{"id":88171,"date":"2021-06-19T15:22:19","date_gmt":"2021-06-19T09:52:19","guid":{"rendered":"https:\/\/kseebsolutions.guru\/?p=88171"},"modified":"2021-06-30T13:24:30","modified_gmt":"2021-06-30T07:54:30","slug":"1st-puc-business-studies-question-bank-chapter-4","status":"publish","type":"post","link":"https:\/\/kseebsolutions.guru\/1st-puc-business-studies-question-bank-chapter-4\/","title":{"rendered":"1st PUC Business Studies Question Bank Chapter 4 Business Services"},"content":{"rendered":"

Karnataka 1st PUC Business Studies Question Bank Chapter 4 Business Services<\/h2>\n

One Mark Questions<\/span><\/p>\n

Question 1.
\nState any one feature of service.
\nAnswer:
\nIntangibility.<\/p>\n

Question 2.
\nName any one category of Services.
\nAnswer:
\nBusiness Services.<\/p>\n

\"1st<\/p>\n

Question 3.
\nState any one difference between goods and services.
\nAnswer:<\/p>\n\n\n\n\n
Goods<\/strong><\/td>\nBad<\/strong><\/td>\n<\/tr>\n
Homogenous<\/td>\nHeterogenous<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Question 4.
\nState any one business service.
\nAnswer:
\nBanking.<\/p>\n

Question 5.
\nWhich Act regulates Banking Services in India?
\nAnswer:
\nIndian Baking Regulates Act 1949.<\/p>\n

Question 6.
\nName any one type of Bank.
\nAnswer:
\nCommercial bank.<\/p>\n

Question 7.
\nWhich is the central bank of our country?
\nAnswer:
\nRBI (Reserve Bank of India).<\/p>\n

\"1st<\/p>\n

Question 8.
\nState any one type of bank account.
\nAnswer:
\nCurrent account.<\/p>\n

Question 9.
\nMention any one function of Commercial Bank.
\nAnswer:
\nAcceptance of deposit.<\/p>\n

Question 10.
\nState any one benefit of E-banking.
\nAnswer:
\nProvides 24 hours 365 days a year services to the customers of the bank.<\/p>\n

Question 11.
\nState any one fundamental principle of Insurance.
\nAnswer:
\nPrinciple of Indemnity.<\/p>\n

Question 12.
\nMention any one function of Insurance.
\nAnswer:
\nRisk sharing.<\/p>\n

Question 13.
\nState any one type of Insurance.
\nAnswer:
\nLife Insurance.<\/p>\n

Question 14.
\nState any one type of General Insurance.
\nAnswer:
\nFire insurance.<\/p>\n

Question 15.
\nState a type of Life Insurance Policy.
\nAnswer:
\nWhole life policy.<\/p>\n

\"1st<\/p>\n

Question 16.
\nWho is an Insured?
\nAnswer:
\nThe person whose risk is insured is called insured.<\/p>\n

Question 17.
\nWho is an Insurer?
\nAnswer:
\nThe firm which insures the risk of loss is known as an insurer.<\/p>\n

Question 18.
\nWhat is Insurance Policy\u2019
\nAnswer:
\nThe agreement (or) contract is put in writing and is known as \u2018policy’.<\/p>\n

Question 19.
\nWhat Is Insurance Premium\u2019
\nAnswer:
\nShip or hull insurance.<\/p>\n

Question 20.
\nState a type of Marine Insurance Policy.
\nAnswer:
\nLloyd’s Policy.<\/p>\n

Question 21.
\nWhich type of marine Insurance coven losses caused by damage to the ship?
\nAnswer:
\nShip or hull insurance.<\/p>\n

Question 22.
\nState any one Marlnelt.
\nAnswer:
\nThe ship attacked by fire or enemies.<\/p>\n

Question 23.
\nWhat is Cargolnsuran?
\nAnswer:
\nThe Cargo being transported by ship is subjected to many risks. Thus, the insurance policy is to cover the risks of Cargo.<\/p>\n

Question 24.
\nWhat is Hull or Ship Insurance?
\nAnswer:
\nThe ship is exposed to many dangers at sea. Thus, the insurance policy is for indemnifying these problems or risks.<\/p>\n

Question 25.
\nWhat is Freight Insurance?
\nAnswer:
\nIf Cargo doesn\u2019t reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. This insurance the losses.<\/p>\n

Question 26.
\nState any one type of communication services that help business
\nAnswer:
\nPostal services.<\/p>\n

\"1st<\/p>\n

Question 27.
\nState any one category postal facilities provided by the Indian Postal Department.
\nAnswer:
\nKisan Vikas Patra.<\/p>\n

Question 28.
\nState any one financial facility provided by the Indian Postal Department
\nAnswer:
\nFinancial facilities.<\/p>\n

Question 29.
\nState any one type of allied services provided by the Indian Postal Department.
\nAnswer:
\nGreeting post.<\/p>\n

Question 30.
\nState any one type of Telecom Service.
\nAnswer:
\nCable services.<\/p>\n

Question 31.
\nState any one type of Warehouse.
\nAnswer:
\nPrivate warehouse.<\/p>\n

Question 32.
\nGive an example for Government Warehouses.
\nAnswer:
\nFood corporation.<\/p>\n

Question 33.
\nMention any one function of warehousing.
\nAnswer:
\nConsolidation.<\/p>\n

Question 34.
\nHQ Expand EFT.
\nAnswer:
\nEFT – Electronic Fund Transfer.<\/p>\n

\"1st<\/p>\n

Question 35.
\nExpand RTGS.
\nAnswer:
\nReal-Time Gross Settlement.<\/p>\n

Question 36.
\nKQ Expand ATM.
\nAnswer:
\nATM-Automated Teller Machine.<\/p>\n

Question 37.
\nExpand KVP.
\nAnswer:
\nKisan Vikas Patra.<\/p>\n

Question 38.
\nExpand DTH.
\nAnswer:
\nDTH – Direct to Home.<\/p>\n

Question 39.
\nExpand SMS, IFSC, MIS, MICR, SCSS. IMO, EPS, EMO, RTUS.
\nAnswer:
\nSMS – Short Message Services
\nIFSC – Indian Financial System Code
\nMIS – Management Information System
\nMICR – Magnetic Ink Character Recognition
\nSCSS – Senior Citizen Saving Scheme
\nIMO – Instant Money Order
\nEPS – Express Parcel Service
\nEMO – Electronic Money Order.
\nRTUS – Real Time Gross Settlement<\/p>\n

\"1st<\/p>\n

Two Mark Questions<\/span><\/p>\n

Question 1.
\nState any two differences between Goods and Services.
\nAnswer:
\n\"1st<\/p>\n

Question 2.
\nGive the meaning of Business Services.
\nAnswer:
\nEnterprises for the conduct of their activities.<\/p>\n

Question 3.
\nGive the meaning of Banking.
\nAnswer:
\nThis means accepting, for the purpose of lending and government of deposits of money from the public.<\/p>\n

Question 4.
\nMention any two types of Banks.
\nAnswer:
\nCommercial Hanks and Co-operative Hank.<\/p>\n

Question 5.
\nWhat are Commercial Banks?
\nAnswer:
\nThe institutions which are dealing in money accepting and lending of money to the public or any other.<\/p>\n

Question 6.
\nWhat are Co-operative Banks?
\nAnswer:
\nIt is meant essentially for providing cheap credit to its members and is governed by the provisions of state cooperative societies.<\/p>\n

It means conducting banking operations through electronic means or devices such as computers mobile, ATMs, etc.<\/p>\n

Question 7.
\nState any two examples for Specialized Banks. (March -N -2018)
\nAnswer:
\nForeign Exchange Bank; Industrial Banks.<\/p>\n

\"1st<\/p>\n

Question 8.
\nState any two functions of Comm&clal Banks.
\nAnswer:
\nAcceptance of deposit and lending of funds.<\/p>\n

Question 9.
\nWhat is e-banking? (March-S-(2018-2019))
\nAnswer:
\nIt means conducting banking operations through electronic means or devices such as computers mobile, ATMs, etc.<\/p>\n

Question 10.
\nState two benefits of e-banking to customers.
\nAnswer:
\n(a) It provides 24 hours, 365 days a year service to customers.
\n(b) There is a very low incidence of error.<\/p>\n

Question 11.
\nState any two benefits of c-banking to banks.
\nAnswer:
\n(a) The operating cost per unit services is lower for banks.
\n(b) It provides a competitive advantage to the bank.<\/p>\n

Question 12.
\nGive the meaning of Insurance-
\nAnswer:
\nInsurance is a contract between two parties where one party agrees to pay the compensation to another party against the loss which may arise due to Uncertainty.<\/p>\n

