Monday, October 27, 2025

CBSE Class 11th Business Studies Test - t7b

Free Business Studies - Class 11th (CBSE) - Test - t7b - Sources of Business Finance

Dear class 11th students,
Prepare yourself for your examination by clearing your concepts regarding “Chapter 7: Sources of Finance”.
Therefore, our team has developed an exclusive test that students can solve and gain more knowledge about the topic.
Here are the quick details:
  • Subject: Business Studies
  • Class: 11th (CBSE)
  • Chapter Name: Sources of Business Finance
  • Marks: 40​
  • Time: 1.5 hours

CBSE Class 11th Test

Q1. Debenture holders are called: (1 Mark)
  1. Employees of the Company
  2. Owners of the Company
  3. Creditors of the Company
  4. None of the above.
Q2. Who among the following are called owners of the company? (1 Mark)
  1. Debenture holders
  2. Employees
  3. Directors
  4. Equity shareholders
Q3. The most dependable source of funds is: (1 Mark)
  1. Equity share
  2. Preference share
  3. Public deposits
  4. Retained earnings
Q4. Ploughing back of profits is also referred to as __________ profits. (1 Mark)
Q5. Payment of dividends on shares is: (1 Mark)
  1. Compulsory
  2. Voluntary
  3. Rarely
  4. None of the above
Q6. Loans given by commercial banks are generally: (1 Mark)
  1. Short-term
  2. Medium-term
  3. Long-term
  4. None of the above
Q7. Which of the following businesses requires a higher amount of working capital? (1 Mark)
  1. Figure A
  2. Figure B
  3. Both A and B
  4. None of these
Q8. Vinita is the finance manager of Kipla Pharma Co. As the company wants to import a piece of new machinery from Japan for its expansion, the capital requirements for the same are estimated to be ₹ 5 crore. Vinita reported that the company is not in a position to bear the extra burden of paying interest to the company, so the company should use its own capital sources rather than borrowed capital. The board of directors is confident about the sales turnover and cash flow position of the company in the coming years and supports the borrowed capital source of raising capital. The company is also considering using retained earnings for the same.
Name the source of owned capital that is available free of cost. (1 Mark)
  1. Equity shares
  2. Preference shares
  3. Retained earnings
  4. Bonds
Q9. Read the following statements—Assertion (A) and Reason (R). (1 Mark)
Choose one of the correct alternatives given below. (1 Mark)
  1. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
  2. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
  3. Assertion (A) is true, but Reason (R) is false.
  4. Assertion (A) is false, but Reason (R) is true.
  • Assertion (A): ICICI assists the creation, expansion, and modernisation of industrial enterprise in the private sector only. (1)
  • Reason (R): ICICI is meant to assist industries in both the public and private sectors.
Q10. Match the statement given under Column I with the correct option given under Column II: (1 Mark)
Match the statement given under Column I with Column II
Column I Column II
A. Equity shares (i) Charge against assets of the company
B. Preference shares (ii) Fixed rate of dividend
C. Debentures (iii) Irredeemably
  1. (A-i) (B-iii) (C-ii)
  2. (A-ii) (B-i) (C-ii)
  3. (A-iii) (B-ii) (C-i)
  4. (A-i) (B-ii) (C-iii)
Q11. Identify and explain the source of finance highlighted in the following cases: (3 Marks)
  1. It facilitates the purchase of goods and services without making immediate payment.
  2. It refers to that part of profits which is kept as a reserve for use in the future.
  3. This source has certain characteristics of both equity shares and debentures.
  4. This source is arranged through brokers, and the rate of interest is higher than that of a bank.
  5. It is also known as ploughing back profits.
  6. This short-term source can be issued only by financially sound and highly creditworthy firms.
  7. It is a permanent source of capital and is not redeemed during the lifetime of the company.
Q12. Ajay was not happy with his government job due to political interference and red tape in his department. He decided to take retirement under the Voluntary Retirement Scheme of the government.
On his retirement, he got some amount of money in the form of gratuity and provident fund, and plans to invest in securities where he can get regular returns with ownership rights.
You, being the financial market expert working for ‘Mitra Financial Advisors, OPC (Private Limited)’ are required to advise him on the following issues: (3 Marks)
  1. Which type of security will you suggest to Ajay?
  2. State two benefits of such securities for the issuing company.
Q13. How would you differentiate between Equity shares and Preference shares? (3 Marks)
Q14. Shiv Sales Pvt. Ltd. owns the agency of different food products, which sells goods of different brands to retailers after purchasing them from several companies. It purchases almost all goods for cash, while it sells on credit for one month. 
So the company keeps struggling with short-term finance. To overcome this problem, the company’s finance department held a meeting. 
The chairperson of the meeting asked the members to express their views on the solution of this problem. 
The first person said, ‘We should use a source of finance which does not involve any bureaucracy and legal problems, and the market of which remains stable’. 
The view of the second person was that the company should buy goods on credit. The third person’s opinion was that the company needs cash credit and overdraft. 
Therefore, the source of finance should be selected considering this fact. 
The chairperson of the meeting listened to the suggestions of all kinds and, to make the final decision, asked them to present at a meeting next week.
Identify and explain the sources of finance as suggested by different persons by quoting the lines. (4 Marks)
Q15. A public limited company decided to borrow additional funds. The management of the company is not interested in dilution of control. (5 Marks)
  1. Suggest a suitable type of source of funds for raising the funds.
  2. State any four merits.
Q16. Sanjoli and some of her friends jointly set up ‘Tirmurti Limited’. The business of their company was to manufacture blankets at a low rate. 
At the time of setting up the company, they issued 25,000 shares of the face value of ₹ 10 each. In this way, they started their business with a capital of ₹ 2,50,000. 
Before collecting the money from the public, they decided that they would issue such a security that would not allow the company to incur any fixed financial charges. 
Also, they wished to have the capital from such a source as should enable the company to keep the rate of return up all the time. 
To collect the capital, Sanjoli and her friends issued a prospectus. Through it, they told the public that in the coming years, the company expected to earn a big profit and that the price of its shares would be very high. 
As a result, the investors would be able to earn extra profit. 
In the prospectus, it was also said that the company would organise its meetings from time to time and that the investors would be invited to these meetings. 
They would have the right to cast their votes in these meetings. 
The company started earning more profit than what had been proposed to the investors. (5 Marks)
  1. Identify the type of shares issued by ‘Trimurti Limited’.
  2. Quoting the relevant lines, write about the four advantages to Trimurti Limited from the shares identified in para (i).
Q17. FSN Industries Limited manufactures heavy machines for small-scale enterprises in India. It enjoys excellent earnings with a sound capital structure position in the industry. 
Capital employed of the company consists of ₹ 50 crore as equity and ₹ 20 crore as long-term borrowings (debt). 
Inspired by the ‘Make in India’ campaign, which is directed to provide ease in doing business, it wishes to spread its business operations to overseas countries by raising ₹ 10 crore to install a new manufacturing unit in rural areas of Nagaland, where the rural women are to be trained under the ‘Skill India Mission’. (6 Marks)
  1. As a financial advisor, you are asked to suggest which source of finance the company should choose to raise further funds. Explain the source.
  2. State the reason for selecting the source of finance under part (i).
  3. Differentiate between shares and debentures on the basis of:
    • Nature
    • Voting rights
    • Redemption

The End

Do you want to practice more for class 11th's Chapter 7: Sources of Finance? Click here.

