Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 11 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Term 2 Set 11 with Solutions
Maximum Marks : 40
Time : 2 Hours
General Instructions
- This is a subjective question paper containing 12 questions.
- This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4 questions of 5 marks each.
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
- This question paper contains Case/Source Based Questions.
Short Answer (SA) Type I Questions (2 Marks)
Question 1.
“A leader who has only good physical features and required knowledge and competence, cannot inspire others to .work.” Then what else is required by a leader to be successful? Explain by giving two points.
Answer:
Apart from good physical features, required knowledge and competence, a leader requires many other qualities which are as follows (any two)
(i) Good Communication Skills A leader requires good communication skills so that he can explain his ideas, guide and motivate his followers. He needs to be a good listener too.
(ii) Initiative The leader does not wait for others but takes the first step and creates opportunities.
(iii) Motivation Skills He should be able to influence the actions of people through proper motivation.
Question 2.
XYZ’s earnings before interest and tax are ₹20 lakhs. It pays 10% interest on its debt. Total investment of company is 1100 lakhs. Advise XYZ whether it should include debt or equity to raise its capital.
Answer:
Company should prefer debt to raise fund as debt is gainful for equity shareholders till Return on Investment (Rol) is greater than rate of interest on debt.
In the given case, \(=\frac{\text { EBIT }}{\text { Total Income }} \times 100=\frac{20}{100} \times 100\)
Rol =20%
Interest on debt is 10%. So, debt is more suitable.
Question 3.
Financial management is concerned with inflow and outflow of money, do you agree? Give any two points of significance of financial management.
Answer:
Yes, it is concerned with inflow and outflow of money and taking decisions regarding procurement and utilisation of funds.
The importance of financial management is discussed below (any two)
(i) Sound financial plan facilitates the smooth functioning of operations in an organisation.
(ii) Finance is required at every stage and for performing activities like distribution, promotion, production, etc. Through financial management, one can analyse the need and requirement of finance to carry out operations.
(iii) Financial management provides scientific analysis of all the facts and figures, through which it helps in taking decisions.
Question 4.
An organisation provided security services. It requires such candidates who are reliable and don’t leak out the secret of their clients. What steps would you recommend in the selection process?
Answer:
An important part of the selection process, which must be emphasised here, is conducting personality tests on the individuals. This test gives cues to a person’s emotions, reactions, attitude and value system. Thus, it helps to ensure that the selected candidate is honest and suitable as per the requirements of the job.
Short Answer (SA) Type II Questions (3 Marks)
Question 5.
Ved Prakash works in an MNC. As per his job agreement, he could work overtime whenever he feels the need to do so and would be paid accordingly. As he worked overtime, he fell ill and had to take leave from work. No one showed concern towards him although he was a permanent employee in the organisation.
(i) Identify the needs which he was able to fulfill through that job by quoting the line.
(ii) Also, identify the need which remained unfulfilled by quoting the lines.
(iii) Name any two other needs as well.
Answer:
(i)
(a) Psychological needs
(b) Safety/Security needs
“Although he was a permanent employee in the organisation”.
(ii) Social needs
“No one showed concern towards him”.
(iii) Other needs are
(a) Esteem/Ego needs
(b) Self-actualisation needs
Question 6.
“Money is not the only motivator”, then what else is required to motivate employees? Explain by giving any three points.
Answer:
“Money is not the only motivator.” This statement is true in this context that an individual has certain psychological, emotional and social needs. Money cannot satisfy them.
In order to satisfy these needs, following non-financial incentives are required
(i) Promotion If an individual gets promotion in the organisation, it satisfies him psychologically as he gets a feeling that his hard work is recognised.
(ii) Job Security Every individual needs stability in terms of future income, job, etc. If their job is secure, they do not feel worried and work with greater zeal.
(iii) Employee Participation It means involving employees in decision-making process. This kind of programmes motivate employees and they feel that their suggestions are of worth.
Answer:
“Money is not the only motivator.” This statement is true in this context that an individual has certain psychological, emotional and social needs. Money cannot satisfy them.
In order to satisfy these needs, following non-financial incentives are required
(i) Promotion If an individual gets promotion in the organisation, it satisfies him psychologically as he gets a feeling that his hard work is recognised.
(ii) Job Security Every individual needs stability in terms of future income, job, etc. If their job is secure, they do not feel worried and work with greater zeal.
(iii) Employee Participation It means involving employees in decision-making process. This kind of programmes motivate employees and they feel that their suggestions are of worth.