Question 13.
\nState the Principles of Insurance applicable to Life Insurance.
\nAnswer:
\n(a) Principle of utmost good faith.
\n(b) Principle of insurable interest.<\/p>\n

\"1st<\/p>\n

Question 14.
\nState any two functions of Insurance.
\nAnswer:
\n(a) Providing certainty.
\n(b) Protection.<\/p>\n

Question 15.
\nWhat do you mean by the principle of \u2018Utmost god faith\u2019
\nAnswer:
\nThe insurance contract must be signed by both pat-tices (insures and insured) in absolute good faith or belief or trust. The person getting insured must willingly disclose his complete information regarding the subject matter.<\/p>\n

Question 16.
\nWhat is meant by the \u2018Principle of Indemnity?
\nAnswer:
\nThe contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. Its purpose is to give compensation in case of any damage or loss.<\/p>\n

Question 17.
\nWhat doyoUnean by \u2018Insurable interest?
\nAnswer:
\nThe insured should be gained by the existence or safety and lore by the destruction of the subject matter of insurance.<\/p>\n

Question 18.
\nWhat do you mean by \u2018ProxiinateCause\u2019?
\nAnswer:
\nIt means when a toss is caused by more than one cause, the proximate or the nearest cause should be taken into consideration to decide the liability of the insurer.<\/p>\n

Question 19.
\nWhat is \u2018Subrogation\u2019?
\nAnswer:
\nIt means when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insured.<\/p>\n

Question 20.
\nWhat do you mean by \u2018Mitigation of Loss\u2019?
\nAnswer:
\nThe insured must try his level best to minimize the loss of his insured property in case of uncertainty. He mustn\u2019t neglect irresponsibly as his property has been insured.<\/p>\n

Question 21.
\nGive the meaning principle of Contribution\u2019.
\nAnswer:
\nIf the insured has taken out more than one policy on the same subject matter then he can claim the compensation only to the extent of actual loss either from all insurers in a proportion or from any insurers.<\/p>\n

Question 22.
\nWhat do you mean by Life Insurance?
\nAnswer:
\nIt is a contract in which the insures in consideration of a certain premium either in a lump sum or by other periodical payments, agrees to pay the assured a sum of money, on the happening of a specified event contingent on human life or at the expiry of a certain period.<\/p>\n

\"1st<\/p>\n

Question 23.
\nName any two types of Life Insurance Policies.
\nAnswer:
\n(a) Whole life policy
\n(b) Joint life policy.<\/p>\n

Question 24.
\nWhat do you mean \u2018Whole Life Policy
\nAnswer:
\nThe amount payable to the insured will not be paid before the death of the assured. It is payable only to the beneficiaries or heir of the deceased.<\/p>\n

Question 25.
\nWhat do you mean by \u2018Fndow Life insurance policy
\nAnswer:
\nThe insure undertakes to pay a specific sum when the insured attains a particular age or on his death whichever is earlier.<\/p>\n

Question 26.
\nWhat do you mean by \u2018Joint Life Policy?
\nAnswer:
\nThis policy is taken up by two or more persons. The premium is paid jointly or by either of them in installments or lump sum. The assured sum is payable upon the death of any one person to the other survivors.<\/p>\n

Question 27.
\nWhat do you mea1 Annuity Policy?
\nAnswer:
\nThe assured sum of money is payable after the assured attains a certain age in monthly, quarterly half-yearly, or annual installments.<\/p>\n

Question 28.
\nWhat is \u2018Fire Insurance\u2019?
\nAnswer:
\nIt is a contract whereby the insures, in consideration of the premium paid, undertakes to make good only Loss or damage caused by fire during specified in the policy.<\/p>\n

\"1st<\/p>\n

Question 29.
\nWhat is \u2018Marine Insurance\u2019?
\nAnswer:
\nA contract in which as per the agreement the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses.<\/p>\n

Question 30.
\nState the Importance of communication services to business.
\nAnswer:
\nIt is helpful to the business for establishing Links with the outside world viz, suppliers, customer competitors, etc.<\/p>\n

Question 31.
\nName the two facilities available under Postal Services. (March – N – 2019)
\nAnswer:
\n(a) Financial facilities
\n(b) Mail facilities.<\/p>\n

Question 32.
\nState any two financial facilities provided by postal services?
\nAnswer:
\nKiran Vikas Palra and Public Provident Fund.<\/p>\n

Question 33.
\nWhat do you mean by Telecom Services?
\nAnswer:
\nIt is a service provided by a telecommunications provider or a specified set of user information transfer capabilities provided to a group of users.<\/p>\n

Question 34.
\nMention any two types of Telecom Services.
\nAnswer:
\n(a) Cellular mobile services
\n(b) Radio paging services.<\/p>\n

Question 35.
\nWhat arc transport services?
\nAnswer:
\nIt comprises freight services together with supporting and auxiliary services by all modes of transportation, i.e. rail, road, air, and sea for the movement of goods and international carriage of passengers.<\/p>\n

Question 36.
\nState any two types of warehouses.
\n(a) Private warehousing
\n(b) Public warehousing<\/p>\n

Question 37.
\nWhat are Private Warehouses?
\nAnswer:
\nThe warehouses operated, owned, or learned by a company handling their own goods, such as retail chain stores or multi-brand, multi-product companies.<\/p>\n

Question 38.
\nWhat is Public VY’areihouses?
\nAnswer:
\nIt can be used for the storage of goods by traders, manufactures, or any member of the public after the payment of the storage fee.<\/p>\n

Question 39.
\nWhat are Bonded Warehouses?
\nAnswer:
\nThese are licensed by the government to accept imported goods prior to payment of tax and customs duty.<\/p>\n

\"1st<\/p>\n

Question 40.
\nWhat are Government Warehouses?
\nAnswer:
\nThese are fully owned and managed by the government. It manages them through organizations set up in the public sector.<\/p>\n

Question 41.
\nState any two functions of Warehousing.
\nAnswer:
\n(a) Consolidation
\n(b) Break the bulk.<\/p>\n

Question 42.
\nWhat do you mean by Consolidation function in warehousing?
\nAnswer:
\nThe warehouse receives and consolidates, materials goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.<\/p>\n

Four Mark Questions<\/span><\/p>\n

Question 1.
\nBriefly explain any four features of services.
\nAnswer:
\nA service is any activity of benefit that one party can offer to another that is essentially intangible and doesn\u2019t result in the ownership of anything.<\/p>\n

\"1st<\/p>\n

Its production may or may not be tied to a physical product.
\n(a) Intangibility: Services are intangible we cannot touch them are not physical objects. A consumer feels that he has the right and opportunity to see, touch, hear, smell or taste the goods before they buy them. This is not applicable to services. The buyer does not have an opportunity to touch smell and taste the services. While selling or promoting a service one has to concentrate on the satisfaction and benefit.<\/p>\n

(b) Perishability: Services are deeds, performance, or acts whose consumption takes place simultaneously hence services cannot be stored, saved, returned, or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer.<\/p>\n

(c) Heterogeneity: Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with an experienced hand, customer, time, and firm. Service buyers are aware of this variability. So, the service firms should make an effort to deliver high and consistent quality in their service.<\/p>\n

(d) Inseparability or Simultaneous Production and Consumption: Services are typically produced and consumed simultaneously. In the case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, in the case of services, it cannot be separated from the service provider. Thus, the service provider would become a part of a service.<\/p>\n

(e) Lack of Ownership: Lack of ownership is a basic difference between the service industry and a product industry because a customer may only have access to or use a facility but does not have any rights to secure ownership of the service. Payment is for the use of, access to, or hires of items.<\/p>\n

Question 2.
\nBriefly explain any four differences between goods and services.
\nAnswer:<\/p>\n\n\n\n\n\n\n\n\n\n
Goods<\/strong><\/td>\nServices<\/strong><\/td>\n<\/tr>\n
A physical commodity<\/td>\nA process or activity<\/td>\n<\/tr>\n
Tangible<\/td>\nIntangible<\/td>\n<\/tr>\n
Homogenous<\/td>\nHeterogeneous<\/td>\n<\/tr>\n
Production and distribution are separated from their consumption<\/td>\nProduction, distribution, and consumption are simultaneous processes<\/td>\n<\/tr>\n
Can be stored<\/td>\nCannot be stored<\/td>\n<\/tr>\n
Transfer of ownership is possible<\/td>\nTransfer of ownership is not possible<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"1st<\/p>\n

Question 3.
\nGive the riding of services. Briefly explain the broad categories of services.
\nAnswer:
\nA service is any activity of benefit that one party can offer to another that is essentially intangible and doesn\u2019t result in the ownership of anything:
\n(a) Business Services: Business services are those services that are used by business enterprises for the conduct of their activities. For example, banking, insurance, transportation, warehousing, and communication services.<\/p>\n

