Lucknow University B.Com. (Hons.) 3rd Semester Question Papers 2026

This page contains complete, previous-year-style model question papers for all 6 core B.Com (Hons.) Semester III papers under the Lucknow University syllabus: Cost Accounting, Business Laws, Operations Management, Marketing Management, International Finance and Business Economics. Each subject has 5 full model sets (Set A to Set E), with 10 questions per set of 14 marks each (answer any five, maximum marks 70), prepared by LUUPDATE for focused exam practice. These are BCom Hons Semester III old-paper-style question banks meant to help you understand the exact pattern, unit-wise weightage and difficulty level you should expect in your actual university examination for the BCom Hons Semester III question paper Lucknow University.

Cost Accounting (Paper BCH 301)

Cost Accounting (Paper BCH 301) covers the meaning, objectives and advantages of cost accounting and its distinction from financial accounting; classification of cost and elements of cost (material, labour and overheads) including inventory valuation and pricing of material issues; accounting for labour cost, overhead allocation, apportionment and absorption, machine hour rate and unit costing (cost sheet); contract costing, job costing, process costing, operating costing and activity based costing; and Cost-Volume-Profit analysis, reconciliation of cost and financial accounts, cost control, cost audit and cost reduction. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Explain the meaning and definition of Cost Accounting. Discuss its objectives and advantages, and distinguish between Cost Accounting and Financial Accounting. [14]

Q2. From the following particulars relating to a raw material, calculate (a) Re-order Level, (b) Minimum Level, (c) Maximum Level, and (d) Average Stock Level: Re-order Quantity 3,000 units; Maximum Consumption 900 units per week; Minimum Consumption 500 units per week; Normal Consumption 700 units per week; Re-order Period 4 to 6 weeks. [14]

Q3. Explain the meaning of wages and discuss the various methods of wage payment, namely the time rate system and the piece rate system, bringing out their respective merits and demerits. [14]

Q4. The time allowed for a job is 10 hours and the time taken by a worker to complete it is 8 hours. The hourly wage rate is Rs. 40. Calculate the total earnings of the worker and the effective hourly rate of earning under the Halsey Premium Bonus Scheme (50 percent share of time saved). [14]

Q5. The time allowed for a job is 12 hours and the time taken by a worker to complete it is 9 hours. The hourly wage rate is Rs. 30. Calculate the total earnings of the worker and the effective hourly rate of earning under the Rowan Premium Bonus Scheme. [14]

Q6. Distinguish between Job Costing and Contract Costing. State their principal features and the typical industries or situations in which each method is applied. [14]

Q7. Job No. 101 required Direct Material of Rs. 25,000 and 200 direct labour hours at Rs. 60 per hour. Factory overhead is absorbed at Rs. 40 per labour hour, and office overhead is charged at 10 percent of works cost. Prepare the Job Cost Sheet for Job No. 101, and determine the price to be quoted so as to earn a profit of 25 percent on the selling price. [14]

Q8. A contractor undertook a contract for Rs. 10,00,000. The following particulars relate to the first year of the contract: Cost of work done to date Rs. 6,00,000; Work certified by the architect Rs. 7,50,000; Cost of work not yet certified Rs. 20,000; Cash received from the contractee 80 percent of the work certified. Calculate the Notional Profit on the contract and the amount of profit to be transferred to the Profit and Loss Account, applying the appropriate rule for a contract where the work certified is 75 percent or more but less than 90 percent of the contract price. [14]

Q9. Explain the meaning and assumptions of Cost-Volume-Profit (CVP) Analysis. Discuss the concepts of contribution, Break-Even Point, Profit-Volume (P/V) Ratio and Margin of Safety. [14]

Q10. The selling price of a product is Rs. 100 per unit and the variable cost is Rs. 60 per unit. The fixed costs of the concern amount to Rs. 2,00,000 per annum. Calculate (a) the P/V ratio, (b) the Break-Even Point in units and in value, and (c) the Margin of Safety, if actual sales for the year are Rs. 8,00,000. [14]

Set B

Q1. Explain the various bases of classification of costs. What do you understand by cost unit and cost centre? Illustrate with suitable examples from a manufacturing organisation. [14]

Q2. A company uses 20,000 units of a raw material annually. The cost of placing one order is Rs. 50 and the annual carrying cost is Rs. 2 per unit. Calculate the Economic Order Quantity (EOQ) and the number of orders to be placed in a year. [14]

Q3. During a month, the average number of workers on the roll of a factory was 1,000. During the month, 80 workers left or were discharged, 180 workers were newly recruited, of whom 60 were engaged to replace the workers who had left. Calculate the Labour Turnover Rate under (a) the Separation Method, (b) the Replacement Method, and (c) the Flux Method. [14]

Q4. Explain the meaning of idle time and overtime. Distinguish between normal and abnormal idle time, and discuss the treatment of idle time and overtime premium in cost accounts. [14]

Q5. Rent of Rs. 36,000 is to be apportioned among Departments A, B and C on the basis of floor area occupied: A 3,000 sq. ft., B 2,000 sq. ft., C 1,000 sq. ft. Power expenses of Rs. 24,000 are to be apportioned on the basis of horse power of machines installed: A 40 H.P., B 30 H.P., C 10 H.P. Depreciation of Rs. 18,000 is to be apportioned on the basis of value of machinery: A Rs. 60,000, B Rs. 30,000, C Rs. 30,000. Prepare a statement showing the apportionment of the above three items of overhead to the three departments. [14]

Q6. A contractor undertook a contract for Rs. 5,00,000. During the first year, the cost of work done amounted to Rs. 80,000 and the value of work certified by the architect was Rs. 1,00,000; there was no work uncertified. Calculate the Notional Profit on the contract, and state, with reasons, the amount of profit, if any, that should be transferred to the Profit and Loss Account for the year. [14]

Q7. Explain the meaning and purpose of an escalation clause, a cost-plus contract and retention money in the context of contract costing. [14]

Q8. In a manufacturing process, 1,000 units of material costing Rs. 50,000 (inclusive of labour and overheads) were introduced. Normal loss is estimated at 10 percent of input, and the scrap arising from the normal loss realises Rs. 5 per unit. The actual output transferred to the next process was 880 units. Prepare the Process Account, and compute the cost per unit of normal output and the value of the abnormal loss, if any. [14]

Q9. A company sells two products, P and Q, which contribute 60 percent and 40 percent respectively to its total sales revenue in the standard sales mix. The P/V ratio of Product P is 50 percent and that of Product Q is 25 percent. The fixed costs of the company amount to Rs. 2,00,000. Compute the composite P/V ratio of the company and the Break-Even Sales value for the business as a whole. [14]

Q10. Explain the need for reconciliation of Cost Accounts with Financial Accounts. Discuss the principal reasons responsible for the difference between the profit shown by cost accounts and the profit shown by financial accounts. [14]

Set C

Q1. Explain the meaning and elements of cost, namely material, labour and overheads. Distinguish between direct and indirect material, direct and indirect labour, and direct and indirect expenses, with suitable examples. [14]

Q2. The following particulars relate to a material item: Opening Stock 200 units at Rs. 10 per unit; Receipts – 5th of the month 300 units at Rs. 12 per unit, 15th of the month 200 units at Rs. 14 per unit; Issues – 8th of the month 350 units, 20th of the month 250 units. Prepare a Stores Ledger Account under the FIFO method and determine the cost of materials issued and the value of closing stock. [14]

Q3. Explain the meaning and classification of overheads on the basis of function, element and behaviour. Discuss the steps involved in dealing with overheads, namely allocation, apportionment and absorption. [14]

