Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 9 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Term 2 Set 9 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.
“Directing is the heart of management process.” Do you agree? Give reason in support of your answer.
Answer:
Yes, directing is the heart of management process. It is the executive function of management related to leading, influencing, guiding, supervising and motivating people towards the attainment of planned targets.
It is concerned with the execution of plans and policies framed by top management. It initiates action in the organisation and helps in adapting to changes too. So, it is known as heart of management process.
Question 2.
“Staffing function is considered to be the key to other functions of management.” Do you agree? Give reasons.
Answer:
Yes, staffing is key to other functions of management because (any two)
(i) It ensures availability of most suitable and capable persons for various jobs in the organisation.
(ii) Planning and organising is done on the basis of staffing which ensures better performance by placing right person on the right job.
(iii) It helps to avoid overmanning, underutilisation of manpower and high labour cost and ensures over all coordination.
Question 3.
Due to steep increase in Cash Reserve Ratio (CRR) by the RBI, NPB Bank is facing acute shortage of cash which may result in imposition of penalty by RBI and a loss of goodwill. Being the financial advisor of the bank, advise that how can it meet these short-term obligations, along with reasons in support of your answer.
Answer:
Being the financial advisor of the bank, I will advise the bank to raise funds through ‘call money’.
It has following features due to which it may be used by NPB Bank
(i) It is a short-term finance repayable on demand.
(ii) It is a tool for inter-bank borrowing.
(iii) It is often used by banks to meet their CRR requirement.
Question 4.
Enumerate the services offered by depository to the investors.
Answer:
Depositories provide following services to investors (any two)
(i) Maintain records of shareholding in electronic form.
(ii) Enable deposit and withdrawal of securities to and form the depository through the process of dematerialisation and rematerialisation.
(iii) Effect the transfer of securities traded in the depository mode on a stock exchange.
Short Answer (SA) Type II Questions (3 Marks)
Question 5.
“Is training beneficial for employees”? Explain with reasons.
Answer:
Yes, training is beneficial for employees. The following importance of training establishes this fact
(i) It helps in improvement of skills and knowledge which leads to better care of the individual.
(ii) It increases the satisfaction and morale of employees.
(iii) It makes the employees more efficient to handle machines, thus, less prone to accidents.
Question 6.
XYZ associates is a law firm, who provides specialised legal services. For this, they require highly educated, specialised and professional staff, who can handle their cases well. With increasing burden of cases on the firm, the manager proposes to hire new lawyers. Discuss any three merits of external sources of recruitment for the firm.
Answer:
Merits of external sources of recruitment are
(i) Wider Choice Firm can choose from a large pool of candidates in external recruitment.
(ii) Fresh Talent Fresh lifeblood is injected into the organisation.
(iii) Qualified Personnel An organisation can attract highly qualified personnel through external sources.
Question 7.
What do you understand by operating cycle?
Answer:
Operating cycle is the time duration from procurement of raw materials to sales realisation. It is a time gap between production of goods and realisation of sales. The operating cycle is different for different firms depending upon their size and nature of business.
e.g. manufacturing firm’s operating cycle may be different from a trading concern. Operating cycle of one manufacturing firm may be different from another on the basis of scale and type of business. Operating cycle of a manufacturing concern is shown below
Question 8.
In order to meet the fund requirements at the time of expansion, Unilive Ltd. is planning to propose the issue of 20,000,12% debentures of ₹ 100 each and certificate of deposit of ₹ 75,00,000.
(i) Identify the markets from where company is planning to arrange funds by quoting the lines from the question.
(ii) Distinguish between the markets so identified in point (i) above, on any two basis.
Or
A stock exchange is an institution which provides a platform for buying and selling of existing securities. Stock exchange facilitates raising finance, providing liquidity and safety of investments to the investors. State three more functions of stock exchange other than those mentioned above.
Answer:
(i) Markets from where company is planning to arrange funds are
(a) Capital Market The lines “Unilive Ltd. is planning to propose the issue of 20,000,12% debentures of ₹ 100 each.”
