Business Finance and Marketing MCQ Quiz in मल्याळम - Objective Question with Answer for Business Finance and Marketing - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക

The correct answer is A - IV, B - III, C - I, D - II.

 Important PointsMM approach - Home made Leverage

• ​Modigliani-Miller theorem - Investors can create their own leverage by borrowing and investing in risk-free assets.
• Homemade leverage- Investors can replicate the effects of corporate leverage by borrowing and investing in a firm's debt and equity.

Implications -

• Firms' capital structure is irrelevant to investors.
• Firms should focus on maximizing expected future cash flows and reducing risk, regardless of how they finance their operations.

In other words, investors can achieve the same level of risk and return regardless of the firm's capital structure. This is because they can always borrow or lend money to adjust their own leverage.

Pecking order theory - No target capital structure

• The Pecking Order Theory suggests that firms prioritize financing methods in a specific order.
• This begin with internal funds, followed by debt issuance, and finally, equity issuance.
• Unlike the traditional notion of a target capital structure, this theory contends that firms do not have a predetermined mix of debt and equity in mind.
• Instead, they rely on available funds and prefer internal financing due to the asymmetry of information between management and external investors.
• This theory emphasizes the pragmatic approach firms take in their financing decisions.

Trade off theory - Costs of financial distress

• Trade-off theory in finance suggests that companies must strike a balance between the tax benefits of debt financing and the costs associated with financial distress.
• The costs of financial distress include legal and administrative expenses related to bankruptcy proceedings, the loss of customer and supplier relationships, and the decline in the firm's value due to the uncertainty surrounding its financial health.
• Additionally, financial distress can lead to a reduced ability to invest in profitable projects, ultimately impacting the company's long-term viability.

Signaling theory - Asymmetric information

• Signaling theory addresses situations where one party possesses more or better information than another.
• In financial contexts, it often refers to a firm's ability to convey its quality or prospects to investors.
• For example, a company may issue a dividend to signal confidence in its future earnings or undertake a stock buyback to indicate undervaluation.
• These actions are intended to bridge the information gap and convey positive signals to investors, potentially affecting the firm's stock price.

The correct answer is Physical distribution

Key Points

• Physical distribution is defined as the process of physical movement of goods from the producer to the consumer.
• It is an important marketing function which describes marketing activities that involves flow of raw materials from the suppliers to the factories for production and also the movement of finished goods from production to the final user.
• The activities that are included in the efficient movement of goods from producer to end user or consumer include transportation, inventory control, warehousing, material handling, forecasting, customer service, plant and warehouse location and order processing.

1. Consumer satisfaction
2. Profit Maximisation
3. To ensure the availability of right goods at the right quantity at the right time and the right place with the least cost for the service.
4. To achieve speedier transportation of goods and maintaining minimum inventory level.
5. To establish the correct price of products by effective management of physical activities of distribution.
6. To achieve competitive advantage over the competitors by providing the best customer service.

• Order Processing:
• Order processing is the first point or in other words, the starting point of the distribution activity. The functions involved in order processing are receiving order, handling the received order, granting of credit for the item ordered, generating invoice, dispatching of order and collecting the bills.
• Businesses should be making an effort to reduce the order cycle time which is the time between placing an order by the customer and delivery of the goods at the customer’s place.
• Storage and Warehousing:
• Storage deals with the storing of goods in proper condition till the time it is ordered by the customer. Goods that cannot be generally made available throughout the year need to be stored.
• Warehouses act as centres of storage and by providing the functionality it helps businesses meet the demands of customers. Apart from being a source of storage, a warehouse also acts as centres for assembling the goods.
• Inventory Control:
• Inventory control refers to the process of efficient control of goods that are stored in the warehouses. Businesses need to maintain adequate levels of inventory in order to ensure uninterrupted fulfillment of orders.
• The level of inventory needs to be optimal, it should not be too less or too more, as less inventory results in out of stock goods, lost business and unhappy customers, while a high level of inventory requires huge investment.
• Material Handling:
• Material handling refers to the activities that are associated with the movement of goods from the site of manufacturing till it is loaded to the transport.
• Proper material handling results in minimising the wastage of goods during transport, reduces unnecessary movement of goods, facilitates quick order processing and efficient goods movement.
• Transportation:
• Transportation is a very essential component of physical distribution which plays a crucial role in movement of the stored goods from warehouse to the customers. The process of transporting involves loading and unloading of goods and their movement from one place to another.

Key PointsThe term ‘redeemable’ is used for Preference shares

Preference Share:

Preference shares, commonly referred to as preferred stock, is a special type of share option that allows owners to receive dividends from a corporation before equity owners do.

