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Question 1 Report
A dealer who buys securities at low prices in anticipation of reselling them at higher prices is called a
Answer Details
A dealer who buys securities at low prices in anticipation of reselling them at higher prices is called a bull.
Here's a simple explanation:
Let's contrast this with the other terms mentioned:
Question 2 Report
Answer Details
In the event of winding up, a company's assets are used to settle its debts and obligations in a specific order of priority. Understanding who gets paid last among the given options involves recognizing the hierarchy of claims. Here's a comprehensive explanation:
1. Debenture holders: Debenture holders are considered creditors of the company. They have a debt claim on the assets of the company. As creditors, debenture holders are paid before any shareholders.
2. Preference Shareholders: Preference shareholders have preferential rights over the assets of the company compared to ordinary shareholders during liquidation. This means they are paid before ordinary shareholders but after all creditors, including debenture holders.
3. Cumulative Preference Shareholders: Similar to preference shareholders, cumulative preference shareholders also have preferential rights over ordinary shareholders. Furthermore, if any preference dividend was missed in previous years, cumulative preference shareholders have the right to receive these unpaid dividends before ordinary shareholders are paid.
4. Ordinary Shareholders: Ordinary shareholders are the last to receive anything from the distribution of a company's assets. This is because they are the owners of the company and bear the most risk. If any assets remain after all debts, liabilities, and preferential claims are settled, this residual is distributed among ordinary shareholders.
In conclusion, **ordinary shareholders** are paid last in the event of a company's winding up. This hierarchy reflects the risk-reward principle where ordinary shareholders take the highest risk but also have the potential for the highest reward if the company performs well.
Question 3 Report
The policy designed to accelerate the greater participation of Nigerians in the ownership and management of business enterprises in Nigeria is called
Answer Details
The policy designed to accelerate the greater participation of Nigerians in the ownership and management of business enterprises in Nigeria is called Indigenization.
Indigenization refers to efforts and policies implemented to transfer ownership and control of enterprises and resources from foreign and non-national entities to the nationals of a country. The aim is to increase the involvement of local citizens in the economy of their country, ensuring that they have a substantial stake in the economic activities.
In the context of Nigeria, the indigenization policy was meant to empower Nigerians by enabling them to own and manage businesses. This was achieved by legally requiring certain levels of Nigerian ownership and participation in various sectors of the economy. Such policies were put in place to reduce foreign control and ensure that the wealth generated within the country contributed to national development and was accessible to the citizens of Nigeria.
Question 4 Report
Which of the following can be used to establish an importer's title to goods?
Answer Details
To establish an importer's title to goods, the most significant document among the given options is the Bill of Lading.
The Bill of Lading is a legal document issued by a carrier to a shipper. It has multiple roles, including serving as a:
The other documents mentioned have different purposes:
In summary, the Bill of Lading is the primary document used to establish an importer's title to goods, serving as both an acknowledgment of the shipment and a legal claim to the goods.
Question 5 Report
The activities concerned with changing of raw materials into finished products belong to __occupation.
Answer Details
The activities involved in transforming raw materials into finished products are related to the manufacturing occupation.
This occupation plays a crucial role in the production process as it focuses on converting raw materials, which could be natural resources or partially processed items, into complete, ready-to-use products.
For instance, consider the process of making a wooden table. Manufacturing involves taking raw wood, cutting, shaping, sanding, assembling, and finally finishing it into a table that is ready for consumers to use.
Manufacturing can take place in various industrial settings, such as factories or plants, where machinery and labor transform inputs into outputs on a large scale.
This is distinct from other types of occupations like:
In summary, manufacturing is the occupation responsible for changing raw materials into finished products, utilizing both technical skills and industrial processes.
Question 6 Report
A contract in which all parties to the contract have carried out their obligation is said to be terminated by
Answer Details
A contract in which all parties have fully met their obligations is said to be terminated by performance.
Here's an explanation:
Question 7 Report
Prospectus in relation to a public limited inability company means
Answer Details
In the context of a public limited company, a prospectus refers to a formal document that is issued by the company to provide essential information to potential investors. It serves as an invitation to the public to buy shares in the company.