(b) Money Market The lines “Certificate of Deposit of ₹ 75,00,000.”
(ii)
| Basis | Capital Market | Money Market |
| Meaning | It refers to the whole network of organisations, institutions and instruments that deal in medium and long-term funds. | Money market is a market for short-term funds which deals in monetary assets whose period of maturity is upto one year. |
| Liquidity | Only actively traded securities have ready market. | In this market, there is a formal arrangement of creating liquidity. |
Or Functions of stock exchange are (any three)
(i) Pricing of Securities : It helps in determining the prices of various securities that reflect their real worth, through the interplay of demand and supply.
(ii) Contributes to Economic Growth : Through the process of disinvestment and reinvestment in stock exchange, savings are channelised into productive investment avenues leading to capital formation and economic growth.
(iii) Provides Scope for Speculation : Certain degree of speculation is necessary to ensure liquidity and price continuity in stock market. Stock market provides this scope in a restricted and controlled manner.
(iv) Liquidity : The presence of stock exchange gives assurance to investors that their investment can be converted into cash whenever they want, thereby providing liquidity to market.
Long Answer (LA) Type Questions (5 Marks)
Question 9.
Ram Rahim is the sales head of Good Fortune Ltd. His team includes three people. Each of the three team members supposed to sell 20 electric mixers in a month. At the end of the month of March, he checked the reports of sales persons. Two members sold less than 20 mixers, whereas one member sold more than 20 mixers.
He decided to hear the reasons of non-accomplishment of target. The reasons they disclosed was the inadequate supply of mixers which lead to less sales. Ram Rahim directed the production department to ensure timely supply of mixers in future.
(i) Name the function of management discussed above.
(ii) State the steps of function identified in part (i) by quoting the lines.
Answer:
(i) Controlling
(ii) Steps of controlling highlighted in case are (any four)
(a) Setting performance standards
“Each of the three team members is supposed to sell 20 electric mixers in a month.”
(b) Measurement of actual performance
“At the end of the month of March, he checked the reports of sales persons.”
(c) Comparing actual performance with standards
“Two members sold less than 20 mixers, whereas one member sold more than 20 mixers.”
(d) Analysing deviations
“He decided to hear the reasons of non-accomplishment of target. The reasons they disclosed was the inadequate supply of mixers which lead to less sales.”
(e) Taking corrective actions.
“Ram Rahim directed the production department to ensure timely supply of mixers in future.”
Question 10.
Discuss in brief the different styles of leadership.
Or
Explain the three important components of staffing.
Answer:
Different styles of leadership are discussed below
(i) Authoritative or Autocratic Leadership An autocratic leader exercises complete control over his subordinates. He centralises powers in himself and takes all decisions without consulting the subordinates. He dominates and drives his group through coercion and command. He loves power and never delegates authority.
The leader gives orders and expects the subordinates to follow them unquestioningly. He uses rewards and holds threat of penalties to direct the subordinates. He does not delegate authority.
(ii) Democratic or Participative Leadership A consultative or democratic leader takes decisions in consultation and participation with the subordinates. He decentralises authority and allows the subordinates to share his power.
The leader does what the group wants and follows the majority opinion. He keeps the followers informed about the matters affecting them. A democratic leader provides freedom of thinking and expression. He listens to the suggestions, grievances and opinions of the subordinates.
(iii) Free-rein or Laissez Faire Leadership Free-rein leadership involves complete delegation of authority, so that subordinates themselves take decisions. The free-rein leader avoids power and relinquishes the leadership position.
He serves only as a contact to bring the information and resources needed by the subordinates. This style of leadership is appropriate when the subordinates are well trained, knowledgeable, self-motivated and ready to assume responsibility.
Or
Important components of staffing are.
(i) Recruitment The process of searching for prospective employees and stimulating or encouraging them to apply for jobs in the organisation. It involves identification of different sources of recruitment, assessing their validity, choosing most suitable sources and inviting applications from the prospective candidates.
