DELHI PUBLIC SCHOOL, R.K.

PURAM
CLASS XII
MID-TERM SAMPLE PAPER
BUSINESS STUDIES

TIME DURATION: 3 HOURS M.M: 80

GENERAL INSTRUCTIONS:
1. This 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.

Q1. Responsibility for the activities of the business and its impact on the society is a
function of the __________ level managers in a business organisation. [1]

Q2. State with reason if the following statement is True/False.

‘A good manager works through a combination of practice, creativity,
imagination, initiative and innovation.’ [1]

Q3. How have the management principles been derived? [1]

Q4. What did Taylor want to communicate through mental revolution? [1]

Q5. The objective of F.W.Taylor’s __________ Study is to determine the number of

workers to be employed; frame suitable incentive schemes and determine labour
costs. [1]

Q6. Identify the feature of the Business Environment from the given statement - ‘It is
very difficult to predict future happenings, especially when environment changes
are taking place too frequently.’ [1]

Q7. State if the following statement is True or False in the context of a business
environment.
‘Specific forces have an impact on all business enterprises and thus may affect an
individual firm only indirectly.’ [1]

Page 1
Q8. Political conditions in the USA differ from those in China or Pakistan. Business
environment is a __________ concept since it differs from country to country
and even region to region. [1]

Q9. Which component of capital structure determines the overall financial risk? [1]

Q10. State the primary objective of financial management. [1]

Q11. State why the working capital needs for a trading organisation are different from
that of a manufacturing organisation? [1]

Q12. Match the following- [1]

Column A Column B

1.) Money Market A.) Also known as the new issues market

2.) Secondary B.) The company is not involved in the exchange of

Market ownership of securities. Ownership of existing
securities is exchanged between investors.

3.) Primary Market C.) Instruments yield less returns due to short
duration, since maturity period is upto one year

Q13. How does a stock exchange provide liquidity and marketability to existing
securities? [1]

Q14. A ____________ contains details of the number of shares bought or sold, the
price, the date and time of deal, and the brokerage charges. This is an important
document as it is legally enforceable and helps to settle disputes/claims between
the investor and the broker. [1]

Q15. State if the following statement is True or False -

People from all over the country and even abroad who wish to participate in the
stock market can buy or sell securities through brokers or members without
knowing each other, via the screen based trading system. [1]

Q16. Why do money market instruments enjoy a higher liquidity than instruments of
the capital market? [1]

Q17. How does a financial market help link savers and investors? [1]

Page 2
Q18. ______________ is the process of classification of products into different groups,
on the basis of some of its important characteristics such as quality, size, etc.
This ensures that goods belong to a particular quality and helps in realising higher
prices for high quality output. [1]

Q19. Aahna is a sole proprietor and sells chemical-free soaps and shampoos. She is
based in Palampur, a hill station and has trained local women in the art to
manufacture the same. Over the last two years, the demand for her products
increased with growing consciousness around sustainable living practices. She has
also tied up with an apparel manufacturing firm so that she can upcycle the cloth
waste as packaging material for her products.

Identify the Marketing Management Philosophy adopted by Aahna in the above

case. [1]

Q20. A paper products manufacturing company has started a campaign ‘3Rs To Paper’.
As a part of the campaign, free samples of their paper products will be
distributed to the students and the teachers in and around University campuses
across the city of Bangalore. The idea is to make them aware about the quality of
the reused and recycled paper and paper products.

Which element of marketing mix is ‘free samples’ here? [1]

Q21. Shayaan and Radha’s business sells home-made pickles and jams procured from
households across the state of Gujarat. The people working in the company were
performing different activities. Their activities were different, but their
objectives were fulfillment of common organisational goals. Here the need was to
continue putting such efforts into an ongoing series of functions. The
arrangement made in the company was such that the efforts of all the employees
were united and led them towards achieving the common goals.

In the light of the above para, state the various features associated with
management. [3]

Q22. The Chief Labour Commissioner recently came up with an amendment to Section
6 of the Payment of Wages Act 1936, to allow employers of certain industries to
make payment through various electronic modes of payments. The amendment
will be applicable to all the public sector undertakings for disbursement of wages
using the e-payment options.

Page 3
 Identify and explain the two dimensions of the business environment which
relate to the above para. [3]

OR

The government of India announced 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 the Reserve Bank of India after the announcement.
State any three features of this exercise of demonetization. [3]

Q23. Suggest how the decisions related to the choice of technique and scale of
operations can help a firm in ensuring a low investment in fixed capital
requirements. [3]

OR

Explain growth prospects and credit availed as factors affecting working capital
requirement of a firm. [3]

Q24. Ananya is the marketing head of an enterprise selling body care products. She
has set up an R&D department in her organisation and has asked them to invent
new types of products to ensure that the products are friendly to the
environment. Ananya wants the team to design the product in such a way that it
improves its performance and also gives the product a competitive advantage in
the market. She is also of the belief that good packaging can act as a silent
salesperson, as it can attract the potential customers and easily communicate a
lot. Ananya wants the name of this new range of body care products to be such
that they be recognized easily and not be lost in the pool of different products in
the market.

