Common Management Admission Test (CMAT) — Questions and Answers

Question 1: Which of the following is considered a 'bull market' in finance?

Market declining by 20%
Market rising by 20% or more (Correct answer)
Stable market with no change
Market with high volatility

Correct answer: Market rising by 20% or more

A bull market is characterized by rising prices, typically when a major market index gains 20% or more.

Question 2: From the choices, identify the one that is opposite in meaning (Antonym) to the main word: IMMACULATE

Immobile
Accumulated
Unclean (Correct answer)
Motherly

Correct answer: Unclean

Explanation: IMMACULATE means: Perfectly clean, neat, or tidy. Free from flaws or mistakes.

Question 3: A table shows product sales by region: North=300, South=250, East=200, West=350. What is the ratio of East to West sales?

3:5
4:7 (Correct answer)
4:5
2:3

Correct answer: 4:7

Ratio = 200:350 = 4:7 in simplest form.

Question 4: What is the effective annual rate (EAR) for a 12% nominal rate compounded monthly?

12.68% (Correct answer)
13%
12%
12.36%

Correct answer: 12.68%

EAR = (1 + 0.12/12)^12 − 1 = (1.01)^12 − 1 ≈ 12.68%.

Question 5: What is 'PESTLE analysis' used for in business?

Assessing employee performance
Calculating production efficiency
Analyzing financial statements
Evaluating external macro-environmental factors (Correct answer)

Correct answer: Evaluating external macro-environmental factors

PESTLE stands for Political, Economic, Social, Technological, Legal, Environmental — a framework for external analysis.

Question 6: What is 'matrix organizational structure'?

A hierarchical organization with rigid reporting lines
An organization divided purely by geography
An organization where employees report to both functional and project managers (Correct answer)
A flat organization with no middle management

Correct answer: An organization where employees report to both functional and project managers

In a matrix structure, employees have dual reporting relationships — to both a functional manager and a project manager.

Question 7: Find the odd one out: 36, 49, 64, 81, 100, 112

112 (Correct answer)
81
64
100

Correct answer: 112

All others are perfect squares (6², 7², 8², 9², 10²), but 112 is not a perfect square.

Question 8: What is the term for persistent increase in the general price level of goods and services?

Stagflation
Inflation (Correct answer)
Deflation
Recession

Correct answer: Inflation

Inflation refers to a sustained rise in the general price level, reducing purchasing power.

Question 9: What is 'market capitalization' of a company?

Total assets minus total liabilities
Total revenue earned in a year
Total capital invested by founders
Share price multiplied by total outstanding shares (Correct answer)

Correct answer: Share price multiplied by total outstanding shares

Market cap = current share price × total number of outstanding shares.

Question 10: What does NASDAQ primarily list?

Energy and commodity companies
Technology and growth companies (Correct answer)
Government bonds
Foreign currency pairs

Correct answer: Technology and growth companies

NASDAQ is known for listing technology and growth-oriented companies like Apple, Google, and Amazon.

Question 11: What is 'organizational culture'?

The corporate social responsibility initiatives of a company
The formal structure and hierarchy of an organization
The shared values, beliefs, and behaviors that shape how work is done (Correct answer)
The cultural backgrounds of employees

Correct answer: The shared values, beliefs, and behaviors that shape how work is done

Organizational culture represents the collective values, norms, and behaviors that define how things are done in a company.

Question 12: What is 'crowdfunding' as a method of raising capital?

Bank loans to groups of entrepreneurs
Raising small amounts of money from a large number of people, often via the internet (Correct answer)
Government grants distributed to many small businesses
Collecting investments from a small group of major investors

Correct answer: Raising small amounts of money from a large number of people, often via the internet

Crowdfunding platforms like Kickstarter and Indiegogo allow entrepreneurs to raise capital from a large pool of small contributors.

Question 13: If P means ÷, Q means ×, R means +, and S means −, what is 18 P 3 Q 4 R 5 S 2?

27 (Correct answer)
31
29
25

Correct answer: 27

Substituting: 18 ÷ 3 × 4 + 5 − 2 = 6 × 4 + 5 − 2 = 24 + 5 − 2 = 27.

Question 14: Fill in the blank with the correct preposition: 'She has been working _______ this project since Monday.'

at
on (Correct answer)
with
for

Correct answer: on

The correct preposition is 'on' when referring to working on a project.

Question 15: Identify the figure of speech in: 'The classroom was a zoo during the unsupervised period.'

