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In each of the cases/statements given below, one of four alternatives is correct. Indicate the correct answer :

Q1: McCarthy’s marketing mix refers to

(A) Price, push, pull and product

(B) Price, promotion, place and product

(C) Price, profit, promotion and product

(D) Price, promotion, profits and product

View Answer

Answer: (B) Price, promotion, place and product

Q2: Pepsi’s “Nothing Official About it” would be an example of

(A) Mission

(B) Vision

(C) Strategic intent

(D) Policy

View Answer

Answer: (C) Strategic intent

Q3: Which of the following market structures would be commonly identified with FMCG products?

(A) Monopoly

(B) Monopolistic competition

(C) Oligopoly

(D) Perfect competition

View Answer

Answer: (B) Monopolistic competition

Q4: Judy Strauss and Raymond Frost’s e-marketing model defines e-business as

(A) EB = EC + SCM + ERP

(B) EB =EC + BI + CRM + SCM + ERP

(C) EB =EC+BI+CRM

(D) EB = CRM + SCM + ERP

View Answer

Answer: (B) EB =EC + BI + CRM + SCM + ERP

Q5: The competitive advantage through market share approach is derived from

(A) Economies of scale

(B) Experience

(C) Market power

(D) All of the above

View Answer

Answer: (D) All of the above

Q6: The introduction of ‘Nano’ by Tata Motors could be viewed as a good example of

(A) Price leadership

(B) Cost leadership

(C) Product leadership

(D) Technology leadership

View Answer

Answer: (B) Cost leadership

Q7: ABC involves

(A) Innovative approach to reduction of cost

(B) Process analysis, cost drivers and innovative approach to reduction of cost

(C) Process analysis and innovative approach to reduction of cost

(D) Process analysis and cost drivers to reduction of cost

View Answer

Answer: (B) Process analysis, cost drivers and innovative approach to reduction of cost

Q8: The Product Market Matrix comprising of Strategies of Penetration, Market development, Product development and Diversification was first formulated by

(A) Ansoff

(B) Drucker

(C) Porter

(D) Andrews

View Answer

Answer: (A) Ansoff

Q9: In the words of Michale Dell, CEO, Dell Computer Corporation, “No advantage and no success are ever permanent. The winners are those who keep moving.” This requires the firm to have

(A) Focus

(B) Strategic flexibility

(C) Ability to diversify

(D) Ability to enter new emerging business

View Answer

Answer: (B) Strategic flexibility

Q10: Nine-cell GE Matrix is the same as the

(A) BCG Matrix

(B) Directional Policy Matrix

(C) PIMS Matrix

(D) 3 x 3 Competitive Positioning Matrixes

View Answer

Answer: (B) Directional Policy Matrix

State whether the following statements, based on the quoted terms, are ‘TRUE’ or ‘FALSE’ with justifications for your answer. If any statement is false, you are required to give the correct terms, duly quoted. No credit will be given for any answer without justification:

Q1: ‘Forward Integration’ means in-house production of critical inputs for the main business.

View Answer

Answer: False — The correct term is ‘Backward Integration’.

Q2: ‘Dogs’ are the products in a high growth market where they have a low market share.

View Answer

Answer: False — The correct term is ‘Question Marks’.

Q3: ‘Debt recovery’ is an arrangement to have debts collected by a factor company, which advances a proportion of the money it is due to collect.

View Answer

Answer: False — The correct term is ‘Factoring’.

Q4: ‘Management buy-in’ refers to the purchase of all or part of a business firm from its owners by the managers.

View Answer

Answer: False — MB occurs when a manager or a management team from outside the company raises the necessary fund, buys it, and becomes the company’s new management.

Q5: ‘Acquisition’ is nothing but the joining of two separate firms to form a single firm.

View Answer

Answer: False — The correct term is ‘Merger’.

Define the following terms (in not more than two sentences)

Q1: Tax Haven.

View Answer

Answer: A ‘Tax Haven’ is a place where certain taxes are levied at a low rate or not at all.

Q2: Franchise.

Answer: Franchise generally means a right or privilege. It may refer to :

Suffrage, the civil right to vote

Franchising, a business method that involves licensing of trademarks and methods of doing

business, such as :

Chain store, retail outlets which share a brand and central management

An exclusive right, for example to sell branded merchandise

Media franchise, ownership of the characters and setting of a film, video game, book, etc.,

A television franchise, a right to operate a television network.

A cable franchise, a right to operate a cable television network.

Q3: Corporate appraisal.

View Answer

Answer: The Corporate appraisal involves critical assessment of SWOT in relation to the internal and external factors affecting a firm.

Q4: Market segmentation.

View Answer

Answer: Market segmentation is the division of market into fairly homogenous subsets, where each subset can be chosen, reached and served by its own tailored marketing mix.

Q5: Loss-Leader.

View Answer

Answer: ‘Loss leader’ means a product or services sold at market at lower-than-normal margins (i.e., probably at a loss) in order to attract customers who might then buy other items of the same company at normal prices.

SECTION – II – Risk Management

In each of the cases/statements given below, one of four alternatives is correct. Indicate the correct answer

Q1: Financial Risk arises out of

(A) The nature of the financial transaction

(B) Conduct of business and investment

(C) Both (A) and (B)

(D) Increase of competition

View Answer

Answer: (C) Both (A) and (B)

Q2: Types of risk does not include

(A) Business Risks

(B) Market Risks

(C) Interest Rate Risks

(D) Uncertainties

View Answer

Answer: (D) Uncertainties

Q3: Which of the following does not relate to EVA?

(A) Customer satisfaction

(B) Operating profits

(C) Tax

(D) Cost of capital

View Answer

Answer: (A) Customer satisfaction

Q4: Which of the following does not relate to BPR?

(A) Reverse engineering

(B) Gap analysis

(C) Process focus

(D) Ambition

View Answer

Answer: (A) Reverse engineering

Q5: Motorola learning lessons from Domino’s Pizza and Federal Express, to improve the speed of delivery for its cellular phones, comes under

(A) Strategic Benchmarking

(B) Functional Benchmarking

(C) Process Benchmarking

(D) Performance Benchmarking

View Answer

Answer: (A) Strategic Benchmarking

State whether the following statements, based on the quoted terms, are ‘TRUE’ or ‘FALSE’ with justifications for your answer. If any statement is false, you are required to give the correct terms, duly quoted. No credit will be given for any answer without justification

Q1: Physical risk arising out of social, political, legal and economic environments is often identified through the performance of lead indicators.

View Answer

Answer: True

Q2: Physical hazard is a condition stemming from material characteristics of an object.

View Answer

Answer: True

Q3: Risk cannot be avoided through insurance but may be considered as an means to transfer the risk.

View Answer

Answer: True

Q4: Interest rate risk refers to the uncertainty market volumes in the future and the quantum of future income caused by the variations in the interest rates.

View Answer

Answer: True

Q5: The EIRR is the measure most often used to indicate the economic viability of bank financial projects.

View Answer

Answer: True