Passage Completion : Exercise 2

In each of the following questions a short passage is given with one of the lines in the passage missing and represented by a blank. Select the best out of the five answer choices given, to make the passage complete and coherent.

1. The cure for inflation, like most cures, consists chiefly in removal of the cause. The cause of inflation is the increase of money and credit. The cure is to stop increasing money and credit………………… It is as simple as that. Although simple in principle; this cure often involves complex and disagreeable decisions on detail. Let us begin with the Federal budget.It is next to impossible to avoid inflation with a continuing heavy deficit. That deficit is almost certain to be financed by inflationary means i.e., by directly or indirectly printing more money. Huge government expenditures are not in them selves inflationary-provided they are made wholly out of tax receipts, or out of borrowing paid for wholly out of real savings. But the difficulties in either of these methods of payment, once expenditures have passed a certain point, are so great that there is almost inevitably a resort to the printing press.

(a) The cure for inflation, in brief, is to stop inflating
(b) The cure for inflation ,in brief ,is to think positively
(c) The cure for inflation is planning small things with little thoughts
(d) The cure of inflation lies in inflation itself
(e) The cure of inflation is hidden in understanding the cause of inflation.

Next sentence after the blank space suggests that blank should have something simple about the inflation. This simple thing should be logical and sensible. Option(a)is simple and goes well with the flow of passage.Option (d) is not right as cure can not lie in cause itself. Option(e) is repetition of what was said in the introduction of passage.

2. The India Union has had more than 55 years of experience with fiscal federalism operating within the framework of the parliamentary democracy and planned economic development. A comprehensive review of fiscal federalism in independent India is, therefore, overdue. There have been feeble protests in form to time about the sprawling powers of the Central government eroding the foundations of fiscal federalism ……………… Now that single party has been dislodged from power in some of the States and parties of different hues and colors are holding office, a can did and comprehensive review of all the aspects of Centre- State relations and the working of fiscal federalism in particular is important and necessary.

(a) But these voices were curbed by all parties.
(b) But democracy does not allow a mechanism to redress this problem
(c) But fiscal federalism is all about ignoring and moving on with protests
(d) But these voices were drowned by the overwhelming influence of the same party at the centre and the States
(e) But these protest died in with time for there feebleness

Options like (e) and (b) are doubtful as passage does not mention such a thing in any of its part. Option(a) talks about all parties but the next statement after the blank space is contradicting it. Option(c) is negative and for fiscal federalism passage discusses its plight not its shortcoming or of democracy as given in option(b). Only option that can fill the blank for going in with the content of passage is option(d). This sentence and next sentence both area combination and coherent in flow.

3. Do firms need banks, or can they make do with stock markets? Do firms need stock markets, or can they make do with banks? Alexander Gerschenkron long ago argued that economically “backward” countries could not trust decentralized capital markets to provide their largest firms sufficient funds……………… More recently, finance theorists have reasoned from agency theory and the economics of information to much the same result. And the transition in Eastern Europe has given the issue a programmatic touch: what should scholars tell the new finance ministers to do about banks and stock markets?

(a) Instead, they needed banks
(b) Instead, they needed centralization mechanisms only
(c) Hence banks and Stock markets are not needed
(d) Therefore Banks score over Stock Markets for them
(e) Banks or Stock markets both are not needed simultaneously

Other options cannot be inserted in the blank space as they are not logical and in sync with passage. Option (b) can be right if ‘only’ is removed from it. Use of ‘only’ makes it incorrect. Banks and Stock markets are decentralization agents and hence are needed as per passage in this way option(c) is against the passage. Then option (d) unnecessarily will introduce comparison between banks and stock markets while passage presents both in as a pair. Option(e) is also wrong on basis of this logic.

4. The Japanese economy is one of the third largest in the world ……………….. The Japanese currency is the Yen.Japan’s main export goods are cars, electronic devices and computers. Most important trade partners are China and the USA, followed by South Korea, Taiwan, Hong Kong, Singapore, Thailand and Germany. Imports: Japan has a surplus in its export/import balance. The most important import goods are raw materials such as oil, food stuffs and wood. Major supplier is China, followed by the USA, Australia, Saudi Arabia, South Korea, Indonesia and the United Arab Emirates. Industries : Manufacturing,construction, distribution, real estate, services, and communication are Japan’s major industries today. Agriculture makes up only about two percent of the GNP. Most important agricultural product is rice. Resources of raw materials are very limited and the mining industry rather small.

