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Question : Comprehension:
Read the given passage and answer the questions that follow.
With an impressive growth in yields, Telangana now claims to be transforming into the rice bowl of India. The Food Corporation of India (FCl) has procured 52 lakh tonnes of paddy from Telangana alone, which is more than half of the national target of 91 lakh tonnes. The state's harvests have nearly doubled in a year. Paddy production is up 93%, maize 95%, and cotton 74%, according to the Telangana Planning Department.

The state is also making its mark as a producer of paddy seed. "About 85% of our village's paddy is of a fine variety that farmers in MP, Haryana, Bengal, and Bihar use as seed," said a farmer in Anksapur Village in Nizamabad district. The seed crop sells at a premium over the state's minimum support price for paddy.

Question:
What is the main idea or theme of this passage?

Option 1: Telangana's yields of paddy have exceeded all expectations.

Option 2: Recently, Telangana has seen a huge increase in the quantity of agricultural products.

Option 3: The state of Telangana has emerged as a significant contributor to the growth of agriculture in the country.

Option 4: Telangana has already become the 'Rice Bowl of India'.

Team Careers360 26th Jan, 2024

Correct Answer: The state of Telangana has emerged as a significant contributor to the growth of agriculture in the country.


Solution : The correct option is the third option.

Explanation:
The passage highlights Telangana's impressive growth in agricultural yields, specifically in paddy, maize, and cotton production. It mentions Telangana's contribution to the national procurement of paddy, surpassing half of the national target. Additionally, the state's emergence as a producer of high-quality paddy seed, sought after by farmers in other states, emphasises its significance in the agricultural landscape of India.

Therefore, the correct answer would be: The state of Telangana has emerged as a significant contributor to the growth of agriculture in the country.

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Question : Case Study: PQR Enterprises - Funding Strategies for Diversification

PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.

Questions : Different Sources of Finance

In the context of financing, what are debentures?

Option 1: Equity shares with voting rights
  

Option 2: Short-term borrowing from banks
    

Option 3: Long-term debt securities

   

Option 4: Government-issued bonds

Team Careers360 26th Jan, 2024

Correct Answer: Long-term debt securities

   


Solution : The correct answer is (c) Long-term debt securities

Debentures are long-term debt instruments issued by companies or institutions to raise funds. Debenture holders are creditors to the company or institution and are entitled to receive periodic interest payments at a specified rate. The principal amount is repaid to debenture holders at maturity. Unlike equity shares debentures do not represent ownership in the company. They are a form of borrowing by the issuing entity. Additionally, debentures are not short-term borrowing or government-issued bonds .

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Question : Case Study: ABC Retail Chain

ABC Retail Chain is a popular brand with multiple stores across the country. They are planning to expand their product range by adding organic and eco-friendly products.

Question:

The type of plan that ABC Retail Chain should develop to expand their product range is:

Option 1: Strategic plan
   

Option 2: Operational plan
   

Option 3: Contingency plan

 

Option 4: Tactical plan

Team Careers360 27th Jan, 2024

Correct Answer: Strategic plan
   


Solution : The correct answer is (a). Strategic plan

A strategic plan is designed to provide a roadmap for the overall direction and goals of the organization. In the case of ABC Retail Chain expanding their product range, a strategic plan would help outline the long-term objectives, market positioning, target audience, and key initiatives related to the introduction of organic and eco-friendly products.

In summary, developing a strategic plan is crucial for ABC Retail Chain to provide a comprehensive and forward-looking approach to successfully expand their product range, especially when introducing organic and eco-friendly products to their stores.

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Question : Case Study: XYZ Ltd. - Raising Finance for Expansion

XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.

Questions : Different Sources of Business Finance

XYZ Ltd. is considering borrowing funds by issuing long-term debt securities. What are these securities called?

Option 1: Equity shares
 

Option 2: Preference shares
  

Option 3: Debentures

 

Option 4: ADRs

Team Careers360 25th Jan, 2024

Correct Answer: Debentures

 


Solution : The correct answer is (c) Debentures

Debentures are long-term debt instruments issued by companies to raise funds from the public or institutional investors. Holders of debentures are creditors of the company and are promised a fixed rate of interest and repayment of the principal amount at maturity. Unlike equity shares, debenture holders do not have ownership rights in the company.