The main purpose of the prospectus is to help potential investors make informed decisions about whether or not to invest in the company's shares. It typically contains details such as:
The prospectus is a crucial document because it ensures transparency and allows investors to assess the potential risks and rewards involved in purchasing shares from the company.
Question 8 Report
Shares are said to be sold at a discount when they are sold
Answer Details
Shares are said to be sold at a discount when they are sold below par value. In finance, the par value of a share is its nominal or face value as stated on the certificate or in the company's financial statements. The par value is typically set when the company is formed and does not usually change.
Selling shares below this par value means that the company is offering them at a lower price than their nominal value. This can occur as a strategy to attract investors when market conditions are tough, or if the company needs to raise capital quickly.
For example: If the par value of a share is $10 and it is sold for $8, it is being sold at a discount of $2 from its par value.
It's important to note that selling shares below par can have implications for a company's perceived financial health and can affect investor confidence. Therefore, companies may do this strategically and with consideration of market reactions.
Question 9 Report
The advertising medium which uses electric current in bulbs is referred to as
Answer Details
The advertising medium you are referring to is neon signs. Neon signs are a type of advertising and signage that use electrified, glowing tubes or bulbs that contain neon gas. When an electric current is passed through the gas, it emits light, creating a bright and eye-catching display. Neon signs are popular because they are highly visible at night and can be customized in various shapes, sizes, and colors. They are often used for attracting attention to businesses or special promotions.
Question 10 Report
The difference between the higher prices and the lower prices quoted for shares and stocks at the stock exchange is known as
Answer Details
The difference between the higher prices and the lower prices quoted for shares and stocks at the stock exchange is known as "jobbers turn."
Here's a simple explanation:
In the stock exchange, there are individuals known as jobbers who buy and sell stocks. They do not deal directly with the public but with brokers. Jobbers make a profit from the difference between the price at which they are willing to buy a stock (the lower price) and the price at which they are willing to sell it (the higher price). This difference is referred to as the "jobbers turn."
It's important to note that the jobbers turn is essentially the profit margin for the jobber, earned from trading activities. This is not to be confused with terms like commission or brokerage, which refer to fees charged by brokers for facilitating trades. Interest, on the other hand, is the cost of borrowing money, not related to the pricing of shares and stocks.
Question 11 Report
Which of the following services is NOT rendered by NITEL?
Answer Details
The service that is NOT rendered by NITEL is Recorded Delivery.
Explanation:
NITEL, which stands for Nigerian Telecommunications Limited, was mainly involved in providing telecommunications services in Nigeria. Its core services included:
On the other hand, Recorded Delivery is a service typically offered by postal services, not telecommunication companies. It involves sending mail with proof of mailing and, sometimes, delivery confirmation. This ensures that mailed items are tracked and delivered securely.
Question 12 Report
The act of being on one job for expertise is called
Answer Details
The act of being on one job for expertise is called specialization. Specialization is when an individual, group, or company focuses on a specific task, role, or field to become highly skilled and efficient in that area. For example, a person might specialize in medicine, engineering, or teaching, dedicating their time and effort to gaining deep knowledge and expertise in that particular domain.
Specialization allows individuals to become experts, improving their ability to perform their job effectively and efficiently. It also contributes to overall productivity and quality, as specialized professionals can apply their specific skills to complex tasks or problems, leading to more innovative and precise solutions.
In summary, by focusing on one job or area, individuals can hone their skills and contribute to greater efficiencies and advancements in their field.
Question 13 Report
An allowance made to a customer for prompt payment is known as
Answer Details
An allowance given to a customer for making prompt payment is called a cash discount. This is a reduction in the amount due to encourage the customer to pay within a shorter period. Essentially, it serves as an incentive for early payment, improving the cash flow for the seller and rewarding the buyer for settling their debts quickly.
Question 14 Report
All the following are principles of insurance EXCEPT
Answer Details
In insurance, there are several fundamental principles that ensure the contractual agreement between the insurer and the insured is fair and effective. Among these principles, three are well-known:
Insurable Interest: This principle states that the insured must have a financial stake in the object or life insured. The policyholder should suffer a financial loss if the insured event occurs. This ensures that insurance is not a mere gambling proposition.
