Correct Answer: Both enable companies to raise funds in international markets

Solution : The correct answer is (d) Both enable companies to raise funds in international markets

GDRs (Global Depositary Receipts) and ADRs (American Depositary Receipts) serve similar functions in that they both allow companies to raise funds in international markets. GDRs are negotiable financial instruments issued by a depositary bank, typically in a country other than where the issuing company is based. They represent a claim to shares in a foreign company and are traded on international stock exchanges. GDRs enable companies to raise capital from investors in international markets.

ADRs are a specific type of GDR that represents shares of non-U.S. companies traded on U.S. stock exchanges. They make it easier for non-U.S. companies to attract investment from American investors by facilitating trading of their shares in the U.S. financial markets.

Both GDRs and ADRs play a crucial role in allowing companies to access international capital markets and attract investment from a broader investor base outside their home countries.

Correct Answer: International Depository Receipt
 

Solution : The correct answer is (b) International Depository Receipt

An International Depository Receipt (IDR) is a financial instrument denominated in a foreign currency and is offered by a non-resident company outside the country where it is listed. IDRs represent shares of the foreign company and can be traded on international stock exchanges, allowing companies to raise capital from investors in foreign markets.

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. The need for business finance does arise due to risks and uncertainties associated with business operations. Businesses face various risks, including market volatility, competition, economic changes, and more. Managing these risks and uncertainties requires financial resources and strategies.

Statement 2 is false. Financial planning cannot eliminate all uncertainties in business activities. While financial planning helps in managing and mitigating risks to some extent, it cannot entirely eliminate uncertainties that are inherent to business operations. Financial planning aims to prepare and strategize for uncertainties rather than eliminating them.

Correct Answer: Allocating resources
   

Solution : The correct answer is ( b). Allocating resources

Once the goals are established, XYZ Manufacturing Company needs to allocate resources such as finances, manpower, technology, and time to support the initiatives outlined in the plan. Proper resource allocation is crucial for implementing the strategies and ensuring the successful introduction of the smart home appliances.

In summary, while all the options mentioned are important aspects of the planning process, allocating resources is the immediate and practical step that follows setting objectives and goals. It ensures that the necessary means are available to implement the plan 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 involves the process of determining the most efficient and effective way to use available financial resources to achieve the goals and objectives of an individual or organization. It involves budgeting, investment planning, risk management, and other strategies to optimize the use of funds.

Statement 2 is false. Financial planning is not only concerned with short-term goals. It encompasses both short-term and long-term financial goals, considering the entire financial landscape and various timeframes. It involves planning for immediate needs as well as future financial stability and growth.

Correct Answer: Both enable companies to raise funds in international markets

Solution : The correct answer is (d) Both enable companies to raise funds in international markets

GDRs (Global Depositary Receipts) and ADRs (American Depositary Receipts) serve similar functions in that they both allow companies to raise funds in international markets. GDRs are negotiable financial instruments issued by a depositary bank, typically in a country other than where the issuing company is based. They represent a claim to shares in a foreign company and are traded on international stock exchanges. GDRs enable companies to raise capital from investors in international markets.

ADRs are a specific type of GDR that represents shares of non-U.S. companies traded on U.S. stock exchanges. They make it easier for non-U.S. companies to attract investment from American investors by facilitating trading of their shares in the U.S. financial markets.

Both GDRs and ADRs play a crucial role in allowing companies to access international capital markets and attract investment from a broader investor base outside their home countries.

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: 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: 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. Business finance does involve making investment decisions that impact the profitability of the company. Investment decisions, such as where to allocate funds for projects, acquisitions, or expansions, can significantly affect a company's profitability in the short and long term.

The reason is false. Investment decisions are not independent of financial planning. In fact, investment decisions are a crucial part of financial planning. Financial planning involves assessing the financial resources available and determining how to allocate those resources, including making investment decisions, to achieve the company's financial goals and maximize profitability. Investment decisions are a key component of the overall financial planning process.

Correct Answer: Statement 2 incorrect, Statement 1 correct.

Solution : The correct answer is (d) Statement 2 incorrect, Statement 1 correct.

Statement 1 is incorrect. Controlling is not an isolated function; it is interconnected with other management activities, including planning, organizing, and leading. It operates in conjunction with these functions to achieve organizational objectives.

Statement 2 is correct. Statement 2 accurately describes the relationship between controlling and other management functions. Controlling is indeed interconnected with planning, organizing, and leading functions as part of the broader management process.