Redeemable Preference Shares:

• Redeemable preference shares are those that the issuing corporation can buy back or redeem at a set price and time.
• These kinds of shares benefit the business by acting as a cushion during inflationary periods.

Additional Information

​Commercial Paper (CP):

• Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
• CP was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors
• Commercial paper is issued by a firm to raise funds for a short period of time, the time can be ranging from 90 days to 364 days after which it has to be redeemed. Commercial paper is an unsecured promissory note.

Equity Shares: 

• Any corporation can obtain long-term finance through equity shares.
• These shares are not redeemable and are distributed to the general public.
• Investors in such shares hold the right to vote, share profits and claim assets of a company.

Public Deposits:

• Public Deposits are unsecure deposits or funds that businesses solicit from the general public in order to meet their short- or long-term working capital needs.

The correct answer is Promotion

Key PointsPromotion:

• Promotion is the process of making the customers aware of the product by presenting it to customers across various channels of promotion and entice them to buy the product.
• The major channels of promotion are: advertising, media, personal selling and promotion (publicity). An ideal promotion mix will be a combination of all or some methods

Elements of Marketing Mix

Product in Marketing Mix:

• A product is a commodity, produced or built to satisfy the need of an individual or a group.
• The product can be intangible or tangible as it can be in the form of services or goods.
• It is important to do extensive research before developing a product as it has a fluctuating life cycle, from the growth phase to the maturity phase to the sales decline phase.
• A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales decline phase.
• It is important for marketers to reinvent their products to stimulate more demand once it reaches the sales decline phase.
• It should create an impact in the mind of the customers, which is exclusive and different from the competitor’s product.
• There is an old saying stating for marketers, “what can I do to offer a better product to this group of people than my competitors”. This strategy also helps the company to build brand value.

Price in Marketing Mix:

• Price is a very important component of the marketing mix definition.
• The price of the product is basically the amount that a customer pays for to enjoy it.
• Price is the most critical element of a marketing plan because it dictates a company’s survival and profit.
• Adjusting the price of the product, even a little bit has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product in the market.
• Things to keep on mind while determining the cost of the product are, the competitor’s price, list price, customer location, discount, terms of sale, etc.,

Place in Marketing Mix:

• Placement or distribution is a very important part of the marketing mix strategy. We should position and distribute our product in a place that is easily accessible to potential buyers/customers.

Promotion in Marketing Mix:

• It is a marketing communication process that helps the company to publicize the product and its features to the public.
• It is the most expensive and essential components of the marketing mix, that helps to grab the attention of the customers and influence them to buy the product.
• Most of the marketers use promotion tactics to promote their product and reach out to the public or the target audience.
• The promotion might include direct marketing, advertising, personal branding, sales promotion, etc.

The correct answer is ​When the growth prospects of the business are high

Key Points

• Working capital is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital.
• If the raw materials and other required materials are available freely and continuously, lower stock levels may suffice.
• If, however, raw materials do not have a record of un-interrupted availability, higher stock levels maybe required.
• The Working Capital Requirement (WCR) is a financial metric showing the amount of financial resources needed to cover the costs of the production cycle, upcoming operational expenses and the repayments of debts.
• The working capital requirement will not be high when the procurement of raw material is difficult or not readily available.
• When the rate of inflation is low, the working capital requirement will likely not be high.

The correct answer is Eco mark. Key Points

• Eco mark is a certification mark issued by the Bureau of Indian Standards (BIS) for products which are ecologically safe and adheres to the standards.
• It was first issued in 1991 by a resolution. It is issued by the Ministry of Environment and Forests.
• Products that meet the prescribed environmental criteria, as well as quality standards set by BIS, will be issued the ECOMARK label.

Additional Information

• AGMARK is a certification mark for agricultural produce,
• Hallmark is a hallmarking system for gold as well as silver Jewelry sold in India.
•  The Wool mark certifies quality wool fashion, sportswear, footwear, interiors and wool care products that is natural, renewable
• Eco mark is a certification mark issued by the Bureau of Indian Standards (BIS) for products which are ecologically safe and adheres to the standards.

Thus, not correctly matched with the standardization marks related to consumer protection is Eco Mark.

The correct answer is "Right to consumer education".