(a) And it is going to achieve number one status sooner
(b) It is eying for number one spot in world economy riding on its recent technological developments
(c) Japanese Economy is going through recession and is bound to slip to lower stands in world economy
(d) Only USA and China have a higher GNP.
(e) It is only in terms of growth rate not in terms of GDP.

This question is to be solved by reading whole passage as no immediate connections can be derived with sentence preceding the blank space and one following it. If Japan is third then which one are two other – it is answered in option(d). USA and China are referred to in whole passage. So they can be the other two. Option(a) is hypothetical in nature and needs some explanation to follow after it. Option (b)also needs some base. This is the case with option(c) and option(e).

5. The prospect of renewed war between India and China is,for now,something that disturbs the sleep only of virulent nationalists in the Chinese press and retired colonels in Indian think-tanks. Optimists prefer to hail the $60 billion in trade the two are expected to do with each other this year.But the 20th century taught the world that blatantly foreseeable conflicts of interest can become increasingly foreseeable wars with unforeseeably dreadful consequences. Relying on prosperity and more democracy in China to sort things out thus seems unwise. Two things need to be done. First, the slow progress towards a border settlement needs to resume. The main on us here is on China. It has the territory it really wants and has maintained its claim to Arunachal Pradesh only as a bargaining chip. It has, after all, solved intractable boundary quarrels with Russia, Mongolia, Myanmar and Vietnam …………………………..

(a) Surely it cannot be so difficult to treat with India?
(b) Surely it will be more difficult with India?
(c) Can it solve dispute with India with its non democratic values?
(d) With India intentions are not clear.
(e) In Indian markets, Chinese presence is increasing.

Last sentence shows that China has solved border dispute with a number of countries, while the passage is mainly about the relationship of India and China.This indicates that finishing statement should also be about improvement in relationships of India and China.This is given in all options. But option (a) poses a valid question as passage shows that relationships between two countries are improving.
From the other options (d) is not correct as positive improvements are illustrated in passage. Markets of option (e) are not discussed here in passage. Option(b) is opposite to the spirit of the passage.

6. ……………………..and the proponents of market reforms have no plans for those who do not have the resources and income to buy even two meals a day.The signals are clear that those who cannot pay for their food have no right to survive. These poorer sections of society are reduced to mere victims, beneficiaries, clients and recipients. In this dichotomous relationship, the state is seen as the ‘dole giver’and the people the ‘dole receiver’. It must be recognized that irrespective of market-governed politics, people remain bound to survival, livelihood and identity issues.

(a) The governments have ceased to govern.
(b) When the market is allowed to govern, the government becomes powerless to effect any radical social changes.
(c) Elections have failed to make democracy distributive and justice oriented.
(d) It is about market reforms and absence of plans for the poorest of the poor.
(e) A patron-client relationship defines modern governments and the masses.

A per the passage in starting portion it has been given that market oriented people do not have plans for poor people or in other words no social agenda which is definitely the priority of any government.But if power of government is transferred to others(market forces in this case) then there would not be any radical social change.From the other options, (c)discusses elections but there is nothing related to elections in the passage.Option (d) is contradicting what is said in the statement following the blank space. Option(e) seems to be a finishing sentence rather than an opening sentence as it is related to last part of passage not with the starting part.

7. To succeed in today’s crowded market place where most of the products and advertising look exactly the same, a small business owner must stand out, shouting above the din with a message so clear and compelling that prospects stop and take notice. It’s a matter of business survival.Unfortunately, most entrepreneurs quickly retreat to the supposed security of sameness, soon to be lost in a sea of anonymity and a tidal wave of frustration. In effect, albeit at a subconscious level, they are saying,”I don’t want to be different”. In back room offices and store fronts everywhere, sales people are telling business owners they should do this or that kind of ad because it worked so great for their competitor. The owners nod and sign on. It’s already proven to be a winner, right? WRONG……….

(a) To make your advertising work, follow the principle if your competition is doing it, don’t.
(b) Following your competitor is a sure recipe for disaster.
(c) Win the battle without a fight.
(d) It will fill people with a sense of déjà vu.
(e) You will do it at your own peril.