(ii) Selection The process of identifying and choosing the best person among the pool of prospective candidates who have applied for a job. The process of selection includes preliminary screening, selection or employment tests, selection interview, reference checks, selection decision, medical examination, job offer and contract of employment.
(iii) Training The process by which the attitudes, skills and abilities of employees to perform specific jobs are increased is known as training. It is a short-term job oriented process suitable for technical staff. There are various on-the-job and off-the-job training methods.
Question 11.
A newly promoted company, dealing in garments have ascertained the fund requirements to procure fixed assets as well as to cater the day-to-day expense of the business. However, the manager has not yet decided upon the sources of finance to be used. The decision regarding determination of sources of finance is dependent on many factors. Discuss any five such factors.
Answer:
The decision regarding determination of sources of finance is dependent on following factors:
(i) Cost: The cost of raising funds through different sources are different. Thus, before selecting a source of fund, costs should be compared.
(ii) Risk: Some degree of risk is involved in every source of finance. More risk is associated with borrowed funds as compared to owner’s fund.
(iii) Cash Flow Position: It also helps in selecting the securities as smooth and steady cash flow can easily afford borrowed funds but if a company faces shortage of cash flows, then it must opt for owner’s fund.
(iv) State of Capital Market: The conditions of capital market also help in deciding the type of securities to be raised. During boom period, demand is more for equity shares but in depression, debt securities are more in demand.
(v) Fixed Operating Costs: If a business has high fixed operating costs, it must reduce fixed financing costs. Hence, equity financing is better. Similarly, if fixed operating cost are less, more debt financing should be preferred.
Question 12.
Neha works as a housemaid in locality of Darya Ganj, Delhi. On one day, while returning from her work, she purchased an iron from Alphine Ltd. When she used it in the next morning, fire burst from it which caused burnt on her hands.
She immediately contacted Alphine Ltd. who asked her to contact the company. Company refused to accept the complaint. On the advise of her landlord, she filed a compliant in district commission but she was not satisfied with their order.
(i) Identify and explain the right violated by the company.
(ii) Where she can appeal further and in how many days?
(iii) Also, write the composition of members of Commission identified in point (ii).
Or
Aishwarya found an insect while eating Britannia Cake. She immediately called on Britannia industries limited’s toll free number given on their packet.
The customer care executive seriously attended the complaint and asked her to share the picture of cake piece which has an insect. Within 24 hours, they contacted her and apologised her for their mistake.
On the next day, company send her Britannia hamper which has lot of cakes, biscuits, etc.
Aishwarya was very happy because she exercised her right. She also appreciated company for their response towards her complaint.
(i) Identify the right violated by Britannia by quoting lines from the text.
(ii) Identify the rights followed by Britannia by quoting lines from the text.
(iii) Mention the responsibility that Aishwarya has exercised being an alert consumer.
Answer:
(i) Right to safety has been violated by the company. Consumers have a right to be protected against supply of such goods and services Which are hazardous to their life.
(ii) If the aggrieved party is not satisfied by the jurisdiction of the District Commission, then they can file an appeal against their judgement in State Commission within 45 days of passing of the order. Thus, Neha can appeal further in State Commission within 45 days of passing of the order.
(iii) Each State Commission shall consist of.
- a President and
- not less than four or not more than such number of members as may be prescribed in consultation with the central government.
Or
(i) Right to safety has been violated by the company which is highlighted from the line, “Aishwarya found an insect while eating Britannia Cake.”
(ii) Rights followed by Britannia
- Right to be heard which is reflected from the lines “The customer care executive seriously attended the complaint and asked her to share picture of cake piece which has an insect”.
- Right to seek redressal which is highlighted from the lines, “On Next day, company send her Britannia hamper which has lot of cakes, biscuits, etc.”
(iii) Aishwarya is an alert consumer who did not ignore the deficiency even though it’s just a matter of ₹ 20 packet of cake. She immediately filed complaint for redressal of her grievances by calling their customer care centre. She exercised her right to be heard.