Q4. From the following data of a department – Direct Material Rs. 50,000; Direct Labour Rs. 40,000; Direct Labour Hours 8,000; Machine Hours 5,000; Factory Overhead Rs. 60,000 – compute the overhead absorption rate under (a) percentage of direct material cost, (b) percentage of direct labour cost, (c) percentage of prime cost, (d) direct labour hour rate, and (e) machine hour rate. [14]

Q5. A machine has effective working hours of 2,000 per annum. Its annual standing charges amount to Rs. 20,000. The running costs are estimated at Rs. 5 per hour for power, Rs. 3 per hour for repairs and Rs. 4 per hour for depreciation. Compute the comprehensive Machine Hour Rate. [14]

Q6. In a manufacturing process, 500 units of material costing Rs. 27,300 (inclusive of labour and overheads) were introduced. Normal loss is estimated at 10 percent of input, and the scrap arising from the normal loss realises Rs. 6 per unit. The actual output was 460 units. Prepare the Process Account, the Normal Loss Account and the Abnormal Gain Account, and compute the cost per unit of normal output. [14]

Q7. Explain the essential features of Process Costing. Discuss the concept of inter-process profit and its treatment when output is transferred from one process to another at a price above cost. [14]

Q8. A product passes through two processes. In Process I, 1,000 units of material costing Rs. 47,700 were introduced. Normal loss is 5 percent of input, with scrap realising Rs. 4 per unit; the entire normal output was transferred to Process II. In Process II, further material, labour and overheads amounting to Rs. 7,410 were added. Normal loss in Process II is 4 percent of the units received, with scrap realising Rs. 5 per unit, and the actual output finished during the period was 900 units. Prepare the Process I Account and the Process II Account, and determine the cost per unit at each stage and the value of any abnormal loss arising in Process II. [14]

Q9. The profit as per Cost Accounts of a concern for a year is Rs. 1,50,000. The following differences were noticed on comparison with the Financial Accounts: overheads over-absorbed in cost accounts Rs. 4,000; rent received, recorded only in financial accounts, Rs. 6,000; closing stock undervalued in cost accounts by Rs. 2,000; overheads under-absorbed in cost accounts Rs. 3,000; loss on sale of a fixed asset, recorded only in financial accounts, Rs. 7,000; interest on loan paid, recorded only in financial accounts, Rs. 1,500. Prepare a Reconciliation Statement to arrive at the profit as per Financial Accounts. [14]

Q10. Explain the meaning and objectives of Cost Control. Discuss the important techniques of cost control, such as budgetary control, standard costing and inventory control, used by an organisation. [14]

Set D

Q1. Explain the meaning, need and objectives of Inventory Control. Describe briefly the ABC analysis and VED analysis techniques of inventory control, and the role of a perpetual inventory system. [14]

Q2. The following particulars relate to a material item: Opening Stock 100 units at Rs. 15 per unit; Receipts – 6th of the month 250 units at Rs. 16 per unit, 18th of the month 150 units at Rs. 18 per unit; Issues – 10th of the month 200 units, 22nd of the month 150 units. Prepare a Stores Ledger Account under the LIFO method and determine the cost of materials issued and the value of closing stock. [14]

Q3. From the following particulars of a manufacturing concern, prepare a Cost Sheet showing Prime Cost, Works Cost, Cost of Production, Cost of Goods Sold, Total Cost and Profit, and determine the cost per unit and profit per unit on the basis of 10,000 units produced: Opening Stock of Raw Material Rs. 20,000; Purchases of Raw Material Rs. 1,60,000; Closing Stock of Raw Material Rs. 30,000; Direct Wages Rs. 90,000; Direct Expenses Rs. 10,000; Factory Overhead 60 percent of Direct Wages; Opening Work-in-Progress Rs. 15,000; Closing Work-in-Progress Rs. 25,000; Office and Administration Overhead 10 percent of Works Cost; Opening Stock of Finished Goods Rs. 40,000; Closing Stock of Finished Goods Rs. 50,000; Selling and Distribution Overhead Rs. 20,000; Sales Rs. 5,00,000. [14]

Q4. The cost data of a completed job of 1,000 units are as follows: Direct Material Rs. 40,000; Direct Labour Rs. 30,000; Factory Overhead 50 percent of Direct Labour; Office Overhead 10 percent of Works Cost. A new tender is invited for a similar order of 1,500 units. It is expected that the price of material will rise by 10 percent and the labour rate by 5 percent, while the overhead ratios will remain unchanged. If the concern desires a profit of 20 percent on the total cost, calculate the price to be quoted for the tender. [14]

Q5. Explain the meaning of under-absorption and over-absorption of overheads. Discuss the causes leading to under-absorption and over-absorption and the methods of their accounting treatment, such as the use of a supplementary rate, writing off to the Costing Profit and Loss Account, and carrying forward to the next accounting year. [14]

Q6. In a process, 1,000 units were introduced during the month at a material cost of Rs. 60,000, and labour and overhead costs of Rs. 36,800 each were incurred. Of the 1,000 units, 800 units were completed and transferred to the next process, while 200 units remained as closing work-in-progress, fully complete as to material but only 60 percent complete as to labour and overhead. There was no opening work-in-progress. Compute the equivalent production for material, labour and overhead, the cost per equivalent unit for each element, and the value of the units transferred and of the closing work-in-progress. [14]

Q7. Explain the meaning and features of Operating Costing. Distinguish it from other methods of costing, and give examples of service organisations, such as transport undertakings, hospitals and hotels, in which it is applied. [14]

Q8. A transport company's annual fixed costs (insurance, taxes, depreciation, drivers' salaries, etc.) amount to Rs. 3,00,000, and running costs (fuel, oil, repairs, etc.) are estimated at Rs. 4 per kilometre. During the year, the fleet ran a total of 1,50,000 kilometres, of which 1,20,000 kilometres were revenue-earning (loaded) kilometres, carrying an average load of 5 tonnes. Compute (a) the total operating cost, (b) the cost per kilometre run, and (c) the cost per absolute tonne-kilometre. [14]

Q9. Explain the meaning and objectives of Cost Audit. Discuss its principal advantages, and outline briefly the qualifications and duties of a cost auditor. [14]

Q10. Explain the meaning and essential characteristics of Cost Reduction. Discuss its important techniques and areas of application, and distinguish Cost Reduction from Cost Control. [14]

Set E

Q1. The following particulars relate to a material item, priced under the Weighted Average method (perpetual system): Opening Stock 300 units at Rs. 8 per unit; Issue of 350 units; thereafter a purchase of 250 units at Rs. 10 per unit; followed by an issue of 300 units. Prepare a Stores Ledger Account and determine the cost of each issue and the value of closing stock, recomputing the weighted average rate after every purchase. [14]

Q2. Explain the meaning of material losses in the form of waste, scrap, spoilage and defectives, and discuss their accounting treatment. Also explain, with reference to a situation in which 2,000 kg. of material is introduced into a process with a normal loss of 5 percent and an actual output of 1,850 kg., how the normal loss and the abnormal loss (if any) would be determined and treated in cost accounts. [14]

Q3. Distinguish between allocation and apportionment of overheads. Discuss the bases commonly used for the apportionment of overhead items such as rent, lighting and power, depreciation of machinery, and canteen expenses. [14]

Q4. The overhead expenses of a factory before apportionment of service department costs are as follows: Production Department P1 Rs. 40,000; Production Department P2 Rs. 30,000; Service Department S1 Rs. 20,000; Service Department S2 Rs. 10,000. Service Department S1 renders service in the ratio of 50 percent to P1, 30 percent to P2 and 20 percent to S2. Service Department S2 renders service in the ratio of 60 percent to P1, 30 percent to P2 and 10 percent to S1. Apportion the cost of the two service departments to the two production departments by using the simultaneous equation (repeated distribution) method for reciprocal services. [14]