Saturday, October 25, 2025

CBSE Class 11th Business Studies Test - t7a

Free Business Studies - Class 11th (CBSE) - Test - t7a - Sources of Business Finance

Dear class 11th students,
The time has come to make your concepts clear regarding “Chapter 7: Sources of Finance”.
Therefore, we have developed an exclusive test that students can solve and gain more knowledge about the topic.
Here are the quick details:
  • Subject: Business Studies
  • Class: 11th (CBSE)
  • Chapter Name: Sources of Business Finance
  • Marks: 40​

CBSE Class 11th Test

Q1. The unsecured source of borrowed fund which can be raised for a period of six months to three years is ______​ (1 Mark)

  1. Public Deposits​
  2. Preference Shares​
  3. Debentures​
  4. None of the above.​

Q2. Public Deposits are not suitable for new companies. (True/False)​ (1 Mark)

Q3. A company needs funds for funding Working capital requirement and Fixed Capital requirement. (True/False)​ (1 Mark)

Q4. Which of the following instruments is also known as hybrid security?​ (1 Mark)

  1. Equity shares​
  2. Debentures​
  3. Public deposits​
  4. Preference shares​

Q5. Preference shareholders get preference over equity shares for​ (1 Mark)

  1. Payment of dividend​
  2. Voting right​
  3. Participation in management​
  4. None of these​

Q6. Equity shareholders are also known as ______ owners.​ (1 Mark)

Q7. Name the kind of return on investment given to the investors shown in the given picture.​ (1 Mark)

An image showing an investment option

  1. Interest Paid on Bank Loan
  2. Retained earnings​
  3. Dividend​
  4. Trade credit​

Q8. The capital of a company is divided into small units called ______.​ (1 Mark)

  1. Shares​
  2. Debentures​
  3. Bonds
  4. None of these​

Q9. Preference shareholders have ______ rights as to the redemption of capital at the time of winding up of the company.​ (1 Mark)

  1. Normal​
  2. Preferential​
  3. No​
  4. None of these​

Q10. Read the following statements carefully:​ (1 Mark)

In light of the given statements, choose the correct alternative from the following:​

  1. Statement 1 is true and statement 2 is false.​
  2. Statement 1 is false and statement 2 is true.​
  3. Both statements 1 and 2 are true.​
  4. Both statements 1 and 2 are false.​
  • Statement 1: Public deposits are not issued against the security of assets of the company.​
  • Statement 2: Public deposits are unsecured​

Q11. Libra Sales Private Limited owns the agency for different food products. This company sells the goods of different brands to retailers after buying them from several companies. The special characteristics of this company’s business are that it buys almost all its goods on a cash basis and sells on a credit basis. The retailers make payment to it about one month after. This is the very reason that the company often struggles with short-term finance. To overcome this problem, the company’s finance department held a meeting. The chairperson of the meeting asked the members to express their views on the solution of this problem. 

The first person said, “We should use such a source of finance that does not involve bureaucracy and legal hassles, and to obtain this, help from other companies can be obtained”. 

The second person’s opinion was  “When we sell goods on credit, why not make efforts to buy goods on credit too? Hence, to do so, pressure on the companies selling goods should be built up.”​

The chairperson of the meeting listened to the suggestions of all the people and, to make the final decision, asked them to be present in the meeting again after a week.​

Quoting the relevant lines, identify the source of finance indicated by the suggestions given by different people.​ (3 Marks)​

Q12. Differentiate between Owners’ funds and borrowed funds on the basis of​: (3 Marks)​

  1. Investors
  2. Control
  3. Risk

Q13. What do you understand by ploughing back profits? (4 Marks)​

Q14. Akshit Ltd. is a manufacturing company.​ The company has issued equity and preference shares to meet its requirements.​

Other sources of finance have not been considered at all.​

This has resulted in payment of a larger amount of taxes to the government, as dividends on shares are not deducted from the income of the company for the purpose of tax calculation.​

  1. State the source of finance that can give the benefit of tax savings.​
  2. State any two merits. (4 Marks)​

Q15. Ratna Metals and Tubes Ltd. is a multi-location, multi-product company, manufacturing tubes and pipes in stainless steel/exotic material in wide size ranges, for a wide spectrum of applications.​It now wants to cater to the Asian market and has decided to invest in new hi-tech machines.​

Since the investment is large, the finance manager wants to raise borrowed funds through the cheapest long-term source of finance.​

On the basis of the given information about Ratna Metals & Tubes Ltd., answer the following questions: (5 Marks)

  1. Identify and explain the source of finance to be used by the company to meet its funding requirements.​
  2. State any three merits of the source of finance identified in part (i).

Q16. After completing her studies, Neetu decided to start her own business of handmade chocolates.​

After analysing all the pros and cons, she came to the conclusion that the total funds required are ₹12,00,000.​

She had ₹2,00,000 in her savings account.​ As these funds were insufficient to start the business, she approached Axis Bank for a loan of ₹10,00,000.​ The loan was approved within a month.​

On the basis of the given case, answer the following questions: (5 Marks)

  1. Categorise the two types of funds on the basis of ownership.​
  2. Out of the two sources of funds, which one is a permanent source of finance?​
  3. Which source of funds requires a legal obligation to pay interest at a fixed rate at regular intervals? ​

Q17. ‘Balaji Traders Ltd.’ is a company that deals in the wholesale business of rice.​ Its Financial Manager, Mr. Charanjeet Chatterji, arranges unsecured short-term finance for the company through a commission agent.​

The rate of interest to be paid on this loan is more than the bank’s rate of interest.​

For Mr. Chatterji, one of the great advantages of this finance was that its source was far away from Bureaucratic and Legal Hassles.​

Identify this source of finance and write about any five of its characteristics. (6 Marks)

The End

Do you want to practice more for Chapter 7: Sources of Finance? Click here.