(b) Social Services: Social services are those services that are generally provided voluntarily in pursuit of certain social goals. These social goals may be to improve the standard of living for weaker sections of society, to provide educational services to their children, etc. For example, health care and education services provided by certain Non-government Organisations (NGOs) and government agencies.<\/p>\n

(c) Personal Services: Personal services are those services that are experienced differently by different customers. These services cannot be consistent in nature. They will differ depending upon the service provider.<\/p>\n

Question 4.
\nBriefly explain different types of Banks. (March – S – 2019)
\nAnswer:
\n(a) Commercial Banks: Commercial banks are institutions dealing in money. These are governed by Indian Banking Regulation Act 1949 and according to it, banking means accepting deposits of money from the public for the purpose of fending or investment.<\/p>\n

(b) Cooperative Banks: Cooperative Banks are governed by the provisions of the State Cooperative Societies Act and meant essentially for providing cheap credit to their members. It is an important source of rural credit i.e., agricultural financing in India.<\/p>\n

(c) Specialised Banks: Specialised banks are foreign exchange banks, industrial banks, development banks, export-import banks catering to specific needs of these unique activities. These banks provide financial aid to industries, heavy turnkey projects, and foreign trade.<\/p>\n

(d) Central Bank: The Central bank of any country supervises controls and regulates the activities of all the commercial banks of that country. It also acts as a government banker. It controls and coordinates the currency and credit policies of any country.<\/p>\n

Question 5.
\nExplain briefly the functions of the commercial hank,
\nAnswer:
\nThe main functions of commercial banks are accepting deposits from the public and advancing them loans. However, besides these functions, there are many other functions that these banks perform.<\/p>\n

All these functions can be divided under the following heads:
\n(a) Accepting Deposits: The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit their savings with the banks.<\/p>\n

\"1st<\/p>\n

Generally, there are three types of deposits which are as follows:<\/p>\n

    \n
  1. Saving Bank Account: These accounts are introduced by the bank to mobilize small savings of low and middle-income group of people. The \u2018saving account\u2019 is generally opened in the bank by salaried persons or by persons who have a fixed regular income.<\/li>\n
  2. Current account: This account is opened by businessmen who have a higher number of regular transactions with the bank.<\/li>\n
  3. Recurring Deposit Account: In a recurring deposit account, a certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.<\/li>\n
  4. Fixed Deposit Account: If the money deposited by the customer with a bank for a fixed period of time for a fixed rate of interest. It is repayable on the expiry of a specified period of time.<\/li>\n<\/ol>\n

    (b) Giving Loans: The second important function of commercial banks is to advance loans to their customers. Banks charge interest from the borrowers and this is the main source of their income<\/p>\n

    Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called credit creation by commercial banks.<\/p>\n

    Banks generally give the following types of loans and advances:
    \n1. Bank Overdraft: An overdrive; V’\u2019 an advance given by the bank allowing a customer to overdraw his current account up to an agreed amount. Interest is charged at an agreed rate only on the amount overdrawn.<\/p>\n

    2. Cash Credits: Cash credit is a short-term cash loan to a company. It is a financial accommodation under which an advance is granted on a separate account called a cash credit account up to a specified limit.<\/p>\n

    3. Demand Loans: These are loans that can be recalled on demand by the banks. The entire loan amount is paid in a lump sum by crediting it to the loan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect.<\/p>\n

    4. Short-term Loans: These loans may be given as personal loans, loans to finance working capital, or as priority sector advances. These are made against some security and the entire loan amount is transferred to the loan account of the borrower. Discounting of Bills of Exchange: It is short-term financial assistance extended by the bank usually to the businesses that have a current account with the bank. When a bill of exchange is presented before the bank for encashment, the bank credits the amount to the customer\u2019s account after deducting some discount. On maturity of the bill, the payment is received by the bank from the drawee.<\/p>\n

    \"1st<\/p>\n

    (c) Investment of Funds: The banks invest their surplus funds in three types of securities as Government securities, other approved securities, and other securities.<\/p>\n

      \n
    1. Government securities include both, central and state governments, such as treasury bills, national savings certificates, etc.<\/li>\n
    2. Other securities include securities of state-associated bodies like electricity boards, housing boards, debentures of land development banks units of UTI, shares of regional rural banks, etc.<\/li>\n<\/ol>\n

      (d) Agency Functions: Banks function in the form of agents and representatives of their customers. Customers give their consent for performing such functions. The important j functions of these types are as follows:<\/p>\n

        \n
      1. Banks collect cheques, drafts, bills of exchange, and dividends of the shares for their customers.<\/li>\n
      2. Banks make payment for their clients and at times accept the bills of exchange: of their customers for which payment is made at the fixed time.<\/li>\n
      3. Banks pay insurance premiums to their customers. Besides this, they also deposit loan installments, income-tax, interest, etc. as per directions.<\/li>\n
      4. Banks purchase and sell securities, shares, and debentures on behalf of their customers.<\/li>\n
      5. Banks arrange to send money from one place to another for the convenience of their customers.<\/li>\n<\/ol>\n

        (e) Miscellaneous Functions: Besides the functions mentioned above, banks perform many other functions of general utility which are as follows:<\/p>\n

          \n
        1. Banks make arrangements of lockers for the safe custody of valuable assets of their customers such as gold, silver, loyal documents, etc.<\/li>\n
        2. Banks give references for their customers.<\/li>\n
        3. Banks collect necessary and useful statistics relating to trade and industry.<\/li>\n
        4. For facilitating foreign trade, banks undertake to sell and purchase foreign exchange.<\/li>\n
        5. Banks advise their clients relating to investment decisions as specialists.<\/li>\n
        6. Bank does the underwriting of shares and debentures also.<\/li>\n
        7. Banks issue letters of credit.<\/li>\n
        8. During natural calamities, banks are highly useful in mobilizing funds and donations.<\/li>\n<\/ol>\n

          Question 6.
          \nWhat is e-banking? What are the advantages of e-banking?
          \nAnswer:
          \nE-banking or Electronic banking means the conduct of banking operations through electronic means or devices such as computers, telephone, mobile phone, ATM, etc.<\/p>\n

          Benefits of E-Banking Services:
          \n(a) E-banking provides 24 hours, 365 days a year services to the customer of the bank.
          \n(b) The operating cost per unit services is lower for the banks.
          \n(c) It offers convenience to customers as they are not required to go to the bank\u2019s premises.
          \n(d) There is a very low incidence of errors.
          \n(e) The customer can obtain funds at any time from ATM machines.
          \n(f) The customer can easily transfer the funds from one place to another place electronically.<\/p>\n

          Question 7.
          \nWhat are the benefits of e-banking to customers?
          \nAnswer:
          \n(a) E-banking provides 24 hours, 365 days a year services to the customer of the bank.
          \n(b) It offers convenience to customers as they are not required to go to the bank\u2019s premises.
          \n(c) The customer can obtain funds at any time from ATM machines.
          \n(d) credit cards and debit cards enable the customers to obtain discounts from retail outlets.
          \n(e) The customer can easily transfer the funds from one place to another place electronically.<\/p>\n

          Question 8.
          \nBriefly explain the main elements of a life insurance contract.
          \nAnswer:
          \n(a) The life insurance contract must have all the essentials of a valid contract. Certain elements like offer and acceptance, free consent, capacity to enter into a contract, lawful consideration, and lawful object must be present for the contract to be valid.<\/p>\n

          (b) The contract of life insurance is a contract of utmost good faith. The assured should be honest and truthful in giving information to the insurance company. He must disclose all material facts about his health to the insurer. It is his duty to disclose accurately all material facts known to him even if the insurer does not ask him.<\/p>\n

          (c) In life insurance, the insured must have an insurable interest in the life assured. Without insurable interest the contract of insurance is void. In the case of life insurance, insurable interest must be present at the time when the insurance is affected. It is not necessary that the assured should have an insurable interest at the time of maturity also.<\/p>\n

          \"1st<\/p>\n

          (d) Life insurance contract is not a contract of indemnity. The life of a human being cannot be compensated and only a specified sum of money is paid. That is why the amount payable in life insurance on the happening of the event is fixed in advance. The sum of money payable is fixed, at the time of entering into the contract. A contract of life insurance, therefore, is not a contract of indemnity.<\/p>\n

          Question 9.
          \nBriefly explain (a) fire insurance (b) marine insurance
          \nAnswer:
          \nFire Insurance: It is a contract whereby the insurer, on payment of premium by the insured, undertakes to compensate the insured for the loss or damage suffered by reason of certain defined subject matter being damaged or destroyed by fire.<\/p>\n

          It is a contract of indemnity, that is, the insured cannot claim anything more than the value of property lost or damaged by fire or the amount of policy, whichever is lower.<\/p>\n