Q5. A machine costs Rs. 6,00,000 and has a scrap value of Rs. 60,000 at the end of its effective life of 10 years. The machine works for 2,500 hours per annum. Repairs and maintenance are estimated at Rs. 50,000 per annum, power consumption is 10 units per hour at Rs. 5 per unit, and standing charges (rent, insurance, etc.) amount to Rs. 75,000 per annum. Compute the comprehensive Machine Hour Rate. [14]

Q6. A hospital has 100 beds. During a year, the total available bed-days were 100 x 365, and the actual patient-days (occupied bed-days) were 25,550, representing an average occupancy of 70 percent. The total operating cost of the hospital for the year was Rs. 76,65,000. Compute the cost per patient-day. [14]

Q7. Explain the meaning of Activity Based Costing (ABC). Discuss the concepts of cost pools and cost drivers, and describe the steps involved in implementing ABC, bringing out how it differs from traditional overhead absorption costing. [14]

Q8. A company manufactures two products, X and Y. Total overhead of Rs. 2,00,000 comprises: Machine Set-up cost Rs. 80,000 (cost driver: number of set-ups, total 40 set-ups); Quality Inspection cost Rs. 60,000 (cost driver: number of inspections, total 60 inspections); Material Handling cost Rs. 60,000 (cost driver: number of material movements, total 100 movements). Product X requires 10 set-ups, 20 inspections and 40 movements, and its output is 1,000 units; Product Y requires 30 set-ups, 40 inspections and 60 movements, and its output is 2,000 units. Compute the overhead cost per unit of each product using Activity Based Costing. [14]

Q9. The sales of a concern for a year amounted to Rs. 5,00,000, the fixed cost was Rs. 1,00,000 and the variable cost was Rs. 3,00,000. Compute the contribution, the P/V ratio, the Break-Even Sales, and the Margin of Safety (in value and as a percentage of sales), and comment briefly on the significance of the angle of incidence. Also determine the revised Break-Even Point if the selling price is increased by 10 percent, assuming the volume of sales (in units) and the total fixed and variable costs remain unchanged. [14]

Q10. A company manufactures two products, A and B, whose contribution per unit is Rs. 60 and Rs. 80 respectively. Each unit of A requires 3 machine hours and each unit of B requires 5 machine hours. Total machine hours available are limited to 6,000 per month. Monthly market demand for Product A is 1,500 units and for Product B is 1,000 units. Determine the most profitable product mix, treating machine hours as the limiting factor, and calculate the maximum contribution obtainable. [14]

Business Laws (Paper BCH 302)

Business Laws (Paper BCH 302) covers the Indian Contract Act 1872 – essentials of a valid contract, offer and acceptance, consideration, contractual capacity, free consent, legality of object, void agreements and discharge of contract including breach and remedies; contingent contracts, quasi-contracts, and the contracts of indemnity, guarantee, bailment and agency; the Indian Sale of Goods Act 1932 – conditions and warranties, caveat emptor, transfer of ownership, performance of the contract of sale, the unpaid seller and the Consumer Protection Act; and the Negotiable Instruments Act – holders and holder-in-due-course, negotiation and endorsement, crossing and dishonour of cheques, along with the Information Technology Act 2000. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Define the term 'contract' as given in Section 2(h) of the Indian Contract Act, 1872, and discuss the essential characteristics that must be present for an agreement to become a valid contract. [14]

Q2. Explain the various kinds of contracts on the basis of their validity, mode of formation and mode of performance, distinguishing between them with suitable examples. [14]

Q3. Define a contingent contract under the Indian Contract Act, 1872, and distinguish it from a wagering agreement. Discuss the rules governing the enforcement of contingent contracts. [14]

Q4. What is a quasi-contract? Discuss its essential characteristics and explain the various kinds of quasi-contractual obligations recognised under Sections 68 to 72 of the Indian Contract Act. [14]

Q5. Define a contract of indemnity and discuss the rights of an indemnity-holder against the indemnifier when sued in respect of matters covered by the contract. [14]

Q6. Define a contract of sale of goods under Section 4 of the Sale of Goods Act, 1932, and distinguish between a sale and an agreement to sell. [14]

Q7. Discuss the essential elements of a valid contract of sale of goods under the Sale of Goods Act, 1932. [14]

Q8. Distinguish between a condition and a warranty in a contract of sale, and discuss the circumstances in which a breach of condition may be treated as a breach of warranty. [14]

Q9. Define a negotiable instrument under the Negotiable Instruments Act, 1881, and discuss its essential characteristics and the various kinds of negotiable instruments recognised under the Act. [14]

Q10. Who is a 'holder' and who is a 'holder in due course' under the Negotiable Instruments Act, 1881? Distinguish between the two. [14]

Set B

Q1. Discuss the essentials of a valid offer and a valid acceptance under the Indian Contract Act, 1872, and distinguish an offer from a mere invitation to offer. [14]

Q2. What is meant by 'consideration' under Section 2(d) of the Indian Contract Act? Discuss its essential elements and the exceptions to the rule 'no consideration, no contract' recognised under Section 25. [14]

Q3. Define a contract of guarantee and distinguish it from a contract of indemnity, bringing out the essential features of each. [14]

Q4. Discuss the rights of a surety against the principal debtor, against the creditor and against his co-sureties on payment or performance of the guaranteed debt or obligation. [14]

Q5. Discuss the various circumstances and modes under which a surety is discharged from his liability under a contract of guarantee. [14]

Q6. Explain the doctrine of 'caveat emptor' and discuss the important exceptions to this doctrine recognised under the Sale of Goods Act, 1932. [14]

Q7. Discuss the implied conditions and implied warranties in a contract of sale of goods in the absence of an agreement to the contrary. [14]

Q8. Discuss the rules relating to the transfer of property (ownership) in goods from the seller to the buyer under the Sale of Goods Act, 1932. [14]

Q9. Discuss the privileges enjoyed by a holder in due course of a negotiable instrument under the Negotiable Instruments Act, 1881. [14]

Q10. Explain the concept of negotiation and endorsement of a negotiable instrument, and discuss the various kinds of endorsement recognised under the Act. [14]

Set C

Q1. Who is competent to contract under Section 11 of the Indian Contract Act, 1872? Discuss the legal position and effects of an agreement entered into by a minor and by a person of unsound mind. [14]

Q2. Explain the meaning of 'free consent' under the Indian Contract Act, and discuss coercion, undue influence, fraud, misrepresentation and mistake as the factors that may vitiate consent. [14]

Q3. Define bailment under the Indian Contract Act, 1872, and discuss its essential elements and the different kinds of bailment. [14]

Q4. Discuss the duties and rights of a bailor and a bailee under a contract of bailment. [14]

Q5. Explain the rights and duties of a finder of goods under the Indian Contract Act, 1872. [14]

Q6. Explain the general rule 'nemo dat quod non habet' and discuss the exceptions under which a person who is not the owner of goods can convey a better title to the buyer than he himself has. [14]

Q7. Discuss the rules relating to delivery of goods and the performance of a contract of sale under the Sale of Goods Act, 1932. [14]

Q8. Who is an 'unpaid seller' under the Sale of Goods Act, 1932? Discuss the rights of an unpaid seller against the goods. [14]

Q9. What is meant by crossing of a cheque? Discuss the various types of crossing and their legal effect under the Negotiable Instruments Act, 1881. [14]

Q10. Discuss the offence of dishonour (bouncing) of a cheque under Section 138 of the Negotiable Instruments Act, 1881, its essential ingredients and the penalties prescribed for the offence. [14]