Wednesday, October 22, 2025

CBSE Class 12th Business Studies Worksheet - W7a

Free Business Studies - Class 12th (CBSE) - Worksheet - W7a - Directing

CBSE Class 12th is like a huddle race that every student wants to win.
However, only those pupils can win it who will practice it every day and with concentration.
For that matter, we are here to assist you.
So, are you feeling anxious about your CBSE class 12th board exams, or do you want to practice Business Studies case studies?
Well, you have visited the correct platform.
On this page, you can find several case studies (short and long) for practice and solve them. The first section is for short case studies, followed by long case studies.
Here are the quick details:
  • Subject: Business Studies
  • Class: 12th (CBSE)
  • Chapter Name: Directing
Below is the content pattern:

CBSE Business Studies Case Studies for Chapter 7: Directing

Short Case Studies

Case Study 1

Classic Rocks is a pioneering advertisement-making company. Mr. Anuj is a dynamic manager who has recently joined the organisation. He receives complete support from top management. There is proper infrastructure, a planning mechanism, and subordinate support. He gives orders and ensures that the actual working of a new unit from the 1st of May. His schedule becomes very hectic.

The demanding work involves him almost throughout the day. He is busy giving meetings, talking to his subordinates or superiors, etc., throughout the day.

One day, he meets Mr. Vijay, who is working at the lower level management, though he himself is a part of the middle level management. He finds that even Vijay is involved in communicating and supervising his employees throughout the year, though he works at the lower-level management.

Similar is the case with his seniors working at the higher-level management. He feels relaxed after knowing this and continues his work with even more dedication.

  1. Which function of management is highlighted in the above case?
  2. Identify any two features of this function of management highlighted in the above case.

Case Study 2

Manav wanted to bring some changes to his company. One of those changes was the establishment of new software in the organisation. The software has the capability to judge the performance of all the employees. Thus, it makes them more accountable.

However, recently it has been observed that the employees disliked Manav’s decision. After a lot of thinking, one fine day, he decided to call a meeting to address their needs and resistance.

He told them that with the installation of the new software, their needs would be fulfilled, and the best-performing employee would be rewarded. Thus, he was able to bring down the resistance level of the employees.

  1. Which concept of directing is applied by Manav in the above case?
  2. Which one of the benefits of this concept has been highlighted in the above case?

Case Study 3

A company has a number of employees who don’t harbour good feelings for the organisation. They don’t care whether the organisation is progressing or not.

Some of them even have a negative attitude towards the management. When a local newspaper wanted to find out the reason for the declining productivity of the organisation, it was found that it was mainly due to the lack of any incentives in the organisation.

Employees were not awarded for increasing the output of the organisation.

  1. What do you think needs to be done in such circumstances?
  2. What could be the positive outcome of your step?

Case Study 4

Identify and state the Maslow’s needs applicable in the following cases of organisational set-up:

  1. Virendra works in an organisation. He has been part of the organisation for the last 20 years. During all these years, in spite of his best performance in the organisation, he hasn’t yet reached the post of Vice-President.
  2. Vandana works in a software firm. She goes to the office, which is situated at a distance of 20 km from her house. Her husband earns very well and is a pilot with a leading Airline. Though she belongs to a good-earning family yet she has decided to keep on going to her job, which she feels helps her gain acceptance in her social circle.

Case Study 5

Shyam Malik, the CEO of Care Hospitals, a leading chain of hospitals, decided to reward the good work of the doctors of this organisation. For this, he instituted two running trophies.

A Healthcare Achievers’ Trophy to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients, and another Beti Bachao Trophy to recognise the outstanding work done by the doctors in saving the girl child. He decided that all doctors must work in rural areas for atleast six months to improve health services.

  1. Identify the incentive provided by Care Hospitals to its doctors through running trophies.
  2. Which need of the doctors will be satisfied through the incentive identified in (i)? State.

Case Study 6

Mrs. Rani is working as the Human Resource Consultant in a firm that manufactures cosmetics. The company is facing a problem of high employee turnover.

The CEO of the company has invited suggestions from her for retaining the talented employees and reducing employee turnover.

Mrs. Rani recommends that the good employees be rewarded in a way that it creates a feeling of ownership among the employees and at the same time makes them contribute towards the growth of the organisation.

  1. Identify the incentive and explain its type, which has been suggested by Mrs. Rani to the CEO of the company.
  2. Also explain any two incentives of the same type.

Case Study 7

Manoj, a highly dedicated sales manager at Stellar Enterprises, consistently worked toward his sales targets with strategic planning and an enthusiastic approach. Recognised for his commitment and motivation, Manoj exceeded expectations by achieving his sales target one month before the deadline.

This impressive accomplishment not only highlighted his dedication but also inspired his team and motivated the organisation to achieve higher benchmarks. 

To honour his achievement, the company’s CEO decided to reward his diligence and hard work. Manoj’s success story was widely publicised as an example of dedication and hard work. 

Additionally, he was awarded with monetary incentives and recognition in the form of a ‘Best Performance’ certificate, which boosted his morale and reinforced the company’s culture of productivity and excellence.

  1. Name the type of incentive provided to Manoj and identify the type of incentive.
  2. List two other incentives of the type identified in (i).

Case Study 8

When Bhanupriya joined as the technical head of Logic Lotus computers, she was keen on increasing the productivity and profitability of the company. However, she observed that the employees were demotivated as no attention was paid to their work. Also, the workers were given little freedom to make decisions.

Bhanupriya decided to stimulate the employees by giving them T-shirts with their names on them. She also decided to include workers in work committees. This helped in improving the performance of the workers.

  1. On the basis of the understanding of Maslow’s Need Hierarchy Theory of motivation, identify the human need that Bhanupriya has recognised in order to make the subordinates act towards the achievement of organisational goals.
  2. Identify and explain two incentives that have been provided by Bhanupriya to improve the performance of the employees.

Case Study 9

Avni Enterprises organised a function for the employees. There were managers, supervisors, foremen, and others. Some of the employees were engaged in having conversations related to personal experiences, while others were discussing company experiences.

One of the supervisors wanted to give a suggestion to the manager of his department. But he could not do it because of official fear. In the function, the supervisor got an opportunity to give his opinion, which was appreciated by the manager. As a result, an appreciation letter was given to the supervisor. This motivated other employees as well.

