (iii) Selfish economic motive
advances and loans of a financial (iv) Possession of information
enterprise) 47. Which of the following relationships raise
D. Cash repayments of amount borrowed presumptions of undue influence?
E. Cash payments to suppliers for goods and A. Parent and child B. Doctor and patient
services C. Husband and wife D. Fiance and fiancee
Choose the correct answer from the option E. Creditor and debtor
given below : Choose the correct answer from the options
(a) A, B and C only (b) C, D and E only given below :
(c) C and D only (d) A, C and D only (a) A, B and C only (b) A, B and D only
Ans. (a) : Following activities are included under (c) A, B and E only (d) B, C and D only
investing activities in the Cash Flow Statement : Ans. (b) : Undue Influence : Undue influence occurs
(i) Cash receipts from disposal of fixed assets when an individual is able to persuade another's
(including intangible) decision due to the relationship between the two
(ii) Cash advance and loans made to third parties parties. Often, one of the parties is in a position of
(other than advanced and loans made by a power over the other due to elevated status, higher
financial enterprise) education, or emotional ties. The more powerful
(iii) Cash receipts from repayment of advances and individual uses this advantage to coerce the other
loans made to third parties (other than advances individual into making decisions that might not be in
and loans of a financial enterprise) their long-term best interest.
44. Identify cost drivers used in Activity Based Doctor and Patient relationships raise presumptions, of
Costing form the following: Undue Influence in the given options in this Question.
A. Volume B. Transaction 48. The Internal Rate of Return (IRR) method
C. Intensity D. Currency offer which of the following advantages?
E. Duration A. It recognises the time value of money
Choose the correct answer from the options B. It is consistent with the shareholders
given below: profit-maximization objective also
(a) A, B and C only (b) C, D and E only C. It considers all cash flows occurring over
(c) A, C and D only (d) B, C and E only the entire life of the project
Ans. (d) : D. It generally gives the same acceptance rule
• Activity Based Costing (ABC) is a method of as the NPV method
assigning overheads and indirect costs - such as E. It considers all positive NPV over the
salaries and utilities - to products and services. entire life of the project
• The ABC system of cost accounting is based on Choose the correct answer from the options
activities, which are considered any event, unit of given below :
work, or task with a specific goal. (a) A, B and C only (b) B, C and E only
• Cost drivers used in Activity Based Costing are as (c) A, B, C and D only (d) A, D and E only
Follows : Ans. (c) : The Internal Rate of Return (IRR) method
(i) Transaction (ii) Intensity (iii) Duration offer the following advantages :
45. Increasing returns to scale arise because as the (i) It recognises the time value of money.
scale of operation increases it causes (ii) It is consistent with the shareholders profit-
A. more division of labour and specialisation maximization objective also.
B. productive utilisation of machinery (iii) It considers all cash flows occurring over the
C. lower procurement and logistic costs entire life of the project.
D. more difficulties in managing firm effectively (iv) It generally gives the same acceptance rule as the
E. more economies in advertising NPV method.

UGC NTA NET Commerce Paper Dec. 2020 June, 2021 529 YCT
49. Which of the following are the off-balance Ans. (c) : Following statements are rightly expressed in
sheet source(s) of finance? relation to statistical testing :
A. Securitisation B. Factoring (i) When the expected frequencies are too small, the
C. Forfaiting D. Operational lease value of χ2 will be overestimated and will result in
E. Credit rating too many rejections of the null-hypothesis.
Choose the correct answer from the options (ii) Kruskal-Wallis test is similar to one-way analysis
given below: of variance.
(a) A and E only (b) B, C and E only (iii) Student's t-Distribution is by definition normal
(c) A, B and C only (d) A, B, C and D only 53. Which of the following are distinctive
Ans. (d) : Following are the off-balance sheet source(s) characteristics of the Performing stage of the
of finance : Group Building Process?
• Securitisation A. The Group gains its identity
• Factoring B. Leadership is shared
• Forfeiting C. Disengagement from relationships
• Operational lease D. Group morale is high
50. Which of the following factors influence E. Group loyalty is intense
portfolio beta? Choose the correct answer from the options
A. Portfolio size given below:
B. Investment longevity (a) A and B only (b) B and C only
C. Trading volume (c) A, D and E only (d) C, D and E only
D. Return interval (weekly vs. monthly) Ans. (c) : There are five stage in Group Building
E. Portfolio leverage process i.e. forming stage, storming stage, Norming
Choose the correct answer from the options stage, Performing stage and Adjourning stage.
given below : Performing stage of the group building process has the
(a) A, B and C only (b) B, C and D only following distinctive characteristics i.e. The group
(c) D and E only (d) A, B, C and D only gains its identity, Group morale is high, Group loyalty
Ans. (d) : Portfolio : Beta is the measure of an entire is intense, the work become more flexible.
portfolio's sensitivity to market changes. 54. Which of the following are characteristic
Following Factors Influence Portfolio beta − quadrants of the BCG matrix?
(a) Portfolio size A. Cash cows B. Question mark
(b) Investment longevity C. White Elephant D. Crown Jewel
(c) Trading volume E. Dogs
(d) Return interval (weekly vs. monthly) Choose the correct answer from the options
51. A contract of life insurance is a/an given below:
A. Indemnity (a) A, B and E only (b) A, C and D only
B. Wagering agreement (c) B, C and E only (d) C, D and E only
C. Contingent agreement Ans. (a) : BCG matrix is also known as Boston
D. Assurance consulting Group matrix, it is (2 × 2) matrix which is
E. Guarantee developed by the Boston Consulting Group, USA. It
Choose the correct answer from the options provides a framework for analyzing products according
given below: to growth and market share.
(a) A, C and E only (b) A and D only
(c) B, C and E only (d) C and D only
Ans. (d) : Explanation : A contract of life insurance is
a contingent contract, because insurer pays a certain
amount if the insured dies, under certain conditions.
The insurer is not called into action until the event of
the death of the insured happens.
A life insurance contract is referred to as an assurance
contract because the insurance company guarantees a
certain amount of compensation in the event of the
insured's death.
52. Which of the following statements are rightly
expressed in relation to statistical testing?
A. When the expected frequencies are too
small, the value of χ2 will be overestimated
and will result in too many rejections of the
null-hypothesis
B. Mann-Whitney test assumes that
population is normal
C. Kruskal-Wallis test is similar to one-way
analysis of variance
D. The homogeneity of variance means that
the test is concemed with the hypothesis 55. The following tools are used for forecasting the
that the identical means came from the supply of inside candidates for human resource
same population
E. Student's t-Distribution is by definition planning
normal A. Scatter Plot
Choose the correct answer from the options B. Personnel replacement charts
given below: C. Managerial Judgement
(a) A, B and D only (b) B, C and D only D. Markov Analysis
(c) A, C and E only (d) C and D only E. Trend Analysis
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 530 YCT
 Choose the correct answer from the options banks could reduce the likelihood of their failure
given below: (ii) Financial inflow reflects the net flow of capital
(a) A and C only (b) C, D and E only into one country in the form of increased
(c) B, C and E only (d) B and D only purchases of domestic assets by foreigners
Ans. (d) : Personnel replacement charts and Markov (iii) Tier II Capital for banks include Perpetual Debt
Analysis are the tools used for forecasting the supply of Instruments
inside candidates for human resource planning. 58. Holistic marketing recognizes that a broad
Personnel replacement charts are used for forecasting integrated perspective is necessary. Which of
future vacancies in particular role. In this, company the following are the components of Holistic
records showing present performance and promotion marketing?
potential of inside candidates for important position. It A. Direct marketing
is prepared for each position in a company to show B. Relationship marketing
possible replacement, candidates and their C. Internal marketing
qualifications. D. Socially responsible marketing
In Markov analysis a matrix is created that shows the E. Green marketing
probabilities that employees in the chain of feeder Choose the correct answer from the options
position for key job will move from position to position given below:
and therefore be available to fill the key position. (a) B and C only (b) B, C and D only
56. Which of the following statements are correct? (c) A, B and C only (d) C, D and E only
A. NEFT allows the customer to transfer funds Ans. (b) : Holistic marketing includes the following
with a maximum limit of Rs. 3,00,000 per day components :-
B. IMPS allows to transfer funds in an Insta • Relationship marketing • Integrated marketing
Payment Mode • Internal marketing • Societal marketing
C. The minimum limit to transfer funds via • Performance marketing
RTGS is Rs. 2,50,000 According to Philip Kotler The Holistic Marketing
D. Instant Real Time Payment System concept is based on the development, design and
developed by National Payment implementation of marketing programs, processes and
Corporation of India is UPI activities that recognizes their breadth and inter-
E. For clearing of cheques under Positive Pay dependencies.
System (PPS), the minimum limit is Rs. 59. Which of the following statements are true for
50,000 Direct Marketing?
Choose the correct answer from the options A. Direct marketing is an interactive mode of
given below : marketing
(a) B and D only (b) C and E only B. Direct marketing model is based on Network
(c) A and B only (d) C and D only marketing and multi-cultural marketing
Ans. (a) : The correct statements are :- C. Globalisation of markets and the internet
• IMPS allows to transfer funds in an Insta Payment
Mode have facilitated the growth of direct
• Instant Real Time Payment System developed by marketing
National Payment Corporation of India is UPI D. Future of direct marketing in India is
The incorrect statements in correct manner :- independent of use of debit and credit cards
• In NEFT, there is no minimum or maximum amount E. Direct marketing activities are not location
required to make transactions from one bank specific
account to another. Choose the correct answer from the options
• The minimum limit to transfer funds via RTGS is 2 given below :
lakhs. (a) A and B only (b) B, C and D only
• For clearing of cheques under positive pay system (c) A, C and E only (d) A, C, D and E only
(PPS), the minimum limit is 5 lakh and above. Ans. (c) : According to "Kotler and Armstrong"-
57. Which of the following statements are correctly "Undertaking marketing activity through various
expressed in relation to capital and credit flows? advertising media that interact directly with consumers,
A. Theoretically, regulators of financial generally calling for a consumer to make a direct
markets believe that increasing capital response is known as direct marketing."
requirements on banks could reduce the The true statements for Direct Marketing are :-
likelihood of their failure • Direct marketing is an interactive mode of
B. Open financial markets are solely marketing
influenced by the currency rate movements • Globalisation of markets and the internet have
C. Financial inflow reflects the net flow of facilitated the growth of direct marketing
capital into one country in the form of • Direct marketing activities are not location specific
increased purchases of domestic assets by 60. An ideal advertisement (ad) campaign would
foreigners ensure that
D. Tier II Capital for banks include Perpetual A. The ad motivates consumers to consider
Debt Instruments purchases of the brand
E. Only private banks in India have B. The ad gives maximum possible product
implemented Basel III guidelines knowledge to the customer
Choose the correct answer from the options C. The ad causes the consumer to pay attention
given below: but does not distract from the intended
(a) C, D and E only (b) B, C and E only message
(c) A, C and D only (d) A and B only D. The ad properly reflects the consumer's
Ans. (c) : The correctly expressed statements in level of understanding and behaviours with
relation to capital and credit flows are :- the product and the brand
(i) Theoretically, regulators of financial markets E. The right consumer is exposed to the right
believe that increasing capital requirements on message at the right place and the right time
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 531 YCT
 Choose the correct answer from the options Ans. (d) : According to section 62, 63 of Indian contract
given below: Act 1872, A contract can be discharged either by agreement
(a) A, B and E only (b) C, D and E only or by a breach. The rule of low in this regard is as
(c) A, B, C and D only (d) A, C, D and E only follows "a thing may be destroyed in the same manner
Ans. (d) : An ideal advertisement (ad) campaign would in which if is constituted." The following methods of
ensure that discharging a contract by mutual agreement are :-
(i) The ad motivates consumers to consider purchases • Novation • Recission • Alteration
of the brand. • Remission • Waiver
(ii) The ad causes the consumer to pay attention but 64. Duties of bailor include
does not distract from the intended message. A. Take cate of goods
(iii) The ad properly reflects the consumer's level of B. Bear extraordinary expenses
understanding and behaviours with the product C. Return accretion to the goods
and the brand. D. Indemnify the bailee
(iv) The right consumer is exposed to the right E. Disclose known faults
message at the right place and at the right time. Choose the correct answer from the options
61. The information Technology Act, 2000 in India given below :
provides legal recognition to which of the (a) A, B and E only (b) A, C and D only
following? (c) B, C and D only (d) B, D and E only
A. Electronic books of accounts in banks Ans. (d) : Duties of the bailor are as follows :-
B. Electronic commerce • Duty to disclose faults in goods bailed (sec 150)
C. Electronic negotiable instrument • Duty to bear expenses of bailment.
D. Electronic signature • Duty to compensate the bailee on premature
E. Electronic sale and conveyance of immovable termination.
property • Duty to receive back the goods.
Choose the correct answer from the options 65. Expenses that are not deductible under Section
given below: 58 of the Indian Income Tax Act for computing
(a) A, B and C only (b) C, D and E only the income chargeable under the head "Income
(c) B, D and E only (d) A, B and D only From Other Sources":
Ans. (d) : The information Technology Act, 2000 in A. Personal expenses
India provides legal recognition for Electronic books of B. Interest payable outside India on which tax
accounts in banks, Electronic commerce, and has not been paid or deducted at source
Electronic signature. C. Wealth tax
62. To make the resolution process faster and D. Commission for realizing dividend income
maximize the realisable value of assets under or interest on securities
Insolvency and Bankruptcy Code (IBC), the E. Expenses which are not of capital nature
Parliamentary Standing Committee has like repairs, depreciation on plant and
recommended strengthening India's insolvency insurance premium
resolution ecosystem by Choose the correct answer from the options
A. A professional code of conduct for the given below :
committee of creditors (a) A, B and D only (b) A, B and C only
B. constitution of specialized National (c) A, B, D and E only (d) A, B, C, D and E
Company Law Tribunals (NCLT) benches Ans. (b) : Expenses that are not deductible under
to hear IBC matters Section 58 of IT Act for computing the income
C. Strengthening the role of resolution chargeable under the head. ‘Income From Other
professionals Source’ are :-
D. Digitising IBC platforms • Any Personal expenses
E. Strengthening and promotion of Asset • Interest payable outside India on which tax has not
Reconstruction Companies been paid or deducted at source.
Choose the correct answer from the options • Any payment of direct taxes like Income tax/wealth
given below : tax, excessive payments to related or relatives.
(a) A, B and C only (b) B, C and D only • Expenditure in respect of Royalty and Technical
(c) C, D and E only (d) A, B, C and D only fees received by a foreign company.
Ans. (d) : To make the resolution process faster and • Expenses in respect of winning from Lottery.
maximize the realisable value of assets under Insolvency Crossword puzzles, races, card games, gambling or
and Bankruptcy Code (IBC), the Parliamentary Standing betting of any form or nature, whatsoever.
Committee has recommended strengthening India's 66. Match List I with List II
insolvency resolution ecosystem by ListI List II
• A professional code of conduct for the committee of Name of Theory of Description
creditors. International
• Constitution of specialized National Company Law Trade
Tribunals (NCLT) benches to hear IBC matters. A. Heckscher- I. The ability of a nation
• Strengthening the role of resolution professionals. Ohlin Theory to produce the goods
• Digitising IBC platforms. more efficiently and
63. In which of the following methods a contract is effectively than any
said to be discharged by mutual consent? other country
A. Novation B. Recission B. Country II. Theory stating that
C. Remission D. Alteration Similarity trade occurs between
E. Accord and Satisfaction Theory nations that have
Choose the correct answer from the options similar characteristics
given below : such as economic,
(a) A, B and E only (b) B, C and D only geography and cultural
(c) A, B, C and D only (d) A, B, C, D and E characteristics
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 532 YCT
 C. Theory of III. The theory that a Ans. (a) : Correct Matching −
Mercantilism nation will export the List - I List - II
goods whose Ind AS Topic (Subjects)
production requires A. Ind AS 37 (III) Provisions, Contingent
intensive use of the Liabilities and
nation's relatively Contingent Assets
abundant and cheap B. Ind AS 104 (I) Insurance contracts
factors and import C. Ind AS 2 (II) Inventories
goods when production D. Ind AS 19 (IV) Employee Benefits
requires intensive use 68. Match List I with List II
of its scarce and List I List II
expensive factors Cost Concepts Description
D. Absolute IV. Theory that aims at A. Explicit cost I. Costs that do not
Advantage accumulating financial require any outlay of
Theory wealth in terms of gold money by the firm
by encouraging exports B. Implicit cost II. A cost that has
and discouraging already been
imports committed and cannot
Choose the correct answer from the options be recovered
given below : C. Total cost III. Costs that require an
(a) A-IV, B-III, C-II, D-I outlay of money by
(b) A-IV, B-II, C-I, D-III the firm
(c) A-III, B-II, C-IV, D-I D. Sunk cost IV. Market value of all
(d) A-III, B-II, C-I, D-IV inputs that a firm uses
Ans. (c) : Correct Matching − in production
List - I List - II Choose the correct answer from the options
Name of Theory Description given below :
of International (a) A-III, B-IV, C-I, D-II
Trade (b) A-II, B-IV, C-III, D-I
A. Heckscher- (III) The theory that a nation will (c) A-III, B-I, C-IV, D-II
Ohlin Theory export the goods whose (d) A-III, B-IV, C-II, D-I
production requires intensive Ans. (c) : Correct Matching −
use of the nation's relatively List - I List - II
abundant and cheap factors and Cost Concepts Description
import goods when production A. Explicit cost (III) Costs that require an
requires intensive use of its outlay of money by
scarce and expensive foctors. the firm
B. Country (II) Theory stating that trade occurs B. Implicit cost (I) Costs that do not
Similarity between nations that have require any outlay of
Theory similar characteristics such as money by the firm
economic, geography and C. Total cost (IV) Market value of all
cultural characteristics. inputs that a firm uses
C. Theory of (IV) Theory that aims at in production
Mercantilism accumulating financial wealth D. Sunk cost (II) A cost that has
in terms of gold by encouraging already been
exports and discouraging committed and cannot
imports. be recovered
D. Absolute (I) The ability of a nation to 69. Match List I with List II
Advantage produce the goods more ListI List II
Theory efficiently and effectively than Type of Description
any other country. Bonds
A. Euro I. Bonds denominated in US
67. Match List I with List II bonds dollar and issued in the
List I List II USA
Ind AS Topic (Subjects) B. Global II. Bonds denominated in a
A. Ind AS 37 I. Insurance contracts bonds foreign currency and are
B. Ind AS 104 II. Inventories offered for simultaneous
C. Ind AS 2 III. Provisions, placement in different
Contingent countries
Liabilities and C. Yankee III. When the bonds issued in a
Contingent Assets bonds foreign country and are
D. Ind AS 19 IV. Employee Benefits denominated in a currency
Choose the correct answer from the options other than the currency of
given below : the country where the
(a) A-III, B-I, C-II, D-IV bonds are issued
(b) A-I, B-II, C-III, D-IV D. Samurai IV. Bonds denominated in
(c) A-IV, B-III, C-II, D-I bonds japanese Yen and issued in
(d) A-II, B-III, C-I, D-IV Japan
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 533 YCT
 Choose the correct answer from the options 71. Match List I with List II
given below : ListI/metÛeer-I List II
(a) A-III, B-II, C-I, D-IV Leadership Style Description
(b) A-IV, B-III, C-II, D-I A. Impoverished I. Work accomplished is
(c) A-III, B-IV, C-I, D-II management from a committee of
(d) A-III, B-II, C-IV, D-I people with
Ans. (a) : Correct Matching − interdependence through
List - I List - II a common stake in
Type of Bonds Description organizational purpose
and with trust and
A. Euro bonds (III) When the bonds issued in respect
a foreign country and are B. Team managers II. Exertion of minimum
denominated in a currency effort is required to get
other than the currency of work done and to sustain
the country where the organizational morale
bonds are issued C. country club III. Efficiency results from
B. Global bonds (II) Bonds denominated in a management arranging work is such a
foreign currency and are way that human elements
offered for simultaneous have little effect
placement in different D. Autocratic task IV. Thoughtful attention to
countries managers the needs of people leads
C. Yankee bonds (I) Bonds denominated in US to a friendly and
dollar and issued in the comfortable
USA organizational
D. Samurai bonds (IV) Bonds denominated in atmosphere and work
japanese Yen and issued environment
Choose the correct answer from the options
in Japan given below:
70. Match List I with List II (a) A-I, B-II, C-IV, D-III
ListI List II (b) A-II, B-I, C-III, D-IV
Sampling methods Descriptions of (c) A-II, B-I, C-IV, D-III
situation (d) A-IV, B-I, C-III, D-II
A. Multi-stage I. Specified number Ans. (c) : Correct Matching −
Sampling of respondents in List - I List - II
best position to Leadership Style Description
provide the desired A. Impoverished (II) Exertion of minimum
information management effort is required to get
B. Systematic II. Heterogenous sub- work done and to sustain
Sampling populations organizational morale
C. Judgement III. Widely spread B. Team managers (I) Work accomplished is
Sampling population and from a committee of
random sampling people with
not possible interdependence through a
D. Stratified IV. Elements of common stake in
Sampling population organizational purpose
arranged in some and with trust and respect
order C. country club (IV) Thoughtful attention to the
Choose the correct answer from the options management needs of people leads to a
given below: friendly and comfortable
(a) A-II, B-IV, C-I, D-III organizational atmosphere
(b) A-III, B-IV, C-I, D-II and work environment
(c) A-I, B-II, C-III, D-IV D. Autocratic task (III) Efficiency results from
(d) A-II, B-III, C-I, D-IV managers arranging work is such a
Ans. (b) : Correct Matching − way that human elements
have little effect
List - I List - II 72. Match List I with List II
Sampling methods Descriptions of situation ListI List II
A. Multi-stage Sampling (III) Widely spread Interest rates Description
population and A. Policy Rate I. RBI lending rate to
random sampling not commercial banks without
possible security
B. Systematic Sampling (IV) Elements of B. Repo Rate II. RBI lending rate when
population arranged commercial banks borrow
in some order money by purchasing
C. Judgement Sampling (I) Specified number of securities issued by RBI
respondents in best C. MCLR III. Internal benchmark rate for
position to provide financial institutions and
the desired banks
information D. Bank Rate IV. Rate established by RBI to
D. Stratified Sampling (II) Heterogenous sub- influence the main monetary
populations variables in the economy
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 534 YCT
 Choose the correct answer from the options Choose the correct answer from the options
given below : given below:
(a) A-I, B-IV, C-III, D-II (a) A-IV, B-II, C-III, D-I
(b) A-IV, B-I, C-III, D-II (b) A-III, B-IV, C-I, D-II
(c) A-IV, B-II, C-III, D-I (c) A-I, B-IV, C-II, D-III
(d) A-II, B-IV, C-I, D-III (d) A-III, B-I, C-IV, D-II
Ans. (c) : Correct Matching − Ans. (b) : Correct Matching −
List - I List - II List - I List - II
Interest rates Description Insurance contracts Presence (time) of
A. Policy Rate (IV) Rate established by RBI to insurable interest
influence the main monetary A. Marine insurance (III) At the time of loss of
variables in the economy the subject matter
B. Repo Rate (II) RBI lending rate when B. Life insurance (IV) At the time of
commercial banks borrow insurance contract
money by purchasing effected
securities issued by RBI C. Fire insurance (I) Both at the time of
contract as well at the
C. MCLR (III) Internal benchmark rate for loss of subject matter
financial institutions and D. General insurance (II) Throughout the
banks contract of insurance
D. Bank Rate (I) RBI lending rate to 75. Match List I with List II
commercial banks without List I List II
security Tax deductions Relevant
73. Match List I with List II Sections
List I List II A. Deduction in respect of rent I. 80 GGC
Market Expansion Description paid
Strategies B. Deduction in respect of II. 80 GG
A. Market I. New products, New contribution given by company
Penetration markets to political parties
B. Market II. Existing markets, C. Deduction in respect of III. 80 GGA
Development Existing products contribution given by any
C. Product III. Existing products, person to political parties
Development New markets D. Deduction in respect of certain IV. 80 GGB
D. Diversification IV. Existing markets, donations for scientific research
New products Choose the correct answer from the options
Choose the correct answer from the options given below:
given below: (a) A-III, B-I, C-IV, D-II
(a) A-I, B-II, C-III, D-IV (b) A-IV, B-II, C-III, D-I
(b) A-I, B-III, C-II, D-IV (c) A-II, B-III, C-I, D-IV
(c) A-II, B-IV, C-I, D-III (d) A-I, B-IV, C-II, D-III
(d) A-II, B-III, C-IV, D-I Ans. (*) : NTA Drop
Ans. (d) : Correct Matching − 76. In relation to the export from India, arrange
the following steps of port procedure and
List - I List - II customs cleareance sequentially:
Market Expansion Description A. C & F agent present mate's recipt to
Strategies shipping company
A. Market Penetration (II) Existing markets, B. Shipping company issues bill of lading. C
Existing products & F agent dispatches bill of lading and
B. Market Development (III) Existing products, other documents to the importer
New markets C. C & F agent receives documents from the
C. Product Development (IV) Existing markets, exporter, takes delivery of cargo and stores
New products cargo in warehouse till shipment
D. Diversification (I) New products, New D. Master of vessel issues mate's receipt to
markets shed superintendent of port
74. Match List I with List II E. Cargo brought to the port shed for loading
List I List II Choose the correct answer from the options
Insurance contracts Presence (time) of given below:
insurable interest (a) C, E, D, B, A (b) C, E, D, A, B
(c) E, C, D, A, B (d) C, D, E, A, B
A. Marine insurance I. Both at the time of Ans. (b) : Steps of port procedure and customs
contract as well at cleareance in relation to the export from India are :-
the loss of subject Step I C & F agent receives documents from the
matter exporter, takes delivery of cargo and stores
B. Life insurance II. Throughout the cargo in warehouse till shipment
contract of Step II Cargo brought to the port shed for loading
insurance Step III Master of vessel issues mate's receipt to shed
C. Fire insurance III. At the time of loss superintendent of port
of the subject Step IV C & F agent present mate's recipt to shipping
matter company
D. General insurance IV. At the time of Step V Shipping company issues bill of lading. C & F
insurance contract agent dispatches bill of lading and other
effected documents to the importer
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 535 YCT
77. The following are contextual auditing with Ans. (a) : The logical sequence of the international
wider intensities arbitrage operation are :-
A. Special Audit B. Internal Audit Identify an opportunity
C. Internal Check D. Annual Audit ↓
E. Interim Audit Review the transaction cost
Choose the correct sequence from the options ↓
given below in increasing order of underlying Purchase the asset
intensity: ↓
(a) C, B, E, D, A (b) B, C, D, A, E Sell the asset
(c) A, B, C, D, E (d) B, C, A, E, D ↓
Ans. (a) : The correct sequence in intensities order of Pocket the profit
underlying intensity are :- 80. Arrange the following steps in sequence for
Internal Check testing a statistical hypothesis
(Limited scope, focusing on a specific process) A. Test statistics
↓ B. Framing the hypothesis
C. Collecting the sample data
Internal Audit D. Level of significance
(Covers the entire organisation or a signficant portion E. Obtaining results and taking decisions
of it) Choose the correct answer from the options
↓ given below:
Interim Audit (a) B, D, C, A, E (b) C, B, A, D, E
(Interim audit is a part of external audit. It is done (c) B, C, A, D, E (d) A, C, B, E, D
before the year end to reduce work pressure at Ans. (a) : Steps in sequence for testing a statistical
finalisation stage) hypothesis are :-
↓ Step I Framing the hypothesis
Annual Audit Step II Level of significance
(It is also known as final audit. It is done after the end Step III Collecting the sample data
of the accounting period) Step IV Test statistics
↓ Step V Obtaining results and taking decisions
Special Audit 81. Arrange the following steps of employee
(This Audit is done when it is suspected that laws or training in the proper sequence:
regulations have been violated in the financial A. Familiarize the employee with equipment,
statement of the company. This is may be initiated by a materials, tools, and trade terms
government agency.) B. Create interest and find out what the
78. Sequence the following steps in the process of employee already knows about the job
estimating demand equation using regression C. Explain why the employee is being trained
analysis. D. Place the trainee/employee as close to the
A. Obtaining data on each variable or its normal working position as possible
E. Explain the whole job and relate it to some
proxy other job which the employee already
B. Estimating slope coefficients knows
C. Model specifications Choose the correct answer from the options
D. Deciding on the functional form of the given below:
demand equation (a) C, E, B, A, D (b) C, B, E, D, A
E. Evaluation of regression results (c) B, E, C, D, A (d) E, A, C, D, B
Choose the correct answer from the options Ans. (b) : Steps of employee training in the proper
given below: sequence are :-
(a) C, A, D, B, E (b) D, C, B, A, E Step I Explain why the employee is being trained
(c) A, B, C, D, E (d) D, A, C, B, E Step II Create interest and find out what the
Ans. (a) : Following are the steps in the process of employee already knows about the job
estimating demand equation using regression analysis:- Step III Explain the whole job and relate it to some
Step I Model specifications other job which the employee already knows
Step II Obtaining data on each variable or its proxy Step IV Place the trainee/employee as close to the
Step III Deciding on the functional form of the normal working position as possible
demand equation Step V Familiarize the employee with equipment,
Step IV Estimating slope coefficients materials, tools, and trade terms
Step V Evaluation of regression results 82. Risk management process follows the following
79. Arrange the following in the logical sequence of steps in which logical sequence?
the international arbitrage operation. A. Selection of appropriate risk model for
A. Identify an opportunity analysis
B. Purchase the asset B. Identification of risk variable
C. Determination of frequency and severity of
C. Review the transaction cost risk
D. Pocket the profit D. Feedback on the risk management process
E. Sell the asset E. Application of a suitable risk instrument
Choose the correct answer from the options Choose the correct answer from the options
given below: given below:
(a) A, C, B, E, D (b) C, A, D, B, E (a) E, A, B, C, D (b) C, B, A, D, E
(c) B, A, D, E, C (d) B, D, A, C, E (c) B, C, A, E, D (d) A, C, B, D, E
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 536 YCT
Ans. (c) : Steps in risk management process are :- Ans. (d) : Steps involved in computation of tax on
Identification of risk variable agricultural income in India are :-
↓ Step I Add Agricultural and Non-agriculture income
Determination of frequency and severity of risk and calculate tax on total income
↓ Step II Add basic exemption limit to Net agriculture
Selection of appropriate risk model for analysis income and calculate tax
↓ Step III Calculate difference of tax in both
Application of a suitable risk instrument computations
↓ Step IV Deduct rebate u/s 87A from the total income
Feedback on the risk management process Step V Add Health Cess
83. Arrange the following purchases made by a 86. Given below are two statements
customer as per Maslow's hierarchy of needs Statement I
theory starting with the lower order needs. Thousands of small firms in developing
A. Purchase of House countries have closed their shutters because of
B. Purchase of an expensive car the competition from large MNCs.
C. Taking a club membership Statement II
D. Enrolling in a learn-by-yourself course MNCs have played a significant role in the
development of poor countries by transfer of
E. Purchase of bathing soap technology, introducing best management
Choose the correct answer from the options practices and halp in improving productivity.
given below: In light of the above statements, choose the
(a) E, A, B, C, D (b) A, E, C, B, D correct answer from the options given below :
(c) E, A, C, B, D (d) A, E, B, C, D (a) Both Statement I and Statement II are true
Ans. (c) : Purchases made by a customer as per (b) Both Statement I and Statement II are false
Maslow's hierarchy of needs theory starting with the (c) Statement I is true but Statement II is false
lower order needs are :- (d) Statement I is false but Statement II is true
→ Purchase of bathing soap Ans. (a) : Statement I : "Thousands of small firms in
→ Purchase of House developing countries have closed their shutters because
→ Taking a club membership of the competition from large MNCs" is correct.
→ Purchase of an expensive car Statement II : "MNCs have played a significant role in
→ Enrolling in a learn-by-yourself course the development of poor countries by transfer of
84. Arrange the following decision outcomes under technology, introducing best management practices and
the Indian Consumer Protection Act, 1986 in a halp in improving productivity" is correct.
rising sequence of severity of offences. Here, both statement I and statement II are true.
A. Removal of defects 87. Given below are two statements, one is labelled
B. Impose cost on parties as Assertion A and the other is labelled as
C. Return of price paid Reason R
D. Discontinuation of unfair practices Assertion (A)
E. Compensation to consumer Economic profit is smaller than accounting
Choose the correct answer from the options profit.
given below: Reason (R)
(a) A, B, C, E, D (b) A, C, E, D, B Accounting profit = Revenue - Explicit costs
(c) C, D, A, B, E (d) D, E, B, C, A Economic Profit = Revenue - Explicit costs -
Ans. (b) : Decision outcomes under the Consumer Implicit costs
Protection Act, 1986 in a rising sequence of severity of In light of the above statements, choose the
offences are :- correct answer from the options given below
Removal of defects (a) Both (A) and (R) are true and (R) is the
↓ correct explanation of (A)
Return of price paid (b) Both (A) and (R) are true but (R) is NOT the
↓ correct explanation of (A)
Compensation to consumer (c) (A) is true but (R) is false
↓ (d) (A) is false but (R) is true
Discontinuation of unfair practices Ans. (a) : Economic profit is smaller than accounting
↓ profit because accounting profit = Revenue - Explicit
Impose cost on parties costs
85. Steps involved in computation of tax on Economic Profit = Revenue - Explicit costs - Implicit
agricultural income in India are followed in costs
which sequence? Here, Accounting profit is usually larger than economic
A. Add basic exemption limit to Net profit because the implicit cost is ignored.
agriculture income and calculate tax Here, both A and R are true and R is the correct
B. Deduct rebate u/s 87A from the total explanation of A
income 88. Given below are two statements :
C. Add Health Cess Statement I
D. Add Agricultural and Non-agriculture The stage in the manufacturing process where
income and calculate tax on total income joint products are separately identifiable is
E. Calculate difference of tax in both called split-off point.
computations Statement II
Choose the correct answer from the options The production cost incurred after the split-off
given below: point are called separable costs.
(a) A, D, B, C, E (b) A, C, D, B, E In light of the above statements, choose the
(c) A, D, C, E, B (d) D, A, E, B, C correct answer from the options given below
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 537 YCT
 (a) Both Statement I and Statement II are true Question (91 to 95) :
(b) Both Statement I and Statement II are false Read the passage below carefully and answer the
(c) Statement I is true but Statement II is false five questions that follow:
(d) Statement I is false but Statement II is true The invention of the office - from the Latin opus
Ans. (a) : Statement I : "The stage in the (work) + Facere (do) = officium (performance of work) -
manufacturing process where joint products are was necessitated by the inability of work to be done
separately identifiable is called split-off point" is remotely. Until very recently, the prevalent technology
correct. was simply not available or very limited to allow work
Statement II : "The production cost incurred after the away from office. If you had to conduct stocktaking,
split-off point are called separable costs " is correct. copy documents or engage in a brainstorming session, on
Here, both statement I and statement II are true. had to be physically close to the tools of work and co-
89. Given below are two statements workers. Even as the technology was becoming
Statement I increasingly available, it was the forced disruption of
Long term capital loss can only be set off pandemic that finally showed that office, like the stock
against the long term capital gains. exchange trading floor, as a shared physical-only space
Statement II was no longer essential to carry out work. Today, as
Long-term capital gains exceeding Rs. one lakh Covid restrictions thankfully recede, the push that had
are subject to tax at the rate of 10% with become the shove of working from home (WFH) is
indexation and at 20% without indexation. becoming a nudge for working from anywhere (WFA).
In light of the above statements, choose the Neither can all work be conducted WFA nor to all
most appropriate answer from the options workers prefer remote working. Seceral reasons for the
given below primacy of the ‘‘face-to-face’’ work model are trotted
(a) Both Statement I and Statement II are correct out - ‘water-cooler’ engagements; ideas flying ‘better’ at
(b) Both Statement I and Statement II are corporeally attended meeting; company values welded
incorrect only under ‘one roof, one team’ norms. But studies,
(c) Statement I is correct but Statement II is including pre-pancemic ones conductes by the likes of
incorrect Harvard Business School's Prithwiraj Choudhury, have
(d) Statement I is incorrect but Statement II is shown that WFA is a ‘win-win for workers, Companies
correct and for Society’. WFA slashes time and energy expanded
Ans. (c) : Statement I : "Long-term capital loss can in commutes; allows workers the choice of their work
only be set off against the long term capital gains" is surroundings that may actually improve their quantitative
correct. and qualitative output; provides less crowded space for
Statement II : "Long-term capital gains exceeding Rs. those who choose offices as their comfort work zone.
one lakh are subject to tax at the rate of 10% with Most importantly, for companies, it allows HFA - hiring
indexation and at 20% without indexation" is incorrect. from anywhere, thereby breaking the talent pool distance
The correct statement will be "Long-term capital gains barrier.
exceeding Rs. one lakh are subject to tax at the rate of The new hybrid work culture is still a work-in
10% without indexation and 20% with indexation" progress. Floor managers will have to be trained to
So, statement I is correct but statement II is incorrect. manage a different kind of floor. Company values will
90. Given below are two statements, one is labelled need to flourish in a digital-deeper environment. The
as Assertion A and the other is labelled as idea of work-life balance itself has to be rejigged. But the
Reason R bottomline is work optimisation. For which WFA,
Assertion (A) without the stress of a pandemic around, makes damn
One of the most difficult product to sell is ‘life good pitch.
insurance’ such that one who sells life 91. Given below are two statements, one is labelled
insurance can sell anything under the Sun. as Assertion A and the other is labelled as
Reason (R) Reason R
What is sought to be marketed in life insurance Assertion (A)
is an assurance whereby payment of money is Work from Anywhere is only possible in case
assured upon death or the happening of any of employees working independently.
contingency depended upon human life. Reason (R)
In light of the above statements, choose the Brainstorming sessions are possible in the case
correct answer from the options given below of Work from Anywhere.
(a) Both (A) and (R) are true and (R) is the In light of the above statements, choose the
correct explanation of (A) most appropriate answer from the options
(b) Both (A) and (R) are true but (R) is NOT the given below
correct explanation of (A) (a) Both (A) and (R) are correct and (R) is the
(c) (A) is true but (R) is false correct explanation of (A)
(d) (A) is false but (R) is true (b) Both (A) and (R) are correct but (R) is NOT
Ans. (a) : One of the most difficult product to sell is the correct explanation of (A)
life insurance such that one who sells life insurance can (c) (A) is correct but (R) is not correct
sell anything under the Sun because what is sought to (d) (A) is not correct but (R) is correct
be marketed in life insurance is an assurance whereby Ans. (d) : Assertion (A) : "Work from Anywhere is
payment of money is assured upon death or the only possible in case of employees working
happening of any contingency depended upon human independently" is incorrect.
life. Reason (R) : "Brainstorming sessions are possible in
Here, both A and R are true and R is the correct the case of Work from Anywhere" is correct.
explanation of A. So, here (A) is not correct but (R) is correct
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 538 YCT
92. Work from Office was preferred because of Ans. (d) : Statement I : "With ease in the stress of the
A. ‘Water cooler’ engagements pandemic around, the relevance of work from
B. Ideas fly better at corporeally attended Anywhere will reduce" is incorrect.
meetings The correct statement will be "With ease in the stress of
C. Promotes one team norm the pandemic around, the relevance of work from
D. Improves work-life balance Anywhere will not reduce".
E. Inability of work to be done remotely Statement II : "For the new hybrid work culture to
Choose the most appropriate answer from the prevail, companies will have to invest more in
options given below: technology" is correct.
(a) A, B and C only (b) C, D and E only Question (96 to 100) :
(c) A, B, C and E only (d) A, B and E only Read the passage below carefully and answer the
Ans. (c) : Work from Office was preferred because of five questions that follow:
Capital flows, exchange rates and the interest are
Water cooler engagements, ideas fly better at causes of immediate concern to the national economies.
corporeally attended meetings, promotes one team Central banks of various countries have been using a
norm and Inability of work to be done remotely. variety of methods with the excessive capital inflows.
93. Given below are two statements Foreign portfolio investment have a direct and indirect
Statement I impact on exchange rates, valuation of traded assets and
Work from home concept was not initiated in yields of various government and corporate securities.
the past because no one had conceptualised it. RBI, in the post-pandemic scenario and the recent
Statement II Russia-Ukrain war situation is working on multiple options
It was not possible to Work form home in the to stabilize the exchange rates by protecting both the
past. exporters and importers. One way which RBI adopts to
In light of the above statements, choose the maintain a desirable level of exchanges rates is to mop up
most approptiate answer from the options nets foreign exchange assets from scheduled commercial
given below banks in exchanges of domestic currency (`) assets. The
(a) Both Statement I and Statement II are correct liquidity flows are, in essence, inflationary. RBI has
(b) Both Statement I and Statement II are projected a comfortable GDP rate for the current fiscal
incorrect and believes a reasonable level of CPI inflation as 5.3%.
(c) Statement I is correct but Statement II is The retail inflation, according to the RBI governor,
recently is likely to be 4.5% in 2023 fiscal. With this
incorrect perspective, the repo rate and reverse repo rate remain at
(d) Statement I is incorrect but Statement II is 4% and 3.35%, respectively, since May 22, 2020. A
correct balancing act between economic growth and inflation is
Ans. (d) : Statement I : "Work from home concept visible. Though the RBI rates are consistent, the burden
was not initiated in the past because no one had on borrowers for the short-term and long-term, is still
conceptualised it" is incorrect. unpredictable.
Statement II : "It was not possible to Work form home 96. The primary purpose of the monetary policy of
in the past" is correct. RBI is to maintain
94. Which one of the following is NOT true for (a) Wealth (b) Exchange Rate Volatility
Work from Anywhere? (c) Income Equality (d) Stability of prices
(a) It reduces time and energy expended in Ans. (d) : The primary purpose of the monetary policy
commuting of RBI is to maintain Stability of prices.
(b) It increases talent pool distance barrier 97. The stance of a monetary policy wherein the
(c) It allows an employee to choose his work interest rates may move either way, upwards or
surroundings downwards, is called
(d) It improves quality and quantity of work (a) Accommodative stance (b) Neutral stance
output (c) Calibrated stance (d) Hawkish stance
Ans. (b) : "It increases talent pool distance barrier" is Ans. (b) : The stance of a monetary policy wherein the
not true for work from Anywhere. The correct interest rates may move either way, upwards or
statement will be "work from anywhere is breaking the downwards, is called Neutral stance.
talent pool distance barrier". 98. An increase in investment is most likely to be
95. Given below are two statements in relation to caused by
the passage: (a) Decrease in marginal propensity to consumer
Statement I (b) Expectations of lower GDP
With ease in the stress of the pandemic around, (c) Lowering of interest rates
(d) Writing-off of Non-performing Assets
the relevance of work from Anywhere will Ans. (c) : An increase in investment is most likely to
reduce be caused by Lowering of interest rates.
Statement II 99. Quantitative easing by the Central bank implies
For the new hybrid work culture to prevail, (a) Selling of assets by the Central bank
companies will have to invest more in (b) Lowering of interest rates for commercial
technology bank lending
In light of the above statements, choose the (c) Purchase of assets by the Central bank
most approptiate answer from the options (d) Central bank reducing the policy rate
given below Ans. (c) : Quantitative easing by the Central bank
(a) Both Statement I and Statement II are correct implies purchase of assets by the Central bank.
(b) Both Statement I and Statement II are 100. Changes in foreign portfolio investments is
incorrect directly related to
(c) Statement I is correct but Statement II is (a) Money demanded (b) Exchange rates
incorrect (c) Prices (d) Circulation of money
(d) Statement I is incorrect but Statement II is Ans. (b) : Changes in foreign portfolio investments is
correct directly related to Exchange rates.
UGC NTA NET Commerce Paper Dec. 2020 June, 2021 539 YCT
 NTA UGC NET/JRF Exam, June 2023
COMMERCE
Solved Paper
Exam Date: 00.00.2023 Shift-I

1. In case of presence of outliers in a data set, Ans. (a) : Informative Advertising- Informative
which of the following can better measure the Advertising is sales and marketing approach that
central tendency? focus on the task of attracting consumer by educating
A. Mode B. Trimmed Mean them on the nature and benefits derived from
C. Arithmetic Mean D. Median choosing to purchase those products. Typically this
E. Harmonic Mean approach focuses attention on what a given product
Choose the correct answer from the options has to offer in terms of quality and practical use rather
given below : than comparing the product to similar products or
(a) A and B only (b) B and C only services available in the market places.
(c) C and E only (d) B and D only 4. A population has a mean of 200 and a standard
Ans. (d) : In case of presence of outliers in a data set deviation of 50. Suppose a simple random
Trimmed mean and median can better measure the sample of size 100 is selected then the
central tendency. probability that the sample mean will be ± 5 of
An outlier is an observation that lies at an abnormal the population mean is _______
distance from other value in a random sample of (a) 0.7523 (b) 0.6928
population. Outlier are important because they can (c) 0.9544 (d) 0.6826
have a large influence as statistics derived from the Ans. (d) : 0.6826
data set. Outlier affect the mean value of data but Given that
have little effect on the median or mode of a given set Mean = 200
of data. Standard deviation = 50
2. From the following information you are n = 100
required to compute Return on Total Capital µ x = 200
employed. σ 50 50
σx= = = =5
Net Profit Rs. 1,00,000 n 100 10
Provision for tax Rs. 1,00,000 With in 5 = 200 ± 5 = 195, 205
Income from Investment Rs. 10,000 = P (195< x < 205) = P(–1 < z < 1)
Fixed Assets Rs. 4,50,000 = (z < 1) – P(z < –1)
Current assets Rs. 1,50,000 = 0.8413– 0.1587
Interest on debenture Rs. 10,000 = 0.6826
Reserves Rs. 1,00,000 5. According to the theory of contestable markets,
(a) 30% (b) 50% vigorous competition can take place even
(c) 60% (d) 40% among few sellers if _____ and _____
Ans. (d) : Return on Total Capital Employed (ROCE) A. Product is differentiated
EBIT B. Demand is infinitely elastic
ROCE = ×100 C. Entry into the market is absolutely free
Total Asset − TotalCurrent liabilites
D. There are strong entry-exit barriers
200000 E. Exit from the market is entirely costless.
ROCE = ×100 = 40%
500000 Choose the correct answer from the options
EBIT- given below :
Net Profit = 100000 (a) A and D only (b) B and E only
100000 (c) A and C only (d) C and E only
Provision for Tax = Ans. (d) : Contestable Market- A contestable
200000 market allows the free entry and exit of firms.
Total Asset Potential entrants need to recognize a fleeting profit
Fixed Asset = 450000 opportunity because they can enter, pocket their
Current Asset = 150000 profits before prices change and leave without
Income from Investment = 10000 incurring any cost if the environment turns hostile. Its
610000 susceptibility to hit and-run entry is the essential
Total Current Liabilities- characteristics of a contestable market. The firms or
Reserves = 100000 businesses here need not be small in size, numerous,
Interest on Debenture = + 10000 autonomous in their Judgment, or able to create
110000 uniform goods. On the contrary, it's the only
3. Which one of the advertising planning characteristic of perfect competition that contestable
strategies is suitable for cars and appliances? market may share. In other words, a completely
(a) Informative strategy (b) Affective strategy competitive market is also necessary for being a
(c) Habitual strategy (d) Satisfaction strategy perfectly contestable market.
UGC NTA NET Commerce Paper June 2023 Shift-I 540 YCT
6. Which of the following one considered as SERVQUAL Model: 5 Gaps
supply factors affecting the flow of Foreign Gap 1- Knowledge Gap
Direct Investment (FDI) : Gap 2- Standard Gap
A. Customer Access Gap 3- Delivery Gap
B. Economic Priorities Gap 4- Communications Gap
C. Resource Availability Gap 5- Satisfaction Gap
D. Avoidance of Trade Barrier 9. Which one of the following values is not a part
E. Logistics of OCTAPACE framework?
Choose the most appropriate answer from the (a) Openness (b) Extension
options given below : (c) Proactivity (d) Autonomy
(a) A and B only (b) B and D only Ans. (b) : OCTAPACE : OCTAPACE culture
(c) C and E only (d) A and E only includes ethics, values, beliefs, attitudes norms, ethos
Ans. (c) : Foreign Direct Investment (FDI) means climate, environment and culture.
companies or individuals purchase capital or acquire The Eight Dimensions of OCTAPACE are
ownership or control over assets in the foreign country. O - Openness
Factors affecting foreign direct investment are- C - Confrontation
1) Resource Availability T - Trust
2) Logistics A - Authenticity
3) Wages Rate P - Proactive
A - Autonomy
4) Tax Rate C - Collaboration
5) Labour skills E - Experimenting
6) Size of economy/Potential for growth.
7) Political Stability. 10. Substitution effect is usually larger than the
income effect in real world because _________
7. Which committee had recommended a (a) Consumes usually spends only a small
comprehensive framework of reform in the proportion of income on any one community
insurance sector? (b) Consumer often consumes a small number of
(a) Ghosh Committee (1993) commodities
(b) Sodhani Committee (1994) (c) Consumer only spends small portion of
(c) Malhotra Committee (1993) income or consumption
(d) Kalia Committee (1994) (d) Consumers income is relatively smaller in
Ans. (c) : A Committee was set up in 1993 under the relation to the consumption.
Chairmanship of R.N. Malhotra former Governor of Ans. (a) : Consumer usually spends only a small
the Reserve Bank of India to make recommendation proportion of income on any one community.
for reforms in the insurance sector. The "Substitution effect" is an effect due to the
The Malhotra committee recommended introduction adjustment of the cost of a service or product that
of a concept of "professionalism" in the insurance causes customers to substitute more extravagant item
Sector to make out a strong case for paving the way for less expensive ones.
for foreign capital. The "income effect" refers to the adjustment of
8. Arrange the following service gaps as per interest in a product or service caused by the
SERVQUAL approach in the logical sequence. adjustment of a customer real income.
A. The gap between service quality * Lowering the price of a product makes it cheaper
specifications and service delivery than its substitutes which attracts more customers
B. The gap between the customer's and causes the products or services to become more
expectations and management perception desirable.
* Increase in the price of the product since the other
C. The gap between perceived service and product are similarly cheaper, customers will switch
expected service to other product.
D. The gap between management perception The substitution effect is greater than the income
and service quality specification effect because the amount of money spent on any one
E. The gap between service delivery and commodity is less.
external communications. 11. Starting from the earliest, sequence the steps
Choose the correct answer from the options taken to develop the money market in India
given below : A. Introduction of Interest Rate Swaps (IRSs)
(a) D, A, B, E, C (b) B, D, A, E, C B. Introduction of Commercial Paper
(c) A, C, B, D, E (d) C, A, B, E, D C. Introduction of Ways and Means Advances
Ans. (b) : SERVQUAL Approach:- The SERVQUAL (WMA) linked to bank rate
model was created by researchers A. Parasuraman D. Introduction of Liquidity Adjustment
Valarie Zeithaml and Leonard L. Berry in 1985. It Facility (LAF)
measures and drive quality in the service and retail E. Implementation of Real Time Gross
sector. The SERVQUAL model is a framework for Settlement (RTGS)
measuring service quality and customer. Choose the correct answer from the options
Satisfaction through Five dimension:- Reliability given below :
Responsiveness, Assurance, Tangibles and empathy. (a) C, B, D, A, E (b) D, C, B, E, A
Hence it is also known as the RATER model. (c) B, D, C, A, E (d) B, C, D, A, E
UGC NTA NET Commerce Paper June 2023 Shift-I 541 YCT
 Ans. (d) : Steps taken to develop the money market in 14. Given below are two statements : One is
India are labelled as Assertion A and the other is labelled
1) Commercial Paper in 1990 as Reason R
2) Ways and Means Advances in 1997 Assertion A : Usually manufacturing companies
3) Liquidity Adjustment Facility in 1998 use sale and lease back arrangement to unlock
4) Interest Rate Swaps in (IRSs) in 1999 investment in fixed assets.
5) Real Time Gross Settlement in 2004 Reason R : In a sale of lease back arrangement,
12. The sales step in which a salesperson learns as the companies sell the asset to a leasing
much as possible about a prospective customer company, and lease it back to enjoy the
before making a sales call is known as ______
uninterrupted use of asset in their business.
(a) Approach (b) Prospecting
(c) Pre-approach (d) Presentation In the light of the above statements, choose the
Ans. (c) : Pre-Approach Sales Step :- Pre-Approach most appropriate answer from the options
is one of the initial steps in the selling process where given below :
in the preparation is done about customers by a (a) Both A and R are true and R is the correct
salesperson before approaching them. It includes explanation of A
customer analysis, abilities, needs wants about a (b) Both A and R are true but R is not the correct
customer so that the process of sale is more relevant explanation of A
to all the stakeholder. (c) A is true but R is false
13. The Competition (Amendment) Act, 2023 (d) A is false but R is true
revamped the competition Act in which of the Ans. (b) : Lease back is an arrangement in which the
following perspectives : company that sells an asset can lease back that same
A. The CCI needs to be intimated if the value asset from the purchaser, with a lease back-also called
of merger and acquisition deal exceeds Rs. a sale-lease back-the detail of the arrangement such as
2000 crores the lease payment and duration are made immediately
B. The overall timeline for assessment of after the sale of the asset.
combination has been reduced to 150 days
Hence A and R are true but R is not the correct
from 210 days
C. ‘‘Exclusive selling agreements’’ has been explanation of A.
replaced with ‘‘exclusive dealing 15. Arrange the following advance payment of tax
agreement’’ in ascending order (Section 207 to section 211)
D. Entities who are not engaged in identical or of the Income Tax Act, 1961.
similar trade shall also be part of an Anti- A. Instalment of advance tax and due date
competitive Agreement under Section 3(3) B. Liability for payment of Advance Tax
of the Act C. Payment of advance tax by the assessee on
E. Anti-competitive conduct like ‘‘tie-up own record
arrangements’’ ‘‘re-sale price D. Condition of liability to pay advance tax
maintenance’’ and ‘‘exclusive distribution E. Computation of advance tax
agreement’’ have been redefined. Choose the correct answer from the options
Choose the correct answer from the options
given below :
given below :
(a) A, B and C only (b) C and E only (a) A, B, C, D, E (b) B, D, E, C, A
(c) A, B, C and D only (d) A, B, C, D and E (c) B, D, E, A, C (d) C, D, E, A, B
Ans. (d) : Key features of the competition Ans. (b) : Section 207- Liability for payment of
(Amendment) Bill 2023 advance Tax
* The CCI needs to be intimated if the value of Section 208- Condition of liability to pay advance tax
merger and acquisition deal exceeds Rs. 2000 crores Section 209 - Computation of advance tax
* The overall timeline for assessment of combination Section 210 - Payment of advance tax by the assessee
has been reduced to 150 days from 210 days. on own record
* Exclusive selling agreements has been replaced with Section 211- Installment of advance tax and due date
exclusive dealing agreement 16. Empirical studies indicate that long run
* Entities who are not engaged in identical or similar average cost (LAC) curve is __________
trade shall also be part of an Anti-competitive (a) L-shaped (b) U-shaped
Agreement under Section 3(3) of the Act.
(c) S-shaped (d) V-shaped
* Anti-competitive conduct like tie-up arrangements
re-sale price maintenance and exclusive distribution Ans. (a) : The modern theory contents that long-run
agreement have been redefined. average cost essentially comprised production and
* Expends the powers of the Director General for managerial cost of which the average production cost
investigating contraventions under the Act. continue to fall even at large scales while the
* As per the amended section 536 (2) of the Act a new managerial costs per unit of output may rise only
provision has been added mandating the deposit of gradually and at larger scales of output. The long-run
25% of the amount levied by the CCI prior to filing average cost curve is L-shaped or inverse L-shaped
an appeal against a CCI order. under the modern theory of cost.
UGC NTA NET Commerce Paper June 2023 Shift-I 542 YCT
 C. Natural hedge III. Simultaneous
borrowing and lending
in two different
currencies
D. Netting/vesefšbie IV. Holding and managing
of cash by the affiliates
Choose the correct answer from the options
given below :
(a) A-I, B-IV, C-II, D-III
(b) A-IV, B-III, C-I, D-II
(c) A-IV, B-II, C-III D-I
L-Shaped Long Run Average Cost (LAC) (d) A-I, B-II, C-III, D-IV
17. Section 61 to 64 of the company act 2013 states Ans. (b) : The correct match is:-
‘Alteration proper’ which includes : List-I (Technique) List-II (Feature)
A. Cancellation of the unissued shares A. Pooling IV. Holding and managing
B. Cancellation of issued shares of cash by the affiliates
C. Increase in share capital by issue of new B. Financial hedge III. Simultaneous borrowing
shares and lending in two
D. Decrease of share capital by redemption of different currencies
shares C. Natural hedge I. Setting up production
E. Conversion of fully paid shares into stock facilities in a number of
and vice versa. countries
Choose the most appropriate answer from the D. Netting II. Reduction of Foreign
options given below : exchange risk through
(a) B, C and D only (b) A, C and E only leading and lagging
(c) C, D and E only (d) A, B and C only
19. A point estimator is said to be consistent when
Ans. (b) : Alteration proper includes: ________
Section 61 of company Act, 2013 (a) It has smaller standard error
• The share capital of a limited company can be (b) Its expected value is equal to the population
altered by - parameter
* Increase in authorised share capital by issue of new (c) It tend to become closer to the population
share.
* Convert fully paid-up shares to stock and stock to parameter as the sample size become larger
fully paid-up shares. (d) It is based on all available information
* Cancellation of the unissued share . Ans. (c) : Point Estimator:- Point estimators are
* Sub-divide shares into smaller amount functions that are used to find an approximate value
Section 62 (4) & 64 (6) of companies Act, 2013 of a population parameter from random sample of the
* If any company issues debentures/takes any loan population. They use the sample data of a population
from any Government. Such Government may to calculate a point estimate or a statistic that serves
order for conversion of such debenture/loan into as the best estimate of an unknown parameter of a
shares. population.
* The company may approach Tribunal for such order. Consistency tells us how close the point estimator
Section 63 issue of Bonus Shares stays to the value of the parameter as it increase in
* A company may issue fully paid-up bonus share to size. The point estimators requires a large sample size
its member in any manner what so ever out of. for it to be more consistent and accurate.
(i) Its free reserves 20. From the operational point of view, which are
(ii) the securities premium account: or the part of Environmental Audit
(iii) the capital redemption reserve account provided A. Environment Management System Audit
that no issue of bonus shares shall be made by
capitalizing reserves, created by the revaluation B. Social Audit
of assets. C. Compliance Audit
Section 64 of companies Act, 2013 D. Site Property Audit
* The company shall file form SN-7 with in 30 day of E. Energy Audit
• Section 61 event Choose the correct answer from the options
• Section 62(4) & 62(6) Event given below :
• Redemption of Preference share (a) C, D and E only (b) A, C and D only
(c) B, C and D only (d) A, D and E only
18. Match List-I with List-II
List-I List-II Ans. (b) : Environment Auditing is an environmental
(Technique) (Feature) tool which measure the impacts of industrial activities
A. Pooling I. Setting up production on the environment against set standard and criteria.
facilities in a number of Parts of Environmental Audit
countries (1) Compliance Audit- It refers to compliance, with
B. Financial hedge II. Reduction of Foreign local, regional and national laws and regulation.
exchange risk through (2) An Environmental Management System
leading and lagging (EMS)- is a framework that helps an organization
UGC NTA NET Commerce Paper June 2023 Shift-I 543 YCT
 to achieve its environmental goods through Ans. (a) : Both Statement I and Statement II are true
consistent review, evaluation, and improvement of Certificate of Incorporation- The Certificate of
its environmental performance. Incorporation is the certificate which specifies the
(3) Site Property Audit- has been described as an birth of the company as a separate entity. A company
audit of the actions and decisions of the legally comes into existence or becomes a separate
executives. The focus of such an audit is on the legal entity on the date stated in its certificate of
financial discipline, the authority structure, incorporation. A company can immediately
efficiency, rules and regulation and the protection commence its business once its certificate of
of public interest. incorporation is issued. After incorporation if the
21. In case of two variables, the estimated company makes a fresh contract in terms of the pre-
regression equation is ŷ = 60 + 5x. The total incorporation contract, the liability of the promoters
sum of squares is 15730 and sum of square due shall come to an end.
to error is 1530. The estimated regression line 24. Match List-I with List-II
based on this information is a ______ List-I List-II
(a) Poorest fit (b) Moderate fit Non-parametric test Parametric test
(c) Good fit (d) Best fit (Counterpart of
Ans. (c) : In case of two variables, the estimated parameter test)
regression equation is ŷ = 60 + 5x. The total sum of A. Friedman Test I. One-way ANOVA
squares is 15730 and sum of square due to error is B. Mann-Whitney U II. t-test
1530. The estimated regression line based on this Test
information is a good fit because it is one of the C. Kriskal Wallis Test III. Paired t-test
assumptions of Regression. D. Wilcoxon signed IV. two-way ANOVA
22. Given below are two statements : One is Rank Test
labelled as Assertion A and the other is labelled Choose the correct answer from the options
as Reason R. given below :
(a) A-I, B-III, C-IV, D-II
Assertion A : By removing barriers between (b) A-IV, B-II, C-I, D-III
national markets, trading blocks create (c) A-III, B-I, C-II, D-IV
competition due to bigger trading area. (d) A-II, B-IV, C-III, D-I
Reason R : Increased competition can lead to Ans. (b) : The correct matching is as follow.
the closure of local industry and harm domestic
List-I List-II
consumption. Non-parametric test Parametric test
In the light of the above statements, choose the (Counterpart of parameter
most appropriate answer from the options test)
given below : A. Friedman Test IV. Two-way ANOVA
(a) Both A and R are correct and R is the correct
B. Mann-Whitney U Test II. t-test
explanation of A
(b) Both A and R are correct but R is not the C. Kriskal Wallis Test I. One-way ANOVA
correct explanation of A D. Wilcoxon signed III. Paired t-test
(c) A is correct but R is not correct Rank Test
(d) A is not correct but R is correct 25. Sequence the following steps in the operational
functioning of the asset reconstruction companies
Ans. (c) : By removing barriers between national (as per SARFAESI Act 2002)
markets, trading blocks create competition that can A. Charge 2 percent management fee.
strengthen competition in liberalized sector. This can B. Issue security receipts to bank.
help firms exploit economics of scale improve C. Make payment to bank
efficiency, absorb foreign technology and innovate. D. Buys loans of bank at a discount.
Trade liberalization can also boost productivity by E. Carry out the recovery.
increasing the quality and variety of intermediate Choose the correct answer from the options
inputs used in final goods production. given below
Hence, A is correct but R is not correct. (a) D, C, A, E, B (b) D, B, E, A, C
23. Given below are two statements : (c) D, B, C, E, A (d) D, A, B, E, C
Statement I : Certificate of incorporation is Ans. (b) : SARFAESI Act 2002 : The SARFAESI
conclusive evidence that all the requirements of Act is an act to regulate securitization and
the Companies Act have been complied with in reconstruction of financial assets and enforcement of
respect of registration. security interest and to provide for a central data base
Statement II : After incorporation, if the of security interest, created on property rights, and for
company makes a fresh contract in terms of the matter connected there with or incidental there to: The
pre-incorporation contract, the liability of the SARFAESI act grants power to lenders to recover
promoters shall come to an end. their loans without the intervention of the judiciary
In the light of the above statements, choose the operational functioning of The SARFAESI Act:-
correct answer from the options given below : i) Buy loans of bank at a discount
(a) Both Statement I and Statement II are true ii) Issue security receipts to bank
(b) Both Statement I and Statement II are false iii) Carry out the recovery
(c) Statement I is true but Statement II is false iv) Charge 2 percentage management fee
(d) Statement I is false but Statement II is true v) Make payment to bank.