Hyperbole
Metaphor (Correct answer)
Personification
Simile

Correct answer: Metaphor

Directly calling the classroom 'a zoo' without using 'like' or 'as' makes this a metaphor.

Question 16: Who developed the 'Lean Startup' methodology?

Eric Ries (Correct answer)
Steve Blank
Peter Drucker
Clayton Christensen

Correct answer: Eric Ries

Eric Ries introduced the Lean Startup methodology in his 2011 book, emphasizing build-measure-learn cycles.

Question 17: Pointing to a photograph, a woman says, "This man's son's sister is my mother-in-law." How is the woman's husband related to the man in the photograph?

Son
Son in law
Grandson (Correct answer)
Cousin

Correct answer: Grandson

Explanation : Man's son's sister : Man's daughter So Man's daughter is the mother of the woman's husband. Thus, the woman's husband is the grandson. So the woman’s husband is the grandson of the man in the photograph.

Question 18: What is 'disruptive innovation'?

An innovation that improves an existing product
An innovation that creates new markets and displaces established competitors (Correct answer)
An innovation in manufacturing processes
A patent-protected new technology

Correct answer: An innovation that creates new markets and displaces established competitors

Disruptive innovation, a concept by Clayton Christensen, refers to innovations that initially target overlooked segments and eventually displace incumbents.

Question 19: All managers are leaders. Some leaders are visionaries. Which conclusion is definitely true?

Some managers are visionaries
Some managers are leaders (Correct answer)
All managers are visionaries
No manager is a visionary

Correct answer: Some managers are leaders

Since all managers are leaders, it is definite that some managers are leaders.

Question 20: What does 'core competency' mean in strategic management?

A unique capability or advantage that a company does better than competitors and is hard to replicate (Correct answer)
The technical skills of the IT department
The financial reserves of a company
The minimum skills required to operate

Correct answer: A unique capability or advantage that a company does better than competitors and is hard to replicate

Core competencies, a concept by Prahalad and Hamel, are unique strengths embedded in a company that create competitive advantage.

Question 21: What is 'scalability' in the context of a business?

The ability to operate in multiple countries
The ability to increase revenue without a proportional increase in costs (Correct answer)
The ability to reduce prices over time
The ability to hire more employees quickly

Correct answer: The ability to increase revenue without a proportional increase in costs

A scalable business can grow revenue rapidly while keeping costs relatively flat, improving margins as it expands.

Question 22: Select the best meaning of the phrase 'a double-edged sword' as used in context: 'Social media is a double-edged sword for businesses.'

A tool that is exclusively harmful
Something with both advantages and disadvantages (Correct answer)
A strategy that always succeeds
A weapon used in competition

Correct answer: Something with both advantages and disadvantages

A double-edged sword refers to something that has both beneficial and harmful aspects.

Question 23: In a certain code, 'ROAD' is written as 'URDG'. How is 'SWAN' written in that code?

VZDQ (Correct answer)
VBZQ
UZBQ
VZCQ

Correct answer: VZDQ

Each letter is shifted forward by 3 positions: S→V, W→Z, A→D, N→Q giving VZDQ.

Question 24: Which sentence correctly uses the subjunctive mood?

I wish I was taller.
If I was you, I would leave.
It is important that everyone attends.
She demanded that he be present. (Correct answer)

Correct answer: She demanded that he be present.

'Be' in 'demanded that he be present' is the correct subjunctive form after a verb of demand.

Question 25: From the choices, select the most suitable synonym (a word that means the same) for the main word: COMPLACENT

Disappointed
Evasive
Flimsy
Satisfied (Correct answer)

Correct answer: Satisfied

Explanation: COMPLACENT means: marked by self-satisfaction especially when accompanied by unawareness of actual dangers or deficiencies.

Question 26: In decision making under risk, which technique calculates the average outcome by weighting each scenario by its probability?

Minimax regret
Maximax criterion
Expected Monetary Value (EMV) (Correct answer)
Maximin criterion

Correct answer: Expected Monetary Value (EMV)

Expected Monetary Value (EMV) is calculated by multiplying the value of each outcome by its probability and summing all products, providing an average outcome across all scenarios.

Question 27: In economics, 'opportunity cost' refers to:

The price increase due to inflation
The value of the next best alternative forgone (Correct answer)
The cost of raw materials
The total cost of producing a product

Correct answer: The value of the next best alternative forgone

Opportunity cost is the value of the best alternative given up when making a decision.

Question 28: Which financial statement shows a company's assets, liabilities, and equity at a specific point in time?

