Financial Services
Question : Case Study: LMN Ventures - Financing Innovation and Research
LMN Ventures is a research-driven technology company aiming to innovate and develop cutting-edge products. The company is exploring various sources of business finance to support its research and development endeavors.
Questions : Business Finance and Research
Why might LMN Ventures need external financing for its research and development initiatives?
Option 1: To reduce employee turnover
Option 2: To fund marketing campaigns
Option 3: To minimize production costs
Option 4: To support costly innovation projects
Correct Answer: To support costly innovation projects
Solution : The correct answer is (d) To support costly innovation projects
LMN Ventures might need external financing for its research and development (R&D) initiatives primarily to support costly innovation projects. Research and development involve significant investments in terms of resources, technology, talent,
Question : Case Study: ABC Corporation - Financing Growth Strategies
ABC Corporation, a leading manufacturing company, is looking to finance its growth strategies. The company is exploring various sources of business finance to achieve its expansion goals.
Questions : Different Sources of Finance
What are GDRs and ADRs, which ABC Corporation is considering as potential sources of finance?
Option 1: Government Debt Records
Option 2: Equity shares with higher dividends
Option 3: International financial statements
Option 4: Instruments for raising capital in global markets
Correct Answer: Instruments for raising capital in global markets
Solution : The correct answer is (d) Instruments for raising capital in global markets
GDRs (Global Depository Receipts) and ADRs (American Depositary Receipts) are financial instruments that companies can use to raise capital in global markets. GDRs are typically issued outside
Questions : Business Finance and Expansion
What does the term "business finance" refer to?
Option 1: Acquiring funds for personal expenses
Option 2: Managing company personnel
Option 3: Investing in stock markets
Option 4: Obtaining funds for business operations and growth
Correct Answer: Obtaining funds for business operations and growth
Solution : The correct answer is (d) Obtaining funds for business operations and growth
Business finance involves acquiring funds and managing financial resources to support a company's day-to-day operations, projects, expansions, or any other financial needs for achieving the company's objectives
Question : Who is the Chairman of the Financial Stability and Development Council (FSDC) of India?
Option 1: Finance Minister
Option 2: Human Resource Development Minister
Option 3: Home Minister
Option 4: Skill Development Minister
Correct Answer: Finance Minister
Solution : The correct answer is Finance Minister.
The FSDC Chairman is the Finance Minister. The following Heads of the Financial Sector Regulators are members of FSDC:
Pension Fund Regulatory and Development Authority (PFRDA), Securities and Exchange Board of India (SEBI), Reserve Bank of India
Question : Comprehension
In the following passage some words have been deleted. Fill in the blanks with the help of the alternatives given. Select the most appropriate option for each blank.
Unemployment is a major issue in India that (1)________millions of people across the country. Despite being one of the fastest-growing economies in the world, India has struggled to create (2)________jobs to keep up with its rapidly expanding population. The unemployment rate in India varies widely (3)________ different states and regions. Young people, in particular, face significant challenges in finding employment. Many are highly educated but lack the skills and experience needed to (4)________ in a highly competitive job market. There are many factors contributing to the high levels of unemployment in India. Some of these include a lack of investment in infrastructure, a mismatch between the skills of workers and the needs of employers, and a lack of access to finance for small and medium-sized businesses. The Indian government has launched several initiatives to address the issue of unemployment in the country. These include programs to support small businesses, increase investment in infrastructure and provide vocational training to young people. However, much more needs to be done to create sustainable, long-term employment opportunities for all Indians. Unemployment can have serious social and economic consequences, including poverty, crime and social (5)________.
Select the most appropriate option to fill in blank no. 5.
Option 1: cohesion
Option 2: stigma
Option 3: unrest
Option 4: solidarity
Correct Answer: unrest
Solution : The most appropriate choice is the third option: unrest.
Unemployment often leads to social discontent, dissatisfaction, and instability within a society. Unrest encapsulates the sense of dissatisfaction, tension, and potential for upheaval resulting from widespread joblessness.
Question : Case Study 32
UVW Inc. is a technology startup aiming to raise funds for its innovative projects. The company's management is considering different methods of raising capital from the capital market.
Question:
If UVW Inc. chooses to issue new shares to the public, what is this process called?
Option 1: IPO (Initial Public Offering)
Option 2: Follow-on Public Offering (FPO)
Option 3: Private Placement
Option 4: Rights Issue
Correct Answer: IPO (Initial Public Offering)
Solution : The correct answer is (a) IPO (Initial Public Offering)
An IPO is the first sale of a company's shares to the public, allowing the company to raise capital by selling ownership stakes to a wide range of investors. It's a significant event
Question : Comprehension:
In the following passage, some words have been deleted. Fill in the blanks with the help of the alternatives given. Select the most appropriate option for each blank.
Select the most appropriate option to fill in blank no. 1.
Option 1: compromises
Option 2: effects
Option 3: controls
Option 4: affects
Correct Answer: affects
Solution : The correct answer is the fourth option.
This word fits the context best because it signifies the impact or influence of unemployment on millions of people across India. "Affects" means it brings about a change or causes an impact on something or someone.
Question : Which feature of money market is highlighted in the given statement? Statement: The discount finance house of India has been established for this purpose.
Option 1: More liquidity
Option 2: Low transaction cost
Option 3: Speedy transactions
Option 4: Consists of many sub markets
Correct Answer: More liquidity
Solution : One important feature of the money market is more liquidity in the transaction of securities in this market there is a formal arrangement of creating liquidity. The discount finance house of India has been established for this purpose it is always ready to provider
Question : Choose which of the following statements is true.
Option 1: Debentures Redemption Reserve is set aside by all the companies except All India Financial Institutions regulated by RBI and Banking Companies.
Option 2: Amount is set aside to Debentures Redemption Reserve by Unlisted Companies which are not Non-Banking Finance Companies (NBFCs) or Housing Finance Companies (HFCs).
Option 3: Amount is set aside to Debentures Redemption Reserve by all Unlisted Companies.
Option 4: Debentures Redemption Investment is made by the companies required to set aside amount to Debentures Redemption Reserve.
Correct Answer: Amount is set aside to Debentures Redemption Reserve by Unlisted Companies which are not Non-Banking Finance Companies (NBFCs) or Housing Finance Companies (HFCs).
Solution : Answer = amount is set aside to Debentures Redemption Reserve by Unlisted Companies which are not Non-Banking Finance Companies (NBFCs) or Housing Finance
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 : Debentures and Financial Instruments
PQR Enterprises is considering issuing IDR. What purpose does an IDR serve?
Option 1: It raises funds in the domestic market
Option 2: It allows foreign companies to invest in India
Option 3: It enables Indian companies to raise funds abroad
Option 4: It ensures dividend payments to preference shareholders
Correct Answer: It enables Indian companies to raise funds abroad
Solution : The correct answer is (c) It enables Indian companies to raise funds abroad
IDR stands for Indian Depository Receipts. An IDR is a financial instrument denominated in Indian Rupees and issued by a domestic depository in India. It
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