UGC NTA NET Commerce Paper June 2023 Shift-I 544 YCT
26. Which one of the following is the hiring related Ans. (d) : The correct matching-
turnover cost when an employee quits an List-I List-II
organization? (Motive of human (Characteristic)
(a) Advertising (b) Interviewing behavior in organizations)
(c) Training (d) Recruiter fees A. Achievement III. Concern for
Ans. (c) : The cost of turnover is the cost associated excellence
with turning over one position. This calculation B. Control IV. Concern for
includes the cost of hiring for that position, training orderliness
and training of new employee, any severance or bonus C. Extension I. Concern for others
package and managing the role, when it is not filled. D. Dependency II. Concern for self-
Every company experience some turnover. When a development
company has high employee turnover, they risk 29. The optimal capital budget of a firm is
impacting the profitability of their organization the reflected by intersection point of
culture, and the productivity. (a) Security market line and capital market line
27. Match List-I with List-II (b) Weighted average cost of capital curve and
List-I List-II marginal cost of capital curve
(Consequent (Taxation Perspective) (c) Investment opportunity curve and marginal
outcome) cost of capital curve
A. The person is I. Tax Management (d) Weighted average cost of capital curve and
liable to penalty investment opportunity curve.
and prosecution Ans. (c) : Investment opportunity curve and marginal
B. Tax is reduced by II. Tax Avoidance cost of capital curve.
taking advantage Optimal Capital Budget : The inter section of
of loopholes of the investment opportunity schedules with the marginal
law cost of capital curve identifies the optimal amount of
capital should be invested.
C. Main aim is III. Tax Evasion
compliance with
legal formalities
D. It is a guide in IV. Tax planning
decision making
Choose the correct answer from the options
given below :
(a) A-II, B-III, C-IV, D-I
(b) A-II, B-IV, C-III, D-I
(c) A-III, B-II, C-I, D-IV
(d) A-III, B-I, C-IV, D-II
Ans. (c) : The correct matching is:-
List-I List-II
(Consequent outcome) (Taxation Perspective) The marginal cost of capital line with the investment
A. The person is liable to III. Tax Evasion opportunity schedules line and show where the
penalty and prosecution optimal capital budget.
B. Tax is reduced by II. Tax Avoidance 30. Which are the RBI notified domestic accredited
taking advantage of credit rating agencies?
loopholes of the law A. Brickwork ratings B. Acuite ratings
C. Main aim is compliance I. Tax Management C. CRISIL ratings D. Standard and Poor's
with legal formalities E. Moody's
D. It is a guide in decision IV. Tax planning Choose the correct answer from the options
making given below :
(a) B and C only/kesâJeue B Deewj C
28. Match List-I with List-II
List-I List-II (b) C and D only/kesâJeue C Deewj D
(Motive of human (Characteristic) (c) A and C only/kesâJeue A Deewj C
behaviour in (d) C and E only/kesâJeue C Deewj E
organizations) Ans. (a) : The Reserve Bank of India (RBI) issued the
A. Achievement I. Concern for others list of six credit rating agencies that banks can use for
B. Control II. Concern for self- purpose of risk weighting bank claims for capital
development adequacy purpose.
C. Extension III. Concern for The Six Credit Rating Agencies are:-
excellence (1) Acuite Rating & Research Limited (Acuite)
D. Dependency IV. Concern for (2) Credit Analysis and Research Limited (CARE)
orderlines (3) CRISIL Ratings Limited
Choose the correct answer from the options (4) ICRA Limited
(5) INFOMERICS valuation and Ratings Pvt. Ltd
given below : (6) India Ratings and Research Private Ltd (India
(a) A-III, B-IV, C-II, D-I Ratings).
(b) A-IV, B-III, C-II, D-I Bank have to get ratings from these agencies to
(c) A-II, B-IV, C-I, D-III comply with Basel-III capital regulation.
(d) A-III, B-IV, C-I, D-II
UGC NTA NET Commerce Paper June 2023 Shift-I 545 YCT
31. Which of the following are the reasons for Choose the correct answer from the options
manufacturers and retailers to brand their given below :
offerings? (a) C and D only (b) C, D and E only
A. Helps to gauge the level of product quality (c) A and E only (d) Only A, B and E
B. Enables premium pricing Ans. (4) : Social responsibility means that business,
C. Contributes to corporate identity in addition to maximizing shareholder value, must act
programmes in a manner benefiting society, not just the bottom
D. Informs about the source of a product line. Social responsibility has become increasingly
E. Develops customer loyalty. important to investor and consumers who seeks
Choose the most appropriate answer from the investment, that not only are profitable but also
options given below :
contribute to the welfare of society and the
(a) A, B, C and E only (b) B, C and E only
(c) A, B, C and D only (d) A, D and E only environment.
Areas of ethical and social responsibility concerned
Ans. (b) : A brand is a product or a business that has 1) Product Safety
a distinct identity in the perception of consumers. The
2) Fair Price
brand is created through elements of design, packing
and advertising that, as a whole distinguish the 3) Proper Information
product from its competitors. 4) Service Regarding Products
Following are the reasons for which manufacturers 5) Advertising Ethics
and retailers brand their offering: 34. Which of the following cause demand of a
1) Enables premium pricing product to increase?
2) Contributes to corporate identity programmes A. An increase in consumer's income
3) Customer Loyalty B. An increase in the prices of substitutes
4) Consistency C. An increase in the price of complements
5) Credibility D. An increase in the number of substitutes
6) Brand Equity E. An increased taste for the commodity
7) Stay Ahead of competitors Choose the correct answer from the options
32. Match List-I with List-II given below :
List-I List-II (a) A, B and C only (b) C, D and E only
(Purpose) (Committee) (c) B, D and E only (d) A, B and E only
A. Study all aspects of I. Rashid Jilani Ans. (d) : Increase in demand of product can be
Electronic Fund Committee (1992) caused by-
Transfer (EFT) • Increase in income of the consumer
B. Working group on II. Soduani Committee • Increase in the price of substitutes
NBFCs (1994) • Change in Tastes, Habits and Preferences for the
C. Suggest alternate III. Malegam commodity.
methods of Committee (1995) • Increase in population
Lending
D. Expert group on IV. Shere Committee 35. Arrange the following goods and services in the
Foreign exchange increasing order of the underlying income
markets elasticity of demand.
Choose the correct answer from the options A. Normal consumption goods
given below : B. Necessities
(a) A-III, B-I, C-II, D-IV C. Luxuries
(b) A-II, B-I, C-III, D-IV D. Inferior goods
(c) A-I, B-III, C-II, D-IV E. Services
(d) A-IV, B-III, C-I, D-II Choose the correct answer from the options
Ans. (d) : The correct matching is:-- given below :
List-I (Purpose) List-II (Committee) (a) D, B, A, E, C (b) D, C, B, A, E
A. Study all aspects of IV. Shere Committee (c) C, E, B, A, D (d) B, A, D, C, E
Electronic Fund (1995) Ans. (a) : Income elasticity of demand can be defined
Transfer (EFT) as the impact of consumer income on product
B. Working group on III. Malegam Committee demand. It is expressed as the percent change in the
NBFCs (1995) demanded quantity per percent change in income.
C. Suggest alternate I. Rashid Jilani % Change in quantity
methods of Lending Committee (1992) Income elasticity of demand =
% Change in Income
D. Expert group on II. Soduani Committee
Foreign exchange (1994) • Goods and Service in the increasing order of the
markets underlying income elasticity of demand:-
33. For customers, which are the areas of ethical Inferior Goods
and social responsibility concerns? Necessities
A. Product safety B. Fair Price Normal Consumption Goods
C. Fair Wages D. TQM Services
E. Proper disclosures and information Luxuries

UGC NTA NET Commerce Paper June 2023 Shift-I 546 YCT
36. ‘A’ sells a mobile phone to ‘B’, a minor who 39. Match List-I with List-II
pays for it by his cheque. ‘A’ endorses the List-I List-II
cheque to ‘C’ who takes it in good faith and for (Retail Store Format) (Product assortment)
value. The cheque is dishonoured on A. Discount I. Very narrow and
presentation. Can ‘C’ enforce payment of the deep
cheque? B. Specialty II. Broad and shallow
(a) ‘C’ can enforce the payment of cheque only C. Category Killer III. Broad and deep
against ‘A’ D. Supermarket IV. Narrow and very
(b) ‘C’ can enforce the payment of cheque either deep
against ‘A’ or ‘B’ Choose the correct answer from the options
(c) ‘C’ can enforce payment of cheque both given below :
against ‘A’ and ‘B’ (a) A-II, B-I, C-III, D-IV
(d) ‘C’ can enforce the payment of cheque only (b) A-I, B-II, C-III, D-IV
against ‘B’ (c) A-IV, B-II, C-III, D-I
Ans. (a) : 'C can enforce the payment of cheque only (d) A-II, B-I, C-IV, D-III
against 'A'. Ans. (d) : The correct matching-
Section 26 of the Negotiable Instruments Act 1881 List-I (Retail Store List-II
provides that a minor may draw, endorse, deliver and Format) (Product assortment)
negotiate instrument so as to bind all parties except A. Discount II. Broad and shallow
himself. In given situation 'C' can enforce the B. Specialty I. Very narrow and deep
payment of cheque only against 'A'. C. Category Killer IV. Narrow and very deep
37. Arrange the steps of process costing from D. Supermarket III. Broad and deep
beginning and ending with the work in process 40. If the application for information is rejected
inventory under the Right to Information Act 2005, the
A. Summarize total costs to account for work- CPIO/SPIO is obligated which of the following
in-process inventory to furnish the person seeking the information?
B. Compute output in terms of equivalent A. Power and functions of information
unit commission
C. Compute cost per equivalent unit B. Reasons for such rejection
D. Summarize the flow of physical units (of C. Obligation of public authorities
output) D. The particulars of the appellant authority
E. Assign total cost to units completed and to E. The period within which an appeal against
units in ending work in process such rejection may be preferred
Choose the correct answer from the options Choose the correct answer from the options
given below : given below :
(a) D, B, A, C, E (b) B, C, D, A, E (a) A, B and C only (b) B, C and D only
(c) C, B, A, D, E (d) E, D, A, B, C (c) A, C and E only (d) B, D and E only
Ans. (a) : Process Costing:- Process costing is a Ans. (d) : If the CPIO/SPIO decides that the
method used in managerial accounting to allocate information is requested is covered by an exemption,
production cost to product that are produced in then the application will be rejected. In such case the
competitive or repetitive manner. The cost are CPIO/SPIO is obligated to sent a rejection notice.
assigned/charged to individual processes or operations The rejection notice should contain:-
averaged over the number of units produced during * Reason for such rejection
said period. * The particulars of the appellant authority
Steps of Process Costing - * The period with in which an appeal against such
Step 1- Summaries the flow of physical unit rejection may be preferred.
Step 2- Compute output in terms of equivalent unit
41. Which are the appropriate tax planning
Step 3- Summaries total costs to account for work-
perspectives in case of shut down or continue
in process inventory.
decision under Income Tax Act, 1961?
Step 4- Compute cost per equivalent unit
A. Business loss and unabsorbed depreciation
Step 5- Assign total cost to units completed and to
can be carry forward and set off against
units in ending work in process.
profit and gain.
38. Which one group of the following countries are B. The loss making company and profit
members of ASEAN? company may merge to avail the tax
(a) Laos, Cambodia, Brunei benefit.
(b) Malaysia, Thailand, Taiwan C. Tax benefit of deduction u/s 33 AB and 115
(c) Myanmar, Singapore, Hong Kong VT may be withdrawn and liable to tax for
(d) Fiji, Laos, Cambodia the year in which business is discontinued.
Ans. (a) : The Members of ASEAN are countries, D. The condition of section 80 IB / 80 IC of
Laos, Cambodia, Indonesia, Malaysia, Myanmar, The the Act, a deduction is allowed to such
Philippines, Singapore, Thailand and Vietnam undertaking.
ASEAN Stands For- Association of Southeast Asian E. If a person has more than one business, the
Nations. loss making business may not be discontinued.
UGC NTA NET Commerce Paper June 2023 Shift-I 547 YCT
 Choose the most appropriate answer from the 44. Which of the interventions can be used to
options given below : manage the anxiety created by mergers and
(a) A, C and D only (b) B, D and E only acquisitions
(c) C, D and E only (d) A, C and E only A. Speed-up of the integration process
B. Articulate a new vision, common goals and
Ans. (d) : Tax Planning may be defined as an organizational symbols
arrangement of one's financial affairs in such a way C. Employee counselling and stress
that without violating in any way the legal provisions management training
of an Act, full advantage is taken of all exemptions, D. Disengage efforts such as termination
deductions, rebates and reliefs permitted under the act ceremonies
so that the burden of the taxation on an assesses, as E. Social support from spouse, friends,
far as possible, is the least supervisors and coworkers
Appropriate tax planning in case of shut down or Choose the most appropriate answer from the
continue are- options given below :
1) Business loss and unabsorbed depreciation can be (a) A, B and C only (b) B, C and D only
carry forward and set off against profit and gain. (c) A, C and E only (d) A, B and E only
2) Tax benefit of deduction U/S 33 AB and 115 VT Ans. (c) : The uncertainty resulting from merger or
acquisition can increase stress levels and signal risk to
may be withdrawn and liable to tax for the year in target company employees.
which business is discontinued. Following intervention can be used to manage the
3) If a person has more than one business, the loss anxiety created by mergers and acquisitions:
making business may not be discontinued. 1) Speed-up of the integration process
42. As suggested by Collins, arrange the following 2) Employee counselling and stress management
leadership levels in the sequentially higher order. training.
A. The leader is a competent manager 3) Social support from spouse, friend, supervisors and
B. The leader is an executive coworkers.
C. The leader is a highly capable individual 45. Which of the following are the disadvantages of
D. The leader is an effective leader straight salary sales compensation plan?
E. The leader is a contributing team member A. Sales volume is emphasized over profits
B. Sales representative may overstock the
Choose the correct answer from the options customer
given below : C. Low motivational impact
(a) B, C, D, A, E (b) C, E, A, D, B D. Difficult to attract or retain top sales
(c) C, A, E, D, B (d) C, E, A, B, D performers
Ans. (b) : Levels of leadership concept was E. Sales representatives may focus on
developed by Jim Collins author of book Good to products that require least effort to sell
great. Classification of Leaders are:- Choose the most appropriate answer from the
Level 1- The leader is a highly capable individual options given below :
Level 2- The leader is a contributing team member (a) C, D and E only (b) A, B and C only
(c) B, D and E only (d) A, C and D only
Level 3- The leader is a competent manager
Level 4- The leader is an effective leader Ans. (a) : Straight salary sales compensation plans are
not very common, but they're suitable for some
Level 5- The leader is an executive organizations. This structure establishes a set amount
43. Arrange the following steps in a logical sales person will be paid regardless of how much they
sequence in recourse to dishonouring a sell. As the name suggest this approach to pay
negotiable instrument : includes salary and no bonuses no commission and
A. Noting B. Compensation very few if any sales incentive. This type of
C. Protesting D. Notice of dishonour compensation plan is frequently used in industries
E. Penalties prohibiting direct sales.
Choose the correct answer from the options Disadvantages of straight salary compensation-
(1) These plan don't tend to motivate sales
given below : representative.
(a) D, A, C, B, E (b) C, D, A, B, E (2) Difficult to retain or attract top sales
(c) C, D, E, B, A (d) A, C, D, B, E representative
Ans. (a) : When the negotiable instrument is violated, (3) Lack of incentive
the holder must given a sign of dishonor to all the (4) Sales representative may focus on products that
earlier parties to make them accountable. A negotiable require least effort to sale.
instrument can be violated either by non-acceptance, 46. Match List-I with List-II
or by non-payment. Following step are taken after List-I List-II
dishonor of negotiable instrument, (Accounting (Purpose/Applicability)
1 - Notice of Dishonor Concepts)
2 - Noting A. Going Concern I. The same
Concept accounting method
3 - Protesting used by a firm from
4 - Compensation one period to
5 - Penalties another
UGC NTA NET Commerce Paper June 2023 Shift-I 548 YCT
 B. Consistency II. Relate to the Ans. (a) : An agreement with a minor is void and
relative size or therefore it cannot be ratified by him after attaining
importance of an the age of majority and the consideration given to the
item or event minor during minority cannot be a valid consideration
C. Cost concept III. An inappropriate for the promise made by him after attaining the age of
assumption for firm majority.
undergoing
49. In which of the following segmentation criteria,
bankruptcy
the predictability of consumer choice behaviour is
D. Materiality IV. The normal basis
used to account for the highest?
assets (a) Psychological (b) Demographic
Choose the correct answer from the options (c) Behavioral (d) Geodemographic
given below : Ans. (c) : Behavioural Segmentation:- It is based on
(a) A-II, B-III, C-IV, D-I the consumer needs and subsequent reaction to those
(b) A-I, B-II, C-III, D-IV who needs or towards the purchase of intended
(c) A-I, B-II, C-IV, D-III products and service. This study is conducted on all
(d) A-III, B-I, C-IV, D-II variable that are closely related to the product itself
Ans. (d) : The correct matching- like loyalty to a particular brand, cost effectiveness in
List-I List-II terms of benefits and usage circumstances,
(Accounting Concepts) (Purpose/Applicability) responsible for the purchase.
A. Going Concern Concept III. An inappropriate 50. Which of the following are the tools for
assumption for firm consumer promotions?
undergoing A. Price off B. Refunds
bankruptcy C. Coupons D. Event sponsorship
B. Consistency I. The same accounting E. Off-invoice
method used by a Choose the correct answer from the options
firm from one period given below :
to another (a) A, B and C only (b) B, C, D and E only
C. Cost concept IV. The normal basis (c) A, D and E only (d) B, C and D only
used to account for Ans. (d) : Refunds- Refunds offers are rebates
assets
allowed from the price of the product. It is on offer to
D. Materiality II. Relate to the relative
refund part of a product.
size or importance of
an item or event Coupons- A coupons is certificate that fetches buyers
saving when they purchase a specified product.
47. The steps to be followed by a firm while
strategizing to go international are as follows : Coupons are generally issued along with the product.
A. Deciding when to enter They entitle the holder to either a specified saving on
B. Deciding which markets to enter product or a cash refund.
C. Deciding whether to go global Event Sponsorship- Event Sponsorship is way of
D. Choosing a mode of entry advertising your brand by ''Sponsoring'' or supporting
E. Deciding how to enter the chosen market an event financially in exchange for brand exposure to
Choose the correct answer from the options highly engaged attendees.
given below : 51. Which one of the following normative ethical
(a) E, D, C, B, A (b) C, A, E, D, B theories has ‘‘Net benefit from the decision’’ as
(c) C, B, A, E, D (d) A, B, C, E, D consideration in ethical decision making?
Ans. (c) : Expanding internationally can be a great (a) Ethics of duty (b) Theory of justice
way to take firm business to the next level. Not (c) Stock holder ethics (d) Utilitarianism
without risk foreign market entry allows firm to make Ans. (d) : Utilitarianism requires a moral agent to
the most of previously untapped demand and build foresee the consequences of his action in any given
firms global presence. situation he has to consider the available alternative
Steps to be followed by firm to go international are as courses of action and select that course which will
follow- result in the maximum utility or the minimum
1) Choosing whether to go global.
uselessness.
2) Deciding which market to enter.
3) Deciding when to enter. Rather than maximise individual welfare,
4) Deciding how to enter the chosen market. utilitarianism focuses on collective welfare and it
5) Choosing a mode of entry. identifies goodness with the greatest amount of good
48. On attaining the age of majority, a minor's for the greatest number of people: the 'greatest
agreement ________ happiness principle'.
(a) Can be ratified by him So maximizing benefits for the greatest number of
(b) Cannot be ratified by him people involves net assessments of benefit:
(c) becomes void Utility is the net result of 'benefits' and 'disbenefits' or
(d) becomes valid costs.

UGC NTA NET Commerce Paper June 2023 Shift-I 549 YCT
52. Which one of the following is a fully owned 55. The Directorate General of Foreign Trade
subsidiary of the R.B.I.? (DGFT) facilitates and promotes foreign trade
(a) Indian Institute of Bank Management (IIBM) in India and also implements the foreign trade
(b) National Institute of Bank Management policy of India. Which of the following union
(NIBM) ministry governs the DGFT?
(c) Indian Institute of Banking and Finance (a) Ministry of Commerce and Industry
(IIBF)
(d) Indian Financial Technology and Allied (b) Ministry of Science and Technology
Services (IFTAS) (c) Ministry of Finance
Ans. (d) : Deposit Insurance and Credit Guarantee (d) Ministry of External Affairs
Corporation of India (DICGC), Bharatiya Reserve Ans. (a) : The Directorate General of Foreign Trade
Bank Note Mudran Private Limited (BRBNMPL), (DGFT) facilitates and promotes foreign trade in India
Reserve Bank Information Technology private limited and also implements the foreign trade policy of India.
(ReBIT), Indian Financial Technology and Allied Ministry of commerce and Industry governs the
Services (IFTAS). Reserve Bank Innovation HUB DGFT.
(RBIH) are fully owned subsidiary of the R.B.I. 56. X was appointed on 1st July 2022 as a lecturer
53. Match List-I with List-II in an University. He was continued on 30th
List-I List-II April 2023. What would be the duration of the
(Schedule under (Underlying themes) previous year for the assessment year 2023-24
the companies Act, for computation of income under the head
2013) Salary?
A. Schedule I I. Computation of (a) 1 July 2022 to 30 April 2023
Depreciation
(b) 1 April 2022 to 31 March 2023
B. Schedule II II. Code for Independent
directors (c) 1 April 2022 to 30 April 2023
C. Schedule III III. Memorandum of (d) 1 July 2022 to 31 March 2023
Association Ans. (d): The assessment year is the 12 month-period
D. Schedule IV IV. Preparation of Balance that comes right after the financial year. It is the
sheet and statement of period from April 1 to March 31 during which
profit and loss revenue produced during the fiscal year is taxed. As
Choose the correct answer from the options per question, the duration of the previous year for the
given below : assessment year 2023-24 for computation of income
(a) A-II, B-I, C-IV, D-III under the head salary would be 1 July 2022 to 31
(b) A-III, B-I, C-IV, D-II March 2023.
(c) A-III, B-IV, C-I, D-II 57. An agent is personally liable to third parties in
(d) A-I, B-III, C-II, D-IV which of the following situations?
Ans. (b) : Correct Match of List-I with List-II A. If an agent acts for an undisclosed Principal
List-I List-II B. Trade usage and customs makes agent
(Schedules under the (Underlying themes)
companies Act, 2013) personally liable
A. Schedule I III. Memorandum of C. If an agent signs a contract in Principal's
Association name
D. If an agent acts for the named Principal
B. Schedule II I. Computation of
Depreciation E. If an agent works for a foreign Principal
C. Schedule III IV. Preparation of Balance Choose the correct answer from the options
sheet and statement of given below :
profit and loss (a) A, B and C only (b) A, B and E only
D. Schedule IV II. Code for Independent (c) C, D and E only (d) B, C and D only
directors Ans. (b) : An agent is personally liable to third parties
54. The practice of setting a price target by the in following situations:-
firm and then developing a product that would (i) Where the agents acts for an undisclosed
allow the firm to maximize total profits at that principal.
price is called __________ (ii) An agent who is not having any authority to act
(a) Prestige pricing (b) Price lining as an agent or who has exceed the authority and
(c) Price matching (d) Value pricing the same has not been ratified by the principal is
Ans. (b) : Price lining refers to selling different personally liable for any loss beard by a third
products at different price points to cater to customers party (sec. 235).
who are looking for different levels of quality (iii) Trade, usage and customs makes agent
convenience, and value. In this way, businesses can personally liable.
effectively reach out to a broader customer base and (iv) If an agent works for a foreign principal.
increase their sales and revenue. The practice of
(v) When the agent sign a negotiable instrument in
setting a price target by the firm and then developing
a product that would allow the firm to maximize total his own name without making it clear that he is
profit at that price is called price lining. signing as an agent.

UGC NTA NET Commerce Paper June 2023 Shift-I 550 YCT
58. Mutual Funds in India are regulated by : 62. The assumptions of Purchasing Power Parity
(a) Unit Trust of India Theory includes :
(b) Department for Promotion of Industries and A. No costs for converting one currency to
Internal trade another
(c) The Securities and Exchange Board of India B. No restrictions on the movement of capital
(d) Department of financial Services between countries
C. No restrictions on the movement of
Ans. (c) : As far as mutual funds are concerned, SEBI
commodities between countries
formulates policies, regulates and supervises mutual D. No transaction costs for buying and selling
funds with an aim to protect the interest of the financial security
investors. SEBI notified the regulations for mutual E. No transportation costs for transporting a
funds in 1993. commodity from one country to another
59. Which of the following form of market Choose the most appropriate answer from the
organization is the most prevalent in the options given below :
manufacturing sector? (a) A, B and C only (b) B, D and C only
(a) Perfect competition (c) E, A and C only (d) D, A and E only
(b) Monopolistic competition Ans. (c) : Purchasing Power Parity:- PPP theory
(c) Oligopoly compares the exchange rates of two countries based
(d) Duopoly on the prices of a basket of goods and services. It is a
Ans. (c) : Oligopoly is the prevalent form of market Metric for comparing the standards of living between
organization in the manufacturing sectors of industrial the two countries.
nations. A market may be organized as an Oligopoly Assumptions of purchasing power parity theory
are :
if there are many producers of a product, but 1. No costs for converting one currency to another
transportation costs limit the number that compete 2. Goods and services in both countries are identical
directly on a local market. and interchangeable.
60. Regional Economic Integration is an attempt to 3. There are no transportation costs or differential
achieve economic gains from the free flow of taxes applied, which means no tariffs or trade
trade and investment between countries. One restrictions. Goods and services can be moved
such association is NAFTA. NAFTA comprises freely from one country to another.
of the following countries : 4. There are no cross-border trade barriers means
(a) USA, Canada, Mexico imports and export are duty-free and restriction
(b) USA, Canada, Brazil free.
(c) USA, Mexico, Brazil 63. Which of the following are correct for
(d) Canada, Mexico, Panama Agricultural Income?
Ans. (a) : North American Free Trade Agreement A. Income from self grown grass, trees,
(NAFTA), Controversial trade pact signed in 1992 bamboo
that gradually eliminated most tariffs and other trade B. Rent and Rates derived from land
barriers on products and services passing between the C. Income from making the produce fit for
marketing
USA, Canada and Mexico. NAFTA went into effect D. Income from land used for storing
in 1994 and remained in force until it was replaced in agriculture produce
2020. E. Income from farmhouse
61. Which of the following is not the limitation of Choose the correct answer from the options
activity based costing? given below :
(a) It involves various support activities in the (a) B, C and E only (b) B, D and E only
process of making products. (c) A, C and D only (d) C, D and E only
(b) It does not provide relevant information for Ans. (a) : Agricultural Income [Section 10 (1) :-
decision making. As per section 10(1), agricultural income earned by
(c) All costs cannot be identified easily with a the tax payer in India is exempt from tax.
particular activity Agricultural income is defined under section 2(1A) of
(d) Set up cost as well as costs of running and the Income-tax Act. As per section 2(1A), agricultural
updating the ABC system are very high. income generally means:
Ans. a : Limitation of Activity-Based Costing (1) Any rent or revenue derived from land which is
situated in India and is used for agricultural
System:-
purposes.
* Set up cost as well as costs of running and updating (2) Any income derived from such land by
the ABC system are very high. agricultural operations including processing of
* It does not provide relevant information for agricultural produce so as to render it fit for the
decision making. market or sale of such produce.
* All costs cannot be identified easily with a (3) Any income attributable to a farm house subject to
particular activity. satisfaction of certain conditions specified in this
"It involves various support activities in the process of regard in section 2(1A).
making products" is not the limitation of activity Any income derived from saplings or seedling grown
based costing actually it is an advantage of it. in nursery shall be deemed to be agricultural income.
UGC NTA NET Commerce Paper June 2023 Shift-I 551 YCT
64. In the context of banking sector, spread is commercial parties are guaranteed by their respective
defined as a function of the following : government. Deposits and loans to banks are,
A. Forex B. Net Interest income however, not guaranteed except by the banks parent
C. Rate Sensitive Assets D. Asset Ratio companies or their exchange control authorities. The
E. Leverage Ratio euro currency market does not attract CRR and SLR
Choose the correct answer from the options restrictions.
given below : 67. ‘‘It is an art of dodging tax without actually
(a) C and E only (b) A and C only breaking the law’’. This is related with :
(c) B and D only (d) B and E only (a) Tax Management (b) Tax Avoidance
Ans. (c) : Spread in banking is known as the (c) Tax Planning (d) Tax Evasion
difference between the interest rate that a bank Ans. (b) : Tax Avoidance:- Tax Avoidance is the
charges from a borrower and the interest rate a bank legal usage of the tax regime in a single territory to
pays to the depositor. Bank spread is the gap of one's own advantage to reduce the amount of the tax
interest rate that the bank takes from the borrowers that is payable by means that are within the law. A tax
and the interest bank pays to the depositor. shelter is one type of tax avoidance and tax havens are
65. The problem-definition process involves following jurisdictions that facilitate reduced taxs.
steps. Arrange them in a logical sequence. 68. Which of the following are skills and capabilities
A. Determine the unit of analysis related competencies?
B. Determine the relevant variables A. Analysis B. Intellectual curiosity
C. Write managerial decision statement and C. Organization D. Problem solving
research objectives E. Ownership of assignments
D. Write research question and/or research Choose the most appropriate answer from the
hypothesis options given below :
E. Identify key problems (a) A, C and D only (b) A, B and C only
Choose the correct answer from the options (c) B, C and D only (d) A, D and E only
given below : Ans. (a) : Skills are your starting point. They shape
(a) A, B, E, D, C (b) C, D, A, B, E job descriptions, training opportunities and recruitment.
(c) B, E, A, C, D (d) E, C, A, B, D Competency is a measure of performance, whether
Ans. (d) : The problem-definition process involves that's of a skill or capability. Capabilities combine
following steps. your skills, knowledge, tools, processes, behaviors
Step-I Identify key problems and competencies. Analysis, Organization and
⇓ Problem solving are skills and capabilities related to
Step-II Write managerial decision statement competencies.
and research objectives 69. A letter of acceptance sufficiently stamped and
⇓ duly addressed is put into course of
Step-III Determine the unit of analysis transmission. There is a ________
⇓ (a) Contract voidable at the option of acceptor
Step-IV Determine the relevant variables (b) Contract voidable at the option of offeror
⇓ (c) No contract at all
Step-V Write research question and/or (d) Valid contract
research hypothesis Ans. (d) : A Valid Contract:- A letter of acceptance
66. Which of the following are the characteristics sufficiently stamped and duly addressed is put into
of the Euro Currency market? course of transmission. There is a valid contract.
A. The euro currency market does not have 70. The total return for an equity stock during a
geographical limits year was 12.5 percent. The rate of inflation
B. The euro currency market is unregulated during that year was 3.5 percent. The real
C. The euro currency market does not have (inflation-adjusted) return was :
deposit insurance (a) 9.26 per cent (b) 16.00 per cent
D. There are no restriction on the maximum (c) 7.65 per cent (d) 8.70 per cent
interest payable or chargeable. Ans. (d) : Inflation-Adjusted Return :- The inflation
E. The euro currency market does not attract - adjusted return is the measure of return that takes
CRR and SLR restrictions. into account the time period's inflation rate.
Choose the most appropriate answer from the
options given below : 1+ Return
Inflation Adjusted Return = −1
(a) A, B and C only (b) B, E and D only 1+ Inflation Rate
(c) E, C and A only (d) D, A and E only
12.5 100 + 12.5
Ans. (c) : Euro Currency Market:- The euro- 1+
currency market has no geographical limits or a = 100 −1 = 100 −1
common market place. Business is done by telex, 3.5 100 + 3.5
telephone and other communication systems. 1+
Internationally - reputed brokers put through the
100 100
112.5 112.5 − 103.5
transactions for the banks. Deposits are secured for = −1 =
the banks operating in the market by the general 103.5 103.5
guarantee of its parent or holding company and in 9 900
some cases, by its central bank and/or the government = × 100 = = 8.69 or 8.70%
103.5 103.5
of the concerned country. Similarly, loans to
UGC NTA NET Commerce Paper June 2023 Shift-I 552 YCT
71. Given below are two statements : One is Choose the correct answer from the options
labelled as Assertion A and the other is labelled given below :
as Reason R. (a) A and D only (b) B and D only
Assertion A : When a partner retires, all the (c) A and C only (d) B and E only
assets and liabilities are revalued according to Ans. (a) : RRBs are regulated by RBI and supervised
current value. by NABARD as their main area of activity is the rural
Reason R : The balance sheet should show the section. RRBs were created under the Regional Rural
correct values of assets and liabilities. Banks Act, 1976 to serve the credit need of rural areas
In the light of the above statements, choose the which were largely unbanked at that time.
most appropriate answer from the options 74. To remove ‘order bias’ in a questionnaire,
given below : usually researcher use which of the following :
(a) Both A and R are correct and R is the correct A. Pivot questions
explanation of A B. Multiple grid questions
(b) Both A and R are correct but R is not the C. Funnel technique
D. Filter questions
correct explanation of A E. Leading questions
(c) A is correct but R is not correct Choose the most appropriate answer from the
(d) A is not correct but R is correct options given below :
Ans. (b) : Assertion (A): When a partner retires, all (a) B, E and A only (b) D, E and B only
the assets and liabilities are revalued according to (c) E, B and C only (d) C, D and A only
current value. Assertion (A) is correct. Ans. (d) : Questionnaire:- A questionnaire can be
Reason (R) : The balance sheet should show the defined as a research instrument that contains multiple
correct values of assets and liabilities. Reason (R) is questions that are used to collect information from the
also correct. respondents.
However Reason is not the correct explanation of A. To remove 'order bias' in a questionnaire usually
Explanation:- Ascertaining the Amount Due to researcher use pivot questions, funnel technique and
Retiring/ Deceased Partner:- The sum due to the filter questions.
retiring partner (in case of retirement) and to the legal 75. The doctrine of ‘Caveat emptor’ applies in
representatives/ executors (in case of death) includes: which of the following situations?
(i) Credit balance of his capital account; (a) When goods are sold by description
(ii) Credit balance of his current account (if any); (b) When goods are sold by sample
(iii) His share of goodwill; (c) When goods are sold under implied
(iv) His share of accumulated profits (reserves); conditions and warranties
(v) His share in the gain of revaluation of assets and (d) When the buyer does not intimate the purpose
to the seller and depends upon his own skill
liabilities; and judgement
72. When the income of a minor child is clubbed Ans. (d) : The Doctrine of Caveat Emptor:- The
with the income of mother or father, how much doctrine of ‘Caveat emptor means the responsibility
the deduction will be allowed to mother or lies on the buyer of goods and he must perform due
father? diligence before the purchase of the goods. It is
(a) Rs. 1500 expected from the buyer to be alert in a contract of
(b) Rs. 2000 sale. He cannot hold the seller responsible for inferior
(c) Actual income clubbed with the income of goods unless the contract is based on fraud. The
mother or father, whichever is less Doctrine of 'Caveat Emptor' is generally applicable in
(d) No deduction the case of property transactions but it can also be
Ans. (a) : As per section 64 (1A), income of minor applied in the sale of goods and other services.
child is clubbed with the income of his her parent. The doctrine of 'Caveat emptor' applies when the
Income of minor child earned on account of manual buyer does not intimate the purpose to the seller and
work or any activity involving application of his/her depend upon his own skill and judgment.
skill, knowledge, talent, experience, etc will not be 76. A multinational company can use which prices
clubbed with income of his/her parent. However, to create profits in low tax regimes and loss in
accretion from such income will be clubbed with high tax regimes?
income of parent of such minor. (a) Divisional prices
In case the income of individual includes incomes of (b) Inter-Divisional Prices
his/her minor child. Such individual can claim an (c) Holding company prices
exemption under section 10(32) of Rs. 1500 or (d) Transfer prices
income of minor so clubbed, whichever is less. Ans. (d) : Transfer pricing:- Transfer pricing is an
accounting practice that represents the price that one
73. Which is the legal framework governing the division in a company charges another division for
Regional Rural Banks (RRBs) goods and services provided. Companies use transfer
A. Regional Rural Bank Act, 1976 pricing to reduce the overall tax burden of the parent
B. Regional Rural Bank Act, 1966 company.
C. Small industries Development Bank of Companies charge a higher price to divisions in high-
India, 1989 tax countries (reducing profit) while charging a lower
D. Banking Regulations Act, 1949 price (increasing profits) for division in low-tax
E. Indian Partnership Act, 1932 countries.
UGC NTA NET Commerce Paper June 2023 Shift-I 553 YCT
77. An attacking strategy which involves 81. Which of the following describe an intervention
introducing new products or technologies that currency :
rewrite the rules of competition in the market (a) The currency in which exporter choose to
and avoid direct conflict with a rival is known invoice their exports
as _________ (b) The currency in which cross-border
(a) Flanking (b) Bypass transactions are paid for and closed
(c) Encirclement (d) Guerrilla (c) The currency in terms of which a domestic
Ans. (b) : The Bypass Attack Strategy : An currency is quoted
attacking strategy which involves introducing new (d) The vehicle currency
products or technologies that rewrite the rules of Ans. (c) : Currency intervention : Currency
competition in the market and avoid direct conflict intervention, also known as foreign exchange market
with a rival is known as bypass. The Bypass Attack intervention or currency manipulation, is a monetary
Strategy, sometimes known as the Leapfrog Attack policy operation. It occurs when a government or
Strategy, is an indirect approach to challenging a central bank buys or sells foreign currency in
competitor by broadening reach into their weaker or exchange for its own domestic currency, generally
untapped markets. with the intention of influencing the exchange rate
78. Who was of the opinion that labour was ‘‘the and trade policy.
father of wealth’’ and it must be included in 82. From the followings which is an uncommon
any estimate of national wealth? feature of Private Equity and Venture Capital.
(a) William Far (b) William Petty (a) Both invest in companies that are not able to
(c) William C. Pyle (d) Flamholtz or ready to gain capital from the public
Ans. (b) : The form-matter terminology is redolent of (b) Their investment is used for financial or
scholastic Philosophy and the classification of land operating restructuring of the invester
and labor as the original factors hints at William companies
petty, who called land the mother and labour the (c) They are set up an independent pools of
father of wealth. capital contributed by institutions or the high
Sir William Petty was the pioneer in this direction. net worth individuals
The first attempt to value the human beings in (d) Their activities are subject to few regulations
monetary terms was made by him in 1961. Ans. (b) : "Their investment is used for financial or
Petty considered that labour was "the father of operating restructuring of the investor companies." is
wealth" and it must be included in any estimate of an uncommon feature of private equity and venture
national wealth without fail. capital. Both of them invest in companies and make
79. A and B are equal partners, when partnership money by exiting, i.e., generally selling their
is dissolved, their capital are Rs. 40,000 and Rs. investment. But the way they do it is different. PE
50,000 respectively. After all assets are sold and firms buy mature, public companies. VCs invest
liabilities paid, there is a cash balance of Rs. mostly in early-stage companies.
80,000. What is the amount of profit or loss on 83. Match List-I with List-II
realization? List-I List-II
(a) 10,000 (Profit) (b) 20,000 (Profit) (Herfindale Index (Market Type)
(c) 30,000 (Profit) (d) 10,000 (Loss) Value)
Ans. (d) : A's capital = 40,000 A. Zero/(0) I. Oligopoly with high
B's capital = 50,000 risk of cartels
Total = 90,000 B. 0 - 1,000 II. Oligopoly
Cash balance after sale of all assets = 80,000 C. 1,000 - 1,800 III. Monopolistic
So, amount of profit or loss competition
= Cash realized – Capital invested D. 1,800 - 10,000 IV. Extremely competitive
= 80,000 – 90,000 market
= (–10,000) Choose the correct answer from the options
So, 10,000 is the amount of loss on realization. given below :
80. Experimental treatment in research design (a) A-I, B-II, C-III, D-IV
signifies which of the following? (b) A-IV, B-III, C-II, D-I
(a) Selection of dependent variable (c) A-II, B-I, C-III, D-IV
(b) Manipulating independent variable (d) A-I, B-III, C-II, D-IV
(c) Selection of independent variable Ans. (b) : Correct Match of List-I with List-II
(d) Manipulating dependent variable List-I List-II
Ans. (b) : Experimental Research Design:- The (Herfindale Index Value (Market Type)
treatment in any independent variable is manipulated A. Zero IV. Extremely competitive
by the experimenters, and its exact form depends on market
the type of research being performed. In a medical B. 0 - 1,000 III. Monopolistic
trial it might be a new drug or therapy. competition
Experimental design means planning a set of C. 1,000 - 1,800 II. Oligopoly
procedures to investigate a relationship between D. 1,800 - 10,000 I. Oligopoly with high risk
variables. of cartels
UGC NTA NET Commerce Paper June 2023 Shift-I 554 YCT
84. In totalitarianism, called authoritarianism, (c) Statement I is correct but Statement II is
individual freedom is subordinated to the incorrect
power of the authority of a group or state. (d) Statement I is incorrect but Statement II is
Which of the following is not a type of correct
totalitarianism? Ans. (b) : Statement I : The only purpose of logistics
(a) Theocratic (b) Right Wing management is to coordinate activities of moving
(c) Tribal (d) Conservative products from the factory to customers. This
Ans. (d) : Conservative:- Conservatives are Statement is incorrect about logistics management.
individual who believes in the political doctrine of Statement II: Logistics management is only the
conservatism. Conservatism favours the gradual responsibility of marketing function. This statement is
evolution of institutions and practices. Being a also incorrect.
conservative means there is the common belief that Here, Both Statement I and Statement II are incorrect.
the government is responsible for preserving 88. In which of the following balance of payment
traditions so, conservative is not a type of accounts changes in holdings of gold and
totalitarianism in their position as the people's servant, foreign currencies by official monetary
instead of the master. institutions are accounted for :
85. In the process of perception, which one of the (a) Current Account
following is not an external factor influencing (b) Capital Account
selection of stimuli? (c) Official Reserves Account
(a) Experience (b) Familiarity (d) Foreign Exchange Account
(c) Repetition (d) Novelty Ans. (c) : Official reserve transactions :- Official
Ans. (a) : The external factor influencing selection of reserve transactions refer to transactions by the central
stimuli are nature, intensity, size, contrast, repetition, bank that cause changes in its official reserves of
motion and novelty and familiarity. foreign exchange.
Experience is the internal factor which influence the Such transactions take place when a country
selection of stimuli in the process of perception. withdraws from its stock of foreign exchange reserves
86. Under which of the following market to finance deficit in its overall balance of payments
structures, products are differentiated and (BOP). In balance of payment, changes in holdings of
close substitutes? gold and foreign currencies by official monetary
A. Perfect competition institutions are accounted for in official reserve
B. Monopolistic competition account.
C. Oligopoly 89. A box-plot is a graphical summary measures of
D. Duopoly data that displays ________
E. Monopoly A. Mean B. Q1 C. Median
Choose the correct answer from the options D. Q3 E. Mode
given below : Choose the correct answer from the options
(a) A, B and C only (b) B, C and D only given below :
(c) C, D and E only (d) A, C and D olny (a) C and E only (b) A, C and E only
Ans. (b) : Market Structure : Market Structure, in (c) C, D and B only (d) D, B and A only
economics, refers to how different industries are Ans. (c) : Box-plot : A box-plot is a standardized way
classified and differentiated based on their degree and of displaying the dataset based on the five-number
nature of competition for goods and services. summary: the minimum, the maximum, the sample
Under the monopolistic, oligopoly and duopoly median, and first and third quartiles.
markets products are differentiated and close 90. Match List-I with List-II
substitutes because in these market sellers offering List-I List-II
products that are similar but not identical, leading to (A.T. Kearney (Variables)
product differentiation. However, these products are Globalization
also considered close substitutes as they serve similar Index)
consumer needs. A. Economic I. International Tourism
87. Given below are two statements : Integration and Travel
Statement I : The only purpose of logistic B. Personal II. Internet users
management is to coordinate activities of Integration
moving products from the factory to C. Technological III. Foreign Direct
customers. Integration Investment
Statement II : Logistics management is only the D. Political IV. Ratification and
responsibility of marketing function. Integration multilateral treaties
In the light of the above statements, choose the Choose the correct answer from the options
most appropriate answer from the options given below :
given below : (a) A-IV, B-III, C-II, D-I
(a) Both Statement I and Statement II are correct (b) A-III, B-I, C-II, D-IV
(b) Both Statement I and Statement II are (c) A-III, B-II, C-I, D-IV
incorrect (d) A-IV, B-I, C-II, D-III
UGC NTA NET Commerce Paper June 2023 Shift-I 555 YCT
 Ans. (b) : Correct Match of List-I with List-II In the light of the above statements, choose the
List-I List-II correct answer from the options given below :
(A.T. Kearney (Variables) (a) Both A and R are true and R is the correct
explanation of A
Globalization Index) (b) Both A and R are true but R is not the correct
A. Economic III. Foreign Direct explanation of A
Integration Investment (c) A is true but R is false
B. Personal Integration I. International Tourism (d) A is false but R is true
and Travel Ans. (a) : Assertion (A) : Payment banks - which can
C. Technological II. Internet users accept deposits but are prohibited from lending - need
Integration to be part of the UPI ecosystem.
D. Political Integration IV. Ratification and Reason (R) : Loading fee on transactions through
multilateral treaties UPI, payment banks can widen the adoption of
Direction (91-95) : wallets among customers and merchants.
Interoperability guidelines for prepaid payment Here, Both A and R are true and R is the correct
instruments with Unified Payments Interface (UPI) explanation of A.
booster the business case for digital wallets. For a 92. Which of the following use cases are expected
loading fee on transactions through UPI, payments to promotes the growth of payment bases?
banks, for instance, can widen the adoption of wallets A. UPI integration with the digital rupee
among customers and merchants. This increase use cases B. Dislocation of payment banks from digital
for UPI, which largely works on a model of free peer-to- transactions
peer-merchant transactions. The opportunity provided by C. UPI facilitation of cross-border remittances
the scorching growth of UPI transactions must, however, D. Keeping a safe distance from the contactless
cross the hurdle of consumer behavior that is shaped by payment infrastructure
zero fees for payments made from their bank accounts. E. Consumer lending through Rupay Credit
For survival, payments banks - which can accept deposits Cards.
but are prohibited from lending-need to be part of the Choose the most appropriate answer from the
UPI ecosystem. They also need to carve out a distinct options given below :
business segment where they have an advantage over (a) A, B and C only (b) C, D and E only
(c) A, C and E only (d) B, D and E only
full-service banks.
Those use cases are expected to grow as UPI Ans. (c) : UPI integration with the digital rupee, UPI
diversifies into cross-border remittances, introduces facilitation of cross-border remittances and consumer
consumer lending through Rupay credit cards and offers lending through Rupay Credit cards are the cases used
and expected to promotes the growth of payment
currency exchange to foreign travelers, and bill payments bases.
using standing instructions gain traction. UPI will also
have to integrate with the digital rupee that is undergoing 93. Contactless payments infrastructure, as per the
tests for retail and wholesale transactions. The digital passage, will empower fintechs for :
(a) Interoperability with the UPI
payments platform will continue to play a key role in the (b) Innovation in finance
infrastructure that is being developed around contactless (c) Integration with the UPI ecosystem
payments. (d) Integration with the full service banks
This involves building additional UPI context Ans. (b) : UPI will grow by providing solutions for
around digital transactions such as billing and credit- conduct of business. As per the passage, contactless
profiling. Initial adoption has surpassed the most payments infrastructure will empower fintechs for
optimistic expectations. But that is principally on innovation in finance.
account of the waiver of the merchant discount rate. In 94. Given below are two statements :
the next leg, UPI will grow by providing solutions for the Statement I : Initial UPI adoption has
conduct of business. It will have to incorporate lending at surpassed the most optimistic expectations on
some point to become a comprehensive medium of account of the waiver of the merchant discount
commerce. The infrastructure must encourage fintechs to rate.
push innovation in finance. Payments banks have a Statement II : The future growth of the UPI
strong correlation with the growth of digital transactions. will be facilitated by providing solution for the
They are vital pieces of the machinery being built. The conduct of business and to becoming a medium
interoperability with UPI guidelines plugs them deeper. of commerce.
91. Given below are two statements : One is In the light of the above statements, choose the
labelled as Assertion A and the other is labelled most appropriate answer from the options
as Reason R. given below
Assertion A : Payment banks - which can (a) Both Statement I and Statement II are correct
accept deposits but are prohibited from lending (b) Both Statement I and Statement II are
- need to be part of the UPI ecosystem. incorrect
Reason R : Loading fee on transactions (c) Statement I is correct but Statement II is
through UPI, payment banks can widen the incorrect
adoption of wallets among customers and (d) Statement I is incorrect but Statement II is
merchants. correct
UGC NTA NET Commerce Paper June 2023 Shift-I 556 YCT
 Ans. (a) : Statement I: Initial UPI adoption has 96. The Application Supported by Blocked
surpassed the most optimistic expectations on account Amount (ASBA) used in the passage refers to
of the waiver of the merchant discount rate. which market.
Statement II: The future growth of the UPI will be (a) Primary Market (b) Secondary Market
facilitated by providing solution for the conduct of (c) Money Market (d) Forex Market
business and to becoming a medium of commerce. Ans. (b) : The Application Supported by Blocked
Here, Both Statement I and Statement II are correct. Amount (ASBA) used in the passage refers to the
secondary market.
95. As per the passage, why do the payment banks 97. The SEBI has acted on its regulatory remit of
need to carve out a distinct, business segment protecting investors cash and __________.
for themselves (a) Securities (b) Dividend Income
(a) To be a part of the UPI ecosystem (c) Grievances of payment (d) Public Deposits
(b) Because payment banks are in competition Ans. (a) : The SEBI has acted on its regulatory remit
with full service banks of protecting investors cash as well as their securities.
(c) Because payment banks are mandated to push 98. Which are reasons that make replication of
innovation in finance ASBA for the secondary market complicated :
(d) In order to entitle themselves for lending A. Kinds of transactions
Ans. (b) : As per the passage, the payment banks B. Presence of large number of brokers
needs to carve out a distinct business segment for C. Applicability of SEBI guideline
themselves because payment banks are in competition D. Number of Parties
with full service banks. E. Differing time horizon
Direction (96-100) : Choose the most appropriate answer from the
options given below :
The proposed facility similar to the Applications (a) C, D and E only (b) A, B and C only
Supported by Blocked Amount (ASBA) for secondary (c) A and D only (d) B and C only
markets has elements to protect investors while Ans. (c) : Kinds of transactions and number of parties
increasing their potential earnings. The way it works now are reasons that make replication of ASBA for the
in the primary market is that money remains blocked in secondary market complicated.
investor accounts, earning interest till issues of Initial 99. The money used for trading is allowed to be
Public Offerings (IPO) accept subscriptions. Replicating transferred directly to clearing corporation,
this for the secondary market is more complicated through
because of the number of parties, as well as the kinds of (a) Escrow Arrangement
transactions, involved. Investors place a variety of orders (b) Unified Payments Interface
over differing time horizons with or without leverage for (c) E-banking
multiple securities in the secondary market. (d) credit cards
Incorporating all these variables for a mechanism like Ans. (b) : UPI allows money used for trading to be
ABSA involves escrow arrangements with counter transferred directly to clearing corporations, which
parties in a dynamic environment. can then settle with brokers.
The technical challenge may be considerable but not 100. Given below are two statements : One is
insurmountable. In this, the Securities and Exchange labelled as Assertion A and the other is labelled
Board of India (SEBI) is on the right course in its effort as Reason R.
to provide such a structure for investors. The Unified Assertion A : SEBI has offered relief to
Payments Interface (UPI) allows money used for trading brokerages that stand to lose float income on
to be transferred directly to clearing corporations, which account of upstreaming client money to
can then settle with brokers. This flushes out money clearing corporations.
idling with brokers, lowering risk of abuse and Reason R : Brokerage have been allowed to
containing the fallout in case of broker default. This also upstream clients' fund in the form of fixed
offers a pathway for direct settlement, bypassing the pool deposit lien or mutual fund units.
accounts of intermediaries, SEBI has thus, acted on its In the light of the above statements, choose the
regulatory remit of protecting investors' cash as well as correct answer from the options given below :
(a) Both A and R are true and R is the correct
their securities.
explanation of A
SEBI has offered relief to brokerages that stand to (b) Both A and R are true but R is not the correct
lose float income on account of up streaming client explanation of A
money to clearing corporations. Brokerages have been (c) A is true but R is false
allowed to upstream clients' funds in the form of fixed (d) A is false but R is true
deposit lien or mutual fund units. This should keep Ans. (b) : Assertion (A) : SEBI has offered relief to
intermediation fees low while the market regulator brokerages that stand to lose float income on account
nudges the system to clear excess funds from the broker of up streaming client money to clearing corporations.
channel. Higher upfront brokerage fees are an Reason (R): Brokerage have been allowed to
improvement over those subsidised by float income, upstream clients' fund in the form of fixed deposit lien
bettering systemic oversight. This could lead to or mutual fund units.
concentration among brokerages discount players lose Here, Both A and R are true but R is not the correct
their advantage. explanation of A.
UGC NTA NET Commerce Paper June 2023 Shift-I 557 YCT
 NTA UGC NET/JRF Exam, June 2023
COMMERCE
Solved Paper
Exam Date: 13.06.2023 Shift-II