Set D

Q1. What is meant by 'legality of object and consideration'? Discuss the considerations and objects that are declared unlawful under Section 23, and state the agreements expressly declared void under the Indian Contract Act. [14]

Q2. Discuss the various modes of discharge of a contract, laying special emphasis on discharge by breach of contract and the remedies available to the aggrieved party. [14]

Q3. Define an agent and a principal, and discuss the various modes by which the relationship of agency may be created. [14]

Q4. Discuss the classification of agents and distinguish between an agent and a servant. [14]

Q5. Discuss the duties and rights of an agent towards his principal under the Indian Contract Act, 1872. [14]

Q6. Discuss the rights of an unpaid seller against the buyer personally under the Sale of Goods Act, 1932. [14]

Q7. Explain the unpaid seller's right of lien, right of stoppage of goods in transit, and right of resale, bringing out the conditions under which each right can be exercised. [14]

Q8. Discuss the objectives, salient features and important definitions, such as 'consumer', 'goods', 'service' and 'unfair trade practice', under the Consumer Protection Act. [14]

Q9. Discuss the important definitions under the Information Technology Act, 2000, such as digital signature, electronic record and electronic governance. [14]

Q10. Discuss the legal provisions relating to attribution, acknowledgement and dispatch of electronic records under the Information Technology Act, 2000. [14]

Set E

Q1. A entered into a contract with B to sell a specific consignment of cotton lying on a ship, both parties honestly believing the ship to be on its way from Bombay. Unknown to either party, the ship carrying the cotton had already been lost at sea before the contract was made. Discuss the legal position of the contract, explaining the relevant provisions relating to mistake of fact under the Indian Contract Act. [14]

Q2. P, a minor, mortgages his house in favour of Q to secure a loan of Rs. 50,000 advanced by Q. On attaining majority, P refuses to repay the loan and denies the validity of the mortgage. Discuss, with reference to decided case law, the legal position of an agreement entered into by a minor and Q's remedies, if any, against P. [14]

Q3. Explain the various circumstances and modes of termination of an agency. [14]

Q4. Explain the concepts of 'sub-agent' and 'substituted agent' under the law of agency, and discuss their respective rights, duties and liabilities. [14]

Q5. X stood surety for a loan of Rs. 2,00,000 advanced by a bank to Y. Subsequently, the bank granted Y an extension of time for repayment of the loan without obtaining X's consent. Discuss, with reference to the relevant provisions of the Indian Contract Act, whether X continues to be liable as surety. [14]

Q6. Discuss the three-tier consumer dispute redressal machinery established under the Consumer Protection Act for the redressal of consumer grievances. [14]

Q7. Discuss the remedies available to a consumer under the Consumer Protection Act against defective goods and deficient services. [14]

Q8. A purchased a second-hand car from B, who represented it to be a 2020 model, whereas it was actually manufactured in 2015. On discovering the true facts, A wishes to avoid the contract and claim damages. Discuss A's remedies under the Sale of Goods Act, 1932, explaining the relevant provisions relating to condition and misrepresentation. [14]

Q9. Discuss the provisions relating to the regulation of certifying authorities and digital signature certificates under the Information Technology Act, 2000. [14]

Q10. Discuss the duties of subscribers, the provisions relating to penalties and adjudication, and the composition and jurisdiction of the Appellate Tribunal under the Information Technology Act, 2000. [14]

Operations Management (Paper BCH 303)

Operations Management (Paper BCH 303) covers the meaning, nature, scope, duties and responsibilities of operations management, the production function and manufacturing systems (mass, batch, job-shop and project); plant location and plant layout, and material handling equipment; work study – method study and work measurement – and production planning and control; and materials management, inventory management techniques, and quality control including statistical quality control and control charts. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Explain the meaning, nature and scope of Operations Management, and discuss its importance in a modern manufacturing or service organisation. [14]

Q2. Discuss the duties and responsibilities of an Operations Manager in a manufacturing organisation. [14]

Q3. Explain the nature and significance of plant location decisions, and discuss why they are regarded as strategic and long-term decisions for an organisation. [14]

Q4. Discuss the various factors that must be considered while selecting a suitable location for setting up a new plant. [14]

Q5. Explain the various methods used for evaluating and selecting a plant location, such as the factor rating method, break-even analysis and the centre of gravity method. [14]

Q6. Explain the meaning, objectives and scope of Work Study, and discuss its importance in improving productivity. [14]

Q7. Explain the meaning, objectives and importance of Method Study, and outline its principal application areas. [14]

Q8. Discuss the various steps involved in conducting a Method Study, from selection of the job to installation and maintenance of the improved method. [14]

Q9. Explain the meaning, scope and objectives of Materials Management in an organisation. [14]

Q10. Discuss the various factors that influence the level of inventory maintained by a firm. [14]

Set B

Q1. Explain the concept of the Production Function, and discuss how the various factors of production are combined to produce goods and services. [14]

Q2. Explain the Systems Approach to Operations Management, bringing out the input-process-output-feedback framework and its significance in decision making. [14]

Q3. Distinguish between urban, rural and suburban locations as types of areas for setting up a plant, bringing out the advantages and disadvantages of each. [14]

Q4. Discuss the role of government policy, incentives and infrastructure availability in influencing plant location decisions in India. [14]

Q5. Explain the meaning and objectives of a good plant layout. [14]

Q6. Explain the meaning, objectives and importance of Work Measurement, and discuss its principal application areas in an organisation. [14]

Q7. Discuss the various techniques of Work Measurement, such as Time Study, Work Sampling, Predetermined Motion Time Systems (PMTS) and Synthetic Timing. [14]

Q8. Explain the concept of Time Study and discuss the procedure followed in conducting a time study, including the determination of standard time. [14]

Q9. Explain the objectives of Inventory Management, and discuss why the maintenance of an optimum level of inventory is important for a firm. [14]

Q10. Discuss the various techniques of inventory management, such as ABC analysis, VED analysis, Economic Order Quantity (EOQ) and Just-in-Time (JIT). [14]

Set C

Q1. Distinguish between manufacturing operations and service operations, bringing out their essential differences with suitable examples. [14]

Q2. Explain the meaning and characteristics of the Mass Production system, and discuss its advantages and limitations. [14]

Q3. Discuss the various factors that influence the design of an effective plant layout. [14]

Q4. Explain the meaning and characteristics of Process (Functional) layout, and discuss its advantages and limitations. [14]

Q5. Explain the meaning and characteristics of Product (Line) layout, and distinguish it from Process layout. [14]

Q6. Distinguish between Method Study and Work Measurement, bringing out their complementary roles within the overall framework of Work Study. [14]

Q7. Explain the meaning, nature and importance of Production Planning and Control (PPC) in Operations Management. [14]

Q8. Discuss the role and scope of Production Planning and Control in a modern manufacturing organisation. [14]

Q9. A company uses 4,000 units of a raw material per year. The ordering cost is Rs. 100 per order and the annual carrying cost is Rs. 8 per unit per year. Using the Economic Order Quantity (EOQ) formula, calculate the EOQ for this material, and explain the assumptions underlying the basic EOQ model. [14]

Q10. Explain the meaning and importance of ABC analysis as a technique of selective inventory control, and discuss how items are classified into categories A, B and C. [14]

Set D

Q1. Explain the meaning and characteristics of the Batch Production system, and distinguish it from Mass Production. [14]

Q2. Explain the meaning and characteristics of the Job-Shop (Job Order) Production system, and discuss the situations in which it is preferred over other systems. [14]

Q3. Explain the meaning and features of Fixed Position layout and Cellular (Group Technology) layout, and discuss the situations in which each is best suited. [14]