  1. Name the motivational method applied here.
  2. List two more motivational methods of the same category.

Case Study 10

A reputed hostel, Gyan Pradan, provides medical aid and free education to the children of its employees. Which incentive is being highlighted here? State its category and name any two more incentives of the same category.

Case Study 11

In a renowned hospital with 100 beds, the CEO of the hospital congratulates the exceptionally performing employees by meeting in person. Sometimes the name of the employee of the month is displayed on the notice board at the main entrance along with his/her photograph.

Recently, the company went a step ahead and distributed T-shirts to the employees who have been among the top 3 performers.

On Employee Day every year, employees who contribute a lot are either rewarded or awarded.

  1. In the above case, which type of incentive has been used by the company to improve employee performance?
  2. Which type of incentive is this? Also, give the definition of this type of incentive.

Case Study 12

A popular magazine published an article on job cuts across the globe. It stated that due to reasons like cost-cutting, market conditions, and technological advancement, almost two lakh people in the IT sector have lost their jobs during the last year.

This was read and discussed by employees of iTechwire Ltd., a software development company in India. It created a lot of unrest among them, and their morale came down. The productivity of the employees started declining. The chief executive officer of the company observed the insecurity among the staff about their jobs.

Understanding his role as the leader, he wrote an email to all the employees assuring them about the stability of their future income and job.

This communication gave the employees psychological and emotional satisfaction and showed positive results in terms of their performance. The chief executive officer was able to make the subordinates act in a desired manner and achieve the organisational goals, without giving them any monetary rewards.

  1. Identify and explain the incentive used by the chief executive officer to improve the performance of the employees.
  2. State the need on the basis of Maslow’s Need Hierarchy of Needs Theory, which was satisfied in the above case.

Case Study 13

Ravi, the operations manager at Jindal Tea Company in Assam, is known for his firm, directive approach. He gives clear orders to his team without involving them in decision-making, expecting compliance to maintain efficiency and meet production targets.

Ravi believes that consulting with his subordinates may slow down operations and prefers to make decisions independently to ensure swift execution and productivity.

  1. Identify and state the leadership style adopted by Ravi.
  2. When can this style be useful for a manager? State.

Case Study 14

Pramod was a supervisor at the ‘Annapurna Atta’ factory. The factory was producing 200 quintals of atta every day. 

His main task was to ensure that the work went on smoothly and there was no interruption in the production process. 

For this, he would give orders only after consulting his subordinates and work out the policies with the consensus of the group. Identify and describe the leadership style being adopted by Pramod.

Case Study 15

In an organisation, one of the departmental managers is inflexible and once he makes a decision, he does not like to be contradicted. 

As a result, employees always feel they are under stress, and they take the least initiative and fear expressing their opinions and problems to the manager.

What is the problem with the way authority is being used by the manager?

Case Study 16

Balvinder is the production manager of ‘Pramod Tea Company’ in Guwahati. He gives orders to his subordinates and expects that they obey those orders. He does not consult them nor encourage them to participate in decision-making.

  1. Identify and state the leadership style adopted by Balvinder.
  2. When can this style be effectively used by a manager? State.

Case Study 17

Identify and state the type of leadership displayed in the following cases:

  1. Mr. Umang Patel is the CEO of a leading software company. He is least concerned about the managerial development of his subordinates. The communication follows only from top to bottom in his organisation.
  2. Ravish is the head of the marketing department of his company. Recently, he organised a series of meetings to get the suggestions of his team members on various issues. His subordinates appreciate his habit of consulting his team before he makes any major decision.

Case Study 18

Radhika started a business of supplying high-class facial kits to beauty parlours in various cities of the country. Initially, the business was doing well, and her products were popular because of their high quality. 

Radhika faced tough times when difficulties in operations started developing in Kagpur city, where her products failed to gain a strong market presence.

To understand the cause, she appointed a qualified marketing manager.

The marketing manager discovered that there was no proper exchange of facts, ideas, etc. between the branch office at Kagpur city and the employees at different locations of Kagpur. 

Vicky, who was in charge and responsible for overseeing all parlours in Kagpur, was unable to effectively foster a common understanding of the product among the employees. 

As a result, the employees did not grasp the key benefits and features of the high-class facial kits.

In turn, the employees were not able to convince potential clients about the product’s value.

  1. Identify the concept discussed in the above case.
  2. The concept identified in (i) above can be defined as a process having various elements. State the first five elements of this process.

Case Study 19

Rajesh and Suresh are working in the same company but in different departments. They often meet during coffee breaks to catch up on the latest news. One day, Rajesh tells Suresh that there is a rumor going around about the company planning to restructure, which might lead to some job cuts.

  1. Which type of communication is this?
  2. State any four features of the type of communication identified in (i).

Case Study 20

Neeraj, a Sales Representative of ‘Ornida Ltd.’ has changed about 80 jobs in the last year. He is a hard-working person, but is not able to attain targets. Many of the customers were due to his inadequate vocabulary and omission of needed words.

Sometimes, he uses the wrong words, because of which the intended meaning is not conveyed.
All this created a misunderstanding between him and his clients.

  1. Identify the communication barrier discussed above and state the category of this communication barrier.
  2. Explain any other communication barrier of the same category.

Case Study 21

Mr. Fernandes is the owner of Unibie Enterprises, carrying on the business of manufacturing electrical appliances.

There is a lot of discontentment in the organisation, and targets are not being met. He asked his son, Michel, who has recently completed his MBA, to find out the reason. 

Michel found that all decision-making of the enterprise was done by the father. Moreover, his father did not have confidence in the capacity of the employees. Thus, the employees were not able to contribute.

  1. Identify any two communication barriers because of which ‘Unibie Enterprise’ was not able to achieve its target.
  2. State one more barrier of each of the types identified in (i) above.

Case Study 22

Rajeev recently joined as the managing director of Tivori Ltd., an apparel designing company. He observed that the company had a number of experienced fashion designers on its payroll. They regularly offered useful suggestions that were neither appreciated nor rewarded by the company.

Recently, the company outsourced its services to some renowned fashion designers and paid them a good amount for their services. Because of this, the employees felt disheartened and stopped giving useful suggestions.

  1. Identify the communication barrier discussed above and state the category of this communication barrier.
  2. Explain any other communication barrier of the same category.

Case Study 23

Rajeev started working in an MNC. He was very devoted to his job. However, whenever he used to communicate with his subordinates, they were unable to understand him. 

The reason behind this problem was that he himself was unsure about the concept he used to explain to the subordinates. 

This problem was taking place on a daily basis. One day, he got an order from his senior to fly to Goa for a project meeting. 