1. One or more parties to a negotiable instrument Choose the correct answer from the options
is/are discharged from liability in which of the given below :
following ways : (a) C, D, B, A, E (b) E, B, A, C, D
A. By giving the notice dishonour by the holder (c) D, A, B, E, C (d) B, E, D, A, C
B. By deliberately cancelling the name of Ans. (d) : The correct sequence of the leadership
party/parties development process as adopted by Anderson
C. By taking qualified acceptance consulting is as follow:
D. By allowing drawee 24 hours to accept (i) Assess organisation's direction and current strategies
E. By material alteration speed at which susneff results he achieved.
Choose the most appropriate answer from the (ii) Assess again setiws culture dyine required shifts
options given below :
and action merr leader to charge them culture.
(a) B, C, D only (b) D, A, C only
(iii) Coach individual exclusive performed behaviour
(c) E, C, B only (d) A, B, C only
along communication.
Ans. (c) : One or more parties in the negotiable (iv) Coach executive terms on individual leadership and
instruments are discharged from liability in one of the effective teamwork.
following ways:–
(v) Create effective communication strategically for
(i) By cancellation
key influence director, shareholder, employees etc.
(ii) By release
(iii) By Payment in due course 4. Which of the following is not an essential
(iv) By Allowing Drawee characteristic of negotiable instrument?
(v) By Material alteration (a) Sell little to a bonafide transferor for value.
(vi) Notice of Dishonor (b) Flexibility in transfer
(vii) By Operation of law (c) Easy negotiability
2. The coexistence and cooperation between the (d) Transferor can sue in own name without
formal and informal financial sector is giving notice to the debtor.
commonly referred to as : Ans. (a & d) : A negotiable instrument is a specialized
(a) Flexibility of operation type of financial document that are commonly used in
(b) Financial dualism commercial transactions and financial activities to
(c) Well regulated financial system facilitate payment and obligation.
(d) Catering the financial needs of modern Its feature are as follow.
economy (i) In writing
Ans. (b) : The coexistence and co-operation between (ii) Unconditional promise or order to pay.
the formal and informal financial sector is commonly (iii) Fixed amount.
referred to as Financial dualism. It was developed by (iv) No Additional undertaking.
Prof. Hala Myint. According to him such dualism rises (v) Signed by maker or drawer.
because of division of money market as unorganized (vi) Transferable.
and organised in LDCs. (Least Developed Countries)
However option (a) sells little to a bonafide transferor
3. Identify the correct sequence of the leadership for value and option (d) Transferor can sue in own name
development process as adopted by Anderson without giving notice to debtor both are not essential
Consulting characteristics of negotiable instrument.
A. Coach executive terms on individual
leadership and effective teamwork 5. Match List I with List II
B. Assess organisation's direction and current List-I List-II
strategies speed at which susneff results he (Capital structure (Key components)
achieved theories)
C. Create effective communication strategically A. MM approach I. Costs of financial
for key influences directors, shareholder, distress
employed etc
B. Pecking order II. Assymetric
D. Coach individual exclusive performed theory information
behavior along communications
E. Assess again setiws culture dyne required C. Trade off theory III. No target capital
shifts and action merr leader to charge them structure
culture D. Signaling theory IV. Home Made Leverage
UGC NTA NET Commerce Paper June 2023 Shift-II 558 YCT
 Choose the correct answer from the options taxpayers income is taxable both in India and another
given below : country. The various conditions in which unilateral
A B C D relief is granted in cases where section 90 is not
(a) III II IV I applicable are -
(b) IV III I II (i) Assessee should be resident of India in the previous
(c) IV I III II year.
(d) IV III II I (ii) The income should have accrued outside India.
Ans. (b) : The correct match is: - (iii) The income should be taxed both in India and a
foreign country with India has no agreement for
List - I List - II relief.
A. MM Approach IV. Home made 8. Arrange the following legislations in primary
leverage and secondary market in ascending order of its
B. Pecking order III. No target capital enactment
theory structure A. Mutual fund regulations
C. Trade-off theory I. Cost of financial B. Credit rating agencies Regulations
distress C. Credit rating regulations
D. Signaling theory II. Asymmetric D. SEBI intermediaries regulations
information E. Sweat equity regulations
6. Which are correct regulatory provisions for Choose the correct answer from the options
foreign bank operations in India? below :
A. They are incorporated in India and have (a) B, C, A, D, E (b) C, D, E, A, B
their head office in foreign country (c) A, B, C, D, E (d) A, B, E, D, C
B. Foreign banks since 2002 have been allowed Ans. (d) : The legislations in primary and secondary
to set up their subsidiaries in India market in ascending order of its enactment are as
C. The foreign banks are allowed to operate in follow:–
India even if they are not financially sound Mutual fund regulations – 1996
D. They have to operate according to the Credit rating agencies Regulation – 1999
banking regulations in India Sweat Equity Regulation – 2002
E. RBI approved that foreign banks which are SEBI intermediaries Regulations – 2008
present in India could open their branchesw Credit rating regulation – 2009
Choose the correct answer from the options 9. Match List I with List II
given below:-
List-I List-II
(a) A, C, E only (b) A, B, C only
(International Trade (Theory Propounders)
(c) B, D, E only (d) C, D, E only Theories)
Ans. (c) : The regulatory provision for foreign bank A. Factor Endowment I. Adam Smith
operation in India are as follow:- theory
(i) Foreign banks since 2002 have been allowed to set
up their subsidiaries in India B. Product life cycle II. Micheal Porter
theory
(ii) They have to operate according to the banking
regulation in India. C. Absolute cost III. Hecksher and Ohlin
(iii) RBI approved that foreign banks which are present advantage theory
in India could open their branches. D. Competitive IV. Reymond Vernon
7. Which are the conditions in which unilateral advantage theory
relief is granted in cases where section 90 is not Choose the correct answer from the options
applicable in income tax? given below :
A. Assessee should be resident of India is the A B C D
previous year (a) I III II IV
B. The income should have accrued out side (b) III IV I II
India (c) II III I III
C. The assesse should not have paid the tax in (d) IV I III II
such foreign country by deduction Ans. (b) : The correct match is :-
D. The income should not accrued outside List-I List-II
India.
E. The income should be taxed both in India International Trade theories Theory
propounders
and a foreign country with India has no
agreement for relief A. Factor Endowment III. Hecksher and
Choose the correct answer from the options theory Ohlin
given below : B. Product life cycle IV. Reymond Vernon
(a) A, B, E only (b) B, C, E only theory
(c) A, D, E only (d) A, C, E only C. Absolute cost I. Adam Smith
Ans. (a) : Section 90 of Income Tax Act deals with advantages theory
double taxation relief. It provides provision to avoid D. Competitive II. Michael Porter
double taxation of income in situations where a Advantage theory

UGC NTA NET Commerce Paper June 2023 Shift-II 559 YCT
10. Which one of the below mentioned transaction Ans. (c) : Off-balance sheet items of balance sheet are
is not a non-cash transaction? those items that only generate fee incomes to the banks
(a) The acquisition of assets by assuming directly rather they are not related with loans and deposits of
related liabilities banks. Example of such exposures are purchasing a
(b) Conversion of debt into equity future contract, issuing letter of credit, engaging in swap
(c) Interest on dividend received from investing contract etc.
activities 13. When technology allows many firms to operate
(d) The acquisition of an enterprise by means of efficiently in the markets, which market
issue of share structure represents a better use of society's
Ans. (c) : Non-cash transaction are those accounting resources?
transaction on cash flow or income statement that do (a) Perfect competition (b) Monopoly
not involve actual cash transaction. Out of the options (c) Monopolistic Competition (d) Oligopoly
given in the question only option (c) interest on Ans. (a) : Perfect competition/pure competition is
dividend received from investing activities is not a non market structure which allocates the society resources
cash transaction except this all are non-cash transaction most efficiently because in this market there are large
11. Match List I with List II number of producers and consumers competing with
List-I List-II one another so ultimately they have to produce their
(Nature of Goods) (Demand Elasticities) product at minimum cost.
A. Inferior goods I. Positive cross price 14. What are the different strategies firms reset to
elasticity of demand "pricing to capture ..........
(EXY>0) A. Challenge the cost route by ideology the
inflection price point
B. Substitute goods II. Greater than unitary
income elasticity of B. Offering lower/agodesle price point
demand (EI>1) C. Penetration pricing
C. Complementary III. Negative income D. 'What the traffic can bear' pricing
goods elasticity of demand E. Absorption cost pricing
(EI < 0) Choose the most appropriate from the option
given below :
D. Luxury goods IV. Negative cross price
elasticity of demands, (a) A and C only (b) D and E only
(Exy< 0) (c) A and B only (d) B and E only
Choose the correct answer from the options Ans. (c) : For the purpose of binding the price, the
given below : policies adopted by various entities for determining the
A B C D A B C D price are as follow.
(a) III IV II I (b) III I IV II (i) Challenge the cost route by ideology the inflection
Price point.
(c) II I III IV (d) IV III I II
(ii) Offering lower/agodesle price point.
Ans. (b) : The correct match is:-
15. Match List I with List II
List-I List-II
List-I List-II
Nature of Foods Demand Elasticities (Stage of buyers-seller (Characterized by the
A. Inferior Goods III. Negative income relationship) following)
elasticity of demand (Ei A. Pre-relationship I. Political supplies
< 0) stage attempting to reduce
B. Substitute I. Positive cross price risk of change and to
Goods elasticity of demand (Exy shift risk.
> 0) B. Early stage II. Shared muted
C. Complementary IV. Negative cross price dependence and high
Goods elasticity of demands levels of commitment.
(Exy < 0) C. Development stage III. Customer concern
D. Luxury Goods II. Greater than unitary about risk of change
income elasticity of and its distance
demand (Ei > 1) between validity and
12. Which of the following are considered as off the potential supplies.
balance sheet activities of a commercial Bank. D. Long-term stage IV. Reduction,
A. Lending money to a depositor uncertainty and
B. Borrowing from RBI distance.
C. Purchasing a future contract Choose the correct answer from the options
D. Issuing letter of credit given below :
E. Engaging in Swap Contract A B C D
Choose the correct answer from the options (a) I II III IV
given below : (b) IV I II III
(a) A, E, D only (b) B, C, E only (c) III I IV II
(c) E, D, C only (d) A, D, E only (d) I IV III II
UGC NTA NET Commerce Paper June 2023 Shift-II 560 YCT
 Ans. (c) : The correct matching is – Ans. (b) : Adjusted present value model used by MNCs
List-I List-II to evaluate capital budgeting decision is based on value
(Stage of buyer seller (Characterized by the additively approach. This principle states that total
relationship) following) value of a group of assets is equal to the value of all
A. Pre-relationship III. Customer concern individual assets included in the group. It also states that
stage about risk of change NPV of a project can be calculated by discounting each
and its distance cash flow separately and then summing up present value
between validity and to measure project's net value.
potential supplies. 19. Sequence the following steps in the process of
B. Early stage I. Political supplies securitisation.
attempting to reduce A. Special purpose vehicle (SPV) issue tradable
risk of change and to securities to find the purchase of pool of
shift risk. assets
C. Development IV. Reduction, uncertainty B. SPV subcontracts (outsource) the originator
stage and distance. for collection of interest and principle
D. Long term stage II. Shared mutual payments on the pool of assets
dependence and high
levels of commitment. C. SPV repay the funds to the investor or
cashflow arise on the pool of assets
16. Which of the following are likely to lead an
appreciation in the value of a country's currency? D. Originator make a pool of assets and sold it
A. Higher real interest rate to the SPV
B. Higher nominal interest rate E. SPV pays the funds the origination for the
C. Lower inflation pool of assets
D. Higher inflation Choose the correct answer from the options
E. Large current account deficit given below :
Choose the correct answer from the options (a) B, D, A, C, E (b) D, E, B, A, C
given below : (c) D, B, A, E, C (d) E, A, B, D, C
(a) B, C only (b) A, C only Ans. (c) : Securitization refers to the process of
(c) D, B only (d) E, A only converting debt (Assets, Mostly liquid Assets) into
Ans. (b) : Appreciation in the value of currency refers securities, which are than bought and sold in financial
to increase in relation to some other international markets. Its process are as follow.
currency. For e.g. U.S. Dollar. Out of the following (i) Originator make a pool of Assets and sold it to the
options only option (a) Higher real interest rate and SPV.
option (c) lower inflation will lead to appreciation in the (ii) SPV subcontracts (outsource) the originator for
value of country's currency. collection of interest and principle payments on the
17. Which of the following are necessary pool of Assets.
characteristic of modern selling? (iii) Special purpose vehicle (SPV) issue tradable
A. Database and knowledge management securities to find the purchase of pool of assets.
B. Brand extension
(iv) SPV pays the funds the origination for the pool of
C. Customer relationship management Assets.
D. Segmentation, targeting and positioning
E. Satisfying needs and adding value (v) SPV repay the funds to the investor or cash flow
arise on pool of assets.
Choose the most appropriate answer from the
options given below : 20. Arrange the steps for verification and value of
(a) A, C, E only (b) B, C, D only furniture and fixtures by an auditor.
(c) C, D, E only (d) A, D, E only Ensure that amount and rate of
Ans. (a) : Modern selling is a selling approach in which A. Depreciation charged on different items is
seller has strategic knowledge of customer's market based on fair estimate of their working life
place and knows all implications and opportunities B. Check that repair to furniture if any, during
resulting from product/service supply relating to the current year is debited to Profit and loss
customer market place. Account
It is characteristics are as follows:- C. Verify with reference to the purchase
⇒ Customer retention and deletion invoice in case of the assets have been
⇒ Database and knowledge management. acquired during the current accounting
⇒ Customer relationship management. period
⇒ Marketing the product. D. See the payment made on account of
⇒ Problem solving and system selling. purchases of any item of furniture and
⇒ Satisfying need and adding value. fixture through the invoices of the suppliers
18. The adjusted present value model used by E. Check that a stock register is maintained
MNCs to evaluate capital budgeting decision is containing the details of the various items
based on purchased
(a) Gresham's principle Choose the correct answer from the options
(b) Value additivity approach given below :
(c) Law of one price (a) C, E, A, B, D (b) A, B, C, D, E
(d) Multilateral Netting approach (c) B, C, D, A, E (d) A, E, C, D, B
UGC NTA NET Commerce Paper June 2023 Shift-II 561 YCT
Ans. (a) : The various steps for verification and value Ans. (b) : The return on capital invested is a concept
of furniture and fixtures by an auditor is as follows : that measures the profit which a firm earns on investing
(i) Verify with reference to the purchase invoice in a unit of capital. They are frequently stated as a
case of the assets have been acquired during the percentage to the profit to investment ratio and as the
current accounting period. dollar value of investment and the yield on capital is
(ii) Check that a stock register is maintained containing another term employed to express the idea of gain in
the details of various items purchased. percentage terms.
(iii) Depreciation charged on different items is based on Hence both Assertion (A) and Reason (R) are correct
fair estimate of their working life. statements but Reason (R) is not correct explanation of
(iv) Check that repair to furniture if any, during the Assertion (A) .
current year is debited to Profit and loss Account 24. The utilitarian view of ethics is one of the few
(v) See that payment made on account of purchase of perspectives on business ethics and it includes :
any item of furniture and fixture through invoice of A. Respecting and protecting individual
supplier. liberties and privileges
21. In order to maximise profits in oligopolistic B. Imposing and enforcing rules fairly and
markets, in which order firms addresses impartially
following strategic challenges? C. Ethical decisions made soley on the basis of
A. Bargaining power of buyers their outcomes of consequences
B. Competitive intensity of rival firms D. Encourages efficiency and productivity and
C. Bargaining power of suppliers is consistent with goal of profit maximasation
D. Threat from substitute products E. Ethical decisions be learned on existing
E. Threat of new entry ethical norms in industries and communities
Choose the correct answer from the options Choose the most appropriate from the options
given below : given below :
(a) B, C, E, D, A (b) D, E, A, C, B (a) A, E only (b) C, D only
(c) D, E, B, C, A (d) E, B, C, A, D (c) B, C only (d) D, E only
Ans. (b) : In order to maximise profits in oligopolistic Ans. (b) : The Utilitarian view of business ethics is a
markets the firm addresses the strategic challenges in perspective that evaluates the moral worth of business
the following order. decision and actions based on their overall
(i) Threat from substitute products. consequences and their impact on the well being of
(ii) Threat of new entry. stakeholder. It includes –
(iii) Bargaining power of buyers. ⇒ Ethical decisions made solely on the basis of their
(iv) Bargaining power of suppliers. outcome or consequences.
(v) Competitive intensity of rival firms. ⇒ Encourages efficiency and productivity and is
consistent with goal of profit maximisation.
22. The coefficient of variation for a Poisson ⇒ It considers the interest of all stakeholders involved
distribution with λ (mean) = 5 is _______. in business decision.
(a) 31.1 percent (b) 44.7 percent
⇒ It often encourages business to take long term view
(c) 35.2 percent (d) 58.9 percent of their actions.
Ans. (b) : In a Poisson distribution, the standard 25. Frederic W. Taylor is acknowledged as the
deviation (σ) is equal to the square root of the mean (µ). father of scientific management. What is his
Therefore, for a Poisson distribution with mean (λ) = 5. major contribution to management.
Standard deviation (σ) = 5 = 2.236 (a) Theory of bureaucracy
Now, we can calculate the co-efficient of variation (b) Identified characteristics of companies he
using formula. considered excellent
CV = (σ/µ)* 100 (c) Application of psychology to industry and
CV = (2.236/5)* 100 = 44.72% management
23. Given below are two statements one is labelled (d) How to raise productivity through greater
as Assertion (A) and the other is labelled as efficiency in production and increased pay for
Reason (R). workers
Assertion (A) : The return on capital invested is a Ans. (d) : Frederic W. Taylor is acknowledged as the
concept that measures the profit father of scientific management. He started his career as
which a firm earns on investing a an apprentice in small machine shop in Philadelphia
unit of capital (U.S.A) in 1875. His contributions are as follow.
Reason (R) : Yield on capital is another term ⇒ Principles of scientific management.
employed to express the idea • Science not rule of thumb
In the light of the above statements, choose the • Harmony not discord
most appropriate answer from the options • Mental Revolution
given below :
(a) Both (A) and (R) are correct and (R) is the • Co-operation, not individualism
correct explanation of (A) • Individual growth to achieve maximum efficiency and
(b) Both (A) and (R) are correct but (R) is NOT profitability.
the correct explanation of (A) ⇒ Technique of scientific management.
(c) (A) is correct but (R) is not correct • Time study
(d) (A) is not correct but (R) is correct. • Scientific task planning
UGC NTA NET Commerce Paper June 2023 Shift-II 562 YCT
• Differential piece rate system Ans. (a) : The Assertion (A) Promise is an agreement is
• Motion study correct and the Reason (R) An Agreement is the sum
• Standardization and simplification total of offer and acceptance is also correct Section 2 (e)
of Indian contract Act defines Agreement as "Every
• Functional foremanship overall, his major focus was promise and every set of Promises, forming
on how to raise productivity through greater efficiency consideration for each other" and agreement is a result
in production and increased pay for workers. of offer and Acceptance between two parties. Thus both
26. Published by the UNDP, the HDI is summary the statements are correct however the Reason (R) is
measure of human development. It measures correct explanation of Assertion (A).
the average achievements of a country in three 29. Some bottles of soft drink were supplied by X
basic dimensions of human development and to Y. Y got injured due to busting of one of the
include the following. bottles. Y claimed damages from X due to?
(a) Standard of living, Income and Occupation (a) Condition as to fitness as quality
(b) Education, Occupation and Health (b) Condition as to wholesomeness
(c) Health, Education and Standard of living (c) Condition as to merchantability
(d) Poverty, Health and Standard of living (d) Condition in a sale by description
Ans. (c) : Established by UNDP, the HDI is summary Ans. (c) : Some bottles of soft drink were supplied by X
measure of human development. It measures the to Y. Y got injured due to bursting of one of the bottles.
average achievements of a country in three basic Y claimed damage from X due to condition as to
dimension of human development and includes health, merchantability
education and standard of living. Section 16 (2) of Sales of Goods Act states that when
• A long and healthy life, as measured by life goods are bought by description from a seller who deals
expectancy at birth. in goods of that description (whether he is the
• Knowledge as measured by mean years of schooling manufacturer or producer or not), there is an implied
and expected years of schooling. condition that the goods should be of merchantable
quality. Here, the bursting of bottle has breached this
• A decent standard of living, as measured by GNI per condition as to merchantability. So he can claim
capita in PPP terms in US $. damages for that.
27. Blake and Morten recognise four leadership 30. Given below are two statements one is labelled
styles. One of them is the autocratic task as Assertion (A) and the other is labelled as
management style. The autocratic task Reason (R).
manager is one who – Assertion (A) : Cross listing can potentially
(a) Concern themselves very little with either increase the stock price and lower
people or production and have minimum the cost of capital
involvement in their jobs Reason (R) : Cross listing facilitates wider
(b) Display in their actions, the highest possible stock ownership and expands
dedication both to people and to production. investor base for a firm's stock
(c) are concerned only with developing an In the light of the above statements, choose the
efficient operation who have little or no most appropriate answer from the options
concern for people given below :
(d) have little or no concern for production but (a) Both (A) and (R) are true and (R) is the
are concerned only for people correct explanation of (A).
Ans. (c) : An Autocratic leader or manager is (b) Both (A) and (R) are true but (R) is NOT the
centralized figure in the management. He takes all the correct explanation of (A).
decision himself without consulting the subordinates. (c) (A) is true but (R) is false.
He holds close supervision over the employees and uses (d) (A) is false but (R) is true.
punishment and reward as a measure of achieving Ans. (a) : Assertion (A) Cross listing can potentially
target. In other words, The autocratic task manager is increase the stock price and lower the cost of capital and
one who are concerned only with developing an the Reason (R) cross listing facilitates wider stock
efficient operation who have little or no concern for ownership and expands investor base for firm's stock
people. both are correct. However the reason is the correct
explanation of Assertion.
28. Given below are two statements one is labelled
as Assertion (A) and the other is labelled as 31. What are the correct steps of procedures of e-
Reason (R). filing of Income Tax Return?
A. Filing details and computation of tax
Assertion (A) : "Promise is an agreement"
B. Generate XML file, filing income tax return
Reason (R) : "An agreement is the sum total of and use of digital signature
offer and acceptance" C. Register and login on portal and select
In the light of the above statements, choose the application return form
most appropriate answer from the options D. Use of ITR form V and sending ITR-V form
given below : to CPC
(a) Both (A) and (R) are correct and (R) is the E. Making payment of balance tax and contain
correct explanation of (A). the data provided for
(b) Both (A) and (R) are correct but (R) is NOT Choose the correct answer from the options
the correct explanation of (A). given below :
(c) (A) is correct but (R) is not correct. (a) A, D, C, E, B (b) C, A, E, B, D
(d) (A) is not correct but (R) is correct. (c) A, C, D, E, B (d) A, B, C, D, E
UGC NTA NET Commerce Paper June 2023 Shift-II 563 YCT
Ans. (b) : An Income tax return (ITR) is a form used to 34. Match List I with List II
file information about an assessee income and his tax to List-I List-II
income tax department. (Regression (Measurement)
E-filing of income tax implies submitting the returns variations)
electronically on the income tax website its process is as A. Total sum of square I.
∑ ( ŷ – yi )
2
i
follow :–
∑(y )
(i) Register and login on the portal and select B. Sum of square due II. ɵ
2

to regression i – yi
application return form.
C. Sum of square due III.
⇓ ∑(y i – yi )
2

(ii) Filing details and computation of tax. to curve

⇓ D. Standard error of IV.
∑ ( yi – yˆ i ) /n – 2
2
estimate
(iii) Making payment of balance tax contain the data
provided for. Choose the correct answer from the options
given below :
⇓
A B C D A B C D
(iv) Generate XML file, filing income tax return and use (a) I II III IV (b) III I II IV
of digital signature.
(c) IV III I II (d) II IV III I
⇓ Ans. (b) : The correct match is:-
(v) Use of ITR form V and sending ITR-V form to CPC.
List-I List-II
32. In the 'Category F' which companies are (Regression variations) (Measurement)
classified by the SEBI?
A. Total sum of square iii.
∑ (y – y )
2
(a) Existing listed companies that are making a i i
public issue B. Sum of square due i.
∑ ( ŷi – yi )
2
(b) New companies with less than 12 months in to regression
operation C. Sum of square due ii.
( )
2
(c) Companies having a good track record of to curve ∑ yi – yɵ i
profit D. Standard error of iv.
∑ ( yi – yˆ i ) /n – 2
2
(d) Privately held companies estimate
Ans. (a) : In the category 'F' Existing listed companies 35. A business has been discontinued in the
that are making public issue are classified by SEBI. previous year 2021-22. The business loss.
33. Which expenses are expressly disallowed under (a) Can be carried forward and set off against
profits from Business or Profession? profit gain of business and profession
A. Salary paid out of India or to a non-resident (b) Can be set-off against income from business
in India. or profession or income under any other head
B. Wealth tax (c) Can be carried forward and set off for
C. Payment to any Rural Development indefinite period, whether business is carried
or discontinued
Programme
(d) Can be carried forward and set off for six
D. Expenditure incurred by companies on years, whether business is carried or
notified skill development project discontinued
E. Interest, royalty or fees payable outside Ans. (a) : A business has been discontinued in the
India previous year 2021-22. The business loss can be carried
Choose the correct answer from the options forward and set-off against profit gain of business and
given below : profession.
(a) A, D, E only (b) A, B, C only According to Income tax law, If loss of any
(c) C, D, E only (d) A, B, E only business/profession (other than speculative business)
Ans. (d) : The expenses which are expressly disallowed cannot be fully adjusted in the year in which it is
under profit from business or profession are as follow. incurred, then the adjusted loss can be carried forward
for making adjustment in the next year. In the
(i) Salary paid out of India or to a non-resident in India. subsequent year such loss can be adjusted only against
(ii) Wealth Tax charged to tax under the head ""profits and gains of
(iii) Income Tax. business or profession".
(iv) Interest, royalty, fees for technical service etc. 36. Four schedule have been added at the end of
payable to a non-resident or outside India without the Limited Liability Partnership (LLP) Act,
deducting TDS and its payment. the second schedule entertains which one of the
(v) Interest, commission or brokerage, fees for following?
professional services or fee for technical services (a) Provisions to conversion from private
payable to any resident person without TDS and its company into limited liability partnership
payment. (b) Provisions regarding matters to mutual rights
(iv) Any tax on non monetary perquisite actually paid and duties of partners and limited liability
partnership and its partners applicable in the
by employer on behalf of employee. absence of any agreement on such matters
UGC NTA NET Commerce Paper June 2023 Shift-II 564 YCT
 (c) Provisions relating to conversion of a firm 39. A company's stock sells for ` 63. The company
into limited liability partnership pays annual dividend of ` 3 per share and has
(d) Provisions for conversion from unlisted public long established record of increasing its
company into limited liability partnership dividend by a context 5% annually. For this
Ans. (c) : The four schedule which are added at the end company, the cost of equity (Ke) is ________.
of limited liability Partnership (LLPs) are as follow. (a) 13% (b) 14%
Schedule -1- Provision regarding matters relating to (c) 10% (d) 8%
mutual right and duties of partner and limited liability Ans. (c) : Here, we are using Dividend Discount model
partnership and its partners applicable in the absence of (DDM)
any agreement on such matters. Ke = (D1/PO) + g
Schedule -2- Conversion from firm into limited liability Ke = cost of equity
Partnership D1= expected Dividend per share at the end of current year.
Schedule -3- Conversion from private company into PO = Current Market price per share
Limited Liability Company. g = growth rate of dividend.
Schedule -4- Conversion from Unlisted public company In this case we are given
into limited liability company. PO (current market Price) = ` 63
37. Maslow's Hierarchy of Needs depicts human DO (Annual dividend per share) = ` 3
needs in the form of hierarchy ascending from g (Annual growth of dividend) = 5% = 0.05
the lowest to highest need. The correct order is. To calculate D1, the expected dividend per share at the
(a) Esteem needs, Acceptance needs, Safety end of current year, we need to apply the growth rate (g)
needs, Physiological needs, Need for Self- to the current dividend (DO):
Actualisation D1 = DO×(1 + g)
(b) Physiological Needs, Safety needs, D1 = 3× (1 + 0.05)
Acceptance needs, Esteem Needs, Need for D1 = 3× 1.05
Self-Actualisation D1 = ` 3.15
(c) Safety needs, Esteem needs, Need for Self- Now, DDM
Actualisation, Physiological Needs, Ke = (D1/PO) + g
Acceptance Needs Ke = (3.15/63) + 0.05
(d) Physiological needs, Acceptance needs, Ke = 0.05 + 0.05
Safety needs, Need for Self-Actualisation,
Esteem Needs Ke = 0.10 or 10%
Ans. (b) : Maslow Hierarchy of Needs is a theory that 40. Match List I with List II
explains the different level of human needs, arranged in List-I List-II
pyramid structure. According to him individual must (Person non-resident (Rate for deduction
fulfill the lower level needs before they can progress to Indian) of tax at source)
higher level ones. A. On income from Dividend I. 30%
The order is as follows– B. On income by way of II. 10%
(i) Physiological needs- It contains the basic needs of short term capital gain
human such as air, water clothes, food and shelter. referred to in section 111 A
(ii) Safety needs - It contain financial security health, C. On income by way of III. 20%
personal safety etc. winning from horse race
(iii) Love and Belongingness Needs- This involves D. On income by way of IV. 15%
forming healthy and meaningful connection with royalty or fees for
family, friends and community. technical services
(iv) Esteem Needs- This involves sense of achievement, payable by Government
confidence and the desire for others to value and Choose the correct answer from the options
appreciate. given below :
(v) Self - Actualization - It contain desire to reach one's A B C D A B C D
full potential and achieve personal growth. (a) I II III IV (b) II III I IV
38. ________ is a most useful type of non (c) III IV I II (d) IV III I II
probability sampling method when individuals Ans. (c) : The correct match is :-
with the desired characteristics experience or
attitudes are difficult to identify or reach. List-I List-II
(a) Purposive Sampling (Person non-resident Indian) (Rate for
deduction
(b) Convenience Sampling of tax at
(c) Snowball Sampling source)
(d) Quota Sampling A. On income from dividend iii. 20%
Ans. (c) : Snowball sampling is a most useful type of B. On income by way of short term iv. 15%
non-probability sampling method when individuals with capital gain referred to in section
the desired characteristics, experience or attitude are 111 A
difficult to identify or reach. In short it is used when the
target population is difficult to access or when no C. On income by way of winning i. 30%
comprehensive sampling frame exists. This method is from horse race
particularly useful when studying rare or hard to reach D. On income by way of royalty or ii. 10%
populations, such as drug users, homeless individuals, fees for technical service payable
or specific subcultures. by government
UGC NTA NET Commerce Paper June 2023 Shift-II 565 YCT
41. Which of the following enumerates the Statement II : Self-seeing bias is the tendency for
distinctive features of Management Audit? individual to attribute then own
A. It is an appraisal of both policies and success to internal factors while
actions pulling the blame for failures on
B. It is preventive as well as creative check of external factors
cost accounting data In the light of the above statements, choose the
C. It is organisation oriented most appropriate answer from the options
D. It is dynamic and result oriented rather given below :
than simply procedure bound (a) Both Statement I and Statement II are correct.
E. It ensures the sound and healthy growth of (b) Both Statement I and Statement II are
business organisation incorrect.
Choose the correct answer from the option (c) Statement I is correct but Statement II is
given below : incorrect.
(a) A, B, D only (b) A, C, E only (d) Statement I is incorrect but Statement II is
(c) B, D, E only (d) A, D, E only correct.
Ans. (d) : A management audit is a comprehensive Ans. (d) : Statement I is incorrect while statement II is
assessment of an organization's management practices, correct.
process and performance. Its primary objective is to Self - serving bias is a psychological phenomenon
evaluate the effective and efficiency of management where individuals tend to attribute their success to
team in achieving the organisational goal and objective. internal factors (such as their abilities, efforts or skills)
Its distinctive features are :– while attributing their failure to external factors (like
⇒ It is an appraisal of both policies and action. bad luck, other people or situational factors).
⇒ It is dynamic and result oriented rather than simply 44. In order to protect domestic industries, trade
procedure bound. restrictions are often been allowed and justified
⇒ It ensures sound and healthy growth of business to counteract which of the following dumping
organisation. practices?
⇒ It analyzes the financial practices of organisation (a) Persistant dumping (b) Predatory dumping
including budgeting, cost control and financial (c) Sporading dumping (d) Reverse dumping
reporting. Ans. (b) : Predatory dumping is a term used in situation
42. Brewing financial stress endangering economic where a company or country exports goods to another
stability in developed economics is the country at a price below its cost. Its purpose is to gain
immediate consequence of which of the competitive advantage over local producers and
following? monopolize the market in recipient country. To protect
(a) Fiscal indispline (b) Rising price level domestic industry from predatory dumping, countries
(c) Over leverage (d) Increased interest rates may impose anti dumping duties on the imported goods
Ans. (d) : Brewing financial stress endangering to bring their price to fair market value.
economic stability in developed economies is immediate 45. A price ceiling below the equilibrium price
consequence of increased interest rate and many other leads to _______.
economic factors such as government policies and other A. Black marketing
global events etc. B. Shortage of commodity
However from the question point of view let us know C. Surplus of the commodity
the impact of high interest rate of various sectors D. Hoarding of commodity
(i) Debt servicing cost - when interest rate rises the E. Increased in consumption
cost of borrowing increases, so interest payment on Choose the most appropriate from the options
existing loans becomes more expensive, it can lead given below :
to financial distress.
(a) A, B and C only (b) C, D and E only
(ii) Asset prices - In housing market, rising mortgage
rate can reduce demand for homes, leading to (c) A, B and D only (d) B, D and E only
slowdown in real estate sector. Ans. (c) : A price ceiling is a government imposed
(iii) Investment and business growth- High interest maximum price that can be charged for a particular
rate can stop business form borrowing and commodity or service. It can leads to various effects.
expanding their operation. (i) Black marketing:- In this case suppliers may
(iv) Movement debt burden - Higher interest rate choose to hoard goods and sell them at higher price
means that the government interest expense on debt where price ceiling does not apply
increases. This can strain government finances. (ii) Hoarding of commodity:- With the price ceiling in
43. Given below are two statements : place, producers may find it unprofitable to sell the
Statement I : The judgmental alltribution error commodity at the capped price. By holding back
is the tendency to over estimate supply and waiting for the price ceiling to be
the of external factor and removed or raised they can sell their goods at higher
underestimate influence of price.
external factor underestimate the (iii) Shortage of commodity:- In such cases, supplier
influence of internal factors when may hoard their goods to avoid selling out quickly
making indgement about the and being left without inventory to sell at the
behavior of others. controlled price.

UGC NTA NET Commerce Paper June 2023 Shift-II 566 YCT
46. Which of the following non-parametric test has Ans. (b) : The model for budget or "No frills" airlines
no corresponding parametric test? war first developed in USA by southwest Airlines in the
(a) Sparman rank correlation test 1970s. The premise of this budget airline was to get
(b) Kruskal Wallir test passenger to their destination for less with an
"adequate" level of service. This highly successful
(c) Mann-Whitney test model has since been copied by airlines all over the
(d) Ward-Walfowitz one sample runs test world. The competitive advantage to budget airlines
Ans. (d) : The Ward-Walfowitz one sample run test is a arises from maintaining low operating cost while
non- parametric test, and it does not have a direct increasing revenue.
corresponding parametric test. It is used to assess the 50. Match List I with List II Multiple purposes of
randomness or independence of observation in a single performance assessment
sample, and it checks whether the data are randomly List-I List-II
distributed across two categories or exhibit some (General (Specific purpose)
systematic pattern. Applications)
47. 'Pin Money' is used for ______. A. Development uses I. Identification for
(a) Receipt on account of Dharmshala, Goshala performance,
recognition, individual
etc. performance, salary,
(b) Women gets from her husband certain promotion,
amount termination.
(c) Income of non-residents from shipping B. Administrative II. Critics of validity
business uses/decisions research, Helping
(d) Income from building used for agriculture meet legal
Ans. (b) : Pin money is a money given by a man to requirement.
women in his family (for e.g. his wife or daughter). It is C. Organisational III. Identification of
a term used to refer a small amount of money that is set maintained individual needs,
aside for personal spending or discretionary expenses. objectives strengths,
performance
48. What are the positive attributes of mobile feedback.
banking. D. Documentation IV. HR planning,
A. Negative experience in European countries Determining
B. Wireless Application Protocol (WAP) organisation training
C. Advanced Penetration of Mobile network needs.
D. Less security Choose the correct answer from the options
E. Faster data processing speed given below:
Choose the most appropriate answer from the A B C D
(a) IV I II III
options given below :
(b) III I IV II
(a) A, C, D only (b) B, D, E only
(c) II III I IV
(c) B, C, E only (d) C, D, E only (d) I II III IV
Ans. (c) : Mobile banking refers to the use of mobile Ans. (b) : The corrct match is:-
devices, such as Smartphone or tablets to perform
List-I List-II
various financial transaction and banking activities. Its
(General (Specific Purpose)
positive attributes are:- Applications)
(i) Easy Accessibility. A. Development iii. Identification of
(ii) Wireless Application protocol. uses individual needs,
(iii) Advance penetration of mobile network. strength, performance
(iv) Faster data processing speed. and feedback.
49. The Model for Budget or "No frills" airlines B. Administrative i. Identification for
was first developed in the USA by Southwest uses/decision performance,
Airlines in the 1970s. The premise of this recognition,
individual
budget airline was to get passengers to their performance, Salary,
destination for less with an "adequate" level of promotion,
service. This highly successful model has since termination.
been copied by airlines all over the world. The C. Organisational iv. HR planning,
competitive advantage of budget airline arises maintained determining
from the following. objective organisation training
(a) Sound Positioning needs.
(b) Maintaining low operating costs while D. Documentation ii. Critics of validity
increasing revenue research, Helping
(c) Effective market segmentation & Targeting meet legal
(d) Aggressive advertising requirement.

UGC NTA NET Commerce Paper June 2023 Shift-II 567 YCT
51. Match List I with List II 54. Arrange the procedure to make payment using
List-I (Approaches) List-II electronic cash ledger.
(Developed/Suggested) A. Generation of challan Identification number
(CIN) and Amount credited to electronic
A. Opportunity cost I. David Watson cash ledger
Approach B. Form GST PMT-07 and correction in
B. Replacement cost II. Rensis Likert and Eric electronic cash ledger
Approach G. Flamholtz C. Challan of CIN (challan identification
C. Historical cost III. Brummet Flamholtz number) and mandate form payment
Approach and Pyle through NEFT or RTGS mode
D. Standard cost IV. Hekimian and Jones D. Generate the challan in form GST PMT-6
Approach from portal and enter the details
E. Amount as per payment rule can be
Choose the correct answer from the options deposited by using internet banking, debit
given below : credit card etc.
A B C D A B C D Choose the correct answer from the options
(a) I II III IV (b) II III I IV given below :
(c) I IV III II (d) IV II III I (a) A, D, B, C, E (b) A, B, C, D, E
Ans. (d) : The correct match is :- (c) D, E, C, A, B (d) B, C, D, E, A
List I (Approcches) List II (Developed) Ans. (c) : The procedure to make payment using
A. Opportunity cost iv. Hekimian and Jones electronic cash ledger are:-
approach Step-I:- Generate the Challan in form GST PMT-6
from portal and enter the details.
B. Replacement cost ii. Rensis likert and Eric Step-II:- Amount as per payment rule can be deposited
approach G. Flamholtz by using internet banking, debit, credit card etc.
C. Historical cost iii. Brummet, Flamholtz Step-III:- Challan of CIN (Challan identification
approach and pyle number) and mandate form payment through NEFT or
D. Standard cost i. David watson RTGS mode.
approach Step-IV:- Generation of Challan Identification Number
52. Post-purchase consumers invariably experience (CIN) and Amount credited to electronic cash ledger.
cognitive dissonance which is referred to as – Step-V:- Form GST PMT-07 and correction in
electronic cash ledger.
(a) A feeling of happiness with the purchase
(b) Getting angry with the firm 55. A. T. Kearney foreign Policy Globalization
Index (2007) is a comprehensive framework to
(c) A feeling of uncertainty about making the measure globalisation. It is based in 12
right decision variables, grouped into which the following
(d) A state of extreme satisfaction four baskets?
Ans. (c) : Post - purchase consumers invariably (a) Economic integration, Political integration,
experience cognitive dissonance which is referred to as Knowledge Integration, Social Integration
a feeling of uncertainty about making the right decision. (b) Personal Integration, Technological
This feeling is caused by a discrepancy between the integration, Economic integration, Political
expected outcome of the purchase and actual outcome. integration
This is also known as post - purchase regret, buyer's (c) Social integration, Political integration,
remorse, or post - purchase cognitive dissonance. Personal integration, Technological Integration
53. Which one of the following is concerned with (d) Knowledge integration, Economic integration,
Endowment Policy? Political integration Technological integration
(a) The issuer has advantage of receiving money Ans. (b) : AT Kearney foreign policy Globalization
at regular intervals of the policy with a Index (2007) is a comprehensive framework to
specific sum of money at the expiry of the measure globalisation. It is an annual study which
policy assesses the extent to which nations are becoming
(b) At the expiry of the policy, the insured more or less globally connected taking into account
12 variables, grouped into four categories:-
receives the sum of insurance policy economic integration, personal contract,
(c) It covers the insured for the whole life. His technological connectivity and political
nominee receives the assured sum with bonus engagement.
after the death of insured 56. A company can issue shares at a discount
(d) The premium cost is high. If the insurer dies, subject to which of the following conditions?
the nominee receives the insurance amount A. Two year must have passed since the date at
Ans. (b) : An Endowment policy is an insurance plan which the company was allowed to
that provides the policy holder with the benefits of both commence business
an insurance coverage as well as a savings facility. With B. The shares to be issued must be of a class
this type of insurance plan, policy holder will be able to already issued
save regularly, which will allow him to earn a lump sum C. Issue must take place within three month
amount when the policy matures. after the date of the CLB approval

UGC NTA NET Commerce Paper June 2023 Shift-II 568 YCT
 D. Issue of shares must be authorised by an Choose the correct answer from the options
ordinary resolution of the company given below:
E. Resolution must specify the maximum rate (a) A, B, D only (b) B, C, E only
of discount (c) C, D, E only (d) D, E, A only
Choose the correct answer from the options Ans. (b) : The problem of persistent current account
given below : deficit can be avoided by pursuing the following
(a) A, B, C only (b) B, C, D only polices:-
(c) B, D, E only (d) C, D, E only • Controlling fiscal deficit.
Ans. (c) : Shares can be issued at discount subject to the • Devaluation of the domestic currency.
following conditions:- • Reduced dependence in costly external commercial
• The shares can be issued must be of a class already borrowings.
issued. • Reduction in the crude oil and gold imports.
• Issue of shares must be authorised by an ordinary • Encouraging domestic production of goods that are
resolution of the company. currently being imported.
• Resolution must specify the maximum rate of discount
a rate should not be more than 10%. • Adoption suitable policies which attract greater FDI
and more funds from FII's.
• One year must have passed since the date at which the
company was allowed to commence business. 60. Which of the following shapes are used to
• Issue must be take place within two months after the describe the long-run average cost curve?
date of the CLB (Company Low Board) approval. A. S-shape B. L-shape C. V-shape
D. U-shape E. W-shape
57. Which of the following notions objectivity
define an industry? Choose the correct answer from the options
(a) Homogeneity of products given below :
(b) High cross price elasticity of demand (a) A and B only (b) B and D only
(c) Use and consumption pattern (c) C and E only (d) C and D only
(d) Convention and market practices Ans. (b) :
Ans. (b) : The cross price elasticity of demand • Long run average cost curve is a U - shaped curve.
measures the responsiveness of the quantity demanded This shape depends on the returns to scale. As a firm
of one product to changes in the price of another related expands the returns to scale increase. It is based on the
product for the context of defining an industry traditional economic analysis.
objectively a high cross price elasticity of demand • According to the modern costs theory, the long run
between two products can indicate that these products average cost curve is a roughly L- shaped curve. The
are substitutes for each other. As a result, these products L-shape of (LRAC) implies that in the beginning
can be considered part of the same industry or a closely when output is expanded through increase in plant
related industry. size and associated variable factors, cost per unit yells
58. One of the key assumptions of the Boston rapidly due to economics of scale. Hence, L-Shape &
Consulting Group Growth Share Matrix is U-Shape are used to describe the long - run arbitrage
(a) Cash flow can be equated with profitability. cost curve.
(b) Market share has a positive effect on cash 61. According to which concept, the life of the
flow as profits are related to market share. business is divided into appropriate segments
(c) Market share acts as a proxy to competitive for studying the results shown by the business
strength. in each of the segment?
(d) Market growth rate cannot be used as a proxy (a) Periodic Matching Cost and Revenue Concept
to market attractiveness. (b) Dual Aspect Concept
Ans. (b) : The key assumptions of the Boston (c) Accounting Period Concept
Consulting Group growth share matrix are:- (d) Money Measurement Concept
• Market share has a positive effect on cash flow as Ans. (c) : According to 'Accounting period concept,
profits are related to market share. the life of the business is divided into appropriate
• The matrix assumes that the higher the market growth segments for studying the results shown by the
rate, the more attractive the market. business in each of the segment. Generally, an
• The matrix assumes that a higher relative market share accounting period is of 12 months (1 year).
indicates a competitive advantage over rivals. There are two categories of the accounting period:-
• The matrix assumes that companies with a significant Fiscal year - The companies that follows the fiscal
market share are likely to have cost advantage and year, the accounting period starts from the first day of
economies of scale, which can further strengthen their any other month apart from January.
competitive position. Calendar year - The company that follow the
59. The problem of persistent current account calendar year, their accounting period starts from 1st
deficit can be avoided by pursuing which of the January of 31 December of the same year.
following polices? 62. Before writing the research report (Pre-
A. Encouraging Savings writing), a researcher usually considers
B. Controlling fiscal deficit A. Purpose the study
C. Devaluation of the domestic currency B. Readers of report
D. Curtailing productivity C. Climax order of report
E. Reduced dependence in costly external D. Visualization of report
commercial borrowings E. Uses of report
UGC NTA NET Commerce Paper June 2023 Shift-II 569 YCT
 Choose the correct answer from the options Ans. (c) : Correlation ratio (eta), partial correlation and
given below : product moment correlation are measure of association
(a) C, D, E only (b) A, C, E only usually used for the interval scale and ratio scale data.
(c) E, B, A only (d) D, B, A only • The interval scale data is measured along a numerical
Ans. (c) : A research report is an outcome of a scientific scale that has equal distances between adjacent values.
investigation and its purpose is to convey information These distances are called intervals. There is order and
contained in the report to the reader or audience. Before the difference between two values is meaningful.
writing the research report (pre-writing), a researcher • Ratio scale data is very similar to interval variables in
usually considers the uses of report, readers of report addition to all the properties of interval variables, it
and purpose of study. As the purpose of a research features on identifiable absolute zero 'O' point.
report is to communicate the findings of research
studies to a wider audience. The report should be clear, 65. In a situation where the holding and subsidiary
concise, and well organised so, that readers can easily companies own shares in each other is known as–
understand the information presented. (a) Partly owned subsidiary
63. Match List I with List II (b) Cross holding
(c) Subsidiary company
List-I List-II
(d) Wholly owned subsidiary
(Schedules of the Companies (Deals with)
Act, 2013) Ans. (b) : In a situation where the holding and
subsidiary companies own shares in each other is
A. Schedule III I. Code for independent
directors known as cross holding. A holding company is a
Company that owns other companies outstanding
B. Schedule IV II. Corporate social stock.
responsibility activities
A subsidiary company or daughter company is a
C. Schedule V III. Preparation of Balance company that owned or controlled by another
sheet and statement of company, which is called the parent company or
profit and loss holding company
D. Schedule VII IV. Appointment and 66. The employer has provided the facility of a 1.8
remuneration to litre (c.c) car. The car is used for private
managerial personnel's purposes also and all the expenses including the
Choose the correct answer from the options driver salary are borne by the employer. The
given below : expenses of employer during the previous year
A B C D A B C D amounted to Rs 60,000 and the employer has
(a) II IV III I (b) III I IV II recovered Rs 1000 per month from the
(c) I II III IV (d) IV III I II employee for this facility. What amount per
Ans. (b) : The correct match is :- year shall be reduced by the employer from
List-I List-II actual amount of expenditure.
Schedules of the Companies Deals with (a) ` 32,400 (b) ` 16,800
Act, 2013 (c) ` 39,600 (d) ` 21,600
A. Schedule III III. Preparation of Balance sheet Ans. (c) : Here, Car engine capacity is more than 1.6
and statement of profit and liter so, the perquisite will be valued as:
loss Car (2400 × 12) = 28, 800
B. Schedule IV I. Code for independent Driver (900 × 12) = 10, 800
directors Total, 39, 600
C. Schedule V IV. Appointment and Note : (Amount recovered from employee is not
remuneration to managerial deductable)
personnel's The perquisite amount of ` 39,600 shall be reduced by
D. Schedule VII II. Corporate social responsibility the employer from actual amount of expenditure per
activities year.
64. For the interval-scale and ratio-scale data 67. Which of the following economic narratives
usually which of the following measure of relates the trade between any two countries to
association are used? the sign of their economics?
A. Kendall's tau b (a) Phillips Curve (b) Fisher Effect
B. Correlation ratio (eta) (c) Gravity model (d) Kuznets Curve
C. Partial correlation Ans. (c) : The Gravity model of international trade is a
D. Spearman's rho model that, in its traditional form, predicts bilateral
E. Product moment correlation trade flows based on the economic sizes. It means the
Choose the most appropriate answer from the trade between two nations is directly related with their
options given below : GDP's and inversely related with the geographic
(a) A, D, E only (b) B, A, E only distance between them. The model was first introduced
(c) C, B, E only (d) D, B, E only in economies world by Walter Isard in 1954.

UGC NTA NET Commerce Paper June 2023 Shift-II 570 YCT
68. ________ are the moral principles and values Ans. (b) : The correct match is - [Dropped]
that guide behavior within the field marketing List-I Committee List-II Purpose
and cover issues such as product safety, A. Basel committee III. Supervision of Bank
truthfulness in marketing, communication,
honesty in relationships with customers B. Raghuram Rajan II. Reform for financial
distributors, pricing issue and the impact of committee sector
marketing decisions on the environment and C. Vaghal committee I. India's Money market
society. D. Urjit Patel committee IV. Examining the
(a) Sustainable practices monetary framework
(b) Marketing ethics 71. Given below are two statements :
(c) Positioning principles Statement I : The price elasticity of demand is
(d) Corporate social responsibility greater, more and better
substitutes are available for the
Ans. (b) : Marketing ethics are the moral principles and commodity
values that guide behaviour within the field of Statement II : Normal goods (EI > O) for which
marketing and cover issues such as product safety EI > 1 are called luxuries while
truthfulness in marketing, communication, honesty in those normal goods for which EI
relationships with customers, distributors, pricing issue is between zero and one are
and the impact of marketing decisions on the considered necessities
environment and society. In the light of the above statements, choose the
69. Tax planning involves which of the following most appropriate answer from the options
features? given below :
A. It is an inherent right of the tax payer (a) Both Statement I and Statement II are correct.
(b) Both Statement I and Statement II are
B. It has originated from the very existence of incorrect.
certain exemptions, deduction etc (c) Statement I is correct but Statement II is
C. Transaction take the form of colourable incorrect.
devices (d) Statement I is incorrect but Statement II is
D. It is legal and accepted by judiciary correct.
E. It is based on principle of disclosure Ans. (a) :
Choose the most appropriate answer from theStatement-I:- The price elasticity of demand is greater
options given below : more and better substitutes are available for the
(a) A, B, D only (b) B, D, E onlycommodity. The presence of more and better substitutes
(c) B, C, D only (d) A, D, C onlyenhance the price elasticity of demand because
Ans. (b) : Tax planning can be defined as an consumers have the flexibility to switch to alternative
products when faced with price fluctuations.
arrangement of one's financial and business affairs by
Statement -II:- Normal goods (Ei > 0) for which Ei > 1
taking legitimately in full benefit of all deductions,
are called Luxuries while those normal goods for which
exemptions, allowances and rebates so that tax liability
Ei is between zero and one are considered necessities.
reduces to minimum. Normal goods in general, have positive income
The features of tax planning are:- elasticity (Ei > 0), which means that as consumers
• It has originated from the very existence of certain
income increase their demand for these goods also
exemptions, deductions etc. increases. However, the terms "luxury" and necessity
• It is legal and accepted by judiciary. specifically refer to the price elasticity of demand and
how responsive the quantity demanded is to changes in
• It is based on principle of disclosure the price.
• It requires a through knowledge of the Act and Hence, option (a) Both statement I and statement II are
analysis of its provisions. correct.
70. Match List I with List II 72. As the economy weakens, one would expect
List-I List-II investment in ______ funds to increase and
(Committee) (Purpose) investment in ______ funds to decrease.
A. Basel committee I. India's Money (a) Long term : short term
market (b) Equity : bond
(c) Money market mutual : equity
B. Raghuram Rajan II. Reform for financial (d) Municipal bonds : money market mutual funds
committee sector Ans. (c) : As the economy weakens, one would expect
C. Vaghal committee III. Supervision of Bank investment in long term funds to increase and
D. Urjit Patel IV. Examining the investment in equity funds to decrease when the
committee monetary economy weakens investors become more risk-averse
framework which results that they might shift their focus torwards
long term investments on the other hand, during
Choose the correct answer from the options economic downturns, the prospects for businesses and
given below : corporate earnings may not be as favorable.
A B C D A B C D Consequently, investors might reduce their exposure to
(a) II III IV I (b) III II I IV equity funds, as they are more susceptible to market
(c) III IV II I (d) II IV III I fluctuations and can carry higher risks.
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73. The potential benefit of FDI to host countries D. Regulated capital and portfolio flows
include which of the following : E. Demographic dividend and low cost
A. Access to superior technology and increased manufacturing
competition Choose the most appropriate from the options
B. Employment generation given below :
C. Increase in domestic investments (a) A, B and C only (b) C, D and E only
D. Bridging host countries foreign exchange (c) B, D and E only (d) A, C and E only
gaps Ans. (d) : The digital interconnected world has opened
E. Reduction in income inequality up unprecedented opportunities for international business
Choose the correct answer from the options growth.
given below : The drive growth of international business in digitally
(a) B, D, E only (b) A, B, E only interconnected world are as follows:-
(c) C, E, D only (d) A, C, D only • Strong consumption in global south.
• Formation of trade promoting regional groups.
Ans. (d) : The potential benefit of FDI to host countries
includes :- • Demographic dividend and low cost manufacturing.
• Access to superior technology and increased 76. Which of the following elements cause problem
competition. in application of internal rate of return method
while evaluating mutually exclusive projects?
• FDI can stimulate economic growth in host country by A. Discount rate B. Timing
injecting capital and funds into the local economy.
C. Scale D. Reversing flow
• Reduction in income inequality. E. Leverage
• It contribute to the development of infrastructure in Choose the correct answer from the options
the host country. given below :
• Inflow of FDI can improves a country's balance of (a) A, B only (b) D, E only
payments, as it represents a source of foreign (c) B, C only (d) A, D only
currency, Ans. (c) : When evaluating mutually exclusive projects
• To stay competitive in the global market, foreign using the internal rate of return (IRR) method, the
investors often invest in research and development (R timing and scale of cash flow can indeed cause
& D) activities within the host country. This can foster problems and limitations:
innovation and the development of new technologies. • Time Horizon:- The IRR method does not account
74. Arrange the key steps in developing a explicitly for the time horizon of the projects. It only
perceptual map to determine the position of a considers the timing of cash flows and their present
brand in the market place in sequence : value. As a result, it may hot give a clear picture of
A. Identify set of competing brands which project adds more value in the long run.
B. Conduct qualitative research where • Scale of projects:- Mutually exclusive projects may
customers score each brand on all key differ in size and investment amounts. A larger project
attributes may have more significant cash flows which can lead
C. Put brands on two dimensional maps to a higher IRR even if the projects overall return is
D. Aggregate all brands belonging to that lower than a smaller project with a lower IRR. This
category can lead to an incorrect decision if the focus is solely
E. Identify important attributes that on the IRR.
consumers use when choosing brands using 77. In which of the following cases, the agreement
qualitative research in void ab-initio
Choose the correct answer from the option A. Mistake is caused by fraud or misreperatation
given below : B. Mistake as to the identify of person
(a) B, C, E, D, A (b) D, A, E, B, C contracted with
(c) A, C, D, B, E (d) E, B, C, A, D C. Mistake as to the nature and character of a
written document
Ans. (b) : The key steps in developing a perceptual map D. Bilateral mistake
to determine the position of a brand in the market place. E. Unilateral mistake
Step-I:- Aggregate all brands belonging to that Choose the most appropriate answer from the
category. options given below :
Step-II:- Identify set of competing brands. (a) C, D, E only (b) A, C, E only
Step-III:- Identify important attributes that consumers (c) B, A, C only (d) D, E, B only
use when choosing brands using qualitative research.
Step-IV:- conduct qualitative research where customers Ans. (c) : An agreement is considered void ab initio
score each brand on all key attributes. when it is deemed to be invalid from the outset, as if it
never existed in the eyes of the law. In such cases, the
Step-V:- Put brands on two dimensional maps. agreement is treated as though it was never legally,
75. Which of the following drive growth of valid and the parties obligations under the agreement
international business in digitally interconnected are null and void.
world? There are several situations in which an agreement may
A. Strong consumption in global south be declared void ab initio:-
B. Dynamic exchange, interest and inflation → Mistake as to the identify of person contracted with
rates → Mistake is caused by fraud or misreperatation.
C. Formation of trade promoting regional → Mistake as to the nature and character of a written
groups document.
UGC NTA NET Commerce Paper June 2023 Shift-II 572 YCT
78. When no liability for payment of tax in 81. One factor Analysis of Variance (ANOVA)
advance arise by an assesses on his income if ________.
tax payable is (a) Is a perfect generalization of the t-test for
(a) Less than 10,000 (b) Less than 50,000 paired observations.
(c) Less than 5,00,000 (d) Less than 7, 50,000 (b) Requires that the number of observations in
Ans. (a) : As per section 208 of Income tax Act, Every each group be identical
person whose estimated tax liability for the year is ` (c) Has less power when the number
10,000 or more, shall pay his tax in advance, in the form observations in each group is not identical
of "Advance tax" so, if tax payable is less than 10,000, (d) Is extremally sensitive to slight departure
then there is no liability for payment of tax in advance from normality
arise by an assesses on his income. Ans. (c) : In a one factor analysis of variance
79. Sequence the following statistical distribution (ANOVA), the power of the test refers to the ability of
and tests in the increasing order of symmetry the test to detect a significant difference between the
means of the groups when such a difference truly exists
A. Z-distribution
in the population power is affected by various factors,
B. Chi-square distribution and one to them is the sample size in each group. when
C. T-distribution the number of observation in each group is not identical
D. F-distribution (i.e. unbalanced groups), it can impact the power of the
E. Uniform distribution ANOVA test.
Choose the correct answer from the options 82. Which one of the following subsidiary is not
given below : owned by the Reserve Bank of India.
(a) D, B, E, A, C (b) B, C, D, A, E (a) National Housing Bank (NHB)
(c) E, B, D, C, A (d) C, D, E, A, B (b) Industrial Development Finance Corporation
Ans. (c) : Statistical distribution and tests in the (IDFC)
increasing order of symmetry are:- (c) National Bank for Agriculture and Rural
• Uniform distribution Development (NABARD)
• Chi-square distribution. (d) Deposit Insurance and Credit Guarantee
Corporations of India (DICGC)
• F - Distribution.
Ans. (b) : Following are the fully owned subsidiaries of
• T - Distribution.
RBI:-
• Z - Distribution. (i) Deposit Insurance and credit Guarantee corporation
80. The dividend-irrelevance theory of Miller and of India (DICGC).
Modigliani depends on which one of the (ii) Bhartiya Reserve Bank Note Mudran private limited
following relationship between investment (BRBNMPL).
policy and dividend policy. (iii) Reserve Bank Information Technology Private
(a) Since dividend policy is irrelevant, there is no limited (Re BIT).
relationship between investment policy and (iv) Indian Financial Technology and allied services
dividend policy (IFTAS)
(b) The level of investment does not influence or Here, Industrial Development Finance Corporation
matter to the dividend decision (IDFC) is not a Subsidiary of RBI.
(c) Once dividend policy is set, the investment 83. Based on the relationship between marginal
decision are residuals revenue product (MRP) and marginal resource
(d) The investment policy is set ahead of time cost (MRC), when it pays for the firm to
and not altered by change in dividend policy expand the use of variable factor input?
Ans. (d) : (a) MRP > MRC (b) MRP < MRC
The dividend - irrelevance theory of Miller and (c) MRP = MRC (d) MRP = MRC = 1
Modigliani depends on the relationships between Ans. (a) : The relationship between the marginal
investment policy and dividend policy that the revenue product (MRP) and marginal revenue cost
investment policy is set ahead of time and not altered by (MRC) is essential for a firm to make optimal decision
change in dividend policy. In simple it can be say that regarding the use of variable factor inputs.
investment policy and dividend policy are independent MRP represents the additional revenue generated by
and can be chosen separately by a company. The using an additional unit of the variable input, while
investment policy refer to the company's decision MRC represents the additional cost incurred by
regarding investment opportunities. On the other hand employing an extra unit of the same variable input.
dividend policy refer to how the company chooses to when MRP is greater than MRC (MRP > MRC), it
distribute its earnings between dividends and retained means that the revenue gained from the last unit of the
earnings. The value of the firm is determined by its variable input is higher than the cost of that input. In
investment policy and the expected future cash flows this scenario, it is profitable for the firm to expand the
generated by its investments not by how those cash use of the variable factor input. By doing so, the firm
flows are distributed to shareholders. can increase its overall profitability.
UGC NTA NET Commerce Paper June 2023 Shift-II 573 YCT
84. Sequence the conduct of following trade (a) Rs 40,000, Rs 60,000
negotiation and facilitation rounds in (b) Rs 30,000, Rs 50,000
chronological order. (c) Rs 30,000, Rs 60,000
A. Kennedy round B. Doha round (d) Rs 40,000, Rs 70,000
C. Geneva round D. Tokyo round
Ans. (*) : Dropped by NTA
E. Uruguay round
Choose the correct answer from the options 87. Which one of the following is an operational
given below : technique of hedging transaction exposure.
(a) B, D, C, A, E (b) C, A, D, E, B (a) Hedging through money market
(c) A, B, D, C, E (d) D, C, A, E, B (b) Hedging through forward
Ans. (b) : The trade negotiation and facilitation rounds (c) Hedging through swap
in chronological order:- (d) Hedging through leading & lagging
→ Geneva round (April 1947) Ans. (d) : Managing Transaction exposure is crucial for
→ Kennedy Round (May 1964) busineses involved in international trade and finance.
→ Tokyo Round (September 1973) Transaction exposure refers to the risk of financial
losses that arise from fluctuations in exchange rates
→ Uruguay Round (September 1986) between the time a transaction is initiated and the time it
→ Doha Round (November 2001) is settled.
85. While using a recruiting yield pyramid, the Hedging through leading & lagging is an operational
managers are aware of which of the following technique of hedging transaction exposure. Leading
while recruiting new hires? refers to accelerating payments or collections in
A. The ratio of official needs to actual hires anticipation of currency depreciation while lagging
is 2 : 1 involves delaying payments or collections when
B. The ratio of places to the people called for expecting currency appreciation.
an interview is 12 : 1 88. Matrix structure is the realisation of two
C. The ratio of offers male to new hires is 20 : 1 dimensional structure which emanates directly
D. The ratio of candidates invited for from two dimensions of authority. From which
interviews to candidates interviewed is of the two, a martix structure is created?
about 4 : 3 (a) Functional and divisional
E. The ratio of candidates interviewed to offers
made is 3 : 2 (b) Functional and project
Choose the most appropriate from the options (c) Functional and line
given below : (d) Divisional and line
(a) A, D, E only (b) B, C, D only Ans. (b) : Matrix structure is the realisation of two
(c) A, C, E only (d) B, D, E only dimensional structure which emanates directly from
Ans. (a) : The recruitment yield pyramid is a two dimensions of authority i.e. functional. Authority
relationship between the various stages of recruitment. and project or product Authority. Here Employees
It can be an arithmetic or graphical representation of report to both a functional manager (representing the
relationships of recruitment process. functional dimension) and a project or product manager
While using recruiting yield pyramid, the managers are (representing the project dimension). This dual
aware of during recruiting new hires. reporting relationship is the key characteristic of a
Recuiting Yield Pyramid- matrix structure.
89. Which of the following factors influence the
selection and construction of the scale?
A. Multicollinearity
B. Data properties
C. Number of dimensions
D. Level of Significance
E. Research objectives
Choose the most appropriate answer from the
options given below :
(a) A, B, C only (b) D, E, B only
86. P, R and M are Partners in a firm. They shared (c) C, E, B only (d) A, E, D only
profit and losses in the ratio of 3 : 2 : 1. On 1st Ans. (c) : The selection and construction of a scale are
April, R retired. The goodwill of the firm was critical steps in research particularly in the fields of
valued at two years purchase based on the social science and market research.
average of last three years profits. The Profits There are several factors influence the process of
of the last three year were as under : selecting and constructing a scale which are as follows:
2020-21 Profit Rs 2,48,000 • Number of dimensions. • Research objectives.
2021-22 Loss Rs 36,000 • Data properties. • Validity.
2022-23 Profit Rs 1,48,000
• Reliability. • Existing scales.
It was decided that share of goodwill be adjusted
in the capital account of P and M. What will be • Format of Scale. • Pilot testing
the amount of Goodwill of P and M? • Response options. etc.
UGC NTA NET Commerce Paper June 2023 Shift-II 574 YCT
90. The following are the hallmarks of an effective This approach has worked in steering the economy
marketing mix : through multiple global economic crises. A return to
A. The marketing mix matches customer needs competitive populism will be an unnecessary throwback
B. The marketing mix ensures high probability the world's fastest-growing major economy can do
C. The marketing mix contain a competitive without.
advantage 91. Which of the following apt features of course
D. The marketing mix is well blended and corrected India growth story?
matches corporate resources A. Redistributive growth
E. The marketing mix adheres to ethical B. Cluster based growth
principles C. Inclusive growth
Choose the most appropriate answer from the D. Even handed welfare delivery
options given below : E. Competitive populism
(a) A, B, C only (b) A, C, D only Choose the correct answer from the options
(c) C, D, E only (d) B, C, D only given below :
(a) A, B and C only (b) C, D and E only
Ans. (b) : An effective marketing mix is crucial for
any business to achieve its marketing goals and (c) A and C only (d) B and D only
connect with its target audience successfully. The Ans. (d) : Cluster based growth and Even-handed
marketing mix, also known as the 4Ps, It was first welfare delivery are apt features of course corrected
popularized by E. Jerome McCarthy It consists of four India growth story.
essential elements that a company control to influence 92. Secretarian political targeting of welfare,
consumer buying behavior. These four elements are according to the passage will result into ______.
product, price, promotion and place. A. Inequality
The hallmarks of an effective marketing mix are:- B. Market imperfections
• The marketing mix matches customer needs. C. Profiteering
• The marketing mix contain a competitive advantage. D. Inclusive growth
• The marketing mix is well blended and matches E. Decentralised growth
corporate resources. Choose the correct answer from the options
• The marketing mix provides a structured and given below :
comprehensive approach of marketing strategy (a) A and B only (b) B and C only
development. (c) C and D only (d) D and E only
Direction (91-95) : Ans. (a) : According to the passage, secretarian political
Government of India announced a medium-term targeting of welfare will result into Inequality and
fiscal deficit target of 4.5% of GDP by 2025-26, which market imperfections.
involves a 2-percentage-point compression from current 93. India's roadmap to pre-pandemic level fiscal
levels over the course of three financial years. Targets targets is primarily influenced by the
for the centre and states for 2023-24 are 5.9% and 3%, considerations of ______.
respectively, with half-a-percentage point leeway to the A. Keeping competitive population in check
latter for power sector reforms. States have a steeper B. Urgency of broad-based investment revival
glide path for deficit reduction that is particularly in the economy
vulnerable to political promises of free food and energy. C. Need of universal wealth re-distribution
GOI, on its part, is committed to a capital expenditure D. Need to maintain credit flow to small
programme to nurse India economic recovery, and is enterprises
nudging states towards fiscal balance. India's ability to E. Steering the economy through global
attain its pre-pandemic fiscal targets is also influenced by economic crises
its need to keep credit flowing to small enterprises in an
environment of globally high interest rates. Broad-based Choose the correct answer from the options
investment revival depends on keeping credit costs in given below:
check by better budgeting of government expenditure. (a) A, B and C only (b) C, D and E only
States have additional requirement of cleaning up off- (c) A and C only (d) A, B and D only
budget liabilities accumulated through political promises Ans. (d) : India's roadmap to pre pandemic level fiscal
such as those on free electricity. Power distribution being target is primarily influenced by the considerations of:-
the sole point of revenue injection, state utilities inability • Keeping competitive population in check.
to pay is holding up investments in generation and • Urgency of broad based investment revival in the
transmission. Apart from introducing imperfections in economy.
the market mechanism, sectarian political targeting of • Need to maintain credit flow to small enterprises.
welfare perpetuates inequality. Universal wealth
redistribution through cash transfers is a more robust 94. What is the medium term fixed deficit target
approach. Promises to vote banks are essentially a zero- for the Govt of India for financial year 2023-24?
sum game where one segment benefit at the cost of (a) 4.5 percent of GDP (b) 3.0 percent of GDP
another. India has unsuccessfully experimented with (c) 5.9 percent of GDP (d) 6.5 percent of GDP
inclusive growth for much of its post-independence Ans. (c) : The medium term fixed deficit target for the
history. It has now corrected course to grow through govt. of India for financial year 2023-24 is 5.9 percent
clusters accompanied by even-handed welfare delivery. of GDP.

