ExamSpark CUET UG
Mock Test 14 Performance Solutions
Subject: Business Studies
Q1. A fast-growing IT startup, 'InnovateNext', has a policy of promoting its junior developers to team lead positions based on performance, rather than hiring senior managers from outside. However, for a new division in Artificial Intelligence, they are struggling to find the right talent internally. This situation highlights a critical limitation of which source of recruitment?
Correct Answer: Option A (It is an incomplete process as it relies on external sources for filling higher-level jobs.)
Explanation: Detailed explanation will be updated shortly.
Q2. A manager at a textile manufacturing firm observes that the cost of procuring premium cotton (a key raw material) has increased by 15%. Instead of monitoring the cost of every single input like threads, buttons, and packaging, he decides to focus control measures exclusively on the procurement and usage of cotton. Which principle of controlling is being applied here?
Correct Answer: Option A (Management by Exception)
Explanation: Detailed explanation will be updated shortly.
Q3. 'GreenLeaf Organics', a company selling organic vegetables, decides to launch a new line of processed foods like organic jams and sauces. This decision would primarily impact the _______ of its product mix.
Correct Answer: Option A (Depth)
Explanation: Detailed explanation will be updated shortly.
Q4. An established FMCG company, known for its stable and predictable earnings, decides to issue a large tranche of debentures to finance its expansion. The finance manager justifies this by stating that it will increase the earnings per share (EPS) for the equity shareholders. This phenomenon is known as:
Correct Answer: Option A (Favourable Financial Leverage)
Explanation: Detailed explanation will be updated shortly.
Q5. A consumer, Mr. Sharma, purchased a high-end smartphone online. The advertisement claimed a "24-hour battery backup under normal usage." However, the phone's battery drains in just 8-10 hours. Under the Consumer Protection Act, 2019, this falls under which category?
Correct Answer: Option A (Restrictive Trade Practice)
Explanation: Detailed explanation will be updated shortly.
Q6. The top management of 'AutoDrive Inc.' has articulated a broad guideline that "all customer complaints must be resolved within 48 hours." This is an example of a:
Correct Answer: Option A (Policy)
Explanation: Detailed explanation will be updated shortly.
Q7. A supervisor in a factory notices that his team, despite being skilled, is underperforming. He starts holding brief, informal morning meetings to discuss non-work-related topics, celebrates employees' birthdays, and organizes a monthly team lunch. Which level of need in Maslow's Hierarchy is he trying to fulfill?
Correct Answer: Option A (Esteem Needs)
Explanation: Detailed explanation will be updated shortly.
Q8. SEBI's function of defining the code of conduct for brokers and underwriters and taking action against those who violate it is a part of its:
Correct Answer: Option A (Regulatory Function)
Explanation: Detailed explanation will be updated shortly.
Q9. A company requires funds for a period of 90 days to meet its seasonal working capital requirements. It wishes to raise unsecured funds in the form of a promissory note. Which money market instrument would be the most suitable?
Correct Answer: Option A (Treasury Bill)
Explanation: Detailed explanation will be updated shortly.
Q10. Assertion (A): In a Divisional structure, conflicts are more likely to arise between different departments (e.g., production and sales) within the same division.
Reason (R): A Divisional structure is based on product specialisation, and each division has all the necessary functions like production, marketing, and finance within it.
Correct Answer: Option A (: In a Divisional structure, conflicts are more likely to arise between different departments (e.g., production and sales) within the same division.
Reason (R): A Divisional structure is based on product specialisation, and each division has all the necessary functions like production, marketing, and finance within it.)
Explanation: Detailed explanation will be updated shortly.
Q11. A manager delegates a task to a subordinate but does not grant him the permission to access the company's internal data required to complete it. Later, when the task is incomplete, the manager holds the subordinate responsible. Which principle of effective delegation is violated here?
Correct Answer: Option A (Principle of Absoluteness of Accountability)
Explanation: Detailed explanation will be updated shortly.
Q12. The Indian government's "Make in India" initiative, which encourages domestic manufacturing, is an example of which dimension of the business environment?
Correct Answer: Option A (Economic Environment)
Explanation: Detailed explanation will be updated shortly.
Q13. A company launches a new, technologically advanced water purifier with unique features not available with any competitor. It sets a very high initial price to recover its R&D costs quickly before competitors can enter the market. This pricing strategy is known as:
Correct Answer: Option A (Price Penetration)
Explanation: Detailed explanation will be updated shortly.
Q14. Which of the following statements best illustrates that management is a 'dynamic function'?
Correct Answer: Option A (A company's management team consists of individuals with different skills and backgrounds.)
Explanation: Detailed explanation will be updated shortly.
Q15. A plan becomes the standard against which actual performance is measured. This statement highlights the intricate relationship between:
Correct Answer: Option A (Planning and Organising)
Explanation: Detailed explanation will be updated shortly.
Q16. The process of converting a marketing message into symbolic form, such as words, pictures, or gestures, is known as:
Correct Answer: Option A (Decoding)
Explanation: Detailed explanation will be updated shortly.
Q17. A company's stock is listed on the National Stock Exchange (NSE). An existing shareholder wants to sell their shares to another investor. This transaction will take place in the:
Correct Answer: Option A (Primary Market)
Explanation: Detailed explanation will be updated shortly.
Q18. A finance manager observes that the company's Debt-to-Equity ratio is 3:1, while the industry average is 1:1. The Interest Coverage Ratio is also precariously low. What would be the most prudent decision regarding the capital structure?
Correct Answer: Option A (Issue more debentures to take advantage of low-interest rates.)
Explanation: Detailed explanation will be updated shortly.
Q19. A team leader, while assigning a project, clearly defines the objectives, allocates resources, and specifies the deadlines. However, he allows the team members to choose their own methods and approach to achieve the objectives. Which leadership style is he demonstrating?
Correct Answer: Option A (Autocratic Leadership)
Explanation: Detailed explanation will be updated shortly.
Q20. Fayol's principle of 'Esprit de Corps' is most closely violated when a manager:
Correct Answer: Option A (Fails to provide timely feedback to his subordinates.)
Explanation: Detailed explanation will be updated shortly.