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CBSE Class 12th Business Studies Important Questions With Solutions

Business studies class XII

Ques 1. Give any two relief available to a consumer who suffers due to consumption of an expired date medicine.

Ans 1. To refund the price paid for the medicine
2. To pay a reasonable amount of compensation for any loss or injury suffered by the consumer
3. To pay punitive damages in appropriate circumstances.
4. To pay adequate costs to the consumer
Ques 2. Give one point of difference between the terms grading and standardization.
Ans 2. Standardization is production of goods as per predetermined specification Grading is classification of products into different groups on the basis of its important characteristics

Ques 3. What is an optimum capital structure?

Ans 3. Proportion of debt and equity which result in an increase in the value of equity shares. (Maximizes shareholder’s wealth)

Ques 4. Identify the decision taken in financial management which affects the liquidity as well as profitability of business.

Ans 4. Working Capital decision (short term investment decision)

Ques 5. State any three development function of SEBI.

Ans 5. 1. It trains intermediaries of the securities market
2. Conducts research and publishes information useful to all market participants
3. Undertakes measures to develop the capital market by adapting a flexible approach

Ques 6. Sohan is running an ‘Advertising agency’ and earning a lot by providing this service to big industries. State whether the working capital requirement of the firm will be ‘less’ or ‘more’. Give reason in support of your answer.

Ans 6. Less working capital is required as service industries which usually do not have to maintain inventory require less working capital.

Ques 7. Zoom Udyog, a car manufacturing Co., has started its business with Zoom 800 and slowly launched Zoom-1000, Wagon-Z, Swy-fy etc. and offered various services like after sale service, availability of spare parts etc. Identify the element of marketing mix referred here.

Ans 7.Product mix

Ques 8. suresh after completing his graduation started working with a multinational company in Delhi. But due to ill health of his parents he had to go back to his village. There he noticed that the villagers were literate but ignorant about their rights. Many vegetable vendors were using stones as weights to sell their vegetables. Some shopkeepers were selling food items without having ‘FPO mark’. Villagers did not find anything wrong with these practices. So to create awareness among villagers Suresh decided to publish a weekly Journal ‘Jan Jagriti’. State the ‘Right’ which Suresh has exercised by doing so.

Ans 8. Right to consumer education.

Ques 9. What is primary market? Explain any four features of primary market.

a. Primary market refers to that market in which securities are sold for the first time for collecting long term capital.
Features of primary market:
1. The first important feature of primary market is that it is related with the new issue. Whenever a company issues new shares or debentures, it is known as Initial Public Offer (IPO).
2. Primary market is not the name of any particular place but the activity of bringing in new issue.
3. It facilitates the transfer of investible funds from savers to entrepreneurs seeking to establish new enterprises or to expand existing ones through the issue of securities for the first time.
4. The investors in this market are banks, financial institutions, insurance companies, mutual funds and individuals.

Ques 10. Choice of an appropriate channel of distribution is very important marketing decision which affects the performance of an organization’. Explain the factors on which the choice of an appropriate channel depends.

a. Factors affecting choice of channel of distribution
(i) Product related factors
(ii) Company characteristics
(iii) Competitive factors
(iv) Market factors
(v) Environmental factors

Ques 11. Anya’s father who was unwell, called her and gave her a gift packet.Anya opened the packet and saw many crumpled share certificates inside. Her Father told her that they had been left behind by her late grandfather. As no trading is now done in physical form, Anya wants to know the process by adopting which she is in a position to deal with these certificates.

a) Identify and state the process.
A. De-materialization – It is a process where securities held by the investor in physical form are cancelled and the investor gives an electronic entry or number so that she/he can hold it as an electronic balance in an account.
b) Also give two reasons to Anya why dealing with shares in physical form had been stopped.
A. Problems with dealing in physical form – (Any two)
(i) Theft
(ii) fake/forged transfers
(iii) Transfer delays
(iv)Paper work associated with share certificates or debentures held in physical form.

Ques 12. Explain the factors affecting Investment decision.

A. a. Rate of return of the project
b. Cash flow of the project
c. Investment criterion involved

Ques 13. Mona purchased some household goods from a ‘General store’. After reaching home she found a face cream which she had not billed for. After checking the date of expiry and other details, she started using it. Her face burnt due to the use of the cream. Where should Mona file a complaint? Justify. Under Consumer Protection Act, 1986 who can file a complaint?

A. Mona cannot file a complaint in any consumer court since she does
not have the proof of purchase i.e. cash memo. She did not fulfill her
responsibility of an honest consumer. She should have gone back to
the general store to get its billing.
Under the consumer Protection Act 1986 any of the following can file
a complaint:
1. Any consumer
2. Any registered consumer’s association
3. The central government or any state government
4. One or more consumers on behalf of many consumers having
same interest.
A legal representative of a deceased consumer.

Ques 14. What is meant by Certificate of Deposit? Briefly explain its features.
a. Certificate of Deposit refers to a time deposit or fixed deposit which can be
sold in the secondary market. Only a bank can issue Certificate of Deposit.
Following are the features of Certificate of Deposit :
1. The face value of the certificate of deposit is 5 lakhs.
2. It is a bearer certificate and is freely negotiable.
3. Its tenure ranges from 91 days to one year.
4. It is issued at a discount on the actual amount of deposit held.

Ques 15. To promote orderly and healthy growth of securities market and protection of investors, Securities Exchange Board of India was set up”. With reference to this statement explain the objectives of Securities Exchange Board of India.

For promoting a healthy growth of securities market and providing security to investors, SEBI runs on certain objectives which are as follows:
• To regulate stock exchanges and the securities industry to promote their orderly functioning.
• To protect the rights and interests of investors, particularly individual investors and to guide and educate them.
• To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation.
• To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchants, bankers etc. with a view to make them competitive and professional.

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