Utmost Good Faith (Uberrimae Fidei): Both parties involved in an insurance contract are required to disclose all relevant information truthfully. The insured must reveal all material facts, and the insurer should provide honest terms and conditions.
Subrogation: After compensating the insured for a loss, the insurer may step into the shoes of the insured to seek recovery from a third party responsible for the loss. This principle prevents the insured from profiting more than once for the same loss.
On the other hand, the term "Particular Average" is not one of the fundamental principles of insurance. Instead, it is a maritime insurance term used to describe partial loss or damage to a ship or its cargo that is not shared by all parties but borne only by the individual whose cargo was damaged. Therefore, among the options provided, "particular average" is the exception as it is not a principle of insurance.
Question 15 Report
The rules and regulations guiding the conduct of business transactions are known as law
Answer Details
In the context of **business transactions**, the rules and regulations that govern them are primarily known as **commercial law**. This is because **commercial law deals specifically with the legal aspects of business and trade**, and it includes a variety of laws that regulate how businesses operate, how they interact with other businesses, and how consumers are protected in these transactions.
Other laws mentioned, such as:
Therefore, when discussing the guidelines and frameworks for business transactions specifically, **commercial law** is the umbrella under which these rules and regulations fall.
Question 16 Report
Which of the following does a seller send in reply to a letter of inquiry?
Answer Details
When a potential buyer sends a seller a **letter of inquiry**, they are typically asking for information regarding the availability, price, and terms of products or services. In reply to this inquiry, a seller typically sends a **quotation**.
Here is why a **quotation** is the appropriate response:
In conclusion, a seller sends a quotation in response to a letter of inquiry because it addresses the buyer's questions about pricing and other terms related to potential products or services they might purchase.
Question 17 Report
Which of the following warehouse is generally found near a port?
Answer Details
Warehouses that are generally found near a port are known as bonded warehouses.
Bonded warehouses are storage facilities where imported goods are stored until the customs duties are paid.
Key reasons for their location near a port include:
Therefore, locating these warehouses near ports helps streamline international trade processes and enhances logistics efficiency.
Question 18 Report
Which of the following is NOT a credit instrument?
Answer Details
The term **credit instrument** refers to a written document that provides evidence of a borrower's promise to repay a debt. These instruments allow the transfer of money or credit between parties. Each of the options given is assessed below:
Bill of Exchange: This is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date. It is a credit instrument as it facilitates deferred payments.
Bank Notes: These are the paper currency issued by a central bank that people can use to pay for goods and services. They are not credit instruments because they represent actual money rather than a promise to pay in the future.
Cheques: A cheque is a written order directing a bank to pay money as instructed from the account holder's balance. It is a credit instrument as it allows the holder to defer payment until it is presented at the bank.
Bill of Lading: This is a document issued by a carrier to acknowledge receipt of cargo for shipment. It is mainly used to transfer goods and does not involve deferred payments or evidence of a debt, thus it is not a credit instrument.
Therefore, among the given options, the Bill of Lading is NOT a credit instrument as it is primarily related to the shipment and receipt of goods, and not to financial credit or promises of payment.
Question 19 Report
The deliberate throwing of some goods into the sea to prevent the ship from sinking is an example of
Answer Details
The scenario you described is an example of a general average loss. This term is used in maritime law and insurance. It refers to a situation where part of the cargo or equipment is deliberately sacrificed or damaged to save the rest of the ship and its cargo from imminent danger. In this case, the throwing of some goods into the sea is done to prevent the ship from sinking, which benefits all parties involved. As a result, the losses are shared proportionally among all stakeholders, such as the shipowner and cargo owners. This shared approach to dealing with loss is known as a general average loss.
Question 20 Report
The components of a balance of payments account are
Answer Details
The balance of payments (BOP) is a record of all economic transactions between residents of one country and residents of other countries over a specific period. It is divided into three main components, which are: Current, Capital and Monetary movement (financial) account.