UGC NTA NET Commerce Paper June 2023 Shift-II 575 YCT
95. Which of the following is inferred 'zero-sum 97. Open Network for Digital Commerce (ONDC)
game' in the passage? is getting increased traction because of ______.
(a) Wealth redistribution A. Strong consumer preferences and entry
(b) Promises to vote banks barriers
(c) Even handed welfare delivery B. Considerable reduction in the cost of
intermediation
(d) Balanced budget
C. A network of interconnected e-market places
Ans. (b) : Promises to vote banks is inferred 'zero-sum D. Mushrooming growth of gateways to
game' in the passage. facilitate digital purchases
Direction (96-100) : E. Proactive govt support and policy facilitation
The government's efforts to use technology to make Choose the correct answer from the options
ecommerce more competitive are beginning to show up given below :
in food delivery services. Customers are reporting (a) A, B and C only (b) C, D and E only
noticeable price differences in orders placed on online (c) A, B, C and D only (d) B, C and E only
apps using the Open Network for Digital Commerce Ans. (d) : Open network for Digital commerce (ONDC)
(ONDC), which creates a network of interconnected e- is getting increased traction because of:-
market places that makes it easier for small store-owners • Considerable reduction in the cost of intermediation.
to tap demand online. Platform fees for food delivery • A network of interconnected e-market places.
using ONDC are being reported at a fifth of those • Proactive govt. Support and policy facilitation.
charged by the market leaders. This is a considerable
98. After unified payment interface (UPI) success,
reduction in the cost of intermediation. This also holds which of the following government initiatives is
out the potential to break the dominance of Swiggy and making headlines to democrative e-commerce
Zomato, and eventually even that of retail platforms like these day in India?
Amazon and Flipkart. ONDC has the potential to dilute (a) Restraining e-commerce giants to follow
market concentration by increased consumer choice and inventory based business model
lower entry barriers. It could be a game-changer on the (b) Decentralized e-commerce payments
lines of the Unified Payments Interface (UPI), the infrastructure
infrastructure on which digital transactions are growing (c) Proactive government facilitations of open
in this country exponentially. On its own, however, network for digital commerce
technology will not be a necessary and sufficient (d) Prevention of market concentration and
condition to make e-commerce more competitive. UPI monopolies
has exposed those limits by being dominated by PhonePe Ans. (c) : After Unified Payment Interface (UPI)
and Google Pay, despite regulators seeking enhanced success, government initiatives like ONDC (Open
competition from among a wide field players. ONDC, Network for Digital Commerce) is making headlines to
designed by the commerce ministry to democratise e- democrative e-commerce these days in India.
commerce, could get around this by not being a platform, 99. Given below are two statements:
but it needs supporting regulation to break market silos. Statement I : Technology is a necessary and
A proposal to revive consumer protection rules that make sufficient conducting to make e-
e-market places liable for mis-selling by sellers could commerce more competitive
impede the progress of ONDC. Sellers should ideally be Statement II : Sellers are responsible and
responsible for information about products, and accountable for mis-selling on
platforms be accountable for communicating it to buyers. digital platforms
Consumer risks are, in some ways, magnified, in network In the light of the above statements, choose the
of platforms ONDC intends to create. A mushrooming of correct answer from the options given below :
gateways to facilitate digital purchases has to be (a) Both Statement I and Statement II are true.
accompanied by a set of rules that clearly delineates (b) Both Statement I and Statement II are false.
market risk from product risk. (c) Statement I is true but Statement II is false.
96. Open Network for Digital Commerce (ONDC) (d) Statement I is false but Statement II is true.
is expected to ______. Ans. (b) : Both statement I and statement II are false.
A. Lower consumer risk 100. According to the passage which of the following
B. Dilute market concentration is instrument in rapid growth of the Open
C. Reduce cost of intermediation Network of Digital Commerce (ONDC)?
D. Increase competition (a) Network of interconnected market places
E. Increase market failure (b) Decentralised payment infrastructure
Choose the correct answer from the options (c) Unified payment interface for digital
commerce
given below :
(d) Mushrooming gateways facilitating digital
(a) A, C and E only (b) B, C and D only purchases
(c) C, D and E only (d) A, B and C only
Ans. (a) : According to the passage, network of
Ans. (b) : Open Network for Digital commerce (ONDC) interconnected market places is instrument in rapid
is expected to Dilute market concentration, Reduce cost growth of the open network for digital commerce
of intermediation and increase competition. (ONDC).

UGC NTA NET Commerce Paper June 2023 Shift-II 576 YCT
 NTA UGC NET/JRF Exam, December 2023
COMMERCE
Solved Paper (Exam Date: 07.12.2023)

1. Given below are two statements one is labelled 2. Huge reduction in transportation costs of most
as Assertion A and the other is labelled as products
Reason R : 3. Geographical presence
Assertion A : A promoter invariably is the one 4. Cultural and legal considerations.
who has been associated with formation of the 3. ________ is a marketing term for any design to
company. prompt an immediate response or encourage
Reason R : A promoter is the one who an immediate sale.
undertakes to form a company with reference (a) Call for Promotion (b) Call for Activity
to a give object and who takes the necessary (c) Call to Action (d) Call to Aspiration
steps to accomplish that purpose.
Ans. (c) : Call to Action is a marketing term for any
In the light of the above statement, choose the
design to prompt an immediate response or encourage
correct answer form the options given below:
an immediate sale. It is usually placed at the end of any
(a) Both A and R are true and R is the correct
content or in a prominent place on a website. The goal
explanation of A
of a CTA is to motivate the user to take the next step in
(b) Both A and R are true but R is NOT the
the sales process, whether that's filling out a form,
correct explanation of A
making a purchase or downloading a resource.
(c) A is true but R is false
4. Which of the following will be clubbed into the
(d) A is false but R is true
income of Mr. Q whose income from Profession
Ans. (d) : Assertion (A) : Invariably a promoter is a is Rs.85,000?
person who has been associated with the company since
A. Income from Mrs. Q's profession Rs.
its inception. This statement is wrong, because the
45,000
promoter is there even before the establishment of the
B. Mrs. Q's salary as clerk, Rs. 66,000
company, he helps in setting up the company, while
Reason (R) A promoter is a person who establishes a C. Minor son's earned interest on deposits of
company with reference to a given adjective and takes money gifted to him by his uncle Rs. 15,000
necessary steps to fulfill that objective, this statement is D. Minor daughter's earning from sports Rs.
true. 80,000
2. Which of the following are the reasons the E. Minor son's winnings from lottery, Rs.
substitution between domestic and MNC goods? 1,05,000
A. Increased knowledge of foreign products Choose the correct answer from the options
due to international information revolution given below :
B. No need to conduct advertising campaigns (a) A, C, D and E (b) C, D and E
C. Transportation costs having fallen to very (c) C and D only (d) C and E only
low levels for most products Ans. (d) : The statements to be included in the income
D. Restricted international travel of Mr. Q whose business income is Rs. 85,000 are as
E. Tastes are consistent at the global level follows.
Choose the correct answer from the options Statement (c)- The Interest received by the eldest son of
given below : Mr Q on the deposit amount which was gifted by his
(a) A and C only (b) D and E only uncle. His amount is ` 15,000 which will be included in
(c) C and D only (d) A and B only Mr. Q's income because his son is a minor. Any kind of
work by a minor is legal only if he has a guardian.
Ans. (a) : The reasons for substitutability between
Hence, statement (E) The amount received by the minor
domestic and MNC goods are as follows.
1. Increase in information about foreign products due son after wining lottery, which is ` 1,05,000, will also
to international information revolution. be. included in the income of Mr. Q.

UGC NTA NET Commerce December 2023 Paper II 577 YCT

5. Which of the following are considered as the Ans. (b) : A charitable Trust (registered under section
limitations of Cost-Volume-Profit analysis? 128 of the Indian Tax Act) has been registered under
A. Constant selling price regardless of sales GST in new Delhi. It provides yoga training to senior
volume citizens, basketball coaching to teenagers and skill
B. Firm efficiency and productivity are development services to new Delhi residents above 65
constant and the cost are linear years of ago in the month of July. This trust is
responsible for paying GST on Skill development
C. Margin of safety is constant at varied levels
services. Because all services other the specially
of sales
exempted services provided to charitable trust will be
D. Sales mix and the inventory levels are subject to GST. There is no exemption for supply of
constant goods by charitable trusts.
E. Profit is constant at varied levels of sales
8. Channel power is the ability to after channel
price members behaviour so that they take actions
Choose the correct answer from the options they would not have taken otherwise. From the
given below : following channel powers list the ones which
(a) A, B and C only (b) B, C and D only are subjective in nature.
(c) C, D and E only (d) A, B and D only A. Legal Power
Ans. (d) : Following are the limitations of cost volume B. Coercive Power
profit analysis. C. Expert Power
1. Fixed selling price regardless of sales volume. D. Referent Power
2. The company's capacity and productivity are E. Reward Power
constant and costs are linear. Choose the correct answer from the options
3. Sales mix and Inventory levels are stable. given below :
4. The total cost and total revenue functions are linear. (a) D, A and C only (b) D, A and B only
Only short term restricted level of activity are likely (c) A, B and E only (d) A, C and E only
to be sustained. Ans. (a) : Channel power is the ability to change the
5. Profit are calculated on the basis of variable cost behavior of channel members so that they take actions
basis. that they would not otherwise take. Among the
6. When a target company makes a counter bid following channel powers, directive power, legal power
for the stock of the bidder, the defensive and expert power are the list of channel powers of
strategy in reference is called. objective nature.
(a) Green mail (b) Poison pill 9. Which one of the following instruments is often
(c) Pacman defense (d) Golden parachute used to protect the value of a foreign currency
denominated transaction?
Ans. (c) : The Pac-man Defense stratecy is a dopted by
(a) Forward contract (b) Forward swap
the target companies to protect themselves from the
(c) Forward hedge (d) Forward premium
hostile takeovers where the target companies try to buy
shares of the acquiring company by using its liquid Ans. (c) : A forward hedge is a classic use of forward
assets, which makes the acquirer company see the risk contracts to hedge a price today in order to buy or sell a
product at a later date.
of being taken over by the targeted company, and hence
Forward hedge instruments is often used to protect the
the former cease the plan to take over the latter.
value of a foreign currency denominated transaction.
7. A charitable trust (registered under section 12 Forward contract- A forward contract often shortened
AB of the income Tax Act) is registered under to simply forward, is a contract agreement For a future
GST in New Delhi. It provided yoga training to date at a specified date.
middle aged people coaching for Basket-ball to Forward swap- A forward swap is an agreement where
teenagers and skill development services to by two parties exchange cash flow from assets or
persons over the age of 65 years residing in investments at a specified date in the future.
New Delhi in the month of July. This trust is Forward premium- Forward premium is when the
liable to pay GST on. future exchange rate is predicted to be more than the
(a) Yoga training spot exchange rate. So if the rotation of the exchange
(b) Skill development services rate is given like Domestic/foreign and there is a
forward premium, then it means that Domestic currency
(c) Coaching for Basket-ball
will depreciate.
(d) Coaching for basket-ball and Yoga training
UGC NTA NET Commerce December 2023 Paper II 578 YCT
10. Which one of the following accounting concepts Choose the most appropriate answer from the
and convections consider it reasonable to use option given below :
the historical cost to record long-lived assets? (a) A, B, C, and D only (b) A, B, D and E only
(a) The entity concept (c) B, C, D and E only (d) A, B and D only
(b) Going concern convention Ans. (b) : Following are functions of the Reserve Bank
(c) Materiality convention of India.
(d) The periodicity convention A. Bank of issue
Ans. (b) : "Going concern" convention is an B. Banker's bank and lender of the last resort
accounting term used to describe a business that is C. Controller of credit
expected to operate for the foreseeable future. It D. Custodian of foreign exchanges reserves
assumes that the business can generate income, meet its E. Regulator and supervisor of the financial system
obligations and has no plan or Need to liquidate in the F. Regulator and supervisor of payment and settlement
coming years. systems.
The going concern concept is a key assumption under
13. Arrange the following the ascending order to
generally accepted accounting principles, or GAAP.
applicable TDS (Tax deducted of source) rates
11. Which of the following are relavant in
for the Financial Year, 2023-24.
technological innovations?
A. Payment of Rs. 655000 rent by an
A. Most innovations are incremental
individual in a year
B. Most innovations involve the commercial
B. Payment of Rs.20000 on winning from
utilization of ideas
horse races
C. Innovations cannot be explained with
C. Payment of Rs. 8000 as dividuad by cheque
isoquants
D. Introduction of innovations is not D. Payment of Rs. 35000 to an individual
stimulated by strong domestic rivalry and contractor for repait by a university
geographic concentrations E. Payment of Rs. 38000 as fees for
E. The risk in introducing innovations is professional and technical services by a call
usually high center
Choose the correct answer from the options Choose the correct answer from the options
given below : given below :
(a) B, D, and E only (b) A, C and E only (a) A, B, C, D, E (b) D, E, A, C, B
(c) A, B and E only (d) A, B and C only (c) E, D, C, B, A (d) A, E, C, D, B
Ans. (c) : Technology innovation is defined as creation Ans. (b) : Following are the TDS (Tax Deducted at
and application of new or improved technologies, tools, source) rates applicable for the financial year 2023-24
system and processes that bring about significant in ascending order.
advancements or breakthroughs in various fields. It 1. Payment of `35,000 by a university to a contractor
involves harnessing knowledge, expertise, and for repairs.
resources to develop innovative solutions that solve 2. A fee of `38,000 paid by a call center to a
problems, improve efficiency, drive progress and professional for technical services.
deliver value. Following are the relevant facts in 3. ` 655,000 paid as rent by a person in that year.
technological innovation. 4. Payment of `8000 as dividend by cheque.
1. Most innovations are incremental 5. Payment of ` 20,000 as winnings from horse racing.
2. Most innovation involve the commercial utilizations
14. Which amongst the following methods is not a
of ideas
method of generating sales leads in personal
3. The risk in introducing innovation is usually high.
selling?
12. Which of the following are functions of the (a) Referrals (b) Networking
Reserve Bank of India?
(c) Coupons (d) Cold calls
A. Bank of issue
Ans. (c) : Personal selling is when a sales representative
B. Banker's bank and lender of the last resort
meets with potential customers to nurture them until
C. Regulator of fiscal policy
they make a purchase. It usually happens face-to face,
D. Controller of credit Direct contact distinguishes personal selling from other
E. Custodian of foreign exchange reserves sales and marketing strategies, such as public relations
UGC NTA NET Commerce December 2023 Paper II 579 YCT
or automated sales calls that tout your company's 17. By reducing the sales price from Rs. 80 per unit
products or services. to Rs. 78 per unit, the sales manages has
Following methods is a method of generating sales succeeded in selling 1000 units more of a
leads in personal selling. product. Which of the following decisive
(1) Referrals conclusions can be drawn from this?
(2) Networking A. Sales price variance is unfavourable
(3) Cold calls B. Sales volume variance is favourable
15. Match List-I with List-II C. Total sales variance is unfavorable
List -I List -II D. Sales activity variance is `80,000
Asset classes Type of Investment favourable
A. Asset Class A I. Equity shares of E. Sales price variance is `2,000 unfavourable
companies traded in Choose the correct answer from the options
futures and options given below :
segments (a) A, B and C only (b) C, D and E only
B. Asset Class C II. Government securities and (c) A, B and D only (d) B, D and E only
state development loans Ans. (c) : By reducing the selling price per unit form Rs
C. Asset Class E III. Alternate Assets 80 to Rs. 78, a sales manager was able to sell 1,000
more units of an item. From this, conclusive
D. Asset Class G IV. Corporate bonds/
conclusions can be drawn that the sales price variance is
debentures which are listed
unfavorable, the sales volume variance is favorable and
and rated not below A
the sales activity cycle variance is `80,000 (favorable).
Choose the correct answer from the options
given below: 18. Honeywell inc's move from a hierachical
management structure to a much father and
(a) A-I, B-IV, C-II, D-III
team based structure is a good description of
(b) A-III, B-II, C-IV, D-I
which one of the following?
(c) A-III, B-IV, C-I, D-II
(a) Centralisation (b) Decentralisation
(d) A-I, B-III, C-II, D-IV
(c) Span of control (d) Work specialization
Ans. (c) : Match List-I with List-II
Ans. (b) : Decentralization is referred to as a form of an
List-I List-II
organization structure where there is the delegation of
Asset classes Type of Investments
authority by the top management to the middle and
A Asset class A III. Alternate Assets
lower levels of managements in an organization. In this
B Asset class C VI. Corporate bonds/debentures type of organization structure, the duty of daily
which are listed and rated not operations and minor decision-making capabilities are
bellow A transferred to the middle and lower levels which allow
C Asset class E I. Equity shares of companies top-level management to focus more on major decisions
traded in futures and options like business expansion, diversification etc.
segments
19. Match List-I with List-II :
D Asset class G II. Government securities and
state development loans. List-I List-II
16. Every seller who receives an amount exceeding Nature of Business Activity FDI Permitted
______ as consideration for sale of a motor under Automatic
vehicle, shall collect tax @ 1% of the sale Route
consideration from the buys at the time of A. Trading in Transferable I. 49%
receipt of such an amount. Development Rights
(a) `25 lakhs (b) `15 lakhs (TDR)
(c) `10 lakhs (d) `50 lakhs B. Multi-Brand Retail II. Restricted
Ans. (c) : Every seller who receives more than Rs. 10 Trading
lakh as consideration for the dale of motor vehicle will C. Satellite (Establishment III. 51%
be able to collect tax at the rate 1% of the sale and Operations)
consideration from the buyer at the time of receipt of D. Petroleum Refining IV. 100%
this amount. (by PSUs)
UGC NTA NET Commerce December 2023 Paper II 580 YCT
 Choose the correct answer from the option Ans. (b) : Per-experiments are the simplest form of
given below : research design. In a pre-experiment either a single
(a) A-IV, B-II, C-III, D-I group or multiple group are observed subsequent to
(b) A-II, B-III, C-IV, D-I some agent or treatment presumed to cause change.
(c) A-I, B-III, C-II, D-IV Types of pre-Experimental Design
(d) A-IV, B-II, C-I, D-III One-short case study design- A single group is studied
at a single point in time after some treatment that is
Ans. (b) : Match List-I with List-II
presumed to have caused change. The carefully studied
List-I List-II
single instance is compared to general expectations of
Business activities FDI approved what the case would have looked like had the treatment
under automatic not occurred and to other events casually observed.
route One-group pretest-posttest design- A single case is
A Trading in Transferable Restricted observed at two time points, one before the treatment
Development Rights and one after the treatment. Change in the out came of
(TDR) interest are presanmed to be the result of the
B Multi-brand retail Trade 51% intervention or treatment.
C Satellite (Establishment 100% Static-group comparison- A group that has
and operation) experienced some treatment is compared with one that
D Petroleum Refinery (by 49% has not. Observed differences between the two groups
PSU) are assumed to be a result of the treatment.
20. Which of the following are considered while 22. For Forigen Direct Investment, It is argued
avoiding conflict? that a location in question attracts FDI because
A. Conflict based on interpersonal it combines the unique advantage of which of
relationships the following conditions?
B. All conflicts are not bad and can be taken A. Internalisation Advantage
positively B. First Mover Advantage
C. Conflict over content and goals of the work C. Knowledge Advantage
D. Conflicts do not support a group's goal and D. Ownership Advantage
improve its performance E. Location Advantage
E. Conflict over how work gets done Choose the correct answer from the options
Choose the correct answer from the options given below:
given below : (a) E, A and C only
(a) A, B and C only (b) A, B and E only (b) E, A and D only
(c) A, C and E only (d) B, C and D only (c) C, B and D only
Ans. (c) : To avoid conflict the following should be (d) C, E and D only
considered. Ans. (b) : For foreign direct investment, it is argued that
1. Conflict based on interpersonal relationships a location in question attracts FDI because it combines
the unique benefits of the following condition.
2. Conflict about the content and goals of the work
3. Conflict about how to do things. 1. Location Advantage
2. Internalization Advantage
21. Which of following are pre-experimental ?
3. Ownership Advantage
A. One-group pre test-post test 4. Human Resource Development
B. Pre-test post-test control group 5. Increase in Exports
C. Quasi-experiments Foreign Direct Investment (FDI) is the investment of
D. Static group comparison funds by an organization from one country into another.
E. After-Only study with the intent of establishing 'lasting interest'.
Choose the correct answer from the options According to OECD (Organization for Economic Co-
given below : operation and Development), lasting interest in
(a) D, B, C only (b) A, D, E only determined when the organization acquires a minimum
(c) A, C, E only (d) E, B, D only of 10% of voting power in another organization.

UGC NTA NET Commerce December 2023 Paper II 581 YCT

23. In one-factor ANOVA, the computed F-value subsequently forfeited by the company in this
will be negative : regard by which amount share forfeiture
(a) When there is no difference in the treatment account will be credited ?
of means (a) `4,000 (b) `2,000
(b) When there is not difference within (c) `3,000 (d) `200
treatments Ans. (a) : Following entry will be Passed in the books
(c) When SST (total variance) is larger than SSE at the time of forfeiture of shares.
(error variance Share capital A/c Dr. 9,200
(d) Under no circumstances Security Premium A/c Dr. 2,000
Ans. (d) : Analysis of variance (ANOVA) is an analysis To share forfeiture A/c 4,000
tool used in statistics that divides the total observed To share allotment A/c 7,200
variability found within a data set into two parts:
systematic factors and random factors. (Being share forfeited)
ANOVA formula Thus share forfeiture A/c will be debited by ` 4,000.
MST 26. Effective mentoring requires trust and the level
F=
MSE of trust reflects the mentor's:
according to question F-distribution con not take (a) Competence, consistency, communication
negative values, because it is a ratio to variances and abilities and control sharing readiness
variances are always non-negative numbers. The (b) Concerned, cooperativeness, communication
distribution represents the ratio between the variance abilities and coordination skills
between groups and the variances with groups. (c) Competence consistency, complexity and
24. Given below are two statements : communication abilities
Statement I: For a given sample size and level (d) Communication abilities, competence,
of significance (α), the critical value of students concerned behaviour, control sharing
t always exceeds that of z. readiness
Statement II: For a given level of significance Ans. (a) : A trust is fundamental in effective mentoring
(α), the critical value of students t-increases as A mentors competence, consistency, communication
n increases. skills and willingness to share all contribute to building
and maintaining trust. This foundation of trust creates a
In the light of the above statements, choose the
conducive environment for open communication,
most appropriate answer from the options
learning and constructive feedback, enhancing the
given below :
overall effectiveness of the mentor mentee relationship.
(a) Both statement I and statement II are true
27. Which one the following are disposed to
(b) Both statement I and statement II are false
promote financial inclusion?
(c) Statement I is true but statement II is false
(a) Poor quality of services rendered
(d) Statement I is false but statement II is the true
(b) High transaction cost
Ans. (c) : In the given question two statements are
(c) Universal access to financial services
given.
(d) Lack of trust in the system
Statement-I For a given sample size and level of
Ans. (c) : Financial inclusion refers to the availability
significant value (α), the critical value of student t is
and accessibility of financial services to all segments of
always greater than its value Z. This statement is true.
society, especially these who are traditionally excluded
Statement-II The critical value of student t for a given
and underserved. It aim to promote individuals and
level for significant value (α) increases as n increases.
This statement is wrong. Thus, among the options businesses with access to formal financial systems
given, option (c) is the correct answer. including banking services, credit insurance and
25. Luxmi industries issued shares of Rs. 1000 at a investment opportunities.
premium of Rs.10 per share, payable Rs. 20 on 28. The concept of product life cycle is based on
application, Rs. 36 on allotment (including which of the following key assumptions?
premium) and the balance on the first and final A. Profits remain stable at different stages of
call Mr. X who held 200 shares has paid only product life cycle
the application money and these shares where B. Products have an unlimited life
UGC NTA NET Commerce December 2023 Paper II 582 YCT
 C. Product sales pass through district stages, 30. Which one of the following statements does not
each posing different challenges, support the concept of third degree price
opportunities and problems to the seller discrimination?
D. Products require different marketing, (a) The firm must have monopoly power
financial, manufacturing, purchasing and (b) This type of price discrimination is most
human resource strategies in each of the likely to occur in the manufacturing industries
life stages (c) The firm must be able to keep the two
E. Products have a limited life markets separate
Choose the most appropriate answer from the (d) The price elasticity and demand for the
option given below :
commodity must be different in the two
(a) B, C and D only (b) A, B and C only markets
(c) A, C and D only (d) C, D and E only
Ans. (b) : Third degree price discrimination occurs
Ans. (d) : Product life cycle (PLC) theory is a concept when as seller charges different prices to different
that describe the stages a product goes through from its
groups or segment of customers based on observable
introduction to eventual withdrawn from market. It has
characteristics. Unlike first degree price discrimination
four stages.
(individualized pricing based on each customer
1. Introduction
willingness to pay and second degree price
2. Growth
discrimination) (Pricing based on quantity or product
3. Maturity Growth Maturity Decline
4. Decline version). Third degree price discrimination relies on
Its assumption are categorizing customers into distinct groups. Its features
(i) Product sales pass through distinct stages, each are
posing different challenges, opportunities and (i) Market segmentation- The seller divides the
problem to the seller. market into separate segments based on identifiable
(ii) Product require different marketing, financial, characteristics such as age, income, location or
manufacturing, purchasing and human resource customer type.
strategies in each of life cycle stages. (ii) Price discrimination- Different prices are charged
(iii) Product have limited life. to different segments based on the perceived
29. In order to conduct exploratory data analysis, elasticity of demand in each group.
which of following are used by a researcher in (iii) No Arbitrage- The seller attempts to prevent
the five numbers summary? customers from easily switching between segments
A. Median to take Advantage of lower prices, often through
B. First quartile effective market segmentation or other measures.
C. Mean (iv) Market power- The seller must have market power
D. Third quartile to influence prices, such as unique product or
E. Smallest and largest values dominant market position.
Third degree price discrimination is prevalent in
Choose the correct answer from the options
below : industries where there are diverse customer bases with
varying preference and price sensitivities. such as
(a) A, C, D and E only (b) A, B, D and E only
Airline industry, entertainment industry, Hospitality
(c) B, C, D and E only (d) A, D, C and E only
industry etc. However manufacturing industry is not one
Ans. (b) : In exploratory data analysis researchers often
of them
use a number summary that includes various measures
So it is correct answer.
to gain insights into distribution of data.
(i) Smallest value- This is the minimum value in the 31. Arrange the following group member's
data set, represent the lowest observation. behaviour outcomes in a sequence as per the
successive stage of group building process.
(ii) First Quartile (Q1) - It is median of the lower half of
A. Eager. Anxious. Gather data about
data set, marking 25th percentile.
th
(iii) Median- It is also known as 50 Percentile and similarities and differences among
divides data into two equal values members and keep things simple.
(iv) Third Quartile- It represent 75th percentile. B. Upset and depressed
(v) Largest value- It is the maximum value in the data C. Less dissatisfied and a feeling of belonging
set and represent highest observation. to the group

UGC NTA NET Commerce December 2023 Paper II 583 YCT

 D. Confront the differences, feel angry of 33. As per the sub-section (8A) of Section 139 of
frustrated lot of competition and hostilities the income Tax Act a person may furnish an
E. Inter dependence in personal relations updated return of his income for it previous
tendency to get involved in and problem year relevant to such assessment year within
solving _____ from the end of assessment year?
Choose the correct answer from the option (a) 6 month (b) 12 month
given below : (c) 24 month (d) 36 month
(a) A, D, C, E, B (b) A, B, C, D, E Ans. (c) : The finance Act 2022, has inserted subsection
(c) E, C, D, B, A (d) B, C, E, A, D (8A) in section 139 to enable filling of an updated
Ans. (a) : The group building Process typically involves return. The section provides that an updated return can
several stages as individuals come together and form be filed by any person irrespective of the fact whether
cohesive team. The group members behavior outcomes such person has already filed the original, belated or
as per successive stages of group building process are as revised return for the relevant assessment year or not
follow- An updated return can be filed at any time within 24
(i) Curious, anxious, gathering information about months from the end of relevant assessment year.
similarities and differences between members and 34. Given below are two statements one is labelled
simplifying things. as Assertion A and the other is labelled as
(ii) confront the differences, feel angry or frustrated, Reason R.
Lots of competition and hostility.
Assertion A : Consumers may prefer to chosse
(iii) Less dissatisfied and feeling of belonging to the
the channels based on their own shopping goals
group
as well as price, product assortment and
(iv) Inter dependence in personal relations, tendency to
convenience.
get involved in and problem solving.
(v) Upset and Depressed Reason R : Some consumers are unwilling to
'Trade-up' to retailers offering higher and
32. Given below are two statements on is labelled
goods and 'Trade-down' to discount retailers
as Assertion A and the other is labelled as
for private label.
Reason R :
In the light of the above statement, choose the
Assertion A : Persons with high self-esteem are
correct answer form the options given below :
less susceptible to influence, more confident of
achieving goals and more effective in social (a) Both A and R are true and R is the correct
networking. explanation or A
Reason R: Self-esteem manifest in several (b) Both A and R are true but R is NOT the
behaviours. Persons with high self-esteem tend correct explanation of A
to report fewer negative emotions than persons (c) A is true but R is false
with low self-esteem. (d) A is false but R is true
In the light of the above statement, choose the Ans. (a) : Consumer make choices based an a
correct answer form the options given below: combination of factors such as personal shopping goals,
(a) Both A and R are true and R is the correct pricing, product variety and convenience. The reason
explanation or A adds that some consumer might be unwilling to trade up
(b) Both A and R are true but R is NOT the to high end retailers or trade down to discount retailers
correct explanation of A for private labels. This aligns with the concept that
(c) A is true but R is false some consumers have different preferences and may
(d) A is false but R is true have loyalty or aversion to specific type of retailed
Ans. (a) : High self esteem is associated with greater based on their perceived value, brand loyalty or
confidences resilience and a positive outlook. shopping habits. Therefore both assertion and reason are
Individuals with high self-esteem are often more correct and Reason is correct explanation of Assertion.
motivated to pursue and achieve goals, and tend to 35. Which one of the following committee has
engage more resistant to negative external influences, suggested the establishment NBFCs regulatory
more effectively in social interactions. Additionally framework?
research suggests that higher self esteem is correlated (a) Raj Study Group (1975)
with lower levels of negative emotions. Thus, the reason (b) Chakravarty Committee (1985)
provides as valid explanation for the assertion so (A) is (c) Vaghul Committee (1987)
correct option. (d) Shah Committee (1992)
UGC NTA NET Commerce December 2023 Paper II 584 YCT
Ans. (d) : The working group of financial companies A. Payment on buy-back of shares
constituted in April 1992 i.e. the shah committee set out B. Payment to shareholders on reduction of
the agenda for reforms in the NBFC sector. This capital
committee made wide ranging recommendations C. Distribution of debentures
covering, inter alia entry norms, compulsory registration D. Loan granted to shareholders in the
of large size NBFCs, Prescription of prudential norms
ordinary course of business
for NBFCs on the lines of bank and more statutory
E. Loan granted to shareholders by a closely
powers to Reserve bank of India for better regulation of
held company
NBFCs.
Choose the correct answer from the options
36. Arrange the following rounds for mulitlateral
below :
trade negotiations under GATT/WTO in a
chronological order. (a) B and C only (b) B, C and E only
A. Kennedy B. Doha C. Annecy (c) A, B and C only (d) A and C only
D. Torquay E. Tokyo Ans. (b) : The following are deemed to be dividend for
Choose the correct answer from the option the purpose of computing income chargeable under the
given below : head, income from other sources as per income tax act,
(a) C, D, A, E B (b) D, C, E, A, B 1961
(c) B, A, E, C, D (d) B, E, A, D, C (i) Payment to shareholders on reduction of capital
Ans. (a) : The General Agreement on tariffs and trade (ii) Distribution of Debentures to share holders.
(GATT) and its successor, the world Trade organization (iii) Loan granted to shareholders by a monopoly
had several rounds of multilateral trade negotiations company.
which are as follow. 38. Which of the following management actions are
(i) Geneva Round (1947)- It established GATT followed to reduce resistance to change?
framework. A. Education and communication are strong
(ii) Annecy Round (1949)- Focused on tariff tools for resistance to change
reduction and trade liberalization. B. Allows participation to those who oppose a
(iii) Torguay Round (1950-51)- Resulted in
change to participate in decision making
significant Tariff reduction and expansion of
C. Negotiation may become vital when
GATT membership.
resistance comes from a powerful source
(iv) Geneva II (1955-1956)- Continued efforts to
reduce tariffs and address other trade issues. D. Employee counseling does not serve the
(v) Dillon Round (1960-62)- Focused on tariff cuts purpose
and included the Kennedy Round Preparations. E. Coercion can be used to get support easily
(vi) Kennedy Round (1964-67)- Comprehensive Choose the correct answer from the options
negotiations covering tariffs, anti dumping given below :
measures and subsidies. (a) A, B and C only (b) B, C and D only
(vii) Tokyo Round (1973-1979)- Addressed non-tariff (c) B, C and E only (d) A, C and D only
barriers, including the adoption of the subsidies
Ans. (c) : Management often take specific actions to
and countervailing measures Agreement.
reduce resistance to change within an organization.
(viii) Uruguay Round (1986-94)- Resulted in creation
Some common managerial strategies include
of WTO and covered a wide range of issues,
(i) Allow participation to those who oppose a change
including services, intellectual Property and
agriculture to participate in decision making.
(ix) Doha Agreement Agend (2001-ongoin)- (ii) Negotiation may become vital when resistance come
Launched in Doha, Qatar, with a focus on from powerful source.
addressing the concerns of develoving countries. (iii) Coercion can be used to get support easily
37. Which of the following are deemed to be (iv) Demonstrate strong leadership support for the
dividend for the purpose of computing income change.
chargable under the head, income from other (v) Clearly communicate the reason for change its
sources as per the Income Tax Act, 1961? benefits, and the impact on employees.
UGC NTA NET Commerce December 2023 Paper II 585 YCT
39. Which of the following theories of capital Ans. (b) : The impact of the evolving global monetary
structure articulates that a firm borrows up to system on economies are as follow.
the point the tax benefit from extra debt is (i) Increased world trade with limited trade flows.
exactly equal to the cost the comes from the (ii) Protectionism and nationalism
increased probability of financial distress? (iii) Expanded open economies
(a) The static theory (iv) Industrial economies increasingly open and
(b) Net income approach emerging nations open slowly.
(c) Modigliani-Miller-theory (v) Capital flows driving economic development.
(d) Net operating income approach 42. _________ takes into account a host inputs,
Ans. (a) : The static theory, often associated with the such as buyer's image of the product
trade-off theory, points that a firm determines its capital performance, the channel deliverables, the
structure by finding the point at which the tax benefits warranty quality, customer support and softer
of additional debt are precisely equal to the cost arising attributes such as the suppliers reputation,
from the increased likelihood of financial distress. trust worthiness and esteem.
In essence, the static theory suggests that firm aim to (a) Target rate-of return pricing
strike a balance in their capital structure to maximize (b) Auction-type pricing
shareholder wealth. The optimal mix of debt and equity (c) Economic-value-to- customer pricing
is achieved when the marginal benefit of the tax shield (d) Competitive pricing
on debt is just equal to the marginal cost of the financial
Ans. (c) : Economic value to customer (EVC) pricing is
distress that additional debt may bring.
a strategy that considers a range of factors beyond the
40. The present value of future profits, the basic cost of production. It involve assessing the value
individual or segment will generate over a perceived by customers and pricing accordingly. This
lifetime relationship with a brand or firm, is can include factors like product performance, delivery
known as channels, warranty, quality of customer support, as well
(a) Lifelong value as intangible attributes such as supplier reputation, trust
(b) Lifetime value worthiness and esteem associated with the brand. By
(c) Long-life value incorporating these elements, business aims to align
(d) Long-term value their pricing with the perceived value their product or
Ans. (b) : Life time value (LV) represents the total services bring to the customers.
value an individual or segment is expected to bring to a 43. Given below are two statements :
business over the entire duration of their relationship. It Statement I: The ordinary treasury bills that re
involves predicting the future profits a customer or marketable and have a secondary market are
segments will generate. issued to the public and financial instructions.
41. Sequentially arrange the following impacts of Statement II : Ad hoc treasury bills are issued
the evolving global monetary system on the only in favour of the Reserve Bank of India
economic. which is authorized to issue currency notes
A. Protectionism and nationalism against them.
B. Capital flows driving economics In the light of the above statements, choose the
development most appropriate answer from the options
C. Increased word trade with limited capital given below :
flows (a) Both statement I and statement II are true
D. Expanded open economies (b) Both statement I and statement II are false
E. Industrial economics increasingly open and (c) Statement I is true but statement II is false
emerging nations open slowly (d) Statement I is false but statement II is the true
Choose the correct answer from the option Ans. (a) : Statement:- (i) The ordinary treasury bills that
given below : are marketable and have a secondary market are issued
(a) B, D, A, C, E to public and financial institutions. and statement 2
(b) C, A, D, E, B temporary treasury bills are issued only in favor of
(c) C, E, D, A, B Reserve bank of India which is authorized to issue
(d) E, B, D, A, C currency notes against them, both are correct.
UGC NTA NET Commerce December 2023 Paper II 586 YCT
44. Match List -I with List-II 46. Which one of the following consists of physical
List-I List-II working conditions, work schedule, incentives
Types of Effect Description and the number of people with whom employee
would normally interact?
A. Veblen effect I. Conspicuous
(a) Job profile (b) Job content
Consumption
(c) Job context (d) Job specification
B. Snob effect II. Reduction in relative
Ans. (c) : Job Context refers to the specific
price of commodity
circumstances environment and conditions In which a
C. Bandwagon effect III. Negative network job is performed. It Includes factors such as the nature
externality of the work, the organizational culture, the relationship
D. Substitution effect IV. Positive network with colleagues and superiors, the physical workspace,
externality and any other relevant elements that shape the overall
Choose the correct answer from the option experience of the yob.
given below: 47. Which one of the following statements is the
(a) A-I, B-II, C-III, D-IV most relevant to the substitution effect?
(b) A-IV, B-III, C-II, D-I (a) In the real world, substitution effect is much
(c) A-II, B-III, C-IV, D-I larger than the income effect
(d) A-I, B-III, C-IV, D-II (b) Most of the goods are not reasonable
Ans. (d) : The correct matching of List-I with List-II substitutes
List-I List-II (c) In reality, the income effect represents its
Types of effect Description predominance over the substitution effect
A Veblen effect I Conspicuous (d) Substitution and income effects cannot be
consumption separated easily
B Snob effect III Negative network Ans. (a) : The substitution effect is an economic
externality concept that describes the change in consumption
C Bandwagon effect IV Positive network patterns of Individuals in response to a change in the
externality relative prices of goods. Specifically, It refers to the
D Substitution effect II Reduction in relative tendency of consumers to substitute a relatively cheaper
Price of commodity. good for a more expensive one when the price change.
45. Which of the following can become the member 48. In which ratio, will the remaining partners
of an LLP? compensate the retiring partner for a share of
A. Resident Indians goodwill?
B. Limited Liability Partnership (a) Profit-sharing ratio (b) Sacrificing ratio
C. Corporation Sole (c) Gaining ratio (d) Capital ratio
D. Co-operative society Ans. (c) : Gaining ratio is a term used in accounting
E. Companies (including foreign companies) and Partnership agreements to denote the change in the
Choose the most appropriate answer from the distribution of profit among partners when there is a
options given below : change in the partnership structure. It typically occurs
(a) A, B and C only (b) A, C, and D only when a new partner is admitted to the partnership, or an
(c) A, B and D only (d) A, E and B only existing partner retires or withdraws.
Ans. (d) : The following entities can become the 49. Arrange the following steps of a well planned
member of a LLP experiment in the sequential order :
1. Individuals (Resident Indians) A. Specify the treatment levels
2. Companies (Including foreign companies) B. Assign subject to groups and conduct pilot
3. Other LLP test
These entities can become members according to the C. Choose an experimental design suited to
rules and regulations outlined in the LLP. Act, which the hypotheses
may very depending on the Jurisdiction. The LLP Act D. Control the environmental and extraneous
typically specifies the eligibility criteria and conditions factors
for becoming of member. E. Select relevant variables for testing
UGC NTA NET Commerce December 2023 Paper II 587 YCT
 Choose the correct answer from the option Ans. (c) : Emotional advertising uses emotions to
given below : connect with consumers and encourage then to buy a
(a) C, D, E, A, B (b) A, C, D, E, B product or service. Emotional appeal is a type of
(c) E, A, D, C, B (d) D, C, B, A, E advertising appeal based on the following three ideas-
Ans. (c) : The steps of a well planned study are as • It attracts attention and nurtures engagement.
follows- • Prudent request are generally igrored.
Selection of relevant variables for testing • Consumers ignore most advertisements.
↓ 52. Companies use ________ when they lack
Determination of levels of analysis financial resources to carry out direct
marketing and when they can earn more by
↓ doing so.
Controlof environmentaland externalCauses (a) Intermediaries
(b) Internationalisation
↓
(c) Influencers
Selection of relevant variablesfor hypothesis testing (d) Innovation
↓ Ans. (a) : Companies use intermediaries when they lack
Assigning topics to groupsand Conducting advance(Pilot) testing the financial resources to carryout direct marketing and
when they can earn more by doing so. This allows then
50. Which one of thee following is invalid for the to often more products and services in the market. Due
relationship among the agent, the sub-agent to which they get opportunity to grow in new markets
and the principal?
and increase their income.
(a) Sub-agent works under the control and on the
53. Which one of the following beliefs and
directons of the agent
behaviours does not characterise 'collectivism'?
(b) Sub-agent is responsible to the agent only
(a) Relations are moral not contractual
(c) Privity of contract exists between the
(b) Relations take precedence over tasks
principle and the sub-agent
(d) Agent is responsible to the principle for the (c) Individual opinions are independent of
acts of the sub-agent collective opinions
(d) Maintaining harmony is highly valued
Ans. (c) : The relationship between the agent, subagent
and the principal are as follow. Ans. (c) : People who believe in collectivism take
(i) Sub-Agent works under the control and on direction collective decisions by agreeing on various aspects,
of agent. hence individual opinions are independent from
(ii) sub-Agent is responsible to Agent only. collective opinions. This is not a characteristic of
(iii) Agent is responsible to the principle for the acts of collectivism.
sub-Agents. Collectivism is characterized by an idea that talks about
(iv) Privately of contract exist between principle and the prosperity and working collectively to achieve
agent. While the subagent has a relationship with prosperity and justice. In this, collective self-interest is
the agent. They do not have usually have direct considered important and there is a drive to share
contractual relationship with the principal. prosperity rather than individual excellence. Belief and
51. Emotional appeal is one of the types of behavior Characteristics of 'Collectivism' are follows-
adverting appeals based on three ideas, namely. • Relationships are moral, not contractual
A. Rational appeals generally go unnoticed • Relationships have priority over work.
B. Consumers watch all ads • Harmony is very important in relationships.
C. It can capture attention and foster and 54. The exporting firm is termed 'rider' where the
attachment other firm with an established distribution
D. Consumers ignore most ads channel in the target country is termed as
E. Rational appeal generally gets noticed 'Carrier'. This phenomenon is known as:
Choose the correct answer from the options (a) Counter trade
given below : (b) Barter
(a) C, E and D only (b) C, E and B only (c) Piggy Backing
(c) C, A and D only (d) C, A and B only (d) Switch trading
UGC NTA NET Commerce December 2023 Paper II 588 YCT
Ans. (c) : This phenomenon is called "Piggy Banking", Choose the correct answer from the option
in which exporting companies are designated as riders, given below :
while firms with established distribution channels in the (a) A-IV, B-I, C-III, D-II
host country are designated as couriers. 'piggy Banking' (b) A-II, B-III, C-I, D-IV
can be an online banking service that provides more or
(c) A-III, B-II, C-IV, D-I
less support to the users, in which the entire banking
processes take place digitally. (d) A-I, B-III, C-II, D-IV
55. In International Commercial Teams Ans. (a) : The correct matching of List-I with List-II
(INCOTERMES). Identify the one, under List-I List-II
which the delivery of goods to the named place Bond rate and Description
of destination (discharge) takes place at the risk
select's expense. Buyers assumes the cargo
insurance impact custom durance payment of A Coupon rate IV Annual coupon (written
custom duties taxes and other costs and risk. interest payment) divided
(a) Carriage and insurance paid to (CIP) by the value of the Bond
(b) Cost, insurance and freight (CIF) B Yield to I On the interest rate on
(c) Carriage Paid to (CPT) maturity bonds in the market
(d) Cost and Freight (CFR) C Interest rate III It arises from increasing
Ans. (c) : The delivery of goods under the carriage paid risk and decreasing interest
to CPT under international Trade Terms is charged at rates.
the seller's expense to the destination. Buyer assumes
responsibility for cargo insurance, import customs D Current II It is obtained by dividing
clearance, Payment of customs duties and taxes and (Bonds) yield the annual coupon(written
other costs and risks. A marine policy covers loss or interest payment) by the
damage to cargo or merchandise during transportation bond price.
from the point of origin to the destination. 57. A discrete Probability distribution _______.
Marine insurance is necessary to meet export contract (a) Is a listing of all possible values of the
obligations. To align with agreements such as cost
random variable
insurance and freight or carriage insurance paid, the
exporter has to take out marine insurance to protect his (b) Assigns a probability to each possible value
buyer's interests and fulfill his contractual obligations. of the random variable
56. Match List-I with List-II : (c) Can assume the value between -1 and +1
List-I List-II (d) Is independent of the parameters of the
(Band rates and risk) (Description) distribution
A Coupon Rate I. The interest rate Ans. (b) : A discrete probability distribution assigns a
required in the probability to each possible value of a random variable.
market on a Through this we can understand the range of possible
bond outcomes for different situations. A discrete random
B. Yield to maturity II. It is obtained by variable is a type of random variable that has a
dividing annual countable number of distinct values.
coupon (stated
58. Match List-I with List-II :
interest
payment) by the List-I List-II
bond price (Discussions) (Remedies for breach)
C. Interest rate risk III. It germinates A Breach of promise to I Application for
and originates marry injunction
from fluctuating contract
interest rates
B Partial execution (as II Rescission of
D. Current (bond) IV. The annual much as has been contract
yield coupon (stated
earned)
interest
payment) C Freedom from all III Quantam
divided by the obligations (expected
face value of a quantity)
bond phenomenology

UGC NTA NET Commerce December 2023 Paper II 589 YCT

 D A means of securing IV Retaliatory 60. In a certain population, 22% of people are
the specific damages smokers, 57% of people are males and 12%
performance of males are smokers. If a person is chosen at
restrictive terms of a random from the population, what is that
contract probability the selected person is either a male
Choose the correct answer from the option or a smoker.
given below : (a) 0.79 (b) 0.22
(a) A-IV, B-III, C-II, D-I (c) 0.45 (d) 0.67
(b) A-I, B-II, C-III, D-IV
Ans. (d) : According Addition Theorem →
(c) A-III, B-IV, C-I, D-II
P (A +B) = P (A) + P (B) – P (AB)
(d) A-II, B-I, C-IV, D-III
⇒ P ( A ∪ B ) = P (A) + P (B) – P ( A ∩ B )
Ans. (a) : Correct matching of List-I with List-II
List-I List-II = 22% + 57% – 12%
(Discussions) (Remedies for breach) = 67% or 0.67
A Breach of promise to iv Retaliatory 61. The Price earning ratio for firms in a certain
marry damages industry follow the normal distribution. A
B Partial execution (as iii Quantam firm's price earning ratio has a standardized
much as has been (expected value (Z) -1.0 and it is included in the highest
earned) quantity) _____ of firms in the industry.
phenomenology
(a) 99.73% (b) 68.27%
C Freedom from all ii Rescission of
(c) 15.87% (d) 34.13%
obligations contract
D A means of securing the i Application for Ans. (c) : A Z-score result of zero indicates that the data
specific performance of injunction contract point being analyzed is exactly average, located in the
restrictive terms of a middle of the standard. A score of 1 indicates that the
contract data is one standard deviation below the mean, while a
59. Which of the following rations are critically Z-score of -1 places the data one standard deviation
significant for an investor? below the mean.
A. Debt-Equity ratio Therefore, the price -earnings ratio of companies in a
B. Price-Earning ratio certain industry follows a normal distribution, the
C. Dividend yield standard value of the price -earnings ratio of a company
D. Asset turnover ratio is (Z) = 1.0 and it is included in the top 15.87% of the
E. Debtor turnover ratio companies in the industry.
Choose the correct answer from the options 62. Which of the following are objectives of
given below : immediate Payment Service (IMPS)?
(a) A, B and C only (b) D and E only A. To enable bank clients to use mobile
(c) B, C and D only (d) A, D and E only instruments as a channel for accessing
Ans. (a) : The following ratios are very important for an their bank accounts and remit funds
investor:- B. To build the foundation for a full range of
(i) Debt-Equity ratio mobile based banking services.
(ii) Price-Earning ratio C. To sub-serve the goal of Reserve Bank of
(iii) Dividend yield ratio India (RBI) in digital payments
(i) Debt-equity ratio- This let investors know how D. To make payment simpler with the mobile
much debt they are carrying on and whether they number of the beneficiary
are able to maintain a balanced financial position. E. To restrain a nation-wide payment system
(ii) Price-earning ratio- It shows investors how much facilitating one-to-one funds transfer
an investment is earning in valuation and whether
Choose the most appropriate answer from the
the investment is profitable or loss-making.
option given below :
(iii) Dividend- Yield ratio- It is used to measure the
profit and loss position, so investors can understand (a) A, C, D and E only (b) A, B, C and D only
the investment commitment. (c) B, C, D and E only (d) B, A, E and D only

UGC NTA NET Commerce December 2023 Paper II 590 YCT

Ans. (b) : IMPS is immediate payment service. This C. Target III. Focuses on
service provides the facility of transaction from one attractiveness customizing
bank to another through mobile banking and internet company's
banking. its objectives are as follows----- offerings
• Enables bank customers to use mobile as a channel according to the
for easy access to their bank account and found customers needs
remittances. D. Strategic IV. Ways in which
• To lay the foundation for full expansion of mobile Targeting the company can
based baking services. reach
• To support the Reserve Bank of India's goal of strategically
digital payments. important
• Making payment through beneficiary's mobile customers
number. Choose the correct answer from the option
given below :
63. Place the following service differentiators in a
logical sequence : (a) A-I, B-II, C-III, D-IV (b) A-II, B-IV, C-I, D-III
(c) A-II, B-III, C-I, D-IV (d) A-IV, B-III, C-II, D-I
A. Speed and timing of delivery
Ans. (b) : Correct matching of List-I with List-II
B. Maintenance and repair
List-I List-II
C. Returns
Concepts (Definition)
D. Installation, training and consulting
(Target)
E. Ease of ordering A Target ii Reflecting the company's ability
Choose the correct answer from the option compatibility to create high customer value
given below : B Tactical iv Ways in which a company can
(a) E, D, B, C, A (b) E, A, D, B, C Targeting strategically reach important
(c) E, D, A, C, B (d) E, C, A, B, D customers
Ans. (b) : The logical sequence of key service C Target i Represents the ability of a
differentiators are as follows- Attractiveness market segment to create high
(i) Ease of ordering value for the company
⇓ D Strategic iii Emphasis is laid on customizing
(ii) Delivery speed and time targeting the company's needs of the
⇓ customers.
(iii) Installation, Training and consultancy 65. The earning per share for Avant corporation is
⇓ Rs. 4.0. The rate of return is investments is 16
(iv) Maintenance and repair per cent and the return required by its
shareholders is 12 percent. What will be the
⇓
price per share as per the Walter model, if the
(v) Return
payout ratio is 40 per cent?
64. Match List-I with List-II : (a) `24 (b) `36 (c) `40 (d) `72
List-I List-II
D
Concepts (Targeting) Definition Ans. (c) : Walter model ⇒ P =
r−g
A. Target I. Reflects the
P = Price/share
Compatibility ability of a
D = Dividends/share (Earning/share × payout Ratio)
market segment
to create r = Rate of return on investment
superior value g = Growth rate in dividends
for the company (Earning/share × Retention ratio)
B. Tactical Targeting II. A reflection of D = ` 4.0 × 0.40 = ` 1.6
the company's g = EPS × (1 – 0.40) = ` 2.4
ability to create 1.6
So, P =
superior 0.16 − 0.12
customer value P = 40