Income Statement
Cash Flow Statement
Balance Sheet (Correct answer)
Statement of Retained Earnings

Correct answer: Balance Sheet

The balance sheet provides a snapshot of a company's financial position at a given date.

Question 29: Six people A, B, C, D, E, F sit in a row. A is to the right of B, C is to the left of D, and E is between B and D. Who sits in the middle?

C
E (Correct answer)
D
B

Correct answer: E

Arranging based on the clues places E between B and D, making E occupy a central position.

Question 30: A frequency table shows: Score 0-20: 5, 21-40: 10, 41-60: 20, 61-80: 15, 81-100: 10. What percentage scored above 60?

40%
30%
60%
50% (Correct answer)

Correct answer: 50%

Scored above 60 = 15 + 10 = 25 out of 60 total = 41.67%, closest to 40%.

Question 31: Revenue data (in $K): Mon=40, Tue=55, Wed=50, Thu=65, Fri=70. What is the range of revenue?

25
35
28
30 (Correct answer)

Correct answer: 30

Range = Maximum − Minimum = 70 − 40 = 30.

Question 32: Which of the following best describes 'Foreign Direct Investment' (FDI)?

Investing in foreign stocks via an exchange
Lending money to foreign governments
Buying foreign currency
A company establishing business operations in another country (Correct answer)

Correct answer: A company establishing business operations in another country

FDI involves a firm making a physical investment, such as building a factory, in a foreign country.

Question 33: What is 'intrapreneurship'?

Entrepreneurial behavior within an established organization (Correct answer)
A form of social entrepreneurship
Starting a new venture inside a university
Entrepreneurship between two international firms

Correct answer: Entrepreneurial behavior within an established organization

Intrapreneurs behave like entrepreneurs within a larger company, innovating and taking risks to develop new products or services.

Question 34: Choose the best synonym for 'EPHEMERAL'.

Robust
Transient (Correct answer)
Eternal
Significant

Correct answer: Transient

Ephemeral means lasting for a very short time, making transient its closest synonym.

Question 35: Which option correctly identifies the tone of this sentence: 'Despite years of dedicated service, the employee was dismissed without so much as a word of thanks.'

Celebratory
Optimistic
Indignant (Correct answer)
Satirical

Correct answer: Indignant

The sentence conveys resentment and moral outrage, which is characteristic of an indignant tone.

Question 36: A cube is painted red on all faces, then cut into 27 equal smaller cubes. How many small cubes have exactly 2 faces painted?

8
6
24
12 (Correct answer)

Correct answer: 12

Exactly 2 faces painted = edge cubes (not corners); a 3×3×3 cube has 12 edges, each contributing 1 such cube = 12.

Question 37: What does 'span of control' refer to in organizational design?

The number of products a manager oversees
The budget a manager controls
The departments a manager coordinates
The number of subordinates a manager directly supervises (Correct answer)

Correct answer: The number of subordinates a manager directly supervises

Span of control refers to the number of direct reports or subordinates a single manager oversees.

Question 38: The S&P 500 is an index tracking the performance of how many large U.S. companies?

1000
500 (Correct answer)
100
300

Correct answer: 500

The S&P 500 tracks 500 large-cap U.S. publicly traded companies across various sectors.

Question 39: In venture capital, what is a 'unicorn'?

A publicly listed tech company
A startup backed by government funds
A privately held startup valued at $1 billion or more (Correct answer)
A startup that fails within its first year

Correct answer: A privately held startup valued at $1 billion or more

A 'unicorn' refers to a privately held startup company valued at over $1 billion, a term coined by venture capitalist Aileen Lee.

Question 40: Read the passage: 'Although automation displaces certain jobs, it simultaneously creates new roles requiring higher cognitive skills, ultimately shifting rather than eliminating employment.' What is the author's primary argument?

New roles created by automation are inferior.
Cognitive skills are becoming less important.
Automation transforms employment rather than eliminating it. (Correct answer)
Automation causes net unemployment.

Correct answer: Automation transforms employment rather than eliminating it.

The passage explicitly states automation causes a 'shifting rather than eliminating' of employment.

Question 41: In a group, some people speak French, and all French speakers speak English. Can we conclude that all English speakers speak French?

Cannot be determined from the data
Yes, because they share English
No, English speakers may not speak French (Correct answer)
Yes, by logical equivalence

Correct answer: No, English speakers may not speak French

The statement 'all French speakers speak English' does not imply the reverse; there may be English speakers who don't know French.

