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 Series ARSP/15 Set ~ 15
Roll No. Q.P Code 15/15/15
Candidates must write the Q.P Code
on the title page of the answer-book.

 Please check that this question paper contains 06 printed pages.

 Q.P. Code given on the right hand side of the question paper should be written
on the title page of the answer-book by the candidate.
 Please check that this question paper contains 34questions.
 Please write down the serial number of the question in the answer-book
before attempting it.
 15 Minute times has been allotted to read this question paper. The question
paper will be distributed at 10:15 a.m. From 10.15 a.m to 10.30 a.m, the students
will read the question paper only and will not write any answer on the answer –
book during this period.

Business Studies

Time allowed: 3 hours Maximum Marks: 80

General Instructions: Maximum Marks: 80

1. This question paper contains 34 questions.

2. Marks are indicated against each question.

3. Answers should be brief and to the point.

4. Answers to the questions carrying 3 marks may be from 50 to 75 words.

5. Answers to the questions carrying 4 marks may be about 150 words.

6. Answers to the questions carrying 6 marks may be about 200 words.

7. Attempt all parts of the questions together.

1. Management is a universal term used for certain functions performed by individuals in an enterprise who are [1]
bound together in a hierarchy of relationships. Every individual in the hierarchy is responsible for successful
completion of a particular task. To be able to fulfill that responsibility he is assigned a certain amount of
authority or the right to take a decision. This authority-responsibility relationship binds individuals as superiors
and subordinates and gives rise to ________.

a) Characteristics of Management b) Levels of Management

c) Importance of Management d) Objectives of Management

2. The function of Stock Exchange which helps in creating a continuous market where securities are bought and [1]
sold is:

a) Pricing of securities b) Providing liquidity and marketability to

existing securities

c) Contribution to economic growth d) Safety of transactions

3. ________ will include the entire gamut of activities as well as the organisation's policy and how it will [1]
contribute to the overall business plan.

a) Budget b) Objectives

c) Programme d) Policy
4. ________ refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial [1]
charges like interest.

a) Capital structure b) Earning per share

c) Trading on equity d) Return on investment

5. The controlling function aims to: [1]
 i. Find out how far actual performance deviates from standards
ii. Find out how far standards deviate from actual performance
iii. Initiate action by people in the organization
iv. Improve job satisfaction and morale of the employee

a) iv and i b) only i

c) iii and iv d) only iv

6. Identify the principle of general management depicted in this pictorial representation. [1]

a) Esprit De corps b) Orders

c) Unity of direction d) Unity of command

7. At present only two depositories are registered with SEBI ________. [1]

a) NSDL and HDFC b) NEFT and TDS

c) NSDL and ABSL d) NSDL and CDSL

8. Kishore Enterprises is a company engaged in the marketing of air-conditioners of a famous brand. The company [1]
has a functional structure with the four main functions - Purchase, Sales, Finance and Staffing. As the demand
for the product grew, the company decided to recruit more employees. Identify the concept which will help the
Human Resource Manager to find out the number and type of personnel available so that he could decide and
recruit the required number of persons for each department.

a) Workforce Analysis b) Workload Analysis

c) All of these d) Estimating manpower requirements

9. Which of the following statement is true? [1]
a. A higher tax rate makes debt relatively costlier.
b. A company cannot use debt beyond a point.
c. For maximisation of shareholder’s wealth, debt can be used up to any level if ROI is greater than cost of
debt.
d. During a bearish phase, equity shares are more easily sold even at a higher price.

a) option (c) b) option (a)

c) option (b) d) option (d)

10. Assertion (A): Delegation is a pre-requisite to the efficient functioning of an organisation. [1]
Reason (R): It enables a manager to use his time on high priority activities and also satisfies the subordinate's
need for recognition.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

11. Which of the following statements is Not true for primary market? [1]

a) There is no fixed Geographical location. b) Only buying of securities takes place,

securities cannot be sold there.

c) It directly promotes capital formation. d) Prices are determined by demand and

supply of the security.
12. M. Motors is the manufacturer of sophisticated cranes. The Production manager of the company, reported to the [1]
Chief Executive Officer, Aneesh Mehta that one of the machines used in manufacturing sophisticated cranes had
to be replaced to compete in the market, as other competitors were using automatic machines for manufacturing
cranes. After a detailed analysis, it was decided to purchase a new automatic machine having the latest
technology. It was also decided to finance this machine through long term sources of finance. Aneesh Mehta
compared various machines and decided to invest in the machine which would yield the maximum returns to its
investors. The financial decision taken by Aneesh Mehta is ________.