          Its contents are:<\/p>\n

            \n
          • Name of the insured<\/li>\n
          • Name of the insurer<\/li>\n
          • Description of the property insured<\/li>\n
          • Sum insured<\/li>\n
          • Period of insurance<\/li>\n
          • Amount of premium<\/li>\n
          • Risks insured against.<\/li>\n<\/ul>\n

            Marine Insurance: It is an agreement (contract) by which the insurance company (also known as an underwriter) agrees to indemnify the owner of a ship or cargo against risks, which are incidental to marine adventures:<\/p>\n

              \n
            • Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.<\/li>\n
            • Cargo insurance: The cargo while being transported by ship is subject to many risks. These may be at port, i.e. risk of theft, lost goods or on the voyage, etc. Thus, an insurance policy can be issued to cover such risks to cargo.<\/li>\n
            • Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. Freight insurance is for reimbursing the loss of freight to the shipping, company, i.e. the insured.<\/li>\n<\/ul>\n

              Question 10.
              \nBriefly explain any four types of Life Insurance Policies.
              \nAnswer:
              \n(a) Whole Life Policy: In this kind of policy, the amount payable to the insured will not be paid before the death of the assured. The sum then becomes payable only to the beneficiaries or heir of the deceased.<\/p>\n

              (b) Endowment Life Assurance Policy: The insurer undertakes to pay a specified sum when the insured attains a particular age or on his death whichever is earlier. The sum is payable to his legal heir\/s or nominee named therein in case of death of the assured.<\/p>\n

              (c) Joint Life Policy: This policy is taken up by two or more persons. The premium is paid jointly or by either of them in installments or lump sum. The assured sum or policy money is payable upon the death of anyone person to the other survivor or survivors.<\/p>\n

              (d) Annuity Policy: Under this policy, the assured sum or policy money is payable after the assured attains a certain age in monthly, quarterly, and half-yearly or annual installments. The premium is paid in installments over a certain period or a single premium may be paid by the assured. This is useful to those who prefer a regular income after a certain age.<\/p>\n

              \"1st<\/p>\n

              Question 11.
              \nWhat is marine insurance? Briefly explain the three subject matters of marine insurance.
              \nAnswer:
              \nMarine Insurance: A marine insurance contract is an agreement whereby the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. Marine insurance provides protection against loss by marine perils or perils of the sea.<\/p>\n

              The three subject matter of marine insurance:
              \n(a) Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.
              \n(b) Cargo insurance: The cargo while being transported by ship is subject to many risks. These may be at port, i.e. risk of theft, lost goods or on the voyage, etc. Thus, an insurance policy can be issued to cover such risks to cargo.
              \n(c) Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. Freight insurance is for reimbursing the loss of freight to the shipping company, i.e. the insured.<\/p>\n

              Question 12.
              \nExplain briefly different Postal Services.
              \nAnswer:
              \n(a) Financial Facilities: These facilities are provided through the post office\u2019s savings schemes.<\/p>\n

              They are:
              \n(a) Public Provident Fund (PPF)
              \n(b) Kisan Vikas Patra
              \n(c) National Saving Certificates
              \n(d) Monthly Income Schemes
              \n(e) Recurring deposits
              \n(f) Savings account
              \n(g) Time deposits
              \n(h) Money order facility.<\/p>\n

              (b) Mail Services: Indian postal services are mainly concerned with the collection, sorting,-and distribution of letters, parcels, packets, etc. Besides, a number of other services are also provided to the general public as well as business enterprises.
              \n(a) Speed Post.
              \n(b) Registered Post.
              \n(c) Value Payable Post (VPP).
              \n(d) Electronic Money Order (EMO).
              \n(e) Instant Money Order (1MO).
              \n(f) E-Post.
              \n(g) Express Parcel Service.
              \n(h) Elect\u00econic Mail Service.<\/p>\n

              Question 13.
              \nExplain any four Telecom services.
              \nAnswer:
              \n(a) Cellular Mobile Services: These are all types of mobile telecom services including voice and non-voice messages, data services, and PCO services utilizing any type of network equipment within their service area. They can also provide direct interconnectivity with any other type of telecom service provider.<\/p>\n

              (b) Radio Paging Services: A pager is a wireless telecommunication device that receives and displays numeric or text messages, or receives and announces voice messages. One-way pagers can only receive messages, while response pagers and two-way pagers can also acknowledge, reply to, and originate messages using an internal transmitter.<\/p>\n

              (c) Fixed Line Services: A landline telephone refers to a phone which uses a solid medium telephone line such as a metal wire or fiber optic cable for transmission as distinguished from a mobile cellular line that uses radio waves for transmission.<\/p>\n

              \"1st<\/p>\n

              (d) Cable Services: Cable television is a system of distributing television programs to subscribers via radio frequency (RF) signals transmitted through coaxial cables or light pulses through fiberoptic cables.<\/p>\n

              Question 14.
              \nBriefly explain any four types of warehouses.
              \nAnswer:
              \n(a) Private warehouses: These are operated, owned, or leased by a company handling their own goods, such as retail chain stores or multi-brand multi-product companies. As a general rule, an efficient warehouse is planned around a material handling system in order to encourage maximum efficiency of product movement.<\/p>\n

              (b) Public warehouses: It can be used for storage of goods by traders, manufacturers, or any member of the public after the payment of a storage fee or charges. The government regulates the operation of these warehouses by issuing licenses for them to private parties.<\/p>\n

              (c) Bonded warehouses: Bonded warehouses are licensed by the government to accept imported goods prior to payment of tax and customs duty. These are goods which are imported from other countries. Importers are not permitted to remove goods from the docks or the airport till customs duty is paid.<\/p>\n

              (d) Government warehouses: These warehouses are fully owned and managed by the government. The government manages them through organizations set up in the public sector.<\/p>\n

              \"1st<\/p>\n

              Question 15.
              \nBriefly explain any four functions of warehousing. (March – N – 2018)
              \nAnswer:
              \nUsually, goods, are not sold or consumed immediately after production. They are held in stock to be available as and when required. Special arrangements must be made for the storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed.<\/p>\n

              Functions of Warehousing
              \n(a) Consolidation: The warehouse receives and consolidates materials\/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.<\/p>\n

              (b) Break the Bulk: The warehouse divides the bulk quantity of goods received from the production plants into smaller quantities and then transported according to the requirements of clients to their places of business.<\/p>\n

              (c) Stock Piling Goods or Raw Materials which are not required immediately for sale or manufacturing are stored in warehouses to be made available to business depending on customers’ demand. This type of warehouse is also known as the storehouse of surplus goods.<\/p>\n

              (d) Value Added Services: Provision of value-added services such as in transit mixing, packaging, and labeling is also a function of modem warehousing.<\/p>\n

              \"1st<\/p>\n

              (e) Price Stabilization: Warehousing performs the function of stabilizing prices by adjusting the supply of goods according to demand. Financing warehouse owners provide loans to the owners on the security of goods and further supply goods on credit terms to customers. The warehouse keepers issue a receipt when goods are kept in the warehouse. This receipt can be used as security to get loans from banks and owners. In this way, it also helps in financing.<\/p>\n

              Eight Mark Questions<\/span><\/p>\n

              Question 1.
              \nGive the meaning of Services and explain the nature of services.
              \nAnswer:
              \nA service is any activity of benefit that one party can offer to another that is essentially intangible and doesn\u2019t result in the ownership of anything.<\/p>\n

              Its production may or may not be tied to a physical product.
              \n(a) Intangibility: Services are intangible we cannot touch them are not physical objects. A consumer feels that he has the right and opportunity to see, touch, hear, smell or taste the goods before they buy them. This is not applicable to services. The buyer does not have an opportunity to touch smell and taste the services. While selling or promoting a service one has to concentrate on the satisfaction and benefit.<\/p>\n

              (b) Perishability: Services are deeds, performance, or acts whose consumption takes place simultaneously hence services cannot be stored, saved, returned, or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer.<\/p>\n

              (c) Heterogeneity: Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with an experienced hand, customer, time, and firm. Service buyers are aware of this variability. So, the service firms should make an effort to deliver high and consistent quality in their service.<\/p>\n

              (d) Inseparability or Simultaneous Production and Consumption: Services are typically produced and consumed simultaneously. In the case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, in the case of services, it cannot be separated from the service provider. Thus, the service provider would become a part of a service.<\/p>\n

              (e) Lack of Ownership: Lack of ownership is a basic difference between the service industry and a product industry because a customer may only have access to or use a facility but does not have any rights to secure ownership of the service. Payment is for the use of, access to, or hires of items.<\/p>\n

              \"1st<\/p>\n

              Question 2.
              \nWhat are Commercial Banks? Explain their different functions.
              \nAnswer:
              \nThe main functions of commercial banks are accepting deposits from the public and advancing them loans. However, besides these functions, there are many other functions that these banks perform.<\/p>\n