Q4. Discuss the importance of material handling in the overall efficiency and cost structure of a production system. [14]

Q5. Explain the objectives and basic principles of material handling. [14]

Q6. Explain the various functions/phases of Production Planning and Control, namely planning, routing, scheduling, dispatching and follow-up. [14]

Q7. Discuss the various factors that influence production planning in an organisation. [14]

Q8. Explain the meaning and importance of production control, and discuss the benefits that accrue to an organisation from effective production control. [14]

Q9. Explain the meaning, objectives and importance of Quality Control in a manufacturing organisation. [14]

Q10. Explain the meaning and significance of Statistical Quality Control (SQC), and distinguish between process control and product control. [14]

Set E

Q1. Explain the meaning and characteristics of the Project type of production system, and discuss the special problems involved in planning and controlling such projects. [14]

Q2. Compare and contrast the four types of manufacturing systems - Mass, Batch, Job-Shop and Project - with reference to volume, variety, equipment and labour skill requirements. [14]

Q3. Discuss the various factors that influence the selection of material handling equipment for a given production situation. [14]

Q4. Explain the various types of material handling equipment, such as conveyors, cranes and hoists, industrial trucks, and automated guided vehicles (AGVs), bringing out their typical areas of use. [14]

Q5. Discuss the relationship between plant layout and material handling, and explain how a well-designed layout helps in minimising material handling costs. [14]

Q6. Distinguish between production planning and production control, bringing out how the two functions are interlinked in practice. [14]

Q7. Discuss the techniques of scheduling used in Production Planning and Control, such as Gantt charts, and examine their usefulness and limitations. [14]

Q8. Explain how Work Study and Production Planning and Control are interrelated, and discuss how standard times derived from work measurement are used in production planning. [14]

Q9. Explain the concept of a control chart as a tool of Statistical Quality Control, and discuss the meaning of the Upper Control Limit (UCL), Lower Control Limit (LCL) and Central Line (CL). [14]

Q10. The mean of the sample means (X-double-bar) for 20 samples of size 5 each, drawn from a production process, is found to be 50, and the mean range (R-bar) of the samples is 6. Given that for a sample size of 5 the control chart constant A2 = 0.577, calculate the Upper Control Limit (UCL) and the Lower Control Limit (LCL) for the X-bar chart, and explain the significance of these control limits in monitoring process quality. [14]

Marketing Management (Paper BCH 304)

Marketing Management (Paper BCH 304) covers the nature and scope of marketing, the modern marketing concept, marketing mix, the marketing management process, the marketing environment and consumer buying behaviour; market segmentation, positioning and product decisions including branding, packaging and the product mix; pricing methods and policies, channels of distribution, retailing, wholesaling and distribution logistics; and promotion, the communication process, the promotion mix and rural marketing. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Explain the nature and scope of marketing. Discuss how the modern marketing concept differs from the traditional production and selling concepts of business. [14]

Q2. Discuss the meaning and elements of the marketing mix, and examine how a firm blends these elements to achieve its marketing objectives. [14]

Q3. Explain the meaning and importance of market segmentation, and discuss the benefits that accrue to a firm from segmenting its market. [14]

Q4. Discuss the various bases used for segmenting a consumer market, such as geographic, demographic, psychographic and behavioural segmentation. [14]

Q5. Explain the criteria that must be satisfied for a market segment to be considered effective and worth targeting, such as measurability, accessibility, substantiality and actionability. [14]

Q6. Discuss the significance of price as an element of the marketing mix, and examine the various objectives that a firm may pursue while fixing the price of its product. [14]

Q7. Discuss the various factors, internal and external, that affect the determination of price for a product. [14]

Q8. Explain the cost-oriented methods of pricing, such as cost-plus pricing and mark-up pricing, bringing out their merits and limitations. [14]

Q9. Discuss the nature and importance of promotion as an element of the marketing mix, and explain the communication process involved in promoting a product. [14]

Q10. Discuss the various methods of promotion -- advertising, personal selling, sales promotion and public relations -- bringing out their distinctive characteristics. [14]

Set B

Q1. Describe the marketing management process, bringing out the various steps involved from marketing analysis and planning to implementation and control. [14]

Q2. Explain the concept of the marketing environment and distinguish between its macro-environmental and micro-environmental components with suitable examples. [14]

Q3. Explain the meaning and importance of product positioning, and discuss why a firm needs to position its product distinctly in the minds of target customers. [14]

Q4. Discuss the major bases on which a firm may position its product, such as product attributes, price and quality, use or application, product class, and competitors. [14]

Q5. Distinguish between market segmentation and product positioning, bringing out how the two concepts are interrelated in the formulation of marketing strategy. [14]

Q6. Explain the demand-oriented and competition-oriented methods of pricing, such as perceived-value pricing and going-rate pricing. [14]

Q7. Discuss skimming pricing and penetration pricing as new-product pricing strategies, bringing out the circumstances under which each is appropriate. [14]

Q8. Explain the meaning and types of geographical pricing policies, such as FOB pricing, uniform delivered pricing, zone pricing and freight-absorption pricing. [14]

Q9. Explain the concept of integrated marketing communication, and discuss why firms increasingly adopt an integrated approach to promotion. [14]

Q10. Explain the concept of promotion mix, and discuss the various factors that influence a firm's decision regarding the blend of promotional tools to be used. [14]

Set C

Q1. Discuss the various macro-environmental factors -- demographic, economic, socio-cultural, technological, political-legal and natural -- that influence the marketing decisions of a firm. [14]

Q2. Discuss the micro-environmental factors, such as suppliers, marketing intermediaries, customers, competitors and publics, that directly affect a firm's ability to serve its customers. [14]

Q3. Explain the concept of a product and discuss the various levels of a product -- core, actual and augmented product -- with suitable examples. [14]

Q4. Discuss the various bases on which products are classified, distinguishing between consumer goods and industrial goods, and among convenience, shopping, speciality and unsought goods. [14]

Q5. Discuss the major product decisions relating to product attributes -- quality, features and design -- that a marketer must take while developing a product. [14]

Q6. Explain the concept of product-line pricing, and discuss the considerations a firm must keep in mind while pricing different products within the same product line. [14]

Q7. Discuss the meaning and various types of discounts and rebates, such as quantity discount, trade discount, cash discount and seasonal discount, offered by firms to their customers. [14]

Q8. Explain the meaning and importance of channels of distribution, and discuss the functions performed by marketing intermediaries in the distribution process. [14]

Q9. Discuss the growing importance of rural marketing in India, and examine the factors responsible for the increasing attention given to rural markets by firms. [14]

Q10. Explain the distinguishing characteristics of rural markets in India, bringing out how they differ from urban markets in terms of demand pattern, infrastructure and communication. [14]

Set D

Q1. Explain the concept of consumer buying behaviour and describe the various stages involved in the consumer buying decision process, from need recognition to post-purchase evaluation. [14]

Q2. Discuss the psychological factors -- motivation, perception, learning, beliefs and attitudes -- that influence the buying behaviour of a consumer. [14]

Q3. Explain the meaning, importance and functions of branding, and discuss the major branding decisions a firm must take, including brand name selection and brand strategy. [14]

Q4. Discuss the meaning, functions and importance of packaging as a marketing tool, and examine the recent trends responsible for the growing importance of packaging. [14]

Q5. Explain the meaning and legal significance of labelling, and discuss the functions performed by a label on a product. [14]

Q6. Discuss the various types of distribution channels available to a manufacturer, distinguishing between direct and indirect channels and between the number of levels involved. [14]

Q7. Examine the factors that a manufacturer should consider while selecting an appropriate channel of distribution for its product. [14]