a) Financing decision b) Working capital decision

c) Capital budgeting decision d) Dividend decision

13. Statement I: The Consumer Protection Act 2019 provides for five rights of consumers. [1]
Statement II: Right to be assured means that the consumer has the freedom to access variety of products at
competitive prices.

a) Statement I is correct and Statement II is not b) Statement II is correct and Statement I is not
correct. correct.

c) Both the Statements I and II are not correct. d) Both the Statements I and II are correct.
14. Shyam Lal, the Managing Director of Elpis Ltd, retired after 33 years of service. The responsibility was given to [1]
Ram. Ram realised that there was lot of rivalry, confusion and misunderstanding among the departmental heads.
He detected inefficiencies, took corrective measures and developed a master plan for the organisation to follow.
This served as a basis for coordinating the activities of all departments, led to clarity of thought and action and
work got off to a smooth start. The point of importance of planning discussed above is:
a. Planning reduces overlapping and wasteful activities.
b. Planning establishes standards for controlling.
c. Planning reduces the risks of uncertainty.
d. Planning promotes innovative ideas.

a) option (d) b) option (b)

c) option (a) d) option (c)

15. Which of the following is NOT a factor affecting capital structure of a company? [1]

a) Interest Coverage Ratio b) Cash Flow Position

c) Growth Opportunities d) Cost of Debt

16. Statement I: The important decision areas under physical distribution include managing inventory (levels of [1]
stock of goods), storage and warehousing and transportation of goods from one place to the other.
Statement II: Transportation involves physical movement of goods from one place to the other.

a) Statement I is correct and Statement II is not b) Statement II is correct and Statement I is not
 correct. correct.

c) Both the Statements I and II are not correct. d) Both the Statements I and II are correct.
17. Sanya Fashion Ltd. hired Deepak Sharma, an ace fashion designer to develop a new product line. He charged [1]
₹50 lakh for consultation. The company spent another ₹1.5 crore in formulating the marketing campaign for
launching their new product line. Their products were not liked by the consumers and the company could
generate a revenue of ₹15 lakh only from this product line. Thus, the cost incurred is not justifying the benefits
derived from the plans. Which limitation of planning is reflected in the above para?

a) Planning involves huge costs b) Planning leads to rigidity

c) Planning is time consuming d) Planning reduces creativity

18. Match the objective of management in Column I with their respective definition in Column II: [1]

(a)
Organisational (i) Survival, profit and growth
Objectives

(b) Social
(ii) Providing basic amenities like schools and healthcare, etc.
objectives

(iii) Satisfying diverse needs of employees, e.g. financial needs such as competitive salaries
(c) Personnel
and perks, social needs such as peer recognition and higher level needs such as personal
objectives
growth and development.

a) (a) - (i), (b) - (ii), (c) - (iii) b) (a) - (ii), (b) - (i), (c) - (iii)

c) (a) - (iii), (b) - (ii), (c) - (i) d) (a) - (i), (b) - (iii), (c) - (ii)
19. One of the important decisions under financial management relates to the financing pattern or the proportion of [1]
the use of different sources in raising funds. The financial decision highlighted is ________.