              All these functions can be divided under the following heads:
              \n(a) Accepting Deposits: The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit their savings with the banks.<\/p>\n

              Generally, there are three types of deposits which are as follows:<\/p>\n

                \n
              1. Saving Bank Account: These accounts are introduced by the bank to mobilize small savings of low and middle-income groups of people. The \u2018saving account\u2019 is generally opened in the bank by salaried persons or by persons who have a fixed regular income.<\/li>\n
              2. Current account: This account is opened by businessmen who have a higher number of regular transactions with the bank.<\/li>\n
              3. Recurring Deposit Account: In a recurring deposit account, a certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.<\/li>\n
              4. Fixed Deposit Account: If the money deposited by the customer with a bank for a fixed period of time for a fixed rate of interest. It is repayable on the expiry of a specified period of time.<\/li>\n<\/ol>\n

                (b) Giving Loans: The second important function of commercial banks is to advance loans to their customers. Banks charge interest from the borrowers and this is the main source of their income<\/p>\n

                Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called credit creation by commercial banks.<\/p>\n

                Banks generally give the following types of loans and advances:
                \n1. Bank Overdraft: An overdrive; V’\u2019 an advance given by the bank allowing a customer to overdraw his current account up to an agreed amount. Interest is charged at an agreed rate only on the amount overdrawn.<\/p>\n

                2. Cash Credits: Cash credit is a short-term cash loan to a company. It is a financial accommodation under which an advance is granted on a separate account called a cash credit account up to a specified limit.<\/p>\n

                3. Demand Loans: These are loans that can be recalled on demand by the banks. The entire loan amount is paid in a lump sum by crediting it to the loan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect.<\/p>\n

                4. Short-term Loans: These loans may be given as personal loans, loans to finance working capital, or as priority sector advances. These are made against some security and the entire loan amount is transferred to the loan account of the borrower. Discounting of Bills of Exchange: It is short-term financial assistance extended by the bank usually to the businesses that have a current account with the bank. When a bill of exchange is presented before the bank for encashment, the bank credits the amount to the customer\u2019s account after deducting some discount. On maturity of the bill, the payment is received by the bank from the drawee.<\/p>\n

                \"1st<\/p>\n

                (c) Investment of Funds: The banks invest their surplus funds in three types of securities as Government securities, other approved securities, and other securities.<\/p>\n

                  \n
                1. Government securities include both, central and state governments, such as treasury bills, national savings certificates, etc.<\/li>\n
                2. Other securities include securities of state-associated bodies like electricity boards, housing boards, debentures of land development banks units of UTI, shares of regional rural banks, etc.<\/li>\n<\/ol>\n

                  (d) Agency Functions: Banks function in the form of agents and representatives of their customers. Customers give their consent for performing such functions. The important j functions of these types are as follows:<\/p>\n

                    \n
                  1. Banks collect cheques, drafts, bills of exchange, and dividends of the shares for their customers.<\/li>\n
                  2. Banks make payment for their clients and at times accept the bills of exchange: of their customers for which payment is made at the fixed time.<\/li>\n
                  3. Banks pay insurance premiums to their customers. Besides this, they also deposit loan installments, income-tax, interest, etc. as per directions.<\/li>\n
                  4. Banks purchase and sell securities, shares, and debentures on behalf of their customers.<\/li>\n
                  5. Banks arrange to send money from one place to another for the convenience of their customers.<\/li>\n<\/ol>\n

                    (e) Miscellaneous Functions: Besides the functions mentioned above, banks perform many other functions of general utility which are as follows:<\/p>\n

                      \n
                    1. Banks make arrangements of lockers for the safe custody of valuable assets of their customers such as gold, silver, loyal documents, etc.<\/li>\n
                    2. Banks give references for their customers.<\/li>\n
                    3. Banks collect necessary and useful statistics relating to trade and industry.<\/li>\n
                    4. For facilitating foreign trade, banks undertake to sell and purchase foreign exchange.<\/li>\n
                    5. Banks advise their clients relating to investment decisions as specialists.<\/li>\n
                    6. Bank does the underwriting of shares and debentures also.<\/li>\n
                    7. Banks issue letters of credit.<\/li>\n
                    8. During natural calamities, banks are highly useful in mobilizing funds and donations.<\/li>\n<\/ol>\n

                      Question 3.
                      \nExplain the principles of Insurance. (March – (N)(S) – 2018) (March – (N)(S)
                      \nAnswer:
                      \nThe main functions of commercial banks are accepting deposits from the public and advancing them loans. However, besides these functions, there are many other functions that these banks perform.<\/p>\n

                      All these functions can be divided under the following heads:
                      \n(a) Accepting Deposits: The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit their savings with the banks.<\/p>\n

                      Generally, there are three types of deposits which are as follows:<\/p>\n

                        \n
                      1. Saving Bank Account: These accounts are introduced by the bank to mobilize small savings of low and middle-income groups of people. The \u2018saving account\u2019 is generally opened in the bank by salaried persons or by persons who have a fixed regular income.<\/li>\n
                      2. Current account: This account is opened by businessmen who have a higher number of regular transactions with the bank.<\/li>\n
                      3. Recurring Deposit Account: In a recurring deposit account, a certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.<\/li>\n
                      4. Fixed Deposit Account: If the money deposited by the customer with a bank for a fixed period of time for a fixed rate of interest. It is repayable on the expiry of a specified period of time.<\/li>\n<\/ol>\n

                        \"1st<\/p>\n

                        (b) Giving Loans: The second important function of commercial banks is to advance loans to their customers. Banks charge interest from the borrowers and this is the main source of their income<\/p>\n

                        Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called credit creation by commercial banks.<\/p>\n

                        Banks generally give the following types of loans and advances:
                        \n1. Bank Overdraft: An overdrive; V’\u2019 an advance given by the bank allowing a customer to overdraw his current account up to an agreed amount. Interest is charged at an agreed rate only on the amount overdrawn.<\/p>\n

                        2. Cash Credits: Cash credit is a short-term cash loan to a company. It is a financial accommodation under which an advance is granted on a separate account called a cash credit account up to a specified limit.<\/p>\n

                        3. Demand Loans: These are loans that can be recalled on demand by the banks. The entire loan amount is paid in a lump sum by crediting it to the loan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect.<\/p>\n

                        4. Short-term Loans: These loans may be given as personal loans, loans to finance working capital, or as priority sector advances. These are made against some security and the entire loan amount is transferred to the loan account of the borrower. Discounting of Bills of Exchange: It is short-term financial assistance extended by the bank usually to the businesses that have a current account with the bank. When a bill of exchange is presented before the bank for encashment, the bank credits the amount to the customer\u2019s account after deducting some discount. On maturity of the bill, the payment is received by the bank from the drawee.<\/p>\n

                        (c) Investment of Funds: The banks invest their surplus funds in three types of securities as Government securities, other approved securities, and other securities.<\/p>\n

                          \n
                        1. Government securities include both, central and state governments, such as treasury bills, national savings certificates, etc.<\/li>\n
                        2. Other securities include securities of state-associated bodies like electricity boards, housing boards, debentures of land development banks units of UTI, shares of regional rural banks, etc.<\/li>\n<\/ol>\n

                          (d) Agency Functions: Banks function in the form of agents and representatives of their customers. Customers give their consent for performing such functions. The important j functions of these types are as follows:<\/p>\n

                            \n
                          1. Banks collect cheques, drafts, bills of exchange, and dividends of the shares for their customers.<\/li>\n
                          2. Banks make payment for their clients and at times accept the bills of exchange: of their customers for which payment is made at the fixed time.<\/li>\n
                          3. Banks pay the insurance premiums to their customers. Besides this, they also deposit loan installments, income-tax, interest, etc. as per directions.<\/li>\n
                          4. Banks purchase and sell securities, shares, and debentures on behalf of their customers.<\/li>\n
                          5. Banks arrange to send money from one place to another for the convenience of their customers.<\/li>\n<\/ol>\n

                            (e) Miscellaneous Functions: Besides the functions mentioned above, banks perform many other functions of general utility which are as follows:<\/p>\n

                              \n
                            1. Banks make arrangements of lockers for the safe custody of valuable assets of their customers such as gold, silver, loyal documents, etc.<\/li>\n
                            2. Banks give references for their customers.<\/li>\n
                            3. Banks collect necessary and useful statistics relating to trade and industry.<\/li>\n
                            4. For facilitating foreign trade, banks undertake to sell and purchase foreign exchange.<\/li>\n
                            5. Banks advise their clients relating to investment decisions as specialists.<\/li>\n
                            6. Bank does the underwriting of shares and debentures also.<\/li>\n
                            7. Banks issue letters of credit.<\/li>\n
                            8. During natural calamities, banks are highly useful in mobilizing funds and donations.<\/li>\n<\/ol>\n

