Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 4 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Term 2 Set 4 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.
You are HR in TRIMX Ltd. You have recruited 20 candidates for the post of senior executive without conducting the written test due to which the working of a company suffers as unprofessionals are hired for senior positions. In context to this, state any two types of tests conducted in this process.
Answer:
Types of selection tests are (any two)
(i) Intelligence Test : It is a psychological test used to measure the level of intelligence of an individual and his ability to take decisions.
(ii) Aptitude Test : It is a psychological test used to measure the potential of an individual to learn new skills.
(iii) Personality Test It is a test that provides cues regarding a person’s emotions, reactions and value systems.
(iv) Trade Test : It is a test used to measure the existing skills of an individual to perform a job.
Question 2.
Identify and enumerate the apex organisation which hold securities in an electronic form.
Answer:
Depository is an apex institution or organisation which holds securities (e.g. shaies, debentures,bonds, etc.) in electronic form in which trading is done. It provide following services (any two)
- It maintains records of shareholding in electronic form.
- It enables deposit and withdrawal of securities to and from the depository through the process of dematerialisation and rematerialisation.
- It maintains the effect of transfer of securities traded in the depository mode on stock exchange.
Question 3.
Communication is the process of exchange of ideas, facts, feelings, views, etc between two or more people to create common understanding. This process of communication contains many elements. Explain any two of them.
Answer:
The elements of communication are (any two)
(i) Sender The person who conveys the message, is known as the sender or communicator. He may be a speaker, a writer or an actor.
(ii) Message It is the subject matter of communication. It may consist of facts, information, ideas, opinions, etc. It exists in the mind of the sender.
(iii) Encoding The sender translates the message into words, gestures or other symbols, which he feels will make the receiver understand the message.
(iv) Channel or Media The encoded message is transmitted through some medium, which is known as the communication channel, e.g, speaking, writing, phone call, internet, etc.
Question 4.
Sound financial management is the key to prosperity of business. Explain why?
Answer:
Financial management soundness ensures the following, which are the key to the prosperity of business (any two)
(i) Availability of adequate funds, whenever required, through financial planning.
(ii) Procurement of funds at reasonable cost, through financing decision.
(iii) Effective utilisation of funds, through investing decision.
Short Answer (SA) Type II Questions (3 Marks)
Question 5.
Name the method of recruitment in the following cases
(i) A company get applications on and off even without declaring any vacancy. However, as and when the vacancy arises, the company makes use of such applications.
(ii) Recruitment by which most of the senior positions of the industry as well as commerce are filled.
(iii) Casual vacancies of unskilled or semi-skilled jobs when there is a rush of order or when some permanent workers are absent.
Answer:
(i) Casual Callers Method In this method, company makes use of database of unsolicited applicants
which are kept in file. Company recalls them to fill the current vacancies.
(ii) Advertisement Method This method is used to fill the most of the senior positions of the industry as well as commerce.
(iii) Direct Recruitment Method Through direct recruitment, casual vacancies of unskilled or semi¬skilled jobs are filled, when there is a rush of order or when some permanent workers are absent.
Question 6.
Adhisree has joined as a content developer at Compk 12. Her CTC is ₹ 2,64,000 p.a. Her manager Dr Priyanka has told her that on the basis of her quality and quantity of work, she will increase her CTC. Thus, she is working with persistence and efficiency.
Identify the element of directing and enumerate any two features of the same.
Or
Moko Yoko Ltd. is a manufacturing company which manufactures two wheelers for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer base. But, now it is experiencing issue as it is unable to meet its targets with regard to sales and customers satisfaction.
Also, automobile industry in India has grown tremendously and many new players have come with better technology and pricing, which has increased the problems for the company. It is now planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing. You are required to identify and explain the benefits that the organisation will drive from a good control system.
Answer:
Motivation is the element of directing used here. Adhishree has a motive to get increment in her salary. That’s why, she is working with persistence and efficiency. Features of motivation are as follows
(i) Motivation is a Psychological Phenomenon: It is a personal and internal feeling like an urge, drives, desires and aspirations of human being which influence human behaviour.
(ii) Goal Directed: Behaviour Motivation inspires an employee to achieve goals. Thus, it encourages goal directed behaviour.
Or
A good control system helps an organisation in the following ways (any three)
(i) Accomplishing Organisational Goals : The controlling function measures progress towards the organisational goals and brings into light deviations, if any and indicates corrective action. Thus, it guides the organisation and keeps it on the right track, so that organisational goals might be achieved.
