Question:
Name any three special financial institutions and state their objectives.
Answer:
Given below are three financial institutions along with their objectives:
- Industrial Credit and Investment Corporation of India (ICICI): It came into existence in 1955 as a public limited company under the Companies Act, 1956. Objective: ICICI assists the expansion and modernisation of industrial enterprises exclusively in the private sector. The corporation has also encouraged the participation of foreign capital in the country.
- Industrial Development Bank of India (IDBI): It came into existence in 1964 under the Industrial Development Bank of India Act, 1964.
Objective: Its objective was to coordinate the activities of other financial institutions including commercial banks. The bank performed three types of functions namely, assistance to other financial institutions, direct assistance to industrial concerns and promotion and coordination of financial technique service.
- Life Insurance Corporation of India (LIC): It came into existence in 1956 under the LIC Act 1956 after nationalising 245 existing insurance companies.
Objective: It mobilises the community saving in the form of insurance premia and makes it available to industrial concerns. Both public as well as private, in the form of direct loan and underwriting of an subscription to shares and debentures.
Sources of Business Finance
Q 1.
Write a note on international sources of finance.
Q 2.
Differentiate between a share and a debenture.
Q 3.
In leasing agreement what right is given to lessee?
Q 4.
Give the full form of GDR and ADR.
Q 6.
Explain in detail the types of debenture a company can issue.
Q 7.
What is a commercial paper? What are its advantages and limitations?
Q 8.
Name two sources of funds under owner's fund.
Q 9.
Which deposits are directly raised from the public?
Q 10.
Explain trade credit and bank credit as sources of short term finance for business enterprises.
Q 11.
State two factors affecting the working capital requirement of a firm.
Q 12.
What advantage does issue of debentures provide over the issue of equity shares?
Q 13.
Why does business enterprise need finance?
Q 14.
What do you mean by discounting of bills of exchange?
Q 15.
Specify the objective of I.D.B.I.
Q 16.
Preference shares are preferred by company but not by investors. Why?
Q 17.
What is business finance? Why do businesses need funds? Explain.
Q 18.
Who regulates the acceptance of public deposits?
Q 19.
What is factoring? Discuss its pros and cons.
Q 20.
State the meaning of finance. What factors determine working capital and fixed capital requirements of a business?
Q 21.
Name any three special financial institutions and state their objectives.
Q 22.
What are Indian depository receipts (IDRs)?
Q 23.
What is lease financing? Discuss its merits and demerits.
Q 24.
Discuss the financial instruments used in international financing.
Q 25.
Why preferences are given to preferential shares?
Q 26.
What are retained profits? Discuss their advantages and disadvantages.
Q 27.
State various sources of short and medium term funds.
Q 28.
Why is equity share capital called Risk Capital'?
Q 29.
Explain different types of preference shares which can be issued by a company.
Q 30.
Retained earnings are not a good source from the values point of view as it is the right of equity shareholders. Do you agree? Justify your answer.
Q 31.
What are public deposits?
Q 32.
Name zones of the Lessors and Lessees in India.
Q 33.
What is the status of debenture holders?
Q 35.
Describe in brief the features of equity shares.
Q 36.
What preferential rights are enjoyed by preference shareholders? Explain.
Q 37.
What are the two important functions of factors?
Q 38.
What is a trade credit?
Q 39.
Who are called the owners of a company?
Q 40.
State various sources of long term funds.
Q 41.
What is the difference between GDR and ADR? Explain.
Q 42.
State two factors affecting the fixed capital requirement of a firm.
Q 43.
Mr. John has ? 1,00,000 for investment purposes. Should he invest in equity shares, preference shares, public deposits or debentures? Justify your answer.
Q 44.
List sources of raising long-term and short term finance.
Q 45.
List different types of finance.
Q 46.
Preference shares are not suitable for which kind of investors?
Q 47.
What are the preferences given to preference shareholders?
Q 48.
Classify internal and external sources on the basis of time.
Q 49.
Describe briefly the factors responsible for selecting a source of finance.
Q 50.
Debentures are good from debenture holders point of view but not for business. Do you agree? Explain.
