Correct Answer: To allocate funds for new ventures effectively

Solution : The correct answer is (d) To allocate funds for new ventures effectively

Financial planning is essential for diversification as it involves assessing the financial requirements of entering new business areas, determining the amount of funding needed, and devising a strategic plan to allocate funds efficiently. Effective financial planning helps in managing the resources, optimizing budgets, securing necessary financing, and ensuring that the new ventures are adequately funded for successful implementation. This ensures that the company's diversification efforts are financially sustainable and aligned with the broader strategic goals of the organization. Options a, b, and c are not directly related to the significance of financial planning for diversification.

Correct Answer: Planning is a primary function

Solution : Planning is the primary or first function to be performed by every manager. No other function can be executed by the manager without performing planning function because objectives are set up in planning and other functions depends on the objectives only.
Hence, option 1 is the correct answer.

Correct Answer: Financial planning

Solution : The correct answer is (c) Financial planning

Financial planning entails determining the company's financial goals and objectives and devising strategies to achieve them. Selecting the right sources of funds is a crucial aspect of financial planning, as it involves evaluating and choosing the most suitable options for obtaining the necessary funds to support the business's operations, growth, and expansion. This decision is essential for ensuring the financial health and sustainability of the company.

Correct Answer: By allowing conversion into equity shares

Solution : The correct answer is (c) By allowing conversion into equity shares

Convertible preference shares grant the shareholder the right to convert these shares into equity shares at a predetermined conversion ratio and within a specified time frame. This allows the preference shareholders to become equity shareholders and participate in the ownership and growth of the company. It provides flexibility to the shareholders while potentially leading to an increase in equity capital for the company if the conversion option is exercised. This is a common way for companies to raise funds while attracting investors. Options a, b, and d are not accurate methods for raising funds through convertible preference shares.

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 and ADRs are both financial instruments that enable companies to raise funds in international markets by issuing depositary receipts. GDRs are issued and traded outside the United States, while ADRs are specifically issued and traded in the United States. They allow companies to tap into a larger pool of investors and access capital from international markets without directly listing their shares on foreign stock exchanges. These instruments represent claims to shares in the issuing company and facilitate investment from investors in different regions around the world.

Correct Answer: Acquiring funds for business operations and expansion
 

Solution : The correct answer is (b) Acquiring funds for business operations and expansion

Business finance involves acquiring the necessary funds and managing financial resources to support a company's day-to-day operations, projects, and future growth. It encompasses activities related to budgeting, financial forecasting, investment decisions, obtaining loans or equity, managing working capital, and overall financial planning to ensure the efficient use of financial resources for achieving the company's objectives.

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 often arises due to uncertainties and risks in business operations. Businesses need financial resources to mitigate risks, navigate uncertainties, and ensure smooth operations.

Statement 2 is false. Financial planning aims to manage and mitigate risks, but it does not eliminate all uncertainties in business activities. Uncertainties are inherent in business, and while financial planning can help in managing and preparing for them, it cannot completely eliminate them.

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 that is true. Financial planning involves creating a strategic plan to manage funds efficiently, allocate resources appropriately, and achieve financial goals while minimizing wastage and unnecessary expenses.

The reason that is false. Financial planning does consider long-term business goals. In fact, a significant aspect of financial planning involves aligning financial strategies with long-term business objectives. It's essential for ensuring the financial health and sustainability of a business in the long run. Financial planning integrates short-term and long-term financial goals to achieve optimal utilization of funds.

Correct Answer: Idea

Solution : Given:
?, Planning, Strategy, Marketing, Finance

To start a business, we need to come up with an idea, plan accordingly, strategize to implement the idea, identify target markets, and consider the finances required throughout the entire process.
So, the order of steps of the startup business project is as follows –
Idea < Planning < Strategy < Marketing < Finance

So, the idea is the missing term of the given series. Hence, the fourth option is correct.

Correct Answer: Matching buy and sell orders

Solution : The correct answer is (c) Matching buy and sell orders

A broker in the stock market facilitates the buying and selling of securities by acting as an intermediary between buyers and sellers. Their primary role is to match buy and sell orders from different investors. When an investor wants to buy or sell shares, they place an order through their broker, and the broker matches the order with another investor looking to do the opposite (buy or sell). This matching process helps in executing trades and ensuring liquidity in the market. The broker earns a commission or fee for facilitating these transactions.