Question 7.
Dreamz House is a company engaged in developing and promoting housing projects. The total capital of the company is ₹ 75,00,000, out of which ₹ 30,00,000 has been raised from loans. Compute the following
(i) The debt-equity ratio of the firm.
(ii) The percentage of debt in the total capital of the firm.
Answer:
Total Capital of the Firm= ₹ 75,00,000; Debt = ₹ 30,00,000
Equity = 45,00,000(75,00,000 – 30,00,000)
(i) Debt-equity Ratio \(=\frac{\text { Debt }}{\text { Equity }}=\frac{30,00,000}{45,00,000}=2: 3\)
(ii) Percentage of Debt in the Total Capital \(=\frac{30,00,000}{75,00,000} \times 100=40 \%\)
Question 8.
A stock exchange is an institution which provides a platform for buying and selling of existing securities. SEBI, as a watch dog performs various functions which protects the investors. Explain any two functions.
Answer:
(i) SEBI performs the following regulatory functions
- Registration of brokers, sub-brokers and other players in the market.
- Registration of collective investment schemes and mutual funds.
- Regulation of takeover bids by companies.
- Levying fee or other charges for carrying out the purposes of the act.
(ii) SEBI performs the following protective functions
- Prohibition of fraudulent and unfair trade practices.
- Controlling insider trading and imposing penalties for such practices.
- Undertaking steps for investor protection.
- Promotion of fair practices and code of conduct in securities market.
Long Answer (LA) Type Questions (5 Marks)
Question 9.
There are various financial and non-financial incentives used to motivate employees to improve their performance. Discuss any three financial incentives and two non-financial incentives.
Answer:
Financial incentives used to motivate employees are:
(i) Pay and Allowances For every employee, salary is the basic monetary incentive. It includes basic pay, dearness allowance, house rent allowance, etc. Some organisations provide pay hikes and increments for better performance.
(ii) Bonus It is a one time reward for high performance. Bonus may be paid in cash or kind over and above the salary, e.g, performance bonus, 100% attendance bonus, festive bonus, etc.
(iii) Profit Sharing It means to provide employees, a share in the profits of the enterprise. This is in addition to their wages/salaries, which motivates them to improve performance and profits in future. It is a group incentive scheme used to improve productivity and profitability.
Non-financial incentives used to motivate employees are (any two)
(i) Status In business terms, status means ranking of positions in the organisation. The authority, responsibility, rewards, recognition, perquisites and prestige of job indicate the status given to a person holding a managerial position. It satisfies psychological and social needs of an individual.
(ii) Organisational Climate Better conditions in an organisation like individual autonomy, reward orientation, consideration to employees, risk taking, etc provide an organisation to be different from the other organisations. Positive measures taken in these aspects helps to develop better organisational climate.
(iii) Career Advancement Opportunity When employees are provided opportunities to grow in status and responsibility, they are satisfied and are committed to organisational goals. Appropriate skill development programmes and sound promotion policy help employees to improve their skills and be promoted to higher levels and exhibit improved performance.
Question 10.
Mr. Samar is the Chairman of a leading insurance company. In a review meeting, the management of the company realised that their market share has fallen from 40% to 35%. The reason for this loss was attributed to the lack of leadership qualities in managers at regional and district levels. Mr. Samar asked the Sales Director to instruct these managers to change their leadership styles or else be ready for consequences.
(i) Give the importance of leadership for an organisation.
(ii) Briefly discuss the various leadership styles.
Answer:
(i) Importance of leadership is as follows
(a) It influence the behaviour of people towards the achievement of common goal.
(b) It provides confidence and motivation to employees.
(c) It helps in introducing the changes.
(d) It handles the conflicts and disagreements of the employees.
(ii) Types of leadership are.
(a) Autocratic Leadership An autocratic leader exercises complete control over subordinates. He gives order and expects his subordinates to follow them. It follows one way communication as the subordinate acts only according to the command given by the manager.
(b) Democratic Leadership A democratic leader takes decisions after consultation and encourages the participation of subordinates. He provides freedom of thinking and listens to suggestions, grievances and opinions of the subordinates.
(c) Free-rein/Laissez Faire Leadership It involves complete delegation of authority. The subordinates take decisions themselves. Therefore, the leader avoids holding power and surrenders the authority to subordinates.
Question 11.