In the context of the case, state and explain the different functions of marketing
performed by Ananya. [3]

Q25. Zoya and Naseer, art graduates from prestigious universities, set up a company
five years ago that works closely with the phulkari artisans in North Punjab and
provides them a platform to sell their artwork to consumers. They believe that
traditional artforms are our country’s heritage that need to be preserved and

Page 4
 want to ensure that the artisans are able to sustain their livelihoods and skills.

They credit the success of their business to the team of artisans as well as their
employees who are under the able guidance of the company’s management. The
managers perform a deliberate function for achieving harmony among individual
efforts towards the accomplishment of group goals. They feel that this aspect of
management is important as it integrates the efforts of individuals, the
departments and specialists. With this, they are able to gather information about
the changing preferences of the consumers and guide the artisans to incorporate
the designs into new products such that there is no compromise on the quality or
the art.

In the context of the above para,

a.) Identify and explain the aspect of management that the managers perform
continuously to ensure attainment of the organisation’s goals.
b.) Describe how management is creating a dynamic organisation and helping in
the development of the society. [4]

Q26. Gurpreet is running a retail mart in Varanasi to provide various types of products
of daily use under one roof to the buyers. The employee turnover in his business
is very high and he is perpetually on a look out for new staff. The fact of the
matter is that he assigns work to his employees on adhoc basis without letting
them settle down in a specific work area. This approach of his creates a sense of
insecurity among the employees and they tend to leave the job very quickly. This
is despite Gurpreet offering fair wages to his employees so they can afford a
reasonable standard of living.

Identify and describe the general principles of management followed as well as

violated by Gurpreet in the above case. [4]

Q27. Explain how analysis of the business environment ‘helps a firm get the first
mover advantage’ and ‘helps in planning and policy formulation’. [4]

OR

Describe the following features of business environment:

a.) Specific and general forces
b.) Uncertainty
c.) Inter-relatedness
d.) Dynamic nature [4]

Page 5
Q28. Explain the impact of the following factors on the Dividend Decision of a
company.
a.) Growth Opportunities
b.) Stock Market Reaction
c.) Access to Capital Market
d.) Stability of Dividends [4]

Q29. Reshu’s father has gifted her shares of a hydro-power generation company, with
which he had been working before his retirement. The securities were in
physical form. Reshu wished to sell these and approached a registered broker for
the purpose. She informed the broker that she already has a bank account and
does not possess any other forms of securities. In the context of this, answer the
following:

a.) Identify the process that Reshu will have to undertake to convert her
securities to electronic form.
b.) Mention one mandatory detail which she will have to provide to the broker
to initiate the process.
c.) Describe the role of the broker as a Depository Participant in this whole
process. [4]

Q30. There are a number of factors which affect the fixation of the price of a product.
One amongst them is Pricing Objectives. Explain the different pricing objectives
that a firm may set for its products. [4]

OR

Explain ‘product cost’ and ‘utility and demand’ as factors affecting the fixation
of price of a product. [4]

Q31. ‘The primary reason for coordination is that departments and individuals in an
organisation depend on each other for information and resources to perform
their respective activities.’ In the light of this statement, explain any four
features of coordination. [6]

Q32. Identify and explain the following techniques as advocated by F.W.Taylor:

a.) The technique to differentiate between efficient and inefficient workers.
b.) The technique for separation of planning and execution functions. [6]

OR

Page 6
 ‘The principles of management derive their significance from their utility.’ In the
light of this statement, elaborate upon any four points of significance of
principles of management. [6]

Q33. ‘Sriban Limited’ is a bicycle manufacturing company based in Nagpur. It has been
enjoying a buoyant demand for its products and is now planning to set up a new
manufacturing unit to cash in on the increased demand. The Finance team has
estimated that it will require about Rs. 5 crores to set up and about Rs 1 crore of
working capital to start the new plant.
Explain any four factors which will affect the choice of capital structure for this
company. [6]

Q34. SEBI was set up to promote an orderly and healthy growth of the securities
market and for investor protection. Keeping in mind the emerging nature of the
securities market in India, it was entrusted with the twin tasks of both regulation
and development of the securities market. State three regulatory and three
development functions each that this body performs. [6]

OR

‘There was a time when in the open outcry system, securities were bought and
sold on the floor of the stock exchange. But now all trading has shifted to an
online screen based trading system.’
In view of this, define the screen based system and explain its any four
advantages. [6]

Page 7