UGC NTA NET Commerce December 2023 Paper II 591 YCT

66. Arrange the following steps in the investigation (a) Lower of one-fouth of basic salary or Rs.
process of combinations by the Competition 5000 or entertainment allowance received
Commission of Indian the correct order? (b) Lower of one fifth of bacis salary or Rs.5000
A. Call for a report from the Director General or entertainment allowance received
B. Invite any person, affected parties to file (c) Lower of one-fifth of salary or Rs.5000 or
written objections entertainment allowance received
C. Direct the parties of combination from the (d) Lower of one-fourth of salary or Rs.5000 or
parties of the combination entertainment allowance received
D. Call for additional information from the Ans. (b) : According to the Income Tax Act, 1961 [Sec.
parties of the combination 16(ii)] the deduction allowable in respect of
E. Issue a notice for show-cause to the parties entertainment allowance paid to a Government
of the combination employee is the least of the following:-
Choose the correct answer from the option • 20% or one fifth of basic salary
given below : • Rs 5,000
(a) A, B, C, D, E • The amount given as entertainment allowance in the
(b) E, A, C, B, D financial year.
(c) B, A, C, D, E 69. SAFTA (South Asian Free Trade Agreement)
(d) C, A, D, E, B categorises member nations as Non-Least
Ans. (b) : The correct sequence of steps in the Developed Contracting States (NLDCS) and
investigation of combinations by the competition Least Developed Contracting States (LDCS).
commission of India are as follows:- Identify the NLDSC states from the following
(E) Issuance of show cause notice to combining parties A. Bangladesh
⇓ B. Pakistan
(A) Asking for report from Director General C. Bhutan
⇓ D. India
(C) Directing the combining parties to publish detailed E. Sri Lanka
description of the combination Choose the correct answer from the options
⇓ given below:
(B) Invitation to any affected party to file written (a) A, B, and D only (b) A, C and E only
objection (c) E, A and B only (d) E, D and B only
⇓
Ans. (d) : The South Asian Free Trade Area (SAFTA)
(D) Seeking additional information from combining
is a free market arrangement of the South Asian
parties
Association for Regional Cooperation (SAARC).
67. Which one of the following is an exception to This agreement come into force in 2006 after the 1993
the doctrine of Constructive Notice. SAARC Preferential Trade Arrangement. SAFTA
(a) Doctrine of Subrogation (South Asian free Trade Agreement) Categories
(b) Doctrine of Ultra Vires member nations as non- least Developed Contracting
(c) Corporate Veil States (NSDL) and Least Developed contracting States
(d) Turquand Rule (LDCS). On this basis NLDSC nations are as follows-
Ans. (d) : Turquand Rule is an exception to the doctrine Sri Lanka
of constructive Notice. India
The Turquand Rule, also known as the "Indoor Pakistan
management rule", allows third parties dealing with a 70. When a country's is accepted as a reserve
company requirements have been properly followed, currency, the potential conflict may arise
even if they haven't verified them. It provides protection between which of following policy objectives?
to innocent third parties in business transactions. A. Domestic Monetary Policy
68. Which one of the following is the allowable B. Domestic Fiscal Policy
deduction as per the Income Tax Act, 1961 in C. External Currency Policy
respect of entertainment allowance paid to a D. Foreign Trade Policy
government employee? E. Intend Trade Policy
UGC NTA NET Commerce December 2023 Paper II 592 YCT
 Choose the correct answer from the options Choose the correct answer the option given
given below : below :
(a) A, B and C only (b) A, C and D only (a) A, B, C, D, E (b) E, D, C, B, A
(c) B, D and E only (d) C, D and E only (c) A, C, B, D, E (d) C, A, E, B, D
Ans. (b) : When a country's currency is accepted as a Ans. (d) : The systematic sequence regarding price
leadership sustainability are as follows-
reserve currency, possible conflicts may arise in the
(C) The dominant company sets the price of goods that
following policy objectives:- maximizes its profits.
• Domestic monetary policy ⇓
• External currency policy (A) Small companies are allowed to sell whatever they
• Foreign trade policy want in the industry at a given price
– Domestic monetary policy refers to personal finance ⇓
planning and control. This may include saving, (E) Eventually the dominant company comes in to fill
managing debt and planning expenses. the market
– External monetary policy refers to the policy of ⇓
changing and maintaining attitudes in social and (B) The dominant company acts as the residual supplier
of goods
political circumstances.
⇓
– Foreign trade policy is the set of policies adopted by
(D) Small companies in the industry behave as price
the government of a country to control, support and
takers.
organize foreign trade.
73. Mr. X is holding equity share of ABC Let with
71. Which of the following factors are attributed to voting power of 26 percent, Mrs. X is working
the weakening of Indian Rupee? in ABC Ltd at a salary of Rs.20,000 p.m. The
A. Rupee payment for international trade other income of Mr. X and Mrs. X are 6,00,000
B. Rising cost of imports and 3,00,000 respectively. The gross total
C. Widening trage deficit income of Mr. X and Mrs. X are ______
respectively for the assessment Year 2023-24.
D. Opening of Rupee vostro accounts
(a) `6,00,000 and `5,40,000
E. Rupee UPI payments for overseas (b) `7,90,000 and `3,00,000
transactions
(c) `6,00,000 and `4,90,000
Choose the most appropriate answer from the (d) `8,40,000 and `3,00,000
options given below :
Ans. (b) : Tax Assessment year 2023-24
(a) A, B and C only (b) C, D and E only
Income from other sources → Mr. X → ` 6,00,000
(c) A, D and E only (d) B, C and D only
→ Mrs. X → ` 3, 00,000
Ans. (d) : The following factors are said to be Clubbing of Income →
responsible for the weakening of the Indian rupee:- Mr. X → 6,00,000
– Rising cost of inputs Salary (20,000 × 12)
– Growing trade deficit = 2,40,000
– Opening of accounts for money Tax Rebate – 50,000
There can be many other factors causing weakening of 1,90,000 +1,90,000
Indian Rupee such as- norms towards foreign exchange, Gross total Income 7,90,000
economic situation, decrease in foreign investment, Then Mr. X Gross total income ` 7,90,000 and Ms. X
business activities etc. Gross total income ` 3,00,000
72. Arrange the follwoing in a sequence with Note- According to Sec. 64(1) (ii) of Income Tax Act if
regarding to price leadership sustainability. husband has more than 20% voting rights in a company
A. Small firms in the industry are allowed to then any monetary benefit given to his will be clubbed
sell all they want at that price with the income of husband.
B. Dominant firm acts as the residual supplier 74. Match List-I with List-II
of the commodity List-I List-II
C. The dominant firm sets the price for the Assets Transferred Exemptions of
commodity that maximizes its profits capital gains sections
D. Small firms in the industry behave as price 54-54 EC Income
Tax Act
takes
A. Agriculture Land I. Section 54 B
E. Dominant firm then comes into fill the
market B. Residential House II. Section 54 EC

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 C. Land or Building III. Section 54 D (b) Consistency and harmony, Conceptualised
or Both disposition, principled oriented
D. Land and IV. Section 54 (c) Principled oriented, conventional and
Building forming preconventional
part of an (d) Preconventional, conventional, principled
industrial oriented
indertaking Ans. (d) : Ethanol development in Business occurs in
Choose the correct answer from the option three-Level and each level has two stages
given below : Level-1- Preconventional Ethics (4 to 10 years)
(a) A-III, B-II, C-I, D-IV stage (i): Obedience and Punishment
(b) A-I, B-IV, C-II, D-III stage (ii): Instrumental purpose orientation
(c) A-IV, B-III, C-I, D-II Level-2- Conventional Ethics (10 to 13 years)
(d) A-III, B-I, C-IV, D-II stage-(iii): Good boy- good girl orientation
Ans. (b) : Correct matching of List-I with List-II stage-(iv): Maintaining social orders
List-I List-II Level-3- Post conventional ethics (13 to 16 years)
Transferred Assets Exemption from capital stage-(v) : social contract and Individual rights
gains section 54-54 EC stage-(vi) : Universal principles
the Income Tax Act. 77. Match List-I with List-II :
A Agriculture Land i. Section 54 B List-I List-II
B Residential house iv. Section 54 Management Approach Dimensions
C Land or Building or ii. Section 54EC Thinkers
both
A. Kurt Lewin I. Position power,
D Land and building iii. Section 54 D
Task structure,
of an industrial
Leader member
undertaking
relations
75. Arrange the following SBI sponsored RRBs in
a increasing order of their existence since B. Fred E Fiedler II. Authority and
formation? Responsibility,
A. Rajasthan Marudhara Gramin Bank Unity of command
B. Telangana Gramin Bank Scalar chain
C. Saurashtra Gramin Bank C. Henri Fayol III. Power Affiliation,
D. Madhyanchal Gramin Bank Achievement
E. Arunachal Pradesh Rural Bank D. David C. IV. Unfreezing,
Choose the correct answer from the option McClelland Moving Refrezing
given below : Choose the correct answer from the options
(a) A, D, B, E, C (b) C, E, D, A, B given below :
(c) B, A, C, E, D (d) D, E, A, B, C (a) A-I, B-II, C-III, D-IV
Ans. (b) : The following is the systematic sequence of (b) A-IV, B-I, C-II, D-III
RRBs (Regional rural banks) sponsored by SBI (State (c) A-IV, B-III, C-I, D-II
Bank of India) in increasing order according to their (d) A-II, B-IV, C-III, D-I
year of establishment.
Ans. (b) : Correct matching of List-I with List-II :
(C) Saurashtra Gramin Bank (In 1978)
(E) Arunachal Pradesh Rural Bank (In 1983) List-I List-II
(D) Madhyanchal Gramin Bank (In 2012) (Management Thinker) (Access Dimension)
(A) Rajasthan marudhar Gramin Bank (In 2014) A Kurt Lewin iv un block, Re-block
(B) Telangana Gramin Bank (In 2014) circulation
76. The sequential stages of moral development in B Fred E Fedler i Positional power,
business organisations are characterised by work structures,
(a) Conceptualised disposition, consistency and leader-member
harmony, principled oriented relations

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 C Henri Fayol ii Authority and Ans. (b) : The correct matching of List-I with List-II :
responsibility, unity List-I List-II
of command, chain (Description Identifiers) (Research design)
of command A The time dimension iv cross-sectional
D Devid C.Mcclelland iii Power, Affiliation study
Achievement B The purpose of the iii Descriptive study
78. ________ as defined under the Foreign Trade study
Policy (FTP) implemented by Director General C The topical scope of ii Statistical study
of Foreign Trade has the man mentor new and the study
potential exporters on the intricacies of foreign D The degree to which i Exploratory study
trade through counseling training and outreach the research question
programmes' so that they can get into has been crystallized
international trade. 80. Which of the following are relevant in deciding
(a) Niryat Bharat Scheme among different courses of action, the manager
(b) Niryat Bandhu Scheme needs to consider the differential revenue and
(c) Niryat Benefit Scheme costs of alternatives?
(d) Niryat Border Scheme A. Opportunity costs and economics profits
Ans. (b) : The Niryat Bandhu scheme was announced B. Fixed and Sunk Costs
on October 13, 2011 as part of the foreign Trade policy C. Marginal Revenue and Marginal Cost
2009-14. It is implemented by the directorate general of D. Incremental and marginal costs
foreign trade (DGFT), which is under the ministry of E. Economics and dis-economies of scale
commerce and Industry Niryat Bandhu scheme defined Choose the correct answer from the options
under the foreign Trade policy (FTP), the main given below :
objective of the scheme implemented by the director (a) A and D only (b) B and C only
General of foreign Trade is the educate new and (c) D and E only (d) A and B only
potential exporters on the intricacies of foreign trade Ans. (a) : Differential revenues and costs represent the
through counseling, training and outreach (programme) difference in revenues and cost among alternative
To provide advice so that they can make their place in courses of action.
International business. Differential analysis is useful in making managerial
79. Match List -I with List-II decisions related to making or buying products,
List-I List-II keeping or dropping product lines, keeping or dropping
customers, and accepting or rejecting special customer
Description Research design
orders.
Identifiers
Therefore, opportunity cost or economic profit and
A. The time I. Exploratory incremental and marginal cost are relevant for the
dimension study manger to consider the differential revenues and cost of
B. The purpose of II. Statistical study Alternatives in deciding among various action plans.
the study 81. Which of the following framework is
C. The topical scope III. Descriptive considered as the Open International Standard
of the study study for Digital Business Reporting?
D. The degree to IV. Cross-sectional (a) CSR reporting (b) TBL reporting
which the study (c) XBRL reporting (d) PPP reporting
research question Ans. (c) : XBRL is the open international standard for
has been digital business reporting, managed by a global not for
crystallized profit consortium, XBRL international. we are
Choose the correct answer from the options committed to improving reporting in the public interest.
given below : XBRL is used around the world, in more than 50
(a) A-I, B-II, C-III, D-IV countries. Millions of XBRL documents are created
(b) A-III, B-I, C-IV, D-II every year, replacing older, paper-based reports with
(c) A-IV, B-III, C-II, D-I more useful, more effective and more accurate digital
versions.
(d) A-II, B-IV, C-I, D-III
UGC NTA NET Commerce December 2023 Paper II 595 YCT
82. In case of anti-competitive activities by a firm, * Book runners and syndicate members create public
the Competition Commission of India can awareness, generate demand and maintain the order
impose a penalty which shall be not more than: book
(a) Five percent of the average turnover income * Issue price Market (clearing) price deter-mination and
of the firm of the three preceding financial price exploration.
years * Allotment and listing of shares in stock Exchanges.
(b) Ten percent of the average turnover of firm of Therefore, option (A) is correct.
the three presenting financial years 84. Which one of the following concepts measure
(c) Fifteen percent of the average turnover of the amount of capital that the firm can give up
firm of the three preceding financial years by using one additional unit of labour and still
(d) Five percent of the average turnover income remain on the same isoquant?
of firm of the five preceding financial years (a) Diminishing Marginal Rate of Substitution
Ans. (b) : The competition Act prescribes that a penalty (b) Economic Trade-off Region
for violation of cartel provisions by enterprises and the (c) Diminishing Marginal Rate of Technical
monetary consequences could be up to 10% of the Substitution
average turnover of the infringing enterprises for the (d) Diminishing Marginal Utility
preceding three financial years or up to the higher of Ans. (c) : The Marginal Rate of Technical substitution
three times the profit or 10% of the turnover for each (MRTS) is an economic concept that measures the rate
year of the continuation of the cartel. at which one input can be substituted for another while
Therefore, In case of Anti - competitive activities by keeping the level of output constant. The purpose of the
any firm (company), the competition commission of Marginal Rate of Technical substitution is to analyze
India can impose a penalty which will not exceed 10% the efficiency and optimal allocation of resources in
of the average turnover income of the company in the production processes.
last three preceding financial years. Therefore, Diminishing Marginal Rate of Technical
83. Arrange steps in the book building process for substitution measures the amount of capital that the firm
public issue of shares in India. can give up by using one additional unit of labour and
(A) Determine issue price, market cleaning price still remain on the same isoquant.
discovery 85. Which of the following are constituents of the
(B) Book runner and syndicate members generate trilemma of international finance?
awareness, create demand and run the order A. Fixed exchange rate
book B. Independent monetary policy
(C) Appointment of the merchant banker and C. Free mobility of capital
syndicate members (SEBI registered D. Global recessionary tendency
intermediaries) as underwriters E. Rising inflationary conditions
(D) Preparation and filling of red horning Choose the correct answer from the options
propectus with the SEBI for approval given below :
(E) Allotment and listing of shares on stock (a) A, B and C only (b) C, D and E only
exchange
(c) B, C and E only (d) A, C and D only
Choose the correct answer from the option
Ans. (a) : Trilemma is term in economic decision-
given below :
making theory. unlike a dilemma, which has two
(a) C, D, B, A, E
solutions, a trilemma offers A fixed exchange rate,
(b) D, C, A, B, E
independent monetary policy and free mobility of
(c) A, B, C, D, E capital three equal solutions to a complex problem. A
(d) B, C, D, E, A trilemma suggests that countries have three options
Ans. (a) : Following are the steps in preparing books of from which to choose when making fundamental
public issue of India share : decisions about managing their international monetary
* Appointment of syndicate members (SEBI registered - policy agreements.
intermediaries) as merchant bankers and insurers. However, the options of the trilemma are conflictual
* Preparation and filling of Red Herring prospectus with because of mutual exclusivity, which makes only one
SEBI for approval option of the trilemma achievable at a given time.
UGC NTA NET Commerce December 2023 Paper II 596 YCT
86. Which one of the following digital payment the threshold limit of Rs. 20 lakh for supply of
systems is developed and managed by the goods and or services ?
National Payments Corporation of India? A. Arunachal Pradesh
(a) Paytm (b) BharatPe B. Meghalaya
(c) Mastercard (d) RuPay C. Manipur
Ans. (d) : Rupay (portmanteau of Rupee and payment) D. Mizoram
is an Indian multinational financial services and E. Sikkim
payment service system, conceived and launched by the Choose the most appropriate answer from the
National Payments Corporation of India (NPCI) in option given below :
2014.) (a) B, C and A only (b) C, D and E only
It was created to fulfill the Reserve Bank of India (RBI) (c) E, B and A only (d) A, B and D only
vision of establishing a domestic, open and multilateral
Ans. (*) : Business operating in special category states
system of payments. such as Arunachal Pradesh, Manipur, Meghalaya,
87. Identify the source of oligopoly which is also Mizoram, Nagaland, Tripura, and Sikkim, the there sold
applicable to monopoly firms. limit for GST registration is an annual turnover of Rs.
(a) Economics of scale may operate over a small 20 lakhs (for the supply of goods) and Rs. 10 lakhs (for
range of outputs the supply of services).
(b) Huge capital investments and specialized Note : This question has been removed from evaluation
inputs are required to enter the market by UGC.
(c) Large firms may own a patent for the 90. Match list I with List II
exclusive right to produce a commodity List-I List-II
(d) New firms have chances to win customer Activity Based Cost Costs incurred and
loyalty Centers accounted for
Ans. (b) : There are various source of oligopolies. The A. Unit-level activity I. Patent,
difficulties of entry into the industry can form center trademark and
oligopolies because entry requires a large capital which copyright fees
most people may not afford and even a monopoly B. Batch level activity II. Direct material
company is also entry required a large capital - that is, it center and labour costs
is a source that applies to both oligopoly and monopoly
C. Product level III. Plant
88. The trademarks can be broadly classified into activity center depreciation and
which of the following categories? maintenance
(A) Descriptive expenses
(B) Normative D. Facility level IV. Material
(C) Generic activity center handling costs
(D) Explanatory Choose the correct answer from the option
(E) Invented given blow:
Choose the most appropriate answer from the (a) A-II, B-IV, C-I, D-III
option given below : (b) A-II, B-IV, C-III, D-I
(a) A, B and D Only (b) D, E and C Only (c) A-I, B-III, C-II, D-IV
(c) B, C and E Only (d) C, A and E Only (d) A-III, B-I, C-IV, D-II
Ans. (d) : Product trade marks are broadly classified Ans. (a) : The code of correct matching list-I with
into five categories, Generally speaking, these Marks list-II
could either be a Generic Mark, Descriptive Mark, List-I List-II
Suggestive Mark, Fanciful Mark, or an Arbitrary Mark Activity Based cost Cost incurred and
Categorizes trademarks primarily be used on the nature center accounted for
of the product relative to the mark under consideration A. Unit-level activity ii Direct Material and
89. Which are the stats where every supplier of center labour cost
goods auditor services is required to obtain B. Batch level activity iv Material handling
registration if its aggregate turnover exceeds center costs

UGC NTA NET Commerce December 2023 Paper II 597 YCT

 C. Product level activity i Patent, trademark (a) Aggregating billions of micro truths into a
center and copyright fees macro truth
D. Facility level activity iii Plant depreciation (b) Only equalization factors are considered in
center and maintenance economics models
expenses (c) Economics activities are not sufficient to
Comprehension : (91-95) study the macro environment
Read the given passage and answer the question (d) Human being behave irrationally
that follow : Ans. (a) : According to the passage, the following
For most of its existence as a modem field of study reasons for problems in economic modeling are given in
since the 18th century, economics has fared reasonably the forth line of paragraph '3' of the given passage.
well at explaining consumer and producer behavior. It The crisis in economic modeling arises from combining
explained why buyer choose the products they do how macro truth.
firms produce them to maximize profit and how markets 92. Given below are two statements :
discover the most efficient prices. This changed with the Statement I : Macroeconomists can only back-
Great Depression, when aggregate variables came into test their models against data that may be of
play that needed a better understanding than as questionable provenance.
assumption that markets return to equilibrium after
Statement II : Macroeconomic variables elude
shocks. Thus came into existence macroeconomics the
the scientific method of testing hypotheses with
most dismal aspect of the dismal science Economics has
repeated experiments.
since diversified into quite a few other braches, such as
In the light of the above statements, choose the
those employing statistics and psychology but most of its
most appropriate answer from the options
disrepute originates from its failure to predict financial
given below :
crises.
(a) Both statement I and statement II are true
Macro by its very nature-dealing with GDP
(b) Both statement I and statement II are false
employment and other important but soporific maters
and parameters-is headline grabbing stuff Governments (c) Statement I is true but statement II is false
come into play here, as do international relations. Yet, (d) Statement I is false but statement II is the true
macro eludes the scientific method of testing hypotheses Ans. (a) : Statement-I: Macroeconomists can only test
with repeated experiments on can't conceivably wreck an their models on data whose origins are questionable
economy to establish the effect of a stock instead Therefore, Statement-I are correct
macroeconomists can only back test their models against Statement:-II Macro economic variables escape the
data that may be of questionable provenance. This makes scientific method of hypothesis testing through repeated
prediction of the next stock market crash forever experiments
embarrassingly less exact then the return of Halley's Therefore, Statement (II) are also correct.
Comet. 93. Which of the following is the reason, as per the
Microeconomics the reputable part of the endeavor passage for drawing more effective macro
suffers from fewer limitation to controlled parameters policies?
and delivers less equivocal insight. The explosion of (a) Assumption that markets return to
commerce in the modern would owes itself in no small equilibrium after shocks
measure to predicting actions by the smallest economics (b) Improved economic models are capable to
agent humans. Here too, heroic assumptions are made, understand qualitative and quantitative factors
the foremost being that human beings are rational and
(c) Economics has fared reasonably well during
information is free. The crisis in economic is free. The
financial crises
crisis in economic modeling arises from aggregating
(d) Every small measure is not capable to predict
billions of micro truths into one macro truth. Models are
economic outcomes
improving, so are quantitative capabilities and the
qualitative judgements that drive macro policy will Ans. (b) : According to the passage, the following
become more refined. reason for carrying out more effective macro policies is
91. Which one of the following is the reason, as per given in the last line of paragraph '3' of the given
the given passage for crises in economic passage This is improving models and quantitative
modeling? power, making more, sophisticated.
UGC NTA NET Commerce December 2023 Paper II 598 YCT
Therefore, The driving force behind more effective E. Stakeholder's behaviours to maximise
macro policies is that advanced economic models are wealth
capable of understanding qualitative and quantitative Choose the correct answer from the options
factors. given below :
94. Match List-I with List-II : (a) A, B and D only (b) A, B and C only
List-I List-II (c) B, D and E only (d) A, B and E only
Phenomenon Reasons Ans. (a) : According to the passage, the Major
A. Economics defines I. Better contribution made to economics are given in the first
understanding line of paragraph (i) of passage.
of aggregate Economics has rationally described consumer and
variables producer behavior, explaining why buyers choose
products, how firms produce them to maximize profits,
B. Learning of great II. GDP
and how markets set the most efficient prices searched
depression employment and
for therefore the major contributions of economics are
inflation
the behavior of buyers to-wards the product, the
C. Macro-economic III. Human beings behavior of the company to-wards profit maximization
variables are rational and and the behavior of the market towards the most
information is efficient price.
free
Comprehension : (96-100)
D. Pitfalls of Micro IV. How markets
Read the given passage answer the questions that
economics discover the
follow :
most efficient
Over $350 billion of private capital has been
prices
deployed over the last decade which has propelled more
Choose the correct answer from the options than 5,000 enterprises. These new businesses are
given below : anchored in innovative business models combining the
(a) A-I, B-II, C-III, D-IV full potential of technology, facilitating every Indian to
(b) A-II, B-III, C-I, D-IV fulfill their aspirations.
(c) A-III, B-IV, C-II, D-I The big shift in the last decade is the repagination of
(d) A-IV, B-I, C-II, D-III India as an addressable market of 300 million households
Ans. (d) : The code of correct Matching List-I with a massive shift from only 20 million households in tier-1
List-II: cities earlier. This has been propelled by the strong
List-I List-II partnership between entrepreneurs and the PE/VC
(Phenomenon) (Reason) ecosystem. The share of FDI funnelled in to PE/VC has
A. Economics defines iv How the market surged to 50-60% up from 20-30% two decades back.
finds the most Besides the tremendous focus on value creation, the
efficient prices. PE/VC industry has brought about multidimensional
B. Lessons of the great i Best understanding progress in the economy. The principles of responsible
recession of set variables investing that this industry is committed to have enabled
C. Macroeconomic ii GDP, employment, the building of a more equitable inclusive economy and
variable and inflation one that has earned the trust of large global investors as
D. Dangers of Micro iii Humans are logical an attractive investment destination.
economics and information is The PE/VC ecosystem sparked a renaissance
free. empowering young minds to take a bold leap. This led to
a changed in mindset where entrepreneurship is now an
95. Which of the following as per the passage are
accepted livelihood and indeed, a proud way of life.
the major contribution of economics?
Today startups and new businesses are celebrated and
A. Buyers behaviour towards the products
many are giving up established careers to follow their
B. Firm's behavior for maximising profit
heart, with families standing as stalwart supporters of
C. Retailer's behaviours to maximize sale entrepreneurship. The proportionality of risk and reward
D. Market behaviour to the most efficient has been embraced forging a harmonious relationship
prices between uncertainty and achievement.
UGC NTA NET Commerce December 2023 Paper II 599 YCT
 Stories at home and those that went global are Reason R : Today startups and new business
testament to the power of partnerships between the are celebrated and many are given up their
capital provide and entrepreneurs transforming a large established careers to follow their heart with
democracy to be self-relent and elevating over a billion families standing as stalwart supporters.
people to a new world of greater aspirations and In the light of the above statement, choose the
confidence. correct answer form the options given below :
This revaluation has been largely possible because (a) Both A and R are true and R is the correct
of Gol's thrust towards attracting capital. The explanation or A
frameworks of alternative investment funds (AIFs), (b) Both A and R are true but R is NOT the
GIST city IFSC. Startup India programme and budget correct explanation of A
allocation coupled with progressive amendments such as (c) A is true but R is false
GST and India Stack have made India as attractive (d) A is false but R is true
destination for investment. Ans. (a) : Assertion (A) : The private equity and
96. The principles of responsible investing to which venture capital ecosystem has created a renaissance,
private equity and venture capital industry is empowering young minds to take a bold leap.
committed have resulted in which of the Therefore, Assertion (A) is the correct.
following outcomes for the Indian economy? Reason (R) : Today, startup and new businesses are
A. Democratic decentralization celebrated and many individuals are leaving established
B. Balanced regional growth professions to follow the calling of their hearts, with
C. Inclusive and equitable economy their families standing as their strong supporters.
D. Larger export orientation Therefore, Reason (R) is also correct and (R) is the
E. Earned the trust of global investors correct explanation of (A).
Choose the correct answer from the options 99. Which of the following according to the
given below : passage, have made India an attractive
(a) B and C only (b) A and D only destination for investments?
(c) C and E only (d) B, C and D only A. Startup India program
Ans. (c) : According to the passage, the principles of B. Make in India program
responsible investment to which the private equity and C. Goods and Services Tax facilitation
venture capital industry are committed have resulted in D. Alternative Investment funds
an inclusive and equitable economy in the Indian E. Standup Indian program
economy and earning the confidence of global investors. Choose the most appropriate answer from the
97. According to the passage, which of the options given below :
following is now being accepted as a way of life (a) A, B and C only (b) A, C and D only
and livelihood? (c) A, D and E only (d) C, D and E only
(a) PV/VC ecosystem Ans. (b) : According to the passage, the startup India
(b) Risk and uncertainty programme, Goods and Services Tax simplification and
(c) Innovation and achievement alternative investment funds may have made in India an
(d) Entrepreneurship attractive destination for investment.
Ans. (d) : According, to passage, Entrepreneurship is 100. In the recent years, the focus of private equity
now being accepted as a lifestyle and livelihood. and venture capital in India, has been on -
Because it is given in line two of paragraph 4 of passage (a) Self-reliance (b) Job creation
that today entrepreneurship is not only an acceptable (c) Inclusive growth (d) Value creation
livelihood but a glorious lifestyle. Ans. (d) : According to passage, in recent years the
98. Given below are two statements one is lebelled focus of private equity and venture capital in India has
as Assertion A and the other is labelled as been on value creation
Reason R. Because it is given in line one of paragraph '3' of
Assertion A : The private equity and venture passage, with a strong focus on value creation, the
capital ecosystem a renaissance, empowering PE/VC industry has driven multidimensional growth in
young minds to take a bold leap. the economy.

UGC NTA NET Commerce December 2023 Paper II 600 YCT

 NTA UGC NET/JRF Exam (Cancelled), June 2024
COMMERCE
Solved Paper (Exam Date: 18.06.2024)

1. "An agreement which is enforceable by law at 4. Which is not a key element of consumer
the option of one or more of the parties but not psychology and pricing
at the option of the other or others" is called: (a) Reference price
(a) Void contract (b) Valid contract (b) Price indifference band
(c) Voidable contract (d) Illegal contract (c) Image pricing
Ans. (c) : "Contract are defined in Section 2(i) of the (d) Pricing cues
Act "An agreement which is enforceable by law at the Ans. (b) : Consumer psychology and pricing is the
option of one or more of the parties thereto, but not at study of now consumers think, feel, and behave when
the option of the other or others, is a voidable contract". making purchasing decision. It seeks to understand what
A simple definition of a voidable contract is an motivates consumers and what factors influence their
agreement between two parties that one or both parties purchasing behaviour. When it comes to pricing,
can legally cancel. consumer psychology can help business understand the
2. The system where two or more banking psychological impact of different prices on their target
companies are controlled by one or two audience.
individuals is called Their are few key element of consumer psychology and
(a) Chain Banking (b) Group Banking pricing.
(c) Mixed Banking (d) Bunch Banking (A) References price
(B) Image price
Ans. (a) : Chain Banking refers to the system where one or
few individuals control two or more banking companies (C) pricing cues
which are independently chartered or by the same group of But price indifference band not a key element.
persons through purchases of shares of such banks. 5. Arrange the steps in Decision making by a
Individuals secure enough stock to get controlling interest business firm in last to first order:
in the banking corporations involved. A. Exploring available alternative
Therefore, the system where two or more banking B. Performing sensitivity analysis
companies are controlled by one or two individuals is C. Determining Objectives
called are chain banking. D. Choosing best alternative
3. Arrange the phases of capital expenditure/ E. Assessing consequences of various
Investment planning and control from alternative
beginning to end Choose the correct answer from the options
A. Evaluation of the net benefits. given below :
B. Identification of Investment opportunities (a) A, B, C, D, E (b) B, A, D, C, E
C. Development of forecasts of benefits and costs. (c) E, A, C, D, B (d) B, D, E, A, C
D. Authorization for progressing and Ans. (d) : Steps in decision in decision making by a
spending capital expenditure business firm :
E. Control of capital Projects. (B) Performing Sensitivity analysis
Choose the correct answer from the options ↓
given below (D) Choosing best alternative
(a) A, C, D, E, B (b) B, C, A, D, E ↓
(c) A, B, C, D, E (d) B, A, D, C, E (E) Assessing consequences of various alternative
Ans. (b) : Phases of capital expenditure/Investment ↓
planning and control : (A) Exploring available alternative
(B) Identification of Investment opportunities ↓
↓ (C) Determining objectives
(C) Development of forecasts benefits and costs. 6. Arrange the following financial institutions
↓ according to the order in which they were
(A) Evaluation of the net benefits established.
↓ A. NABARD
(D) Authorization for progressing and spending capital B. NHB
expenditure. C. EXIM Bank
↓ D. SIDBI
(E) Control of capital projects. E. IIBI

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 601 YCT
 Choose the correct answer from the options Ans. (d) : Net present value is a tool of capital
given below : budgeting to analyze the profitability of a project or
(a) E, C, A, B, D (b) A, C, D, B, E investment. It is calculated by taking the difference
(c) B, A, C, E, D (d) C, B, D, A, E between the present value of cash inflow and present
Ans. (a) : Financial Institution according to the order of value of cash out flows over a period of time.
established : Merits of NPV :
(I) IIBI (Industrial Investment Banks of India) ⇒ Consider all cash flows
Established in – 1971 ⇒ Consider the time value of money
(II) EXIM Bank (Export-Import Bank of India) ⇒ Satisfies the value additivity principle.
Established in 1 January, 1982 ⇒ Identify the discount rate.
(III) NABARD (National Bank for Agriculture and ⇒ Identify the number of period.
Rural Development) 10. In which book Alfred Marshall has for the first
Established in – 12 July, 1982 time used the term/word "Terms of Trade"?
(IV) NHB (National Housing Bank) (a) Money, Credit and Commerce
Established in 9 July, 1988 (b) Principles of Economies
(V) SIDBI (Small Industries Development Bank of (c) The Economics of Industry
India) (d) On Rent
Established in – 2 April, 1990
Ans. (b) : Alfred Marshall was the dominant figure in
7. "An organisation that carries out its activities British economics (itself dominant in world economics)
not in one central place, but rather in multiple from about 1890 until his death in 1924. His speciality
locations by suppliers and partner firms as was micro economics the study of individual markets
part of strategic alliance or a larger "Supply and industries, as opposed to the study of the whole
Chain" is termed as : economy. His most important book was 'Principles of
(a) Collateral organisations Economics'.
(b) Network organisations 11. Assumptions of the law of diminishing
(c) Virtual organisations marginal utility
(d) Typical matrix organisation A. Rationality
Ans. (c) : An organization that operates across multiple B. Suitable units
locations through suppliers and partner firms as part of C. Cardinal utility
a strategic alliance or larger supply chain is termed a D. Commodity satisfying different wants
Virtual Organization or Network Organization. It E. Introspection/Deelceefvejer#eCe
relies on decentralized operations, collaborating with
independent entities to achieve shared goals, leveraging Choose the correct answer from the options
technology and partnerships for efficiency, flexibility, given below :
and specialized expertise, rather than centralizing all (a) A, B and C only (b) B, C and D only
functions in a single location. (c) A, C and E only (d) C, D and E only
8. Which one of the following has given the Net Ans. (a) : Law of diminishing marginal utility (DMU)
Income approach of capital structure? states that as we consume more and more units of a
(a) Durand (b) Walter commodity, the utility derived from each successive
(c) Gorden (d) Modigilani-Miller unit goes on decreasing.
Ans. (a) : Net income approach of capital structure
theory assumes that the only capital can affect the value
of firm and overall cost of capital.
According to Net Income theory, proposed by David
Durand in 1952. Capital structure is relevant to the
value and overall cost of capital. If firm uses debt as
leverage weighted average cost of capital will decline
and value of firm will be increase.
9. Which of the following are merits of NPV
method of capital budgeting? Assumption–
A. Considers all cash flows. Cardinal measurement of utility
B. Consider the time value of money. Monetary measurement of utility
C. Give more weightage to future receipt. Consumption of reasonable quantity
D. Satisfies the value additively principle. Continuous consumption
E. No relation with the wealth maximisation No change in quality
principle. Rational consumer
Choose the correct answer from the options Suitable units
given below : Independent utilities
(a) A, B, C only (b) C, D, E only MU of money remains constant
(c) B, C, E only (d) A, B, D only Fixed Income and Prices
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 602 YCT
12. Which of the following is/are the principles of Ans. (a) : The code of correct matching List-I with
General Agreement on Tariff and Trade List-II.
(GATT)? List-I List-II
A. Trade without discrimination A. Finance lease 1. The lessor transfers,
B. Protection only through Tariffs. substantially all the risk
C. Stable Trade and rewards incidental
D. Consultation to the ownership of the
E. Unfair distribution of wealth asset to the lessee
Choose the correct answer from the options B. Operating lease 4. The lessor does not
given below : transfer all the risk and
(a) A, B, C and E only (b) A, B, C, D only rewards incidental to
(c) B, C, D, E only (d) A, C, D, E, only ownership of the assets.
Ans. (b) : The General Agreement on Tariffs and Trade C. Sale and lease back 3. The lessee sell an asset
(GATT), signed in 1947 by 23 countries, is a treaty for cash to prospective
minimizing barriers to international trade by eliminating lessor.
or reducing quotas, tariffs, and subsidies. It was D. Direct lease 2. The lease under which a
intended to boost economic recovery after world war-II lessor owns/acquires the
GATT was expanded and refined over the years, assets that are leased to
leading to the creation in 1995 of the World Trade a given lessee.
Organization (WTO), which absorbed the organization 14. Under which sections of the Central Goods and
created to implement GATT. By then, 125 nations were Services Tax Act, 2017, the provisions of Input
signatories to its agreements, which covers about 90% Tax Credit has been provided?
of Global Trade. (a) Section 12 to Section 15
Principles of GATT :- (b) Section 16 to Section 21
Trade without discrimination (c) Section 22 to Section 30
Protection only through tariffs (d) Section 31 to Section 34
Stable trade Ans. (b) : Section 16 to Section 21 of the Central Goods
Consultation and Services Tax Act, 2017, the provisions of Input Tax
Transparency credit has been provided.
Reciprocity Section 16–Eligibility and conditions for taking input
13. Match List-I with List-II : tax credit.
Section 17–Appointment of credit and blocked credit.
List-I List-II
Section 18–Availability of credit in special
A. Finance lease 1. The lessor transfers, circumstances.
substantially all the Section 19–Taking Input tax credit in respect of inputs
risk and rewards and capital goods sent for job work.
incidental to the Section 20–Manner of distribution of credit by Input
ownership of the asset Service Distribution.
to the lessee.
Section 21–Manner of recovery of credit distributed in
B. Operating lease 2. The lease under excess.
which a lessor
15. Who has defined Economics as a 'Science
owns/acquires the which studies human behaviour as a
assets that are leased relationship between ends and scarce means
to a given lessee. which have alternative uses'?
C. Sale and lease 3. The lessee sell an (a) Marshall (b) Pigou
back asset for cash to (c) Robbins (d) Keynes
prospective lessor.
Ans. (c) : Lionel Robbins, an economist, wrote in 1932
D. Direct lease 4. The lessor does not that : Economics to the science that studies human
transfer all the risk behaviour as a relationship between given ends and
and rewards scarce means which have alternative used.
incidental to 16. Which of the following assumption is of Net
ownership of the Income Approach of capital structure?
assets.
A. Cost of debt is less than cost of equity.
Choose the correct answer from the options B. There is no tax.
given below : C. Risk perception of invester will not change
A B C D by the use of debt.
(a) 1 4 3 2 D. Change in capital structure of a company
(b) 4 1 3 2 does not affect market value of the firm.
(c) 1 2 3 4 E. The business risk will remain constant at
(d) 1 3 4 2 every level of debt and equity mix.
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 603 YCT
 Choose the correct answer from the options Ans. (c) : Provisions section wire under the Companies
given below : Act, 2013 in ascending order :
(a) A, B only (b) D, E only (1) Formation company (Section 3)
(c) A, B, C only (d) C, D, E, only (2) Articles (Section 5)
Ans. (c) : According to Net Income Approach, capital (3) Incorporation of company (Section 7)
structure decision is relevant to the value of the firm. (4) Service of Documents (Section 20)
An increase in financial leverae (Debt proportion) will (5) Prospectus (Section 26)
lead to decline in the weighted average cost of capital 19. What is not a distinctive characteristics of
(WACC), white in value of the firm as well as market services?
price of ordinary share will increase. (a) Tangibility (b) Inseparability
Assumption : (c) Variability (d) Perishability
Cost of debt is less than the cost of equity (Kd < Ke) Ans. (a) : Services are a special form of product which
There are no corporate tax consists of activities, benefits or satisfactions offered for
Risk perception of investor will not change by the sale. These are intangible and do not result in the
use of debt. ownership
The cost of debt remains constant at any level of 20. "Management is the Art of getting things done
debt. through people." Who said this?
(a) Peter Drucker (b) Mary Parker Follett
Dividend pay at ratio is 100%
(c) George R. Terry (d) Hanri Fayol
17. Which of the following are quantitative credit
Ans. (b) : Mary parker Follett defines management as
control methods? 'the art of getting things done through people'. The
A. Bank Rate Policy philosophy she posits is based on the idea of shared
B. Open market Operations power structures inside organization. She advocates
C. Rationing of credit flatter organizational structures, informal net works and
D. Margin requirements lateral processes.
E. Variable reserve ratio 21. Match List-I with List-II :
Choose the correct answer from the options List-I List-II
given below : Theorem Formula
(a) A, B, C only (b) C, D, E only A. Theorem of 1. P ( Hi ∩ E )
(c) A, B, E only (d) B, C, D only Addition P(Hi/E) =
P(E)
Ans. (c) : Quantitative and qualitative methods of credit
control are two types of instruments used by the central B. Theorem of 2. P ( E1 ∩ E 2 )
bank of a country to regulate the money supply and Multiplication P(E2/E1) =
P ( E1 )
interest rates in the economy.
Condinal
C. 3. P (E1 U E2) = P (E1) + P
probability (E2)
D. Bayes' 4. P (E1 ∩ E2) = P (E1) × P
Theorem (E2)
Choose the correct answer from the options
given below :
A B C D
(a) 3 4 1 2
(b) 4 3 2 1
(c) 3 4 2 1
(d) 4 1 3 2
Ans. (c) : The code of correct Match List-I with List-II
18. Arrange the provisions section wise under the List-I List-II
Companies Act, 2013 in ascending order Theorem Formula
A. Prospectus A. Theorem of 3. P (E1 U E2) = P (E1) + P (E2)
Addition
B. Incorporation of company
C. Articles B. Theorem of 4. P (E1 ∩ E2) = P (E1) × P (E2)
Multiplication
D. Formation of company
E. Service of Documents
C. Condinal 2. P ( E1 ∩ E 2 )
probability P(E2/E1) =
Choose the correct answer from the options P ( E1 )
given below :
(a) B, A, C, D, E (b) E, C, B, D, A
D. Bayes' 1. P ( Hi ∩ E )
Theorem P(Hi/E) =
(c) D, C, B, E, A (d) A, B, C, D, E P(E)

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 604 YCT
 6 Ans. (c) : The four primary elements of a marketing
22. If two regression co-efficient are byx = − and mix are product price, place, and promotion, this
9
framework aims to create a comprehensive plan to
3
bxy = − which one of the following is the distinguish a product or service from competitors that
7 creates value for the customer. Often, these elements are
value of correlation? dependent on each other.
(a) .2857 (b) –.5345 25. The minimum capital prescribed by the RBI
(c) .5345 (d) –2857 for starting a new-small financial bank is :
6 (a) Rs. 100 crore (b) Rs. 200 crore
Ans. (b) : If two regression co-efficient byx = − and (c) Rs. 10 crore (d) Rs. 1000 crore
9
3 Ans. (b) : The Reserve Bank raised the minimum
bxy − then value of correlation ? capital requirement for small finance banks to Rs. 200
7 crores and permitted payments Bank to upgrade as
r = byx × bxy SFBs. Incidentally, the net worth of all SFBs currently
in operation is in excess of Rs. 200 crore.
6 −3
r= − × 26. Who has stated this "Performance appraisal
9 7 too often degenerates into a dishonest annual
18 rituals"?
r= − (a) Newton and Findlay
63
(b) Armstrong and Murlis
r = −0.2857 (c) Barlow
r = −0.5345 (d) Grint
Note: The Signs of both the regression equations and Ans. (b) : The statement "performance appraisal too
correlation coeffiecient must be same. often degenerates into a dishonest annual ritual" is
23. Match List-I with List-II : attribute to Armstrong and Murlis.
List-I List-II Performance appraisal were formal assessment and
Ind As Related rating of individual by their managers at or after a
review meetings, it has been described to operate as a
A. Ind As-1 1. Revenue top down and bureaucratic system. It is sometimes
B. Ind As-2 2. Property plant and referred to as a dishonest annual ritual.
equipment 27. Which of the following is/are correct about free
C. Ind As-16 3. Inventories consent when it is not caused by?
D. Ind As-18 4. Presentation of Financial A. Coercion
statement B. Undue Influence
Choose the correct answer from the options C. Fraud
given below : D. Misrepresentation
A B C D E. Bailment
(a) 1 2 3 4 Choose the correct answer from the options
(b) 4 3 2 1 given below :
(c) 3 4 2 1 (a) A, B, C only (b) B, C, D only
(d) 4 3 1 2 (c) A, B, C, D only (d) B, C, D, E only
Ans. (b) : The Code of correct matching List-I with Ans. (c) : An agreement becomes a contract when it is
List-II : entered into between two or more people with each
List-I List-II other's free consent, two or more people are said to
consent when they agree to the same thing in the same
Ind As Related/mebyebOe sence. Consent is said to be tree when it is not caused
A. Ind As-1 4. Presentation of Financial by coercion, undue influence, fraud, misrepresentation
statement of mistake.
B. Ind As-2 3. Inventories 28. What are the two numbers whose arithmetic
C. Ind As-16 2. Property plant and equipment mean = 18 and harmonic mean = 16 ?
D. Ind As-18 1. Revenue (a) 20 and 16 (b) 30 and 6
(c) 24 and 12 (d) 22 and 14
24. A particular combination of product, its price,
the methods of promoting it and the ways to Ans. (c) : Step 1 : Arithmetic Mean
make the product available to customer is : The arithmetic mean of two numbers a and b is given by
(a) Market a+b
= 18
(b) Marketing 2
(c) Marketing mix Multiplying both sides by 2, we get a+ b = 36
(d) Market segmentation Step 2 : Harmonic Mean
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 605 YCT
The harmonic mean of two numbers a and b is given by Ans. (a) : The code of correct matching of List-I with
2ab List-II :
= 16
a+b List-I List-II
Substituting a + b = 36 into the equation, we get : Heads Section
2ab A. Agriculture Income 4. Section 10(1)
= 16 B. Amount Received on 3. Section 10(10CC)
3b
Multiplying both sides by 36, we get 2ab = 576 voluntary retirement
Divising both sides by 2, we get ab = 288 C. House Rent Allowance 1. Section 10(13A)
Step 3 : Solving the system of equations D. Provident Fund 2. Section 10(11)
1. a + b = 36 30. Which of the following comes under the
2. ab = 288 significant meaning of foreign exchange?
We can solve these equations by expressing b in terms A. It is used to denote the rate at which
of a from the first equation : different monetary units are exchanged.
b = 36 – a B. It is a process through which international
Substituting b = 36 – a into the second equation we get : payments are liquidated by different
countries.
a ( 36 − a ) = 288
C. It indicates the rate of sale and purchase of
Expanding and rearranging, we get : foreign currency.
a 2 − 36a + 288 = 0 D. Foreign exchange situation in one country
Step 4 : Solving the quadratic Equation does not indicate the strength of the
We solve the quadratic equation economy.
Choose the correct answer from the options
a 2 − 36a + 288 = 0 using the quadratic formula = given below :
b 2 − 4ac (a) A, B, C only (b) B, C, D only
a = −b ± (c) A, C, D only (d) A, B, C, D only
2a
where a = 1, b = –36 and C = 288 : Ans. (a) : The foreign exchange market is an Over The
Counter (OTC) global market place that determines the
a = 36 ± 362 − 4.1.288 exchange rate for currencies around the world, participants
36 ± 1296 − 1152 in these markets can buy, sell, exchange, and speculate on
a= the relative exchange rate of various currency pairs.
Therefore foreign exchange used to denote the rate at
36 + 144 which different monetary units are exchanged, it is a
a = 36 ±
2 process through which international payments are
36 ± 12 liquidated by different countries and it indicates the rate
a= of sale and purchase of foreign currency.
2
31. Match List-I with List-II :
this gives us two solutions :
List-I List-II
36 + 12 36 − 12
a= = 24 and a = = 12 International Meaning
2 2 Business
Thus, the AM = 24 and HM =12 A. Ethnocentric 1. Companies establish foreign
29. Match List-I with List-II : Approach subsidiary and empower
List-I List-II their executives
Heads Section B. Polycentric 2. The domestic companies
A. Agriculture Income 1. Section Approach view foreign market as an
10(13A) extension to domestic
markets
B. Amount Received on 2. Section 10(11)
voluntary retirement C. Regiocentric 3. Companies view the entire
Approach world as a single country
C. House Rent 3. Section
Allowance 10(10CC) D. Geocentric 4. Subsidiaries consider
Approach regional Environment for
D. Provident Fund 4. Section 10(1) Policy strategy formulation
Choose the correct answer from the options Choose the correct answer from the options
given below : given below :
A B C D A B C D
(a) 4 3 1 2 (a) 2 1 4 3
(b) 4 3 2 1 (b) 1 3 4 2
(c) 1 2 3 4 (c) 2 3 1 4
(d) 2 1 4 3 (d) 4 1 2 3
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 606 YCT
 Ans. (a) : The code of correct matching of List-I with As per Section 44AB of the Income Tax Act, 1961 :
List-II : Every person carrying on a business is entitled to
List-I List-II get his accounts audited it his turnover, total sales,
International Business Meaning or gross receipts in business exceeds Rs. 1 crore in
the previous year.
A. Ethnocentric 2. The domestic
Every person carrying on a profession is entitled to
Approach/ve=kesâefvõkeâlee companies view
get his accounts audited if his grass receipts in
Gheeiece foreign market as an
profession exceed Rs. 50 lakh in the previous year.
extension to domestic
markets 34. Arrange the five variables of inter-relationship
under the model of the Expectancy Theory of
B. Polycentric Approach 1. Companies establish
Motivation propounds by V.H. Vroom.
foreign subsidiary and
empower their A. Individual Activity
executives B. Individual Performance
C. Regiocentric Approach 4. Subsidiaries consider C. Organisational Reward
regional Environment D. Individual Goal
for Policy strategy E. Organisational Goal
formulation Choose the correct answer from the options
D. Geocentric Approach 3. Companies view the given below :
entire world as a (a) A, C, D, B, E (b) A, C, B, D, E
single country (c) B, A, C, D, E (d) C, A, D, E, B
32. Arrange the following steps involved in a Ans. (b) : The expectancy theory of motivation,
qualitative research in the proper sequence : proposed by V.H. Vroom, posits that motivation is a
A. Reviewing of literature. result of the expectation that one's effort will lead to
B. Identifying a research topic. desired performance which in turn will result in
rewards that are aligned with one's personal goals.
C. Setting the purpose and selection of
participant. Key variables of Inter-relationship in this theory :
D. Writing the report E. Data collection Individual Activity
and data analysis. Organisational Reward
Choose the correct answer from the options Individual performance
given below : Individual Goal
(a) A, B, C, E, D (b) C, A, B, D, E Organisational Goal
(c) C, B, A, E, D (d) B, A, C, E, D 35. If an average 2 customers arrive at a shopping
Ans. (d) : Qualitative research process : mall per minute, what is probability that in
given minute exaction 4 customers will arrive ?
(1) Identifying the problem e–2 = .1353
↓ (a) .1804 (b) .0902
(2) Reviewing literature (c) .1353 (d) .2706
↓ Ans. (b) : 2 Customer per minute
(3) Setting the purpose and selection of participant Mean = 2
mk
↓ P ( K ) = e−m ×
(4) Collection of Data k!
K = we have to calcualte probability for 4 customer
↓ 24
(5) Analyzing of Data P ( 4 ) = e −2 ×
4!
↓ 16
(6) Interpreting findings and stating conclusion = .1353 ×
4 × 3 × 2 ×1
↓ 16
= .1353 ×
(7) Writing the report 24
33. Under Section 44-AB of Income Tax Act audit = .0902
is compulsory if a person is carrying on 36. Arrange the following procedure of e-filing of
business, whose gross turnover exceeds : income tax return in proper sequence.
(a) Rs. 60 lakhs (b) Rs. 1.0 crore A. Login
(c) Rs. 50 lakhs (d) Rs. 2.0 crore B. Register
Ans. (b) : Tax audit is an examination of the return by C. Verification
the IRS to verify that your income and deductions are D. Downloading utility and preparing return
precise. E. e-filing Income Tax Return

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 607 YCT
 Choose the correct answer from the options 39. Non-collusive oligopoly models include :
given below : A. Cournot model
(a) B, A, D, E, C (b) A, B, C, D, E B. Price-leadership model
(c) D, A, B, C, E (d) B, A, C, D, E C. Edgeworth model
Ans. (a) : The taxpayer shall file an income tax return D. Bertrand model
every year Via ITR forms prescribed by the income tax E. Market share model
department. Choose the most appropriate answer from the
Procedure of E-filing options given below :
Register (a) A, B and C only (b) C, D and E only
(c) A, C and D only (d) B, D and E only
Login
Downloading utility and preparing return Ans. (c) :
E-filing Income Tax Return
Verification
37. What is value of cost of equity if risk-free rate
is 6 percent, market risk premium is 9 percent
and beta is 1.54?
(a) 19.86³ (b) 5.48³
(c) 14.46³ (d) 13.86³
Ans. (a) : Risk free rate (Rf) = 6%
Market risk premium (Rm – Rf) = 9%
Beta (β) = 1.54
Ke = Rf + βx (Rm – Rf)
Ke = 6% + 1.54 × 9
Ke = 6% + 13.86%
Ke = 19.86%
38. Match List-I with List-II :
List-I List-II
Theories of Propounder
Motivation 40. Which of the following is substantive document
used in foreign trade?
A. Need Hierarchy 1. Clay Alderfer
(a) Commercial invoice
Theory
(b) Certificate of origin
B. E.R.G. Theory 2. Sigmund Freud (c) Bill of exchange
C. Psychoanalytic 3. Abraham H. Maslow (d) Inspection certificate
Theory Ans. (a) : Document used in foreign trade–
D. Two-Factor 4. Fredric Herzberg (I) Performa Invoice
Theory (II) Bill of lading
Choose the correct answer from the options (III) Packing List
given below : (IV) Commercial invoice
A B C D (V) Certificate of origin
(a) 2 1 3 4 (VI) Consular Invoice
(b) 3 1 2 4 (VII) Inspection certificate
(c) 3 2 1 4 But commercial Invoice substantive document used in
(d) 4 1 2 3 foreign trade.
Commercial invoice is the foundation of all other
Ans. (b) : The code of correct matching of List-I with
documents and is the first international shipping
List-II : documents that should be completed. The commercial
List-I List-II invoice is prepared by the exporter and is required by
Theories of Motivation Propounder the foreign buyer to prove ownership and arrange for
A. Need Hierarchy 3. Abraham H. Maslow payment.
Theory 41. Which of the following Provident Fund is set
B. E.R.G. Theory 1. Clay Alderfer up under the Provident Fund Act, 1925?
(a) Statutory Provident Fund
C. Psychoanalytic 2. Sigmund Freud
(b) Recognised Provident Fund
Theory
(c) Unrecognised Provident Fund
D. Two-Factor Theory 4. Fredric Herzberg (d) Public Provident Fund
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 608 YCT
Ans. (a) : Statutory Provident Fund Schemes is set up Choose the correct answer from the options
under the Provident Funds Act, 1925. It is meant for given below
government employees, universities, recognised A B C D
educational institutions, railways, etc. It is also known (a) 3 1 2 4
as the General Provident Fund. The government revives (b) 2 1 4 3
the interest rates of general provident funds from time (c) 3 2 4 1
to time. Private sector employees are not eligible to (d) 4 2 3 1
contribute to the general Provident Fund.
Ans. (b) : The code of correct Matching List-I with
42. Which of the following is properties of List-II :
standard deviation (σ) : List-I List-II
A. σ x + K = σ x Contents/Provisions Discussion/Provision in
B. σ x − K = σ x − K under the Central Goods chapters
& Services Tax Act, 2017
σ
C. σ x ÷ K = x A. Levy and collection of 2. Chapter-III
K Tax
D. σ x × K = Kσ x B. Registration 1. Chapter-VI
E. σ x × K = σ x C. Input Tax credit 4. Chapter-V
Choose the correct answer from the options D. Payment of Tax 3. Chapter-X
given below 45. Financial Enterprises, dividend paid are
(a) A, B, C only (b) C, D, E only showing which one of the following activities of
(c) A, C, D only (d) B, C, E only Cash Flow Statement?
Ans. (c) : Standard Deviation a statistic that measures (a) Operating activities
the dispersion of a data set relative to its mean and is (b) Financing activities
calculated as the square root of the variance. (c) Investing activities
Properties of standard deviation (σ) : (d) Operating and Financing activities both
n Ans. (b) : Cash flow from financing activities is a
∑ i = 1( x1 − x )
2
section of a company's cash flow statement that shows
σ= the net flows of cash that are used to fund the company,
n −1
financing activities include transaction involving debt,
σx + k = σx equity, and dividend.
σx Cash flow from financing activities provides investors
σx ÷ k = with insight into a company's financial strength and
k
σ x × k = kσ x how well a company's capital structure is managed.
46. The Channels/Levels of distribution are :
43. Who has given a new school of thought known A. Direct marketing channel or zero-level
as the 'Principles of Management' or the channel
'Management Process School'?
B. Dual-level channel or Single-level channel
(a) Mary Parker Follett (b) Hanri Fyol
C. Exclusive distribution
(c) Luther Gulick (d) Peter Drucker
D. Reverse flow channel
Ans. (b) : The Management Process School is also called E. Selective distribution
as Operational School of management, Choose the correct answer from the options
traditional/university the classicist approach.' Henery fayol' given below :
is considered to be the father of this school. This school
(a) A, B and C only (b) C, D and E only
considered management as a process of getting things done
through and with people operating in organizational (c) A, B and D only (d) B, D and E only
groups. According to this school the management process Ans. (c) : Distribution channel refers to means or route
divided into five function such as planning, organizing, through which products or services are transferred from
staffing, directing and controlling. the producer or manufacturer to the end consumer.
44. Match List-I with List-II : It encompasses a series of intermediaries, such as
wholesalers, retailers, and distributors, who facilitate
List-I List-II the movement and exchange of goods in the market
Contents/Provisions Discussion/Provision in place.
under the Central chapters
Goods & Services
Tax Act, 2017
A. Levy and 1. Chapter-VI
collection of Tax
B. Registration 2. Chapter-III
C. Input Tax credit 3. Chapter-X
D. Payment of Tax 4. Chapter-V

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 609 YCT
47. Match List-I with List-II : Working Ca;ital (WC) = CA – CL
List-I List-II Given that WC = 6,00,000
Name of Theories Propounder/Autho 2.5 × CL – CL = 6,00,000
r 1.5 × CL = 6,00,000
A. Theory of 1. Michael Porter 6,00,000
CL =
comparative 1.5
Advantage CL = 4,00,000
B. Theory of competitive 2. David Ricardo Value of Inventory :
Advantage Inventory = CA – LA
Inventory = 2.5 × CL – 1.5 × C
C. The Purchasing Power 3. Adam Smith Inventory = 1 × CL
Parity Theory Inventory = 4,00,000
Therefore, the value of Inventory is Rs. 4,00,000.
D. Theory of Absolute 4. Gustav Cassel 49. In which year the General Agreement on
Advantage Tariffs and Trade (GATT) was set up?
Choose the correct answer from the options (a) October, 1947 (b) November, 1964
given below : (c) January, 1995 (d) July, 1991
A B C D Ans. (a) : The General Agreement on Tariffs and Trade
(a) 2 3 4 1 (GATT) signed by 23 contries in october 1947, after
(b) 2 1 4 3 world war II, and became law on January 1 1948, is a
(c) 1 3 4 2 treaty minimizing barriers to international trade by
(d) 3 1 2 4 eliminating or reducing quotas, tariffs, and subsidies.
Ans. (b) : The Code of correct Matching of List-I with 50. A committee was set-up in 1993 under the
List-II : chairmanship of R.N. Malhotra to evaluate
List-I List-II which one of the following?
Name of Theories Propounder/Author (a) Banking Industry
A. Theory of comparative 2. David Ricardo (b) Small-Scale Industry
Advantage (c) Mutual Fund Industry
B. Theory of competitive 1. Michael Porter (d) Insurance Industry
Advantage Ans. (d) : Recommendation of the Malhotra
C. The Purchasing Power 4. Gustav Cassel Committee, in 1999 the Insurance Regulatory and
Parity Theory Development Authority (IRDA) was constituted to
regulate and develop the insurance industry and was in
D. Theory of Absolute 3. Adam Smith corporated in April, 2000. Objectives of the IRDA
Advantage include promoting competition to enhance customer
48. Working capital of a company is Rs. 6,00,000 satisfaction with increased consumer choice and lower
current ratio is 2.5 : 1, liquid ratio = 1.5 : 1. premiums while ensuring the financial security of the
What is the value of inventory? insurance market.
(a) Rs. 6,00,000 (b) Rs. 10,00,000 51. Match List-I with List-II :/metÛeer-I kesâ meeLe metÛeer-
(c) Rs. 4,00,000 (d) Rs. 2,00,000
II keâe efceueeve keâerefpeS :
Ans. (c) : Given :
Working capital = Rs. 6,00,000 List-I List-II
Current Ratio = 2.5 : 1 Term Meaning
Liquid Ratio = 1.5 : 1 A. Income effect 1. A table showing the
Current Assets (CA) different total
Current Ratio = quantities of a good
Current Liabilities (CL) that consumers are
Liquid Assets (LA) willing and able to
Liquid Ratio = buy at various prices
Current Liabilities
Current Ratio : over a given period
of time.
CA
2.5 = B. Substitution 2. A table showing the
CL effect different quantities of
CA = 2.5 × CL a good that a person
Liquid ratio in willing and able to
1.5 = LA/CL buy at a given period
LA = 1.5 × CL of time.

