Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

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TN State Board 12th Commerce Model Question Paper 2 English Medium


  1. The question paper comprises of four parts.
  2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. All questions of Part I, II. III and IV are to be attempted separately.
  4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer.
  5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about 50 words.
  6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in about 150 words.
  7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in about 250 words. Draw diagrams wherever necessary.

Time: 3 Hours
Max Marks: 90

Part – I

Choose the correct answer. Answer all the questions: [20 x 1 = 20]

Question 1.
Dividing the work into small tasks is known as …………..
(a) discipline
(b) unity
(c) division of work
(d) equity
(c) division of work

Question 2.
Delegation of Authority is easily done with the help of ………..
(a) MBM
(b) MBE
(c) MBO
(d) MBA
(c) MBO

Question 3.
Participants is the capital market includes ……………
(a) Individuals
(b) Corporate
(c) Financial institutions
(d) All of the above
(d) All of the above

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 4.
Stock exchanges deal in ……………
(a) Goods
(b) Services
(c) Financial securities
(d) Country’s currency
(c) Financial securities

Question 5.
Planning is a …………….. function.
(a) selective
(b) pervasive
(c) both a and b
(d) None of the above
(b) pervasive

Question 6
…………… refers to the process of identifying and attracting job seekers so as to build a pool of qualified job applicants.
(a) selection
(b) training
(c) recruitment
(d) Induction
(c) recruitment

Question 7.
The spot market is classified on the basis of …………….
(a) commodity
(b) transaction
(c) regulation
(d) time
(b) transaction

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 8.
Which one represents a cluster of manufacturers, content providers and online retailers organized around an activity?
(a) Virtual mall
(b) Association
(c) Metomediary
(d) Portal

Question 9.
………….. is the king of modem marketing.
(a) consumer
(b) wholesales
(c) producer
(d) retailer
(a) consumer

Question 10.
GST stands for ……………..
(a) Goods, Sales and Tax
(b) Goods and Services Tax
(c) Global Services and Tax
(d) Government Services and Tax
(b) Goods and Services Tax

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 11.
In case of the sale, the has the right to sell.
(a) buyer
(b) seller
(c) hirer
(d) consignee
(b) seller

Question 12.
What are the characteristics of an entrepreneur?
(a) spirit of enterprise
(b) flexibility
(c) self confidence
(d) all of the above
(d) all of the above

Question 13.
………… is the government of India’s endeavour to promote culture of innovation and entrepreneurship.
(a) AIM
(b) STEP
(c) SEED
(d) AIC
(a) AIM

Question 14.
A private company shall have a minimum of ………………
(a) seven directors
(b) five directors
(c) three directors
(d) two directors
(d) two directors

Question 15.
Which of the following is verification function?
(a) planning
(b) Organisation
(c) staffing
(d) Controlling
(d) Controlling

Question 16.
Primary market is also called as ………………
(a) secondary market
(b) Money Market
(c) new issue market
(d) indirect market
(c) new issue market

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 17.
A major player in the money market is the
(a) Commercial Bank
(b) Reserve Bank of India
(c) State Bank of India
(d) Central Bank
(a) Commercial Bank

Question 18.
In which year SEBI was constituted as the regulator of capital markets in India?
(a) 1988
(b) 1992
(c) 2014
(d) 2013
(a) 1988

Question 19.
Recruitment bridges gap between and
(a) Job seeker and Job provider
(b) Job seeker and agent
(c) Job provider and owner
(d) Owner and servant
(a) Job seeker and Job provider

Question 20.
Vestibule training is provided
(a) On the job
(b) In the class room
(c) In a situation similar to actual working environment
(d) By the committee
(c) In a situation similar to actual working environment

Part – II

Answer any seven in which question No.30 is compulsory. [7 x 2 = 14]

Question 21.
What is meant by Motivation?
The goals are achieved with the help of motivation. Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers. This is done by a resourceful leader.

Question 22.
What is equity market?
Equity Market is the financial market for trading in Equity Shares of Companies.

Question 23.
What is a CD market?
Certificate of Deposits are short-term deposit instruments issued by banks and financial institutions to raise large sums of money. The Certificate of Deposit is transferable from one party to another. Due to their negotiable feature, they are also known as negotiable certificate of deposit.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 24.
What is Demat account?
A demat account holds all the shares that are purchased in electronic or dematerialized form.