                              Question 4.
                              \nDescribe various types of Insurance.
                              \nAnswer:
                              \nInsurance may be classified as follows:
                              \nLife Insurance: It may be defined as a contract in which the insurer in consideration of a certain premium, agrees to pay to the assured, or to the person for whose benefit the policy is taken, the assured sum of money, on the happening of a specified event contingent on the human life or at the expiry of a certain period.<\/p>\n

                              There are various types of life insurance policies like:
                              \n(a) Whole Life Policy
                              \n(b) Endowment Life Assurance Policy
                              \n(c) Joint Life Policy
                              \n(d) Annuity Policy
                              \n(e) Children\u2019s Endowment Policy.<\/p>\n

                              Fire Insurance: It is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period up to the amount specified in the policy. The fire insurance policy is generally taken for a period of one year after which it is to be renewed from time to time.<\/p>\n

                              \"1st<\/p>\n

                              A claim for loss by fire is considered valid only if it satisfies the following two conditions:
                              \n(a) There must be actual loss
                              \n(b) Fire must be accidental and non-intentional.<\/p>\n

                              Marine Insurance: A marine insurance contract is an agreement whereby the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. Marine insurance provides protection against loss by marine perils or perils of the sea.<\/p>\n

                              There are three things involved in marine insurance:
                              \n(a) Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.
                              \n(b) Cargo insurance: The cargo while being transported by ship is subject to many risks. These may be at port i.e., risk of theft, lost goods or on the voyage, etc. Thus, an insurance policy can be issued to cover such risks to cargo.
                              \n(c) Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. Freight insurance is for reimbursing the loss of freight to the shipping company i.e., the insured.<\/p>\n

                              Question 5.
                              \nWrite a detailed note on communication services.
                              \nAnswer:
                              \nThe postal services can be classified into two types:
                              \n(a) Mail services
                              \n(b) Financial services<\/p>\n

                              Mail Services: Indian postal services are mainly concerned with the collection, sorting, and distribution of letters, parcels, packets, etc. Besides, a number of other services are also provided to the general public as well as business enterprises.
                              \n1. Speed Post: Under this service, letters, documents and parcels are delivered faster i.e., within a fixed time frame. This facility is available at specific post offices.<\/p>\n

                              2. Registered Post: To ensure that our mail is definitely delivered to the addressee otherwise it should come back to us. In such situations, the post office offers a registered post facility ‘ through which we can send our letters and parcels.<\/p>\n

                              3. Value Payable Post (VPP): The value payable system is designed to meet the requirements of persons who wish to pay for articles sent to them at the time of receipt of the articles or of the bills relating to them, and also to meet the requirements of traders and others who wish to recover, through the agency of the post office the value of article supplied by them.<\/p>\n

                              4. Electronic Money Order (EMO): EMO is the Money Order issued by the computerized s post office for the payment of a sum of money to the \u201cPayee\u201d by the \u201cRemitter\u201d electronically. Data is transmitted electronically to the destination Post Office. Money is – paid at the doorstep of the payee by cash. The receiver has to submit identity proof.<\/p>\n

                              \"1st<\/p>\n

                              5. Instant Money Order (IMO): IMO is an instant web-based money transfer service through Post Offices (IMO Centre) in India between two resident individuals in the Indian Territory. The receiver has submitted 16 digit code as well as an identity proof.<\/p>\n

                              6. E-Post: E-Post sends messages as a soft copy through the internet and at the destination, it , will be delivered to the addressee in the form of a hard copy.<\/p>\n

                              7. Express Parcel Service: Express parcel is the ideal service for sending the parcel up to ( 3 5 kg within India. It is a service where the parcel will be picked from the doorstep of the customer and delivered to the doorstep of the receiver.<\/p>\n

                              8. Electronic Mail Service: Electronic mail is a method of exchanging messages from any author to one or more recipients.<\/p>\n

                              Financial Services:
                              \n1. Public Provident Fund (PPF): It is a savings-cum-tax-saving instrument in India. It also serves as a retirement-planning tool for many of those who do not have any structured pension plan covering them.<\/p>\n

                              2. Kisan Vikas Patra (KVP): It is a saving scheme that was announced by the Government of India that doubles the money invested in eight years and seven months.<\/p>\n

                              3. National Savings Certificate (NSC): National Savings Certificates popularly known as 1 NSC is a saving bond, primarily used for small saving and income tax saving investment in India.<\/p>\n

                              4. Senior Citizen Savings Scheme (SCSS): The account may be opened by an individual<\/p>\n

                                \n
                              • Who has attained the age of 60 years or above on the date of opening of the account?<\/li>\n
                              • Who has attained the age 55 years or more but less than 60 years and has retired.<\/li>\n<\/ul>\n

                                5. Recurring Deposit Account: In a recurring deposit account certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.<\/p>\n

                                6. Saving Bank Account: These are introduced by the bank to mobilize small savings of low and middle-income groups of people. The \u2018saving account\u2019 is generally opened in the bank by salaried persons or by persons who have a fixed regular income.<\/p>\n

                                7. Fixed Deposit Account: Fixed deposit means the money deposited by a customer with a bank for a fixed period of time for a fixed rate of interest. Fixed deposit is repayable on the expiry of a specified period of time.<\/p>\n

                                Question 6.
                                \nExplain in detail th\u00e9 war\u00e9houling services
                                \nAnswer:
                                \nUsually, goods are not sold or consumed immediately after production. They are held in stock to be available as and when required. Special arrangements must be made for the storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed.<\/p>\n

                                Functions of Warehousing
                                \n(a) Consolidation: The warehouse receives and consolidates materials\/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.<\/p>\n

                                (b) Break the Bulk: The warehouse divides the bulk quantity of goods received from the production plants into smaller quantities and then transported according to the requirements of clients to their places of business.<\/p>\n

                                (c) Stock Piling Goods or Raw Materials which are not required immediately for sale or manufacturing are stored in warehouses to be made available to business depending on customers’ demand. This type of warehouse is also known as the storehouse of surplus goods.<\/p>\n

                                (d) Value Added-Services: Provision of value-added services such as in transit mixing, packaging and labeling is also a function of modem warehousing.<\/p>\n

                                \"1st<\/p>\n

                                (e) Price Stabilisation: Warehousing performs the function of stabilizing prices by adjusting the supply of goods according to demand. Financing warehouse owners provide loans to the owners on the security of goods and further supply goods on credit terms to customers. The warehouse keepers issue a receipt when goods are kept in the warehouse. This receipt can be used as security to get loans from banks and owners. In this way, it also helps in financing.<\/p>\n

                                Question 7.
                                \nGive the meaning of warehousing. Explain the different types of warehousing.
                                \nAnswer:
                                \nThe warehouse was initially viewed as a static unit for keeping and storing goods in a scientific and systematic manner so as to maintain their original quality, value, and usefulness.
                                \n(a) Private Warehouses: These are operated, owned, or leased by a company handling their own goods, such as retail chain stores or multi-brand, multi-product companies. As a general rule, an efficient warehouse is planned around a material handling system in order to encourage maximum efficiency of product movement.<\/p>\n

                                (b) Public Warehouses: It can be used for storage of goods by traders, manufacturers, or any member of the public after the payment of a storage fee or charges. The government regulates the operation of these warehouses by issuing licenses for them to private parties.<\/p>\n

                                (c) Bonded Warehouses: These are licensed by the government to accept imported goods prior to payment of tax and customs duty. These are goods which are imported from other countries. Importers are not permitted to remove goods from the docks or the airport till customs duty is paid.<\/p>\n

                                (d) Government Warehouses: These warehouses are fully owned and managed by the government. The government manages them through organizations set up in the public sector.<\/p>\n

                                Question 8.
                                \nExplain different types of banks.
                                \nAnswer:
                                \n(a) Commercial Banks: Commercial banks are institutions dealing in money. These are governed by Indian Banking Regulation Act 1949 and according to it, banking means accepting deposits of money from the public for the purpose of fending or investment.<\/p>\n

                                (b) Cooperative Banks: Cooperative Banks are governed by the provisions of the State Cooperative Societies Act and meant essentially for providing cheap credit to their members. It is an important source of rural credit i.e., agricultural financing in India.<\/p>\n

                                (c) Specialised Banks: Specialised banks are foreign exchange banks, industrial banks, development banks, export-import banks catering to specific needs of these unique activities. These banks provide financial aid to industries, heavy turnkey projects, and foreign trade.<\/p>\n

                                (d) Central Bank: The Central bank of any country supervises controls and regulates the activities of all the commercial banks of that country. It also acts as a government banker. It controls and coordinates the currency and credit policies of any country.<\/p>\n