Question 42: What does 'MVP' stand for in the startup context?

Market Validation Protocol
Minimum Viable Product (Correct answer)
Maximum Viable Plan
Most Valuable Partner

Correct answer: Minimum Viable Product

An MVP (Minimum Viable Product) is the simplest version of a product that delivers value to early customers and enables testing of key assumptions.

Question 43: Which of the following is an example of a non-sequitur logical fallacy in written argument?

She is a doctor, so she must be wealthy. (Correct answer)
This product worked for me, so it will work for everyone.
All birds can fly; penguins are birds, so penguins can fly.
Either you support this policy or you oppose progress.

Correct answer: She is a doctor, so she must be wealthy.

Concluding wealth from being a doctor is a non sequitur—the conclusion does not logically follow from the premise.

Question 44: A statement says: 'All honest people are trusted.' Its contrapositive is:

All trusted people are honest
No honest person is trusted
All untrusted people are dishonest (Correct answer)
Some dishonest people are trusted

Correct answer: All untrusted people are dishonest

The contrapositive of 'If P then Q' is 'If not Q then not P': if not trusted, then not honest.

Question 45: What is 'Theory X and Theory Y' in management?

A production efficiency framework
Douglas McGregor's theory about managers' assumptions about employee motivation (Correct answer)
A financial management model
A marketing segmentation tool

Correct answer: Douglas McGregor's theory about managers' assumptions about employee motivation

Douglas McGregor's Theory X assumes employees dislike work; Theory Y assumes they are self-motivated and seek responsibility.

Question 46: What does 'SWOT' stand for in strategic planning?

Systems, Workflow, Output, Testing
Sales, Workforce, Operations, Technology
Strategy, Work, Objectives, Targets
Strengths, Weaknesses, Opportunities, Threats (Correct answer)

Correct answer: Strengths, Weaknesses, Opportunities, Threats

SWOT analysis evaluates an organization's Strengths, Weaknesses, Opportunities, and Threats.

Question 47: What is 'management by objectives' (MBO)?

A process where managers and employees jointly set goals and measure performance against them (Correct answer)
Managing employees strictly by following procedures
Setting objectives only at senior management level
Using financial objectives to evaluate all business decisions

Correct answer: A process where managers and employees jointly set goals and measure performance against them

MBO, introduced by Peter Drucker, aligns organizational goals with individual performance by involving employees in goal-setting.

Question 48: Which global organization was created to promote international trade by reducing trade barriers?

World Bank
WTO (Correct answer)
IMF
UNCTAD

Correct answer: WTO

The World Trade Organization (WTO) was established in 1995 to facilitate and regulate international trade.

Question 49: Which of the following is an example of a non-renewable resource?

Wind power
Natural gas (Correct answer)
Solar energy
Hydropower

Correct answer: Natural gas

Natural gas is a fossil fuel formed over millions of years and is non-renewable once consumed.

Question 50: A pie chart shows market share: Company A=35%, B=25%, C=20%, D=20%. If total market is $500M, how much more does A earn than C?

$75M (Correct answer)
$80M
$50M
$70M

Correct answer: $75M

A earns $175M and C earns $100M; difference = $75M.

Question 51: In a certain code '123' means 'soldiers are fit'; '345' means 'fit are healthy'; '61' means 'young soldier'. Which digit in the code means 'are'?

5
2 (Correct answer)
3
4
6
1

Correct answer: 2

Explanation: In the first and the second statements, the common word is 'fit' and the common code digit is 3. So 3 means fit. In the first and the third statements, the common word is 'soldier' and the common code digit is 1. So 1 means soldier. Now, in the first statement, the only remaining word is 'are' and the only remaining digit is 2. Thus in the first statement 2 means 'are'.

Question 52: In project management, what does a Gantt chart represent?

A visual timeline of project tasks and their scheduled durations (Correct answer)
Financial budget allocation
Organizational hierarchy
Risk assessment matrix

Correct answer: A visual timeline of project tasks and their scheduled durations

A Gantt chart is a horizontal bar chart showing project tasks, their durations, and timing across a timeline.

Question 53: In a CMAT reading passage, the author states a fact and then draws a broad conclusion applicable to all cases. This is an example of:

Circular reasoning
Deductive reasoning
Analogical reasoning
Inductive reasoning (Correct answer)

Correct answer: Inductive reasoning

Moving from specific facts to a broad general conclusion is inductive reasoning.

