130. In specification analysis, assumptions related to residuals states must be

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A) worst
B) independent
C) dependent
D) good
✅ ANSWER: B
In specification analysis, assumptions related to residuals states must be independent. The goal of the Requirements Analysis and Specification is to clearly understand customer requirements and to systematically organize these requirements in a specification document.

128. Which is not a function of ERP?

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A) Human resource management
B) financial
C) warehousing
D) None of the above
✅ ANSWER: D
Enterprise resource planning (ERP) is a method of using computer technology to link various Functions such as accounting, inventory control, and human resources across an entire company. However, there are certain things that we need to consider in the ERP to enhance the business processes. All the above are functions of ERP.

126. According to Marshall, the basis of consumer surplus is

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A) Law of diminishing MU
B) Law of Equi-MU
C) Law of proportions
D) All of the above
✅ ANSWER: A
According to Marshall, the basis of consumer surplus is Law of diminishing MU. As per the law, as we purchase more of a commodity, its marginal utility reduces. Since the price is fixed, for all units of the goods we purchase, we get extra utility. This extra utility is consumer surplus.

124. Identify the incorrect statement.

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A) In interview of the prospect agent is knowledge alone is not important
B) Listening is not important as the prospect may not know much about life insurance
C) The agent should avoid being judgmental. It is necessary for the agent to pay
D) Attention to what the prospect says as also to his body language
✅ ANSWER: B
Listening is important as the prospect may not know much about life insurance.

120. A firm encounters its ‘shutdown point’ when

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A) Average total cost equals price at the profit-maximizing level of output
B) Average variable cost equals price at the profit-maximizing level of output
C) Average fixed cost equals price at the profit-maximizing level of output
D) Marginal cost equals price at the profit-maximizing level of output
✅ ANSWER: B
A firm encounters its ‘shutdown point’ when average variable cost equals price at the profit-maximizing level of output.

154. The weak form of the EMH is supported if successive price changes over time are________.

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A) independent of each other
B) negative
C) positive
D) lagged
✅ ANSWER: A
The weak form of the EMH is supported if successive price changes over time are independent of each other. The efficient-market hypothesis (EMH) is a theory in financial economics that states that asset prices fully reflect all available information.

151. If a policy document is lost, then

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A) Claim may be settled on the basis of an indemnity bond
B) An advertisement may have to be placed in a newspaper if the amount to be paid is high
C) Both A & B
D) None of the above
✅ ANSWER: C
If a policy document is lost, then claim may be settled on the basis of an indemnity bond and an advertisement may have to be placed in a newspaper if the amount to be paid is high.