2013 CSAT, all questions

UPSC Prelims 2013 · CSAT

Question 4: Reading Comprehension

Passage – 2 · as printed by UPSC
Passage beginning “Corporate governance is based on principles such…”Passage beginning “Corporate governance is based on principles such…”

According to the passage, which of the following is/are the major benefit/benefits of good corporate governance ?

  1. 1.Good corporate governance leads to increase in share price of the company.
  2. 2.A company with good corporate governance always increases its business turnover rapidly.
  3. 3.Good corporate governance is the main criterion for foreign institutional investors when they decide to buy a company.

Select the correct answer using the codes given below :

a1 only
b2 and 3 only
c1 and 3 only
d1, 2 and 3

AnswerUPSC’s answer is (a).

The passage links good governance to a positive effect on the share price, so statement 1 holds. Statement 2 fails: the passage mentions cheaper access to capital, not rapid growth in turnover, and 'always' is unsupported. Statement 3 fails on one word: foreign institutional investors increasingly use governance as one of their criteria, not the main one. In CSAT, a statement can sit very close to the passage and still be wrong because it upgrades 'one of' to 'the main' or adds 'always'.

  • 1. The passage says good governance has a positive influence on the share price.
  • 2. Rapid turnover growth is never claimed; 'always' is also unsupported.
  • 3. Governance is one of the criteria investors use, not the main criterion.

How you could have got this

  1. If you were sure statement 3 is not correct, (b), (c) and (d) go: each of them includes 3.

    What you needed to know: Governance is one of the criteria investors use, not the main criterion.

Only (a) is left. You didn’t need statements 1 or 2.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Right. Only the share price benefit is stated as such.
  • (b) Wrong. Turnover growth is not mentioned, and governance is one criterion for investors, not the main one.
  • (c) Wrong. Statement 3 upgrades 'one of the criteria' to 'the main criterion'.
  • (d) Wrong. Statements 2 and 3 both overstate the passage.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2013, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.