                                Question 9.
                                \nBriefly explain the fundamental principles of insurance applicable to life insurance.
                                \nAnswer:
                                \n(a) Principle of Utmost Good Faith: According to this principle, the insurance contract must be signed by both parties (i.e. insurer and insured) in absolute good faith or belief or trust. The person getting measured must willingly disclose and surrender to the insurer his complete true information regarding the subject matter of insurance.<\/p>\n

                                \"1st<\/p>\n

                                (b) Principle of Insurable Interest: As per this principle, the insured must have an insurable interest in the subject matter of insurance. It means the insured should gain by the existence or safety and lose by the destruction of the subject matter of insurance.<\/p>\n

                                1st PUC Business Studies Business Services Textbook Questions and Answers<\/h3>\n

                                Multiple Choice One Mark Questions<\/span><\/p>\n

                                Question 1.
                                \nDTH services are provided by
                                \n(a) Transport companies
                                \n(b) Banks
                                \n(c) Cellular companies
                                \n(d) None of the above
                                \nAnswer:
                                \n(c) Cellular companies<\/p>\n

                                Question 2.
                                \nThe benefits of public warehousing include
                                \n(a) Control
                                \n(b) Flexibility
                                \n(c) Dealer relationship
                                \n(d) None of the above
                                \nAnswer:
                                \n(b) Flexibility<\/p>\n

                                Question 3.
                                \nWhich of the following is not a function of insurance?
                                \n(a) Risk sharing
                                \n(b) Assist in capital formation
                                \n(c) Lending of funds
                                \n(d) None of the above
                                \nAnswer:
                                \n(b) Assist in capital formation<\/p>\n

                                Question 4.
                                \nWhich of the following is not applicable in a life insurance contract?
                                \n(a) Conditional contract
                                \n(b) Unilateral contract
                                \n(c) Indemnity contract
                                \n(d) None of the above
                                \nAnswer:
                                \n(c) Indemnity contract<\/p>\n

                                \"1st<\/p>\n

                                Question 5.
                                \nCWC stands for
                                \n(a) Central Water Commission
                                \n(b) Central Warehousing Commission
                                \n(c) Central Warehousing Corporation
                                \n(d) Central Water Corporation
                                \nAnswer:
                                \n(c) Central Warehousing Corporation<\/p>\n

                                Question 6.
                                \nThe contract of life insurance is
                                \n(a) A contract of utmost good faith with an insurable interest
                                \n(b) An indemnity contract
                                \n(c) One-way contract
                                \n(d) None of the above
                                \nAnswer:
                                \n(b) An indemnity contract<\/p>\n

                                Question 7.
                                \nWhich one of these is not the function of warehousing?
                                \n(a) Break the bulk
                                \n(b) Consolidation
                                \n(c) Price stabilization
                                \n(d) Advertising
                                \nAnswer:
                                \n(d) Advertising<\/p>\n

                                Question 8.
                                \nWhich of the following Is not a type of bank?
                                \n(a) Commercial bank
                                \n(b) Co-operative bank
                                \n(c) Central bank
                                \n(d) Savings bank
                                \nAnswer:
                                \n(d) Savings bank<\/p>\n

                                Short Answer Questions<\/span><\/p>\n

                                Question 1.
                                \nWhat is e-banking? What are its benefits to banks? 4
                                \nAnswer:
                                \nE-banking or Electronic banking means the conduct of banking operations through electronic means or devices such as computers, telephone, mobile phone, ATM, etc.<\/p>\n

                                Benefits to Banks
                                \n(a) E-banking provides a competitive advantage to the bank.
                                \n(b) E-banking provides an unlimited network to the bank and is not limited to the number of
                                \nbranches. Any PC connected to a modem and a telephone having an internet connection can provide cash withdrawal needs of the customer.
                                \n(c) Load on branches can be considerably reduced by establishing a centralized database and by taking over some of the accounting functions.<\/p>\n

                                Question 2.
                                \nExplain briefly the principles of insurance with suitable examples.
                                \nAnswer:
                                \n(a) Principle of Utmost Good Faith: According to this principle, the insurance contract must be signed by both parties (i.e. insurer and insured) in absolute good faith or belief or trust. The person getting insured must willingly disclose and surrender to the insurer his complete true information regarding the subject matter of insurance.<\/p>\n

                                Example: If any person has taken a life insurance policy by hiding the fact that he is a cancer patient and later on if he dies because of cancer then the Insurance Company can refuse to pay the compensation as the fact was hidden by the insured.<\/p>\n

                                (b) Principle of Insurable Interest: As per this principle, the insured must have an insurable interest in the subject matter of insurance. It means the insured should gain by the existence or safety and lose by the destruction of the subject matter of insurance.<\/p>\n

                                Example: If a person has taken the loan against the security of factory premises then the lender can take the fire insurance policy of that factory without being the owner of the factory because he has a financial interest in the factory premises.<\/p>\n

                                \"1st<\/p>\n

                                (c) Principle of Indemnity: According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. The insurance contract is not made for making a profit else its sole purpose is to give compensation in case of any damage or loss.<\/p>\n

                                Example: A person insured a car for 5 lakhs against damage or an accident case. Due to the accident, he suffered a loss of 3 lakhs, then the insurance company will compensate him 3 lakhs not only the policy amount i.e. but 5 lakhs as the purpose behind it is also to compensate not to make a profit.<\/p>\n

                                (d) Principle of Contribution: According to this principle, the insured can claim the compensation only to the extent of actual loss either from all insurers in a proportion or from any one insurer.<\/p>\n

                                For example; A person gets his house insured against fire for 50,000 with insurer A and for 25,000 with insurer B. A loss of 37,500 occurred. Then A is liable to pay 25,000 and B is liable to pay 12,500.<\/p>\n

                                (e) Principle of Subrogation: According to the principle of subrogation, when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer.<\/p>\n

                                Example: If a person receives Rs. 1 lakh for his or her damaged stock, then the ownership of the stock will be transferred to the insurance company and the person will hold no control over the stock.<\/p>\n

                                (f) Principle of Mitigation of Loss: According to the Principle of mitigation of loss, the insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a fire outbreak or blast, etc. The insured must not neglect and behave irresponsibly during such events just because the property is insured.<\/p>\n

                                Example: If a person has insured his house against fire, then, in case of fire, he or she should take all possible measures to minimize the damage to the property exactly in the manner he or she would have done in absence of the insurance:<\/p>\n

                                (g) Principle of Causa Proxima: Principle of Causa Proxima (a Latin phrase), or in simple English words, the Principle of Proximate (i.e. Nearest) Cause, means when a loss is caused by more than one causes, the proximate or the nearest cause should be taken into consideration to decide the liability of the insurer.<\/p>\n

                                Example: If an individual Suffers a loss in a fire accident, then this should already be a part of the contract in order for this person to claim the insurance amount.<\/p>\n

                                Question 3.
                                \nWhat is warehousing? Explain its functions. (March – N – 2019)
                                \nAnswer:
                                \nUsually, goods, are not sold or consumed immediately after production. They are held in stock to be available as and when required. A special arrangement must be made for the storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed.<\/p>\n

                                Functions of Warehousing
                                \n(a) Consolidation: The warehouse receives and consolidates materials\/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.<\/p>\n

                                (b) Break the Bulk: The warehouse divides the bulk quantity of goods received from the production plants into smaller quantities and then transported according to the requirements of clients to their places of business.<\/p>\n

                                (c) Stock Piling Goods or Raw Materials which are not required immediately for sale or manufacturing are stored in warehouses to be made available to business depending on customers’ demand. This type of warehouse is also known as the storehouse of surplus goods.<\/p>\n

                                (d) Value Added Services: Provision of value-added services such as in transit mixing, packaging, and labeling is also a function of modem warehousing.<\/p>\n

                                (e) Price Stabilization: Warehousing performs the function of stabilizing prices by adjusting the supply of goods according to demand. Financing warehouse owners provide loans to the owners on the security of goods and further supply goods on credit terms to customers. The warehouse keepers issue a receipt when goods are kept in the warehouse. This receipt can be used as security to get loans from banks and owners. In this way, it also helps in financing.<\/p>\n

                                Long Answer Questions<\/span><\/p>\n

                                Question 1.
                                \nWhat are services? Explain their distinct characteristics or features?
                                \nAnswer:
                                \nA service is any activity of benefit that one party can offer to another that is essentially intangible and doesn\u2019t result in the ownership of anything.<\/p>\n

                                Its production may or may not be tied to a physical product.
                                \n(a) Intangibility: Services are intangible we cannot touch them are not physical objects. A consumer feels that he has the right and opportunity to see, touch, hear, smell or taste the goods before they buy them. This is not applicable to services. The buyer does not have an opportunity to touch smell and taste the services. While selling or promoting a service one has to concentrate on the satisfaction and benefit.<\/p>\n