Q8. Explain the meaning, importance and functions of retailing, and discuss the various types of retail formats found in India. [14]

Q9. Discuss the peculiarities of the rural consumer in India, and examine the factors that influence the buying behaviour of rural consumers. [14]

Q10. Discuss how a firm should plan its product strategy while formulating the marketing mix for rural markets in India. [14]

Set E

Q1. Examine the social and cultural factors, such as culture, social class, reference groups and family, that influence consumer buying behaviour. [14]

Q2. "Marketing is not merely selling; it begins with identifying and satisfying customer needs profitably." Critically evaluate this statement in the light of the modern marketing concept and discuss its implications for business firms. [14]

Q3. Discuss the meaning and importance of after-sales service as an element of product strategy, and examine its role in building customer satisfaction and loyalty. [14]

Q4. Explain the concept of product mix and product line, distinguishing between the width, length, depth and consistency of a product mix. [14]

Q5. Discuss the various product-mix and product-line decisions available to a firm, such as line stretching, line filling and line modernisation, with suitable examples. [14]

Q6. Explain the meaning, importance and functions of wholesaling, and distinguish between the role of a wholesaler and that of a retailer in the distribution channel. [14]

Q7. Discuss the concept, objectives and importance of distribution logistics, and explain its role in ensuring the efficient physical movement of goods. [14]

Q8. Explain the major elements and types of distribution logistics, such as order processing, warehousing, inventory control and transportation, bringing out how they contribute to customer service. [14]

Q9. Discuss how a firm should plan its pricing and distribution strategy while formulating the marketing mix for rural markets in India. [14]

Q10. Discuss how a firm should plan its promotion strategy while formulating the marketing mix for rural markets in India, with special reference to the challenges of rural communication. [14]

International Finance (Paper BCH 305)

International Finance (Paper BCH 305) covers the meaning and development of international finance, foreign exchange markets and international financial institutions such as the IMF, SDR and IBRD; exchange rate quotations, spot and forward rates, exchange arithmetic and exchange rate forecasting; parity conditions, arbitrage and the law of one price, the Fisher Effect and the International Fisher Effect; and international finance instruments – forward contracts, futures and currency options – along with foreign exchange risk exposure. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Explain the meaning and need for international finance in the present-day global economy, and trace the major developments in the international monetary system since the Bretton Woods Conference. [14]

Q2. Describe the structure and functioning of the foreign exchange market, and explain the role played by its principal participants such as commercial banks, central banks, brokers and multinational corporations. [14]

Q3. Explain the meaning of the ready (spot) exchange rate, and describe the mechanics of TT (telegraphic transfer) rates and other ready rates quoted in the interbank foreign exchange market. [14]

Q4. In Mumbai, the direct quotation for the US Dollar is Rs. 80.00 = 1 USD. Convert this direct quotation into the indirect (American terms) quotation, expressing the rate as the number of US Dollars per one unit of Indian Rupee, and explain the distinction between direct and indirect methods of quotation. [14]

Q5. If 1 US Dollar is quoted as Rs. 83.00 in the Indian market and 1 British Pound is quoted as 1.25 US Dollars in the international market, calculate the cross rate of the British Pound in terms of the Indian Rupee, and explain the concept and importance of cross rates in the absence of a direct quotation between two currencies. [14]

Q6. Explain the concept of Purchasing Power Parity (PPP), distinguishing between its absolute and relative versions, and discuss the assumptions on which the theory is based and the reasons for its limited empirical validity. [14]

Q7. Discuss the Interest Rate Parity theorem, distinguishing between covered and uncovered interest rate parity, and explain the role played by interest rate parity in the determination of forward exchange rates. [14]

Q8. The real rate of interest in an economy is 3 per cent per annum and the expected rate of inflation is 5 per cent per annum. Using Fisher's exact equation, determine the nominal rate of interest that should prevail, and explain the reasoning underlying the Fisher Effect. [14]

Q9. Explain the meaning and salient features of a forward contract as an instrument of hedging foreign exchange risk, and discuss the circumstances under which a firm may prefer a forward contract to remaining unhedged. [14]

Q10. Explain the meaning and salient features of currency futures contracts, and distinguish them from forward contracts with reference to standardisation, margin requirements and the role of the clearing house. [14]

Set B

Q1. Discuss the structure of international financial markets, such as the Euro-currency market, the Euro-bond market and international equity markets, and examine their significance in financing international trade and investment. [14]

Q2. Explain the origin, objectives and organisational structure of the International Monetary Fund (IMF), and discuss its role in promoting international monetary cooperation and exchange rate stability. [14]

Q3. Explain the direct and indirect methods of quoting a foreign exchange rate, illustrating each method with a suitable example, and discuss the circumstances under which a country may switch from one method of quotation to the other. [14]

Q4. Explain the meaning of forward margin, and discuss the various factors, such as interest rate differentials, market expectations and the demand-supply position of a currency, that determine whether a currency quotes at a forward premium or a forward discount. [14]

Q5. The spot rate for the US Dollar is Rs. 80.00 and the three-month forward rate is Rs. 81.60. Calculate the forward margin on the US Dollar, expressed as an annualised percentage premium or discount, and explain the significance of such a forward margin for an importer and an exporter. [14]

Q6. Explain the Law of One Price and the concept of arbitrage, and discuss how arbitrage activity tends to restore equality of prices for identical goods and financial assets across different markets and currencies. [14]

Q7. Discuss the Fisher Effect and explain the relationship it establishes among the nominal rate of interest, the real rate of interest and the expected rate of inflation in an economy. [14]

Q8. The nominal rate of interest in a country is 9 per cent per annum and the expected rate of inflation is 4 per cent per annum. Using Fisher's exact equation, calculate the real rate of interest, and discuss the practical significance of distinguishing between nominal and real interest rates. [14]

Q9. Explain the meaning and salient features of currency options, distinguishing between a call option and a put option, and discuss the significance of the option premium and the strike price in the exercise decision. [14]

Q10. An Indian exporter books a forward contract to sell US Dollars 100,000 for delivery in three months at a forward rate of Rs. 83.60 per US Dollar. On the date of maturity, the spot rate turns out to be Rs. 82.10 per US Dollar. Calculate the exporter's gain or loss on account of having booked the forward contract as compared with remaining unhedged. [14]

Set C

Q1. Discuss the drawing rights and loan instruments of the International Monetary Fund, such as the credit tranche policy, the Stand-By Arrangement and the Extended Fund Facility, and explain the conditions attached to their use. [14]

Q2. Explain the nature of the Special Drawing Right (SDR) as a reserve asset, discuss the method of determining its value on the basis of a basket of currencies, and describe the manner in which it is utilised by member countries. [14]

Q3. Discuss the various factors that determine the spot exchange rate between two currencies, such as the balance of payments position, interest rate differentials, inflation differentials, speculation and central bank intervention. [14]

Q4. The spot rate for the British Pound is Rs. 100.00 and the six-month forward rate is Rs. 98.00. Calculate the annualised forward margin on the British Pound, state whether the Pound is quoting at a premium or at a discount, and explain the factors that could give rise to such a forward margin. [14]

Q5. A bank quotes a bid rate of Rs. 82.90 and an ask rate of Rs. 83.10 for the US Dollar. Calculate the bid-ask spread as a percentage of the ask rate, and explain the factors that determine the width of the bid-ask spread quoted by a bank. [14]

Q6. Explain the International Fisher Effect and discuss the relationship it postulates between the interest rate differential prevailing between two countries and the expected change in the exchange rate between their currencies. [14]