Option (b) vehemently represents the sense of passage; additionally it contains in it a message that author wants to convey through the passage. One more point supports this option is that it fits well with the capitalized word (which is of course used to emphasize) WRONG. Hence strong message should follow it.

8. Google, the internet power house, seeks to organize the entire world’s information. The company has told publishers it will delay until November its work on copyrighted texts and will not scan any items that the copyright owner does not want included. The Assn. of American Publishers was outraged by this offer, saying Google is trying to turn copyright law inside out. Google should have to ask permission to copy a book for its database, they say, it shouldn’t be up to publishers to object. Google argues that it is making a fair use of the books. The dispute could easily wind up in the courts. Building a guide to the contents of books is hardly the same as making boot legged copies or plagiarizing. It’s a monumental and costly task, and publishers have given no reason to believe they can do it for them selves. Unless their works are as well integrated with the Net as other forms of information and entertainment,they may be left waiting on the shelves for an audience that no longer bothers to walk through the stacks……………

(a) This has put both the internet search engine and the publishers on an unwarranted collision course
(b) Since the case might drag on for years to the detriment of both the parties, an out of court settlement is well advised
(c) Isn’t it rather difficult, or even in fructuous to protect copyright on published text in this internet age?
(d) Perhaps both the parties ought to try and appreciate the other’s view point, as well as legitimate apprehensions, but with the overall goal of the public good in mind.
(e) Mean while, Google should show more respect for publishers’ rights – and publishers should not make the mistake of using the strictures of copyright law to tie their own hands

This option is right as it does not judge or present an opinion rather it comes up with a possibility with right approach i.e. positive and covers legal aspect of matter as well. Other options are more or less judgments or opinions that do not qualify as finishing /closing statement.

9. Relations between the factory and the dealer are distant and usually strained as the factory tries to force cars on the dealers to smooth out production. Relations between the dealer and the customer are equally strained because dealers continuously adjust prices – make deals – to adjust demand with supply while maximizing profits. This becomes a system marked by a lack of long-term commitment on either side,which maximize feelings of mistrust. In order to maximize their bargaining positions, everyone holds back information- the dealer about the product and the consumer about his true desires…………………

(a) As a result, ‘deal making’ becomes rampant, with out concern for customer satisfaction.
(b) As a result, inefficiencies creep into the supply chain.
(c) As a result, everyone treats the other as an adversary,rather than as an ally
(d) As a result, fundamental innovations are becoming scarce in the automobile industry.
(e) As a result, everyone loses in the long run.

All other options except(e) are rephrasing of all ready discussed facts of passage. But Option (e) is incomplete as it does not show what can be the loss specifically. But option (d) shows it. It can be inferred that holding back information would lead to lack of innovations in auto industry, these innovations can be in supply chain for dealers, new car models with improved performance at chap pricing for customers/end users and increased profit for company.

10. The tax system of India encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings. Nevertheless, it is clear that India’s tax system does not consistently favor borrowing over saving, for if it did, there would be no______

(a) tax relief in India for those portions of a taxpayer’s income, if any, that are set a side to increase that taxpayer’s total savings
(b) tax relief in India for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans
(c) tax relief in India for interest that taxpayers are charged on the unpaid balance in credit card accounts
(d) taxes due in India on the cash value of gifts received by taxpayers from banks trying to encourage people to open savings accounts
(e) taxes due in India on the amount that a taxpayer has invested in interest-bearing savings accounts

Understand it in this way –
Although savings is discouraged but borrowings are also not encouraged for a longer (persistent) period. This question is a difficult one. Best method to solve these type of questions is to use elimination method. Option(c) is out of context talking about credit cards so can be rejected. Option (d) involves banks and gifts for saving account which seems to be giving triviality to the matter of paragraph. Option (e) is second best option. But contradicts what is said in passage. Option (a) is best answer for the blank space as it supports only what is given in passage.

11. ……………….. Unemployment typically continues to rise even after GDP starts to increase, so pain for workers is far from over. Already 9.5% of the workforce is unemployed,and all of country’s metropolitan areas reported unemployment rates of at least 10% in June. More jobless will probably mean less shopping and a slower recovery.The latest consumer-confidence numbers show that people are jittery. The quarterly GDP report also makes it clear that consumers pending, which rose slightly in the first quarter,dropped again in the second, by 1.2%. The good news,therefore, was more a result of government stimulus than evidence of a real, sustainable recovery in private demand.

