WAEC SSCE - Commerce - 1994

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The term used to indicate the manufacturer from whom goods are to be bought is "Closed indent". A closed indent is a type of purchase order used by a buyer to purchase goods from a specific supplier or manufacturer. In this type of indent, the buyer specifies the name of the supplier or manufacturer, the quantity and quality of the goods, and the delivery schedule. The closed indent is a legal document that binds both the buyer and the supplier to the terms and conditions of the order.

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Firms merge in order to create a monopoly. A merger is a corporate strategy where two or more companies combine their operations to form a single company. The main objective of a merger is to create a larger and more powerful company that can enjoy greater market power, economies of scale, and higher profits. By merging, companies can eliminate competition and increase their pricing power. They can also reduce costs by combining their operations and resources. This can lead to greater efficiency and profitability. Creating a monopoly is one of the main reasons why firms merge. A monopoly is a situation where a single company or group dominates a particular market or industry. Monopolies can be very profitable, as they have the power to control prices and limit competition. By merging, firms can combine their market share and eliminate competition, which can allow them to establish a monopoly position. Compared to the other options listed, which include discouraging the employment of specialists, encouraging competition, discouraging the use of each other's bye-products, and decreasing the size of the business, creating a monopoly is the most common reason why firms merge. While mergers can have other objectives, such as cost reduction and increased efficiency, the ultimate goal is often to create a more dominant position in the market.

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Retail outlets which sell from specialised vans are called mobile shops. These shops are specially designed vehicles that travel from place to place to sell their products, often serving customers in areas where traditional brick-and-mortar stores may not be available or easily accessible. Mobile shops can sell a variety of products including groceries, clothing, electronics, and more, and are a popular option for small business owners who want to reach customers in different locations without the high overhead costs associated with renting a physical storefront.

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The rebate given to the retailer by the wholesaler to enable him make profit is called a "trade discount". A trade discount is a reduction in the list price of a product that is offered by a wholesaler to a retailer. It is given as a percentage of the list price and is intended to enable the retailer to make a profit when selling the product at the list price to customers. For example, if a wholesaler sells a product to a retailer at a list price of $100 and offers a trade discount of 20%, the retailer would only pay $80 for the product. This means that the retailer can sell the product to customers at the list price of $100 and make a profit of $20. Trade discounts are commonly used in business-to-business transactions, especially in industries where there is a lot of competition and price negotiation. They are also used to encourage retailers to buy larger quantities of products, as the trade discount may increase as the quantity purchased increases.

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Among the given options, shipping is an example of a commercial occupation. Shipping involves the transportation of goods or people by sea or inland waterways for commercial purposes. It is a vital component of international trade and commerce, and it contributes significantly to the global economy. Shipping involves a range of activities, such as freight forwarding, cargo handling, ship management, and logistics, and it requires specialized knowledge and skills.

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The storing of goods under proper conditions until they are required is known as warehousing. Warehousing involves the receipt, storage, and dispatch of goods. It is an important function in the logistics and supply chain management of businesses. Warehouses are used for storing goods for future use or for distribution to retailers and customers. Proper warehousing helps to ensure that goods are kept in good condition and are readily available when needed. It also helps to reduce costs associated with stockouts and overstocking.

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The rebate given to the retailer by the wholesaler to enable him make a profit is known as a "trade discount". A trade discount is a reduction in the price of goods or services that a supplier offers to a buyer, typically a retailer, in order to encourage them to purchase more or to make a profit on the sale. It is usually expressed as a percentage of the list price and is given at the time of the sale. For example, a wholesaler may offer a 10% trade discount to a retailer who purchases a large quantity of goods. This means that the retailer can buy the goods at a lower price and then sell them at a higher price to make a profit. In summary, a trade discount is a discount given by a supplier to a buyer in order to encourage them to purchase more or to make a profit on the sale.

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Agents who link buyers with sellers receive brokerage. Brokerage is a fee paid by either the buyer or the seller or both, to an agent who acts as an intermediary in the transaction. The agent helps to facilitate the transaction by bringing the buyer and the seller together, negotiating the terms of the transaction, and completing the necessary paperwork. The fee paid to the agent is called brokerage. It is a common term in the real estate and stock markets, but can be applied in other industries as well.

