CMAT Exam 2023 Shift 1 Solved Paper

Question : 92 of 100

Marks: +1, -0

Given below are two statements: one is labelled as Assertion A and the other one is labelled as Reason R. Assertion A: Industrial Development Bank of India (IDBI) caters the financial needs of the budding industries.
Reason R: Financial constraint is one of the biggest reasons of business failures in entrepreneurship and there is need to provide financing support to them.
In the light of the above statements, choose the most appropriate answer from the option given below:

Both A and R are correct and R is the correct explanation of A
Both A and Rare correct and R is the NOT the correct explanation of A
A is correct but R is not correct
A is not correct but R is correct

Validate

Solution:

A) Both

{\A}

and

{\R}

are correct, and

{\R}

is the correct explanation of

{\A}

.
Assertion A states that the Industrial Development Bank of India (IDBI) caters to the financial needs of budding industries. This is true as IDBI is a specialized financial institution in India that provides financial assistance and support to various industries, including startups and emerging businesses.
Reason R states that financial constraint is one of the biggest reasons for business failures in entrepreneurship, and there is a need to provide financing support to them. This is also true as many businesses, especially startups and budding industries, face challenges related to lack of adequate financial resources, and providing financing support can help address these constraints and contribute to their success.
In this case, Reason R provides a correct explanation for Assertion A, as it establishes the connection between the IDBI's role in catering to the financial needs of budding industries and the importance of addressing financial constraints to prevent business failures.
Therefore, the most appropriate answer is

{\A}

) Both

{\A}

and

{\R}

are correct, and

{\R}

is the correct explanation of

{\A}

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