There, he started explaining his concept to others, but there were many aspects that the team of Goa wanted to explain to him.

He was more concerned about speaking than listening. This resulted in the failure of the meeting, which was very important for the company.

In this hopelessness, he forgot to review the instructions he had given to his subordinates about a very important programme to be organised in his hometown.

What measures would you suggest to Rajeev so that he could improve his communication effectiveness?

Long Case Studies

Case Study 24

Sunrise Manufacturing Pvt. Ltd., a medium-sized company based in Pune, has been a leading player in the automobile parts industry for over two decades. 

Founded by Mr. Raghav Mehra, the company started with a modest production unit and a team of 50 employees. 

Over the years, through hard work and dedication, Sunrise Manufacturing expanded its operations, now employing over 500 workers and supplying automotive components to various car companies in India.

In 2022, Sunrise Manufacturing secured a large contract with one of the top automobile manufacturers in the country. 

This contract required the company to increase its production capacity significantly within a short period. To meet the growing demand, the management decided to install new machinery and hire additional workers. 

While the expansion was a positive development, it also brought challenges in managing the larger workforce and ensuring that new employees were integrated without compromising quality.

Mr. Mehra, the managing director, was aware that simply increasing the workforce and upgrading technology would not be sufficient to meet the new targets. 

He understood that the company needed strong leadership and effective communication to guide the employees effectively.

Mr. Mehra appointed Ms. Priya Kapoor, a seasoned manager with a strong track record in leadership, as the Head of Operations. 

Her primary responsibility was to oversee the expansion and ensure that the production targets were achieved on time.

Upon taking charge, Ms. Kapoor noticed that the rapid expansion had led to confusion among the workers.

The employees were unsure about their new roles, responsibilities and how the new machinery worked.

There was a lack of coordination among different departments, and the production process was becoming inefficient.

Recognising the urgency of the situation, Ms. Kapoor decided to take immediate action.

She started by organising a series of meetings with department heads to communicate the company’s goals and the importance of each department’s role in achieving these goals.

She then held training sessions for the workers to familiarise them with the new machinery and production process. During these sessions, Ms. Kapoor encouraged open communication, allowing workers to express their concerns and ask questions. 

This approach helped in building trust and ensuring that everyone was on the same page. To further enhance productivity, Ms. Kapoor introduced a system of regular feedback and performance reviews.

She set clear expectations for each team and provided guidance on how to meet these expectations.
Ms. Kapoor also recognised and rewarded employees who performed exceptionally well, motivating others to follow suit. 

Under her leadership, the workers began to feel more confident and engaged in their roles, leading to improved coordination and a significant increase in production efficiency.

As the company’s production ramped up, Ms. Kapoor continued to monitor the progress closely.

She maintained regular communication with the teams, addressing any issues that arose and providing the necessary support to keep operations running smoothly.

Her ability to direct the workforce effectively played a crucial role in Sunrise Manufacturing’s ability to meet the demands of the new contract without any major disruptions.

By the end of the year, Sunrise Manufacturing had successfully fulfilled the contract, exceeding the client’s expectations in terms of both quality and delivery time. 

The company’s success was largely attributed to Ms. Kapoor’s leadership and her ability to guide the employees toward achieving common goals. 

The experience also reinforced the importance of effective leadership and communication in managing a large workforce and achieving organisational objectives.

  1. Identify the management function.
  2. Identify the management function that Ms. Priya Kapoor primarily utilised to address the challenges at Sunrise Manufacturing.
  3. Discuss the importance of the management function identified in the case.

Case Study 25

Riya Sharma was the Operations Manager at “FitGear Sportswear,” a company known for its high-quality athletic apparel. The company was recognised for its dynamic work culture, where employees felt motivated and aligned with the company’s goals.

Riya Sharma ensured that every employee clearly understood their role and responsibilities, creating a structured work environment.

To maintain high levels of productivity, Riya frequently communicated the company’s vision and objectives to her team, making sure that everyone stayed aligned. 

She was also known for providing one-on-one feedback to her members, praising their accomplishments and guiding them to improve when necessary.

Riya believed that encouraging her employees and recognising their achievements not only boosted their morale but also enhanced their commitment to the company’s objectives.

Moreover, Riya delegated tasks efficiently, ensuring that work was distributed based on individual strengths and capabilities. This allowed the team to work cohesively and achieve their targets effectively. 

As a result, FitGear Sportswear consistently delivered high-quality products and maintained a strong market position.

However, during a crucial project, one of the team leaders faced difficulties in executing the assigned tasks. Riya provided guidance and additional training to help the team leader overcome the challenges.

This support not only ensured the completion of the project but also strengthened the team leader’s confidence and competence.

By identifying from the above case, identify and explain the three elements of the directing function of management discussed in the case.

Case Study 26

Smita had been working as an assistant manager with ‘Johnson Enterprises’ for the last ten years. She was very popular amongst her colleagues because of her commitment and dedication to the work. 

When the manager senior to her retired, all her colleagues thought that now Smita would be promoted.

But to everyone’s surprise, the vacant post was filled by an outsider, Mrs. Rita. Smita felt demoralised, and her performance started declining. She would often be absent herself and could not meet her targets.

Mrs. Rita was a good leader who would not only instruct her subordinates but also guide and inspire them. Her subordinates would trust her and feel that their performance made her happy. 

Smita’s behaviour made it obvious that though she would raise the slogan of organisations and would speak in meetings, her behaviour was not in line with the thinking and behaviour of the high-level joint management committee.

Smita was now punctual in the office, and her performance started improving.

  1. Identify and state the function of management being performed by Rita.
  2. Name the element of the above function of management which helped Rita to improve Smita’s behaviour.
  3. State any four features of the element identified in (ii) above.

Case Study 27

Inaya Ltd. is a multinational technology company focusing on artificial intelligence, online advertising, and search engine technology. 

The company is generating good profits and is aware of the well-being of its staff. The company offers benefits like allowances, medical aid, and insurance to employees. 

Regular exercise is promoted, and the manager/lead regularly conducts team-building sessions in this regard.

It frequently promotes employees to senior positions and makes various types of incentives available to them.

Under a special incentive scheme, the employees are offered shares of Inaya Ltd at a price that is lower than the market price. Each year, the company keeps aside funds to pay 10% of the basic salary as a bonus to its employees. 

No overtime wages would be provided for working at Inaya Ltd. to extend. Explain four incentives being provided by Inaya Ltd. to motivate their employees for better performance.

