In which of the following are both sources of funds appropriate for a business purchasing extra stock before a busy trading period? A - HSC - SSCE Business Studies - Question 7 - 2018 - Paper 1

In this scenario, retained profits are a source of internal financing, allowing the business to utilize its own accumulated earnings. This can be a stable and cost-effective way to fund operations.

Bank overdraft, on the other hand, is a form of short-term borrowing from the bank that allows the business to withdraw more money than it has in its account up to a certain limit. This flexibility is particularly beneficial for managing cash flow during peak trading periods.

Thus, the correct answer is option D: Retained profits and bank overdraft, as both options are appropriate and provide the necessary funds for purchasing extra stock.