Question 25.
Give the meaning of Recruitment.
Recruitment is the process of finding suitable candidates for the various posts in an organisation

Question 26.
What is meant by training?
Training is the act of increasing / enhancing the new skill of problem solving activity and technical knowledge of an employee for doing the jobs themselves.

Question 27.
Define Marketing Mix.
“Marketing mix is a pack of four sets of variables namely product variable, price variable, promotion variable, and place variable”.

Question 28.
What do you know about National Commission?

  • The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act of 1986.
  • The National Consumer Disputes Redressal Commission (NCDRC) is also called as National Commission.

Question 29.
What is Share?
The term Share is viewed by a layman as a fraction or portion of total capital of the company which have equal denomination.

Question 30.
Define Meeting.
A company meeting must be convened and held in perfect compliance with the various provisions of the Act and the rules framed thereunder

Part – III

Answer any seven in which question No. 31 is compulsory. [7 x 3 = 21]

Question 31.
Differentiate Management from Administration.

Basis for Comparison Management Administration
Meaning An organised way of managing people and things of a business organisation is called the management. The process of administrating an organisation by a group of people is known as the administration.
Authority Middle and lower level. Top level
Role Executive Decisive
Concerned with Policy Implementation. Policy formulation.
Area of operation It works under administration. It has full control over the activities of the organisation.
Applicable for Profit making organisations, i.e. business organisations. Government offices,     military clubs, business enterprises,hospitals,religious and educational organisations.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 32.
State the importance of staffing.
Staffing refers to placement of right persons in the right jobs. Staffing includes selection of right persons, training to those needy persons, promotion of best persons, retirement of old persons, performance appraisal of all the personnel, and adequate remuneration of personnel. The success of any enterprise depends upon the successful performance of staffing function.

Question 33.
What are the various kinds of Capital Market? Explain.
The capital market is divided into two i.e., primary market and secondary market.

  • Primary Market: Primary market is a market for new issues or new financial claims.
  • Secondary Market: Secondary Market may be defined as the market for old securities, in the sense that securities which are previously issued in the primary market are traded here.

Question 34.
Explain Stag and Lame Duck.

  • Stag: A stag is a cautious speculator in the stock exchange. He applies for shares in new companies and expects to sell them at a premium.
  • Lame Duck: When a bear finds it difficult to fulfill his commitment, he is said to be struggling like a lame duck.

Question 35.
What is structured interview?
Under this method, a series of questions to be asked by the interviewer are pre-prepared by the interviewer and only these questions are asked in the interview.

Question 36.
What is need for market and explain the concept of marketing?
Market is needed for the producers and consumers. For this there are various concepts:

  • The products produced are to be marketed in the market for sales.
  • First create a consumer and then create products.
  • Keep respect and love customers than the products.
  • Customer is the king of the business.

Question  37.
What are the important legislations related to consumerism in India?
Consumer Legislation:

  • The Indian Contract Act, 1982
  • The Sale of Goods Act, 1982
  • The Essential Commodities Act, 1955
  • The Agricultural Products Grading and Marketing Act, 1937
  • The Prevention of Food Adulteration Act, 1954
  • Weights and Measures Act, 1958
  • The Trademark Act, 1999

Question 38.
What are the political environment factors?
Political and Legal environment – The framework for running a business is given by the political and legal environment.

  • Political stability is reflected by the following parameters like the election system, the law and order situation.
  • The image of the leader and the country in the international arena.
  • The constitution of the nation.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 39.
Distinguish between Negotiability and Assignability.

S.No. Basis of Difference Negotiability Assignability
1. Legal Ownership It passes to the transferee by mere endorsement in the case of a bearer instrument and by endorsement and delivery in the case of an order instrument. An assignment can be made by observing certain formalities. For instance, an instrument is to be made in writing, duly stamped and signed by the transferor or his agent.
2. Notice Notice is not necessary for the holder of negotiable instrument to claim the payment from the debtor. In case of actionable claim, notice of the assignment by the transferee regarding the transfer of debt to the debtor is necessary.
3. Nature of title Holder of negotiable instrument in due course gets a better title than even the transferor. It means that the transferee gets the instrument free from any defect existing in the title of the transferor or any prior party. The transferee’s title to the instrument is subject to the defects of the transferor’s title. In other words, defects in the title of the transferor pass on to the transferee too.
4. Consideration Consideration is presumed. The assignee has to prove the consideration for the transfer.

Question 40.
What do you understand by Issue of Securities at Premium?
When shares are issued at a price above the face or nominal value, they are said to be issued at a premium. For example, a share having the face value of Rs.10 is issued at Rs.12. Here, Rs.2 is the premium. The amount of share premium has to be transferred to an account called the ‘Securities Premium Account’.