Case Study 28

Ramesh is a manager in a company engaged in the production of electrical appliances. He has been holding this position for a long time. 

He is liked by his subordinates as he encourages them and takes an interest in their tasks and important decisions. 

Being an experienced manager, he believes that money is not sufficient to motivate the employees.
Therefore, he uses the following non-financial incentives to motivate the employees.

  • Ramesh has set up a suggestion box system in order to involve his subordinates in decision-making. This has boosted the confidence of employees to participate in issues related to the organisation.
  • Ramesh gives freedom or more autonomy to the employees working under him, with an assurance of greater responsibility from them. Since workers have taken part in the process of decision-making, they feel that their job is important.
  • Ramesh makes arrangements at the workplace for employees to make their work more meaningful. The outcome has been an increase in motivation for the workers at the place of work itself.
  • Ramesh often makes arrangements for appropriate skill development programmes. He has chalked out a sound promotion policy to give more growth opportunities to employees.

  1. Identify and explain the leadership style followed by Ramesh.
  2. State the meaning of leadership.
  3. Also identify and explain the various non-financial incentives used by Ramesh to motivate the employees.

Case Study 29

In an organisation, all the employees take things easy and are lazy in approaching anyone for minor queries and problems.

This has resulted in everyone talking to each other, thus resulting in inefficiency in the office. It has also resulted in the absence of secrecy and confidential information being leaked.

Which system do you think the manager should adopt to improve communication?

Case Study 30

Rajat Verma was the Marketing Head of a leading FMCG company, ‘FreshPure Products’. The company was known for its wide range of organic and healthy food items.

Rajat was a skilled communicator who ensured that his team was well-informed about the latest market trends and customer preferences. He conducted regular meetings with his team to discuss sales strategies and new product launches.

During one of the meetings, Rajat introduced a new product that required immediate attention and a strategic marketing plan. 

However, during the meeting, several team members were distracted by their phones and didn’t pay full attention to Rajat’s presentation. 

As a result, the team evaluated the strategy without fully understanding the details, which led to misunderstandings. 

When Rajat followed up on the actions discussed, he discovered that employees had different interpretations of the plan, resulting in a poorly coordinated marketing campaign.

Additionally, many subordinates did not actively participate in the discussion as they felt that their suggestions wouldn’t be valued or recognised, leading to a lack of initiative to communicate or offer suggestions. 

Employees may not take the initiative to communicate in the absence of proper incentives or motivation.

Meanwhile, a competitor, ‘NutriFoods’, launched a similar product with a highly effective marketing strategy and captured a significant market share. 

FreshPure Products struggled to communicate the product benefits properly, leading to a drop in sales and loss of market position.

Quoting lines from the above paragraph, identify and explain three barriers to communication and state the category.

The End

Friday, October 17, 2025

CBSE Class 11th Business Studies Worksheet - w7a

Free Business Studies - Class 11th (CBSE) - Worksheet - w7a - Sources of Business Finance

Students often neglect multiple-choice questions (MCQs) while studying Business Studies for class 11th. They emphasise case studies and theory-related questions.
However, Business Studies is a subject that requires a balance among objective-type questions, case studies, and theory-related questions.
Hence, we are providing the best questions to you to practice and gain excellent marks in CBSE class 11th.
Here are the quick details:
  • Subject: Business Studies
  • Class: 11th (CBSE)
  • Chapter Name: Sources of Business Finance

Objective Type Questions/Multiple-Choice Questions (MCQs)

Carrying 1 mark each

Q1. Which of the following statements is not true in the case of debentures?

  1. It is an instrument to raise long-term debt capital.
  2. Payment of interest on debentures is compulsory.
  3. Debenture holders carry voting rights.
  4. Issue of debentures creates a charge on the assets of the company.

Q2. Which financial instrument saves tax?

  1. Equity shares
  2. Debentures
  3. Retained earnings
  4. Preference shares

Q3. Which of the following statements does not hold true in the case of equity shares?

  1. It is suitable for cautious investors.
  2. It is a permanent source of capital.
  3. It does not create a charge on the assets of the company.
  4. The liability of equity shareholders is limited to their share capital.

Q4. Which of the following is never redeemed during the lifetime of the company?

  1. Equity shares
  2. Preference shares
  3. Debentures
  4. Both (a) and (b)

Q5. The deposit made by one company with another company is called

  1. Public deposits
  2. Inter-corporate deposit
  3. Loan from a commercial bank
  4. Loan from financial institutions

Q6. The fund required to purchase current assets is an example of

  1. Fixed capital requirement
  2. Ploughing back profits
  3. Working capital requirement
  4. Lease financing

Q7. FDI means

  1. Foreign Direct Investment
  2. Free Direct Investment
  3. Forestry Deposit Investment
  4. None of the above

Q8. Fixed Capital requirements of a manufacturing concern are usually

  1. Same as that of a trading concern
  2. More than that of a trading concern
  3. Less than that of a trading concern
  4. None of the above

Q9. ______ are the unsecured short-term deposits made by company with another company.

  1. Indian Depository Receipts
  2. American Depository Receipts
  3. Global Depository Receipts
  4. Inter-Corporate Deposits

Q10. In rural, backward, and hilly areas, special financial assistance is provided by

  1. Money lenders
  2. Commercial Banks
  3. Regional Rural Banks
  4. All of these

Q11. Which of the following is a merit of retained earnings?

  1. Economical
  2. No charge on assets
  3. Enhances the market value of shares
  4. All of these

Q12. The working capital requirements of a business that sells goods on credit are usually:

  1. More than that of a business selling goods only on a cash basis
  2. Same as that of a business selling goods only on a cash basis
  3. Less than that of a business selling goods only on a cash basis
  4. None of these

Q13. Who are the primary risk bearers of the company?

  1. Equity shareholders
  2. Debenture holders
  3. Preference shareholders
  4. Creditors

Q14. ______ is commonly used by business organisations as a source of short-term financing.

  1. Lease financing
  2. ADRs
  3. Trade Credit
  4. None of these

Q15. The preference shares, which carry the right to accumulate unpaid dividends in future years, are known as

  1. Non-cumulative Preference shares
  2. Cumulative Preference shares
  3. Participating Preference shares
  4. None of these

Q16. The working capital requirements of a business are high if

  1. The sales turnover of the business is high
  2. It sells goods on credit
  3. It has an expansion plan
  4. All of the above

Q17. The term ‘redeemable’ is used for

  1. Preference shares
  2. Commercial paper
  3. Equity shares
  4. Public deposits

Q18. Which of the following is a short-term source of finance?

