Common Management Admission Test (CMAT) — Questions and Answers

Question 1: What is 'market capitalization' of a company?

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

Correct answer: Share price multiplied by total outstanding shares

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

Question 2: The 'Five Whys' technique is used in problem solving to:

Rank five decision criteria in order of importance
Set five measurable performance targets for a project team
Identify the root cause of a problem by repeatedly asking 'why' (Correct answer)
Evaluate five strategic alternatives simultaneously

Correct answer: Identify the root cause of a problem by repeatedly asking 'why'

The 'Five Whys' technique involves asking 'why' up to five times in succession to uncover the root cause of a problem, moving beyond surface-level symptoms.

Question 3: From the choices, select the most suitable synonym (a word that means the same) for the main word: ABSTRACT

Normal
Diagnostic
Peculiar
Summary (Correct answer)

Correct answer: Summary

Explanation: ABSTRACT means: Existing in thought or as an idea but not having a physical or concrete existence.

Question 4: In decision making, 'risk aversion' describes a preference for:

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)
Ignoring probability estimates in the decision-making process

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

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

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

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

Correct answer: Balance Sheet

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

Question 7: A table shows product sales by region: North=300, South=250, East=200, West=350. What is the ratio of East to West sales?

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

Correct answer: 4:7

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

Question 8: In economics, 'opportunity cost' refers to:

The cost of raw materials
The price increase due to inflation
The value of the next best alternative forgone (Correct answer)
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 9: The S&P 500 is an index tracking the performance of how many large U.S. companies?

100
300
500 (Correct answer)
1000

Correct answer: 500

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

Question 10: Which of the following sentences contains a dangling modifier?

Running late, she missed the bus.
After he completed the task, the team celebrated.
Having finished the report, the meeting was adjourned. (Correct answer)
Confused by the map, the tourist asked for directions.

Correct answer: Having finished the report, the meeting was adjourned.

In option B, 'Having finished the report' dangles because the meeting cannot finish a report.

Question 11: 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
Constant percentage growth (Correct answer)
Constant absolute growth
Increasing 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 12: If the day before yesterday was Thursday, what day will it be the day after tomorrow?

Sunday
Tuesday
Monday (Correct answer)
Wednesday

Correct answer: Monday

If day before yesterday = Thursday, today = Saturday, and day after tomorrow = Monday.

Question 13: A sum doubles itself in 10 years at simple interest. What is the annual interest rate?

12%
15%
10% (Correct answer)
8%

Correct answer: 10%

SI = P when it doubles, so P = (P × R × 10)/100, giving R = 10%.

Question 14: Annual revenue is $1.2M and average accounts receivable is $100,000. What is the receivables turnover ratio?

8
14
10
12 (Correct answer)

Correct answer: 12

Receivables Turnover = Revenue / Avg. Receivables = 1,200,000 / 100,000 = 12.

Question 15: What is the name of the U.S. legislation that governs financial reporting for publicly traded companies?

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

Correct answer: Sarbanes-Oxley Act

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

Question 16: A 20% increase followed by a 20% decrease results in what net change?

−4% (Correct answer)
0%
−2%
−5%

Correct answer: −4%

Net factor = 1.20 × 0.80 = 0.96, representing a 4% decrease.

Question 17: In a certain code, 'ROAD' is written as 'URDG'. How is 'SWAN' written in that code?

UZBQ
VZDQ (Correct answer)
VBZQ
VZCQ

Correct answer: VZDQ

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

Question 18: Which sentence correctly uses the subjunctive mood?

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

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 19: What is 'venture capital'?

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

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 20: From the choices, identify the one that is opposite in meaning (Antonym) to the main word: CONSIDERATE

Malignant
Atrocious
Comprehensive
Indifferent (Correct answer)

Correct answer: Indifferent

Explanation: CONSIDERATE means: showing kind awareness or regard for other's feelings, circumstances, etc. Indifferent means: without interest or concern; not caring; apathetic Example sentence: The king remained indifferent to the sufferings of his people.

Question 21: What is the 'product-market fit' in startups?

Choosing the right distribution channel
The degree to which a product satisfies strong market demand (Correct answer)
Ensuring product quality meets regulatory standards
Matching product price to market norms

Correct answer: The degree to which a product satisfies strong market demand

Product-market fit means the product meets the needs of the target market effectively, evidenced by strong customer engagement and growth.

Question 22: Choose the same relationship from given four choices as given in the original pair: Stairs : Lift

Crane : Load
Walk : Drive (Correct answer)
Write : Type
Pen : Write

Correct answer: Walk : Drive

Explanation: One can walk up or down the stairs or take the lift to do the same thing. Same way one can either walk to the destination or drive.

Question 23: Choose the best synonym for 'EPHEMERAL'.

Significant
Transient (Correct answer)
Robust
Eternal

Correct answer: Transient

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

Question 24: What is a 'business model canvas'?

A one-page visual framework to describe a business model (Correct answer)
A marketing strategy template
An organizational chart
A financial projection tool

Correct answer: A one-page visual framework to describe a business model

The Business Model Canvas, developed by Osterwalder, is a strategic management template that visualizes a company's value proposition, infrastructure, customers, and finances.

Question 25: A bar chart shows exam scores of 5 students: 72, 85, 68, 91, 74. What is the median score?

72
85
74 (Correct answer)
75

Correct answer: 74

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

Question 26: The idiom 'to bite the bullet' means:

To make a hasty decision
To endure a painful situation with courage (Correct answer)
To avoid confrontation
To act aggressively

Correct answer: To endure a painful situation with courage

'To bite the bullet' means to endure a painful or difficult situation stoically.

Question 27: Which management function involves monitoring performance and taking corrective action?

Leading
Controlling (Correct answer)
Planning
Organizing

Correct answer: Controlling

Controlling involves comparing actual performance to standards and taking corrective action when necessary.

Question 28: What does 'SMART' stand for in goal setting?

Structured, Monitored, Approved, Ranked, Timed
Simple, Manageable, Assigned, Reviewed, Tested
Specific, Measurable, Achievable, Relevant, Time-bound (Correct answer)
Strategic, Meaningful, Actionable, Realistic, Trackable

Correct answer: Specific, Measurable, Achievable, Relevant, Time-bound

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound — a framework for effective goal setting.

Question 29: Which of these best describes 'design thinking'?

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

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 30: In venture capital, what is a 'unicorn'?

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

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.

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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These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

cdnbbsr.s3waas.gov.in — Test delivery, eligibility, fees, passing score, time limit · verified Oct 2026
nta.ac.in — Exam dates · verified Oct 2026
cmat.nta.nic.in — Exam information · verified Nov 2026