Correct Answer: Prohibiting insider trading

Solution : The correct answer is (d) Prohibiting insider trading

One of the protective functions of SEBI (Securities and Exchange Board of India) that ensures fair practices in the securities market is prohibiting insider trading. Insider trading refers to the illegal practice of trading in securities of a company based on non-public, material information about that company. SEBI regulates and enforces rules to prevent insider trading, aiming to maintain a level playing field for all investors and ensure fair and transparent trading in the market. This helps in upholding the integrity of the securities market and protecting the interests of investors.

Correct Answer: Setting organizational goals and strategies

Solution : The correct answer is (c) Setting organizational goals and strategies

Planning in management encompasses activities such as setting organizational goals, developing strategies to achieve those goals, and outlining the necessary steps and actions to be taken. While allocating resources and guiding and motivating employees are important management activities, they are typically more associated with the organizing and leading functions of management, respectively. Monitoring employee performance is part of the controlling function of management and is related to assessing progress and making necessary adjustments, but it's not the primary focus of the planning function. Planning primarily deals with setting the direction and objectives of the organization.

Correct Answer: Regulation of insider trading
 

Solution : The correct answer is (a) Regulation of insider trading

The function of a stock exchange that ensures transparency in trading and prevents fraudulent activities is the "regulation of insider trading." Insider trading involves trading in a company's stocks or other securities based on non-public, material information about that company. Stock exchanges enforce rules and regulations to prohibit insider trading, helping maintain fairness and transparency in the market by ensuring that all investors have equal access to information and opportunities. These regulations aim to prevent individuals or entities from taking advantage of privileged information to gain unfair profits in the market.

Correct Answer: Equity shares

Solution : The correct answer is (c) Equity shares

Equity shares represent ownership in a company and provide ownership rights and claims on the company's assets and earnings. When a company issues equity shares, it is essentially selling ownership stakes to investors, allowing them to become shareholders and participate in the company's growth and success. This is a common way for companies to raise funds for their operations, expansions, or other financial needs.

Correct Answer: Identifying potential risks

Solution : The correct answer is (c) Identifying potential risks

Identifying potential risks is a crucial step in risk management and planning. This involves assessing the various factors that could impact the success of the new product launch. By recognizing potential risks, XYZ Software Solutions can develop strategies to mitigate or manage these challenges effectively.

Correct Answer: Statement 1 is true, and statement 2 is false.
 

Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.

Statement 1 is true. Financial planning does assist in the optimal allocation of financial resources for various business activities. It involves planning for both short-term and long-term financial goals to ensure efficient use of resources.

Statement 2 is false. Financial planning is not solely focused on short-term goals. It encompasses a comprehensive approach, including both short-term and long-term financial objectives. Effective financial planning considers the long-term sustainability and growth of the business, not just short-term gains.

Correct Answer: Evaluating alternative courses of action
 

Solution : The correct answer is (a). Evaluating alternative courses of action

After identifying different courses of action, it is essential for ABC Retail Chain to thoroughly evaluate each option. This involves assessing the potential benefits, risks, feasibility, and implications associated with each course of action. By conducting a comprehensive evaluation, the retail chain can make an informed decision on the most suitable and effective approach for expanding its product range. This step is crucial for ensuring that the chosen expansion strategy aligns with the company's objectives and maximizes the chances of success.

Correct Answer: Planning does not guarantee success

Solution : Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again as there are so many unknown factor which may lead to failure of plan in future. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again as there are so many unknown factor which may lead to failure of plan in future.
Hence, option 4 is the correct answer.

Correct Answer: Ownership in the company
   

Solution : The correct answer is (b) Ownership in the company

Equity shares represent ownership or equity ownership in a company. Shareholders who hold equity shares have ownership rights in the company, which typically includes voting rights, the right to share in the company's profits (through dividends), and the right to participate in decision-making processes related to the company's operations and policies. Unlike debt securities (e.g., debentures), equity shares do not guarantee fixed interest payments or redemption; instead, the dividend payments to equity shareholders are variable and based on the company's profitability and the decisions of the company's board of directors.

Correct Answer: Achieving long-term innovation goals

Solution : The correct answer is (c) Achieving long-term innovation goals

Financial planning in the context of innovation and research involves strategic allocation of financial resources to support long-term innovation goals. This includes funding research projects, developing new products, exploring new technologies, and investing in activities that will position the company for future growth and competitiveness. The focus is on achieving sustained innovation and long-term success rather than short-term profit maximization, minimizing production costs, or meeting immediate operational expenses, although these factors are also considered within the broader financial planning strategy.