Question 54: A man walks 5 km north, turns right and walks 3 km, turns right and walks 5 km. How far is he from the starting point and in which direction?

5 km North
3 km West
3 km East (Correct answer)
8 km South

Correct answer: 3 km East

He ends up 3 km east of the starting point after the north-east-south path cancels the vertical displacement.

Question 55: Project A has a 70% chance of earning $100,000 and a 30% chance of losing $50,000. What is the expected monetary value of Project A?

$55,000 (Correct answer)
$50,000
$85,000
$70,000

Correct answer: $55,000

Expected value = (0.70 × $100,000) + (0.30 × −$50,000) = $70,000 − $15,000 = $55,000.

Question 56: Read the passage carefully and answer the question. In the last few years, there has been a rapid increase in the number of car owners in the country. On the other hand, there is an economic boom and there is double-digit growth in almost all sectors in all the industries. Each of the following if true, could help explain the increase in the number of car owners in the country, except:

Rising petrol prices.
Easy availability of car loans.
Launch of low-cost car models by various car companies. (Correct answer)
Rise in people's income levels due to the economic boom.

Correct answer: Launch of low-cost car models by various car companies.

Explanation: The question requires the test taker to analyze the four given options and then figure out the option that is not a factor for the rise in the number of car owners in the country. Options 1,2 and 4 are all reasonable factors for the rise in the number of car owners in the city. Option 3 is not the reason for the rise in number of car owners in the country. So option 3 is the correct answer.

Question 57: Find the missing number: 5, 11, 23, 47, ?

97
93
89
95 (Correct answer)

Correct answer: 95

Each term is 2× previous term + 1: 5×2+1=11, 11×2+1=23, 23×2+1=47, 47×2+1=95.

Question 58: What is 'social entrepreneurship'?

Running a business on social media platforms
Government-sponsored business initiatives
Business ventures created to address social, cultural, or environmental problems (Correct answer)
Entrepreneurship that primarily uses social networks for marketing

Correct answer: Business ventures created to address social, cultural, or environmental problems

Social entrepreneurs like Muhammad Yunus (Grameen Bank) create enterprises primarily to generate social value rather than purely financial returns.

Question 59: A rectangle's length is increased by 20% and width decreased by 10%. What happens to its area?

Increases by 10%
Increases by 8% (Correct answer)
Decreases by 8%
Stays the same

Correct answer: Increases by 8%

New area factor = 1.20 × 0.90 = 1.08, so area increases by 8%.

Question 60: A bar chart shows sales: Jan=200, Feb=250, Mar=300, Apr=350. What is the average monthly sales?

250
262.5
275 (Correct answer)
300

Correct answer: 275

Average = (200 + 250 + 300 + 350) / 4 = 1100 / 4 = 275.

Question 61: A shopkeeper marks a product 25% above cost price and gives a 10% discount. What is the profit percentage?

10%
15%
17.5%
12.5% (Correct answer)

Correct answer: 12.5%

Selling price = 1.25 × 0.90 = 1.125 times cost, giving 12.5% profit.

Question 62: A table shows quarterly profits (in $M): Q1=2.5, Q2=3.0, Q3=3.5, Q4=4.0. What is the compound growth rate from Q1 to Q4?

About 60%
About 10%
About 20%
About 17% (Correct answer)

Correct answer: About 17%

CAGR over 3 periods = (4.0/2.5)^(1/3) − 1 ≈ 1.6^0.333 − 1 ≈ 17%.

Question 63: In critical thinking, an 'ad hominem' fallacy occurs when:

An argument appeals to the popularity of an idea as proof of its truth
An argument attacks the person making it rather than addressing the argument itself (Correct answer)
Two unrelated events are linked as if one caused the other
Statistical data is used incorrectly to support a claim

Correct answer: An argument attacks the person making it rather than addressing the argument itself

An ad hominem fallacy occurs when someone attacks the character or circumstances of the person making an argument rather than addressing the argument's actual merits.

Question 64: I purchased the original genuine CD of XYZ software. The software worked flawlessly on my computer and I was very happy with it until I spoke to a friend and came to know that even he had purchased the same software, but a pirated copy, at one-tenth of the price that I paid for the software. He is very happy with the software and on his PC too, the software works flawlessly. All this has made me regret my decision to buy a genuine copy of the software instead of the pirated one. Which of the following, if true would weaken the above conclusion?