  1. Shares
  2. Trade Credit
  3. Public deposits
  4. All of these

Q19. The fixed capital requirement of a business is low if

  1. It plans to upgrade the technology
  2. It plans to shift the business to a new location
  3. The business is operated on a large scale
  4. None of the above

Q20. Finance received on the issue of shares is a

  1. Short-term
  2. Medium-term
  3. Long-term
  4. Very short period

Q21. Which of the following is a limitation of equity shares?

  1. Permanent burden of interest
  2. Charge on assets
  3. Danger of over-capitalisation
  4. Repayment of obligation

Q22. Which one of the following is known as ‘Risk capital’?

  1. Debentures
  2. Preference shares
  3. Equity shares
  4. Retained earnings

Q23. An undistributed portion of net earnings in the business is known as

  1. Ploughing back profits
  2. Self-financing
  3. Retained earnings
  4. All of the above

Q24. Which of the preferential rights is enjoyed by preference shareholders over equity shareholders?

  1. Voting right
  2. Right to receive a fixed rate of dividend
  3. Right to receive repayment of capital
  4. Charge on assets

Q25. ______ are debt instrument that does not carry a specific rate of interest, but issued at a heavy discount.

  1. Debentures
  2. Equity shares
  3. Bonds
  4. None of these

Q26. The capital of the company is divided into a number of parts, each of which is called

  1. Dividend
  2. Profit
  3. Interest
  4. Share

Q27. Which of the following statements pertain to public deposits?

  1. It is easy for the new companies to raise funds through public deposits.
  2. Public deposits create a charge on the assets of the company.
  3. The depositors have voting rights.
  4. None of the above.

Q28. Debentures represent

  1. Fixed capital of the company
  2. Permanent capital of the company
  3. Fluctuating capital of the company
  4. Loan capital of the company

Q29. Which one of the following is NOT a limitation of raising funds through debentures?

  1. No dilution of control
  2. Charge on assets
  3. Fixed obligation
  4. All of the above

Q30. Which of the following businesses requires a higher amount of working capital?

Image of working capital business

  1. Figure A
  2. Figure B
  3. Both A and B
  4. None of these

Q31. Identify the different sources of finance traded in the organisation shown in the picture.

Image of stock exchange with a bear and bull

  1. Shares
  2. Debentures
  3. Both A and B
  4. None of these

Q32. Name the kind of return on investment given to the investors shown in the given picture.

‘Shall we allow a near-term consideration of ethics to overwhelm higher profit margins? Ladies and gentlemen, I think we’re better than that.’

  1. Commercial paper
  2. Retained earnings
  3. Dividend
  4. Trade credit

The End

Do you want to practice more for Chapter 7: Sources of Finance? Click here.

Saturday, October 11, 2025

Class 12th Business Studies Worksheet - W10a

Free Business Studies - Class 12th (CBSE) - Worksheet - W10a - Financial Market

Do you want free Business Studies (CBSE) for class 12th to score higher in your board exams?
Well, you have visited the correct platform.
On this page, you can find several case studies (short and long) for practice and solve them. The first section is for short case studies, followed by long case studies. 
Here are the quick details:
  • Subject: Business Studies
  • Class: 12th (CBSE)
  • Chapter Name: Financial Market
Below is the content pattern:

CBSE Business Studies Case Studies (Financial Market)

Short Case Studies

Case Study 1

Identify the type of financial market in the following cases:
  1. In this financial market, there is a higher degree of liquidity of the financial instruments available to the investors, as there is an institution that takes a guarantee of this action.
  2. The name of this institute is DFHI (Discount Finance of India).
  3. The securities return in this market is riskier in relation to other markets because there is a possibility of both recession and prosperity of the issuing company. When these companies perform well, there is a chance that the returns may go up, and eventually, when the companies do not perform well, the returns may go down and result in a loss of money to the investors.

Case Study 2

‘Hitesh Ltd.’ is a well-known company in the cement industry since 1999. The company has an authorised capital of ₹ 100 crore and is listed on a reputed stock exchange.
The value of its shares is increasing day by day due to an increase in the demand for cement.
Now the company wants to enter the car manufacturing business. For this, it requires ₹ 200 crore.
The finance manager of the company decides to raise this capital through a public issue.
  1. Identify the market in which the company’s existing securities are being traded.
  2. Name the market through which the company wants to raise its capital of ₹ 200 crore for its new business.
  3. Distinguish between the markets identified in (i) and (ii) above on the basis of any two points.

Case Study 3

These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed the most.
To give strength to the economy, SEBI is undertaking measures to promote the stock market.
In addition to this, there is another market in which unsecured and short-term debt instruments are actively traded.
This market helps to meet the short-term requirements of the government, banks, and investors in directing the available funds into their most productive investments.
  1. Name the function being performed by the market in the above case.
  2. Name the market segment other than the capital market in which unsecured and short-term debt instruments are traded. Also, give any three points of difference between the markets.

Case Study 4

In 2nd five Five-Year Plan, ‘industrialisation’ was the ‘main focus’.
But the major problem was saving and investment—households used to invest in gold and property only.
The government had to take the initiative to establish infrastructure and other basic industries.
With the pace of economic development, small savings were promoted by establishing an organised market.
This market is regulated by SEBI and has contributed a lot to economic development.
  1. Identify the market referred to in the case.
  2. State two functions of this market.

Case Study 5

Raman, who is a broker in a stock exchange, has to face challenging questions from society.
His own family sometimes asks him to think about his decision to become a broker.
He, however, has full faith in the stock exchange.
He knows that membership of a stock exchange is properly regulated, and abiding by the legal system and the public interest is safe in making deals.
His children once asked him the reason behind the ups and downs in the stock market.
He clarified their doubt by telling them that the forces of supply and demand decide the prices of securities in the secondary market.
Of late, he has decided to write a book on the functioning of the stock exchange and its significance in the Indian economy.
He is trying to highlight in his book how, through the process of investment and disinvestment, existing securities are sold and resold, and savings are channelised into the most productive opportunities.
Definitely, Raman is justifying his presence in his job.
  1. What is the meaning of the stock exchange?
  2. Identify and briefly explain the functions of the stock exchange discussed in the above case.

Case Study 6

Rajiv, a small investor from a remote town, is looking to invest in stocks for the first time.
He accesses the stock market through an online platform that allows him to view real-time prices, make quick trades, and track his portfolio from his home.
The platform he uses is highly efficient, with minimal errors and quick order executions.
Rajiv is amazed by how he can trade alongside investors from different parts of the world, all on the same platform, without physically visiting any stock exchange office.
Based on the case above, list any three advantages of the screen-based trading system.