Q7. The rate of interest on one-year deposits in India is 10 per cent per annum while the corresponding rate in the United States is 6 per cent per annum, and the spot exchange rate is Rs. 83.00 per US Dollar. Using the International Fisher Effect, calculate the expected percentage change in the value of the Rupee against the Dollar and the expected spot rate one year hence. [14]

Q8. Discuss the meaning of inflation risk and examine its impact on the valuation of bonds, equities and other financial assets traded in international financial markets. [14]

Q9. Explain the meaning of foreign exchange risk exposure, and discuss the various types of exposure faced by an international firm, namely transaction exposure, accounting (translation) exposure and economic exposure. [14]

Q10. An importer purchases a call option on US Dollars 50,000 at a strike price of Rs. 84.00 per US Dollar, paying a premium of Rs. 0.50 per US Dollar. On the date of expiry, the spot rate is Rs. 85.20 per US Dollar. Examine whether the importer would exercise the option, and calculate the net gain to the importer from having taken the option as compared with buying US Dollars at the spot rate prevailing on expiry. [14]

Set D

Q1. Discuss the objectives and functions of the International Bank for Reconstruction and Development (IBRD), and examine its principal lending activities, including project loans and policy-based lending. [14]

Q2. Distinguish between the International Monetary Fund and the World Bank Group, and briefly explain the roles played by the International Development Association, the International Finance Corporation and the Multilateral Investment Guarantee Agency. [14]

Q3. Distinguish between the spot rate and the forward rate of exchange, and discuss the circumstances under which an exporter or an importer would prefer to book a forward contract rather than deal in the spot market. [14]

Q4. If 1 US Dollar is quoted as Rs. 83.00 and 1 Euro is quoted as 1.10 US Dollars, calculate the cross rate of the Euro in terms of the Indian Rupee using the chain rule of exchange arithmetic, and explain the procedure followed in such a calculation. [14]

Q5. Discuss the various approaches to exchange rate forecasting, such as the purchasing power parity approach, the interest rate parity approach, and technical and econometric approaches, and examine the limitations of each. [14]

Q6. Discuss the assumptions underlying the theory of Purchasing Power Parity, and examine the principal reasons, such as transaction costs, trade barriers and non-tradable goods, on account of which the theory fails to hold precisely in the short run. [14]

Q7. Explain the concept of covered interest arbitrage, and discuss the conditions under which such arbitrage opportunities arise and the manner in which arbitrage activity ultimately restores the equilibrium condition implied by interest rate parity. [14]

Q8. The spot rate for the US Dollar is Rs. 80.00 and the one-year forward rate is Rs. 84.00. The rate of interest on one-year deposits is 4 per cent per annum in the United States and 10 per cent per annum in India. Determine, with the help of the interest rate parity formula, whether a covered interest arbitrage opportunity exists, and if so, describe the sequence of transactions an arbitrageur holding US Dollars 1,000,000 would undertake to profit from it. [14]

Q9. Discuss the meaning and measurement of accounting (translation) exposure, distinguishing between the current rate method and the temporal method of translating foreign currency financial statements, and examine the impact of such exposure on a firm's reported financial position. [14]

Q10. An exporter holds a put option on British Pounds 40,000 at a strike price of Rs. 105.00 per Pound, having paid a premium of Rs. 1.20 per Pound. On the date of expiry, the spot rate is Rs. 102.00 per Pound. Examine whether the exporter would exercise the option, and calculate the net gain to the exporter from having taken the option as compared with selling Pounds at the spot rate prevailing on expiry. [14]

Set E

Q1. Explain the meaning and objectives of exchange control, and discuss the various methods of exchange control, distinguishing between unilateral, bilateral and multilateral methods. [14]

Q2. Trace the evolution of India's exchange control policy from the Foreign Exchange Regulation Act (FERA) to the Foreign Exchange Management Act (FEMA), and discuss the extent of current account and capital account convertibility of the Rupee. [14]

Q3. The spot rate for the Australian Dollar is Rs. 75.00, and the currency is expected to quote at an annualised forward premium of 6 per cent for a period of three months. Calculate the three-month forward rate of the Australian Dollar, and explain how forward margins are converted between different maturity periods. [14]

Q4. Discuss the meaning and objectives of exchange rate forecasting, and examine the difficulties faced by forecasters on account of the volatility and unpredictability of floating exchange rates. [14]

Q5. An importer has to remit US Dollars 50,000 to a foreign supplier. The bank quotes a spot selling rate of Rs. 83.40 per US Dollar and levies an exchange margin of 0.10 per cent over the spot rate. Calculate the effective exchange rate charged by the bank and the total Rupee outlay for the importer, and explain the purpose of such an exchange margin. [14]

Q6. Discuss the relationship among Purchasing Power Parity, Interest Rate Parity and the Fisher Effect, and explain how these parity conditions together form an integrated framework for understanding the international financial system. [14]

Q7. The spot rate for the US Dollar is Rs. 83.00. The expected annual rate of inflation is 6 per cent in India and 2 per cent in the United States. Using relative Purchasing Power Parity, forecast the spot exchange rate expected to prevail one year hence, and discuss the assumptions underlying such a forecast. [14]

Q8. Discuss the causes and consequences of interest rate differentials across countries in the context of international capital flows, and examine the role of the Fisher Effect and the International Fisher Effect in explaining such differentials. [14]

Q9. Discuss the meaning of economic exposure, examine the factors on which the extent of a firm's economic exposure depends, and discuss the strategies available to a firm for managing and hedging such exposure. [14]

Q10. An importer has to pay US Dollars 200,000 in three months. The bank offers a forward contract locking in a rate of Rs. 83.80 per US Dollar. Alternatively, the importer could buy a call option at a strike price of Rs. 83.50 per US Dollar, paying a premium of Rs. 0.60 per US Dollar. If the spot rate on the date of settlement turns out to be Rs. 85.00 per US Dollar, compare the total Rupee outflow for the importer under the forward contract and under the option contract, and determine which of the two hedging instruments would have proved cheaper. [14]

Business Economics (Paper BCH 306)

Business Economics (Paper BCH 306) covers the nature and scope of business economics, the law of demand, elasticity of demand, demand estimation and forecasting and the indifference curve technique; the production function, laws of returns, returns to scale, cost curves and break-even analysis; price and output decisions under perfect competition, monopoly, monopolistic competition and oligopoly; and national income analysis, the consumption and investment functions, business cycles and inflation. Time: 3 Hours, Maximum Marks: 70. Answer any five of the ten questions given below; all questions carry equal marks (14 each). The five sets below (Set A to Set E) give you full practice coverage across every unit of the syllabus.

Set A

Q1. Explain the nature and scope of Business Economics, and distinguish it from Economics as a social science, bringing out the special features that make Business Economics an applied discipline of managerial decision making. [14]

Q2. Discuss the relationship between Economic theories and Business Economics, and explain how the various tools of economic theory, such as demand analysis, cost analysis and market structure, assist a business manager in decision making under conditions of uncertainty. [14]

Q3. State and explain the Law of Demand along with its underlying assumptions, and discuss the important exceptions to the law, such as Giffen goods, Veblen goods, and goods purchased in anticipation of future price changes. [14]

Q4. Explain the meaning of a production function and discuss its important assumptions, distinguishing between the short-run and long-run production functions of a firm. [14]

Q5. Explain the Cobb Douglas Production Function, state its important properties, and discuss how the sum of its exponents indicates the nature of returns to scale operating in a firm. [14]

Q6. Explain the meaning and features of perfect competition, and discuss with the help of a diagram how a firm under perfect competition determines its short-run equilibrium price and output. [14]

Q7. Explain, with the help of a diagram, the long-run equilibrium of a firm and of the industry under perfect competition, and discuss why a firm earns only normal profit in long-run equilibrium. [14]