Pirated copies of software are very cheap compared to genuine software.
Genuine copies of software are meant for organizations only. Individuals should always buy pirated copies of software.
Software piracy is not a crime and it does not harm the software makers as they can sell a good number of genuine copies to large organizations.
Genuine software is always the latest version and the Software companies provide after-sales support and online updates for it. Ethically it is wrong to use pirated software and there is always a possibility that the company might take legal action against users of pirated software. (Correct answer)

Correct answer: Genuine software is always the latest version and the Software companies provide after-sales support and online updates for it. Ethically it is wrong to use pirated software and there is always a possibility that the company might take legal action against users of pirated software.

Explanation: The question requires the test taker to analyze the four given options and then figure out the option that would make the conclusion of the passage weak. In the passage, the person regrets his decision to buy a genuine copy of the software instead of the pirated one. So if option 3 is true. Then the person made the right decision by buying a genuine copy of the software. This option definitely weakens the conclusion. So the correct answer is option 3.

Question 65: The 'satisficing' approach to decision making, proposed by Herbert Simon, means:

Choosing the optimal solution from all available options
Using satisfaction surveys to guide the decision-making process
Satisfying all stakeholders simultaneously before deciding
Selecting the first acceptable solution rather than exhaustively seeking the best one (Correct answer)

Correct answer: Selecting the first acceptable solution rather than exhaustively seeking the best one

Satisficing refers to choosing a solution that is 'good enough' rather than searching exhaustively for the optimal one, recognizing practical limits of time and information.

Question 66: The ratio of ages of A and B is 3:5. Six years later, their ratio will be 2:3. What is B's current age?

25
20
30 (Correct answer)
35

Correct answer: 30

Let ages be 3x and 5x; (3x+6)/(5x+6) = 2/3 gives x = 6, so B = 30.

Question 67: A clock shows 3:15. What is the angle between the hour and minute hands?

7.5° (Correct answer)
22.5°
0°
15°

Correct answer: 7.5°

At 3:15, minute hand is at 90° and hour hand is at 97.5°, giving a difference of 7.5°.

Question 68: Passage: 'The proliferation of social media has created an era of information abundance yet simultaneously fostered echo chambers that limit exposure to diverse perspectives.' The word 'proliferation' most nearly means:

Decline
Regulation
Consolidation
Rapid spread (Correct answer)

Correct answer: Rapid spread

Proliferation means rapid increase or spread, fitting the context of social media growth.

Question 69: In decision making, 'risk aversion' describes a preference for:

Ignoring probability estimates in the decision-making process
Maximizing expected value regardless of the variance of outcomes
Choosing uncertain options that offer higher potential returns
A certain outcome over an uncertain one with the same expected value (Correct answer)

Correct answer: A certain outcome over an uncertain one with the same expected value

A risk-averse decision maker prefers a certain outcome over a gamble with an equal or even slightly higher expected value, prioritizing security and predictability over potential gain.

Question 70: What is 'blue ocean strategy'?

Entering developing country markets first
Creating uncontested market space where competition is irrelevant (Correct answer)
A strategy focused on beating direct competitors
Focusing on sustainable ocean-related businesses

Correct answer: Creating uncontested market space where competition is irrelevant

Blue Ocean Strategy by Kim & Mauborgne advocates creating new demand in uncontested market space rather than competing in existing markets.

Question 71: Which institution is responsible for monetary policy in the United States?

Federal Reserve (Correct answer)
IMF
World Bank
U.S. Treasury

Correct answer: Federal Reserve

The Federal Reserve (the Fed) is the central bank of the U.S. and manages monetary policy.

Question 72: What does GDP stand for in economics?

General Development Plan
Global Distribution Point
Government Debt Payment
Gross Domestic Product (Correct answer)

Correct answer: Gross Domestic Product

GDP stands for Gross Domestic Product, measuring the total value of goods and services produced in a country.

Question 73: Choose the word that correctly completes the sentence: 'The CEO's _______ remarks at the press conference reassured investors.'

cryptic
ambiguous
candid (Correct answer)
vitriolic

Correct answer: candid

Candid means truthful and straightforward, which would logically reassure investors at a press conference.

Question 74: Which of the following represents a 'false dichotomy' fallacy?

Offering customers two product choices that are genuinely the only options available
Using statistical data to support two equally valid conclusions
Stating 'Either we cut costs or the company will fail' with no other options considered (Correct answer)
Presenting two opposing viewpoints for a balanced policy debate

Correct answer: Stating 'Either we cut costs or the company will fail' with no other options considered

A false dichotomy (or false dilemma) occurs when a situation is presented as having only two possible outcomes, ignoring other valid alternatives that exist.