Key Points

• Every Consumer has the right to access informational programs and materials. It will help them to make the right decision.
• Ignorance of consumers, particularly of rural consumers, is mainly responsible for their exploitation. They should know their rights and must exercise them.
• Only then real consumer protection can be achieved with success. Thus, the concern of consumer protection is to ensure fair trade practices ;quality of goods and efficient services with information to the consumer with regard to quality, quantity, potency, composition and price for their choice of purchase. ​

Important Points

• The Consumer Protection Act aims at providing protection to the consumers and to provide a timely solution to their problem which is effective.
• It protects the consumers against deficiencies and defects in goods and services.
• Such a consumer protection policy creates an environment whereby the clients, customers and consumers receive satisfaction from the delivery of goods and services needed by them.​
• Securing the rights of consumers against restrictive or wrongful trade practices is an important part of the Consumer Protection Act.​

Additional Information

• Right to be heard - Every Consumer has the right to put their complaint in front of the concerned authority. Means that consumer's interests will receive due consideration at appropriate forums. It also includes the right to be represented in various forums formed to consider the consumer's welfare. The consumers should form non-political and non commercial consumer organizations which can be given representation in various committees formed by the Government and other bodies in matters relating to consumers.
• Right to choose -  Every consumer has the right to select products and services at a competitive price. Means right to be assured, wherever possible of access to a variety of goods and services at Competitive price. In the case of monopolies, it means the right to be assured of satisfactory quality and service at a fair price. It also includes the right to basic goods and services. This is because unrestricted right of the minority to choose can mean a denial for the majority of its fair share. This right can be better exercised where a variety of goods are available at competitive prices.
• Right to be informed - Every Consumer can exercise their right to have information about the quality, quantity, standard and price of the goods and services so as to protect the consumer against unfair trade practices. Consumers should insist on getting all the information about the product or service before making a choice or a decision. This will enable him to act wisely and responsibly and also enable him to desist from falling prey to high pressure selling techniques.

The correct answer is "Importance of physical safety".

Key Points

• Indian markets are over flooded with products. The products may be adulterated and may be health hazardous. This may endanger their life and due to this a consumer needs to be protected.
• Irrespective of different restriction many organization follows monopoly practice and consumers gets influenced and should be protected.​

Important Points

• Majority of the consumers are ignorant. They do not know about consumer rights. Consumer movements inform consumers about their rights and protect their interest and rights.
• Business has a moral duty to the society and consumer and they should take steps which should not hamper the society or consumer. They should prevent any sort of exploitation like adulteration, unfair practices, defective product, fair price and weight.​

Additional Information

• Consumer ignorance - Consumer when seeing it from their point of view then we have gathered some aspects to it. Of which, Consumer Ignorance needs to be taken care of. They should know how to exercise their rights and how to seek reliefs.
• Prevention from malpractice - Business malpractices are rapidly growing in the modern market. Businessmen follow unfair trade practices, restrictive trade practices and monopolistic trade practices and consumer protection plays a vital role.
• Social responsibility - Businesses have responsibilities towards the consumer, government bodies and society and they should work in a way which should be beneficial to them and the business as in return it will flourish their business.

The correct answer is Helps in promotion of the products

Key Points

• Promotion is a marketing tool, used as a strategy to communicate between the sellers and buyers.
• Through this, the seller tries to influence and convince the buyers to buy their products or services.
• It assists in spreading the word about the product or services or company to the people.
• The company uses this process to improve its public image.
• This technique of marketing creates an interest in the mindset of the customers and can also retain them as a loyal customer.
• Promotion is a fundamental component of the marketing mix, which has 4 Ps:

1. Product,
2. Price,
3. Place, and
4. Promotion.

• It is also an essential element promotional plan or mix, which includes advertising, self and sales promotion, direct marketing publicity, trade shows, events, etc.,

The correct answer is "Consumer responsibility".

Key Points

• Consumer responsibilities indicate that customers have a specific responsibility towards the society and other consumers and help them to fight against the unfair practice or at least be aware of it.
• These rights and responsibilities are registered under the Consumer Protection Act 1986.​

Important Points

• The responsibilities of consumers will be supported by on-going consumer education and awareness programmes from SAMA as well as initiatives by the various banks for their own consumers.
• There are various consumer responsibilities :
  • ​Responsibility to be aware 
  • Responsibility to think independently
  • Responsibility to speak out
  • Responsibility to complain
  • Responsibility to be an Ethical Consumer​​

Additional Information

• Consumer requirements - Developing products that people want to buy requires that companies consider customer requirements. These requirements represent the desires or needs customers have that will persuade them to make a purchase. Understanding what types of features are most attractive can help companies garner interest in their products or services. 
• Consumer rights - Consumer rights are a set of rights governed by the law that gives allows customers to have the necessary information about goods and services while purchasing.
• Consumer awareness - Consumer awareness is a process of making an individual or consumer awareness of their rights and responsibilities when purchasing goods and services. Awareness is essential for all customers so that they take the right decision and make the right choice about the products and services being sold and sold. One of the examples of Consumer Awareness Example in India is “Jago Grahak Jago’