(a) A greater worry is the bleeding in country’s labor market.
(b) The Finance Department has revised its estimates of just how bad 2008 really was.
(c) Figures released by Commerce Department confirmed what most had been expected
(d) New GDP figures suggest some hope for country’s economy. But the pain is far from over.
(e) House prices still have a long way to go before they return to the level of a year ago

Passage shall start with a hope in the GDP figures as in next sentence that hope fades away. See the use of word ‘even after’ this indicates that incident detailed here should have happened before it. Another thing that goes in favor of option (d) is that it shows the pain of unemployment and its sustenance which is a major issue highlighted in paragraph.

12. Everything in New Delhi is extreme.It is a city of the incredibly rich and the miserably poor. For the rich, there are expensive private schools and hospitals, concert halls and theatres- although fewer of those than formerly -and restaurants. The poor are on a hiding to no where: all public facilities, schools and hospitals and housing, are deteriorating. But then there are some world known social workers in it. There are thousands of heroin addicts, and an equal number of carriers of the Aids virus. …………….This is Delhi for you.

(a) But then there are thousands of people who are social workers
(b) But then some of rarest examples of humanity come from this city
(c) But then there is a faith in the City
(d) But then there are people addict to charity and altruism also.
(e) But then there are people who are totally against the drugs and faithful to their partners

‘also’ of this statement connects well with the preceding sentence. Passage presents Delhi in two different shades. And this statement complements the negative statement just before the blank space. Same example is given earlier in passage -on one hand, social amenities deteriorating while on other hand world known social workers are also working in Delhi. In same sense while there are people with addiction for wrong things, there are also people with addiction to right things.

13. Computers are used in banks for a variety of reasons. They help bank personnel operate more efficiently and effectively. Computers are used to track certain transactions and they help process other customer information as well. With out computers, it would be very hard for a bank to offer good customer service day in and day out. Computers help a bank save time and money, and can be used as an a id to generate profits. In nut shell they have become indispensible part of the banks. Bank personnel become so helpless in absence of their machine that nervousness is evident on their faces while technical glitch renders the computer systems dysfunctional for a small period of time. ………once again queues starts to move and crowd starts to thin with fingers starting to work on keyboards; nervousness has made way for confidence of knowing everything at just a click of mouse.

(a) Crowd starts to swell and nervousness starts to turn in fear of failure.
(b) A sense of relief spreads as the problem gets rectified.
(c) There is a condition of traffic jam in bank and everything comes to a halt.
(d) It is not their fault and they are excused for it.
(e) Technology comes with its own disadvantages.

Passage can be divided in two parts. One before the blank space and another after the blank space. First part says that bank people are nervous as computer systems are not working. Second part says that queues get thinner. It means problem mentioned in first part gets rectified and effect of it is seen in second part.

14. Some of the world’s most expensive land can be found in central Mumbai………. However, housing costs are distinctly lower in Mumbai’s suburbs, surrounding prefectures and in other regions and cities of India.Additional commuting costs are often more than compensated by the savings on the rent, especially as many companies pay part or all of their employees’ commuting expenses. If you prefer to live close to city centers, rented houses are an inexpensive option to consider. Utilities such as gas, water and especially electricity are expensive, and phone rates are high. For international calls, consider internet phones, callback services and other offers for the expat community.

(a) Consequently; even tiny apartments in the city center are very expensive
(b) This land is unauthorized land usurped by Land Mafia in city
(c) A new bubble – Reality bubble similar to housing bubble of West is waiting to burst
(d) City is breathing on its seams
(e) The prices will continue to rise till Government come out with an effective policy for reality prices incoming months

this option connects well with the opening statement. Second option can not be reached through passage. Third option also needs some mentioning in the passage. In absence of this linkage it does not qualify for the correct answer. Option (d) is irrelevant. Option(e) is again introducing governance issue that in absence of any elaboration in further reading of passage becomes inappropriate.

15. Now digest the main historical event of this week: China has officially become the world’s second-biggest economy,overtaking Japan. In the West this has prompted concerns about China overtaking the United States sooner than previously thought. But stand back a little farther, apply a more Asian perspective………… These two Asian giants,which until 1800 used to make up half the world economy,are not, like Japan and Germany, mere nation states. In terms of size and population, each is a continent-and for all the glittering growth rates, a poor one.