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 610 YCT
 C. Demand Schedule 3. The effect of a B. Industrial Development 2. 1964
for changes in price on Bank of India (IDBI)
quantity demanded C. Industrial Credit 3. 1955
an individual arising Investment Corporation
from the consumer of India (ICICI)
switching to or from
D. India Infrastructures 4. 1948
alternative products
Finance Company
D. Market demand 4. The effect of change Limited (IIFCL)
schedule in price on quantity
Choose the correct answer from the options
demanded arising
given below :
from the consumer
becoming better or A B C D
worse off as a result (a) 4 2 3 1
of price change (b) 4 1 2 3
Choose the correct answer from the options (c) 3 2 1 4
given below :/veerÛes efoS ieS efJekeâuheeW ceW mes mener (d) 3 1 4 2
Gòej keâe ÛeÙeve keâerefpeS : Ans. (a) : The code of correct Matching of List-I with
List-II :
A B C D
(a) 1 2 3 4 List-I List-II
(b) 4 3 2 1 Institution Year of
(c) 3 4 1 2 establishment
(d) 2 1 3 4 A. Industrial Finance Corporation 4. 1948
of India (IFCI)
Ans. (b) : The code of correct Matching of List-I with
List-II : B. Industrial Development Bank of 2. 1964
India (IDBI)
List-I List-II
Term Meaning C. Industrial Credit Investment 3. 1955
Corporation of India (ICICI)
A. Income effect 4. The effect of change in
price on quantity D. India Infrastructures Finance 1. 2006
demanded arising from Company Limited (IIFCL)
the consumer becoming 53. Which one of the following is rate of TDS on
better or worse off as a payment contractor if the recipient is an
result of price change individual?
B. Substitution effect 3. The effect of a changes (a) 1% (b) 2%
in price on quantity (c) 5% (d) 10%
demanded an individual Ans. (a) : TDS rate on payment to contractors under
arising from the Section 194C :
consumer switching to Once the conditions under Section 194C are met, the
or from alternative deductor needs to deduct TDS on payment to contractor
products at the following rate.
C. Demand Schedule 2. A table showing the Type of contractor/sub-contractor Rate of TDS
for different quantities of a Any person who is an individual or a 1%
good that a person in HUF
willing and able to buy
at a given period of time Any person other than an individual or a 2%
HUF
D. Market demand 1. A table showing the
schedule different total quantities Any person who is a transporter Nil
of a good that 54. Arrange in proper sequence the steps of
consumers are willing Financial Accounting.
and able to buy at A. Summarisation
various prices over a B. Identification and measures of financial
given period of time. transaction
52. Match List-I with List-II C. Classification
List-I List-II D. Recording
Institution Year of E. Interpretation of result
establishment Choose the correct answer from the options
A. Industrial Finance 1. 2006 given below :
Corporation of India (a) C, B, A, E, D (b) C, B, D, A, E
(IFCI) (c) B, D, C, A, E (d) B, D, A, C, E

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 611 YCT
Ans. (c) : The accounting cycle is a standard, process Ans. (d) : Purchase consideration is the agreed amount
that tracks, records, and analyzes all financial activity which transferr company (purchasing company) pays to
and transactions within a business. It starts when a the transferor company (vender company) in exchange
transaction is made and ends when a financial statement of the ownership of the transferor company.
is issued and the books are closed.

58. Bank overdraft payable on demand should be

treated as cash and cash equivalent according
to which one of the following Accounting
55. "The bailment of goods as security for payment
Standard?
of a debt or performance of a promise" is
called : (a) AS-3 (Revised) (b) Ind-AS-7
(a) Bailment (b) Pledge (c) Ind-AS-107 (d) Ind-AS-18
(c) Pledgee (d) Pawnee Ans. (b) : The objective IAS-7 is to require the
presentation of information about the historical changes
Ans. (b) : Pledge is a kind of bailment. Pledge is also
in cash and cash equivalents of an entity by means of a
known as Pawn. It is defined under Section 172 of the
statement of cash flows, which classifies cash flows
Indian Contract Act, 1892, by pledge, we mean
during the period according to operating, Investing and
bailment of goods as a security for the repayment of
financing activities.
debt or loan advanced or performance of an obligation
or promise. The person who pledge the goods as 59. Which of the following is probability sampling?
security is known as pledger or pawnor and the person A. Simple random sampling
in whose favour the goods are pledge is known as B. Clustered sampling
pledgee or pawnee. C. Quota sampling
56. In which type of insurance should insurable D. Stratified sampling
interest be present at the time when policy is E. Snowball sampling
taken? Choose the correct answer from the options
(a) Life Insurance only given below :
(b) Fire Insurance only (a) A, B, C, E only (b) A, C, D, E only
(c) Marine Insurance only (c) A, B, D only (d) B, C, D only
(d) Life and Marine Insurance only Ans. (c) : Sampling is a process in statistical analysis
Ans. (a) : In life insurance, the policyholder must have where researchers take a predetermined number of
an insurable interest in the life of the insured person, observations from a larger population. Sampling allows
this means that the policy holder would suffer a researchers to conduct studies about a larger group by
financial or emotional loss if the insured person dies. using a small portion of the population.
For example, a spouse may have an insurable interest in Methods of sampling
the life of their partner, a parent in the life of their child,
or a business in the life of a key employee.
57. Which of the following is/are the methods of
calculation of purchase consideration?
A. Lump-sum payment method
B. Net asset method
C. Total payment method
D. Net realization method
E. SWAP rate method/SWAP
Choose the correct answer from the options
given below :
(a) A, B and C only (b) B, C and D only
(c) A, D, E only (d) A, B, C and E only
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 612 YCT
60. Which both Average Revenue (AR) and A minimum of seven person must be willing to
Marginal Revenue (MR) are in straight line subscribe their names to the memorandum before
shape, MR curve will cut the distance between public company can be formed and registered for
AR curve and Y-axis in the : any legal reason what so ever.
(a) Middle Like wise, two or more people also form a private
(b) Near to beginning company.
(c) Near to end It is referred to as a one person company when one
(d) Will not cut any where person form it.
Ans. (a) : Both average revenue (AR) and Marginal 63. The most popular forms of advertising does not
revenue (MR) curves are of straight-line shape, it can be include :
shown that (MR) curve will cut the distance between (a) Informational appeals
AR curve and the Y-axis in the middle, in other words, (b) Television advertising
when both AR and MR curves are straight lines, then if (c) Print advertising
a perpendicular is drawn from a point on the AR curve (d) Online advertising
to the F-axis MR curve will cut this perpendicular at its Ans. (a) : The most popular forms of advertising does
middle point. inlclude :
Television advertising
Print advertising
Online advertising
But informational appeals not include popular forms
of advertising.
Informational appeal tend to be used when there is a
need to communicate product or service information in
a clear and often detailed way informational messages
are central to many non-profit, public sector and social
marketing.
64. Who has propounded the 'Theory of Absolute
61. A card is drawn from a pack of playing cards. Advantage' in his book 'An Inquiry into the
What is the probability of drawing a king or Nature, causes of the Wealth of Nations'?
red card? (a) Altred Marshall (b) Adam Smith
1 30 (c) A.C. Pigou (d) David Recardo
(a) (b)
2 52 Ans. (b) : The concept of absolute advantage was
16 7 first introduced in 1776 in the context of
(c) (d) international trade by Adam Smith, a Scottish
26 13 philosopher considered the father of modern
Ans. (d) : Probability of drawing Red card = 13+13/52 economics. In his monumental work an Inquiry into
Probability of king’s card= 4/52 the nature and causes of the Wealth of Nation, he
So, Probability of being a red or kings card = argued that, in order to become rich, countries should
26/52+4/52-2/52 (2 kings card already included in the specialize in producing the goods and services in
red card) which they have absolute advantage and engage in
So the final answer is 28/52 = 7/13 free trade with other countries to sell their goods.
62. Which of the following is/are correct for 65. If EBIT = 1120, PBT = 320, Fixed cost = 700.
formation of a company under Section 3 of the What is the value of degree of operating
Companies Act, 2013? leverage?
A. Seven or more persons; where the (a) 3.5 (b) 5.6
company formed is to be a public company (c) 1.25 (d) 1.625
B. Two or more persons, where the company Ans. (d) : EBIT = 1120
is to be formed to be a private company. PBT = 320
C. One person, where the company to be Fixed Cost = 700
formed is to be one person company. Degree of operating leverage (DOL) ?
D. Five or more persons, where the company Contribution
formed is to be a public company. DOL =
Choose the correct answer from the options EBIT
given below : Contribution = EBIT + Fixed Cost
(a) A, B only (b) B, C only = 1120 + 700
(c) A, B, C only (d) B, C, D only = 1820
Ans. (c) : Section 3 of the formation of a company 1820
DOL =
under Companies Act, 2013 details the basic 1120
requirements of forming a company as follows : DOL = 1.625

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 613 YCT
66. Which of the following approaches are charting 69. Who held that both demand and supply were
the Career Paths as developed by Rothwell and equally important in determining the price of
Kazan's? the product?
A. The Traditional Approach (a) Pigou (b) Robbins
B. Career Path Approach (c) Keynes (d) Marshall
C. Lattice or Network Approach Ans. (d) : Demand and supply are equally important in
D. Career Goal Approach determining the price of a product. Alfred Marshall is
Choose the correct answer from the options known for his emphasis on the equilibrium of demand
given below : and supply as the determinant of price in his economic
(a) A, B, C only (b) A, C, D only theories.
(c) B, C, D only (d) A, B, C, D only 70. Which of the following transactions are shown
as investing activities in cash flow statement by
Ans. (d) : The model of Rothwell and Kazanas creates a final companies?
framework for the inclusion of human resource as an A. Cash proceed from sale of fixed assets
integral part of a total business strategy.
B. Repayment of loan taken
According to the theory developed by Rothwell and C. Debenture purchased
Kazan, the approaches include :
D. Loan advanced
Traditional approach
E. Purchase of patent
Career Path approach Choose the correct answer from the options
Lattice or Network aproach given below :
Career Goal approach (a) A, B, C only (b) A, C, E only
67. The balance of securities premium account (c) B, C, D only (d) B, D, E only
cannot be utilized for which one of the Ans. (b) : Cash flow from Investing Activities is the
following? Section of a company's cash flow statement that
(a) Writing off floating cost displays how much money has been used in (or
(b) Writing of discount on issue of debenture generated from) making investments during a specific
(c) Dividend distribution time period.
(d) Bonus issue Investing activities include purchases of long-term
Ans. (c) : According to Section 52 of the Act, securities assets (such as property, plant, and equipment),
premium can be used for the following : acquisitions of other businesses, and investments in
Writing off floating cost marketable securities (stock and bonds).
Therefore, cash proceed from sale of fixed assets,
Writing of discount on issue of debenture
debenture purchased and purchase of plant the
For the issue of fully paid bonus share capital transaction are shown as investing activities in cash
For meeting the preliminary expenses incurred by flow statement by financial companies.
the company.
71. Match List-I with List-II :
But dividend distribution cannot be utilized for
securities premium account. List-I List-II
Methods of risk Meaning
68. Arrange the marketing Logistics decisions in analysis
proper sequence beginning from start to end.
A. Sensitivity 1. A computer
A. Order processing Analysis generates a very
B. Inventory large number of
C. Warehousing scenarious according
D. Transportation to the probability
Choose the most appropriate answer from the distribution of
options given below : variable.
(a) A, B, C and D only B. Scenario Analysis 2. Provide a way to
(b) A, C, B and D only present different
(c) A, B, D and C only possibilities so that
(d) C, A, B and D only we can be sure that
decision we make
Ans. (a) : Market logistics includes planning the today.
infrastructure to meet demand, then implementing and
controlling the physical flous of materials and final C. Simulation 3. Analysing the project
goods from points of origin to points of use, to meet Analysis NPV (Or IRR) for a
given change one
customer requirements at a profit.
variable at a time
Market-Logistics Decision–
D. Decision Tree 4. Analysing the project
How should we handle orders (Order processing)
Analysis NPV (IRR) for a
How much stock should be hold (Inventory) given change in
Where should we locate our stock (warehousing) combination of
How should we ship goods (transportation) variable.
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 614 YCT
 Choose the correct answer from the options Ans. (d) : Product are like living beings, they are
given below : conceived born, grow, achieve maturity and finally die.
A B C D Assumption :
(a) 1 2 3 4 Every product has a limited life
(b) 4 3 1 2 Product sales pass through distinct stages, each
(c) 3 4 2 1 passing different challenges, opportunities and
(d) 3 4 1 2 problem to the seller
Ans. (d) : The code of correct Matching List-I with Profit rise and fall at different stages of the cycle
List-II : Product life cycle analysis is conducted for a
List-I List-II product categories
Methods of risk Meaning Different buyers groups buy products during
analysis different phases
A. Sensitivity 3. Analysing the project NPV The product life cycle stages require different
Analysis (Or IRR) for a given marketing strategy.
change one variable at a
time. 74. Which of the following exemption or deduction
will not be available, if assessee opt to be taxed
under Section 115 BAC for assessment year
B. Scenario 4. Analysing the project NPV 2024–25?
Analysis (IRR) for a given change in
A. House Rent Allowance
combination of variable
B. Leave Travel Concession.
C. Simulation 1. A computer generates a C. Standard deduction.
Analysis very large number of
scenarious according to the D. Tax on Employment.
probability distribution of E. Interest on loan taken for self-occupied
variable. house property.
Choose the correct answer from the options
D. Decision Tree 2. Provide a way to present given below :
Analysis different possibilities so
(a) A, C, D, E only (b) A, B, C only
that we can be sure that
decision we make today. (c) A, B, D, E only (d) B, C, D, E only
Ans. (c) : Section 115 BAC limits deduction and
72. Which one of the following is true with respect disallows HRA, Leave travel concession, Tax on
to working capital finance? employment medical costs, interest on loan take for self
(a) Liquidity is higher in aggressive approach occupied noise property and educational loan interest.
(b) Profitability is higher in conservative Additionally, starting from FY 2023-24, individual can
approach claim a standard deduction of Rs. 50,000 under Both the
(c) Liquidity is lower in matching approach new and old tax regimes.
(d) Profitability is higher in aggressive approach 75. Arrange the steps of selection process from
Ans. (d) : There are three major approaches to beginning to end.
managing working capital. They are aggressive, A. Selection Test
moderate or hedging, and conservative, with an B. Screening of Application
aggressive approach, the company's working capital
investment are minimal, it is a high-risk, high-profit C. Physical Examination
strategy. D. Interview
73. The concept of product life cycle is based on E. Approval by appropriate authority and
few key assumptions. They are : placement
A. Products have a limited life Choose the correct answer from the options
B. Product sales pass through distinct stages, given below :
each passing different challenges, (a) A, C, D, B, E (b) B, A, D, C, E
opportunities and problem to the seller (c) C, B, A, D, E (d) A, B, C, D, E
C. It occupies most desirable position in Ans. (b) : The selection process can be defined as the
consumer's mind making the brand almost process of selection and short listing of the right
impregnable. candidates with the necessary qualifications and skill set
D. It erects outposts to protect a weak front or to fill the vacancies in an organization.
support a possible counterattack. Selection process
E. Profits rise and fall at different stages of Screening of application
the cycle.
Selection Test e
Choose the correct answer from the options
given below : Interview
(a) A, B and D only (b) B, C and D only Physical Examination
(c) C, D and E only (d) A, B and E only Approval by appropriate authority and placement

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 615 YCT
76. Match List-I with List-II: Ans. (a) : Using statistics, hypothesis testing is a formal
List-I List-II process for examining our theories about the world
Term Meaning scientists most frequently employ it to examine
particular hypotheses that result from theories./
A. Scarcity 1. The act of using goods and
services to satisfy want Process of hypothesis testing
(1) Setup null alternative hypothesis
B. Consumption 2. The total amount of output in
(2) Select the level of significance
the economy
(3) Select statistics
C. Macroeconomics 3. The excess of human wants
(4)Establish the decision rule
over what can actually be
produced to fulfill their wants (5) Perform computation and draw a conclusion
D. Aggregate 4. The branch of economics that 78. Match List-I with List-II :
demand studies economic aggregate List-I List-II
the over all level of prices, Provision under the Indian Relevant Sections
output and employment in the Contract Act, 1872
economy A. Contingent contract 1. Section 31
Choose the correct answer from the options B. Bailment 2. Section 15
given below C. Fraud 3. Section 17
A B C D D. Coercion 4. Section 148
(a) 1 2 3 4
Choose the correct answer from the options
(b) 3 4 2 1 given below
(c) 3 1 4 2 A B C D
(d) 4 3 2 1 (a) 1 4 3 2
Ans. (c) : The code of correct matching list-I with (b) 1 3 2 4
List-II : (c) 2 3 4 1
List-I List-II (d) 4 3 1 2
A Scarcity III The excess of human wants Ans. (a) : The code of correct matching list-I with list-II
over what can actually be List-I List-II
produced to fulfill their Provision under the Relevant Sections
wants Indian Contract Act, 1872
B Consumption I The act of using A. Contingent contract I. Section 31
goods and services to B. Bailment IV. Section 148
satisfy want
C. Fraud III. Section 17
C Macro IV The branch of
economics D. Coercion II. Section 15
economics that
studies economic 79. Match List-I with List-II :
aggregate the overall level List-I List-II
of price, output and Determinants of Meaning
employment in the Service quality
economy. A. Responsiveness 1. The Provision of caring,
D Aggregate II The total amount of output individualised attention
demand in the to customer.
economy B. Assurance 2. The appears of physical
77. Arrange the following steps of the process of facilities, equipment,
hypothesis testing in the proper sequence. staff and
A. Set up null and alternative hypothesis communication
B. Establish the decision rule materials.
C. Select statistics C. Empathy 3. The knowledge and
D. Select the level of significance courtesy of employees
E. Perform computation and draw a and their ability to
conclusion convenience trust and
Choose the correct answer from the options confidence.
given below : D. Tangibles 4. The willingness to help
(a) A, D, C, B, E (b) D, A, C, E, B customer's and provide
(c) D, A, C, B, E (d) C, D, A, B, E prompt service
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 616 YCT
 Choose the correct answer from the options Choose the correct answer from the options
given below: given below :
A B C D A B C D
(a) 4 3 1 2 (a) 4 3 2 1
(b) 1 2 3 4 (b) 3 4 2 1
(c) 3 1 2 4
(c) 4 1 3 2
(d) 2 1 4 3
(d) 4 1 2 3
Ans. (a) : The code of correct matching list-I with list-II
Ans. (d) : The code of correct matching list-I with list-
List-I List-II
II
Determinants of Meaning
Service quality List-I List-II
A. Responsiveness IV. The willingness to help Iteam Head Meer<e&
customer's and provide A. Interest accrued on IV. Current Assets other
prompt service Investment than current Assets
B. Assurance III. The knowledge and courtesy B. Bank Overdraft I. Current liabilities
of employees and their
ability to convenience trust C. Trade Mark II. Property, plant and
and confidence. equipment
C. Empathy I. The Provision of caring, D. Stores and Spares III. Current Assest
individualised attention to Inventory
customer.
82. Change the financial institutions according to
D. Tangibles II. The appears of physical their year of establishment from earlier to
facilities, equipment, staff and
communication materials. later.
A. Imperial Bank
80. Which of the following is/are key Components
of a Third Generation Balanced Score Card? B. State Bank of India
A. Destination Statement C. Life Insurance Corporation of India
B. Strategic Objectives D. Unit Trust of India
C. Strategic Linkage Model and Perspective E. Regional Rural Banks
D. Measures and Initiatives Choose the correct answer from the options
E. Strategic growth Diversification given below :
Choose the correct answer from the options (a) A, B, C, D, E (b) C, D, A, B, E
given below : (c) B, E, C, A, D (d) D, C, E, A, B
(a) A, B, D, E only (b) A, B, C, D only
Ans. (a) : The year of the establishment of the
(c) B, C, D, E only (d) A, C, D, E only
following institutions from earlier to later are as
Ans. (b) : In business performance management, a third follows.
generation balance score card is a version of the traditional
balanced score card, a structured report, supported by (A) Imperial Bank
proven design methods and automated tools, that can be (B) State Bank of India
used by managers to keep track of the execution of (C) Life Insurance corporation of India
detivities by staff the within their control, and to monitor (D) Unit Trust of India
the con-sequences arising from these actions. (E) Regional Rural Banks
Key components of a 3rd Generation Balance score card
are: 83. "If a partnership formed to carry on a business
(1) Destination statement without specifying any period of time and
(2) Strategic objective continues to exist as long as the partners are
(3) Strategic Linkage Model and perspectives willing to carry" is called :
(4)Measure and Initiatives (a) Partnership for fixed term
81. Match List-I with List-II : (b) Partnership at will
List-I List-II (c) Particular Partnership
Iteam Head (d) Partnership for long period
A. Interest accrued 1. Current liabilities Ans. (b) : When no fixed period is prescribed for the
on Investment expiration of partnership than it is a partnership at will.
B. Bank Overdraft 2. Property, plant and According to section 7 two conditions need to be
equipment fulfilled :
C. Trade Mark 3. Current Assest No agreement about the determination of the fixed
Inventory period of partnership.
D. Stores and Spares 4. Current Assets other No clause with respect to the determination of
than current Assets partnership.

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 617 YCT
84. What is not included in Demand and quantity D. The Service of RRB's are not available in
demanded? the state of Goa and Sikkim
(a) Tastes and desires of consumer for a E. RRB's are owned by Central Government,
commodity State governments and the sponsorer bank
(b) Expenses of the consumer in the proportion of 30%, 15% and 35%.
Choose the correct answer from the options
(c) The price of related goods
given below :
(d) Substitutes or complements (a) A, B, C, D only (b) B, C, D, E only
Ans. (b) : Demand is the quantity of a goods or services (c) A, B, D, E only (d) A, C, D, E only
that consumers are willing and able to buy at given Ans. (c) : Regional Rural Bank (RRB) are Indian
prices during a period of time. Quantity demanded is the scheduled commercial Bank (Government Bank)
amount of a goods or service peoples will buy at a operating at regional level in different state of India
particular price at a particular time. Features of RRB
Included in Demand and quantity demanded : First Regional Rural Bank was established 2nd
Tastes and desires of consumer for a commodity October 1975. The Prathama bank of Moradabad UP
The price of related goods was the first RRB
Substituted or complements RRB were established under the provision of an
But not included expenses of the consumer. ordinance passed on 26 September 1975 and true
RRB Act 1976
85. Arrange the following international The autorised capital of the RRB has been raised
organisations according to their year of from Rs 5 crore to Rs 2000 crore/
formation from earlier to latest. The minimum issued capital of the RRB has been
A. General Agreement on Tariff and Trade raised from Rs 25 lakhs to Rs 1 crore
(GATT) The service of RRBs are not available in the state of
B. World Trade Organisation (WTO) goa and sikkim
C. United Nations Conference on Trade and RRBs are owned by central government state
Development (UNCTAD) government and the sponsore bank in he proportion
D. Assistance to States for Developing Export of 5%, 15% and 35%
Infrastructure and Allied Activities 87. Match List-I with List-II :
(ASIDE) List-I List-II
Choose the correct answer from the options Pricing Meaning
given below : A. Mark-up Price 1. Starting with rate of
(a) A, B, C, D (b) A, C, B, D return objective and
(c) B, A, C, D (d) C, A, D, B then setting price that
will yield desired
Ans. (b) : International organization generally refers to
rate of return.
international governmental organization or
organizations with a universal membership of sovereign B. Target rate of 2. Adding standard
return pricing overhead cost and
states. profit
International organization according to their year of
C. Economic value 3. firms disposing off
formation from earlier to later. to Customer excess inventories or
(i) General Agreement on Tariff and trade (GATT) Pricing used goods.
1947 D. Auction Pricing 4. Adding host of
(ii) United National conference on Trade and inputs such as buyers
Development image of the product
(iii) World Trade organization (WTO) performance,
(iv) Assistance to states for developing export warranty quality
Infrastructure and Allied Activities (ASIDE- customer support and
2002) other softer
attributes.
86. Which of the following statements are correct
Choose the correct answer from the options
about Regional Rural Banks? given below :
A. The first RRB's were established on A B C D
October 02, 1975 (a) 1 2 3 4
B. The RRB's Act of 1976 is applicable (b) 2 4 1 3
C. The minimum paid up capital of RRB's is (c) 2 1 4 3
10 crores (d) 4 2 1 3
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 618 YCT
Ans. (c) : The code of correct Matching of List-I with B. Section 80E 2. Deduction in respect
List-II of rent paid
List-I List-II C. Section 80GG 3. Deduction for Interest
Pricing Meaning paid on loan taken for
A. Mark-up Price II. Adding standard overhead pursuing higher
cost and profit education
B. Target rate of I. Starting with rate of return D. Section 80 GGB 4. Deduction in respect
of Medical treatment
return pricing objective and then setting
price that will yield desired Choose the correct answer from the options
rate of return. given below:
C. Economic value IV. Adding host of inputs such A B C D
to Customer as buyers image of the (a) 1 2 3 4
Pricing product performance, (b) 2 3 1 4
warranty quality, customer (c) 4 3 2 1
support and other softer (d) 3 4 1 2
attributes. Ans. (c) : The code of correct Matching of List-I with
D. Auction Pricing III. firms disposing off excess List-II
inventories or used goods. List-I List-II
88. Which of the following income from house Deduction Related
property is not charged to tax? A. Section 80 4. Deduction in respect of Medical
A. Farm House. DDB treatment
B. Property held for charitable purposes. B. Section 80E 3. Deduction for Interest paid on
C. More than two self-occupied house. loan taken for pursuing higher
D. Place of ex-ruler. education
E. House property of registered trade union. C. Section 2. Deduction in respect of rent paid
Choose the correct answer from the options 80GG
given below :
D. Section 80 1. Deduction in respect of
(a) B, C, D, E only (b) A, C, D only Contribution given by companies
GGB
(c) A, D, E only (d) A, B, D, E only to political party
Ans. (d) : The annual value of self-occupied property is
considered nil. Therefore, a self- occupied house is Read the following passage carefully, and answer
supposed to be non-revenue generating, hence not question No. 91 to 95.
taxable. Introduction of Corporate Governance in a
Income from Company brings order and method in decision
House property is not charged to tax : making process and fixes who should own the
responsibility. That is the goal and role classification
Farm house emerges. The Company will focus on its mission,
Property held for charitable purposes vision and not any personal likes and dislikes of a few
Place of ex-ruler top officers. The benefits of corporate governance an
House property of registered trade union difficult to quantity in short range.
89. SUGAM is also known as : Accounting jugglery and showing profits give a
(a) ITR-1 (b) ITR-2 Company short term gains but they are not long term
(c) ITR-3 (d) ITR-4 policies for financial credibility. True financial
performance of a company, openness and the
Ans. (d) : The Sugam ITR-4s form is the Income tax
governance policies give investor confidence.
return form for those taxpayers who have opted for the
presumptive Income scheme as per section 44 AD and The unethical policies or mismanagement by
section 44A E of the Income tax Act. However if the CEO or director of a company will be exposed by
turnover of the business mentioned above exceeds Rs 3 adhering to corporate governance principles.
Corporate governance will throw light on excessive
crores the tax payer will have to file ITR-4.
remunerations given to direction or CEOs. It
90. Match List-I with List-II:/metÛeer-I kesâ meeLe metÛeer-improves investor confidence and relations.
II keâe efceueeve keâerefpeS : The occurrence of frauds and mismanagement
List-I /metÛeer-I List-II/metÛeer-II can be detected early for remedial actions. It is also
agreed that is system can remove fraudulent practices
Deduction/keâšewleer Related/mebyebOe fully. Corporate governance is an open democratic
A. Section 80 DDB 1. Deduction in respect system. They may appeal long winded or time
of Contribution given consuming or individual decision making is hindered.
by companies to The risk of fraud is much bigger and damage to a
political party company.

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 619 YCT
91. How does corporate governance help in 94. What is one of the advantages of corporate
exposing unethical policies or mismanagement governance mentioned in the passage?
in a company? (a) Fixing-up excessive remunerations for
(a) By competing with large sized companies directors and CEOs
(b) By fixing responsibilities and promoting (b) Discouraging individual decision making
openness (c) Promoting international accounting practices
(c) By focusing on short-term gains (d) Improving investor's confidence and relations
(d) By promoting single-entry system Ans. (d) : Improving investor's confidence and relations:
Ans. (b) : By fixing responsibilities and promoting The passage highlight that corporate governances
openness: promotes openers and governance policies that in
The passage discusses that corporate governance turn, improve investor confidence and relations.
introduced order and method in decision making, It underscores the importance of transparency and
which includes fixing responsibilities. responsible management in building and maintaining
It also emphasizes that corporate governance trust with investors.
encourages oneness, which helps in exposing This in creased confidence in a result of the
unethical policies or mismanagement by CEOs or company exhibiting true financial performance and
directors. ethical conduct.
This system ensure transparency and accountability 95. What is one of the primary goals of introducing
making it harder for unethical practices to go corporate governance in a company?
unnoticed. (a) Maximizing short-term gains
(b) Bringing order and method to decision making
92. How does the passage describe corporate
governance as a system? (c) Window dressing of financial statements
(a) Time consuming and ineffective (d) Implementing IFRS in accounting system
(b) Hiding the risk of fraud Ans. (b) : Bringing order and method to decision
(c) An open democratic system with some making:
drawbacks The passage states that the introduction of corporate
governance introduces order and methods into the
(d) Perfectly capable of removing fraudulent decision -making process within a company.
practices
This goal is essential for ensuring that decision are
Ans. (c) : An open democratic system with some made systematically and responsibly, rather than
drawbacks : based on personal preferences of a few top officers:
The passage describes corporate governance as an Corporate governance helps in establishing clear
open democratic system that emphasizes roles and responsibilities, aligning company
transparency responsibility, and accountability. operations with its mission and vision.
It acknowledges that while the system is beneficial, it Read the following passage carefully and answer
has drawbacks such as being long-winded, time - question No. 96 to 100.
consuming, and potentially hindering individual It is rightly said that "It is easy to dodge our
decision making. responsibilities, but we cannot dodge the
Despite these drawbacks, the passage stresses that consequences of dodging our responsibilities," -
the benefits of reducing fraud and mismanagement Josiah Charles Stamp, 1886-1941, former director
out weight the negatives. of the Bank of England. In this modern digitalized
93. According to the passage, what is the benefit of world, businesses are required to be mindful both in
adhering to corporate governance for terms of what they are doing and how they are
investors? doing it. The company's brand is not just dependent
(a) Assumed return on investments on the quantity of products they are offering to
people but on the overall impact of the company's
(b) Gain on liquidation operations on the society, environment and the
(c) Confidence in true financial performance economy.
(d) Insider information Their sense of Social responsibility provides
Ans. (c) : Confidence in true financial performances: them with a competitive edge over their competitors
The passage nightlights that corporate governance in a crowded marketplace. CSR is a holistic and
promotes openness and adherence to governance integrated management concept whereby
policies, which is turn boosts investor confidences companies integrate their Social and environmental
in the company true financial status. objectives with their business objectives. It works
It emphasizes the long-term benefits transparency on a Triple Bottom Line Approach, i.e. Company
and responsible management in fostering trust focuses on 3P's People, Planet & Profit while
among investors. addressing all the expectations of its stakeholders.
The majority of policy initiatives in the country are
By adhering to corporate governance principles,
driven by the objectives of equal opportunities,
companies exhibit true financial performance rather minimizing poverty and human deprivation, focus
than short-term profit achieved via unethical on fundamental rights, etc. thereby leading to
accounting practices. strong human development.
UGC NTA NET Commerce June 2024 (Cancelled) Paper II 620 YCT
 The choices that we make today will be going According to the passage, It is rightly said that ''it is
to affect and influence our future generations. easy to dodge our responsibilities, but we cannot
Despite all this inequality and disparity still dodge the consequences of dodging our
exists. This year, the Indian Government responsibilities.'' - Josiah Charles Stamp, 1880-
implemented new CSR guidelines. These 1941, former director of the Bank of England.
guidelines require Indian companies to spend 2 98. According to the passage what is the
percent of their net profit on CSR. India is the significance of a company's Social
first country in the world to make CSR responsibility in the modern digitalized world?
mandatory. Including the CSR mandate in (a) It has no impact on the company's brand
Companies Act, 2013 is a great step of engaging
(b) Quality of product have no relationship with
the corporate sector in the equitable development
the company's image
the country. Earlier companies were acquired to
spend 2 percent of profits towards CSR and in (c) It provides a competitive edge in a crowded
case of failure to do so; they were required to give market place
reasons. But as per the present amendment, (d) It leads to wealth maximization
companies are required to spend 2 percent of Ans. (c) : It provides a competitive edge in a crowded
profits towards CSR in the given time limit or are Market place-
required to turn over this amount of profits in According to the passage In this modern digitalized
the funds which are run by the government. world, businesses are required to be mindful both in
The new amendment will require all the terms of what they are doing and how they are doing
companies which qualify the provisions under it. The company brand is not just dependent on the
CSR guidelines to spend the specified part of quality of products they are offering to people but
their profits towards Corporate Social on the overall impact of the company's operations
Responsibility without failing. Researchers have on he society, environment and the economy.
made an attempt to study issues and Challenges Their sense of social responsibility provides them with a
associated with CSR in India and also to competitive edge over their competitors in crowded
determine various factors driving CSR practices market pace.
in Indian Companies.
99. What did the Indian Government implement
96. What is the consequence for companies that
with regards to CSR?
fail to meet CSR spending requirements as per
the new amendment? (a) Mandatory 2% spending of net profit on CSR
(a) They face no repercussions. (b) voluntary CSR guidelines
(b) They must provide reasons for their failure. (c) Tax incentives for CSR activities
(c) The companies operations may be closed for (d) No specific CSR requirements
a specific period Ans. (a) : Mandatory 2% spending of net profit on
(d) They are required to turn over the profits to CSR-
government run funds According to the passage the Indian government
Ans. (d) : They are required to turn over the profits to implemented new CSR guidelines. These guidelines
government -run funds- require Indian companies to spend 2% of their net
According to passage Earlier companies were profit on CSR India is the first country in the world
required to spend 2% of profits towards CSR and in the make CSR mandatory. Including the CSR
case of failure to do So: they were required to given mandate in companies Act, 2013 is a great step of
reasons. But as per the present amendment, engaging the corporate sector in the equitable
companies are required to spend 2 percent of profits development of the country.
towards CSR in the given time limit or are required 100. What is "Triple Bottom Line Approach" in
to turn over this amount of profits in the funds which CSR?
are run by the government. (a) A focus on customer satisfaction, revenue and
97. According to the passage, what is the main profit
point emphasized by Josiah Charles Stamp's (b) A focus on people] planet, and profit
quote? (c) A focus on shareholder interests, environment
(a) Companies cannot avoid the consequences of sustainability and innovation
neglecting their responsibilities. (d) A focus on people, planet and plant
(b) Companies must be careful about corporate Ans. (b) : Focus on people, planet, and profit
governance According to the passage CSR is a holistic and
(c) Social responsibility has no impact on a integrated management concept where by
company's brand. companies integrate their social and environmental
(d) The consequences of dodging responsibilities objectives with their business objective. It works on
are immediate. a Triple Bottom limes Approach. i.e. company
Ans. (a) : Companies cannot avoid the consequences of focuses on 3 Ps people, planet and profit while
neglecting their responsibilities – addressing all the expectations of its stakeholders.

UGC NTA NET Commerce June 2024 (Cancelled) Paper II 621 YCT
 NTA UGC NET/JRF Re-Exam, June 2024
COMMERCE
Solved Paper (Exam Date: 03.09.2024, Shift-I)

1. The current ratio of a company is 2:1. Which Choose the correct answer from the options
one the following suggestions would improve given below:
the current ratio? (a) A-III, B-IV, C-I, D-II
(a) Purchase of stock for cash (b) A-II, B-IV, C-I, D-III
(b) Cash collection from debtors (c) A-III, B-I, C-IV, D-II
(c) Pay a current liability (d) A-IV, B-I, C-III, D-II
(d) Purchase of fixed assets
Ans. (a) : Correct match of List-I with List-II
Ans. (c) : The current ratio is calculated as:
List-I List-II
Current Assets Shapes Type of Distribution
Current Ratio =
Current Liabilities III. Negatively
The improve (increase) the current ratio, we need either A. skewed
an increase in current assets, a reduction in current
liabilities, or both.
Pay a current Liability:- Reducing a current liability IV. Leptokurtic
improves the current ratio. B. Distribution
This option will improve the current ratio (as cash and
current liability both will reduce). I. Platykurtic
C. Distribution
2. Which one of the following non-functional
rewards does NOT fall under job design
II. Positively
category?
D. Skewed
(a) Compliment of work progress
(b) Flexible hours
(c) Participation in decisions 4. Arrange the given component tasks to be
(d) Flexible breaks handle in positioning in the logical sequence-
Ans. (a) : The non-functional reward, that does not fall A. Developing the value proposition
under the job design category is: B. Analyzing competitor's positioning: Is
Compliment of work progress-While compliments there a gap somewhere?
can be a form of recognition, they are more about C. Communicating the value proposition to
feedback and motivation rather than aspects of job target consumers?
design, which focuses on structuring the job itself, such D. Deciding the locus in consumers' mind:
an flexible hours, participation in decision and flexible Where to lodge the product/brand?
breaks. E. Ensuring the infrastructure/competitive
3. Match the List-I with List-II advantage for delivering the premise
List-I List-II Choose the correct answer from the options
Shapes Type of Distribution/ given below:
Platykurtic (a) D, B, A, E, C (b) D, B, E, A, C
Distribution (c) B, D, A, E, C (d) B, D, C, A, E
A. I.
Ans. (b) : The correct logical sequence for positioning
is-
Positively
• Deciding the locus in consumers' mind: Where to
B. II. Skewed
lodge the product/brand?
• Analyzing competitor's positioning: Is there a gap
Negatively somewhere?
C. III. Skewed • Ensuring the infrastructure/competitive advantage for
delivering the premise
Leptokurtic • Developing the value proposition
D. IV. Distribution • Communicating the value proposition to target
consumers?

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 622 YCT
5. An exploratory study is finished when the A. NABARD
researcher has achieved the following: B. EXIM Bank
A. Established the major dimensions of the C. UTI
research task D. SIDBI
B. Defined a set of subsidiary investigative E. ECGC
question that can be used as guide to a Choose the correct answer from the options
detailed research design given below:
C. Developed several hypotheses about (a) A, B, C, D, E (b) C, B, A, D, E
possible causes of a management (c) C, A, B, E, D (d) E, C, B, A, D
dilemma
Ans. (d) : The following financial institution are
D. Learned that certain other hypothesis are
arrange in increasing order of their date of
such remote possibilities that they can be
establishment-
safely ignored in any subsequent study
(E) ECGC- Export credit Guarantee Corporation of
E. Concluded additional research is needed
India was established in 30th July, 1957
and it is feasible
(C) UTI- Unit trust of India was established in 1963
Choose the correct answer from the options
(B) EXIM Bank- Export-import Bank of India was
given below:
established in 1 January 1982.
(a) A & B only
(A) NABARD- National Bank for Agriculture and
(b) A, B & C only
Rural Development was established in 12 July
(c) A, B, C & D only 1982.
(d) B, C, D & E only (D) SIDBI- Small industries Development Bank of
Ans. (c) : An exploratory study is type of research that India was established in 2 April 1990.
is conducted to explore a new topic or area it is often 8. What is the correct sequence to be followed for
used to generate hypotheses or ideas for further the following transactions undertaken by an
research. The goals of an exploratory study include. individual while computing his gross total
A. Established the major dimensions of the research income as per the Income tax Act 1961?
task. A. Investment in own public provident fund.
B. Defined a set of subsidiary investigative question B. Investment in one residential house in
that can be used as guides to a detailed India for exemption from capital gains.
research design.
C. Interest on capital borrowed for
C. Developed several hypotheses about possible purchasing a self-occupied house
causes of a management dilemma. property.
D. Learned that certain other hypotheses are such D. Tax on employment.
remote possibilities that they can be safely ignored
E. Payment of Medical insurance premium on
in any subsequent study.
his own life.
6. Which one of the following is NOT a marketing Choose the correct answer from the options
principle? given below:
(a) Focus on the customer (a) C, B, D, E, A (b) D, C, B, A, E
(b) Markets are homogeneous (c) E, A, D, B, C (d) B, C, E, A, D
(c) Customers do not buy products
Ans. (b) : The correct sequence to be followed for the
(d) Marketing is too important to leave to the following transactions undertaken by an individual
marketing department while computing his gross total income as per the
Ans. (b) : The statement that is not a marketing income-tax Act, 1961 is:
principle is: • Tax on employment
Markets are homogeneous- This is not a marketing • Interest on capital borrowed for purchasing a self-
principle. The reality, markets are often heterogeneous, occupied house property.
meaning they consist of diverse groups with different
• Investment in one residential house in India for
needs and preferences. Recognizing and catering to
exemption from capital gains.
these differences is essential for successful marketing.
• Investment in own public provident fund.
7. Arrange the following Financial Institution in
the increasing order of their date of • Payment in Medical insurance premium on his own
establishment. life.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 623 YCT
9. Which one of the following refers to the need (d) He has paid income-tax in that country on the
on the part of the customer that gets satisfied income earned in that country and no Double
by the service? Taxation Avoidance Agreement (DTAA)
(a) Service Benefits exists between India and that country
(b) Service Expectations Ans. (b) : The following condition is required to be
(c) Service Offer satisfied by an individual for the purpose of claiming
(d) Service Level unilateral relief under section 91(1) of the Income tax
Ans. (a) : Service Benefits- It refers to the value or Act, 1961. In a previous year-
advantages that a customer gains from using a service. • He must be resident in India in that previous year.
These can include factors like convenience, time saving, • He has earned an income during that previous year
quality, and satisfaction. Essentially, service benefits from another country and that income has accrued
address the customer's needs and expectations by
or arose outside India.
delivering outcomes that enhance their experience or
solve a problem. • He has paid income-tax in that country on the
income earned in that country and no Double
10. Which one of the following is known as
backbone of auditing? Taxation Avoidance Agreement (DTAA) exists
(a) Verification of assets between India and that country.
(b) Internal check His total income exceeds ` 10,00,000 during the
(c) Vouching previous year this is not required to be satisfied by an
(d) Internal audit individual for the purpose of claiming unilateral relief.
Ans. (c) : Vouching- It is the fundamental process in 13. Under section 206C of the Income-tax Act,
auditing that involves tracing transactions from source 1961 as seller is supposed to collect income tax
documents to the financial statements to ensure from the buyer in respect of sale of the
accuracy and completeness. It's considered the following goods:
backbone of auditing because it's the primary method A. Motor Vehicle of the value between
used to verify the validity and reliability of financial `7,00,000 – `9,00,000
information. B. Alcoholic liquor for human consumption
11. In which of the following cases, undue influence C. Electronic items of the value between
is presumed: `10,00,000 – `15,00,000
(a) Creditor and debtor
D. Timber obtained under a forest lease
(b) Landlord and tenant
E. Minerals being coal or lignite or iron ore
(c) Husband and Wife
Choose the correct answer from the options
(d) Parent and Child
given below:
Ans. (d) : Undue influence- A contract is said to be
(a) A, C & E only (b) B, D & E only
induced by “undue influence” Where the relations
subsisting between the parties are such that one of the (c) A & C only (d) B & E only
parties is in a position to dominate the will of the other Ans. (b) : Under section 206 C of the Income Tax Act,
and uses the position to obtain an unfair advantage over 1961, a seller is supposed to collect, Income Tax from
the other. Undue influence is presumed in following the buyer in respect of sale of the following goods:-
case- • Alcoholic liquor for human Consumption-Tax rate
Parent and child:- This is a classic example where a is 1%
power imbalance exists, and the child might be more,
• Timber obtained under a forest lease-tax rate is
vulnerable to undue influence by the parent.
2.5%
12. Which of the following condition is NOT
required to be satisfied by an individual for the • Minerals, being coal or lignite or iron ore-tax rate
purpose of claiming unilateral relief under is 1%
section 91(1) of the Income-tax Act, 1961 in a 14. Where there is an unconditional contract for
previous year? the sale of specific goods in a deliverable state,
(a) He must be resident in India in that previous the property (ownership) in goods passes to the
year buyer when
(b) His total income exceeds `10,00,000 during (a) the contract is made
that previous year (b) the payment is made
(c) He has earned an income during that previous (c) the goods are delivered
year from another country and that income
(d) the goods are dispatched
has accrued or arose outside India
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 624 YCT
Ans. (a) : When there is an unconditional contract for 17. Which of the following are social factors
the sale of specific goods in a deliverable state, the influencing consumer buying behaviour?
property (ownership) in goods passes to the buyer when A. Culture
the contract is made. According to the sale of goods B. Reference groups
Act, 1930 in the case of an unconditional contract for C. Social Class
the sale of specific goods in a deliverable State, the D. Roles assumed
property in the goods passes to the buyer when the E. Sub-culture
contract is made. This is regardless of whether the time
Choose the correct answer from the options
of payment or delivery is postponed.
given below:
15. In which one of the following ratios, the share (a) A, B & C only
capital of RRBs is prescribed for the Central (b) B & D only
Government, State government and
(c) A, C & D only
Sponsoring bank?
(d) B, D & E only
(a) 50 : 30 : 20 (b) 50 : 35 : 15
(c) 60 : 20 : 20 (d) 50 : 15 : 35 Ans. (b) : Social factors are those factors that influence
consumer buying behavior due to their interactions and
Ans. (d) : The share capital of regional Rural Banks
relationships with other people.
(RRBs) is prescribed for the Central Government, State
Government, and Sponsoring Bank in the ratio of • Reference groups:- These are groups of people that
50:15:35. This means the Central Government holds an individual uses as a reference point for their own
50% of the share Capital, the State Government holds behavior. They can include family, friends, co-
15% and the Sponsoring bank holds 35%. workers or celebrities.
• Roles assumed:- Depending on one's role in society
16. Which of the following methods have been
(e.g., parent, manager, student), they might make
prescribed by the Central Board of Direct
certain purchasing decisions. A manager might buy
Taxes (CBDT) for computation of Arm's
Length Price required to compute income formal clothes to maintain their professional status.
arising from an international transaction under 18. For the purpose of taking Capital Budgeting
Chapter X of the Income-tax Act, 1961? Decisions in respect of a company in India,
A. Transactional Net Margin Method following are taken into consideration in
B. Incomparable Controlled Price Method computing cash flows in the terminal year of
C. Profit Split Method the project:
D. Resale Price Method A. Tax loss on short-term capital gains
E. Cost Minus Method B. Tax loss on short-term capital loss
Choose the correct answer from the options C. Release of net working capital
given below: D. Tax saving on short-term capital loss
(a) B, D & E only (b) A, B & D only E. Tax saving on short-term capital gains
(c) C, D & E only (d) A, C & D only Choose the correct answer from the options
given below:
Ans. (d) : The Central Board of Direct Taxes (CBDT)
has prescribed the following methods for the (a) A, C & D only
computation of Arm's length Price under chapter X of (b) B, C & E only
the Income-Tax Act, 1961 :- (c) C & E only
• Transaction Net Margin Method: This method (d) B & E only
compares the net profit margin of the international Ans. (a) : When computing cash flows in the terminal
transaction with the net profit margin of comparable year of a capital budgeting project in India, the
uncontrolled transactions. following factors are considered:
• Profit split Method: This method allocates the 1. Tax loss on short-term capital gains- Tax liability
profits of a controlled transaction between the on asset sale.
associated enterprises based on their relative 2. Release of net working capital- Recovery of
contribution to the transaction. invested working capital
• Resale price method: This method is applicable 3. Tax saving on short-term capital loss- Tax benefit
when one associated enterprise resells a product or from asset sale at loss
service to an unrelated party and the resale price is 19. Which of the following are true about the
known. The arm's length price is determined by equilibrium of the Industry in long run under
deducting a markup from the resale price. perfect competition?

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 625 YCT
 A. The long-run supply and demand for the Ans. (d) : Correct match of List-I with List-II
product of the industry should be in List-I List-II
equilibrium Valuation of Human Developed by
B. All firms in the industry should be in longResources approach
run equilibrium by equating price with
A. Historical Cost IV. Brummet Flamholtz
long run marginal cost (P = LMC)
approach and Pyle
C. There should be tendency for the new
B. Replacement Cost I. Rensis Likert and
firms to enter the industry or for the
approach Eric G. Flamholtz
existing firms to leave it
D. The firms are earning zero economic C. Opportunity Cost II. Hekimian and Jones
profits with price being equal to long-run approach
minimum average cost (P = min. D. Standard Cost III. David Watson
LAC) approach
E. The firms would not have adjusted their 21. Which of the following are primary functions
size of plants when there is long-run of commercial Banks?
equilibrium (P = LMC) A. Accepting Deposits
Choose the correct answer from the options B. Agency Service
given below: C. Discounting Trade Bills
(a) A, B & C only D. Financing Foreign Trade
(b) C, D & E only E. General Utility Service
(c) A, B & D only Choose the correct answer from the options
(d) B, C & D only given below:
(a) A, C & E only (b) A, B & D only
Ans. (c) : The following are true about the equilibrium
of the industry in long run under perfect competition : (c) B, C & E only (d) A, C & D only
• The long run supply and demand for the product ofAns. (d) : The primary functions of commercial banks
the industry should be in equilibrium. are-
• All firms in the industry should be in long run • Accepting Deposits- This is the core function where
banks collect money from customers in various types
equilibrium cost (P = LMC)
of accounts (savings, current, fixed).
• The firms are earning zero economic profits with
• Discounting trade bills- This involves buying bills
price being equal to long run minimum average cost
of exchange (promissory notes) at a discount before
(P = min. LAC)
their maturity date, providing immediate funds to the
20. Match the List-I with List-II seller.
List-I List-II • Financing foreign trade- This involves facilitating
Valuation of Human Developed by international trade transactions through letters of
Resources approach credit, foreign exchange services, etc.
A. Historical Cost I. Rensis Likert 22. What is the correct sequence to be followed for
approach and Eric G. the following while computing income under
Flamholtz the head Capital Gains?
B. Replacement II. Hekimian and A. Deduction of indexed cost of acquisition
Cost approach Jones B. Determination of full value of
consideration
C. Opportunity III. David Watson
C. Determination whether the asset is a
Cost approach
capital asset or not
D. Standard Cost IV. Brummet D. Determination whether the transaction is
approach Flamholtz and regarded as transfer or not
Pyle
E. Exemption under section 54EC in respect
Choose the correct answer from the options of investment in the long-term specified
given below: asset
(a) A-I, B-II, C-III, D-IV Choose the correct answer from the options
(b) A-III, B-IV, C-I, D-II given below:
(c) A-I, B-IV, C-II, D-III (a) B, A, C, E, D (b) E, A, D, C, B
(d) A-IV, B-I, C-II, D-III (c) D, B, C, A, E (d) C, D, B, A, E
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 626 YCT
Ans. (d) : The correct sequence to compute income 25. In WTO terminology subsidies in general are
under the head capital Gains is: identified by "boxes". Domestic support
1. Determination whether the asset is a capital asset or measure considered to distort production and
not trade, which is defined in Article 6 of the
2. Determination whether the transaction is regarded Agriculture Agreement falls into which box?
as transfer or not (a) Amber Box (b) Jumbo Box
3. Determination of full value of consideration (c) Green field Box (d) Black Box
4. Deduction of indexed cost of acquition Ans. (a) : Amber Box- In WTO terminology, the
5. Exemption under section 54EC in respect of Amber Box contains domestic support measures that are
investment in the long term specified asset. considered to distort production and trade. These
23. Which one of the following is NOT an issue (to subsidies are subject to reduction commitments under
be tackled) of conceptual component of a CRM the agreement on Agriculture (Article 6). Amber Box
programme? subsidies are those, as exceed the a minimum level and
(a) Choosing the technology (b) Setting out are seen as having a significant effect on production and
the objectives in clear terms trade.
(c) Processing all customer requests coming in The other options (Jumbo Box, Greenfield Box, Black
through multiple channels Box) are no part of WTO subsidy classifications.
(d) Putting customers first 26. Which of the following are the instruments of
Ans. (c) : Processing all customer requests coming in qualitative Credit Control Methods in India's
through multiple channels- This is not an issue of the Monetary Policy?
conceptual component of a CRM programme. It is an A. Cash Reserve Ratio
operational issue that needs to be addressed after the B. Consumer Credit Regulation
conceptual component has been established. C. Altering Margin Requirements
The conceptual component deals with the overall D. Statutory Liquidity Ratio
strategy and planning of the CRM propgramme,
E. Differential Rate of Interest
including defining objectives, choosing the technology
Choose the correct answer from the options
and putting customers first.
given below:
24. Which of the following are true in case of
(a) A, B & D only (b) B, C & E only
Internal Reconstruction?
(c) C, D & E only (d) D, E & A only
A. The existing company is liquidated
B. No new company is formed Ans. (b) : Qualitative Credit Controls Methods are tools
C. There is certain reduction of capital and used by the central bank to regulate the quality and
sometime liabilities are also reduced allocation of credit rather than the overall volume.
D. The new company issues fresh capital The following are the instrument of qualitative credit
E. It is done as per section 66 of the control methods-
Companies Act, 2013 • Consumer credit regulation - it is a qualitative
Choose the correct answer from the options method as it controls credit extended to consumers.
given below: • Altering margin Requirements- It is a qualitative
(a) A, D & E only (b) A, C & E only tool, which affects the amount of loan a barrower
(c) B, C & E only (d) B, C & D only can obtain against a security.
Ans. (c) : Internal reconstruction involves restructuring • Differential Rate of interest- It is a qualitative
a company's capital without forming a new entity, measure where interest rates are varied based on the
typically involving a reduction of capital and sometimes type of borrower of sector.
liabilities, and it is conducted according to section 66 of Cash reserve Ratio and Statutory liquidity Ratio are the
the companies Act, 2013. methods of quantitative credit control.
The following are true in case of internal 27. Which of the following item is included in the
Reconstruction- definition of the term "Goods" as per Sales of
• No new company is formed Goods Act, 1930?
• There is certain reduction of capital and sometimes (a) Purchase of lottery tickets
liabilities are also reduced. (b) The decree of court of Law
• It is done as per section 66 of the companies Act, (c) Actionable claims
2013. (d) Immovable Property
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 627 YCT
Ans. (b) : A decree of court of Law indeed be considered Ans. (d) : The correct sequence to be followed in
as goods under the sale of Goods Act, 1930, but only in designing a channel system is:
specific circumstances. When a court decree pertains to • Matching the channel design to customer
specific performance, damages, rescission, or the delivery needs/characteristics
of goods, it provides legal protection and remedies to • Evaluating the distribution environment.
parties involved in a sale of goods contract, ensuring
• Evaluating competitors channel design.
fairness and justice in commercial transaction.
Sale of Goods Act, 1930, defines "goods" as every kind of • Evaluating the short-listed alternative designs and
movable property, excluding actionable claims and money. selecting the one Suits the firm best.
• Choosing the channel intensity and number of tiers.
28. How much percent of income by way of interest
received on compensation or on enhanced 31. Which of the following are cases of Funds
compensation is allowed as deduction while Flow?
computing income under the head Income from A. Payment of trade creditors by sale of
Other Sources under the Income-tax, 1961? Land
(a) 25% (b) 50% B. Cash collection from debtors
(c) 75% (d) 100% C. Purchase of Furniture by issue of bills
Ans. (b) : Section 57(iv) of the Income Tax Act, 1961 payable
allows a deduction of 50% of the interest received on D. Payment of long term loan by cash
compensation or enhanced compensation while E. Payment of bills payable by cash
computing income under the head income from other Choose the correct answer from the options
sources. This deduction is specifically provided for given below:
interest earned on compensation received for land (a) A, D & E only
acquisition or compulsory acquisition of immovable (b) B, C & D only
property. (c) A, C & D only
29. The price of a company's share is `80 and the (d) B & E only
value of growth opportunities is `20. If the Ans. (c) : Fund flow refers to the movement of funds
company's capitalization rate is 15%, how within a business, showing the changed in the financial
much is the EPS? position between two accounting periods. It tracks the
(a) `20 (b) `12 inflow and out flow of funds and helps indentify how a
(c) `3 (d) `9 company's resources are used and financed.
Ans. (d) : Given; Cases of Funds flow are-
Price of share (P) = ` 80 • Payment of trade creditors by sale of land
Value of growth opportunities (V) = ` 20 • Purchase of Furniture by issue of bills payable
Capitalization rate (r) = 15% = 0.15 • Payment of long term loan by cash.
Formula :
32. Match the List-I with List-II
EPS = (P-V)²r
List-I List-II
EPS = (`80 - `20)² 0.15 Product Description
EPS = `60 ² 0.15 A. Dinosaur I. Products that are
EPS = ` 9 beautiful but
30. Arrange the given steps involved in designing a unsaleable
channel system in the logical order- B. Flamingo II. Products that are
A. Evaluating distribution environment blind to the future
B. Evaluating the short-listed alternative
C. Ostrich III. Products that are
designs and selecting the one that suits the
source of a
firm best
profitable future
C. Matching the channel design to customer
needs/characteristics D. Pearl IV. Products that have
missed their niche
D. Choosing the channel intensity and
number of tiers Choose the correct answer from the options
E. Evaluating competitors channel design given below.
Choose the correct answer from the options (a) A-IV, B-II, C-I, D-III
given below: (b) A-II, B-I, C-IV, D-III
(a) A, C, E, B, D (b) C, A, E, D, B (c) A-I, B-II, C-IV, D-III
(c) C, E, D, A, B (d) C, A, E, B, D (d) A-IV, B-I, C-II, D-III
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 628 YCT
 Ans. (d) : Correct match of List -I with List-II Choose the correct answer from the options
List-I List-II given below.
Product Description (a) A-II, B-III, C-I, D-IV
A. Dinosaur IV. Products that have missed (b) A-III, B-II, C-IV, D-I
their niche (c) A-IV, B-III, C-I, D-II
B. Flamingo I. Products that are beautiful (d) A-I, B-II, C-III, D-IV
but unsaleable Ans. (c) : Correct match of List-I with List-II
C. Ostrich II. Products that are blind to List-I List-II
the future Negotiable Their Explanation
D. Pearl III. Products that are source of Instruments
a profitable future An incomplete instrument
33. A statistical statement in International business in some respect where a
that shows at a point the value of financial Inchoate
A. IV. person signs & delivers to
assets of residents of an economy that are Instrument
another a blank or
claims on non-residents or are gold bullion held incomplete paper
as reserve assets and the liabilities of residents
When the instrument
of an economy to non-residents is known as
owing to its faulty
(a) currency composition table Ambiguous drafting may be
(b) special purpose entities (SPEs) B. III.
Instrument interpreted either as a
(c) Cross Border Flows promissory note or bill of
(d) The International Investment Position (IIP) exchange
Ans. (d) : The International Investment position (IIP) is When negotiable
a statistical statement in international business that instrument is delivered
shows at a point the value of financial assets of conditionally or for a
residents of an economy that are claims on non- C. Escrow I.
specific purpose as a
residents or are gold bullion held as reserve assets and collateral security or for
the liabilities of residents of an economy to non- safe custody only
residents.
When the name of the
34. Match the List-I with List-II Fictitious
D. II. drawer or the payee or
List-I List-II Bill
both are fake in a bill
Negotiable Their Explanation
35. Data preparation needs to ensure the accuracy
Instruments of the data and their conversion from raw form
When negotiable to reduced and classified forms for analysis. It
Inchoate instrument is delivered includes which of the following:
conditionally or for a
A. Instrument I. A. Coding B. Data Entry
specific purpose as a
C. Editing D. Steming
collateral security or for
safe custody only E. Aliasing
When the name of the Choose the correct answer from the options
Ambiguous given below:
B. II. drawer or the payee or
Instrument (a) A & C only (b) B & D only
both are fake in a bill
When the instrument (c) A, B & C only (d) C, D & E only
owing to its faulty Ans. (c) : Data preparation needs to ensure the accuracy
drafting may be of the data and their conversion from raw form to
C. Escrow III.
interpreted either as a reduced and classified forms for analysis. The following
promissory note or bill processes are typically included:
of exchange
• Coding: Assigning numerical or alphabetical codes
An incomplete to date to facilitate analysis.
instrument in some
• Data Entry: Inputting raw data into a computer
respect where a person
D. Fictitious Bill IV. system for processing.
signs & delivers to
another a blank or • Editing: checking data for errors and inconsistencies
incomplete paper and making corrections.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 629 YCT
36. Arrange the following content theories of work 2, 000
motivation in the increasing order of their ⇒ 20, 000
× 100 = 10%
development % change in quantity demanded of petrol=
A. Herzberg-motivation and hygiene 165 − 150
factors × 100
150
B. Alderfer ERG Needs
15
C. Maslow-Hierachy of Needs ⇒ ×100 = 10%
150
D. Scientific Management
E. Human relations 10%
Income Elasticity of Demand = =1
Choose the correct answer from the options 10%
given below: 38. Arrange the following sequentially with respect
(a) D, C, E, A, B (b) D, E, C, A, B to operating cycle of a manufacturing firm-
(c) B, C, A, D, E (d) D, E, A, C, B A. Payables Deferral Period
B. Finished Goods Conversion Period
Ans. (b): Here's the increasing order of the
C. Raw Meterial Conversion Period
development of these content theories of work
D. Receivables Conversion Period
motivation:
E. Work in progress Conversion Period
• Scientific management (1911)- Developed by
Choose the correct answer from the options
Frederick Taylor, Focused on improving economic
given below:
efficiency and labor productivity. (a) A, D, C, E, B (b) C, E, B, D, A
• Human Relations (1920-1930)- This movement (c) B, D, A, E, C (d) D, B, E, A, C
emphasized the importance of social factors in
Ans. (b) : The correct sequence with respect to the
workplace productivity, initiated by the Hawthorne operating cycle of a manufacturing firm is:
Studies. 1. Raw Material Conversion Period- Time to convert
• Maslow's Hierarchy of Needs (1943)- Proposed by raw materials into work in progress.
Abraham Maslow, it explains motivation based on a 2. Work in progress Conversion period- Time to
hierarchy of needs. Convert work in progress into finished goods.
• Herzberg's Motivation and hygiene factors 3. Finished Goods Conversion Period- Time to
(1959)- Proposed by Frederick Herzberg, it convert finished goods into sales.
distinguishes between hygiene factors and motivators 4. Receivable Conversion period- Time to collect
in the workplace. payment from sales.
• Alderfer's ERG Needs (1960)- Clayton Alderfer 5. Payables Deferral Period- Time before the firm
Simplified Maslow's hierarchy into three categories: pays its suppliers.
Existence, Relatedness and Growth. 39. Match the List-I with List-II
37. Which among the following is the correct value List-I List-II
of Income Elasticity of Petrol consumption Concept Meaning
from the following information? A. Systematic risk I. Compensation
The Government announces a 10 percent for time
dearness allowance to its employees. As a result B. Beta II. Increase in
average monthly salary of Government corporate tax
employees increases from `20,000 to `22,000. rate
Following the pay hike, monthly petrol C. Risk-free rate III. Sensitivity
consumption of government employees coefficient
increased from 150 litres per month to 165 D. Unsystematic IV. Competitor
litres per month: risk enters the
(a) 0.5 (b) 1 market
(c) 2 (d) 0.1 Correct the correct answer from the options
given below:
Ans. (b) : Income Elasticity of Demand = (% change in
(a) A-I, B-IV, C-III, D-II
quantity demanded of good)/(% change in income)
(b) A-IV, B-I, C-II, D-III
( 22, 000 − 20, 000 ) (c) A-III, B-II, C-IV, D-I
% change in income = × 100
20, 000 (d) A-II, B-III, C-I, D-IV