a) Dividend decision b) Capital budgeting decision

c) Working capital decision d) Financing decision

20. Controlling is necessary for ________. [1]

a) Large Scale Enterprise b) Medium Level Enterprise

c) All of these d) Small Scale Enterprise

21. Monika, Rashmi and Garima are childhood friends. After completing their education, Monika joined a school as [3]
a teacher. Rashmi joined a firm as a Chartered Accountant and Garima as a General Manager in a Multi-National
Company. After a long time in a re-union function of the school, they met each other. Rashmi said that they were
all professionals now. Garima told Rashmi that she can say this about Monika and herself, but not about her
since Manager is not considered a full fledged professional.
Why did Garima say that she was not a professional? State any three points in support of your answer.
22. What is meant by financial incentives? State any two financial incentives. [3]
OR
Explain briefly any three semantic barriers to communication.
23. State any three factors that determine the requirements of working capital of a company. [3]
24. Vivek purchased a bike from Sarnath Automobiles with a written guarantee to repair or replace, if necessary, [3]
 within six months or 5,000 kms of distance travelled whichever is earlier. After covering the distance of 400 kms
in two months, the gears of the bike started giving problems. Vivek took the bike to the dealer who refused to
listen to his complaint. He was confused about what he should do.
Suggest the rights that Vivek may exercise in the above case.
OR
Anita purchased a book from Satish book stores. While reading the book, she found that ten pages were missing. She
approached the book seller and complained about the missing pages. The seller promised that if the publisher was
ready to change the book, he would change the same. After one week, the seller informed Anita that the publisher
had refused to change the book.
Where can Anita file a complaint against the seller of the book? Give reason in support of your answer. Also, explain
who is a consumer as per Consumer Protection Act, 2019.
25. Kaveri is busy in preparing the financial blueprint for her organisation's future operations. She feels that detailed [4]
plans of action reduce waste and duplication of efforts. However, her friend, Sana feels that in an uncertain and
dynamic world, this type of planning may not work. Kaveri again stresses on her statement and explains why
this financial blueprint is important.
Identify the concept and state three points of its importance in addition to those explained in the above para.
OR
Explain objectives and strategy as types of plan.
26. Describe briefly the steps in the process of controlling. [4]
OR
How does controlling helps in judging accuracy of standards and ensuring order and discipline?
27. Explain the following techniques of scientific management: [4]
a. Time Study;
b. Motion Study; and
c. Functional Foremanship.
28. Neha was a regional sales manager in ‘Good Look Garments Ltd. ‘for ten years. On the retirement of the [4]
marketing manager, Neha applied for the same post as she was extremely ambitious and had dedicated all her
energies to obtain the post of a marketing manager. However, the top management of the company decided to fill
this post by selecting a better person from outside the company. Because of this Neha was heart-broken and her
performance declined.
When the new marketing manager joined, one of her major problems was how to motivate and inspire Neha to
her former level of performance.
Suggest any three non-financial incentives that the new marketing manager may use to motivate Neha.
29. Explain Private Placement and Rights Issue as methods of floatation of new issues in the primary market. [4]
30. Rajneesh purchased a 500 ml bottle of fruit juice for ₹ 60 in Ahmedabad from a local store. While consuming it, [4]
he found an insect floating in it. He sent a legal notice to the company immediately and decided to approach a
Consumer Dispute Redressal Agency for a relief of ₹ 2 lakh.
i. Which Consumer Dispute Redressal Agency did Rajneesh approach, out of the three-tier machinery set up
under Consumer Protection Act, 2019 for redressal?
ii. If Rajneesh is not satisfied by the order of the above Agency, where can he appeal against such order and
within how many days?
iii. State any two reliefs that can be granted to Rajneesh in the above case.
31. Explain the various steps in the Process of Staffing function of management. [6]
OR
Atul is working in an organisation. After every three months, his manager transfers him from one department to
another so that he may gain a broader understanding of all the departments of the organisation.
Name and explain the method of training Atul is undergoing.
32. After completing his MBA from the USA, Mr. Ajay came to India to start a new business under the banner [6]
Ecom Creations Ltd. He launched a new product in e-leaming for senior secondary school students in the
commerce stream which already had an established market in the UK and the USA but not in India. His business
started flourishing in India. As a result, more Indian companies entered the market with other subjects also.
Identify and quote the lines from the above paragraph which highlight the significance of understanding the
business environment.
OR
The government of India announced the Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the
midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender
from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India
after the announcement.
This step resulted in a substantial increase in the awareness about and use of Point of Sale machines, e-wallets, digital
cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure
led to a rise in government revenue in the form of tax collection.
i. Enumerate the dimensions of the business environment highlighted above.
ii. State the features of Demonetization.
33. Shreyskar runs a locks manufacturing factory. He wants to expand his business. For expansion, he contemplates [6]
to enter into the manufacturing of locks for cars as an ancillary company. By doing this,his company will be able
to provide many products to car manufacturers. Which type of organisational structure will he choose for his
factory and why? State any five advantages of this organisational structure.
34. What is meant by sales promotion? Explain any five sales promotion techniques with an example of each. [6]