                                \"1st<\/p>\n

                                (b) Perishability: Services are deeds, performance, or acts whose consumption takes place simultaneously hence services cannot be stored, saved, returned, or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer.<\/p>\n

                                (c) Heterogeneity: Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with an experienced hand, customer, time, and firm. Service buyers are aware of this variability. So, the service firms should make an effort to deliver high and consistent quality in their service.<\/p>\n

                                (d) Inseparability or Simultaneous Production and Consumption: Services are typically produced and consumed simultaneously. In the case of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later. But, in the case of services, it cannot be separated from the service provider. Thus, the service provider would become a part of a service.<\/p>\n

                                (e) Lack of Ownership: Lack of ownership is a basic difference between the service industry and a product industry because a customer may only have access to or use a facility but does not have any rights to secure ownership of the service. Payment is for the use of, access to, or hires of items.<\/p>\n

                                Question 2.
                                \nExplain the functions of commercial banks with an example of each. (March – S – 2018)
                                \nAnswer:
                                \nThe main functions of commercial banks are accepting deposits from the public and advancing them loans. However, besides these functions, there are many other functions that these banks perform.<\/p>\n

                                All these functions can be divided under the following heads:
                                \n(a) Accepting Deposits: The most important function of commercial banks is to accept deposits from the public. Various sections of society, according to their needs and economic condition, deposit their savings with the banks.<\/p>\n

                                \"1st<\/p>\n

                                Generally, there are three types of deposits which are as follows:<\/p>\n

                                  \n
                                1. Saving Bank Account: These accounts are introduced by the bank to mobilize small savings of low and middle-income groups of people. The \u2018saving account\u2019 is generally opened in the bank by salaried persons or by persons who have a fixed regular income.<\/li>\n
                                2. Current account: This account is opened by businessmen who have a higher number of regular transactions with the bank.<\/li>\n
                                3. Recurring Deposit Account: In a recurring deposit account, a certain fixed amount is invested every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.<\/li>\n
                                4. Fixed Deposit Account: If the money deposited by the customer with a bank for a fixed period of time for a fixed rate of interest. It is repayable on expiry of a specified period of time.<\/li>\n<\/ol>\n

                                  (b) Giving Loans: The second important function of commercial banks is to advance loans to their customers. Banks charge interest from the borrowers and this is the main source of their income<\/p>\n

                                  Banks advance loans not only on the basis of the deposits of the public rather they also advance loans on the basis of depositing the money in the accounts of borrowers. In other words, they create loans out of deposits and deposits out of loans. This is called credit creation by commercial banks.<\/p>\n

                                  Banks generally give the following types of loans and advances:
                                  \n1. Bank Overdraft: An overdrive; V’\u2019 an advance given by the bank allowing a customer to overdraw his current account up to an agreed amount. Interest is charged at an agreed rate only on the amount overdrawn.<\/p>\n

                                  2. Cash Credits: Cash credit is a short-term cash loan to a company. It is a financial accommodation under which an advance is granted on a separate account called a cash credit account up to a specified limit.<\/p>\n

                                  3. Demand Loans: These are loans that can be recalled on demand by the banks. The entire loan amount is paid in a lump sum by crediting it to the loan account of the borrower, and thus entire loan becomes chargeable to interest with immediate effect.<\/p>\n

                                  \"1st<\/p>\n

                                  4. Short-term Loans: These loans may be given as personal loans, loans to finance working capital, or as priority sector advances. These are made against some security and the entire loan amount is transferred to the loan account of the borrower. Discounting of Bills of Exchange: It is short-term financial assistance extended by the bank usually to the businesses that have a current account with the bank. When a bill of exchange is presented before the bank for encashment, the bank credits the amount to the customer\u2019s account after deducting some discount. On maturity of the bill, the payment is received by the bank from the drawee.<\/p>\n

                                  (c) Investment of Funds: The banks invest their surplus funds in three types of securities as Government securities, other approved securities, and other securities.<\/p>\n

                                    \n
                                  1. Government securities include both, central and state governments, such as treasury bills, national savings certificates, etc.<\/li>\n
                                  2. Other securities include securities of state-associated bodies like electricity boards, housing boards, debentures of land development banks units of UTI, shares of regional rural banks, etc.<\/li>\n<\/ol>\n

                                    (d) Agency Functions: Banks function in the form of agents and representatives of their customers. Customers give their consent for performing such functions. The important j functions of these types are as follows:<\/p>\n

                                      \n
                                    1. Banks collect cheques, drafts, bills of exchange, and dividends of the shares for their customers.<\/li>\n
                                    2. Banks make payment for their clients and at times accept the bills of exchange: of their customers for which payment is made at the fixed time.<\/li>\n
                                    3. Banks pay the insurance premiums to their customers. Besides this, they also deposit loan installments, income-tax, interest, etc. as per directions.<\/li>\n
                                    4. Banks purchase and sell securities, shares, and debentures on behalf of their customers.<\/li>\n
                                    5. Banks arrange to send money from one place to another for the convenience of their customers.<\/li>\n<\/ol>\n

                                      (e) Miscellaneous Functions: Besides the functions mentioned above, banks perform many other functions of general utility which are as follows:<\/p>\n

                                        \n
                                      1. Banks make arrangements of lockers for the safe custody of valuable assets of their customers such as gold, silver, loyal documents, etc.<\/li>\n
                                      2. Banks give references for their customers.<\/li>\n
                                      3. Banks collect necessary and useful statistics relating to trade and industry.<\/li>\n
                                      4. For facilitating foreign trade, banks undertake to sell and purchase foreign exchange.<\/li>\n
                                      5. Banks advise their clients relating to investment decisions as specialists.<\/li>\n
                                      6. Bank does the underwriting of shares and debentures also.<\/li>\n
                                      7. Banks issue letters of credit.<\/li>\n
                                      8. During natural calamities, banks are highly useful in mobilizing funds and donations.<\/li>\n<\/ol>\n

                                        Question 3.
                                        \nWrite a detailed note on various facilities offered by the Indian Postal Department.
                                        \nAnswer:
                                        \nThe postal services can be classified into two types:
                                        \n(a) Mail services
                                        \n(b) Financial services<\/p>\n

                                        Mail Services: Indian postal services are mainly concerned with the collection, sorting, and distribution of letters, parcels, packets, etc. Besides, a number of other services are also provided to the general public as well as business enterprises.
                                        \n1. Speed Post: Under this service, letters, documents and parcels are delivered faster i.e., within a fixed time frame. This facility is available at specific post offices.<\/p>\n

                                        \"1st<\/p>\n

                                        2. Registered Post: To ensure that our mail is definitely delivered to the addressee otherwise it should come back to us. In such situations, the post office offers a registered post facility ‘ through which we can send our letters and parcels.<\/p>\n

                                        3. Value Payable Post (VPP): The value payable system is designed to meet the requirements of persons who wish to pay for articles sent to them at the time of receipt of the articles or of the bills relating to them, and also to meet the requirements of traders and others who wish to recover, through the agency of the post office the value of article supplied by them.<\/p>\n

                                        4. Electronic Money Order (EMO): EMO is the Money Order issued by the computerized s post office for the payment of a sum of money to the \u201cPayee\u201d by the \u201cRemitter\u201d electronically. Data is transmitted electronically to the destination Post Office. Money is – paid at the doorstep of the payee by cash. The receiver has to submit identity proof.<\/p>\n

                                        5. Instant Money Order (IMO): IMO is an instant web-based money transfer service through Post Offices (IMO Centre) in India between two resident individuals in Indian Territory. The receiver has submitted 16 digit code as well as identity proof.<\/p>\n

                                        6. E-Post: E-Post sends messages as a soft copy through the internet and at the destination, it, will be delivered to the addressee in the form of a hard copy.<\/p>\n

                                        7. Express Parcel Service: Express parcel is the ideal service for sending the parcel up to 35 kg within India. It is a service where the parcel will be picked from the doorstep of the customer and delivered to the doorstep of the receiver.<\/p>\n

                                        8. Electronic Mail Service: Electronic mail is a method of exchanging messages from any author to one or more recipients.<\/p>\n

                                        Financial Services:
                                        \n1. Public Provident Fund (PPF): It is a savings-cum-tax-saving instrument in India. It also serves as a retirement-planning tool for many of those who do not have any structured pension plan covering them.<\/p>\n

                                        2. Kisan Vikas Patra (KVP): It is a saving scheme that was announced by the Government of India that doubles the money invested in eight years and seven months.<\/p>\n

                                        3. National Savings Certificate (NSC): National Savings Certificates popularly known as 1 NSC is a saving bond, primarily used for small saving and income tax saving investment in India.<\/p>\n

                                        4. Senior Citizen Savings Scheme (SCSS): The account may be opened by an individual<\/p>\n