CA Foundation Business & Commercial Knowledge Study Material Chapter 6 Common Business Terminologies – Test Questions

1. A stock that provides regular dividends even during economic downturn is called
(a) Listed
(b) Crow Stock
(c) Income Stock
(d) Defensive Stock

2. Carrying forward a transaction from one settlement period to the next is known as
(a) Basket Trading
(b) Margin Trading
(c) Badla
(d) Option deal

3. Call is the opposite of
(a) Equity
(b) Bid
(c) Ask/offer
(d) Equity

4. A speculator who buys securities in anticipation of increase in prices is called
(a) Stag
(b) Bull
(c) Bear
(d) None of them

5. A bear market means
(a) A market wherein share prices are falling consistently
(b) A market wherein share prices are rising consistently
(c) A market wherein share prices are stable
(d) None of the above

6. Simultaneous purchase and sale of the same stock in two different markets is known as
(a) Basket trading
(b) Badla
(c) Arbitrage
(d) Margin Trading

7. Buying or selling all 30 scrips of sensex in pro-portion of their current weights in the sensex in one go is called
(a) Basket trading
(b) Arbitrage
(c) Badla
(d) Margin Trading

8. The relationship between the price of a share and the sensex is measurably
(a) Alfa
(b) Beta
(c) Book value
(d) Annuity

9. Combination of two or more firms into one firm is called
(a) Consolidation
(b) Yield
(c) Option
(d) None of the above

10. An option to buy a particular share at a specified price within a specified future period is known as
(a) Put option
(b) Bid
(c) Offer
(d) Case option

11. The value of a share printed on the share certificate is called
(a) Face value
(b) Market Value
(c) Future value
(d) Current value

12. Sensex is made up of how many scrips
(a) 50
(b) 30
(c) 40
(d) 20

13. Nifty consists of how many scrips
(a) 20
(b) 30
(c) 40
(d) 50

14. When a company makes first issue of shares to the general public it is called
(a) ADR
(b) GDR
(c) CD
(d) IPO

15. A textile firm enters into cement manufacturing business. It is an example of:
(a) Consolidation
(b) Diversification
(c) Liquidation
(d) Turnaround

16. The strategy used to minimize the risk and maxi-mize the return on an investment is called
(a) Hedge
(b) Index
(c) Bid
(d) Offer

17. The statistical measure of changes in prices on a stock exchange is:
(a) Dividend
(b) Index
(c) Beta
(d) Bid

18. A security whose price is derived from one or more underlying assets is a
(a) Blue Chip
(b) Derivative
(c) Hedge
(d) Index

19. Piecemeal sale of the assets of a division of the company is called
(a) Modernization
(b) Diversification

20. Total share holding of an investor is known as his/her
(a) Mutual Fund
(b) Holding Period
(c) Pastfolio
(d) Limit order

21. Dividing a share with a face value of Rs. 100 each into 10 shares with a face value of Rs. 10 each is an example of
(a) Sheet selling
(b) Liquidation
(c) Diversification
(d) Stock split

22. Paid form of non-personal promotional of ideas, goods and services by an identified sponsor is called :
(a) Adventuring
(b) Sales promotion
(c) Personal Selling
(d) None of the above

23. The process of comparing the products and services with those of best in the industry to improve quality and performance is known as
(a) Advertising
(b) After-sale-Device
(c) Benchmarking
(d) None of the above

24. Commitment of customers to a particular brand is called
(a) Brand Equity
(b) Brand recognition
(c) Brand loyalty
(d) Benchmarking

25. A combination of several firms working together to build or buy something is known as:
(a) Business Modal
(b) Business Portfolio
(c) Combination
(d) Consortium

26. The values, beliefs and traditions shared by the members of a company is called
(a) Corporate culture
(b) Consortium
(c) Cross selling
(d) None of the above

27. Giving unique identity to a product to differentiate it from rival products means
(a) Direct marketing
(b) Differentiation
(c) Diversification
(d) None of the above

28. It is the process of eliciting support for a company and its activities from its employees. Name it
(a) Internal Marketing
(b) Direct Marketing
(c) Internet Marketing
(d) None of the above

29. A company created jointly by two or more companies for mutual advantage is called
(a) Consolidation
(b) Merger
(c) Joint Venture
(d) None of the above

30. Dividing the total market into several groups on the basis of consumer characteristics is known as:
(a) Market segmentation
(b) Market Development
(c) Market Research
(d) None of the above.

31. Offering existing products or their new version to a new customer group is called
(a) Market entity
(b) Market Positioning
(c) Market Development
(d) None of the above

32. Selecting the most attractive market segment for a particular product or product line is known as
(a) Market Positioning
(b) Market Entry
(c) Target Marketing
(d) None of the above

33. It is the exploitation of small market segments, name it
(a) Direct Marketing
(b) Niche Marketing
(c) Mass Marketing
(d) None of the above

34. A product’s customer benefit that no other product can claim is known as
(a) Opportunity
(b) Publicity
(c) Unique Selling Proposition
(d) None of the above.

35. The rate at which the Reserve Bank of India lends, money to commercial banks for long period is called
(a) Repo Rate
(b) Goring Rate
(c) Bank Rate
(d) None of the above

36. The money deposit made by the buyer to the seller of real estate during negotiation stage is known as
(a) Earnest Money Deposit
(b) Fixed Deposit
(c) Current Deposit
(d) None of the above

37. The document issued by a bank on behalf of the importer promise to pay money for imported goods is called
(a) Letter of credit
(b) Debt Card
(c) Bank Draft
(d) None of the above

38. The rate of interest offered by the Reserve Bank of India on deposit of surplus funds by commercial banks is known as
(a) Bank Rate
(b) Repo Rate
(c) Reverse Repo rate
(d) None of the above

39. Jan Dhan Account is an example of
(a) Current Account
(b) Fixed Deposit Account
(c) Zero Balance Account
(d) None of the above

40. The rate of interest at which banks borrow money for short periods from the Reserve Bank of India is called.
(a) Bank Rate
(b) Repo Rate
(c) Reserve Repo Rate
(d) None of the above

41. Profits, people and planet together constitute a company’s
(a) Vision
(b) Mission
(c) Triple Bottom Line
(d) None of the above

42. Integration of national economies into a world economy is called:
(a) Globalisation
(b) Privatization
(c) Liberalization
(d) None of the above

43. Molasses in sugar industry is an example of
(a) Joint product
(b) Unique product
(c) Byproduct
(d) None of the above

44. Sale of public enterprises to private sector is called
(a) Globalisation
(b) Privatization
(c) Liberalization
(d) None of the above

45. Financial recovery of a loss making company is known as
(a) Turn around
(b) Privatization
(c) Liberalization
(d) None of the above

46. The roadmap of a company future is
(a) Mission
(b) Vision
(c) Business Module
(d) None of the above

47. The statement that defines what a company is and what it does is called
(a) Mission
(b) Vision
(c) Business Module
(d) None of the above

48. Activities involved in physical involvement of goods from the factory to market etc. is called
(a) Logistics
(b) Merger
(c) Mission
(d) None of the above