(a) China’s longer-term contest is with that other recovering economic behemoth: India
(b) China’s longer term contest with USA is going to end in near future
(c) China is now focusing on Asian Market space more than other markets
(d) China is going in tandem with other Asian economy -India
(e) China’s long term border dispute with India effects Asian economy’s growth rate

‘these two Asian giants’ hints reference of some Asian country in previous line. On this basis Option(b) is wrong. Option(c) is about only the China, Option(e) gives new dimension to passage by introducing border dispute which is unwarranted. Fight is between Option(d) and Option (a); latter scores over former as word ‘behemoth’ complements ‘giants’ of subsequent sentence.

16. North India lies in the Indo-Gangetic plain. Towards the North is the Himalayas, which separates the country from Central Asia. The Vindhya ranges separate the North from the South. South India is situated in the Peninsular Deccan Plateau. This region has the Arabian Sea in the west, Bay of Bengal in the east and Indian Ocean in the south. When talking about the racial differences, the North Indians are termed as Aryans,and the South Indians as Dravidians. Inphysique as well, there are many differences between the people of the South and North. The North Indians are taller,and more strongly built than the South Indians. The South Indians are a bit darker than the North Indians…………..Salwar Kamiz is the widely used dress by North Indian women. On the other hand, women in the South wear saris. While men in the North wear Salwar, the men in South prefer dhotis. Another difference that can be seen between North and South India is their food. When compared to the North Indian food, the South Indian food is spicier. The South Indians use more tamarind and coconut when compared to North Indians. The North Indians use more milk products when compared to the people of South India. When talking about the culture, there is vast difference between North and South India. One can come across differences in their music (Northern Hindustani and Southern Carnatic), dance forms and folks.

(a) A big difference is in their style of living
(b) A big difference is in their fashion statements
(c) A big difference can be seen in their dressing styles
(d) A big difference arises in their taste for clothes based on their earnings
(e) A big difference can be seen in their climate that demands different dressing styles

After the blank space two or three sentences are about the dressing styles of North and South Indians. It is not about the climate or earning based choice or fashion. Rather it is just the difference on general basis.

17. An open economy is an economy in which there are economic activities between domestic community and outside, e.g. people, including businesses, can trade in goods and services with other people and businesses in the international community, and flow of funds as investment across the border. Trade can be in the form of managerial exchange, technology transfers, all kinds of goods and services. Although, there are certain exceptions that can not be exchanged, like, railway services of a country can not be traded with another. To avail this service, a country has to produce its own. This contrasts with a closed economy in which international trade and finance can not take place. The act of selling goods or services to a foreign country is called exporting. The act of buying goods or services from a foreign country is called importing…………. There are a number of advantages for citizens of a country with an open economy. One primary advantage is that the citizen consumers have a much larger variety of goods and services from which to choose. Additionally, consumers have an opportunity to invest their savings outside of the country. In an open economy, a country’s spending in any given year need not to equal its output of goods and services. A country can spend more money than it produces by borrowing from abroad, or it can spend less than it produces and lend the difference to foreigners. There is no closed economy in today’s world.

(a) Together exporting and importing are collectively called trade
(b) Exporting and Importing are exclusive classes of trade
(c) Both are independent of each other and do not constitute the term ‘trade’.
(d) Together they make GDP of a country
(e) Together they are indicators of influence of a country on world map

This question is more a checking of logic and sense than an understanding of the passage. Only export and import do not make GDP of a country. They are not the only indicators of influence of a country on world map. Option(c) is not logical and no sense prevails through it.

18. A no budget film is a produced film made with very little, or no money. Young directors starting out in film making commonly use this method because there are few other options available to them at that point. All the actors and technicians are employed without remuneration, and the films are largely non-profit.,…………….. or uses a very minimum “crew” of volunteers to assist him/her on such projects where no money or financing is available, not including the cost of film. No-budget films are made everyday with video tapes and consumer cameras.

(a) Usually the director works alone on such films
(b) These films are huge employers in entertainment industry
(c) A team of experts two or three in number starts without any significant infrastructure
(d) Director is the camera-man, light-man, script writer,screen player and sometimes even act himself in the film
(e) It is difficult task to find suitable people with desired skills ,hence director works alone on such films

Option (b) is not correct as it goes against the passage. Option (e) is illogical and does not fit as there is no reason why skilled people are not available. Option(d) seems silly on basis of its impossibility. Experts are not discussed in passage. Only option which fits well in the context is director working alone on such films of low budget.

