Classical

JUNE 2013 - Paper 2

1:  

The hypothesis that 'consumption in one period would be a function of income in that period and the rehlrns on savings of the previous period' is given by

A.

Irving Fisher

B.

Franco Modigliani

C.

Duesenberry

D.

Robert Hall

 
 

Option: B

Explanation :


2:  

From the following identify one which is not a property of Indifference curve?

A.

Indifference curves are downward sloping

B.

Indifference curves are concave to the origin

C.

Indifference curves are convex to the origin

D.

Indifference curves do not intersect each other

 
 

Option: B

Explanation :


3:  

Which one of the following statements is true?

A.

Business decisions cannot be taken without a sound knowledge of Macro Economic Theories

B.

Knowledge of Economic Theory is misleading in making business decisions.

C.

With the help of Economic Theories, it is always possible to predict the future accurately.

D.

Every Economic Theory is based on realistic facts which are common to all societies

 
 

Option: D

Explanation :


4:  

Arrange the following in the proper order for decision under, capital budgeting.

(i) Estimating the cost and benefits of proposals

(ii) Deciding the investment objective.

(iii) Selecting the best investment proposal.
 
(iv) Applying the capital budgeting decision technique
 
A.

(ii) (iv) (i) (iii)

B.

(ii) (iv) (iii) (i)

C.

(ii) (i) (iv) (iii)

D.

(ii) (i) (iii) (iv)

 
 

Option: B

Explanation :


5:  

Match the following items in List - A with the most appropriate options from List - B :

List - A

List - B

a. A lender buys securities to protect himself from falling interest rate

1. Interest rate collar

b. A borrower buys securities to protect himself from rising interest rate

2. Interest rate cap

c. A combination of interest rate cap and floor

3. Interest rate corridor

d. A combination of two or more interest rate caps

4. Interest rate floor

 

A.

a   b   c   d

2   4   3   1

B.

a  b  c   d

4  2   1  3

C.

a  b  c   d

4  2  3  1

D.

a  b  c   d

3  2   1  4

 
 

Option: D

Explanation :




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