UGC NET Management Previous Year Solved Papers - December 2019
- Option : C
- Explanation : Hubris: Richard Roll in 1986 spelled out his hubris hypothesis for merger activity. Hubris means over-weaning self-confidence or, less
kindly, arrogance. Managers commit errors of over-optimism in evaluating merger opportunities due to excessive pride or faith in their own abilities. The suggestion is that
some acquirers do not learn from their mistakes and maybe convinced that they can see an undervalued firm when others cannot. They may also think that they have
the talent, experience, and entrepreneurial flair to shake up a business and generate improved profit performance.
Note that the hubris hypothesis does not require the conscious pursuit of self-interest by managers. Th ey may have worthy intentions but can make mistakes in judgment.
37. The major factor that allowed Portfolio Theory to develop into Capital Market Theory is
- Option : A
- Explanation : Development of Capital Market Theory: The major factor that allowed Markowitz portfolio theory to develop into capital market theory is the concept of a risk-free asset, that is, an asset with zero variance. As we will show, such an asset would have zero correlation with all other risky assets and would provide the risk-free rate of return
(RFR).
This assumption of a risk-free asset allows us to derive a generalized theory of capital asset pricing under conditions of uncertainty from the portfolio theory. This achievement is generally attributed to William Sharpe (1964), who received a Nobel Prize for it, but Lintner (1965) and Mossin (1966) derived similar theories independently.
- Option : B
- Explanation : Negotiation refers to a process in which two or more entities come together to discuss common and conflicting interests in order to reach an agreement of mutual benefit. What needs emphasis is that there is no scope in negotiation for intimidation, or bludgeoning the other party into submission. Rather, it involves the more subtle art of persuasion, whereby all parties feel as though they have benefited. Negotiation should result in a win-win situation for all the parties involved.
In international business, negotiation involves handling cross-cultural nuances. In American and several European cultures, negotiations tend to assume an aggressive, adversarial manner. Negotiations in these societies view contracting as a win-lose proposition, taking pride in having driven the hardest bargain.
In Asian countries, negotiations take a much different form. The role of a contract in Asian societies is influenced by three aspects of local cultures. First, every person must strive to maintain harmony and accord in society. From childhood, individuals are taught to avoid disputes and acrimony in their personal and business relationships with others. Second, the maintenance of harmony and the importance placed on personal dignity stress the importance of not embarrassing others.
The considerable social pressure to avoid dishonour works in all aspects of life, including negotiating contracts and resolving contract disputes. Third, most Asians attach utmost importance to the social group to which one belongs, particularly to one’s school or company. Thus, business people may be characterised by their group loyalty, and their desire for group harmony and consensus.
Steps in International Negotiations: Experts on international negotiation agree that it involves at least seven steps: preparation, strategy, building the relationship, exchanging information and the first offer, persuasion, concessions and agreement (see Fig.)
39. Match the terms with the statement given below:
| (a) Human behaviour results from a continuous and multidirectional interaction between the person and the situation | (i) Interactionalism |
| (b) People are central to the organization and they must be developed to their potential | (ii) Productivity Approach |
| (c) Manager’s efficiency depends on optimum utilization of resources | (iii) Contingency Approach |
| (d) The belief that there is no one best option available for an organization | (iv) HR Approach |
- Option : C
- Explanation : Statistics are numerical characteristics of samples. Parameters are numerical characteristics of populations. When used to estimate a parameter, a statistic is termed an
estimator. Sample statistics are often symbolized by Roman letters, and population parameters are often symbolized by Greek letters.
Good estimators are efficient and unbiased. An efficient estimator requires a minimum of cases to generate a good estimate. An unbiased estimator neither overestimates nor underestimates a parameter. The sample mean ( X ), sample variance (s2), and sample proportion (p) are efficient and unbiased. The sample standard deviation (s) is efficient and has negligible bias.
Point estimates state-specific values. Interval estimates state a range of likely values. Sampling error is the difference between the sample statistic and the population parameter (sampling error = sample statistic – population parameter). A sampling distribution is the distribution of a statistic that results from selecting an infinite number of random samples of the same size from a given population.
