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Class 11 - Business Studies

Business Services Test 01

Question No. 1 to 5 are based on the given text. Read the text carefully and answer the questions:

This is a plastic card with an embedded microchip that can be for a variety of purposes. They are loaded with data,
provide tamper-proof storage of user and account identity. The transactions carried out through these cards are highly
secure as they require PIN/OTP/biometric data for authentication.

One of these cards relays a message to the cardholder's bank to withdraw funds from the cardholder's designated bank
account and thereby widely used for electronic payments. You can't withdraw more than the amount present in your
account with this card. Another card similar to it provides your overdraft facility to a certain limit. Apart from these,
these plastic cards are also used in transportation. This is a virtual wallet on which you can load fare thereby facilitates
you with seamless travel. Due to the ease of transactions they provide, worldwide people are now using these cards.

1. The whole case study is revolving around which card?

a. Smart Card
b. Credit Card
c. ATM Card
d. Debit Card
2. You can't withdraw more than the amount present in your account with this card. Name the plastic card which is
discussed here.
a. Credit Card
b. Health Card
c. Debit Card
d. Aadhar Card
3. Another card similar to it provides your overdraft facility to a certain limit. Which card are we talking about?
a. Jan Dhan Card
b. Debit Card
c. Metro Card
d. Credit Card
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4. This is a virtual wallet on which you can load fare thereby facilitates you with seamless travel. Which card is this?
a. Debit Card
b. Metro Card
c. ATM Card
d. PAN Card
5. Which of the following advantages of plastic cards has been highlighted in the first para?
a. Adaptability
b. Convenience
c. Cost Reduction
d. Security
6. Which type of function of banks is Accepting deposit?
a. None of these

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b. Primary function
c. Social function
d. Secondary function
7. Which of the following is the subject-matter of Marine Insurance?
a. Hull
b. Freight
c. All of these
d. Cargo
8. A doctor can operate only on the condition that the patient is ready to take his service. It is the example of this point of
nature of business services.
a. Non-stocking
b. Simultaneity
c. Customer participation
d. Non-transferability
9. Assertion (A): The insured may or may not have an insurable interest in the subject matter of insurance.

Reason (R): Insurable interest means some pecuniary interest in the subject matter of the insurance contract.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are true but R is not the correct explanation of A.
c. A is true but R is false.
d. A is false but R is true.
10. Assertion (A): Fire Insurance policy doesn't have any surrender value.

Reason (R): No amount is paid in case of fire insurance to the insured if he surrenders the policy as there is no loss to
compensate.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are true but R is not the correct explanation of A.
c. A is true but R is false.
d. A is false but R is true.
11. State True or False:
a. A fire insurance policy can be taken for any amount.
a. True
b. False
b. The Insurable Interest in fire insurance should be at the time of insurance and at the time of damage.
a. True
b. False
12. Fill in the blanks:
a. ________ means storage and preservation of commodities or goods in a warehouse.
b. If the insurance contract is terminated before time, the amount received is called ________.
13. Match the following:
(a) This principle suggest that it is the right of an insurance to call upon other liable insurance to (i) Sum
contribute for the loss of payment assured

(b) This principle states that it is the duty of the insured to take reasonable steps to minimise the loss to (ii) Cause
the insured property Proxima
(c) The insurer is liable to compensate for the loss only if the proximate cause is covered under the (iii)
policy Contribution
(d) This is the amount for which the insurance policy is taken (iv) Mitigation

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14. When should the Insurable interest be presented in the life insurance?
15. A Shipping Co. gets its ship insured for getting compensation for the loss likely to be suffered from sea-disasters.
Identify this insurance.
16. Explain the following principle of insurance: Utmost good faith, Indemnity.
17. Why is life insurance considered as a contract of assurance?
18. What is e-banking? What are the advantages of e-banking?
19. Nakul is running a business of manufacturing invertors in Delhi. He has received an order for supply of 20 invertors
from Better Electronics in Jaipur. As the amount of payment is more than ₹2 lakhs, Better Electronics decided to transfer
the funds electronically from their bank account.
i. Which service of bank has been referred to in the above para. Name and explain it.
ii. Also explain any 3 points related to benefits of e-Banking provided to customers by banks.
20. State the types of life insurance policies.

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Class 11 - Business Studies

Business Services Test 01

Solution

1. (a) Smart Card

Explanation: Smart Card

2. (c) Debit Card

Explanation: Debit Card

3. (d) Credit Card

Explanation: Credit Card

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4. (b) Metro Card

Explanation: Metro Card

5. (d) Security

Explanation: Security
6. (b) Primary function

Explanation: Primary function

7. (c) All of these

Explanation: All of these

8. (b) Simultaneity

Explanation: Simultaneity
9. (d) A is false but R is true.

