Class 11 Finance Important Chapter 1 Basic of Finance

Class 11 Finance Important Chapter 1 Basic of Finance Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 11 Finance Important Solutions and select need one. AHSEC Class 11 Finance Additional Notes English Medium Download PDF. HS 1st Year Finance Important Solutions in English.

Class 11 Finance Important Chapter 1 Basic of Finance

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 11 Banking Additional Question Answer are part of All Subject Solutions. Here we have given HS 1st Year Banking Important Notes in English for All Chapters, You can practice these here.

Basic of Finance

Chapter: 1

IMPORTANT QUESTION AND ANSWER

Answer the Following Question:

1. What is finance?

Ans: Finance is the management, raising, and utilization of money for economic activities.

2. What is the relationship between money and finance?

Ans: Finance is the provision of money at the time it is needed.

3. What is equity finance?

Ans: Finance raised by issuing shares owned by promoters or public.

4. What is borrowed capital?

Ans: Funds borrowed from external sources like banks and institutions.

5. Why is finance called the lifeblood of business?

Ans: Because without adequate funds, business operations become ineffective.

6. Explain the importance of finance in business.

Ans: Finance supports all business activities by ensuring availability of funds, enabling growth, expansion, and meeting day-to-day expenses. It helps in maximizing profits and creating employment.

7. What are the functions of finance?

Ans: Acquisition, allocation, utilization of funds, channelizing funds, maintaining controls, maximizing profits, aiding decisions, and increasing cash flow.

8. Explain the difference between owned capital and borrowed capital.

Ans: Owned capital is equity with no repayment obligation but ownership dilution. Borrowed capital is debt with interest and repayment obligations but no ownership dilution.

9. Discuss the internal and external sources of finance.

Ans: Internal sources include retained profits and sale of assets; external sources include loans, bonds, and debentures from outside parties.

10. Explain the concept of optimal mix of funds.

Ans: It is the balanced combination of owned and borrowed capital that minimizes cost and risk while maximizing profitability.

State True or False:

1. Finance is not related to economics.

Ans: False.

2. Trade credit is a short-term source of finance.

Ans: True.

3. Equity capital requires repayment with interest.

Ans: False.

4. Debentures are a type of owned capital.

Ans: False.

5. Retained earnings are an internal source of finance.