CAIIB – ABFM – Mock Test- 08

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What distinguishes the H model from the traditional two-stage model in terms of the exceptional growth rate?

The exceptional growth rate decreases linearly in the H model but not in the traditional two-stage model.

The H model assumes a higher exceptional growth rate than the traditional two-stage model.

The H model assumes no exceptional growth rate, while the traditional two-stage model assumes a constant exceptional growth rate.

The exceptional growth rate remains constant in the H model but not in the traditional two-stage model.

What challenges are associated with early studies in artificial intelligence concerning knowledge representation? A) Combinatorial explosion causing exponential slowdown B) Access to common sense knowledge C) The sub-symbolic nature of common sense knowledge D) Formal knowledge representations in various contexts

A and C

A and B

A, B, and C

A, C, and D

According to the initial definition, when is an entity considered a startup in India?

If its turnover for any financial year does not exceed Rs. 100 crore

Up to five years from the date of its incorporation/registration

If it is a private limited company

Up to ten years from the date of its incorporation/registration

What changes are expected in the market for venture capital? A) Venture capital becoming more decentralized B) Biotechnology and medical startups attracting significant interest C) Values of customers influencing the evolution of businesses D) Prospects for investment in private equity

B and C

A and B

A, B, and D

A, C, and D

What ae the special features of financial services companies that distinguishes them from other businesses. ? A) Use of debt for earning income B) Heavily Regulated Sector C) Difficulty in measuring reinvestment D) Capital Adequacy Norms

All of the above

a and b

None of the above

a, c and d

Who sets the market standards for the documentation involved in acquisition finance conducted in Indian rupees (INR)?

There is no universally acknowledged market standard for such documentation

Securities and Exchange Board of India (SEBI)

Companies Act of 2013

Reserve Bank of India (RBI)

What is the primary focus of effective financial management regarding corporate valuation?

Optimizing value creation for shareholders

Enhancing market share

Reducing operational costs

Maximizing revenue

Why is the Contingency School of Management criticized?

It is criticized for providing standardized principles for specific situations.

It is criticized for not emphasizing leadership styles enough.

It is criticized for being too rigid in its principles.

It is criticized for being too expensive in terms of time and money.

Which of the following is NOT a pre-offer defense strategy used by target organizations?

Pacman defense

Staggered board

Golden parachute

Poison pills

10.

How can historical data be used to estimate the sales-to-capital ratio in Step 4 of the analysis framework?

By examining the company’s history, which is always available.

By solely relying on industry averages.

By looking at the history of the company and the industry averages.

By assuming a fixed sales-to-capital ratio for all companies.

11.

What is the primary objective of Fund of funds funding?

Investing in other funds

Real estate private equity

Leveraged buyouts

Investing in public markets

12.

What is one of the disadvantages of performance appraisals systems?

They use elements that are always accurate and appropriate.

Managers conducting the appraisals may lack the necessary qualifications.

They accurately evaluate nebulous aspects like attitude and initiative.

They are not impacted by the elements used for evaluation.

13.

What is one drawback of using preference capital for financing from the perspective of equity shareholders?

Lower cost of funding

Dividend on preference shares is tax-deductible

Higher voting rights for equity shareholders

Possibility of management interference in case of non-payment of dividends

14.

How might a corporate benefit from diversification in terms of risk mitigation?

Diversification can reduce overall risk and protect against cyclical downturns in specific projects

Diversification leads to higher profitability of individual projects.

Diversification always results in increased shareholder favor.

Diversification adds substantial risk to the corporate profile.

15.

What is the primary factor that influences the effectiveness of the decision-making process?

The use of objective probability based on past experience

The quality of data, analytical skills, and experience of decision makers

The assignment of probabilities to estimated outcomes

The level of risk associated with the decision

16.

What role does a venture capitalist undertake post-investment in a company?

Minimal participation in company activities

Representation on the company’s board of directors for oversight

Involvement in day-to-day operations

Sole decision-making power in the company

17.

What is a common strategy normally adopted by corporates to hedge against exchange rate fluctuations in foreign investments?

Hedging the entire amount of funds exposed to currency risk

Relying solely on market index fluctuations

Investing in unrated debt securities

Constructing a currency-specific hedge portfolio

18.

What is the main focus of the "Unfreeze" phase in Lewin's Change Management Model?

Resisting any form of change

Preparing the organization for change

Implementing the desired change

Returning to the previous state

19.

What is the main difference between extrinsic and intrinsic motivations?

Extrinsic motivations are more sustainable over time.

Intrinsic motivations result from external factors.

Extrinsic motivations come from outside sources, while intrinsic motivations come from within the individual.

Intrinsic motivations are driven by external rewards.

20.

How does HTTP header analysis assist in mobile web analytics?

Identifying user devices

Providing fundamental device and browser data

Tracking IP address changes

Accessing browser logs

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