Question 75: Sales data in thousands: Year 1=50, Year 2=60, Year 3=75, Year 4=90, Year 5=108. What is the pattern of growth?

Decreasing percentage growth
Increasing absolute growth
Constant percentage growth (Correct answer)
Constant absolute growth

Correct answer: Constant percentage growth

Each year grows by 20%: 50→60→72→86.4 — the data closely follows constant 20% growth.

Question 76: A stacked bar shows total production and defects: 2021(500 total, 25 defects), 2022(600 total, 24 defects). Which year had a lower defect rate?

2021
Cannot be determined
2022 (Correct answer)
Both the same

Correct answer: 2022

2021 defect rate = 25/500 = 5%; 2022 = 24/600 = 4%; 2022 was lower.

Question 77: What is 'corporate governance'?

The financial management of a corporation
The system of rules and practices by which a company is directed and controlled (Correct answer)
The strategy for corporate expansion
The government regulations applied to corporations

Correct answer: The system of rules and practices by which a company is directed and controlled

Corporate governance encompasses the framework of rules, relationships, and practices governing how a company is run and overseen.

Question 78: Which analytical tool helps decision makers evaluate options under uncertainty by mapping out possible choices and their outcomes?

Gantt chart
Decision tree (Correct answer)
SWOT analysis
Fishbone diagram

Correct answer: Decision tree

A decision tree is a diagram that maps possible decisions, their outcomes, and associated probabilities, helping managers evaluate alternatives under uncertainty.

Question 79: The 'devil's advocate' approach in group decision making is used to:

Delay the decision-making process indefinitely
Avoid interpersonal conflict within the group
Challenge the prevailing view to improve the quality of analysis (Correct answer)
Appoint a single person to make all final decisions

Correct answer: Challenge the prevailing view to improve the quality of analysis

The devil's advocate approach assigns someone to critique the dominant solution, forcing the group to examine assumptions and improve the quality of the final decision.

Question 80: Passage: 'The ancient Silk Road was not merely a trade route for silk but a conduit for ideas, religions, technologies, and cultures.' The word 'conduit' most likely means:

Repository or storage
Barrier
Record or archive
Channel or means of transmission (Correct answer)

Correct answer: Channel or means of transmission

A conduit is a channel through which something is transmitted or conveyed.

Question 81: If a boat travels 15 km upstream in 3 hours and 15 km downstream in 1.5 hours, what is the stream's speed?

2.5 km/h (Correct answer)
2 km/h
3 km/h
5 km/h

Correct answer: 2.5 km/h

Upstream speed = 5 km/h; downstream speed = 10 km/h; stream speed = (10−5)/2 = 2.5 km/h.

Question 82: A bar chart shows exam scores of 5 students: 72, 85, 68, 91, 74. What is the median score?

74 (Correct answer)
72
85
75

Correct answer: 74

Sorted: 68, 72, 74, 85, 91; the middle (3rd) value is 74.

Question 83: What is 'Total Quality Management' (TQM)?

A program for total cost reduction
A method for total workforce management
A financial auditing framework
An approach focused on long-term success through customer satisfaction and continuous improvement (Correct answer)

Correct answer: An approach focused on long-term success through customer satisfaction and continuous improvement

TQM is a management philosophy involving all employees in continuous process improvement to achieve long-term customer satisfaction.

Question 84: Which decision-making model assumes that decision makers have complete information and always select the best possible option?

Rational model (Correct answer)
Political model
Intuitive model
Bounded rationality model

Correct answer: Rational model

The rational model assumes perfect information, clear objectives, evaluation of all alternatives, and selection of the optimal solution—an idealized approach rarely achievable in practice.

Question 85: Choose the correctly spelled word.

Accommodate (Correct answer)
Acommodate
Accomodate
Acomodate

Correct answer: Accommodate

'Accommodate' is spelled with double 'c' and double 'm'.

Question 86: Debt-to-equity ratio = 0.5. If total equity is $200,000, what is total debt?

$150,000
$100,000 (Correct answer)
$50,000
$200,000

Correct answer: $100,000

Debt = D/E Ratio × Equity = 0.5 × 200,000 = $100,000.

Question 87: If 8 workers can complete a job in 15 days, how many days will 12 workers take?

8
12
9
10 (Correct answer)

Correct answer: 10

Total work = 8 × 15 = 120 man-days; 12 workers need 120/12 = 10 days.

Question 88: Which U.S. regulatory body oversees securities markets and protects investors?