There are many instruments used in money market. Explain any two such instruments.
Or
Explain the term trading on equity. Why, when and how it can be used by a business organisation?
Answer:
(i) Treasury Bills
- These are issued by RBI on behalf of government of India to meet its short-term requirements of funds.
- They are highly liquid and have negligible risk.
- These are freely transferable.
- These are issued for a period of 14 to 364 days.
- Treasury bills are issued for a minimum amount of ₹ 25,000 and in multiples thereof.
(ii) Call Money
- It is a method by which commercial banks borrow from each other to maintain minimum cash balance.
- It is a short-term finance repayable on demand.
- It has a maturity period of 1 day to 15 days.
- The interest rate on call money, known as call rate, is highly volatile and changes from day-to-day or even from hour-to-hour.
- There is an inverse relationship between call rate and demand for call money.
Or
Trading on equity refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest. The use of more debt along with equity increases Earning Per Share (EPS). The primary objective of financial management is to maximise wealth of shareholders. That’s why companies use the concept of trading on equity.
Let us take an example of companies A and B.
Thus, from the above example it is clear that shareholders of company B receive higher EPS than the shareholders of company A due to more debt in the total capital of company B. But more debt will result in increase in earning only when the rate of earning of the company i.e., return on investment is more than the rate of interest on debt. In the above example, in case of company B, return on investment is 30%, which is higher than the rate of interest which is 15% i.e. 30% > 15%. Thus, more debt is beneficial for owners of the company.
Question 12.
Chanika, MBBS doctor went to village Bhamragad for covid vaccination drive. While on duty, she asked for a sanitizer from a shopkeeper. The shopkeeper charged her ₹ 300 while maximum retail price printed on the sanitizer was ₹ 250. She enquired about the same, to which shopkeeper told her that due to high demand and shortage of sanitizers, they are selling at ₹ 300.
But Chanika educated him that its her right to get the product at MRP only. Inspite of many arguments, the shopkeeper was not ready to sell the sanitizer for less than ₹ 300.
Later on her duty, she discovered that villagers were Illiterate and ignorant about their rights. Many local shopkeepers were engaged in black marketing and unfair trade practices. Chanika along with her team, decided to create awareness among villagers about their rights by putting posters, organising dramas, etc.
She also decided to set up an organisation “Jagrukta” for the protection and promotion of consumer, interest of the villagers.
(i) As an aware consumer, state the rights which Chanika has exercised.
(ii) State the functions that the organisation “Jagrukta” established by Chanika, will be performing.
Or
Sushmita purchased a mattress for her mother due to her back pain. Within 1 week of its use, her mother discovered that a pit has been formed in the centre of it. She immediately approached the seller, “Roopa decors” and complained about the same.
Seller asked her to contact the manufacturer but Sushipita insisted seller, to replace her mattress from the manufacturer himself. Seller told him. that their work is over on sale. Sushmita/ then asked the, manufacturer to replace it but they refused to replace it. She, then filed the complaint in district commission and was satisfied as they ordered manufacturer to replace mattress.
(i) State who are not considered as consumer under Consumer Protection Act, 2019.
(ii) Mention the right exercised by Sushmita.
(iii) Upto which amount a complaint can be filed in district commission?
Answer:
(i) As an aware consumer, Chanika has exercised following rights
- Right to be Heard When she was exploited by shopkeeper who was selling sanitizer above MRP.
- Right to Consumer Education When she decided to set up her organisation “Jagrukta” to educate villagers about their rights.
(ii) There are various NGOs working for Consumer Protection like “Jagrukta”.
Functions of these organisations are as follows
- Educating consumers about their consumer rights by organising dramas, seminars and creating awareness through posters.
- Filing complaints on behalf of consumers in consumer redressal agencies.
- Motivating people to ask for price, quality, quantity, standards of goods or services, etc.
- Motivating consumers to raise their voice against exploitative and unfair trade practices.
Or
(i) Following persons are not considered as consumer under Consumers Protection Act
- The person who obtains goods without any consideration
- The person who hires or avails any services without consideration.
- The person who obtains goods for resale.
- The person who uses the goods without the approval of buyer.
(ii) Right exercised by Sushmita
- Right to be heard by filing a complaint against manufacturer.
- Right to seek redressal when she got new mattress in exchange of defective mattress.
(iii) In District Commission, complaints can be filed where value of goods or services do not exceed ₹ 1 crore.