Part – IV

Answer all the following questions. [7 x 5 = 35]

Question 41.
(a) Briefly explain different types of Directors.
Types of Directors as per Companies Act 2013:

  • Residential Director: According to Section 149(3) ofCompaniesAct2013, every company should appoint a director who has stayed in India for a total period of 182 days.
  • Independent Director: An independent director is an alternate director other than a Managing Director who is known as Whole-time director or Nominee director.
  • Small shareholder’s Director: Small shareholders can appoint a single director in a listed company.
  • Nominee Director: A director nominated by any financial institution in pursuance of the provisions of law.
  • Additional Directors: Any Individual can be appointed as Additional Directors by a company.
  • Alternate Directors: Alternate director is appointed by the Board of Directors, as a substitute who may be absent from India, for a period of 3 months.


(b) Describe the steps for promoting Entrepreneurial venture.
Steps for promoting entrepreneurial venture:

  • Selection of the product: An entrepreneur may select a product according to his capacity and motivation after a thorough scrutiny of micro and macro environment of business.
  • Selection of form of ownership: Entrepreneur has to choose the form of organisation suitable and appropriate for his venture namely family ownership, partnership and private company.
  • Selection of site: Entrepreneur has to choose suitable plot for starting his venture. The plot may be industrial site, land by the private people or housing board plot allotted.
  • Designing capital structure: The entrepreneurs has to determine the source of finance for funding the venture. It may be own savings, loan from friends, relatives or loan from banks.
  • Acquisition of Manufacturing know-how: Entrepreneur can acquire manufacturing know-how from government research laboratories and industrial consultants.
  • Preparation of project report: Project reports needs to be prepared according to the format prescribed in the loan application forms.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 42.
(a) Distinguish between an Entrepreneur and an Intrapreneur.

Basis of difference Entrepreneur Intrapreneur
Thinking Entrepreneur is a free thinker. Intrapreneur is forced to think independently but within scope of business activities undertaken in the enterprise.
Dependency Entrepreneur is an independent person. Intrapreneur is dependent on the entrepreneur. He is an employee.
Fund Mobilization Entrepreneur has to mobilize funds to finance the venture. Intrapreneur does not engage in fund mobilization. But can access funds mobilized by the entrepreneur.
Reward Entrepreneur is rewarded by profit for the risk bearing exercise. Intrapreneur does not share in profits of venture. But gets perquisites, salary, incentives, etc., for the service.
Risk Bearing Entrepreneur bears the risk involved in the venture undertaken. Intrapreneur does not bear any risk in the venture and does not even share the risk inherent in the project or work assigned. However Intrapreneur is accountable for the task or project assigned.
Entrepreneur is owner, and doesn’t report to anybody in the venture. Intrapreneur is a salaried employee. Intrapreneur works within control put in place in the organization and is made accountable for the activities undertaken.


(b) Explain the micro environmental factors of business.
Micro environmental factors are those, which are in the immediate environment of a business affecting its performance. These include the following:

  1. Suppliers: In any organisation the suppliers of raw materials and other inputs play a vital role. Timely procurement of materials from suppliers enables continuity in production and reduces the cost of production.
  2. Customers: The aim of any business is to satisfy the needs of its customers. The customer is the king of the business.
  3. Competitors: All organisations face competition at all levels local, national and global. Competitors maybe for the same product or for similar products.
  4. Financiers: The financiers of a business includes the debenture holders and financial institutions.
  5. Marketing Channel members: The marketing intermediaries serve as a connecting link between the business and its customers. The middlemen like dealers, wholesalers and retailers ensure transfer of product to customers.

Question 43.
(a) Describe the various strategies pursued in recent day’s marketers.
The market scenario in the world today is changing very rapidly.
Strategies of Recent Marketers:

  • Due to the development in information technology, transportation, liberalisation, their buying habits are varying.
  • In the globalised business environment, the marketer must move goods faster and quicker to satisfy the needs of the customer.
  • It is possible to carryout all the business transactions over an electronic network.
  • They use a variety of tools like computers, laptops, tablet or android phone devices to access different websites.


(b) How the market can be classified on the basis of Economics?
The Market can be classified on the basis of Economics as follows:
(a) Perfect Market: A market is said to be a perfect market, if it satisfies the following conditions:

  • Large number of buyers and sellers are there.
  • Prices should be uniform throughout the market.
  • Buyers and sellers have a perfect knowledge of market.
  • Goods can be moved from one place to another without restrictions.