Explanation: The insured must have an insurable interest in the subject matter of the insurance as per the principle of
Insurable Interest.
10. (a) Both A and R are true and R is the correct explanation of A.

Explanation: Since insurance is not a contract of making a profit, that's why the amount is paid only when there is loss
and nothing is paid if the insured surrenders the policy before happening of the event.
11. State True or False:
a. (b) False

Explanation: False. The policy amount cannot be more than the value of the subject matter.
b. (a) True

Explanation: True
12. Fill in the blanks:
a. Warehousing
b. Surrender value
13. (a) - (iii), (b) - (iv), (c) - (ii), (d) - (i)
14. At the time of getting insurance, the insurable interest should be presented in the life insurance.
15. It is known as the 'Hull Insurance'.
16. i. Utmost good faith: It is the duty of the insured to disclose all the material facts relating to the risk to be covered. A
material fact refers to the fact which would influence the mind of the prudent underwriter in deciding whether to
accept a risk for insurance and on what terms.
ii. Indemnity: The purpose of indemnity is to restore the insured person to approximately the same financial position
that existed prior to the loss. The important word here is 'approximately' the same and the reason for this is to prevent

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the insured from profiting from insurance to reduce moral hazards. Indemnity can be defined as the compensation of
loss or injury sustained. This principle applies in all insurance policies except life insurance. 
17. Assurance means security for compensation. Under the contract of insurance, the compensation is paid by the insurer on
the happening of an event. For example, in the case of fire insurance, the compensation is given only when the insured
suffers a loss due to fire. But in case of life insurance, the compensation is paid irrespective of happening of an event. In
life insurance, the compensation is paid either on the death or on expiry of a specific time period whichever comes
earlier. Since payment of compensation is assured by the insurance company, that is why life insurance is considered as a
contract of assurance. This is also known as "whole of life" cover.
18. Electronic banking has many names like e-banking, virtual banking, online banking, or internet banking. It is simply the
use of electronic and telecommunications network for delivering various banking products and services. Through e-
banking, a customer can access his account and conduct many transactions using his computer or mobile phone. This
system has a direct interface with the customer.

Advantages:
i. E-banking provides services 24 hours, 365 days a year to the customers of the bank.
ii. Customers can make some of the permitted transactions from office or house or while travelling via mobile phones.
iii. It develops a sense of financial discipline by recording each and every transaction.
iv. Greater customer satisfaction by offering unlimited access to the bank, not limited by the walls of the branch and less
risk as well as greater security to the customer as they can avoid travelling with cash.
19. i. RTGS.

Real-Time Gross Settlement (RTGS): Real-Time Gross Settlement is a funds transfer system where the transfer of
funds or money takes place from one bank account (say, bank X) to another bank account (say, Bank Y) on a Real-
Time and on "Gross Time" basis. Settlement in 'Real Time' means payment transaction is not subjected to any
waiting period. The transactions are settled as soon as they are processed. The gross settlement means the transaction
is settled on one to one basis without bunching or netting with any other transaction. Once processed, payments are
final and irrevocable. RTGS systems are managed and run by the central banks of country.
ii. E-banking is a method through which customers can perform their financial transactions online. Benefits of e-
Banking to Customers are :
a. e-banking provides facilitates 24 hours a day x 365 days a year services to the customers of the bank.
b. Customers can make some of the permitted transactions from office or house or while traveling even through the
mobile telephone.
c. Recording of each and every transaction develops a sense of financial discipline.
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material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams. Teachers can use Examin8 App to create similar
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20. A life insurance policy is a protection against the uncertainty of life that is death. It provides protection to the family a
premature death of an individual. The various types of life insurance policies are as follows:
i. Term insurance policy: This policy is a pure risk cover with the insured amount to be paid only if the policyholder
dies during the period of policy time. The intention of this policy is to protect the policy holder's family in case of
death.
ii. Endowment policy: In this policy, the term policy is defined for a specified period like 15, 20, or 25 years. The
insurance company pays the claim to the family of the assured on the event of his death within the policy term or on
the event of the assured serving the policy term.
iii. Whole life policy: In this policy, the insurance company collects premiums for the insured for the whole life or till
the time of his retirement and pays a claim to the family of the insured only after his death.
iv. Money-back policy: Money back policy provides money on occasions when the policyholder needs it for his personal
reasons. The occasions may be marriage, education, etc. The money will be paid back to the policyholder in a

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specified direction. If the policyholder dies before the policy term, the sum assured will be given to his family. A
portion of the assured amount is payable at regular intervals. On survival, the remainder of the sum assured is
payable.
v. Annuities and pension: In an annuity, the insurer agrees to pay the insured a stipulated sum of money periodically.
The purpose of an annuity is to protect the insured against risk as well as provide money in the form of pension at
regular intervals. Over the years, insurers have added various features to basic insurance policies in order to address
the specific needs of a cross-section of people.

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