FDIC
CFTC
SEC (Correct answer)
FTC

Correct answer: SEC

The Securities and Exchange Commission (SEC) regulates the securities industry and enforces federal securities laws.

Question 89: Which of these best describes 'design thinking'?

Following a strict linear product development process
A human-centered approach to innovation that emphasizes empathy and iteration (Correct answer)
Focusing on engineering specifications
Using aesthetics to differentiate products

Correct answer: A human-centered approach to innovation that emphasizes empathy and iteration

Design thinking is an iterative, user-centered problem-solving process involving empathy, ideation, prototyping, and testing.

Question 90: A graph shows exports (in $M): 2019=200, 2020=180, 2021=220, 2022=260. What was the percentage decline from 2019 to 2020?

5%
8%
10% (Correct answer)
12%

Correct answer: 10%

Decline = (200 − 180) / 200 × 100 = 20/200 × 100 = 10%.

Question 91: A sum of money becomes 3 times in 8 years at simple interest. In how many years will it become 5 times?

14 years
18 years
12 years
16 years (Correct answer)

Correct answer: 16 years

Rate = 200/8 = 25%; to become 5 times, need 400% interest; time = 400/25 = 16 years.

Question 92: What does the Latin phrase 'per se' mean in English usage?

As a result
In other words
For example
By itself or intrinsically (Correct answer)

Correct answer: By itself or intrinsically

'Per se' is a Latin phrase meaning 'by itself' or 'intrinsically,' used to isolate a concept.

Question 93: For the word given below, a contextual usage is provided. Pick the word from the alternatives that are most appropriate in the given context: OBLIVIOUS: The minister seemed oblivious to the prejudices that prevailed in the village.

Aware
Bothered
Insouciant
Unaware (Correct answer)

Correct answer: Unaware

Explanation: OBLIVIOUS means: Not aware of or not concerned about what is happening around one.

Question 94: What is the net present value (NPV) of a project with initial investment $5,000, single year cash flow of $6,000, and discount rate 10%?

$363.6
$454.5 (Correct answer)
$545.5
$1,000

Correct answer: $454.5

NPV = −5,000 + 6,000/1.10 = −5,000 + 5,454.5 = $454.5.

Question 95: What is 'bootstrapping' in entrepreneurship?

Launching a business through crowdfunding
Growing a business using only internal cash flows without external funding (Correct answer)
Getting angel investment at an early stage
Taking a large bank loan to start a business

Correct answer: Growing a business using only internal cash flows without external funding

Bootstrapping means building a company from the ground up using personal savings and revenue without relying on external investment.

Question 96: What is the primary purpose of the International Monetary Fund (IMF)?

To regulate global trade
To stabilize exchange rates and provide financial assistance to countries (Correct answer)
To fund infrastructure projects in developing nations
To develop new monetary currencies

Correct answer: To stabilize exchange rates and provide financial assistance to countries

The IMF promotes global monetary cooperation and provides financial assistance to countries facing balance-of-payments problems.

Question 97: What is the name of the U.S. legislation that governs financial reporting for publicly traded companies?

Dodd-Frank Act
Sherman Antitrust Act
Glass-Steagall Act
Sarbanes-Oxley Act (Correct answer)

Correct answer: Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002 established strict financial reporting requirements for public companies.

Question 98: What is 'venture capital'?

Bonds issued by startup firms
Government grants for new businesses
Loans offered by banks to startups
Private investment funding for early-stage high-growth companies (Correct answer)

Correct answer: Private investment funding for early-stage high-growth companies

Venture capital is private equity funding provided to early-stage startups with high growth potential in exchange for equity.

Question 99: Identify the type of sentence: 'Although he studied hard, he failed the examination.'

Complex (Correct answer)
Compound
Simple
Compound-Complex

Correct answer: Complex

The sentence has one independent clause and one dependent clause introduced by 'although,' making it complex.

Question 100: If a company's total assets are $500,000 and total liabilities are $200,000, what is the equity?

$300,000 (Correct answer)
$250,000
$350,000
$200,000

Correct answer: $300,000

Equity = Total Assets − Total Liabilities = 500,000 − 200,000 = $300,000.

Common Management Admission Test (CMAT)

CMAT is a national-level MBA entrance exam conducted by NTA for admission to AICTE-approved management programs across India. It assesses candidates across five domains: quantitative aptitude, logical reasoning, language comprehension, general awareness, and innovation & entrepreneurship.

100

Questions

180 min

Time Limit

70%

To Pass

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