Children’s Academy

PRE-TERM : 3 (2021-2021)

Business Studies
Class : XI

Maximum Marks: 50
Time Allowed: 90 minutes

General Instructions:

1. The Question Paper has 25 questions.

2. All questions are compulsory.
3. Answer the questions as per given instructions.

Multiple choice questions. ( 1 mark each )

Direction (Question number 1 to 5) All the questions have four options out of which
only one is correct. Choose the correct option as your answer.

1. Debentures bear a ________ rate of interest.

a. Flexible
b. Floating
c. Fixed
d. All of these
2. When goods are imported for the purpose of export is called ________.
a. home trade
b. foreign trade
c. entrepot
d. trade
3. Internal sources of capital are those that are:
a. generated through issue of shares
b. generated through a loan from commercial banks
c. generated within the business
d. generated through outsiders such as suppliers
4. Payment of dividend to the equity shareholders is ________.
a. not compulsory
b. mandatory
c. compulsory
d. fixed
 5. Which of the following is the main problem for small business?
a. Finance
b. Managerial skill
c. Raw material
d. All of these

Case Based Questions ( 2 mark each/or based on given answers)

Direction( Q.no. – 11 to 15) Read the following case study and answer questions 16 to 25.
11. Rajinder Singh and his brother Ravinder Singh own a large scale retail outlet at a
central location in Amritsar. They deal with varied kinds of products like textiles,
footwear, cosmetics, etc. which are sold through different divisions within the
establishment.
In the context of the above case answer the following questions:

a. Identify the type of retail outlet being described in the above lines.
b. State any two merits and two limitations of the type of retail outlet as identified
in part (a) of the question.

12. After completing graduation, three close friends (Prakash, Sanyog, and Manoj)
decided to start their own business.

a. Prakash established a factory to produce readymade garments and invested

Rs. 4 crores in Plant and Machinery.
b. Sanyog set up a manufacturing unit to produce sanitary fittings. He invested
Rs. 7.5 crores in Plant and Machinery.
c. Manoj started a manufacturing unit to produce stationery items and invested
Rs. 20 lakhs in Plant and Machinery.

Identify the category in which their business will fall under Micro, Small and Medium
Enterprises Development Act, 2006

13. Mayank has surplus money of Rs. 25,00,000, which he wants to invest
either in equity shares or in preference shares. Two real estate companies
(Magic Estate and Skylark Enterprises), with almost the same
creditworthiness, are launching their public issue. Magic Estate is coming
up with a public issue of preference shares, while Skylark Enterprises is
coming up with equity shares. Mayank is confused about the two issues.
He consulted his friend Gaurav, who is a portfolio manager and Gaurav
convinced him to invest the money in Magic Estate due to ‘Preferential
Rights’ of preference shareholders over equity shareholders.
State the ‘Preferential Rights’ stated by Gaurav, which convinced Mayank
to invest in Magic Estate.
14. When we buy some goods from the market the shopkeeper issues us a
Trade Document. At the bottom of this document is written E.&O.E. What
do you understand from these letters? Explain the justification of these
letters.
15. Vishal buy goods in larger quantities and sell them to small businessmen.

a. Which type of trader is Vishal? Explain it.

b. State/ explain any two services to consumers to retailers.
Short-Answer Type Questions ( 3-4 Marks )

Direction (Q. Nos. 16 to 25) Read the following questions and answer in 30 words.

16. After completing the studies, Priyanka decided to start her own business
of hand made chocolates. After analyzing all the pros and cons, she came
to the conclusion that the total funds required are Rs. 12,00,000. She had
Rs. 2,00,000 in her savings bank account. As these funds were insufficient
to start the business, she approached Axis Bank for obtaining a loan of Rs.
10,00,000. The loan was approved within a month. On the basis of the
given case, answer the following questions:
a. Categorize the two types of funds on the basis of ownership.

b. Out of the two sources of funds, which one is a permanent source of

finance?

c. Which source of funds requires a legal obligation to pay interest at a

fixed rate at regular interval ?

17. Describe any four functions of retailers.

18. Identify the source of finance highlighted in the following case:

a. It refers to that part of profits which is kept as reserves for use in the
Future.
b. This source has characteristics of both equity shares and debentures.
c. It is the cheapest source of internal financing.
19. Name the retail organisation where same type of commodities are sold at
uniform prices located all over the country. What are the features of such
organisations?
20. Briefly explain the problems of international business?
21. Sarah has shifted residence to a new settlement colony. There are no retail
shops nearby. What difficulties will Sarah face in the above case.
22. Explain the features of Cottage Industry.
23. What is business finance? Why do businesses need funds? Explain.

24. Explain the advantages of Retained Earnings.

25. What are the incentives given by Govt. to the Industries set up in hurry,
backward and rural areas.