Case Study 7

Supriya’s grandmother, who was unwell, called her and gave her a gift packet.
Supriya opened the packet and saw many crumpled share certificates inside.
Her grandmother told her that they had been left behind by her grandfather.
As no trading is now done in physical form, Supriya wants to know the process by adopting which she is in a position to deal with these certificates.
  1. Identify and state the process.
  2. Also give two reasons to Supriya why dealing with shares in physical form has been stopped.

Case Study 8

Mr. Patel, a director of ABC Ltd., was privy to confidential information that the company was planning to issue bonus shares in its upcoming board meeting.
Anticipating that this announcement would lead to a rise in the company’s stock price, Mr. Patel took advantage of this insider information.
He decided to buy 12,000 shares of ABC Ltd. from the stock market before the announcement was made public.
Once the announcement was made, as expected, the stock price surged by 10 due to increased demand from investors excited by the bonus share issue.
After a few months, when the stock price had risen considerably, Mr. Patel sold all 12,000 shares and made a substantial profit, leveraging his access to confidential company information that was not available to general investors.
  1. Name the act of Mr. Patel.
  2. Is it permitted?

Case Study 9

Due to various malpractices and exploitation of investors in the securities market, the Indian Government established a separate regulatory body to protect the investors and to develop and regulate the securities market.
  1. Identify the regulatory body set up by the government.
  2. Discuss its various objectives.

Case Study 10

Identify and explain the type of function of SEBI in the following cases.
  1. Rajeev was unwilling to buy shares in the stock market as he was told by someone that the stock market is a place where various malpractices take place. He decided to discuss the matter with his friend, who explained how SEBI takes care of the interests of the investors.
  2. Prakash wants to become a stockbroker. When he approaches people and asks them to get started as investors through him, they ask for a certificate, which the SEBI must have given him. He becomes aware that in order to function as a stockbroker, he will have to get registered with SEBI.

Long Case Studies

Case Study 11

Shreya is a student of 10+2 (Commerce). Her two friends, Sugandha and Sakshi, are 10+2 (Non-medical) students. Shreya has full knowledge of the capital market. Both her friends are interested in it, but they do not have even an iota of knowledge about it. Shreya gives them the knowledge about the capital market in the following manner.
“In order to meet its financial requirements, the company issues shares. Shares are issued in the capital market. The company issues a prospectus and invites the general public to invest in shares. It is called an Initial Public Offering (IPO). The company is successful in talking when the investors are trapped.
If they so desire, they can sell their shares at the current market price to other investors so that they can use their own capital.
Another important fact is that the market in which the company issues shares has no particular place.
However, the market wherein the shareholders sell shares does have a particular place, called the stock exchange.”
  1. In the above paragraph, two types of capital markets have been mentioned. Identify them.
  2. Of the identified type of capital market, give two characteristics of each, by way of quotation.

Case Study 12

Reena got ₹ 10,00,000 after selling her parental property, which she had got as a gift from her grandmother. Her friend advised her to invest in securities in the stock market.
Reena was unaware of the procedure for the same. Her friend introduced her to a stockbroker, who was registered with the National Stock Exchange. Reena approached the broker.
The broker guided her to open a DEMAT account with a depository, as well as a bank account. Reena opened a bank account and a DEMAT account with Exim Bank.
  1. Identify and state the steps in the trading procedure for buying and selling securities, which have been discussed above.
  2. State the next four steps of the trading procedure.

Case Study 13

Rahul, an avid investor, was following the stock market closely. One day, he read about a company that suddenly halted trading of its shares due to an order from SEBI (Securities and Exchange Board of India). The company was found guilty of manipulating stock prices, which created artificial demand for its shares.
SEBI’s intervention not only suspended trading but also imposed penalties on the company’s officials involved in these malpractices.
Rahul was curious about how SEBI ensures such activities don’t go unchecked and how it helps in maintaining transparency in the securities market.
This incident made him wonder about the actual role of SEBI and how it contributes to the overall development of the securities market.
He began researching SEBI’s functions and its impact on both investors and companies.
  1. Explain the purpose and role of SEBI in the Indian securities market.
  2. State the developmental and protective functions of SEBI and how they contribute to the growth of the securities market.
  3. State any one objective of SEBI.

Case Study 14

Rajiv Malhotra was the managing director of ‘Finvest Securities’, a leading financial services firm. The firm primarily dealt with portfolio management, mutual funds, and stock market investments. Rajiv ensured that all regulatory guidelines were followed diligently.
His firm was known for registering brokers and intermediaries according to the rules set by SEBI. Rajiv also paid close attention to the company’s responsibilities, ensuring that Finvest Securities was fully compliant with all the necessary regulations and levies.
However, during a stock market boom, there was an increase in fraudulent practices, insider trading, and speculative activities in the industry. Despite these developments, Finvest Securities continued to follow their strict regulatory framework and refused to participate in unfair trade practices. Their conservative approach limited their short-term profits but earned them a solid reputation for ethical behaviour.
In contrast, Market Flow Investments, a competitor, saw rapid growth by exploiting loopholes and engaging in aggressive trading strategies. This allowed them to generate high profits in the short term. However, when SEBI launched an inquiry and audited the intermediaries involved, market flow was penalised for insider trading, while Finvest Securities was praised for upholding ethical standards.
Quoting lines from the above paragraph, identify and explain two regulatory functions and two protective functions of SEBI as discussed in the case above.

Case Study 15

R Ltd. is a real estate company that was formed in 1950. In about 56 years of its existence, the company has managed to carve out a niche for itself in this sector. 
Lately, this sector has been witnessing a boom due to the fact that the Indian economy is on the rise. 
The incomes of the middle class are rising. More people can afford to buy homes for themselves due to the easy availability of loans and accompanying tax concessions.
To expand its business in India and abroad, the company weighs various options to raise money through equity offerings in India. 
Whether to tap the equity or debt market, whether to raise money from the domestic market, the international market, or a combination of both? When to raise the necessary finance from the money market or the capital market? It is also planning to list itself on the New York Stock Exchange to raise money through ADRs.
To make its offerings attractive, it is planning to present a flow of financial plans and products to its stakeholders and investors, and also expand its listing on the stock exchange after complying with the regulations of SEBI.
  1. What benefits will the company derive from listing at the stock exchange?
  2. What are the regulations of SEBI that the company must comply with?
  3. How does the SEBI exercise control over R Ltd. in the interest of investors?

The End

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