Answer 5 questions

-: Actuarial Science
-: Management
-:Chartered Accountancy (C.A)
-:Company Secretary (C.S)

The following points highlight the top five functions of an entrepreneur. The functions are: 1. Decision Making 2. Management Control 3. Division of Income 4. Risk-Taking and Uncertainty-Bearing 5. Innovation.

Function # 1. Decision Making:
The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell and’ so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs. In brief, he is to make vital business decisions relating to the purchase of productive factors and to the sale of the finished goods or services.

Function # 2. Management Control:
Earlier writers used to consider the manage­ment control one of the chief functions of the entrepreneur. Management and control of the business are conducted by the entrepreneur himself. So, the latter must possess a high degree of management ability to select the right type of persons to work with him. But, the importance of this function has declined, as business nowadays is managed more and more by paid man­agers.

Function # 3. Division of Income:The next major function of the entrepreneur is to make necessary arrangement for the division of total income among the different factors of production employed by him. Even if there is a loss in the business, he is to pay rent, interest, wages and other contractual incomes out of the realised sale proceeds.

Function # 4. Risk-Taking and Uncertainty-Bearing:
Risk-taking is perhaps the most important function of an entrepreneur. Modern production is very risky as an entrepreneur is required to produce goods or services in antici­pation of their future demand.

Broadly, there are two kinds of risk which he has to face. Firstly, there are some risks, such as risks of fire, loss of goods in transit, theft, etc., which can be insured against. These are known as measurable and insurable risks. Secondly, some risks, however, cannot be insured against because their probability cannot be calculated accurately. These constitute what is called uncertainty (e.g., competitive risk, technical risk, etc.). The entrepreneur undertakes both these risks in production.

Function # 5. Innovation:
Another distinguishing function of the entrepreneur, as emphasised by Schumpeter, is to make frequent inventions — invention of new products, new techniques and discovering new markets — to improve his competitive position, and to increase earnings.

1ci) Extractive Industry: its the process that involve the extraction of raw materials from the earth to be used by consumers. The extractive industry consists of any operations that remove metals, mineral and aggregates from the earth.

1cii) Construction industry: it is a sector of national economy engaged in preparation of land and construction, alteration, and repair of buildings, structures, and other real property.

1ciii) Manufacturing industry refers to those industries which involve in the manufacturing and processing of items and indulge in either creation of new commodities or in value

1civ) Tertiary Industry: The tertiary industry is the segment of the economy that provides services to its consumers, including a wide range of businesses such as financial institutions, schools and restaurants. It is also known as the tertiary sector

1cii) Construction industry: it is a sector of national economy engaged in preparation of land and construction, alteration, and repair of buildings, structures, and other real property.


-Commodities exchanges provide a ready and continuous market for the purchase and sale of commodities. This enables the producer to be independent of middlemen and therefore to derive more value from their production activities.

-They provide hedging facilities, which make them necessary in reducing fluctuations in price of raw material and consequently also reducing fluctuations in the price of finished products.

-Commodities exchanges provide the producers an opportunity to transfer their risk to the professional risk-bearers.

-By providing continuity in the trading of commodities, commodities exchanges induce bankers and financiers to lend against commodities.

-Commodities exchanges provide facilities and opportunities for arbitrating and thus equalizing the price levels of commodities at various centers


(i) Futures

Long ago, to trade commodities one had to trade commodity futures and you can still trade this way currently. You need to simply open an account with a futures trading firm, obtain the needed front-end trading software and put up a substantial amount of money.
Of course, this method is not for every investor. Futures trading is actually extremely risky and requires professional trading skills and uncommon devotion. An ability to comprehend the essential markets and technical analysis are required to thrive.

(ii). Mutual Funds –
Mutual fund commodities offer not only portfolio diversification because they typically have a low correlation to a broad market index but also diversify various commodities within a single fund. However, there are a variety of fund types with a variety of risks: commodity funds, commodity funds that hold futures, natural resource funds and combination funds.


5a) Newspaper Advertising

ii) Journals/Magazine Advertising

iii) TV Advertising

iv)Radio Advertising

v) internet Advertising

5b) Personal selling is also known as face-to-face selling in which a person who is the salesman tries to convince the customer in buying a product. It is a promotional method by which the salesperson uses his or her skills and abilities in an attempt to make a sale.