Q8. A firm operating under perfect competition has the total cost function TC = 200 + 10Q + Q^2, where Q is the output, and sells its product at the market-determined price of Rs. 50 per unit. Calculate the profit-maximising level of output for the firm, and determine the amount of total profit earned at that level of output. [14]

Q9. Explain the various concepts of national income, such as GDP, GNP, NDP and NNP at market price and factor cost, and personal and disposable income, and discuss the circular flow of income in a simple economy. [14]

Q10. Discuss the product (output) method, the income method and the expenditure method of measuring national income, and examine the major difficulties encountered in the accurate measurement of national income of a country. [14]

Set B

Q1. Explain the meaning of elasticity of demand and describe its various types, namely price elasticity, income elasticity, cross elasticity and promotional (advertisement) elasticity of demand, with suitable examples of each. [14]

Q2. Describe the percentage (proportionate), total outlay, point (geometric) and arc methods of measuring price elasticity of demand, bringing out the situations in which each method is most appropriately used. [14]

Q3. The price of a commodity falls from Rs. 20 per unit to Rs. 18 per unit, as a result of which the quantity demanded rises from 100 units to 120 units per week. Using the percentage method, calculate the price elasticity of demand for the commodity, and state whether demand is elastic, inelastic or unitary. [14]

Q4. State and explain the Law of Variable Proportions (Law of Returns) with reference to the three stages of production, and discuss the reasons for the eventual operation of diminishing returns to a variable factor. [14]

Q5. Distinguish between returns to a factor and returns to scale, and discuss the concept of economies and diseconomies of scope as it relates to a multi-product firm. [14]

Q6. Explain the meaning and features of monopoly, and discuss with the help of a diagram how a monopolist determines the short-run price and output that maximise profit. [14]

Q7. A monopolist faces the demand function P = 100 - Q and has the total cost function TC = 10Q + 0.5Q^2, where Q is the output. Calculate the profit-maximising output, the price charged, and the total profit earned by the monopolist. [14]

Q8. Explain the meaning of the consumption function, and discuss the Keynesian psychological law of consumption along with the concepts of average propensity to consume and marginal propensity to consume. [14]

Q9. Explain the meaning and determinants of the investment function, and discuss the concept of marginal efficiency of capital and its role in inducing investment in an economy. [14]

Q10. Explain the concept of the investment multiplier and discuss its relationship with the marginal propensity to consume and the marginal propensity to save, bringing out its significance for income determination. [14]

Set C

Q1. The price of a commodity falls from Rs. 10 per unit to Rs. 8 per unit, and the corresponding quantity demanded rises from 50 units to 70 units. Using the arc elasticity formula, calculate the price elasticity of demand over this price range, and explain why the arc method is considered more appropriate than the percentage method for measuring elasticity over a finite price range. [14]

Q2. Discuss the significance of the concept of elasticity of demand in business decision making, with particular reference to pricing policy, price discrimination and the imposition of commodity taxes. [14]

Q3. Discuss the various internal and external economies and diseconomies of scale that a firm may experience as it expands its scale of operations. [14]

Q4. Explain the various short-run cost concepts, namely total fixed cost, total variable cost, total cost, average fixed cost, average variable cost, average total cost and marginal cost, and discuss the relationship among them with the help of cost curves. [14]

Q5. Explain the derivation of the long-run average cost curve as the 'envelope curve' of a family of short-run average cost curves, and discuss why it is generally U-shaped under the traditional approach. [14]

Q6. Explain the meaning and features of monopolistic competition, and discuss with the help of diagrams the short-run price-output equilibrium of a firm and the concept of 'excess capacity' in long-run equilibrium. [14]

Q7. Compare the price-output equilibrium of a firm under perfect competition with that under monopoly, and examine the implications of each market structure for allocative efficiency and consumer welfare. [14]

Q8. Explain the meaning and essential features of oligopoly, and discuss why the demand curve facing an oligopolist is generally considered indeterminate. [14]

Q9. Explain the meaning of business cycles and describe their various phases, namely prosperity, recession, depression and recovery, with reference to the behaviour of output, employment and prices in each phase. [14]

Q10. Discuss the important theories of business cycles, such as the monetary theory, the over-investment theory, the Keynesian theory and Schumpeter's innovation theory. [14]

Set D

Q1. Explain the meaning and importance of demand estimation for a business firm, and discuss the survey method and the market experiment method of estimating demand for a product. [14]

Q2. Explain the meaning and need for demand forecasting, and discuss the survey of buyers' intentions method, the expert opinion (Delphi) method, and the trend projection (time-series) method of demand forecasting. [14]

Q3. Explain the meaning and properties of indifference curves, and describe how an indifference map together with a budget line determines the consumer's equilibrium. [14]

Q4. Discuss the concept of the 'L' shaped long-run average cost curve, and explain how the modern empirical approach to cost curves differs from the traditional U-shaped long-run average cost curve. [14]

Q5. A firm's total cost function is given by TC = 100 + 5Q + 2Q^2, where Q is the output. Derive the average cost (AC) and marginal cost (MC) functions of the firm, and calculate the values of AC and MC when the firm produces 10 units of output. [14]

Q6. Discuss the concept of price leadership under oligopoly, distinguishing between dominant firm price leadership and barometric price leadership, with suitable examples. [14]

Q7. Explain the kinked demand curve model of oligopoly, derive the kink with the help of a diagram, and discuss how it explains the phenomenon of price rigidity in oligopolistic markets. [14]

Q8. Discuss the meaning, rationale and criticisms of cost-plus (full-cost) pricing as a pricing policy commonly followed by business firms. [14]

Q9. Discuss the meaning and various types of inflation, distinguishing between creeping, walking, galloping and hyperinflation, and between demand-pull and cost-push inflation. [14]

Q10. Examine the principal causes responsible for inflation in a developing economy such as India. [14]

Set E

Q1. Using the indifference curve technique, explain the substitution effect and income effect of a change in the price of a commodity, and show how these effects together determine the shape of the demand curve for a normal good. [14]

Q2. Discuss the applications of the indifference curve technique in analysing the effect of a subsidy, a lump-sum tax, and rationing on consumer welfare and choice. [14]

Q3. A firm's total cost function is given by TC = 50 + 8Q + Q^2, where Q is the output. Derive the average cost (AC) and marginal cost (MC) functions of the firm, calculate the values of AC and MC when the firm produces 5 units of output, and comment on how AC and MC behave as output increases further. [14]

Q4. Explain the concept, assumptions and uses of break-even analysis, and describe with the help of a break-even chart the meaning of fixed cost, variable cost, contribution margin, break-even point and margin of safety. [14]

Q5. A firm has a fixed cost of Rs. 40,000, sells its product at Rs. 50 per unit, and incurs a variable cost of Rs. 30 per unit. Calculate the break-even point in units and in value. If the firm's actual sales are 3,000 units, calculate the margin of safety in units and in value, and also calculate the P/V (profit-volume) ratio. [14]

Q6. Explain the meaning and degrees of price discrimination, and discuss the essential conditions that must be satisfied for a firm to practise successful price discrimination. [14]

Q7. Discuss the various forms of non-price competition, such as product differentiation, advertising and sales promotion, adopted by firms under monopolistic competition and oligopoly. [14]

Q8. Discuss the effects of inflation on different sections of society, such as fixed-income groups, debtors and creditors, producers, and on the general pace of economic growth. [14]

Q9. Discuss the monetary, fiscal and other remedial measures that may be adopted by the government and the central bank to control inflation in an economy. [14]

Q10. Explain, with the help of the Keynesian cross diagram, how the consumption function and the investment function together determine the equilibrium level of national income in a simple two-sector economy. [14]