Question 7.
The finance manager of Aerial Automobiles has made a detailed plan analysing the minutest financial needs of the firm in the coming six months.
He also analyses the sources from where such fund requirement will be met.
(i) Name the process the finance manager is involved in.
(ii) Explain any two essential requirements of a sound financial plan.
Or Mr. A is a teacher, having a reputed job with good earnings. He wants to trade on a stock exchange. Enumerate the first three steps involved for purchase and sale of securities in a stock exchange.
Answer:
(i) The financial manager is involved in financial planning.
(ii) Following are the two essential elements of a sound financial plan .
(a) A sound financial plan should help in facilitating the collection of optimum funds. .
(b) It should be able to tap appropriate sources at the appropriate time. Thus, it helps in fixing the most appropriate capital structure.
Or
The procedure for purchase and sale securities in a stock exchange involves the following steps
Step 1 Selection of a Broker The first step is to select a broker, who will buy /sell securities on behalf of the investor/speculator. Brokers may be individuals, partnership firms or corporate bodies. Selection of broker is compulsory as trading can only be done by SEBI registered brokers, who are members of a stock exchange.
Step 2 Opening of a Demat Account with Depository Dematerialised (Demat) account refers to an account which an individual must open with the depository participant (banks, stock brokers) to trade in the listed securities in electronic form.
Step 3 Placing the Order The next step is to place the order with the broker, which can be done through telephone, cell phone, e-mail, etc. Instruction regarding which securities and how many securities are to be bought or sold should be clearly given to the broker.
Question 8.
Briefly explain any two money market instruments available for private companies.
Answer:
Two money market instruments that can be used by private companies are as follows
(i) Commercial Paper: It is issued by large credit worthy companies to raise short-term funds at lower rates of interest than the market rates. It is an unsecured promissory note, having a maturity of 15 days to one year.
The primary purpose is to meet working capital requirements but it is also used to cover the expenses associated with the issue of securities like flotation costs.
(ii) Commercial Bill: It is a bill of exchange used by business firms to meet their working capital needs. It is a short-term, self liquidating, negotiable instrument used for financing credit sales of a firm.
Long Answer (LA) Type Questions (5 Marks)
Question 9.
The Federal Bank, Kannur Branch, Kerala has decided to launch a special campaign for four months to provide life cover to all their savings account holders under ‘Prime Minister Jeevan Jyoti Yojna’. At the end of first month, the bank had succeded to obtain premium from 35% of their account holders as against the target of 40%. On thorough analysis, the bank manager came to a conclusion that illiteracy among public and lack of awareness about social security measures were two main causes of failure to achieve the required target.
(i) Identify and explain the function of management performed by bank manager.
(ii) Mention any three objectives of the function so identified in point (i) above.
Or
Priyanka, Personnel Manager of the company takes all the decisions herself and expects her subordinates to follow unquestioningly. Employees are not at all allowed to talk with each other or to maintain friendly relationships among them. All the employees are highly dissatisfied and wants to switch their job as soon as possible.
(i) Identify the function of management indicated in the above paragraph.
(ii) Identify and explain two disadvantages of the leadership style followed by Priyanka.
(iii) Identify and explain the need of employees that has been neglected by the company.
Answer:
(i) Controlling function is performed by bank manager. This function is concerned with taking
preventive actions against deviations. It is the process, through which managers assure that the actual activities conform to the planned activities.
Controlling has a very wide scope. It does not end only by comparing the actual performance with planned performance, but it tries to find the reasons and solutions for such problems also.
(ii) The main objectives of controlling are
(a) It ensures that work is carried.on as per the planned targets.
(b) It enables managers to find out deviations/errors, thus providing direction for the work to move on the right track.
(c) It helps in making efficient use of resources.
Or
(i) The function of management indicated in the above paragraph is directing.
(ii) Leadership style followed by Priyanka is autocratic.
Disadvantages of autocratic leadership are as follows
(a) It leads to dissatisfaction and low morale among employees.
(b) Motivation and initiative level of employees goes down.
(iii) Need of employees which has been neglected by the company is social needs.
This need is concerned with affection, sense of belongingness, acceptance and friendship. It is fulfilled when employees have cordial relations with colleagues.
Question 10.
Akansha puri is planning to start her business of woollen shawls. To fulfill her social responsibility and to encourage women in rural areas, she opened her factory unit in a rural area. She carefully assessed and analysed the type and number of workforce with specific skills needed in the factory. Mention the step already undertaken by Akansha for obtaining a satisfied workforce. Also, explain next steps that will have to be undertaken by her.
