Business Studies 3 Marks Question

Bonds are issued as long-term financial instruments by the Central Government, State Government, or any specialized financial institution.
These are some fine differences between debentures and bonds:
i. There is no to the minimum risk involved in bond investments but the risk factor is high in debentures.
ii. At the time of liquidation, the bondholders are always given preference.

Equity shares are the main source of finance of a firm. It gives the right to the holders to claim dividend on the surplus profits of the company. The rate of dividend on the equity capital is determined by the management of the company.
Features:
i. Equity shares are transferable in nature. They can be transferred from one person to another with or without consideration.
ii. Equity shareholders are the actual owners of the company and they bear the highest risk.

Wholesalers purchase goods in bulk from manufacturers, store them and distribute them to retailers in small quantities for further resale. This bulk purchase of goods enables manufacturers to undertake production on a large scale without worrying about storage facilities. By offering warehouses close to the centres of distribution, wholesalers provide what is known as place utility. Wholesalers not only provide warehousing facilities such as collection, storage and protection of goods but also facilitate marketing and distribution, creating time utility.

i. No, this transaction cannot be constituted as a business activity. Reema has sold materials on OLX only once and has earned profit out of it. But, it can not be termed as business activity as the motive of selling is over and there are no intentions of Reema to sell the same items again. Thus, the continuity of business is broken.
ii. The underlying characteristic of business is 'Dealings in goods and services on a regular basis'.

i. Non-economic
ii. Non-economic
iii. Economic
iv. Economic

importance of international business for a country are as follows:
i. Earning of foreign exchange: International business helps a country to earn foreign exchange which it can later use for meeting its imports of capital goods, technology, petroleum products and fertilisers, pharmaceutical products and a host of other consumer products which otherwise might not be available domestically.
ii. More efficient use of resources: As stated earlier, international business operates on a simple principle - produce what your country can produce more efficiently, and trade the surplus production so generated with other countries to procure what they can produce more efficiently.
iii. Improving growth prospects and employment potentials: Producing solely for the purposes of domestic consumption severely restricts a country's prospects for growth and employment. Many countries, especially the developing ones, could not execute their plans to produce on a larger scale, and thus create employment for people because their domestic market was not large enough to absorb all that extra production.
iv. Increased standard of living: In the absence of international trade of goods and services, it would not have been possible for the world community to consume goods and services produced in other countries that the people in these countries are able to consume and enjoy a higher standard of living.