Question 21 Report
A public limited liability company is owned by
Answer Details
A Public Limited Liability Company is owned by shareholders. These are individuals or entities that own shares in the company. Each share represents a portion of ownership, so the more shares an individual or entity owns, the more ownership they have in the company. Shareholders have the right to vote on important company matters, including the election of the board of directors and major company policies.
It is important to note that although the shares of a public limited liability company are available for purchase by the general public on the stock exchange, the term "general public" refers to potential or current investors and does not mean that the general public owns the company. Ownership is exclusively linked to those who buy shares, making them shareholders.
Neither the government nor debenture holders own the company. The government may regulate the company but does not hold ownership unless it has explicitly purchased shares. Debenture holders are lenders to the company, holding debt instruments rather than equity, so they do not have ownership rights. Their relationship with the company is typically based on the repayment of debt with interest, rather than ownership.
Question 22 Report
The aid to trade which enables producer and consumer to transact business without physical contact is known as
Answer Details
The aid to trade that enables a producer and consumer to transact business without physical contact is known as communication.
To understand why, consider the following: Communication is a process that involves the exchange of messages, ideas, and information. With modern technology, such as telephones, emails, and the internet, communication allows people from various locations to interact and conduct business seamlessly. This eliminates the necessity for face-to-face meetings.
For example, a consumer can order a product online and communicate with the seller via chat or email. Similarly, a producer can advertise a product to a global audience through digital platforms without any need for physical presence. These exchanges are facilitated primarily by effective communication.
Question 23 Report
A holding company is one which holds shares in another company up to
Answer Details
A holding company is a corporation that owns enough voting shares in another business to control its management and policies. Control is typically established by owning the majority of the voting stock. In most cases, owning over 50% of the voting shares is considered having sufficient control. Thus, a holding company generally holds shares up to 51% or more in another company to exercise control. To further clarify:
Therefore, a holding company usually holds shares up to and typically beyond 51% in another company to ensure they can steer the business according to their interests and policies.
Question 24 Report
Stock exchange quoted the shares of ABC Plc at #0.75K for #1.25K per share. This means the shares were sold at a
Answer Details
When shares are quoted on a stock exchange, it signifies the price at which the stock is available for purchase. The problem provides two prices regarding the shares of ABC Plc:
In this scenario, since the selling price (#1.25K) is higher than the par value (#0.75K), the shares were sold at a premium. Therefore, the stocks of ABC Plc were sold for more than their face value, which indicates that investors were willing to pay more than the nominal value for those shares, typically due to the company's perceived potential or existing market demand.
Question 25 Report
The term "consumer sovereignty" means that the consumer is a
Answer Details
The term "consumer sovereignty" indicates that the consumer is considered a king in the market. This concept emphasizes the power and freedom consumers have to influence the goods and services that are produced in a market economy. Essentially, businesses strive to fulfill the desires and needs of consumers because their satisfaction and demand determine what should be produced. In this role, the consumer wields the power to make decisions based on preferences, effectively guiding the market dynamics. Companies that understand their consumers well and meet their needs are more likely to succeed.
Question 26 Report
Which of the following CANNOT be sold through a vending machine?
Answer Details
When considering what items can be sold through vending machines, **the main factor to consider** is whether the item can fit within the confines of the machine and be dispensed in a simple manner without needing additional services. Let's analyze the options:
In conclusion, considering the typical size and function of a regular vending machine, **shoes cannot be sold** effectively through standard vending machines, while snacks, tickets, and tea can be dispensed without significant issues.
Question 27 Report
Answer Details
The relationship between a country's visible imports and exports in a trading year is known as the balance of trade.
To understand this concept, think of it as a way to measure how much a country is buying from other countries (imports) compared to how much it is selling to other countries (exports). When we talk about "visible" imports and exports, we refer to tangible goods like cars, food products, electronics, etc., that you can see, touch, and feel.
The balance of trade is essentially the difference in value between a country's visible exports and visible imports. If a country exports more than it imports, it has a trade surplus. Conversely, if it imports more than it exports, it has a trade deficit.
This concept is crucial because it gives insights into a country's economic health. A trade surplus might indicate a strong economy, whereas a trade deficit might suggest dependency on other nations for goods.