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 630 YCT
Ans. (d) : Correct match of List-I with List-II 42. A company forfeits 100 shares of `10 each of
which `300 had been received 60 shares are
List-I List-II
reissued at `9 per share. Which one of the
Concept Meaning
following amount is to be transferred to
A. Systematic risk II. Increase in corporate Capital Reserve Account?
tax rate (a) `200 (b) `180
B. Beta III. Sensitivity coefficient (c) `120 (d) `60
C. Risk-free rate I. Compensation for time Ans. (c) : Total amount forfeited:
D. Unsystematic risk IV. Competitor enters the 300 was received on 100 shares, so, amount received
market per share = ` 300÷100
40. Arrange the given Prefatory Information sub- = ` 3 Per share
modules into a sequence to form a Long Total amount for feited on 100 share
Management Report- = ` 3×100 = ` 300.
A. Title Page Reissue of shares:
B. Executive Summary 60 shares were reissued at ` 9 per share.
C. Table of contents
Total amount received from the reissue =
D. Letter of transmittal
` 9 × 60 = ` 540.
E. Authorization statement
Choose the correct answer from the options Amount received before forfeiture:
given below: The company received = ` 3 per share on the forfeiture
(a) B, C, D, A, E (b) E, D, B, C, A shares.
(c) D, A, E, B, C (d) C, A, D, E, B Total amount forfeited on 60 shares =
Ans. (c) : The correct sequence for arranging the given ` 3 × 60 = ` 180.
Prefatory Information sub-modules into a Long Calculation of Capital Reserve:
Management Report is: Capital Reserve = Amount forfeited on reissue
1. Letter of transmittal- This is a formal letter Shares – Discount Allowed on Reissue.
introducing the report and addressing it to the Discount Allowed = Face value – Reissue price.
intended recipient.
2. Title Page- This provides essential information such = `10 – `9 = `1 per share
as the title, author(s), date, and company or Total discount = `1 × 60 = `60
organization. Capital Reserve = Amount forfeited on 60 shares (–)
3. Authorization statement- This section states who Discount
authorized the report and its preparation. = `180 – `60
4. Executive Summary- This is a concise overview of = `120
the entire report, highlighting key findings,
conclusions, and recommendations. 43. If two regression lines are: 8x – 10y + 66 = 0
5. Table of contents- This lists all the major section and 40x – 18y = 214. then x & y are
and subsections of the report, with page numbers. respectively
41. If selling price per unit is `56.00. Variable cost (a) 13, 14 (b) 16, 15
per unit is `32.00 and total fixed cost is `60,000 (c) 14, 13 (d) 13, 17
what is the number of units that used to be sold
Ans. (d) : To find the means X and Y from the given
in order to achieve a profit of `84,000?
regression lines, we first need to rearrange each
(a) 6000 units (b) 8400 units
regression equation into the slope-intercept form y = mx
(c) 5000 units (d) 6500 units
+ b.
Ans. (a) : Given :
Equation (1) 8x – 10y + 66 = 0
Selling price per unit = ` 56
10y – 8x + 66
Variable cost per unit = ` 32
Fixed cost = ` 60,000 8 66
y= x+
Desired profit = ` 84,000 10 10
Number of units = y = 0.8x + 6.6
Fixed cost + Desired profit Equation (2) 40x – 18y = 214
Selling price unit − Variable cost per unit 18y – 40x = 214
60, 000 + 84, 000 40 214
= y= x−
56 − 32 18 18
1, 44, 000 20 107
= = 6000 units. y= x−
24 9 9

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 631 YCT
Solving equation (1) and (2) Ans. (b) : Build a reputation for being fair but not firm
20 107 is not good bargainers while bargaining with employees
0.8x+6.6 = x− because in bargaining, it's important to be both fair and
9 9 firm. Being perceived as fair builds trust, but if you're
Multiply the entire equation by 9 not firm, you may be seen as weak, which can be
9(0.8x + 6.6) = 20x – 107 detrimental in negotiations.
7.2x + 59.4 = 20x – 107 46. For test hypothesis H0: µ1 ≤ µ2 and H1: µ1 > µ2,
59.4 + 107 = 20x – 7.2x the critical region (Z) at α = 0.10 and n > 30
166.4 = 12.8 x will be
166.4 (a) Z ≤ 1.96 (b) Z > 1.96
x= = 13
12.8 (c) Z > 1.645 (d) Z ≤ –1.645
Substituting x = 13 in equation (1) We get, Ans. (*) : Null Hypothesis (HO): µ1 ≤ µ 2
y = 0.8 x + 6.6 Alternate Hypothesis (H1): µ1 > µ 2
= 0.8 ×13 + 6.6
= 10.4 + 6.6 This is a one-tailed test (right-tailed)
= 17 Significance level (α): 0.10
For α = 0.10 and n > 30 (large sample), the critical Z-
∴ The values of X and Y are value corresponds to the 90th percentile of the standard
X = 13 normal distribution.
Y = 17 Critical Z-value: approximately 1.645
Critical Region:
44. Arrange the following steps for the
Z > 1.645
Incorporation of a new LLP (Limited Liability
Partnership) in the correct order- This indicates that if the Calculated Z-statistic exceeds
1.645, the null hypothesis will be rejected.
A. Drafting of LLP Agreement
Note- However Commission has assume option (d)
B. Deciding the partners and designated
Z ≤ −1.645 is correct
partners
C. Electronic filing of documents with ROC & 47. The tool that International Development
issuing of Certificate of Incorporation by Association (IDA) uses to address the impact of
ROC (Registrar of Companies) severe natural disasters, public health
D. Checking the availability of Name emergencies by providing extra finances is
known as
E. Obtaining DPIN & Digital Signature
(a) Emergency Response Fund (ERF)
Certificate
(b) Long term Lending system
Choose the correct answer from the options
given below: (c) Crisis Response Window (CRW)
(a) B, E, D, A, C (b) C, A, B, D, E (d) Monetary Fund
(c) A, B, C, D, E (d) E, A, C, D, B Ans. (c) : Crisis response Window- The International
Development Association (IDA) uses the Crisis
Ans. (a): Limited Liability Partnership- LLP is a
Response Window (CRW) to provide extra finances to
business structure that combines elements of both
countries facing severe natural disasters or public health
partnerships and corporations. It offers the benefits of
emergencies. This flexible tool allows IDA to quickly
limited liability to its partners, while still providing the
respond to crisis and help countries recover and rebuild.
flexibility of a traditional partnership.
The correct order for the incorporation of a new LLP is- 48. Match the List-I with List-II
1. Deciding the partners and designated partners. List-I List-II
2. Obtaining DPIN & digital signature certificate. Institutions Date of
3. Checking the availability of Name. establishment
4. Drafting of LLP Agreement A. National Housing I. 01-07-1964
5. Electronic filling of documents with ROC & issuing Bank
of certificate of incorporation by ROC (Registrar of B. Industrial II. 01-07-1948
Companies) Development Bank
45. Which one of the following is NOT good for of India
bargainers while bargaining with employees? C. Small Industrial III. 02-04-1990
(a) Do not hurry Development Bank
(b) Build a reputation for being fair but not firm of India
(c) Strive to keep some flexibility in your
D. Industrial Finance IV. 09-07-1988
position
Corporation of
(d) Respect the importance of face saving for the India
other party
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 632 YCT
 Choose the correct answer from the options Ans. (b) : The following factors constitute the
given below: economic environment of a country are-
(a) A-I, B-II, C-III, D-IV • Financial system- Part of the economic environment
(b) A-III, B-I, C-IV, D-II as it deals with how money is managed and
(c) A-I, B-IV, C-III, D-II regulated in a country.
(d) A-IV, B-I, C-III, D-II • Economic Policies- These are crucial in shaping the
economic environment through government
Ans. (d) : Correct match of List-I with List- II decisions like taxation, spending and regulation.
List-I List-II • Structural Equilibrium- Refers to the stability of
Institutions Date of country's economic system, which is a factor in its
establishment overall economic environment.
A. National Housing Bank IV. 09-07- 51. Match the List-I with List-II
1988 List-I List-II
B. Industrial Development Bank I. 01-07- Personality Traits Descriptive
of India 1964 Characteristics
C. Small Industrial Development III. 02-04- A. Conscientiousness I. Outgoing
Bank of India 1990 B. Agreeableness II. Caring
D. Industrial Finance II. 01-07- C. Extraversion III. Creative
Corporation of India 1948 D. Openness to IV. Depenable
49. Which one of the following is a correct experience
assumption of Law of Diminishing Returns to a
Choose the correct answer from the options
variable Input?
given below:
(a) Labour and Capital are the only variable (a) A-III, B-II, C-I, D-IV
inputs (b) A-IV, B-II, C-III, D-I
(b) The units of Labour and Capital are (c) A-IV, B-II, C-I, D-III
homogeneous (d) A-I, B-II, C-III, D-IV
(c) The state and technology in not given Ans. (c) : correct match of List-I with List-II
(d) Input prices are given
List-I List-II
Ans. (d) : Law of Diminishing Returns- The law of Personality Traits Descriptive
diminishing returns states that when one variable input Characteristics
in increased while other inputs remain constant, the A. Conscientiousness IV. Depenable
marginal output will decreases. This is because the
B. Agreeableness II. Caring
effectiveness of each additional unit of input decreases.
C. Extraversion I. Outgoing
Assumptions of Law of Diminishing Returns:
D. Openness to experience III. Creative
A. Fixed inputs (e.g., capital, technology)
52. WTO is its 8th Ministerial conference adopted a
B. Variable input (e.g., labor)
decision allowing members to waive the
C. Homogeneous units of variable input provisions of Article II (most favored-National
D. Given input prices Treatment) of the GATS to allow the granting
E. Constant stage of Technology of preferential treatment to services and service
F. No change in external factors. supplies to which countries?
(a) Adjacent countries
50. Which of the following factors constitute the
(b) Non-Nuclear countries
Economic Environment of a country?
(c) Least-developed countries
A. Financial System
(d) SAARC countries
B. Socio-cultural environment
Ans. (c) : The World Trade Organization (WTO) is an
C. Economic Policies international Organization that regulates and facilitates
D. Educational Environment international trade between nations. It officially began
E. Structural Equilibrium operations on January 1, 1995, replacing the General
Choose the correct answer from the option Agreement on Tariffs and Trade (GATT), which had
given below: been in place since 1948. WTO in its 8th ministerial
(a) A, B & C only conference adopted a decision allowing members to
waive the provisions of Article II (most favored-
(b) A, C & E only national Treatment) of the GATS to allow the granting
(c) B, C & E only of preferential treatment to services and service supplies
(d) C, D & E only to least developed countries.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 633 YCT
53. Arrange the following banks in an increasing 3. The exporter factor pays cash in advance to the
order of their year of formation exporter against receivables until the payment is
efvecveefueefKele yeQkeâeW keâes Gvekesâ ie"ve kesâ Je<e& kesâ yeÌ{les received from the importer.
›eâce ceW JÙeJeefmLele keâjW 4. The export factor transfers the invoice to the import
factor, who, in return, assumes credit risk and
A. State Bank of India undertakes administration of receivable
B. Imperial Bank of India 5. The import factor presents invoice to importer, take
C. Reserve Bank of India payment and pays to the export factor.
D. Regional Rural Bank 55. Which of the following are the characteristics
E. Small Finance Bank of a Leader?
Choose the correct answer from the options A. Focuses on systems and structure
given below: B. Eye on the horizon
(a) E, D, C, B, A (b) E, D, A, B, C C. Asks how and when
(c) B, C, A, D, E (d) C, B, A, D, E D. Does things right
Ans. (c) : The following banks are arrange in E. Originates
increasing order of their year of formation- Choose the correct answer from the options
• Imperial Bank of India- Formed in 1921. given below:
• Reserve Bank of India- Established in 1935. (a) A, B & D only
(b) B & E only
• State Bank of India- Came into existence in 1955 (by
(c) B, C & D only
renaming and expanding the imperial Bank of India).
(d) A, B, D & E only
• Regional Rural Banks- Established in 1975.
Ans. (b) : A leader is someone who inspires, guides,
• Small Finance Banks- Came into existence in 2016.
and influences others to achieve a common goal or
54. In international trade, factoring is widely used vision.
in short-term transactions as a continuous Characteristics of a leader are-
arrangement. Arrange the steps of export • Eye on the horizon- leader often have a long term
factoring operations is sequence- vision and are focused on future goals rather than just
A. The export factor transfers the invoice to the immediate tasks.
the import factor, who, in return, assumes • Originates- Leader often initiate new ideas, projects,
credit risk and undertakes administration or strategies. They are often the source of innovation
of receivable. and change.
B. The export factor pays cash in advance to • Inspiring - They motivate and energize others to
the exporter against receivables until the pursue a shared vision.
payment is received from the importer. • Integrity- Trustworthiness and ethical behavior are
C. The importer and exporter enter into a central to gaining and maintaining followers.
sales contract and agree on the terms of
56. Which one of the following is Value Added
sale.
Service of EXIM Bank?
D. The import factor presents invoice to (a) Line of Credit
importer, take payment and pays to the
(b) Pre-shipment Credit
export factor.
(c) Buyers Credit
E. The exporter ships the goods to the
(d) Export Marketing Services
importer and submits the invoice to the
export factor. Ans. (d) : The Export-Import Bank of India (EXIM
Bank) is a specialized financial institution established
Choose the correct answer from the options
by the Government of India in 1982 to enhance and
given below:
facilitate India's international trade.
(a) E, A, B, D, C (b) E, B, A, D, C
The Value Added Service of EXIM Bank is Export
(c) C, B, E, D, A (d) C, E, B, A, D Marketing Services- This service helps exporters in
Ans. (d) : The correct sequence of export factoring identifying international markets, conducting market
operations is- research, and building strategies to enhance their global,
1. The importer and exporter enter into a sales contract presence, offering support beyond just financial
and agree on the terms of sale. assistance.
2. The exporter ships the goods to the importer and Line of credit, pre-shipment credit and Buyers credit are
submits the invoice to the export factor. financing and credit facilities.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 634 YCT
57. Which one of the following selection tests 59. Which one of the following sources of power of
answers the question "Does this test measure the supervisor is NOT true for the subordinates
what it's supposed to measure"? to comply?
efvecveefueefKele ceW mes keâewve mee ÛeÙeve hejer#eCe Fme ØeMve DeOeervemLeeW Éeje Devegheeueve kesâ efueS heÙe&Jes#ekeâ keâer Meefòeâ
keâe Gòej oslee nw efkeâ ‘‘keäÙee Ùen hejer#eCe Jener ceehelee nw kesâ efvecveefueefKele œeesleeW ceW mes keâewve mee mener veneR nw?
efpemes ceehevee ÛeeefnS’’? (a) Reward
(a) Content validity (b) Coercive
(b) Criterion validity
(c) Expert
(c) Contruct validity
(d) Means-ends-control
(d) Test validity
Ans. (*) : The following sources of power of the
Ans. (d) : Test Validity - Test validity directly
addresses the question of whether a test measures what supervisor is true for the subordinates to comply-
it is intended to measure. It is a fundamental concept in • Reward- Supervisors can use rewards (e.g.
assessment and ensures that the inferences drawn from promotions, raises, bonuses) to motivate subordinates
test scores are accurate and meaningful. to comply with their requests.
While other options might seem related, they are more • Coercive- Supervisors can use threats or
specific types of validity:
punishments (e.g., demotions, reprimands, layoffs) to
• Content Validity- Examines if the test items are force subordinates to comply.
representative of the content being measured. • Expert- Supervisors can use their expertise or
• Criterion Validity- Assesses how well the test knowledge to persuade subordinates to comply.
scores correlate with a relevant criterion (e.g., job Means-ends-control is not sources of power of the
performance) supervisor for the subordinates to comply.
• Construct Validity- investigates whether the test Note:- However Commission has assume option (c)
measures the underlying theoretical construct it is Expert is correct.
designed to measure.
60. Which one of the following is standard
58. The rate of diffusion of any innovation depends
deviation of first 7 (1 to 7) natural numbers?
upon the following factors:
(a) 4 (b) 3
A. The relative advantage of the innovation
over previous solutions (c) 2 (d) 6
B. The compatibility of the innovation with Ans. (c) : Standard Deviation Calculation:-
existing values and norms Find the mean ( x ) of the first 7 natural number :
C. A lack of complexity in using the (1 + 2 + 3 + 4 + 5 + 6 + 7)
innovation x=
7
D. The divisibility of the innovation
facilitating low-risk trial 28
x⇒ =4
E. The communicability of the advantages of 7
the innovation Calculate the variance (σ2) :
Choose the correct answer from the options
σ2 = (∑xi - x )2/N
given below:
(a) A, C & E only xi = individual number (1 to 7)
(b) A, B, C & E only N = Total numbers (7)
(c) A, B, C, D & E σ2 = [(1-4)2 + (2-4)2 + (3-4)2 + (4-4)2 + (5-4)2 + (6-
(d) B & D only 4)2 + (7-4)2]/7
2
Ans. (c) : The rate of diffusion of any innovation σ = [9+4+1+0+1+4+9]/7
depends upon the following factors- σ2 = 28/7
A. The relative advantage of the innovation over σ2 = 4
previous solutions
Calculate the Standard Deviation :
B. The compatibility of the innovation with existing
values and norms SD = σ2
C. A lack of complexity in using the innovation
SD = 4
D. The divisibility of the innovation facilitating low-
risk trial. SD = 2
E. The communicability of the advantage of the Therefore, the standard deviation of the first 7 natural
innovation. numbers is 2.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 635 YCT
61. The maximum number of Partners in a Choose the correct answer from the options
Limited Liability Partnership can be: given below
(a) Seven (b) Fifty (a) A-II, B-III, C-IV, D-I
(c) Hundred (d) No limit (b) A-III, B-II, C-IV, D-I
Ans. (d) : Limited Liability Partnership (LLPs) are (c) A-II, B-IV, C-III, D-I
separate legal entities from their partners, who only
liable for the amount of money they invest, plus any (d) A-IV, B-I, C-II, D-III
personal guarantees, LLPs can be made up of Ans. (a) : Correct match of List-I with List-II
individuals or corporate entities, and can be used by List-I List-II
profit-making businesses.
Macro Level Examples
There is no maximum number of partners in a limited
liability partnership (LLP). However, there must be at Organizational Stressors
least two partners to form an LLP. A. Administrative Policies II. Merit Pay
62. Which of the following is NOT the assumption and Strategies Plans
of Baumol's model of cash management? B. Organizational III. No opportunity
(a) The firm is unable to forecast its cash needs Structure and Design for
with certainty advancement.
(b) The opportunity cost of holding cash is
known C. Organizational IV. Lack of
(c) The firm will incur the same transaction cost Processes participation in
whenever it converts securities to cash decisions
(d) The firm's cash payments occur uniformly D. Working Conditions I. Crowded work
over a period of time area.
Ans. (a) : In Baumol's model of cash management, it is 64. Which one of the following cost value price trio
assumed that the firm can predict its cash needs with
a manufacturer would like to seek?
certainty, Which is essential for the model to work
effectively. (a) Value > Price > Costs
Assumptions of Baumol's model of cash management (b) Price > Value > Costs
are- (c) Price > Costs > Value
• The opportunity cost of holding cash is known (d) Price = Value > Costs
• The firm will incur the same transaction cost Ans. (*) : The most desirable cost-value-price trio for a
whenever it converts securities to cash.
manufacturer is:
• The firm's cash payments occur uniformly over a
Value > Price > Costs
period of time.
The firm is unable to forecast its cash needs with • Value > Price : The customer perceives the
certainty is not the assumption of Baumol's model of product's value to be higher than its price, which
cash management. increases the likelihood of purchase and builds
63. Match the List-I with List-II customer satisfaction. It also encourages brand
List-I List-II/metÛeer-II loyalty and reduces the need for heavy discounts.
Macro Level Examples/GoenjCe • Price > Costs:- The manufacturer ensures a positive
Organizational profit margin by setting the price higher than
Stressors production costs. This is essential for sustaining
A. Administrative I. Crowded work operations, covering overheads, and reinvesting in
Policies and area future growth.
Strategies
65. X Ltd. incurred a capital expenditure of
B. Organizational II. Merit Pay
`5,00,000 for the purpose of promoting family
Structure and Plans
Design planning amongst its employees during the
assessment year 2024-25. How much deduction
C. Organizational III. No opportunity
Processes for in respect of such expenditure can be claimed
advancement by X Ltd. during the assessment year 2024-25,
while computing income under the head Profits
D. Working IV. Lack of and Gains of Business or Profession?
Conditions participation in (a) `5,00,000 (b) `2,50,000
decisions (c) `1,00,000 (d) `50,000
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 636 YCT
Ans. (c) : According to the income Tax Act, 1961, a Ans. (d) : Correct match of List-I with List-II
company can claim a deduction of up to 1/5th of the List-I List-II
capital expenditure incurred for promoting family
planning among its employees. Theories of Outline of Theory
In this case, the total, expenditure is ` 5,00,000, so the International
allowable deduction would be 1/5th of ` 5,00,000, Investment
which is ` 1,00,000. The framework
Therefore, X LTd. can claim a deduction of ` 1,00,000 follows three tiers-
in respect of the expenditure incurred for promoting ownership location
family planning among its employees during the and internalization
assessment year 2024-25 assuming that
66. Match the List-I with List-II companies are not
A. Eclectic Theory IV.
List-I List-II likely to follow
Theories of Outline of Theory through the FDI, if
International they can get the
Investment service or product
FDI occurs largely in internally and at lower
oligopolistic costs
industries rather than The firm should be
A. Eclectic Theory I.
in industries able to keep the
operating under near Appropriability benefits resulting from
B. III.
perfect competition Theory its innovation &
Capital as an Research for its
investment will move exclusive use.
from countries where FDI occurs largely in
it is abundant to oligopolistic industries
Appropriability countries where it is Market
B. II. rather than in
Theory scarce because the C. Imperfection I.
industries operating
returns on investment Theory
under near perfect
opportunities are competition.
higher where capital
Capital as an
is limited
investment will move
The firm should be from countries where
able to keep the it is abundant to
Market Theory of
benefits resulting countries where it is
C. Imperfection III. D. Capital II.
from its innovation &
Theory scarce because the
Research for its Movements
returns on investment
exclusive use
opportunities are
The framework higher where capital is
follows three tiers- limited.
ownership location
and internalization 67. Match the List-I with List-II
assuming that List-I List-II
Theory of
companies are not Concept Meaning
D. Capital IV.
likely to follow
Movements Rate that equates the
through the FDI, if
investment outlay with
they can get the Profitability
service or product A. I. the present value of cash
Index
internally and at inflow received after
lower costs one period
Choose the correct answer from the options Compound average
given below: Accounting annual rate that is
(a) A-IV, B-I, C-III, D-II Rate of calculated with a
B. II.
(b) A-I, B-III, C-II, D-IV Return reinvestment rate
(c) A-III, B-IV, C-II, D-I (ARR) different than the
(d) A-IV, B-III, C-I, D-II project's IRR

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 637 YCT
 Rate that is computed Choose the correct answer from the options
Internal given below.
by dividing the average
C. Rate of III. (a) A-III, B-II, C-I, D-IV
profit after tax with the
Return
average investment (b) A-IV, B-III, C-II, D-I
Ratio of the present (c) A-I, B-III, C-II, D-IV
Modified value of cash inflows at (d) A-II, B-IV, C-I, D-III
Internal the required rate of Ans. (d) : Correct match of List-I with List-II
D. Rate of IV. return to the initial cash List-I List-II
Return outflow of the
Pricing Strategies Their Explanation
(MIRR) investment
Where a close
Skimming
A. II. substitute for the new
Choose the correct answer from the options Pricing Policy
product is not available
given below.
Penetration IV New product substitutes
(a) A-IV, B-III, C-I, D-II B.
Pricing Strategy . are available
(b) A-I, B-IV, C-II, D-III
Peak load Where the products are
(c) A-II, B-I, C-III, D-IV C. I.
pricing policy non-storable in nature.
(d) A-III, B-II, C-IV, D-I
Export of goods at a
Ans. (a) : Correct match of List-I with List-II Dumping III
D. price which is lower
List-I List-II pricing policy .
than the domestic price.
Concept Meaning 69. Arrange the following steps of Activity Based
Ratio of the present value Costing (ABC) in proper sequence-
of cash inflows at the A. Staff Training and Review Follow up
Profitability
A. IV. required rate of return to B. Identify Main Activities
Index
the initial cash outflow of
C. Process specification
the investment.
D. Identify non-value adding Activity and
Accounting Rate that is computed by cost pools
Rate of dividing the average
B. III. E. Selection of Activity Cost Drivers and
Return profit after tax with the
Tracing of costs with objects
(ARR) average investment.
Choose the correct answer from the options
Rate that equates the
given below:
investment outlay with
Internal Rate (a) C, B, D, E, A (b) B, C, D, E, A
C. I. the present value of cash
of Return (c) D, B, C, A, E (d) E, D, B, C, A
inflow received after one
period. Ans. (a) : Activity-based costing (ABC) is a costing
Compound average method that assigns costs to products and services based
Modified on the activities that are required to produce them.
annual rate that is
Internal Rate The following steps of Activity Based (ABC) are
D. II. calculated with a
of Return arrange in proper sequence-
reinvestment rate different
(MIRR)
than the project's IRR. • Process specification
68. Match the List -I with List -II • Identify Main Activities
List-I List-II • Identify Non-value adding Activity and cost pools
Pricing Strategies Their Explanation • Selection of Activity Cost Drivers and Tracing of
Where the nature of the costs with objects
Skimming
A. II. products are non- • Staff Training and Review Follow up
Pricing Policy
storable.
70. Under the Income-Tax Act 1961 the value of
Where close substitute perquisite in respect of movable assets (other
Penetration IV
B. of a new product are than the assets already specified in Rule 3 of
Pricing Strategy .
not available the Income tax Rules, 1962) owned by the
Exporting goods at a employer is calculated at rate of:
Peak load
C. I. price lower than the (a) 10% per annum of the actual cost
pricing policy
domestic price. (b) 20% per annum of the actual cost
Dumping III Substitutes of New (c) 10% per month of the actual cost
D.
pricing policy . product are available (d) 20% per month of the actual cost

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 638 YCT
Ans. (a) : Under the Income-Tax Act, 1961 the value of (a) A-IV, B-III, C-II, D-I
perquisite in respect of movable assets (other than the (b) A-I, B-II, C-III, D-IV
assets already specified in Rule 3 of the Income Tax (c) A-IV, B-II, C-III, D-I
Rules, 1962) owned by the employer is calculated at the (d) A-I, B-III, C-II, D-IV
rate of 10% per annum of the actual cost. Ans. (a) : Correct match of List-I with List-II
71. Compute the after-tax cost of capital of a List-I List-II
company in case a perpetual bond (face value is Classification of Their Definition
`100) is sold as well as redeemed at par having goods as per
coupon rate of interest being 7% and corporate
the Sales of Goods
tax rate is 30%. Act, 1932
(a) 2.1% (b) 4.9%
The goods which are
(c) 7% (d) 10% identified and agreed
Ans. (b) : To compute the after-Tax cost of capital for a Specific
A. IV. upon at the time of
perpetual bond, we can use the formula for the after-tax Goods
making the contract of
cost of debt: sale.
After-tax cost of debt = Coupon Rate (1- Tax Rate) The goods which are
Given : identified and agreed
Coupon Rate = 7% or 0.07 Ascertained
B. III. upon subsequent to the
Goods
Tax Rate = 30% or 0.30 formation of contract of
After-tax cost of debt = 0.07 (1-0.30) sale.
= 0.049 or 4.9% The goods which are
After tax cost of debt = 4.9% not identified and
Unascertained
72. Match the List-I with List-II. C. II. agreed upon at the time
Goods
of formation of contract
List-I List-II of sale.
Classification of Their Definition
The goods which are to
goods as per
be manufactured or
the Sales of Goods produced or acquired
Act, 1932 D. Future Goods I.
by the seller after
The goods which are making the contract of
to be manufactured or sale.
produced or acquired 73. Which of the following subsidiaries are fully
Specific
A. I. by the seller after owned by the Reserve Bank of India?
Goods
making the contract of A. National Housing Bank
sale B. National Bank for Agriculture and Rural
Development
The goods which are C. The Deposit Insurance and Credit
not identified and Guarantee Corporation of India
Ascertained agreed upon at the D. Bhartiya Reserve Bank Note Mudran
B. II.
Goods time of formation of Private Limited
contract of sale E. Securities Trading Corporation of India
Choose the correct answer from the options
The goods which are given below:
identified and agreed (a) A, C & D only (b) A, D & E only
Unascertained upon subsequent to (c) B, D & E only (d) B, C & E only
C. III.
Goods the formation of
Ans. (a) : The following subsidiaries are fully owned by
contract of sale
the reserve Bank of India-
• National Housing Bank (NHB)- The National
The goods which are Housing Bank. (NHB) is a statutory body in India
identified and agreed established in 1988 under the National Housing Bank
D. Future Goods IV. upon at the time of Act of 1987. It operates under the aegis of the
making the contract of Reserve Bank of India (RBI) and primarily focuses
sale on promoting housing finance institutions and
Choose the correct answer from the options providing financial and other support for housing
given below: development in the country.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 639 YCT
• The Deposit Insurance and Credit Guarantee A. A Digital Signature is an Electronic
Corporation of India- The Deposit Insurance and Signature
Credit of the reserve Bank of India (RBI), established B. Digital Signatures are accepted globally
in 1978 under the Deposit Insurance and Credit C. Each vendor has to make his own standard
Guarantee Corporation Act, 1961. Its primary to regulate digital Signatures
objective is to provide deposit insurance and credit D. The term Electronic Signature is broader
guarantee for banks in India. than Digital Signature
• Bharatiya Reserve Bank Note Mudran Private E. A digital signature is less secure than
Limited- Bharatiya Reserve Bank Note Mudran Electronic Signature
Private Limited (BRBNMPL) is a wholly owned
Choose the correct answer from the options
subsidiary of the Reserve Bank of India (RBI),
given below:
established in 1995. Its primary responsibility is to
print Indian banknotes to meet the increasing demand (a) A, D & E only
for currency in the country. (b) A, B & D only
74. A person applies for a loan of `1,00,000. The (c) C, B & E only
bank informed him that over the years it had (d) B, C & D only
received 2920 loan applications per year and Ans. (b) : A digital signature is a mathematical
the probability of approval was on an average algorithm that verifies the authenticity of digital
0.85. The applicant wants to know the average documents or messages. It's a type of electronic
number of loans approved per year by the signature that creates a unique virtual fingerprint for a
bank. What can be that number? person or entity. Digital signatures are used to protect
(a) 1920 (b) 3250 information and identify users in digital documents or
(c) 1000 (d) 2482 messages.
Ans. (d) : To find the average number of loans The following are true about Digital Signature under
approved per year, we can use the formula: Information Technology (IT) Act, 2000-
Average number of loans approved per year = Total • A Digital Signature is an Electronic Signature
loan applications per year X probability of approved • Digital Signatures are accepted Globally.
Given: • The term Electronic Signature is broader than digital
Total application per year = 2920 signature.
Probability of approval = 0.85 77. Which among the following are the key
Average number of loans approved per year aspects/determinants for an equilibrium under
= 2920 X 0.85 monopolistic competition?
= 2482 A. The mobility of factors of production
75. The Narsimhan Committee 1991 recommended B. The Price
the reforms with respect to the banking sector. C. Imperfect knowledge about the market
These reforms are also known as: D. The Nature of the Product
(a) First generation reforms E. The amount of advertising outlay
(b) Second generation reforms Choose the correct answer from the options
(c) Financial sector reforms given below:
(d) Third generation reforms (a) B, D & E only
Ans. (a) : The Narsimhan Committee-I was established (b) A, B & C only
in 1991 by FM Manmohan Singh to examine the
(c) B, C & D only
functioning of banks. It was chaired by Dr. M.
(d) C, D & E only
Narsimhan, a former Governor of the Reserve Bank of
India. Ans. (a) : Monopolistic Competition- It is a market
The purpose of the Narsimham Committee-I was to structure where the number of firms is large, there is
study all aspects relating to the structure, organisations, free entry and exit of firms, but the goods produced by
functions and procedures of the financial systems. them are not homogeneous. Such a market structure is
The Narsimham Committee 1991 recommended the called monopolistic competition.
reforms with aspect to the banking sector. Following are the key aspects/determinants for an
These reforms are known as first generation reforms. equilibrium under monopolistic competition-
76. Which of the following are true about Digital • Price - The price plays a crucial role as firms have
signature under Signature under Information some control over the prices they set due to product
Technology (IT) Act 2000? differentiation.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 640 YCT
• Nature of the Product- The differentiation of Ans. (c) : The following are true about the relationship
products allows firms to compete not only on price but between average cost (AC) and marginal cost (MC)-
also on other attributes, influencing their market • When MC is falling the rate of fall in MC is greater
power. than that of AC
• Amount of advertising outlay- Advertising is • When MC increases, AC also increase but at a lower
essential for creating brand recognition and rate. However, there is a range of output where MC
influencing consumer preferences, thus impacting begins to increase while AC continue to decrease.
demand and equilibrium.
• MC curve intersects AC curve at its minimum.
78. Which one of the following is not a basic
When AC is constant, AC<MC this is not true
property of Indifference curve?
because, When AC is constant, MC = AC :
(a) Indifference curve slope downwards to right
This is the correct relationship. When average cost is
(b) Indifference curve of imperfect substitutes are
constant it means that the additional cost of producing
convex to the origin
one more unit (marginal cost) is equal to the average
(c) Indifference curve either intersect or the
cost of all units produced so far. This occurs at the
tangent to one another
minimum point of the average cost curve.
(d) Upper indifference curves indicate a higher
level of satisfaction
Ans. (c) : An indifference curve is a curve that
represents all the combinations of goods that give the
same satisfaction to the consumer.

80. Match the List-I with List-II

List-I List-II/metÛeer-II
Purpose for which deduction Relevant Section
is given under the Income-tax
Act, 1961
A. Contribution to I. Section 80
Basic property of Indifference curve are- Agnipath Scheme TTB
• Indifference curve slope downwards to right B. Profits and gains from II. Section 80
• Indifference curve of imperfect substitutes are business of collecting GGB
convex to the origin. and processing of bio-
• Upper indifference curves indicate a higher level of degradable waste
satisfaction. C. Interest on deposits in III. Section 80
79. Which one of the following is NOT true about case of senior citizens CCH
the relationship between Average Cost (AC) D. Contributions given by IV. Section 80
and Marginal Cost (MC)? companies to political JJA
(a) When MC is falling the rate of fall in MC is parties
greater than that of AC
Choose the correct answer from the options
(b) When MC increases AC also increase but at a
given below:
lower rate. However there is a range of output
where MC begins to increase while AC (a) A-III, B-IV, C-I, D-II
continue to decrease (b) A-II, B-IV, C-III, D-I
(c) When AC is constant AC < MC (c) A-IV, B-III, C-I, D-II
(d) MC curve intersects AC curve at its minimum (d) A-I, B-II, C-IV, D-III

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 641 YCT
Ans. (a) : Correct match of List-I with List -II Ans. (d) :The correct sequence of steps in the decision
making process in the application of Economics in
List-I List-II
Business decision making is:
Purpose for which deduction is Relevant
1. Determining and defining objective
given under the Income-tax Act, Section
2. Identifying Business Related Issues.
1961
3. Collection and Analysis of Relevant Data
A. Contribution to Agnipath III. Section 4. Investing developing possible course of Action
Scheme 80 CCH 5. Selection and implementation of the Decision.
B. Profits and gains from IV. Section 83. Which of the following antecedent conditions
business of collecting and 80 JJA explain intergroup conflict?
processing of bio-degradable A. Personal differences
waste B. Competition for resources
C. Interest on deposits in case of I. Section C. Role incompatibility
senior citizens 80 TTB D. Task independence
D. Contributions given by II. Section E. Jurisdictional ambiguity
companies to political parties 80 GGB Choose the correct answer from the options
81. Import of service means: given below:
A. The supplier of service is located in India (a) A, B & C only (b) A, B, D & E only
(c) A, C & D only (d) B, D & E only
B. The supplier of service is located outside
India Ans. (d) : The following antecedent conditions explain
intergroup conflict-
C. The recipient of service is located in
1. Competition for resources- Intergroup conflict
India
often arises when groups compete for limited
D. The recipient of service is located outside
resources, leading to tension and competition.
India
2. Task Independence- When groups are
E. The place of supply of service is in India interdependent in completing tasks, conflict may arise
Choose the correct answer from the option if one group's success or failure affects the other.
given below: 3. Jurisdictional ambiguity- Unclear or overlapping
(a) A, B & E only areas of responsibility between groups can cause
(b) A, D & E only conflict due to misunderstandings or competition
(c) B, D & E only over who controls certain tasks.
(d) B, C & E only 84. Match the List-I with List-II
Ans. (d) : Import of services has specifically been List-I List-II
defined under IGST Act, 2017 and refers to supply of Ind AS Related
any service where the supplier is located outside India, A. Ind AS-12 I. Leases
the recipient is located in India and the place of supply B. Ind AS-17 II. Borrowing Costs
of service is in India. C. Ind AS-19 III. Employee Benefits
82. Arrange the following steps of decision-making D. Ind AS-23 IV. Income Taxes
process in application of Economics in business Choose the correct answer from the options
decision making from starting to end- given below:
A. Selection and Implementation of the (a) A-IV, B-I, C-III, D-II
Decision (b) A-III, B-II, C-IV, D-I
B. Inventing, developing possible Course of (c) A-I, B-IV, C-III, D-II
Action (d) A-IV, B-III, C-I, D-II
C. Collection and Analysis of Relevant Data Ans. (a) : Correct Match of List-I with List-II
D. Identifying Business Related Issues List-I List-II
E. Determining and defining objective Ind AS Related
Choose the correct answer from the options A. Ind AS-12 IV. Income Taxes
given below: B. Ind AS-17 I. Leases
(a) D, C, E, B, A (b) C, D, B, E, A C. Ind AS-19 III. Employee Benefits
(c) B, C, D, E, A (d) E, D, C, B, A D. Ind AS-23 II. Borrowing Costs
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 642 YCT
85. Arrange the steps of Sampling Design in a form Agreement trade terms, tariff
of questions that are to be answered in securing (CEPA) concession to
a sample- partner countries
A. What is the appropriate sampling A precursor of
method? Preferential CECA thus a step
B. What are the parameters of interest? C. Trade III. towards enhanced
C. What size sample is needed? Agreement engagement and
D. What is the target population? confidence building
E. What is the sampling frame? Looks into the
Choose the correct answer from the options regulatory aspect of
given below: trade and
Free Trade
(a) E, D, B, A, C (b) B, E, A, C, D D. IV. encompasses an
Agreement
(c) C, B, A, E, D (d) D, B, E, A, C agreement on
Ans. (d) : Sampling design refers to the framework or customs competition
plan that is used to select a sample from a larger & IPR
population. It outlines the steps, techniques, and Choose the correct answer from the options
Methods that will be employed to ensure that the given below:
sample accurately represents the population, while (a) A-III, B-IV, C-I, D-II
minimizing biases errors. Samping design is crucial for (b) A-IV, B-III, C-II, D-I
obtaining reliable and valid results in research. (c) A-I, B-III, C-II, D-IV
Steps of sampling design are arrange in a form of (d) A-II, B-I, C-IV, D-III
question that are to be answered in securing a Ans. (a) : Correct Match of List-I with List-II
sample-
List-I List-II
1. What is the target population?
Trade agreement Types Description
2. What are the parameters of interest?
3. What is the sampling frame? A precursor of
CECA thus a step
4. What is the appropriate sampling method?
Early Harvest towards enhanced
5. What size sample is needed? A. III.
Scheme (EHS) engagement and
86. RBI permitted the issue of commercial papers confidence
within the framework of its guidelines. Which building
one of the following committee recommended
Looks into the
these guidelines?
regulatory aspect
(a) Verma committee Comprehensive
of trade and
(b) Padmnabhan committee Economic
B. IV. encompasses an
(c) Kalia committee partnership
agreement on
(d) Vaghul committee Agreement (CEPA)
customs
Ans. (d) : The Vaghul Committee, headed by M.S. competition & IPR
Vaghul recommended the introduction of commercial Two or more
paper (CP) in India in 1989. The Committee's parties give right of
recommendations to the RBI were implemented in entry to certain
1990. Preferential Trade
C. I. products by
Agreement
87. Match the List-I with List-II reducing duties on
List-I List-II an agreed number
Trade agreement Description in tariff lines
Types In which two or
Two or more parties more countries
give right of entry to Free Trade agree to provide
D. II.
Early Harvest certain products by Agreement trade terms, tariff
A. I. concession to
Scheme (EHS) reducing duties on
an agreed number in partner countries
tariff lines 88. Which one of the following theory of capital
Comprehensive In which two or structure discusses Arbitrage Process?
B. Economic II. more countries het bpeer mebjÛevee kesâ efvecveefueefKele ceW mes keâewve mee efmeæevle
partnership agree to provide Deeefye&š^spe Øeef›eâÙee hej ÛeÛee& keâjlee nw?
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 643 YCT
 (a) Traditional Approach Choose the correct answer from the options
(b) Modigliani and Miller (MM) Approach given below:
(c) Net Operating Income (NOI) Approach (a) A, C, D, B, E (b) B, C, A, D, E
(d) Net Income (NI) Approach (c) E, B, C, D, A (d) B, C, A, E, D
Ans. (b) : The Modigliani-Miller (M&M) Approach is Ans. (b) : The following theories of Profit in order of
a Corporate finance theory that helps simplify time when these were propounded from oldest to
investment decisions by relating levered and unlevered latest-
firms. The M&M theorem states that a company's Theories of Profit Propounded
capital structure is not a factor in its value. The theorem 1. Walker's Theory of Prof. F.A. Walker in
was developed in the 1950s by economists Franco Profit: Profit as Rent 1876
Modigliani and Merton Miller. of Ability.
89. Which of the following are the assumptions of 2. Clerk's Dynamic J.B. Clark in 1900
Gordon's dividend-capitalization model? Theory of Profit
A. No taxes 3. Hawley's Risk Theory Frederick Barn and
B. Cost of capital is less than the growth of profit Hawley in 1907
rate 4. Schumpeter's Joseph Schumpeter in
C. No internal financing Innovation Theory of 1911
D. Constant retention Profit
E. Constant cost of capital 5. Knight's Theory of Prof Knight in 1921
Choose the correct answer from the options Profit
given below: Read the passage and answer the questions given
(a) A, B & D only below.
(b) B, C & E only The export hubs are expected to act as a center
(c) A, C & D only for favourable business infrastructure and facilities
(d) A, D & E only for cross-border e-commerce including facilitating
faster customs clearance of cargo and also addressing
Ans. (d) : Gordon's Dividend Capitalization model, also the problem of reimportation because about 25
known as the Gordon Growth Model (GGM), is a percent of goods in e-commerce are reimported.
method used to determine the intrinsic value of a Additionally, the hubs will offer warehousing
company's stock based on the assumptions that facilities, processing returns, labelling product testing
dividends will grow at a constant rate indefinitely. repackaging items and dedicated logistics
It is a simple and popular model for valuing a infrastructure for connecting to and leveraging the
company's stock, particularly for firms that pay services of nearby logistics hubs, thereby achieving
consistent dividends. agglomeration benefits for exporters.
The following are the assumptions of Gordon's In the attempt to leverage e-commerce
Dividend Capitalization model- platforms to support local exporters manufacturers
1. There is no external financing and MSMEs in reaching potential international
2. There is constant return buyers the DGFT signed a memorandum of
understanding with global e-commerce firm Amazon
3. The cost of capital is constant
last year to offer capacity-building sessions training
4. There is perpetual earnings and workshops for MSMEs across districts identified
5. No taxes by the DGFT as part of the "District as Exports
6. Constant retention Hub" initiative. Amazon surpassed $8 billion in
7. Cost of capital will be greater than growth rate. cumulative exports from India in 2023 and aims to
90. Arrange the following theories of Profit in achieve its ambitious target of $20 billion by next
order of time when these were propounded year.
from oldest to latest- India's exports through online platforms stood
A. Hawley's Risk Theory of profit at $8-10 billion in 2022-23 compared to China's
staggering figure of more than $300 billion. A key
B. Walker's Theory of Profit: Profit as Rent
reason for this gap is the cumbersome compliance
of Ability process associated with exports especially when it
C. Clerk's Dynamic Theory of Profit comes to payment reconciliation which is particularly
D. Schumpeter's Innovation Theory of challenging for new or small exporters. At the same
Profit time global cross border e-commerce trade was $800
E. Knight's Theory of Profit billion.
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 644 YCT
 With India's cross-border e-commerce exports The rapid growth of online shopping and global
likely to increase to $200 billion over the next six to marketplaces has created new challenges and
seven years. It can become a key strategy in achieving opportunities for exporters.
the $2 trillion overall exports target by 2030. 2. E-commerce exports need a combination of
India's services export increased by only $15.8 facilities including warehousing, processing returns,
billion in 2023-24 over 2022-23 while merchandise repacking:- E-commerce exports require unique
export declined $14 billion in the same period. facilities and processes compared to traditional exports.
Overall India's combined value of exported goods and A separate policy can address these specific needs and
services registered a marginal increase of around $2 provide guidelines for infrastructure development.
billion in 2023-24. At a time when export growth
94. E-commerce export hub can offer which of the
remains tepid and the overall trade deficit is around
following agglomeration benefits for exporters?
$78 billion establishing a supportive e-commerce
A. Repacking and labelling of products
ecosystem can truly give a fillip to India's export
performance. Given the patchwork of rules and B. Substantial decrease in upfront cost
export provisions framed for exporters there is an incurred in export
urgent for a separate e-commerce export policy, C. Interconnection of Logistics Custom
which can ease the compliance burden on exporters. clearance exemption
91. Which enterprise has been identified to mentor D. Custom clearance exemption
the MSMEs for boosting e-commerce exports? E. Assured export orders
(a) DGFT (b) Walmart Choose the correct answer from the options
(c) Amazon (d) DGCA given below:
Ans. (c) : Amazon has been identified to mentor the (a) A, B & C only (b) B, C & D only
MSMEs for boosting e-commerce exports. (c) A, B & E only (d) C, D & E only
They have signed a memorandum of understanding with Ans. (a) : E-commerce export hub can offer which of
the Directorate General of Foreign Trade (DGFT) to the following agglomeration benefits for exporters-
provide Capacity building sessions, training and A. Repacking and labelling of products.
workshops for MSMEs in identified districts. B. Substantial decrease in upfront cost incurred in
92. India export through platforms in comparison export.
to China in 2022-23 was C. Interconnection of Logistics Custom clearance
(a) 9% (b) 6% exemption.
(c) 12% (d) 3% 95. Which of the following statements are correct
Ans. (d): India's export through platforms in based on export related details given in the
comparison to China in 2022-23 was 3%. passage?
A. India's services export declined in 2023-24
93. Why there is an urgent need for a separate e-
over 2022-23
commerce export policy?
B. India export through online platform is
A. Reimport issues are being addressed by
existing export policies less than China in 2022-23
B. Cross-border e-commerce has gained C. Amazon targets to double or more than
double its exports from India in 2024-25
significantly in last few years
D. More than 20% of goods in e-commerce
C. Existing export centers have favorable
are reimported
business infrastructure
E. India's merchandize exports increased in
D. E-commerce export can be managed with
2023-24 over 2022-2023
existing logistic hubs
Choose the correct answer from the options
E. E-commerce exports need a combination of
given below:
facilities including warehousing processing
returns repacking (a) A, B & C only (b) B, C & D only
Choose the correct answer from the options (c) C, D & E only (d) A, B & E only
given below: Ans. (b) : The following statements are correct based
(a) A & C only (b) B, C & D only on export related details given in the passage-
(c) B & E only (d) C, D & E only • India export through online platform is less than
Ans. (c): There is an urgent need for a separate e- China in 2022-23.
commerce export policy because- • Amazon targets to double or more than double its
1. Cross-border e-commerce has gained significantly exports from India in 2024-25.
in last few years- This is the most crucial factor driving • More than 20% of goods in e-commerce are
the need for a separate e-commerce export policy. reimported.
UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 645 YCT
Read the passage and answer the question given Ans. (b) : The storage capacity issue is associated with
below: renewable energy sources such as wind, solar and
National power demand in India has hit 250 Hydral (hydropower). These sources are intermittent
Gw, 25 percent more than last year and 71 percent and may not generate electricity continuously or on
more than in 2022. The power ministry has rightly demand, which creates the need for efficient energy
taken pride in ensuring that thermal power stations
storage solutions.
have adequate stocks of coal to keep the lights, fans
and air-conditioning on. This has been a chronic • Wind:- Energy generation depends on wind
problem in previous summers leading to prolonged availability. When the wind isn't blowing, no power
outages. This year coal stocks have reached plants is generated, requiring energy storage systems for
well on time. As on June 23, 2024 thermal power stability.
plants had 16 days of stocks as against 9.4 days on • Solar:- Solar power is only generated during the day
June 23, 2022 and 12.7 days on the same day in 2023. and can be affected by weather conditions, making
The Government expects to add 15.4 Gw of storage essential for nighttime and cloudy periods.
coal-fired capacity in 2024-25 the highest in 9 years • Hydral (Hydropower):- Though some large dams
and 90 Gw by 2032. A programme of "Coal Reforms
can store water for controlled energy production,
3.0" is on the agenda to increase the availability of
run-of-the-river hydro plants lack storage capacity,
coal for industrial sectors especially steel units with
the broad objective of reducing imports to zero in the limiting their ability to provide constant energy.
next two financial years. 97. The availability of coal stock with power plants
India has set a target to achieve 50 percent this year is approximately _______ more than
cumulative installed capacity from non-fossil fuel it was 2 years ago.
based energy resources by 2030 and has pledged to (a) 26% (b) 52%
reduce the emission intensity of its gross domestic (c) 70% (d) 100%
product by 45 percent by 2030 based on 2005 levels.
The installed capacity of non-fossil power in India in Ans. (c): The availability of coal stock with power
now 45.3 percent of the total capacity putting India plants this year is approximately 70% more than it was
on track to exceed its climate-change commitments. 2 years ago.
But this is illusory progress. The absence of viable 98. Out of the total installed Power capacity the
storage technologies has limited grid off take from installed capacity of fossil power is:
renewable sources. (a) 45.3% (b) 50%
Encouraging industry to continue its (c) 54.7% (d) 45%
dependence on coal is unhelpful. In this respect coal
reforms 3.0 appears to be at odds with a scheme Ans. (c) : Out of the total installed Power capacity the
announced earlier this year for a pilot project for installed capacity of fossil power is 54.7%.
given hydrogen to replace coal both as a fuel and as 99. How much (approximately) was the national
feedstock (which is possible even in steel produced power demand in 2022?
through the blast furnace route). Given that coal- (a) 200 GW (b) 175 GW
based thermal plants are responsible for a
(c) 62.5 GW (d) 146 GW
disproportionately higher share of emission than the
industrial sector, the government may do well to Ans. (d) : 146 GW (approximately) was the national
power India's economy in the immediate future. power demand in 2022.
96. Which of the following power sources have 100. Which of the following statement is true?
limitation of storage capacity? (a) Industrial sector pollute more than coal based
A. Wind thermal power plants
B. Solar (b) The Chronic problem of coal shortage is
C. Thermal likely to continue
D. Nuclear (c) Coal Reforms 3.0 is in synergy with green
E. Hydral hydrogen pilot project
Choose the correct answer from the options (d) Coal Reforms 3.0 will bring down coal
given below:
imports to zero in the coming two years
(a) A, C & D only
Ans. (d) : The following statement is true-
(b) A, B & E only
(c) B, C & D only Coal Reforms 3.0 will bring down coal imports to zero
(d) A, B, D & E only in the coming two years.