19. In finance, the term ‘yield’ describes the amount in cash that returns to the owners of a security. Normally it does not include the price variations, at the difference of the total return. Yield applies to various stated rates of return on stocks (common and preferred, and convertible), fixed income instruments (bonds, notes, bills, strips, zero coupon), and some other investment type insurance products (e.g. annuities)……… It can be calculated as a ratio or as an internal rate of return (IRR). It may be used to state the owner’s total return, or just a portion of income, or exceed the income. It may be used for production output in other industries, Because of these differences, the yields from different uses should never be compared as if they were equal.

(a) The term is a misnomer
(b) The term is understood differently by different people
(c) The term has no definite meaning
(d) The term is used in different situations to mean different things
(e) The term slightly differs in meaning from the text book definitions

See the part of passage after the blank space, this gives a number of meaning of term ‘yield’ taken in different fields. This is same thing which is stated in the passage.From the other options, text definition angle is wrong in (e). Option(d) is links the term with situations which is not correct. Option (a) and (c) are false.

20. Market trends are fluctuated on the demographics and technology. In a macro economical view, the current state of consumer trust in spending will vary the circulation of currency. In a micro economical view, demographics within a market will change the advancement of businesses and companies. With the introduction of the internet, consumers have access to different vendors as well as substitute products and services changing the direction of which a market will go. Despite that, it is believed that market trends follow one direction over a matter of time, there are many different factors that can change this idea. Technology s-curves as is explained in the book The Innovator’s Dilemma. It states that technology will start slow then increase in users once better understood, eventually leveling off once another technology replaces it………………….

(a) This proves that change in the market is actually consistent
(b) Change is inevitable
(c) Fluctuations with these changes do not last long
(d) Be prepared for the change
(e) Changing changes the fortunes

This is best option which expresses the fact illustrated in passage that the market is ever changing. Other options are generalized statements with no special linkage to passage.

21. The financial year 2007-08 witnessed a slew of acquisitions across diverse sectors of the economy in India……………Of all sectors, steel was the most dominant in terms of stake sales as deals valuing $ 3.862 billion took place in Q1 of 2007-08 by the Indian companies in the global arena. Energy ranked second, with automotive and auto components close on its heels. In the domestic segment, iron ore, aviation and steel were the most prolific in terms of mergers and acquisitions. With Indian corporate houses showing sustained growth over the last decade, many have shown an interest in growing globally by choosing to acquire or merge with other companies outside India. One such example would be the acquisition of Britain’s Corus by Tata an Indian conglomerate by way of a leveraged buy-out. The Tata’s also acquired Jaguar and Land Rover in a significant cross border transaction. Whereas both transactions involved the acquisition of assets in a foreign jurisdiction, both transactions were also governed by Indian domestic law.

(a) These acquisitions are purely Indian but covering diverse sectors ranging from automobiles to Steel
(b) Acquisitions are like a big shark swelling a small fish without noticeable fight put up by the latter
(c) Unlike in the past, such activity was not limited to acquisitions within India or of Indian companies
(d) Globalization has brought this trend to India and Indian companies are no longer isolated from its effects
(e) International law of acquisitions hold true for all the countries and binding on each member

Let us examine the validity of each and every option one by one.
Only Indian is not right overseas acquisitions are also discussed in passage.
Acquisitions are not hostile always.
This can be verified with the subsequent content of the passage.
Globalization is not given in passage.
This option is totally out of context.

22. ……………….. But there is, in fact, a vast difference. Merger generally refers to a circumstance in which the assets and liabilities of a company (merging company) are vested in another company (the merged company). The merging entity loses its identity and its shareholders become shareholders of the merged company. On the other hand, an amalgamation is an arrangement, where by the assets and liabilities of two or more companies (amalgamating companies) become vested in another company (the amalgamated company).The amalgamating companies all lose their identity and emerge as the amalgamated company; though incertain transaction structures the amalgamated company may or may not be one of the original companies.

