11/09/2021

Guidance on
answering
examination
questions
iGCSE BUSINESS STUDIES

Paper 1-style questions Student has

explained the
wrong
type of profit.
Students need to
• 1. Explain what is meant by the term ‘retained profit’. [2] read the question
carefully to make
sure they know
• Student’s answer: which type of
• Profit is the total revenue less total cost. profit
the question is
asking about.
• Final mark: 1/2

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2. Would it be better for a company to issue shares rather than take

out a loan to buy out a rival company? Justify your answer. [6]

Student’s answer:
DECISION
Shares will definitely be better as long as they are able to raise enough
money from shareholders. This is because shares do not have to be repaid,
unlike a loan. A loan will also incur interest charges which will add to the
business’s costs. Banks might be reluctant to lend to the business it they
think that the takeover is not a good idea. Even if the buy-out works, it might
take time for any financial benefits to appear, but the loan will still need to be
repaid every month. So issuing shares is a better option.
Final mark: 6/6

This is an excellent answer as

the student has made a clear
decision which is supported by
the points made. The student
Comment has considered both options
and explained factors for each
on student's method. Based on this
information, the student has
answer given a clear reason
why issuing shares is better
and in the end he/ she restates
his/ her judgement.

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Manchu shoes operates in the mass

shoe market. It has seen sales rise
steadily over the past two or three
years. The Marketing Manager thinks
it could do even better if it segments
the market. Comment on
1. Explain the term ‘mass market’. [2] student's answer

Student’s answer: The student has

just reordered
the words.
A market which has a mass of sales. Answers like this
would not
Final mark: 0/2 be credited.

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2 Identify and explain

two ways that a shoe
shop could segment
this market. [4]
Student’s answer:
Way 1: By gender
Way 2: By geography
Final mark: 2/4

Comment on student's answer

The student has correctly identified two ways to

segment the market but there is no explanation of
how this could be done.

3. Identify and explain two benefits

of segmentation for Manchu. [4] This is a good
explanation of
the benefit and it has
Student’s answer: been clearly
 Benefit 1: If they know who is applies to Manchu’s
business.
buying the shoes they can target
(2 marks)
their advertising to this audience in
order to sell more, e.g.
The second benefit has
ladies shoes in women’s been identified but not
magazines. well explained as to
how filling the gap
would help
 Benefit 2: Might spot a gap in the Manchu. (1 mark)
market. They could then fill this
gap.
 Final mark: 3/4

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4. The shoe market The student

is worth $2000 clearly knows
how to calculate
million. the sales figure but
Manchu has about has made an error
in the answer.
3% of the market. As they have shown
Calculate the value their workings they
of its sales. [2] can still be
awarded the
method mark.
Student’s answer:
2000 × 3/100 = $6
million

Final mark: 1/2