Or “Controlling helps in finding out deviations between actual performance and planned performance”. In the light of the statement, mention the significance of controlling.
Answer:
Estimating manpower requirement is the step which is already undertaken by Akansha as she has carefully assessed and analysed the type and number of workforce with specific skills needed in the factory.
Other steps that will be undertaken by Akansha in staffing are as follows:
(i) Recruitment It refers to inducing people to apply for the job. As Akansha wants workforce, methods like direct recruitment and labour contractors will be suitable.
(ii) Selection It refers to choosing the most suitable candidate to fill the vacant job. For this, Akansha can take their skill test and interviews.
(iii) Placement and Orientation It refers to occupying the post for which the person is selected. Orientation refers to introducing new employees to the existing employees by organising orientation programmes.
(iv) Training and Development It is provided by the organisation to improve the employees skills. Akansha can train women employees to weave shawls and sweaters, etc.
Or
Significance of controlling is as follows
(i) Accomplishing Organisational Goals It measures progress towards the organisational goals and involves taking corrective actions in case of any deviation. It helps to keep the activities on right track so that goals could be achieved efficiently and effectively.
(ii) Efficient Use of Resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is preformed in accordance with predetermined standards and norms which helps in effective and efficient utilisation of resources.
(iii) Improves Employees Morale It helps employees in realising what they are expected to do and what are the standards of performance, on the basis of which they are appraised. This motivates them to perform better.
(iv) Ensures Discipline and Order By keeping a check on the activities of the workers, controlling creates an atmosphere of order and discipline among them. It also helps to keep a check on the dishonest behaviour of employees.
(v) Judging Accuracy of Standards Through an effective control system, managers can easily judge the accuracy of standards. It also keeps a careful check on the changes taking pla.e in the organisation and in the environment which facilitates the review of standards, in the light of such changes.
Question 11.
Mr Sahil and Mr Rajesh are promoting a new company. They are not able to decide on, how to raise funds.
Sahil is interested in a new issue through prospectus, while Rajesh wants a right issue.
(i) As a financial manager, suggest Sahil and Rajesh for the appropriate decision.
(ii) Discuss the methods by which securities are issued in the primary market.
Answer:
(i) The issue of shares through prospectus is appropriate, as suggested by Sahil, as a new company
cannot issue right shares because this can only be done by existing companies.
(ii) The various methods by which securities are issued in the primary market are as follows
(a) Offer Through Prospectus/IPO Under this method, a company invites public to subscribe for its shares through issue of prospectus, which makes a direct appeal to investors to invest in the company, through an advertisement in the newspapers and magazines.
(b) Offer for Sale Under this method, securities are not issued directly to the public, but are offered for sale through intermediaries like issuing houses or stock brokers.
(c) Private Placement Private placement is the allotment of securities by a company to institutional investors and some selected individuals. It is considered beneficial because it helps to raise funds more quickly than a public issue.
(d) e-IPOs When the public issue is made through an online system of stock exchange, it is known as e-IPO, i.e., electronic Initial Public Offer.
Question 12.
Neha purchased a facewash and a foundation from Amio’s retail store in Karol Bagh. She paid ₹ 1,000 for facewash and foundation for which she was not given bill receipt nor she asked for it as she was in hurry. When she used foundation, it caused rashes and skin allergies all over her face. She immediately contacted the retail store who refused to replace it. Now, Neha is planning to file a complaint in consumer court asking for compensation. Can, Neha file a complaint in consumer court? If not, then why so? Also, state responsibilities of a consumer.
Answer:
No, Neha cannot file a complaint against the retail store because she did not exercise her responsibility by asking for the bill of products purchased.
Responsibilities of consumer are as follows (any four)
(i) A consumer should be aware about the various goods and services available in market so that he can make a wise choice by comparing their features and prices.
(ii) A consumer should always ask for a cash memo, as it is the proof of purchase required at the time
of taking any action against a fraudulent seller/manufacturer.
(iii) A consumer must always buy standardised goods as they provide quality assurance. Thus, consumer should look for ISI mark on electrical goods, FPO mark on food products, etc.
(iv) A consumer must read the labels carefully so as the have complete information about the price, quantity, ingredients, usage, contents, expiry etc.
(v) A consumer must file a complaint in case of any short coming in goods or services availed.