(b) Imperfect Market: A market is said to be imperfect when

  • Products are similar but not identical.
  • Prices are not uniform.
  • There is lack of communication.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 44.
(a) Briefly explain the various types of tests.
(1) Prospectus:
Several tests are conducted in the selection process to ensure whether the candidate possesses the necessary qualifications.

(2) Ability Test: Ability test may be divided into:

  • Aptitude Test
  • Achievement Test
  • Intelligence Test
  • Judgment Test.

(3) Aptitude Test: Aptitude test is a test to measure suitability of the candidates for the post.

(4) Achievement Test: This test measures a candidate’s capacity to achieve in a particular field.

(5) Intelligence Test: Intelligence test is designed to measure a variety of mental ability, individual capacity of a candidate.

(6) Judgment Test: This test is conducted to test the presence of mind and reasoning capacity of the candidates.

(7) Personality Test: It refers to the test conducted to find out the non-intellectual traits of a candidate. It can be further divided into:

(8) Interest Test: Interest test measures a candidate’s extent of interest in a particular area. Projective

(9) Test: This test measures the candidate’s values, personality of the candidate.

(10) Attitude Test: measures candidate’s tendencies towards the people, situation, action and related things.


(b) Elaborate on the Managerial functions of Human Resource Management.
Managerial Functions of Human Resource Management:

  • Planning: Planning is deciding in advance what to do, how to do and who is to do it.
  • Organising: It includes division of work among employees by assigning each employee their duties, delegation of authority required.
  • Directing: It involves issue of orders and instructions along with guidance and motivation to get the best employees.
  • Controlling: The control process includes fixing of standards, measuring actual
    performance, comparing actual with standard laid down, measuring deviations and taking corrective actions.

Question 45.
(a) What are the functions of SEBI?
SEBI performs three key functions: quasi-legislative, quasi-judicial and quasi-executive.

  • Safeguarding the interests of investors by means of adequate education and guidance.
  • Regulating and controlling the business on stock markets.
  • Conduct inspection and inquiries of stock exchanges, intermediaries and self-regulating organizations.
  • Barring insider trading in securities.
  • Prohibiting deceptive and unfair methods used by financial intermediaries operating in securities market.
  • Registering and controlling the functioning of stock brokers, sub-brokers, share transfer agents, bankers, trustees, underwriters who are linked to securities market.
  • SEBI issues Guidelines and Instructions to businesses orgnisations for issue of shares.
  • Registering and controlling the functioning of collective investment schemes such as mutual funds.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium


(b) Explain the Benefits of Stock Exchange.

  • Economic Development: It increases the economic development by ensuring steady flow of savings for production.
  • Fund Raising Platform: It enables the well-managed companies to raise funds by issue of shares.

Benefits to the Company:

  • Enhances Goodwill or Reputation: Companies whose shares are quoted on a stock exchange enjoy greater goodwill and credit standing.
  • Raises huge funds: Stock exchange helps the companies to raise huge funds by issue of shares and debentures.

Benefits to Investors:

  • Liquidity: Stock exchange helps to convert his shares into cash quickly.
  • Investor protection: The stock exchange safeguards, investor’s interest by following strict rules and regulations.

Question 46.
(A) Explain the characteristics of Money Market.

1. Short-term Funds: It is a market purely for short-term funds or financial assets called near money.

2. Maturity Period: It deals with financial assets having a maturity period upto one year only.

3. Conversion of Cash: It deals with only those assets which can be converted into cash readily without loss and with minimum transaction cost.

4. No Formal Place: Generally, transactions take place through phone, i.e., oral communication. Relevant documents and written communications can be exchanged subsequently.

5. Sub-markets: It is not a single homogeneous market. It comprises of several sub-markets each specialising in a particular type of financing.

6. Role of Market: The components of a money market are the Central Bank, Commercial Banks. Commercial banks generally play a dominant role in this market.

7. Highly Organized Banking System: The Commercial Banks are the nerve centre of the whole money market. They are the principal suppliers of short-term funds.

8. Existence of Secondary Market: There should be an active secondary market for these instruments.

9. Demand and Supply of Funds: There should be a large demand and supply of short-term funds.

8. Wholesale Market: It is a wholesale market and the volume of funds or financial assets traded in the market is very large.

9. Flexibility:  Due to greater flexibility in the regulatory framework, there are constant endeavours for introducing new instruments.

