In the question below, two statements are given with one blank each, which must be filled in with the same word. Following the statements are five words. Choose the most appropriate word which could fill in both the blanks to make both the statements grammatically and contextually correct.
I. The auditors found it difficult to ________ between genuine transactions and fraudulent ones.
II. A good leader must ________ between personal bias and professional responsibility.

The correct answer is Distinguish.

Let us analyze the context of both sentences step-by-step to understand why "distinguish" is the most appropriate word:

Sentence I: "The auditors found it difficult to ________ between genuine transactions and fraudulent ones."
Here, the sentence talks about recognizing or identifying the difference between two types of transactions: genuine and fraudulent. The verb followed by the preposition "between" must mean to recognize the difference or tell them apart.

Sentence II: "A good leader must ________ between personal bias and professional responsibility."
Similarly, this sentence describes the action of recognizing the difference or separating one's personal bias from professional responsibility.

Analyzing the Options:
1. Distinguish: This verb means to recognize or point out a difference. It is commonly followed by the preposition "between" (e.g., "distinguish between A and B"). This fits both sentences grammatically and contextually.
2. Judge: While you can judge something, the construction "judge between A and B" is less common in this context. To "judge between" usually implies acting as a referee or deciding a dispute, which does not fit Sentence I well.
3. Arbitrate: This means to settle a dispute between two parties. Auditors do not arbitrate between transactions, nor do leaders arbitrate between bias and responsibility.
4. Divide: This means to separate into parts. While you can divide something, we do not say "divide between A and B" to mean recognizing a difference.
5. Segregate: This means to isolate or set apart. The standard grammatical construction is "segregate A from B" rather than "segregate between A and B".

Therefore, the word distinguish is the only option that grammatically pairs with "between" and contextually fits both sentences perfectly.