UGC NTA NET Commerce June 2024 (Re-Exam) Paper II, SH-I 646 YCT
 NTA UGC NET/JRF Re-Exam, June 2024
COMMERCE
Solved Paper (Exam Date: 03.09.2024, Shift-II)

1. Calculate Debt Service coverage ratio from the Choose the correct answer from the options
following data Net profit before interest and given below:
Tax ` 50,000 (a) A, B, C & D Only (b) C, D & E Only
10% Debenture (payable in 10 years in equal (c) B, C, D & E Only (d) A, B, C & E Only
installments) Ans. (d) : Following are the benefits of globalization-
(a) 1.27 (b) 1.67 • Increase in competition would make companies
(c) 2.27 (d) 2.67 more cost & quality conscious and invocative.
Ans. (b) : Given, • An open economy spurs innovative with fresh ideas
Net profit before interest and tax = 50,000. from abroad.
10% Debenture = ` 1,00,000 • Liberalization & global competition enhances
Tax rate = 50% consume choice and consumer surplus.
Debt service coverage ratio = ? • Globalisation open up enormous domestic and global
opportunities for firms in developing countries.
(DSCR)
Hence, option (d) is correct answer.
2. Which of the following are the rights of the
4. Which of the following is NOT a part of micro
equity shareholders? environment?
A. Right to Income (a) Suppliers (b) Customers
B. Right to claim Dividend (c) Competitors (d) Technology
C. Right to Control Ans. (d) : According to Charles hill and garth Jones, "A
D. Right to Liquidation company's micro environment consists of elements that
E. Pre-emptive Rights directly affects the company such as competitors,
Choose the correct answer from the options customers and suppliers."
given below: However, Technology is typically part of the macro
(a) A, B, C, D & E (b) B, C & E Only environment, as it refers to broader technological trends
(c) A, B, C & D Only (d) A, C, D & E Only and developments that affect industries on a large scale.
Ans. (d) : The equity shareholders do not enjoy any Therefore, option (d) is correct answer.
preferential right in the payment of dividend or 5. The authentication to be affected by use of
repayment of capital. The dividend on equity shares is asymmetric crypto system and hash function is
not fixed and it may vary from year to year depending known as:
upon the amount of profit available for distribution. (a) E-commerce (b) Virtual signature
Thus, the valid rights of equity. (c) Digital signature (d) E-verification
Shareholders are- Ans. (c) : The authentication mechanism that uses an
• Right to Income. asymmetric crypto system (public and private key pair)
along with a hash function is known as a Digital signature.
• Right to Control. A digital signature ensures the authenticity, integrity, and
• Right to Liquidation. non-repudiation of a message or document by encrypting
• Pre-emptive Rights. the hash of the message with the sender's private key. The
Hence, option (d) correct answer. recipient can verify the authenticity by decrypting it with
3. Which of the following are the benefits of the sender's public key.
globalization? There fore, the correct answer is option (c).
A. Increase in competition would make 6. Match the List-I with List-I
companies more cost & quality conscious List-I (Section) List-II (Ceiling limit)
and innovative. A. 80-C I 50,000
B. An open economy spurs innovation with B. 80-CCD(1) II. 10% of salary or 20%
fresh ideas from & abroad. of gross total income as
C. Liberalisation & global competition enhances per case
consumer choice and consumer surplus. C. 80-CCD(1B) III. 14% of salary
D. Developing countries could be very D. 80-CCD(2) IV. 1,50,000
vulnerable to the harmful effects of
(a) A-I, B-II, C-III, D-IV
globalisation.
(b) A-IV, B-II, C-I, D-III
E. Globalisation opens up enormous domestic
(c) A-IV, B-III, C-II, D-I
and global opportunities for firms in
developing countries. (d) A-III, B-IV, C-I, D-II

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 647 YCT
 Ans. (b) : The code of correct match of List-I with 9. The profit volume ratio of a company is 50%
List-II. and the margin of safety is 40%. Calculate net-
profit if the sales volume is `1,00,000.
List-I List-II
(a) 10,000 (b) 18,000
(Section (Ceiling limit)
(c) 20,000 (d) 25,000
A. 80-C IV. 1,50,000
Ans. (c) : Given,
B. 80-CCD (1) II. 10% of salary or 20% of Profit volume ratio = (50%)
gross total income as per Margin of safety = 40%
case Sales volume = 1,00,000
C. 80-CCD (1B) I. 50,000 Not Profit =?
D. 80-CCD (2) III. 14% of salary Formula,
7. The supply function is given as q = -100 + 10p. Net profit = contribution x margin of safety
Find the elasticity of supply (Es) using point contribution = sales x P/V ratio.
method, when price is `15. contribution = 1,00,000 × 50%
(a) Es = 2 (b) Es = 3 = 50,000
(c) Es = 3.5 (d) Es = 4 Net profit = 50,000 × 40%
Ans. (b) : Given, = 20,000
Supply function is q = – 100 + 10q The net profit is 20,000.
price is ` 15. 10. Which of the following is the apex decision-
Elasticity of supply (Es) = ? making body of WTO?
Quantity supplied when price (P) is ` 15. (a) General Council
q = – 100 + 10 × 15 (b) Executive Council
= – 100 + 150 (c) Ministerial Conference cebef$emlejerÙe meccesueve
= 50. (d) TRIMS
Derivative of supply function (slope): Ans. (c) : The apex decision-making body of the world
Trade organization (WTO) is the Ministerial
dq
= 10 conference. It is the highest authority of the WTO and
dp consists of representatives from all member countries.
The ministerial conference meets at least once every
p dq
formula; Es = × two years and makes key decisions regarding the
q dp organization and multilateral trade agreements.
15 11. Arrange the following process of incorporation
Es = × 10 of a new LLP in proper sequence.
50
A. Reserve LLP name
Es = 0.3 × 10
B. Procure Digital Signature Certificate
Es = 3 C. Prepare documents for incorporation of
So, the correct answer is (b) i.e. Es = 3. LLP
8. According to Dividend Growth Model, the cost D. LLP incorporation and DIN Application
of Equity is equal to: E. Drafting and Filling LLP Agreement
(a) Retained Earning + Dividend yield F. Apply for PAN and TAN
(b) Dividend yield + Expected Growth in Dividend Choose the correct answer from the options
(c) Retained Earning+Expected Growth in Dividend given below:
(d) Dividend yield + Intrinsic value (a) A, B, C, D, F, E (b) B, A, D, C, E, F
(c) B, A, C, D, F, E (d) A, B, C, D, E, F
Ans. (b) : According to the Dividend Growth Model
(DGM), the cost of equity (Ke) is calculated using the Ans. (c) : The steps of incorporation process of New
following. LLP in proper sequence. are:-
Step-I Procure digital signature certificate.
D
Ke = l + g Step-II Reserve LLP name
P0 Step-III Prepare documents for incorporation of LLP
Where, Step-IV LLP incorporation and DIN Application.
Ke = Cost of equity. Step-V Apply for PAN and TAN.
D1 = Divided expected in the next period. Step-VI Drafting and filling LLP agreement.
P0 = Current price of the stock. 12. Which of the following is correct to compute
G = Expected growth rate in dividends. Labour Mix Variance (LMV)?
This formula shows that the cost of equity is equal to (a) LMV = Actual rate (Revised Std. time-Actual
D  time)
the dividend yield  1  + Expected growth in (b) LMV = Actual time (Std. Rate-Actual rate)
 P0  (c) LMV = Std. Rate (Revised Std. time- Actual
Dividend. time)
So, the correct answer is options (b). (d) LMV = Std. time (Actual rate-Std. Rate)

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 648 YCT
Ans. (c) : The correct formula to compute labour Mix
variance (LMV) is:-
LMV = Standard rate × (Revised std. time-Actual time).
It is used to analyze the efficiency of labour usage in
terms of the mix of workers employed. It reflects the
difference in cost that arises due to employing a Left-skewed (Negative skew ness)
different mix of labour than was originally planned. 16. Arrange the following new product planning
13. Which of the following is/are included in salary process in proper sequence.
as per section-17 G of Income Tax Act 1961? A. Idea screening
B. Idea generation
A. Wages
C. Concept Development and testing
B. Perquisite
D. Market strategy development
C. Profits in lieu of salary E. Business Analysis
D. Compensation on termination of employment Choose the correct answer from the options
Choose the correct answer from the options given below
given below: (a) A, B, C, D, E (b) B, A, C, D, E
(a) A & B Only (b) B & C Only (c) A, B, C, E, D (d) E, D, B, A, C
(c) A, B & C Only (d) A, B, C & D Ans. (b) : Product planning process is a systematic
Ans. (d) : According to section 17 G of income tax Act approval used by businesses to develop, design and
1961 salary and its components includes basic salary introduce new products or improve existing ones.
which forms the foundation of an employee's pay; The steps involved in the product planning process
allowances like house rent allowance (HRA) and leave Idea Gencration
Travel Allowance (LTA), provided for specific
purposes; perquisites, which are benefits given in ↓
addition to salary, such as rent-free accommodation or Idea Screening
company car; and profits in lieu of salary which covers
additional compensation like gratuity or pension. ↓
14. Arrange the following steps of securitization in Concep Development and Testing
a correct sequence. ↓
A. Forming SPV
Business Analysis
B. Transfer to SPV
C. Credit Enhancement ↓
D. Seasoning Pr oduct Development
E. Issuance of securities
↓
Choose the correct answer from the options
given below: Market Testing
(a) A, B, C, D, E (b) B, C, A, D, E ↓
(c) D, C, A, B, E (d) D, C, B, A, E Commercialization
Ans. (c) : The steps of securitization in a correct
sequence are:- 17. The Bretton Woods monetary system was
based on the fixed rate monetary system. It
Step-I Seasoning lasted between the years:
↓ (a) 1946 To 1974 (b) 1944 To 1974
Step-II Credit Enhancement (c) 1940 To 1974 (d) 1944 To 1971
↓ Ans. (d) : The Bretton woods monetary system was
Step-III Forming SPV established during a confrence held in July 1944 in
↓ Bretton woods, new Hampshire, involving 44 nations.
Step-IV Transfer to SPV The system aimed to create a stable international
monetary system after of world war II. It was ended in
↓ 1971 when the U.S suspended the convertibility of the
Step-V Issuance of securities. dollar into gold, leading to the transition to a floating
15. The distribution of data which has a long left exchange rate system.
tail is known as: 18. A firm wants to launch a new brand of
(a) Positively skewed distribution television and refrigerator. The firm conducted
(b) Negatively skewed distribution a survey and found that 60% of the households
(c) Symmetrical distribution have television, 65% have a refrigerator and
35%, both a television and a refrigerator. If a
(d) Mesokurtic distribution household is randomly selected, what is the
Ans. (b) : The distribution of data which has a long left probability that the household has either a
tail is known as 'Negatively skewed distribution. In it, television or refrigerator?
most of the values are concentrated on the right side of (a) 0.70 (b) 0.90
the distribution graph, while the left tail is longer.' (c) 0.80 (d) 0.60

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 649 YCT
Ans. (b) : The formula for union of two events is Ans. (c) : Stage-I "Obtain stage of Investigation
P (T ∪ R) = P (T) + P (R) – P (T ∩ R) instructions from the client and prepare terms of
Where; reference."
• P (T) is the probability that a household has a Stage-II "Plan work to be done and timing."
television = 0.60. Stage-III "Collect necessary information and documents."
Stage-IV "Make necessary calculation to eliminate
• P (R) is the probability that a household has a inconsistencies."
refrigerator = 0.65
Stage-V "Formulate conclusions/analysis of findings."
• P (T∩R) is the probability that a household has both
a television and a refrigerator = 0.35. 22. Which of the following can file a petition for
winding up of a company?
Substitute the values:- A. Shareholders
P (T∪ R) = 0.60 + 0.65 – 0.35 B. The creditor or prospective creditors
= 0.90 C. The legal heirs
19. Which of the following is the pre-condition for D. The person authorized by the central
applying Chi-square test? government
(a) Data should not be presented in percentage or Choose the correct answer from the options
ratio form. given below:
(b) The sample should consists of at least 100 (a) A, B & C Only (b) B, C & D Only
observations. (c) A, C & D Only (d) A, B & D Only
(c) The sample should not be drawn randomly. Ans. (d) : Section 272 of company Act 2013, provides
(d) All the individual observations in a sample that the petition for winding up of a company has to be
should not be independent. made by any of the following persons:-
Ans. (a) : The pre-condition for applying chi-square test (a) The company, or
is! "Data should not be presented in percentage or ratio (b) Any creditor or creditors,
form." (c) All contributory or contributories,
The chi-square test is applied to raw data, not (d) All or any of the parties specified above in clauses
percentages or ratios. It is used to compare observed (a), (b), (c) together.
frequencies with expected frequencies, so the data (e) The Registrar.
should be in frequency counts. (f) Any person authorized by the central government in
20. A company prices one liter bottle of its mineral that behalf.
water at `20/- but 100 ml of the same water in a (g) By the central government or state government in
moisturizer spray for `50/-. This is an example case of company acting against the interest of the
of which one of the following pricing practices? sovereignty and integrity of India.
(a) Customer-Segment Pricing 23. In case of performance appraisal, an
(b) Image Pricing assessment should focus on:
(c) Product-form Pricing A. Technology to intervene between appraiser
and appraise.
(d) Mark-up Pricing
B. Individual traits
Ans. (c) : In product-form pricing, different forms of C. Behaviours exhibited by the assesses
the same product are priced differently, even though the D. Knowledge/skills possessed
cost to produce these forms may be similar. In this case, E. Results achieved
the same mineral water is being sold in two different Choos)e the correct answer from the options
forms: a 1 liter bottle and a 100ml moisturizer spray, given below:
with a significant difference in price. This prancing (a) A, B, C & D Only (b) A, B & C Only
strategy leverages the different perceived value or use (c) B, C & D Only (d) B, C, D & E Only
of the product in its various forms.
Ans. (d) : In case of performance appraisal, an
21. Arrange the following stages of investigation in assessment should focus on Individual traits, behaviors
proper sequence. exhibited by the assesses, knowledge skill possessed
A. Plan work to be done and timing. and results achieved, as they directly impact an
B. Obtain instructions from the client and employee's job performance Technology intervention is
prepare terms of reference. not a key focus in performance appraisals.
C. Make necessary calculation to eliminate Therefore, the correct answer is option (d).
inconsistencies. 24. Which organisational structure promotes
D. Collect necessary information and control and co-ordination within a department
documents. because of similarity in the tasks being
E. Formulate Conclusions/analysis of findings. performed?
Choose the correct answer from the options (a) Divisional Structure
given below: (b) Functional Structure
(a) A, B, C, D, E (b) A, C, B, D, E (c) Formal Structure
(c) B, A, D, C, E (d) A, B, D, C, E (d) Matrix Structure

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 650 YCT
Ans. (b) : In a functional structure, employees are A. Sale B. Death
grouped based on their specialized roles or tasks, such C. Insolvency D. Maturity
as marketing finance or production. This structure Choose the correct answer from the options
promotes control and co-ordination within each given below:
department due to the similarity of tasks being (a) A & B Only (b) A & C Only
performed, allowing for greater efficiency and expertise (c) B & D Only (d) B & C Only
in specific functions.
Ans. (d) : Transmission of shares is a legal process that
25. Match the List-I with List-II transfers the little of shares to a legal heir/trustee when a
List-I List-II shareholder dies or declared bankrupt or insolvent. It is
A. Right to I. Consumers have a right different from transfer of shares by sales or on maturity.
Safety against the marketing of Therefore, transmission of shares is effected by death or
goods, products or insolvency.
services which are 27. Match the List-I with List-II
hazardous to life &
property. List-I List-II/metÛeer-II
B. Right to be II. Consumers have a right to A. Capital Asset I E D
Pricing Model γ E + γ D (1 - TC )
assured know about the quality, V V
quantity, potency, purity, B. Gordon Model II. RE = Rf +βE ( RM - Rf )
standard and price of
goods or services. C. Weighted III.  E
C. Right to be III. Consumers have a right to Average Cost P = mD + 
of Capital  3
informed be assured that their
interest will receive due D. Traditional IV. E1 (1 - b )
consideration at Model P0 =
appropriate commission k - br
D. Right to be IV. Consumer has the Choose the correct answer from the options
heard opportunity to choose given below:
from a wide range of (a) A-IV, B-I, C-II, D-III
products at reasonable (b) A-II, B-III, C-I, D-IV
rates. (c) A-I, B-II, C-III, D-IV
Choose the correct answer from the options (d) A-II, B-IV, C-I, D-III
given below: Ans. (d) : The correct match is:-
(a) A-I, B-IV, C-II, D-III List-I List-II
(b) A-II, B-III, C-I, D-IV
(c) A-III, B-II, C-I, D-IV
A. Capital Asset II R E = R F + βE ( R M - R f )
Pricing Model
(d) A-IV, B-III, C-II, D-I
Ans. (a) : The correct match is:- B. Gordon Model IV. E1 (1- b )
P0 =
List-I List-II K - br
A. Right to I. Consumers have a right C. Weighted I. E D
Safety against the marketing of Average Cost γ E + γ D (1- TC )
goods, products or services V V
of Capital
which are hazardous to life
& property. D. Traditional III.  E
Model P = mD + 
B. Right to be IV. Consumer has the  3
assured opportunity to choose from 28. Match the List-I with List-II
a wide range of products at
reasonable rates. List-I List-II
Act/Institution Year
C. Right to be II. Consumers have a right to
informed know about the quality, A. Consumer Protection Act I 1964
quantity, potency, purity, B. FEMA II. 1945
standard and price of goods C. IMF III. 1999
or services.
D. UNCTAD IV. 2019
D. Right to be III. Consumers have a right to
Choose the correct answer from the option
heard be assured that their
interest will receive due given below:
consideration at (a) A-IV, B-III, C-II, D-I
appropriate commission (b) A-II, B-III, C-I, D-IV
26. Transmission of shares is effected by which of (c) A-III, B-IV, C-II, D-I
the following? (d) A-I, B-II, C-III, D-IV

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 651 YCT
 Ans. (a) : The correct match from List-I to List-II is 32. Match the List-I with List-II
as following. List-I (Instruments) List-II (Market)
List-I/Act/Institution List-II/Year A. Forwards I Primary
A. Consumer Protection Act IV 2019 Market
B. FEMA III. 1999 B. Certificate of Deposits II. Money Market
C. IMF II. 1945
C. FPO III. Derivative
D. UNCTAD I. 1964
Market
29. What is the time limit within which an
information is to be provided regarding the life D. IPO IV. Stock Market
and liberty of a person under RTI Act, Choose the correct answer from the option
2005?/DeejšerDeeF& DeefOeefveÙece, 2005 kesâ Debleie&le given below:
efkeâmeer JÙeefòeâ kesâ peerJeve Deewj mJeleb$elee kesâ mebyebOe ceW (a) A-I, B-III, C-II, D-IV
metÛevee Øeoeve keâjves keâer meceÙe-meercee keäÙee nw? (b) A-II, B-IV, C-I, D-III
(a) 30 days (b) 60 days (c) A-IV, B-II, C-III, D-I
(c) 24 hours (d) 48 hours (d) A-III, B-II, C-IV, D-I
Ans. (d) : According to section 7 (1) of the RTI Act, Ans. (d) : The correct match from List-I to List-II is
2005, 'If the sought information concerns the life or as following
liberty of a person, in that case information shall be
provided within 48 (forty-eight) hours of the receipt of List-I/(Instruments) List-II/(Market)
the request. A Forwards III Derivative Market
Note- The General response time to RTI application is B Certificate of Deposits II Money Market
to respond within 30 days of receiving them.
30. Revenue from sale of products, ordinarily is C FPO IV Stock Market
reported as part of the earning in the period D IPO I Primary Market
when: 33. The price of one kg of tea is `30. At this price
(a) The sale is made `5 kg of tea is demanded. If the price of coffee
(b) The cash is collected rises from `25 to `35 per kg, the quantity
(c) The products are manufactured
demanded of tea rises from 5 kg to 8kg. Find
(d) The profit is computed
the cross price elasticity of tea.
Ans. (a) : Revenue from the sale of products is
generally recognized when the sale is made. when the (a) (+) 0.5 (b) (+) 1.0
risks and rewards of ownership have been transferred to (c) (+) 1.5 (d) (-) 0.5
the buyer, even if the cash has not yet been collected. Ans. (c) : The cross-price elasticity of demand
This is inline with the accrual basis of accounting, measures the responsiveness of the quantity demanded
which recognizes revenue when it is earned, not when of one good to changes in the price of another good. It
cash is received.
is calculated using the following formula.
31. Arrange the following anti-dumping process in
proper sequence. Cross-price elasticity =
A. Initiation % Change in quantity demanded of tea
B. Preliminary screening % change in price of coffee
C. Rejection under de minimis, % change in quantity demanded of tea:-
unsubstantiated information etc.
D. Exporting country allowed to modify Initial quantity = 5kg
practice. New quantity = 8kg.
E. Preliminary findings followed by final 8−5
finding and measures. = × 100
5
Choose the correct answer from the options
given below: = 60%
(a) B, C, A, D, E (b) A, B, C, D, E % change in price of coffee:-
(c) B, A, C, D, E (d) B, C, A, E, D Initial price = ` 25
Ans. (a) : The sequence in anti-dumping process are as New price = ` 35
follows:- 35 − 25
Step-I 'preliminary screening' = × 100
Step-II 'Rejection under de minimis unsubstantiated 25
information etc ' = 40%
Step-III 'Initiation.' 60%
Step-IV "Exporting country allowed to modify So, cross price elasticity =
practice." 40%
Step-V "Preliminary findings followed by final finding = 1.5
and measures." Thus, the cross price elasticity of tea is (+ 1.5).

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 652 YCT
34. From the following identify the measures of 36. Which of the following means management
dispersion should promote a team-spirit of unity and
A. Mean Deviation harmony among employees?
B. Range (a) Unity of command
C. Standard Deviation (b) Unity of direction
D. Coefficient of Variation (c) Scalar chain
E. Coefficient of correlation (d) Espirit De Corps
Choose the correct answer from the options Ans. (d) : Expirit De corps refers to the principle of
given below:
fostering team spirit, unity and harmony among
(a) B, C, D & E Only (b) A, B, D & E Only
employees. It is one of the Henri Fayol's 14 principle of
(c) A, C, D & E Only (d) A, B, C & E Only management, emphasizing the importance of
Ans. (d) : The measures of dispersion is an statistical maintaining good relationships and encouraging co-
tools used to describe the spread or variability within a operation to improve morale and efficiency in the
set of data. From the given options measures of organization.
dispersion are"
37. The management of Vibgyor Fabrics
• Mean Deviation.
subscribes to the NOI approach and believes
• Range. that its cost of debt and overall cost of capital
• Standard deviation. will remain at 9% and 12% respectively. If the
• Co-efficient of correlation. debt-equity ratio is 0.8, what is the cost of
Co-efficient of variation is not a measure of dispersion; equity?
it measures the strength and direction of the linear (a) 16.4% (b) 12.4%
relationship between two variables.
(c) 14.4% (d) 8.12%
35. What is the valuation formula based on the
Ans. (c) : The formula to calculate the cost of equity
Walter's model if
(ke) based on the NOI approach is:-
P: Price per equity share
D: Dividend per share D
Ke = Ko + (Ko – Kd) ×
E: Earnings per share E
r: Rate of return on investment Where-
k: Cost of equity Ke = Cost of equity
D + (E − k) / r Ko = Overall cost of capital (12%)
(a) P = Kd = Cost of debt (9%)
r
E + (D − E) r / k D
= Debt-equity ratio (0.8)
(b) P = E
k
on putting the values on formula we get,
D + (E − D) r / k
(c) P = Ke = 12% + (12% – 9%) × 0.8
k Ke = 12% + 3% × 0.8
E + (E − D) r / k Ke = 12% + 2.4%
(d) P =
k Thus, the cost of equity is 14.4%.
Ans. (c) : The correct valuation formula based on 38. Which of the following sections of the Income-
Walter's model is:- Tax ACT-1961, provide for double taxation
D + (E − D) r / k relief in India?
P= A. Section-89
k
where: B. Section-90
• P = Price per equity share C. Section-91
• D = Dividend par share D Section-92
• E = Earnings per share E. Section-93
• r = Rate of return on investment Choose the correct answer from the options
given below:
• k = cost of equity.
(a) A & B Only (b) B & C Only
This formula is derived from Walter's model,, which
explains the relationship between a firm's dividend (c) C & D Only (d) A, B & E Only
policy and its market price per share. Ans. (b) : Section 90 and 91 of the Income tax Act,
The model suggests that the market price of a share is 1961 provide relief from double taxation in India.
influenced by both the dividends paid and the Section 90 deals with relief through agreements with
reinvestment of retained earnings, depending on the foreign countries, while section 91 offers unilateral
company's return on investment (r) compared to the cost relief for income earned in countries without a tax treaty
of equity (k). with India.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 653 YCT
39. Which of the following are the participants in Ans. (c) : Strategic decision in international business in
T-Bills Market? proper sequence are as follows-
A. Reserve Bank of India International Business Decision
B. Commercial Banks
C. Foreign Banks ↓
D. Provident Funds Market Selection Decision
E. Corporate
Choose the correct answer from the option ↓
given below: Entry and operating Decision
(a) B, C D & Only
(b) A, B, C & E Only
↓
(c) A, B, D & E Only Marketing Mix Decision
(d) A, B, C, D & E ↓
Ans. (d) : Treasury bills (T-bills) are short-term debt
instruments issued by the Government of India in tenors International organisation & HR Decisions
of 91 days, 182 day, and 364 days. These are zero- 42. Arrange the online registration process of a
coupon securities and pay no interest. Instead, T-bills new private limited company in proper
are issued at a discount and redeemed at face value sequence.
upon maturity, making them a key money market A. Select and Reserve Company Name
instrument. B. Acquire DIN & DSC of promoters
The participants in T-Bills market are as follows- C. Draft Memorandum and Articles of
• Reserve Bank of India. Association
• Commercial Bank. D. Get Company Registration Certificate
• Foreign Banks. E. File SPICE + Application
• Provident Funds. Choose the correct answer from the options
• Corporates. given below:
Hence, option (d) is correct answer. (a) A, B, C, E, D (b) A, B, E, D, C
40. Arrange the steps of research process in the (c) B, A, C, E, D (d) B, A, C, D, E
correct logical order. Ans. (c) : The online registration process of a new
A. Formulate a research question private limited company in proper sequence are as
follow:-
B. Literature review meeefnlÙe meceer#ee
Step-I Acquire DIN & DSC of promoters,
C. Collect data Step-II Select and Reserve Company Name
D. Develop a research plan Step-III Draft Memorandum and Article of
E. Interpret the result Association.
Choose the correct answer from the options Step-IV File SPICE + Application.
given below: Step-V Get company Registration Certificate.
(a) B, A, D, C, E (b) A, B, D, C, E
43. Which of the following is the most frequently
(c) A, C, D, B, E (d) B, A, C, D, E held meeting of a company?
Ans. (b) : The steps of research process in the correct (a) Statutory Meeting
logical order are as follows- (b) Annual General Meeting
Step-I 'Formulate a research question' (c) Class Meeting
Step-II 'Literature review' (d) Director's Meeting
Step-III 'Develop a research plan'
Ans. (d) : The most frequently held meeting of a
Step-IV 'Collect data' company is typically the Director's meeting. This
Step-V 'Interpret the result'. meeting is held regularly to discuss various matters
41. Arrange the following strategic decisions in regarding the management and operations of the
international business in proper sequence. company. while Annual general meetings (AGMs) is
A. Market Selection Decision held once a year, and statutory meetings are held only
B. International Business Decision once at the beginning of a company's incorporation,
C. Entry and Operating Decision class meetings are held but are less common.
D. International organisation & HR Decisions 44. Providing a total package of related goods and
E. Marketing Mix Decision services to solve a customer's needs is called:
Choose the correct answer from the options (a) Complete Selling
given below: (b) Conglomerate Selling
(a) A, B, C, D, E (b) A, B, C, E, D (c) Wholesale Selling
(c) B, A, C, E, D (d) B, C, A, E, D (d) Systems Selling

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 654 YCT
Ans. (d) : Providing a total package of related goods 47. Match the List-I with List-II
and services to solve a customer's needs is called List-I List-II
systems selling. It involves offering a complete solution A. Transfer of ownership I Negotiable
by bundling products and services to meet the Instrument
customer's specific requirements.
B. Sale of goodwill after II. Contract of
45. Which of the following are the assumption dissolution sale of Goods
underlying MM Theory of capital structure?
C. Buy back of shares III. Dissolution of
A. Perfect capital Market
Partnership
B. Heterogeneous Expectations Firm
C. Absence of Taxes
D. Promissory Note IV. Share Capital
D. 100% Dividend Payout of Company
E. Equivalent Risk Class
Choose the correct answer from the option
Choose the correct answer from the options given below:
given below:
(a) A-II, B-III, C-IV, D-I
(a) A, C & E Only
(b) A-I, B-II, C-III, D-IV
(b) B, C & E Only
(c) A-II, B-III, C-I, D-IV
(c) A, B, C & D Only
(d) A-I, B-III, C-II, D-IV
(d) B, C, D & E Only
Ans. (a) : The correct match is:-
Ans. (a) : MM theory was proposed by Franco
Modigliani and Merton miller in 1961. According to List-I List-II
this theory, the investment decision is dependent on the A. Transfer of II Contract of sale
investment policy of the company and not on the ownership of Goods
divided policy. B. Sale of goodwill after III. Dissolution of
following are the assumptions of MM Theory of capital dissolution Partnership Firm
structure:- C. Buy back of shares IV. Share Capital of
• Perfect capital market Company
• Fixed Investment Policy D. Promissory Note I. Negotiable
• Absence of Taxes Instrument
• Equivalent Risk class 48. ''Fiduciary relationship'' is a relationship
• Investor is indifferent between dividend & capital based on:
gain income. (a) Legal obligations
Hence, option (a) is correct answer. (b) Absolute trust and reliance
46. Which of the following are the schemes (c) Trade relation
promoted by NABARD? (d) Monetary benefits
A. Kisan Credit Card (KCC) Ans. (b) : A fiduciary relationship is based on absolute
B. Capital Investment Subsidy Scheme trust and reliance. In such a relationship, one party (the
C. Special Economic Zone Scheme fiduciary) is in a position of trust and must act in the
D. Rural Innovation Fund best interest of another party. often involving legal
E. Tribal Development Fund obligations, but the core of the relationship is trust and
Choose the correct answer from the options confidence.
given below: An example of a fiduciary relationship is the
(a) A, B, C & D Only relationship between attorney and client, CEO and
(b) B, C, D & E Only company etc.
(c) A, B, D & E Only 49. Match the List-I with List-II
(d) A, C, D & E Only List-I Trader List-II
Ans. (c) : The schemes promoted by NABARD Function/Activity
indude:- A. Hedger I Buying and selling
• Kisan credit card (KCC) shares quickly
• Capital Investment subsidy scheme. B. Speculator II. Reducing investment
• Rural Innovation fund. Risk
• Tribal Development fund. C. Arbitrageur III. Taking increased Risk
The special Economic zone scheme is not a scheme willingly
promoted by NABARD but is a government initative D. Scalper IV. Taking advantage of the
for industrial development. mismatch of the prices
Hence, option (c) is correct answer. in two markets

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 655 YCT
 Choose the correct answer from the option 52.
When the number of trials (n) is large but
given below: the probability success (p) is small,
(a) A-I, B-II, C-III, D-IV Binomial probability distribution can be
(b) A-II, B-I, C-III, D-IV approximated using:
(c) A-II, B-III, C-IV, D-I (a) Normal Distribution
(d) A-III, B-IV, C-II, D-I (b) Hyper geometric Distribution
Ans. (c) : The correct match between list-I with List- (c) Poisson Distribution heesFmeesve efJelejCe
II is as following- (d) Bernoulli Distribution
List-I/Trader List-II/Function/Activity
Ans. (c) : When the number of trials (n) is large, but the
A. Hedger II Reducing investment Risk probability of success (p) small, the Binomial
B. Speculator III Taking increased Riskprobability distribution can be approximated using the
willingly poison distribution. This approximation is valid when n
C. Arbitrageur IV Taking advantage of the is large and p is small such that the product n × p
mismatch of the prices inremains moderate (often denoted as the expected
two markets number of successes, λ = n × p).
D. Scalper I Buying and selling shares53. Assessment made not only from inside the
quickly company but from groups outside the
50. A company has Return on Assets (ROA) of organization is known as:
10% and profit margin of 2%. Compute the (a) 360-Degree Feedback
total assets turnover.
(b) 720-Degree Feedback
(a) 2.5% (b) 5%
(c) 7.5% (d) 10% (c) Performance Appraisal
(d) MBO
Ans. (b) : Given-
Return on Assets (ROA) = 10% Ans. (b) : The assessment that is made not only from
Profit margin = 2% inside the company but also from groups outside the
Total assets turnover =? organization is known as 720-Degree feedback. In it,
Formula to calculate the total assets turnover feedback is collected not only form internal sources
(such as peers, subordinates, and supervisors, as in 360-
ROA degree feedback) but also from external stakeholder like
=
Profit Margin customers, suppliers, and business, partners, providing a
10% more comprehensive evaluation.
= 54. The effect of exchange rate fluctuations on a
2%
= 5% firms future cost and revenues is termed as:-
The, total assets turnover is 5%. (a) Transaction Exposure
51. Determine the correct sequence of the steps (b) Translation Exposure
involved in the process of hypothesis testing (c) Accounting Exposure
A. Setting the null and alternative hypothesis (d) Operating Exposure
B. Setting the level of significance Ans. (d) : The effect of exchange rate fluctuations on
C. Determining the appropriate statistical test a firm's future costs and revenues is termed as
D. Setting the decision rule operating exposure. It also known as economic or
E. Analyzing the collected data strategic exposure, refers to the risk that exchange
Choose the correct answer from the options rate fluctuations will affect a firm's future cash flows,
given below: costs, and revenues, impacting its overall competitive
(a) B, A, C, D, E (b) B, C, A, D, E position.
(c) A, C, B, D, E (d) A, B, C, D, E 55. Match the List-I with List-II
Ans. (c) : The steps involved in the process of List-I List-II
hypothesis testing are as follows:-
A. Informal I Grouping of Jobs of
setting the null and alternative hypothesis Organisation similar nature
↓ B. Formal II. Interaction among
Deter min ing the apprropriatestatistical test Organisation people at work gives
rise to a network of
↓ social-relationship
setting the level of significance among employees
↓ C. Divisional III. The organisation
Structure structure comprises
Setting the decision rule separate business units
↓ D. Functional IV. Specifies clearly the
Analysing the collected data Structure boundaries of authority
and responsibility
UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 656 YCT
 Choose the correct answer from the option Choose the correct answer from the option
given below: given below:
(a) A-II, B-III, C-IV, D-I (a) A-I, B-II, C-III, D-IV
(b) A-II, B-III, C-I, D-IV (b) A-II, B-III, C-I, D-IV
(c) A-II, B-IV, C-III, D-I (c) A-III, B-IV, C-II, D-I
(d) A-II, B-IV, C-I, D-III (d) A-IV, B-III, C-I, D-II
Ans. (c) : The correct match from List-I with List-II Ans. (d) : The correct match from List-I with List-II
are as follows:- are as follows:-
List-I List-II List-I List-II
A. Informal II. Interaction among people (Technique) (Description)
Organisation at work gives rise to a A. Gordon IV Steering a discussion of
network of social- Technique crystallize solutions.
relationship among B. Morphologic III. Listing of alternative
employees al Analysis solution to problems
B. Formal IV. Specifies clearly the C. Built-in- I. Teaching the importance
Organisation boundaries of authority Tension of resolving matters
and responsibility D. Manodrama II. Insight into a given
C. Divisional III. The organisation structure interaction
Structure comprises separate 58. Which of the following are the price-adaption
business units strategies?
A. Price discounts and allowances
D. Functional I. Grouping of Jobs of
Structure B. Target return Pricing
similar nature
C. Geographical pricing
56. The liquidator after realizing the assets of the D. Differential pricing
company should distribute the proceeds among E. Going rate pricing
below mentioned claimants in which order? Choose the correct answer from the options
A. Liquidator's remuneration and cost of given below
expenses of winding up. (a) A, C & E Only
B. Legal charges (b) B, C & D Only
C. Claims of secured creditors (c) A, C & D Only
D. Preferential creditors and creditors secured (d) A, B & D Only
by floating charges Ans. (c) : Price adaptation referee to a business's ability
E. Unsecured Creditors to adjust its pricing models to suit various factors such
Choose the correct answer from the options as geographic area, consumer demands, and local
given below: incomes.
(a) A, B, C, D, E (b) B, A, C, D, E The key price adapting strategies include:-
(c) B, C, A, D, E (d) A, C, B, E, D • Geographical pricing.
Ans. (b) : The correct order of distribution of proceeds • Price discounts and allowances.
after the liquidator has realized the assets of the • Differentiated/Discriminatory pricing.
company is as follows:- • Promotional pricing.
B. Legal charges Hence, option (c) is correct answer.
A. Liquidator's remuneration and cost of expenses of 59. Which of the following are included under
winding up. EPRG framework of internationalisation?
C. Claims of secured creditors A. Eco centrism
D. Preferential creditors and creditors secured by B. Ethno centrism
floating charges C. Poly centrism
E. Unsecured Creditors. D. Regio centrism
57. Match the List-I with List-II E. Geo centrism
List-I/metÛeer-I List-II/metÛeer-II Choose the correct answer from the options
given below:
Technique Decription
(a) B, C, D & E Only
A. Gordon I Teaching the (b) A, B, C & E Only
Technique importance of resolving (c) A, C, D & E Only
matters (d) A, B, C, & E Onlys
B. Morphologi II. Insight into a given Ans. (a) : The EPRG model stands for ethnocentric,
cal Analysis interaction polycentric, Regio centric and Geocentric approaches,
C. Built-in- III. Listing of alternative which describe the orientation of companies when
Tension solution to problems expanding internationally. It was introduced by howard
D. Manodram IV. Steering a discussion to V. perlmutter in 1969 for use in international marketing.
a crystallise solutions Hence, option (a) is correct answer.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 657 YCT
60. Which of the following section of Companies Ans. (c) : The environment that shapes the attitude of
Act, 2013 deals with amalgamation, absorption human beings, with great diversity in its impact, is the
and reconstruction? 'socio-cultural Environment'. It encompasses the social
(a) Section 139 (b) Section 219 and cultural factors that influence individuals' beliefs,
(c) Section 319 (d) Section 391 values, and behaviors.
Ans. (*) : Under the Companies Act, 2013, the 64. Compute the tax liability under default tax
provisions related to amalgamation, absorption, and regime of Mr. X (35 year), having total income
reconstruction are broadly dealt with in Sections 230
to 240, which replaced Section 391 of the Companies of ` 51,75,000 for the assessment year 2024-25.
Act, 1956. However, as per the context, Section 391 Assume that his total income comprises salary,
refers to the corresponding provision in the Companies income from house property and interest on
Act, 1956. fixed deposit:
Note: This question has been dropped by the UGC from (a) 13,75,000 (b) 13,77,750
evaluation. (c) 14,30,000 (d) 14,75,000
61. Arrange the steps of Capital Budgeting Process Ans. (c) :
in correct sequence. 65. The general consideration applicable to tax
A. Preparation of Capital Budget and planning in the field of business deduction
Appropriation revolve around which of the following?
B. Performance Review A. Allowability
C. Assembling of Investment Proposals
B. Year of allowability
D. Identification of Investment opportunities
E. Decision Making C. Extent of allowability
Choose the correct answer from the options D. Carry forward to future years
given below: Choose the correct answer from the options
(a) D, C, E, A, B (b) A, C, D, B, E given below:
(c) A, D, C, B, E (d) B, D, C, E, A (a) A & B Only (b) A & C Only
Ans. (a) : The steps of capital budgeting process are as (c) A, B & C Only (d) A, B, C & D
follows:- Ans. (d) : The general considerations in tax planning
Identification of Investment opportunties. for business deductions include:-
• Allow ability
↓ • Year of Allow ability
Assembling of Investment proposals • Extent of allow ability.
↓ • Carry forward to future years.
Decision Making 66. Which of the following capital budgeting
Techniques follows the discounting criteria?
↓ A. Net Present Value
Pr eparation of capiatal Budget and Appropriation B. Benefit-cost Ratio
C. Accounting Rate of Return
↓ D. Internal Rate of Return
Performance Re view E. Payback Period
62. An appeal that elaborate on non-product Choose the correct answer from the options
related benefit or image and attempts to induce given below:
emotional responses from consumers is called: (a) A, B, C, D Only (b) B, C, D Only
(a) Physiological Appeals (c) A, B, D Only (d) A, C, D Only
(b) Informational Appeals Ans. (c) : The following capital budgeting techniques
(c) Sociological Appeals follow the discounting criteria:-
(d) Transformational Appeal • Net Present value (NPV)- It calculates the present
Ans. (d) : An appeal that elaborate on a non product value of cash inflows and outflows to assess
related benefit or image and attempts to induce investment profitability.
emotional responses from consumer is called
Transformational Appeal. For example:- • Benefit-cost-Ratio- (BCR)- It evaluates the
relationship between discounted benefits and costs.
CoCa-cola advertisements often focus on feelings of
happiness, togetherness, and enjoyments. • Internal Rate of Return (IRR):- It determines the
63. Which environment shapes the attitudes of discount rate that makes the NPV of cash flows
human beings, though there may be great equal to zero.
diversity in its impact? However, Accounting Rate of Return (ARR) and Pay
(a) The Political Environment back period are not follows discounting criteria as ARR
(b) International Environment relies on accounting profits rather than cash flows, and
(c) The Socio-Cultural Environment payback Period does not consider the time value of
(d) The Economic Environment money.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 658 YCT
67. According to Proposition II of Modigliani- C. Penalty for III. Imprisonment
Miller theory of capital structure, which of the Breach of upto 2 years or
following statements is true? confidentiality fine which may
(a) Financial Leverage has no effect on the and privacy extend to one lakh
wealth of shareholders. (Sec.72) rupees or with
(b) Financial Leverage increases with wealth of both.
shareholders. D. Punishment for IV. Imprisonment
(c) Rate of return expected by shareholders cyber extends to
increases with the increase in equity financing. terrorism imprisonment for
(d) Rate of return expected by shareholders (Sec-66F) life.
increases with financial leverage.
Choose the correct answer from the option
Ans. (d) : According to proposition II of Modigliani given below:
Miller theory of capital structure 'rate of return expected
(a) A-I, B-II, C-III, D-IV
by shareholders increases with financial leverage'. It
states that while the overall value of the firm remains (b) A-II, B-I, C-IV, D-III
unaffected by its capital structure in a perfect market, (c) A-II, B-III, C-I, D-IV
the expected return on equity increases with the use of (d) A-III, B-IV, C-I, D-II
financial leverage. So, option (d) is correct statement. Ans. (c) : The correct match from List-I with List-II
68. Match the List-I with List-II are as follows:-
List-I List-II List-I List-II
A. Personal I Commercially significant A. Tampering with II. Imprisonment upto
Selling news computer source 3 years, or fine of
B. Advertising II. Advertising within buses, documents (sec.65) ` 2 lakh or both
railway compartments
B. Penalty for III. Imprisonment upto
C. Transit III. Non-personal 2 years or fine
misrepresentation
advertising communication
(sec.71) which may extend
D. Publicity IV. Two way communication to one lakh rupees
Choose the correct answer from the option or with both.
given below: C. Penalty for breach I. Imprisonment upto
(a) A-I, B-II, C-III, D-IV of confidentiality 2 years and/or fine
(b) A-II, B-III, C-IV, D-I and privacy upto ` 1 lakh
(c) A-I, B-III, C-II, D-IV (sec.72)
(d) A-IV, B-III, C-II, D-I
D. Punishment for IV. Imprisonment
Ans. (d) : The correct match from List-I with List-II
cyber terrorism extends to
are as follows:-
(Sec - 66F) imprisonment for
List-I List-II life.
A. Personal Selling IV. Two way
70. Which of the following are included in Foreign
communication
Direct Investment?
B. Advertising III. Non-personal A. Wholly owned subsidiary
communication
B. Joint venture
C. Transit advertising II. Advertising within
C. Investment in GDR
buses, railway
compartments D. Acquisition
D. Publicity I. Commercially E. Investment by FIIs
significant news Choose the correct answer from the options
69. Match the List-I with List-II givens below:
Match the offences and their corresponding (a) A & B Only
penalties as per I.T Act-2000. (b) B, C & D Only
List-I/metÛeer-I List-II (c) C, D & Only
(d) A, B & D Only
A. Tampering with I Imprisonment
computer source upto 2 years Ans. (d) : Foreign Direct Investment (FDI) involves
documents and/or fine upto direct investment in business operations in another
(Sec.65) `1 lakh country through means like wholly owned subsidiaries,
B. Penalty for mis- II. Imprisonment joint ventures, and acquisitions Investments in GDR and
representation upto 3 years, or by Fill's are considered portfolio investments rather than
(Sec.71) fine of ` 2 lakh or FDI.
both Hence, option (d) is correct answer.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 659 YCT
71. Match the List-I with List-II C. To negotiate multinational trade agreements.
List-I List-II/metÛeer-II D. To make proposals for putting its principles
and policies into effect.
A. Buyer's Mind I Members of Social-club Choose the correct answer from the option
B. Personal II. Motivation given below:
Factor (a) A, B & C Only (b) B, C & D Only
C. Psychological III. Life Style (c) A, B & D Only (d) A, C & D Only
Factor Ans.(d): UNCTAD stands for 'United Nations
D. Reference IV. Black Box Conference on Trade and Development.' It was
Group established in 1964 as a permanent intergovernmental
Choose the correct answer from the option body under the United Nations.
given below: The principal function of UNCTAD are:-
(a) A-I, B-II, C-III, D-IV • To Promote international trade with a view to
accelerating economic. development.
(b) A-II, B-III, C-IV, D-I
• To formulate principles and policies on international
(c) A-III, B-IV, C-I, D-II trade and related problems of economic development
(d) A-IV, B-III, C-II, D-I • To negotiate multinational trade agreements.
Ans. (d) : The correct match from List-I with List-II • To make proposals for putting its principles and
are as follows:- polices into effect.
List-I List-II 75. Arrange the following steps of sampling design
A. Buyer's mind IV Black Box process in correct order.
B. Personal factor III. Life style A. Sampling frame must be determined
C. Psychological II. Motivation. B. Target population should be defined
according to objective
factor
C. Sampling process must be effectively executed
D. Reference Group I. Members of social D. Selecting a sampling technique
club E. Number of elements to be included in
72. What is the privilege of a holder in due course? the study must be carefully determined.
(a) The right to cancel the instrument at any time. Choose the correct answer from the options
(b) Instrument cleansing of all defects. given below:
(c) Exemption from legal obligations. (a) B, D, E, C, A (b) A, B, D, E, C
(d) Unrestricted transfer of the instrument. (c) A, C, B, D, E (d) B, A, D, E, C
Ans. (b) : According to section 53A of Negotiable Ans.(d): The steps of sampling design process are as
instrument Act 1881. A holder in due course holds the follows:–
negotiable instrument free from any defect of title of Step I–Target population should be defined according
prior parties, and free from defenses available to prior to objective.
parties among themselves, and may enforce payment of Step II–Sampling frame must be determined.
the instrument for the full amount there of against all Step III–Selecting a sampling technique.
parties liable thereon." Step IV–Number of elements to be included in the
study must be carefully determined.
73. Which of the following is not a feature of
Step V–Sampling process must be effectively executed.
capitalist economy?/efvecveefueefKele ceW mes keâewve-meer
76. Nicosia Model of consumer behaviour is
hetbpeerJeeoer DeLe&JÙeJemLee keâer efJeMes<elee veneR nw? divided into four major fields, which of the
(a) Right of private property following is the third field under this model?
(b) Freedom of choice to consumers (a) Feedback
(c) Government Interference (b) Act of Purchase
(d) High level of competition (c) Firm's and consumer's attributes
Ans. (c) : A capitalist economy is characterized by the (d) Search and evaluation
right to private property, freedom of choice to Ans.(b): The Nicosia Model of Consumer Behaviour is
consumers, and a high level of competition. a model that illustrates the relationship between a
Government interference is typically minimal, as consumer's decision-making process, a company's
capitalism emphasizes a free market system where marketing activities and the consumer's experience with
economic decisions are largely made by private the product. It was proposed by Francesco Nicosia in
individuals or businesses rather than the government. 1970's.
The model is divided into four major fields:–
74. Which of the following are the principal
• Firm's and consumer's attributes.
functions of UNCTAD?
• Search and evaluation
A. To promote International trade with a view
to accelerating economic development. • Act of purchase
B. To assist economic development of • Feedback
developing countries by promoting private Hence, option (b) act of purchase is the third field under
enterprises. this model.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 660 YCT
77. Arrange the following steps involved in the C. One of the events can II. Equally likely
process of IPO issue in correct order. not be expected to Events
A. Verification by SEBI occur in preference
B. Hiring an under writer over the other
C. Registration for IPO D. The occurrence of one IV. Mutually
D. Pricing of IPO event implies that the Exclusive
E. Allotment of shares other can not occur Events
Choose the correct answer from the options
given below: 79. Match the List-I with List-II
(a) A, C, D, B, E (b) A, D, C, B, E List-I List-II
(c) B, C, D, A, E (d) B, C, A, D, E A. Organisational I Refers to the
Ans.(d): The process involved in IPO issue are as stucture delegation of
follows– authority
throughout the
Hiring an under writer organisation.
↓ B. Span of II. Groups activities on
Management the basis of
Registration for IPO products.
↓ C. Divisional III. Refers to the
Structure number of
Verification bySEBI subordinates under
↓ a supervisor.
D. Decentralisation IV. The Framework
Pricing of IPO within which
↓ managerai and
operating tasks are
Allotment of Shares operated.
78. Match the List-I with List-II Choose the correct answer from the option
given below:
List-I List-II/metÛeer-II (a) A-I, B-II, C-III, D-IV
A. Joints occurrence of I Collective (b) A-III, B-II, C-I, D-IV
Events Exhaustive (c) A-II, B-III, C-IV, D-I
Events (d) A-IV, B-III, C-II, D-I
B. Outcome of an II. Equally likely Ans.(d): The correct match from List-I with List-II are
experiment consisting Events as follows:–
of all possible events List-I List-II
C. One of the events can III. Compound A. Organisational structure IV. The framework within
not be expected to Event which managerial and
operating tasks are
occur in preference operated.
over the other B. Span of Management III. Refers to the number of
D. The occurrence of one IV. Mutually subordinates under a
event implies that the Exclusive supervisor.
other can not occur Events C. Divisional structure II. Groups activities on the
Choose the correct answer from the option basis of products
given below: D. Decentralisation I. Refers to the delegation
of authority throughout
(a) A-III, B-I, C-II, D-IV the organisation
(b) A-IV, B-II, C-I, D-III
80. Match the List-I with List-II
(c) A-III, B-II, CI, D-IV
List-I List-II/metÛeer-II
(d) A-I, B-II, C-III, D-IVr
A. Unity of I Maintaining high morale
Ans.(a): The correct match of List-I with List-II are as Comman among employees is
follows:– d imperative
List-I List-II B. Unity of II. Hierarchical, formalized
A. Joints occurrence of III Compound Direction communication channel
Events Event C. Scalar III. Functions have only one
B. Outcome of an I. Collective Chain plan and one boss
experiment consisting Exhaustive D. Espirit de IV. Sub-ordinates reports to
of all possible events/ Events Corps only one boss

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 661 YCT
 Choose the correct answer from the option Ans.(c): The phase of the International Monetary
given below: system in chronological order (old to new) are as
(a) A-I, B-II, C-III, D-IV follows:–
(b) A-I, B-IV, C-III, D-II Phase of International Monetary Order with
(c) A-IV, B-III, C-II, D-I System Duration
(d) A-II, B-III, C-IV, D-I B. Gold specie standard 1821
Ans.(c): The correct match from List-I with List-II are A. Gold Bullion Standard 1925-1931
as follows:– D. Gold Exchange Standard 1870-1944
List-I List-II E. Bretton woods System 1944-1971
A. Unity of IV. Sub-ordinates reports to C. Floating Exchange Rate 1973-Present
Command only one boss 83. The tax planning strategies used by
multinational enterprises that exploit gaps and
B. Unity of III. Functions have only one mismatches in tax rules to avoid paying tax is
Direction plan and one boss known as:
C. Scalar Chain II. Hierarchical, formalised (a) AEPS (b) BEPS
communication channel (c) EBPS (d) CEPS
Ans.(b): BEPS (Base Erosion and profit shifting) refers
D. Espirit de I. Maintaining high morale
Corps among employees is to the tax planning strategies used by multinational
imperative enterprises to exploit gaps and mismatches in tax rules.
These strategies allow companies to shift profits from
81. Tax treaties are generally based on which of higher-tax jurisdictions to lower-tax jurisdictions, thus
the following convention? reducing their overall tax liabilities.
A. OECD Model Tax Convention
84. Arrange the following forums in correct
B. UN Model Tax Convention
sequence of first appeal to final appeal by an
C. WTO Model Tax Convention assessee under Income Tax Act-1961
D. IMF Model Tax Convention
A. Supreme Court
Choose the correct answer from the options
B. High Court
given below:
(a) A & B only (b) A & C only C. Appellate Tribunal
(c) B & D only (d) A, B & C only D. Joint Commissioner
Choose the correct answer from the options
Ans.(a): Tax treaties are generally based on
given below:
internationally recognized models that provide guidance
on how countries should allocate taxing rights and (a) A, B, C, D (b) D, C, B, A
resolve tax disputes. (c) B, D, A, C (d) C, A, D, B
The two primary models used for tax treaties are:– Ans.(b): The correct sequence of forums for appeals
• OECD Model Tax Convention–It is developed by under the income Tax Act, 1961, from the first appeal to
organization for Economic Co-operation and the final appeal by an assessee are:–
Development. It is widely used by developed D. Joint Commission (Appeals)
countries and focuses on preventing double taxation C. Appellate Tribunal
by allocating taxing rights between the country of B. High Court
residence and country where the income is earned. A. Supreme Court
• UN Model Tax Convention–It is developed by 85. Which of the following are true about chi-
United Nations which provides more taxing rights to
square test and chi-sqare distribution?
source countries. It benefits developing nations that
often rely on foreign investment. A. Chi-square test is a non-parametric test.
Whereas WTO and IMF do not have model tax B. Chi-square test was developed by
conventions. spearman.
82. Arrange the following phases of International C. Chi-square distribution can never be
Monetary System in Chronological order (old negative.
to new). D. Chi-square distribution is a discrete
A. Gold Bullion Standard distribution.
B. Gold Specie Standard E. Chi-square distribution is a function of its
C. Floating Exchange Rate degree of freedom.
D. Gold Exchange Standard Choose the correct answer from the options
E. Bretton Woods System given below:
Choose the correct answer from the options (a) B, C & D Only
given below: (b) A, C & E Only
(a) A, B, E, D, C (b) A, D, E, C, B (c) A, B & D Only
(c) B, A, D, E, C (d) B, D, A, C, E (d) B, D & E Only
UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 662 YCT
Ans.(b): The correct statement about chi-square test and We use linter model to caculate the DPS for 2024
chi-square distribution are:– D1V1 – D1V0 = a × {(Cr × eps1) – D1V0}
A. Chi-square test is a non-parametric test. On putting the value on formula we get.
C. Chi-square distribution can never be negative. D1V1 – 1.2 = 0.7 × {(0.6 × 3) – 1.2}
E. Chi-square distribution is a function of its degree of D1V1 – 1.2 = 0.7 × (1.8 – 1.2)
freedom.
The correct form of false statements are:– D1V1 = 1.2 + 0.7 × 0.6
B. The Chi-square test was developed by Pearson not D1V1 = 1.2 + 0.42
Spearman. D1V1 = 1.62
D. The Chi-square distribution is a continuous The dividend per share of Rohtas Industries for the year
distribution. 2024 is 1.62.
86. Matrix organisation violates which of the 90. Which of the following are different types of
following management principles? dumping?
(a) Span of Management A. Persistent dumping
(b) Scalar chain B. Predatory dumping
(c) Unity of Direction C. Sporadic dumping
(d) Unity of Command D. Nomadic dumping
Ans.(d):A matrix organisation violates the ‘principle of Choose the correct answer from the options
unity command’. This principle state that each given below:
employee should report to only one manager, but in a (a) A & B Only (b) A, B & C Only
matrix structure, employees often have dual reporting (c) B & C Only (d) C & D Only
relationships. (eg. to both a functional and project
manager), leading to a violation of this principle. Ans.(b): In international trade, dumping occurs when a
country exports goods to another country at prices lower
87. Who among the following has given this than those in its domestic market or below production
definition of CSR? '' Wealth created from
society has to be ploughed back into society''. costs.
(a) Milton (b) Henry Ford Following are different types of dumping:–
(c) Mahatma Gandhi (d) Kay and Silberston • Peristent dumping
Ans.(c): The definition of Corporate Social • Predatory dumping
Responsibility (CSR) as ‘‘Wealth created from society • Sporadmic dumping
has to be ploughed back into society’’ was given by Hence, the option (b) A, B and C only is correct answer.
Mahatma Gandhi. He advocated for businesses to act as Comprehension: hindi from examination
trustees, using their wealth for the betterment of socity.
paper of hindi comprehension .
88. In the context of an organisation, the process of Solar Tech Ltd, a global solar panel
making subordinates to act in a desired manufacturer, sought to expand into emerging
manner to achieve certain organisational goals markets to counteract stagnation in its domestic
is known as: market. After analyzing global opportunities, the
(a) Employee participation company targeted India due to its favorable
(b) Co-partnership renewable energy policies and growing demand
(c) Affiliation for sustainable energy solution.
(d) Motivation Solar Tech Ltd. established a joint venture with a
Ans.(d): In the context of an organisation, the process local firm to leverage their market knowledge and
of making subordinates to act in a desired manner to distribution network. They also customized their
achieve certain organisational goals is known as products to meet local regulatory standards and
motivation. It involves encouraging and inspiring climatic conditions. Despite initial challenges,
employees to work towards achieving the goals set by such as navigating regulatory, complexities and
the organization. cultural differences, solar tech achieved a 25%
89. What will be the dividend per share of Rohtas market share within two years.
Industries for the year 2024 given the following The success of the company was attributed to
information about the company? strategic partnership, product customization and
EPS for 2024 = `3 effective market entry tactics. However it faced
DPS for 2023 = `1.2 ongoing issues with supply chain-disruption and
Target Payout Ratio = `0.6 the need for continuous innovation to stay
Adjustment Rate = `0.7 competitive.
(a) `1.8 (b) `1.62 91. Despite its success, what ongoing issue did
(c) `1.52 (d) `1.72 Solar Tech Ltd. encounter?
Ans.(b): Given (a) Decreasing customer base
EPS for 2024 = `3 (b) Increased competition from local brands
DPS for 2023 = `1.2 (c) Supply chain disruption
Target payout Ratio = ` 0.6 (d) Difficulties in securing financing
Adjustment Rate = ` 0.7 Ans.(c): Despite its success Solar Tech Ltd. faced
DPS for 2024 = ? ongoing issues with supply chain-disruption.

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 663 YCT
92. What was a key factor in Solar Tech Ltd. The CEO is puzzled to get the SMS, as he was
ability to achieve a 25% market share in India unable to find the required information. You are
(a) Price reduction required to help the CEO in finding relevant
(b) Aggressive advertising campaigns information from the SMS as indicated in the
(c) Strategic partnership and product customisation following questions:
(d) Government Subsidies 96. Compute the value of inventory from the data
Ans.(c): Strategic partnership and product given in case.
customisation are the factor which enables solar tech. to (a) `40,000 (b) `45,000
achieve 25% market share in India. (c) `50,000 (d) `60,000
93. What were some of the challenges Solar Tech. Ans.(a): Total Debt = 0.60 × `1,00,000 = 60,000
Ltd faced in Indian Market? Current Debt = 0.40 × 60,000 = ` 24,000
(a) Labour shortage and high tariffs Fixed assets = 0.60 × 1,00,000 = ` 60,000
(b) High inflation rate Total assets = 1,00,0000 + 60,000 = ` 1,60,000
(c) Political instability and poor infrastructure Sales = 2 ×1,60,000 = 3,20,000
(d) Regulatory complexities and cultural Inventory = Sales/Inventory Turnover
differences = `3,20,000/8
Ans.(d): Regularity complexities and cultural = `40,000
differences are those challenges that solar tech. Ltd. 97. Find out the value of total assets from the given
faced in Indian market. information
94. How did Solar Tech Ltd. initially approached (a) `80,000 (b) `1,20,000
the market entry into India? (c) `1,45,000 (d) `1,60,000
(a) By setting up a wholly owned subsidiary Ans.(d): Total assets = Owner's equity + total Debt
(b) Through a joint venture with a local firm Owner's equity = 1,00,000
(c) By acquiring a local competition Total Debt to owner's equity is 0.60
(d) By exporting products directly
Total debt = 0.60 × 1,00,000
Ans.(b): Solar Tech Ltd. initially approach the market = 60,000
entry into India through a joint venture with a local Total assets = 1,00,000 + 60,000
firm.
= 1,60,000
95. What was the primary reason for Solar Tech.
to expand its business to Indian market? 98. Identify the value of long term debt from the
(a) Declining domestic demand given data
(b) Favourable policies and growing demand in (a) `32,000 (b) `35,000
India (c) `36,000 (d) `39,500
(c) Lower production cost in India Ans.(c): Long term debt = total debt – current debt
(d) Saturated international market Total debt = 0.60 × 1,00,000
Ans.(b): Favourable policies and growing demand in = 60,000
India was the primary reason for Solar Tech. to expand Current debt = 0.40 × 60,000
its business to India Market. = 24,000
Comprehension: Long term debt = 60,000 – 24,000
The finance manager of ABC Ltd, a company = 36,000
based in Bangalore has gone on vacation to an 99. What would be the value of fixed assets as per
island with his family. The island has very poor the ratio given in the case?
connectivity and hence he is unable to make or (a) `50,000 (b) `60,000
receive calls. The CEO of the company send him a (c) `70,000 (d) `75,000
SMS to provide certain information related to
financial statement as he was unable to connect Ans.(b): Owner's equity = ` 1,00,000
due to network problems and CEO has a meeting Fixed assets to owner's equity = 0.60
with the chairman next day. ⇒ 0.60 × 1,00,000
The finance manager has no documents with him ⇒ 60,000
and he was also not able to take the help of 100. What would be the value of sales as per the
internet to send the desired information due to data given in case
lack of internet facility on the island. On the basis (a) `1,60,000 (b) ` 2,20,000
of his memory, he was able to send the following
information to the CEO through SMS, which was (c) ` 3,00,000 (d) ` 3,20,000
delivered after 2 hours. Sales
(A) Current Debt to Total Debt Ratio : 0.40 Ans.(d): Total assets Turnover =
Total Assets
(B) Total Debt to owner's equity : 0.60
On putting the value
(C) Fixed Assets to owner's equity : 0.60
(D) Total Assets turnover : 2 Times Sales
2×
(E) Inventory turnover : 8 Times 1, 60, 000
(F) Owner's equity :` 1,00,000 Sales = 3,20,000

UGC NTA NET Commerce June 2024 (Re-Exam) Shift-II 664 YCT