10. Presence of a Central Bank:  The central bank keeps their cash reserves and provides them financial accommodation in difficulties by discounting their eligible securities.

(b) Briefly explain the functions of capital market.
(i) Savings and Capital Formation: In capital market, various types of securities help to mobilize savings from various sectors of population (Individuals, Corporate, Govt. etc.) The twin features of reasonable return and liquidity in stock exchange are definite incentives to the people to invest in securities. This accelerates the capital formation in the country.

(ii) Permanent Capital: The existence of a capital market/stock exchange enables companies to raise permanent capital. The investors cannot commit their funds for a permanent period but companies require funds permanently.

(iii) Industrial Growth: The stock exchange is a central market through which resources are transferred to the industrial sector of the economy.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(iv) Ready and Continuous Market: The stock exchange provides a central convenient place where buyers and sellers can easily purchase and sell securities.

(v) Reliable Guide to Performance: The capital market serves as a reliable guide to the performance and financial position of corporate, and thereby promotes efficiency.

(vi) Proper Channelization of Funds: The prevailing market price of a security and relative yield are the guiding factors for the people to channelize their funds in a particular company.

(vii) Provision of Variety of Services: The financial institutions functioning in the capital market provide a variety of services such as grant of long term and medium term loans to entrepreneurs.

(viii) Development of Backward Areas: Capital Markets provide funds for projects in backward areas. This facilitates economic development of backward areas.

(ix) Foreign Capital: Capital markets make possible to generate foreign capital. Indian firms are able to generate capital funds from overseas markets by way of bonds and other securities.

(x) Easy Liquidity: With the help of secondary market investors can sell off their holdings and convert them into liquid cash.

Question 47.
(a) Enumerate the different kinds of financial markets.
Financial Markets can be classified in different ways.
On the Basis of Type of Financial Claim

  • Debt Market is the financial market for trading in Debt Instrument (i.e. Government Bonds or Securities, Corporate Debentures or Bonds).
  • Equity Market is the financial market for trading in Equity Shares of Companies.

On the Basis of Maturity of Financial Claim

  • Money Market is the market for short term financial claim (usually one year or less) E.g. Treasury Bills, Commercial Paper, Certificates of Deposit.
  • Capital Market is the market for long term financial claim more than a year; E.g. Shares, Debentures.

On the Basis of Time of Issue of Financial Claim

  • Primary Market is a term used to include all the institutions that are involved in the sale of securities for the first time by the issuers (companies). Here the money from investors goes directly to the issuers.
  • Secondary Market is the market for securities that are already issued. Stock Exchange is an important institution in the secondary market.

On the Basis of Timing of Delivery of Financial Claim

  • Cash/Spot Market is a market where the delivery of the financial instrument and payment of cash occurs immediately, i.e. settlement is completed immediately.
  • Forward or Futures Market is a market where the delivery of asset and payment of cash takes place at a pre-determined time frame in future.

On the Basis of the Organizational Structure of the Financial Market

  • Exchange-Traded Market is a centralized organization (stock exchange) with standardized procedures.
  • Over-the-Counter Market is a decentralized market (outside the stock exchange) with customized procedures.


(b) Explain the various functions of management.
Main Functions:
(i) Planning:- Planning is the primary function of management. Planning is a constructive reviewing of future needs so that present actions can be adjusted in view of the established goal.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(ii) Organising:- Organising is the process of establishing harmonious relationship among the members of an organisation and the creation of network of relationship among them.

(iii) Staffing:- Staffing function comprises the activities of selection and placement of competent personnel.

(iv) Directing:- Directing denotes motivating, leading, guiding and communicating with subordinates on an ongoing basis in order to accomplish pre-set goals.

(v) Controlling:- Controlling is performed to evaluate the performance of employees and deciding increments and promotion decisions.

(vi) Co-ordination:- Co-ordination is the synchronization of the actions of all individuals, working in the enterprise in different capacities.

(vii) Motivating:- The goals are achieved with the help of motivation. Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers.

Subsidiary Functions:

  • Innovation:- Innovation includes developing new material, new products, new techniques in production, new package, new design of a product and cost reduction.
  • Representation:- A manager has to act as representative of a company. It is the duty of every manager to have good relation with others.
  • Decision-making:- Every employee of an organisation has to take a number of decisions every day. Decision-making helps in the smooth functioning of an organisation.
  • Communication:- Communication is the transmission of human thoughts, views or opinions from one person to another person. Communication helps the regulation of job and co-ordinates the activities.

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