(a) Very often, the two expressions “merger” and “amalgamation” are used synonymously
(b) ‘Merger’and ‘amalgamation’ are terms that can be used interchangeably but up to a limit
(c) ‘Merger’ and ‘amalgamation’ are synonymous to each other
(d) ‘Merger’ and ‘amalgamation’ are not synonymous to each other
(e) Words ‘merger’ and ‘amalgamation’ should be used cautiously

In option (b) ‘limit’ is doubtful.
Option (c) and Option (d) are incorrect and cannot be defined from the passage.
Option (e) applies too much caution which is not intended here.
Option (a) is only option which in combination with next statement is sensible.

23. Being one of the central banks which was involved in the exercise of drawing up the Core Principles, the Reserve Bank of India had assessed its own position with respect to these Principles in 1998. The assessment had shown that most of the Core Principles were already enshrined in our existing legislation or current regulations. Gaps had been identified between existing practice and principle mainly in the areas of risk management in banks, inter-agency cooperation with other domestic/international regulators and consolidated supervision. Internal working groups were set up to suggest measures to bridge these gaps and their recommendations have been accepted by the Board for Financial Supervision and are now in the process of being implemented. Given the spread and reach of the Indian banking system, with over 60,000 branches of more than 100 banks…….. However, the Reserve Bank of India is committed to the full implementation of the Core Principles. The Bank also serves on the Core Principles Liaison Group of the BCBS, which has been formed “to promote the timely and complete implementation of these principles worldwide”.

(a) implementation is a challenge for the supervisors
(b) implementation is impossible
(c) implementation should be done on trail basis
(d) Implementation is a problem for supervisors
(e) Implementation is a long process to take years

Implementation can be a challenge for such a wide banking system of India but it cannot be impossible or problem (supervisors are there to implement). It is foolish to implement on trail basis on a vast scale. Option (e) can be true or false as passage does not elaborate on it.

24. Indian banks having overseas operations are required to lay down internal guidelines on country risk management and fix limits based on risk rating of the country. Limits should also be fixed for a group of countries in a particular risk category subject to a maximum ceiling fixed by RBI. In the normal course, prudential exposure norms apply to all loans and investments overseas including loans to sovereign entities………………….. Adequacy of the bank’s policy on identification, measurement and control of country risk is assessed during on site inspection by host country representatives. It is also monitored through a quarterly return on country-wise counter party exposure.

(a) The overseas branches are governed by the host country regulations also
(b) Host country is speculative for the success of these branches
(c) Banks and host countries conduct joint audits in branches in that country
(d) Host country regulations do not bind on these overseas branches
(e) Success of overseas branches depend on only the policies of host countries

A little reasoning is required to solve the question. If a foreign bank is operating in a country then it shall be governed by the regulations of that country along with its original county. Then only that country will allow it to operate. On this logic option (d) can be rejected. Little extension of this logic discards the possibility of audit in country of origin. Hence rule out (c). Success does not depend on only policies of a country it demands a lot of other ingredients. Reject (e). Option(b) is in appropriate as passage does not support it.

25. The prospect of renewed war between India and China is,for now,something that disturbs the sleep only of virulent nationalists in the Chinese press and retired colonels in Indian think-tanks. Optimists prefer to hail the $60 billion in trade the two are expected to do with each other this year. But the 20th century taught the world that blatantly foreseeable conflicts of interest can become increasingly foreseeable wars with unforeseeably dreadful consequences. Relying on prosperity and more democracy in China to sort things out thus seems unwise. Two things need to be done. First, the slow progress towards a border settlement needs to resume. The main on us here is on China. It has the territory it really wants and has maintained its claim to Arunachal Pradesh only as a bargaining chip. It has, after all, solved intractable boundary quarrels with Russia, Mongolia, Myanmar and Vietnam………………….

(a) Surely it cannot be so difficult to treat with India?
(b) Surely it will be more difficult with India?
(c) Can it solve dispute with India with its non democratic values?
(d) With India intentions are not clear.
(e) In Indian markets, Chinese presence is increasing.

Last sentence shows that China has solved border dispute with a number of countries, while the passage is mainly about the relationship of India and China.This indicates that finishing statement should also be about improvement in relationships of India and China.This is given in all options. But option (a) poses a valid question as passage shows that relationships between two countries are improving.
From the other options (d) is not correct as positive improvements are illustrated in passage. Markets of option (e) are not discussed here in passage. Option(b) is opposite to the spirit of the passage.