In summary, the balance of trade helps us understand the economic relationship between a country and its trading partners by showing whether the country has a surplus or deficit in its visible goods trade. Other terms like counter trade, international trade, and balance of payment have different meanings in economics and should not be confused with the balance of trade.
Question 28 Report
Which of the following types of insurance is usually excluded from the principle of indemnity?
Answer Details
The principle of indemnity in insurance states that an insured should not profit from a loss but rather be restored to their financial position prior to the loss. This principle is applied to prevent the insured from benefiting financially from an insurance claim.
Among the options provided, Life Insurance is usually excluded from the principle of indemnity. In the case of life insurance, it is not possible to quantify the loss of life in monetary terms and therefore indemnification in its traditional sense does not apply. Instead, life insurance works on a principle of paying out a specified sum when the insured event (death or specified incident) happens.
Other types of insurance like Fire, Fidelity Guarantee, and Marine are indemnity-based, meaning the payout aims to cover the actual financial loss. For example, if a fire damages property, the insurance payout is based on the value of the property destroyed. Similarly, fidelity guarantee insurance covers loss due to employee dishonesty, and marine insurance compensates for damage or loss of goods during transit. Therefore, these fall under the principle of indemnity.
In summary, life insurance is excluded from the principle of indemnity because it deals with the incalculable loss of a life by providing a predetermined benefit rather than a directly quantifiable financial covering of loss.
Question 29 Report
Which of the following is NOT part of Pre-Sales Service/ice?
Answer Details
Pre-sales services are the activities and support provided to potential buyers before the actual sale takes place. These services aim to assist customers in making informed purchasing decisions and to facilitate a smooth sales process. They typically include activities such as providing information about the products, answering inquiries, and assisting with product selection. However, granting credit or hire purchase sales facilities is not typically considered a pre-sales service.
Question 30 Report
A bill of exchange sold for less than its face value before maturity is said to be
Answer Details
A bill of exchange that is sold for less than its face value before maturity is said to be discounted.
Here's a simple explanation: A bill of exchange is a written order used in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date or on demand. When you hold a bill of exchange and decide to sell it before its maturity date, you usually sell it for less than its full value. This is because the buyer is taking on the risk of waiting for the maturity date to receive the full amount, and they are compensated for taking that risk by paying less than the bill's face value.
This process is known as discounting the bill of exchange. The amount you receive in the sale is called the discounted value, while the difference between the face value and the discounted value is known as the discount. Discounting is a common financial practice and allows the holder of the bill to get immediate funds, albeit at a lesser amount than the bill's face value.
Question 31 Report
Which of the following forms part of a company's Article of Association?
Answer Details
The name of the company is an essential component of the Articles of Association. It specifies the legal name under which the company operates and is registered.
Question 32 Report
The rights of the consumers does NOT include
Answer Details
In discussing the rights of consumers, it's important to recognize that these rights are intended to ensure fair treatment, safety, and access to necessary information. Let's look closely at the options provided to determine which one does not align with consumer rights:
The right to fix prices: However, this is not a consumer right. **Consumers do not have the right to set or fix the prices of goods and services.** ^Pricing is usually determined by companies, influenced by factors like production costs, market demand, and competition.^ While consumers can compare prices and make choices based on their budget and preferences, the **determination of prices is not within their rights**.
In summary, **the correct answer is that consumers do not have the right to fix prices**. This responsibility lies with businesses and is regulated to prevent practices like price fixing, which can harm consumer interests.
Question 33 Report
The service rendered by NIPOST in which letters are addressed to any post office to await collection by the addressee is known as
Answer Details
The Free post service allows individuals to send letters or parcels to any post office without the need to pay for postage upfront. The addressee can then collect the item from the designated post office upon presentation of proper identification.
Question 34 Report
Transfer of ownership of goods sold under Hire Purchase System takes place when
Answer Details
Under the Hire Purchase System, the transfer of ownership of goods occurs when the buyer completes all the terms of the agreement. Specifically, this means that the ownership is transferred only when the final instalment is paid. Until the final payment is made, the ownership of the goods remains with the seller or the finance company facilitating the hire purchase. This arrangement allows the buyer to use the goods while making payments in instalments, but the buyer does not become the legal owner until they fulfill the entire payment commitment. Therefore, **the final payment is crucial** for the change of ownership, ensuring that all obligations under the agreement are satisfied.
