Business Studies 3 Marks Question

The various advantages of investing in equity shares over preference shares are:
i. The investors who are willing to assume higher risks for higher returns prefer equity shares over preference shares.
ii. The equity shareholders enjoy voting rights, whereas no such right is attached to preference shares.
iii. The return on equity is more if the profits of the company are high, whereas the return on preference shares is fixed.

The three special financial institutions and their objectives are as follows:-
i. Industrial Finance Corporation of India (IFCI): Its objective include promoting balanced regional development and encouraging new entrepreneurs to enter into the priority sectors of the country. It was set up as a statutory corporation in July' 1948.
ii. Unit Trust of India (UTI): It is a statutory public sector investment institution which was set up in February 1964 with the basic objective to mobilize the community's savings and channelise them into productive ventures.
iii. Industrial Development Bank of India (IDBI): It was established in 1964 with an objective to coordinate the activities of other financial institutions, including commercial banks.

Two features of internal trade are as follows:
i. Use of domestic currency at the time of sale and purchase.
ii. Good sold or purchased within the domestic boundary of the country.

Yes, I agree with the given statement. For example, if a doctor treats his patients at the clinic, then it is an economic activity as the doctor gets fees for that. However, if the doctor treats his son at home, then it is a non-economic activity.

Social Responsibility of business can e defined as activities that a business performs over and above the statutory requirements of the business in order to benefit society and for social welfare. Social responsibility of business is broader than Legal responsibility, as a business can fulfill its legal responsibilities by compliance with law whereas to fulfill social responsibility voluntary efforts are required. Social responsibility is voluntary in nature but legal responsibility is mandatory in nature.

i. It is a document of title which gives the holder the right to possession of the goods.
ii. It is a very important document as it serves as a receipt issued by a carrier to a shipper.
iii. It is a contract of affreightment comprising the terms and conditions on which the shipping company has agreed to carry the goods to the destination port.
iv. It may be used as collateral security for raising loans.