5c) *Advantages*

i) Two-Way Communication

ii) Immediate Feedback

iii) Individual Services

iv) Flexibility

Adverse or deficit balance of payment

(i)Foreign exchange control:Foreign exchange control involves the rationing forign exchange in order to reduc balance of payment deficit
(ii)Expenditure reduction:This is used in order to cut down domestic demand and reduce imports
(iii)Expenditure switching:This involves the manipulationof exchange rates to induce people to patronize locally made goods.
(iv)Fiscal control:This involves the raising of tarriffs ie increase import duties in order to reduce balance f payment deficit
(v)Devaluation:Devaluation cheapens exports and makes imports expensive,thus improving balance of payments
(vi)Reduction of imports: The government can restricts imports by the use of tarriffs,quotas and


1 Door to door shipping
2. Tracking service
3. Packaging service
4 overnight service

Advantages and Disadvantages of Railway Transport

*1. Dependable:*
The greatest advantage of the railway transport is that it is the most dependable mode of transport as it is the least affected by weather conditions such as rains, fog etc. compared to other modes of transport.

*2. Better Organised:*

The rail transport is better organised than any other form of transport. It has fixed routes and schedules. Its service is more certain, uniform and regular as compared to other modes of transport.

*3. High Speed over Long Distances:*
Its speed over long distances is more than any other mode of transport, except airways. Thus, it is the best choice for long distance traffic
*4. Suitable for Bulky and Heavy Goods:*

Railway transport is economical, quicker and best suited for carrying heavy and bulky goods over long distances.

*5. Cheaper Transport:*
It is a cheaper mode of transport as compared to other modes of transport. Most of the working expenses of railways are in the nature of fixed costs. Every increase in the railway traffic is followed by a decrease in the average cost. Rail transport is economical in the use of labour also as one driver and one guard are sufficient to carry much more load than the motor transport.

*6. Safety:*
Railway is the safest form of transport. The chances of accidents and breakdowns of railways are minimum as compared to other modes of transport. Moreover, the traffic can be protected from the exposure to sun, rains, snow etc.

*7. Larger Capacity:*
The carrying capacity of the railways is extremely large. Moreover, its capacity is elastic which can easily be increased by adding more wagons.

*8. Public Welfare:*
It is the largest public undertaking in the country. Railways perform many public utility services. Their charges are based on ‘charge what the traffic can bear’ principle which helps the poor. In fact, it is national necessity.

*9. Administrative Facilities of Government:*
Railways provide administrative facilities to the Government. The defence forces and the public servants drive their mobility primarily from the railways.

*10. Employment Opportunities:*

The railways provide greater employment opportunities for both skilled and unskilled labour. Over 16 lakh persons are depending upon railways for their livelihood.

Although railway transport has many advantages, it suffers from certain serious limitations:

*1. Huge Capital Outlay:*
The railway requires is large investment of capital. The cost of construction, maintenance and overhead expenses are very high as compared to other modes of transport. Moreover, the investments are specific and immobile. In case the traffic is not sufficient, the investments may mean wastage of huge resources.

*2. Lack of Flexibility:*
Another disadvantage of railway transport is its inflexibility. Its routes and timings cannot be adjusted to individual requirements.
3. Lack of Door to Door Service:
Rail transport cannot provide door to door service as it is tied to a particular track. Intermediate loading or unloading involves greater cost, more wear and tear and wastage of time.
The time and cost of terminal operations are a great disadvantage of rail transport.

*4. Monopoly:*
As railways require huge capital outlay, they may give rise to monopolies and work against public interest at large. Even if controlled and managed by the government, lack of competition may breed inefficiency and high costs.

*5. Unsuitable for Short Distance and Small Loads:*
Railway transport is unsuitable and uneconomical for short distance and small traffic of goods.

*6. Booking Formalities:*

It involves much time and labour in booking and taking delivery of goods through railways as compared to motor transport.

*7. No Rural Service:*

Because of huge capital requirements and traffic, railways cannot be operated economically in rural areas. Thus, large rural areas have no railway service even today. This causes much inconvenience to the people living in rural areas.

*8. Under-utilised Capacity:*

The railway must have full load for its ideal and economic operation. As it has a very large carrying capacity, under-utilisation of its capacity, in most of the regions, is a great financial problem and loss to the economy.

*9. Centralised Administration:*
Being the public utility service railways have monopoly position and as such there is centralised administration. Local authorities fail to meet the personal requirements of the people as compared to roadways.

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