 

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Question : Case Study 3:

MNO Inc. is a well-known conglomerate that is planning to diversify its business operations by acquiring other companies.

Question : 

To finance its acquisition plans, MNO Inc. is considering issuing bonds. What type of market activity does this represent?

Option 1: Primary market
 

Option 2: Secondary market
 

Option 3: Money market

 

Option 4: Capital market

Team Careers360 25th Jan, 2024

Correct Answer: Primary market
 


Solution : The correct answer is (a) Primary market

If MNO Inc. is considering issuing bonds to finance its acquisition plans, it represents a primary market activity. The primary market is where new securities, such as bonds and stocks, are issued for the first time and sold directly by the issuing company to investors. In this case, MNO Inc. would issue bonds to raise funds for its acquisition plans. Investors would purchase these newly issued bonds directly from MNO Inc., and the company would receive the proceeds from the sale of these bonds. This infusion of capital from the sale of bonds would then be used to finance the acquisition of other companies, helping MNO Inc. diversify its business operations.

The secondary market, on the other hand, is where existing securities are bought and sold among investors, and the issuing company does not directly receive proceeds from these transactions. The money market primarily deals with short-term debt securities, and the capital market encompasses both the primary and secondary markets for long-term securities.

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Question : Assertion-Reason Questions: Chapter - Sources of Business Finance

Questions : Business Finance and Its Meaning

Assertion: Financial planning plays a critical role in optimizing the allocation of funds and resources.

Reason: Financial planning focuses solely on allocating funds to marketing activities.

Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
   

Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
   

Option 3: Assertion is true, but the reason is false.

 

Option 4: Both assertion and reason are false.

Team Careers360 25th Jan, 2024

Correct Answer: Assertion is true, but the reason is false.

 


Solution : The correct answer is (c) Assertion is true, but the reason is false.

The assertion is true. Financial planning involves efficiently allocating funds and resources to various activities within a business, aiming to achieve the company's financial goals and objectives.

The reason is false. Financial planning is a comprehensive process that involves the allocation of funds to various areas within a business based on the organization's goals and priorities. While marketing may be one area where funds are allocated, financial planning covers all aspects of resource allocation, not just marketing.

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Question : Case Study 80

LMN Corporation is a well-established company planning to raise funds for its expansion projects. The company's management is considering the regulatory functions of SEBI.

Question :

What is the primary regulatory role of SEBI?

Option 1: Allocating resources to companies
 

Option 2: Facilitating trading on stock exchanges
 

Option 3: Protecting the rights of investors

 

Option 4: Providing loans to companies

Team Careers360 25th Jan, 2024

Correct Answer: Protecting the rights of investors

 


Solution : The correct answer is (c) Protecting the rights of investors

The primary regulatory role of the Securities and Exchange Board of India (SEBI) is to protect the rights of investors. SEBI is the regulatory body for the securities market in India. It oversees and regulates the securities market to ensure fair and transparent dealings, protect the interests of investors, and promote a conducive environment for investment. SEBI's responsibilities include ensuring that companies provide accurate and adequate information to the investors, preventing fraudulent and unfair trade practices, and maintaining market integrity and transparency. Through its regulations and guidelines, SEBI plays a crucial role in safeguarding the rights and interests of investors in the securities market.

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Question : Case Study 16:

GHI Ltd. is a leading company in the telecommunications sector planning to expand its international operations.

Question : 

GHI Ltd. is looking to raise funds for expanding its international operations. Which type of financial instrument might it use?

Option 1: Commercial paper
 

Option 2: Equity share
 

Option 3: Debenture

 

Option 4: Treasury bill

Team Careers360 25th Jan, 2024

Correct Answer: Equity share
 


Solution : The correct answer is (b) Equity share.

Equity shares are a type of security that represents ownership in a company. When a company sells equity shares, it is raising funds by selling a piece of itself to investors. Equity shares are a good way for companies to raise funds for long-term investments, such as expanding international operations.

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