Question 35 Report
An agent held responsible for non-payment of goods bought by the customer he introduced to his principal is called agent
Answer Details
The agent responsible for non-payment of goods bought by the customer he introduced to his principal is called a del-credere agent.
This type of agent provides an additional guarantee or assurance to their principal that customers introduced by them will pay for the goods purchased. If the customer fails to pay, the del-credere agent is liable and must cover the payment to the principal. This arrangement reduces the risk for the principal regarding customer payments.
Here's a simple breakdown:
Question 36 Report
Departmental store, supermarket and chain store are examples of
Answer Details
Departmental stores, supermarkets, and chain stores are examples of large scale retailers. This is because they operate on a much larger scale compared to typical small shops. Here’s why each of these falls under this category:
In summary, all these stores are structured to cater to a vast number of customers with extensive offerings, significant inventory, and often require substantial investment and infrastructure, which are defining traits of large scale retailers.
Question 37 Report
The main objective of nationalization of industries is to
Answer Details
Nationalization of industries is primarily aimed at bringing an industry under state ownership and control. This means that the government takes ownership of certain industries or sectors, rather than leaving them in private or foreign hands.
There are several reasons a government might choose to nationalize an industry:
1. Ensure National Control: Nationalization is used to ensure that important industries, such as natural resources or critical infrastructure, remain under national control and are protected from foreign influence or exploitation.
2. Social Welfare: The state can prioritize social welfare over profit by ensuring that essential goods and services (like electricity, water, and healthcare) are accessible and affordable to all citizens.
3. Economic Stability: By owning and controlling key industries, the government can directly influence economic activities, stabilize markets, and support strategic economic goals. This can include preventing firms from liquidation in cases where those firms are crucial for national economic stability.
4. Redistribution of Wealth: Nationalization can be a tool for redistributing wealth, particularly if industries are previously owned by a small, wealthy segment of the population or foreign entities.
5. Promote Employment: The government may aim to maintain or increase employment opportunities in crucial industries by keeping them operational and under state management.
Overall, while making profits for the government can be a benefit of nationalization, the primary objective is often that of exercising control over key industries for the aforementioned strategic and social reasons.
Question 38 Report
Answer Details
The term "caveat emptor" is a Latin phrase which translates to "let the buyer beware." This principle is used primarily in property transactions and essentially means that the buyer assumes the risk of the quality and condition of the item purchased, unless it is covered by a warranty. In simple terms, it emphasizes the responsibility of the purchaser to examine and evaluate what they are buying. It is a warning that the buyer should be cautious and perform any necessary due diligence prior to completing a transaction. Sellers are not obligated to volunteer details about the products or properties they sell unless asked by the buyer or required by law.
Question 39 Report
The documents sent by the suppliers of good to a prospective buyer, informing him of what to pay if he buys the good is
Answer Details
The document sent by suppliers of goods to a prospective buyer, informing him of what to pay if he buys the goods is called an invoice. An invoice is a commercial document that itemizes all the products or services provided by the seller, as well as the prices. It typically includes important details such as the list of goods, quantities, agreed-upon prices, any discounts or taxes, and the total cost that the buyer needs to pay.
Invoices serve multiple purposes: they act as a request for payment, provide a clear record of a sale, and can be used for accounting and taxation purposes. By receiving an invoice, the prospective buyer is informed of the amount they need to pay if they decide to purchase the goods.
Question 40 Report
Fishing is an example of
Answer Details
Fishing is an example of the extractive industry. This industry involves activities that extract natural resources from the earth or water bodies. In the case of fishing, it means obtaining fish and other sea creatures from oceans, rivers, and lakes. The extractive industry is characterized by the removal of raw materials from their natural environment without any transformation into other forms before they are further processed, utilized, or consumed.
For example, when fishermen catch fish, they are directly taking resources from nature without altering them. These resources can either be directly consumed or processed into different products, depending on the demand and usage.
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