ExamSpark CUET UG
Mock Test 03 Performance Solutions
Subject: Business Studies
Q1. A start-up, "InnovateX," has a policy of allowing its software developers to spend 15% of their work time on personal projects they believe could benefit the company. This has led to the creation of two new successful products. Which principle of management is most effectively being demonstrated here?
Correct Answer: Option A (Esprit de Corps)
Explanation: Detailed explanation will be updated shortly.
Q2. Assertion (A): In the modern business environment, management is considered a multi-faceted and dynamic process.
Reason (R): Management involves the management of work, people, and operations, all of which are static and do not interact with each other.
Correct Answer: Option A (: In the modern business environment, management is considered a multi-faceted and dynamic process.
Reason (R): Management involves the management of work, people, and operations, all of which are static and do not interact with each other.)
Explanation: Detailed explanation will be updated shortly.
Q3. "Green-Volt," an electric scooter company, noticed that a government subsidy announcement (Political Environment) led to a sudden surge in funding from venture capitalists (Economic Environment) and accelerated R&D in battery technology (Technological Environment). This phenomenon highlights which feature of the business environment?
Correct Answer: Option A (Relativity)
Explanation: Detailed explanation will be updated shortly.
Q4. A company is facing a significant public relations crisis. The top management decides to issue a broad, comprehensive statement outlining the company's commitment to ethical practices and future conduct. This statement will guide all managers' decisions in similar situations. This statement is an example of a:
Correct Answer: Option A (Rule)
Explanation: Detailed explanation will be updated shortly.
Q5. Match List-I (Money Market Instrument) with List-II (Primary Issuer/Purpose).
| List-I | List-II |
| :--- | :--- |
| (a) Treasury Bill | (i) Large creditworthy companies for bridge financing |
| (b) Commercial Paper | (ii) Banks to maintain Cash Reserve Ratio |
| (c) Call Money | (iii) Exporters for financing working capital |
| (d) Commercial Bill | (iv) RBI on behalf of the Central Government |
Choose the correct option:
Correct Answer: Option A ((a)-(iv), (b)-(i), (c)-(ii), (d)-(iii))
Explanation: Detailed explanation will be updated shortly.
Q6. The HR manager of "Global Connect," a BPO, uses a series of tests where candidates are placed in life-like business situations and are asked to make decisions. They are observed by experts on their problem-solving and decision-making abilities. What type of selection test is being used?
Correct Answer: Option A (Personality Test)
Explanation: Detailed explanation will be updated shortly.
Q7. A manager at a manufacturing plant notices a 3% increase in raw material wastage. The acceptable limit is 2%. Simultaneously, he observes a 15% increase in electricity costs, where the critical permissible deviation is only 5%. According to the principles of control by exception, what should be his immediate course of action?
Correct Answer: Option A (Address both deviations with equal urgency.)
Explanation: Detailed explanation will be updated shortly.
Q8. "Aura Cosmetics" sells high-end organic skincare. Their marketing campaigns focus heavily on product quality, superior ingredients, and continuous product improvement, assuming that customers will automatically prefer a product with the best features. Which marketing management philosophy has the company adopted?
Correct Answer: Option A (Production Concept)
Explanation: Detailed explanation will be updated shortly.
Q9. A company with an EBIT (Earnings Before Interest and Tax) of ₹10,00,000 is considering two capital structure plans. Plan A: All Equity (1,00,000 shares @ ₹100). Plan B: Debt of ₹40,00,000 @ 10% interest and Equity of ₹60,00,000 (60,000 shares @ ₹100). The tax rate is 30%. What phenomenon explains the potential for higher EPS in Plan B?
Correct Answer: Option A (Financial Leverage)
Explanation: Detailed explanation will be updated shortly.
Q10. Mr. Sharma purchased a new laptop with a 1-year warranty. After 8 months, the screen started malfunctioning. The company's service center refused to repair it for free, citing "internal physical damage" without any proof. Which right of Mr. Sharma, as a consumer, is most directly violated here?
Correct Answer: Option A (Right to Safety)
Explanation: Detailed explanation will be updated shortly.
Q11. A firm is producing a single product line: "organic soaps." It plans to expand by introducing "organic shampoos" and "organic detergents." Which organisational structure would be most advisable for the company to adopt to manage this expansion effectively?
Correct Answer: Option A (Functional Structure)
Explanation: Detailed explanation will be updated shortly.
Q12. During an emergency at a chemical plant, the plant supervisor, Priya, took complete control, issued direct commands without consultation, and ensured a rapid, coordinated shutdown, preventing a major disaster. In this specific situation, her leadership style could be described as:
Correct Answer: Option A (Democratic)
Explanation: Detailed explanation will be updated shortly.
Q13. SEBI's requirement for companies to disclose all material information through a structured process and the prohibition of insider trading primarily serves to uphold which function of the stock exchange?
Correct Answer: Option A (Providing liquidity and marketability to existing securities)
Explanation: Detailed explanation will be updated shortly.
Q14. A consumer purchased a geyser for ₹22,000 which turned out to be defective. He also claims compensation for mental agony and medical expenses incurred due to an injury caused by it, totaling his claim to ₹95 lakhs. Where should he file his complaint?
Correct Answer: Option A (District Commission)
Explanation: Detailed explanation will be updated shortly.
Q15. Which of the following is NOT a characteristic of 'Coordination'?
Correct Answer: Option A (It is a deliberate function.)
Explanation: Detailed explanation will be updated shortly.
Q16. A company sets its pricing low to penetrate the market deeply and quickly, aiming to capture a large market share from the outset. Which element of the marketing mix is the primary focus of this strategy?
Correct Answer: Option A (Product)
Explanation: Detailed explanation will be updated shortly.
Q17. The process of converting the message of a promotion into a comprehensible set of symbols, pictures, or words by the sender is known as:
Correct Answer: Option A (Decoding)
Explanation: Detailed explanation will be updated shortly.
Q18. A manager's ability to see the organization as a whole, understand the complex relationships between different departments, and visualize the organization's fit within the broader industry is an example of:
Correct Answer: Option A (Technical Skills)
Explanation: Detailed explanation will be updated shortly.
Q19. Which of the following is a key limitation of using internal sources of recruitment?
Correct Answer: Option A (It is more expensive than external sources.)
Explanation: Detailed explanation will be updated shortly.
Q20. The primary objective of Financial Management is:
Correct Answer: Option A (Maximisation of profit.)
Explanation: Detailed explanation will be updated shortly.