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Those involved in obtaining the gifts of nature from land and sea are engaged in an extractive occupation. Extractive occupations involve extracting natural resources such as minerals, oil, gas, fish, and timber from the earth or sea. This includes activities like fishing, logging, mining, and drilling, which are focused on obtaining natural resources that can be used for further processing or sale.

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The option that encourages free trade among member nations is the EEC (European Economic Community), now known as the European Union (EU). The EEC was created to establish a common market among its member countries and eliminate trade barriers, including tariffs and quotas, to promote free trade. This allows member countries to trade goods and services with each other without restrictions, thus promoting economic growth and increasing competitiveness. The EU is now one of the world's largest trading blocs, with 27 member states and a population of over 446 million people.

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A cover note gives temporary protection to the insured while the policy is being drawn up. A cover note is a temporary document issued by an insurance company that provides proof of insurance coverage for a specified period until a formal insurance policy can be issued. It is usually issued when an insurance policy is being prepared or renewed, and the insured needs immediate coverage before the policy is issued. The cover note specifies the terms of the insurance coverage, such as the type of coverage, the limits, and the premium. Once the policy is issued, the cover note is no longer valid.

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Digging for precious stones is an example of extractive industry. Extractive industries are those that involve the extraction or removal of natural resources from the earth, such as mining, quarrying, drilling for oil and gas, or harvesting timber. In this case, precious stones are extracted from the earth through the process of mining. The other options mentioned involve the manufacturing or construction of goods, rather than the extraction of raw materials.

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The cost of postage and advertisement is a problem facing mail order businesses. In order to operate, mail order businesses need to advertise their products to potential customers and deliver those products through the mail. However, the cost of postage can be significant, particularly for larger or heavier items. Additionally, advertising can be expensive, as mail order businesses may need to reach a wide audience to attract enough customers to make a profit. These costs can eat into a mail order business's profit margin and make it difficult to compete with other types of retailers. Despite these challenges, mail order businesses can still be successful by finding ways to keep costs low, such as by using targeted advertising or negotiating bulk postage rates.

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The term you're looking for is "sum assured." In insurance, the sum assured is the amount of money that an insurer agrees to pay to the policyholder in the event that the insured event occurs, such as death or damage to property. The sum assured is the maximum amount of money that the policyholder can receive from the insurer, and it is agreed upon at the time of taking out the insurance policy. For example, if a person takes out a life insurance policy with a sum assured of $100,000 and they pass away, the insurer will pay the beneficiary of the policy $100,000. Similarly, if a person takes out a car insurance policy with a sum assured of $20,000 and their car is damaged beyond repair, the insurer will pay the policyholder up to $20,000 to cover the cost of the damage. The sum assured is an important consideration for both the policyholder and the insurer, as it determines the level of coverage and the premium payable by the policyholder. The higher the sum assured, the higher the premium payable by the policyholder, as it represents a greater risk to the insurer.

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An establishment that specializes in taking care of risks is called an insurance company. An insurance company provides a service by offering various types of insurance policies to individuals or businesses in exchange for regular premium payments. The purpose of insurance is to provide financial protection against potential losses due to unexpected events such as accidents, illness, or damage to property. Insurance companies pool the premiums of many policyholders and use that money to pay out claims to those who experience losses covered by their policies.

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The retail of goods through currency-operated machines is known as "automatic vending." Automatic vending refers to the selling of goods, such as snacks, beverages, and cigarettes, through machines that accept payment in the form of coins, bills, or credit/debit cards. These machines are often found in public places like airports, train stations, and shopping malls, providing a convenient and accessible way for consumers to purchase goods without the need for human interaction.

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To drive away smaller firms is not an aim of advertising. Advertising is a marketing communication tool used by firms to inform, persuade, and remind consumers about their products or services. The main aims of advertising are to make one's product known, increase sales, help firms compete with others, satisfy consumers, and ultimately generate profit. Driving away smaller firms is not an aim of advertising as it is not a positive or ethical business practice, and it does not contribute to the growth or success of the firm.

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The practice of importing goods for the purpose of re-exporting them is known as "entrepot trade". In this type of trade, the goods are not meant for domestic consumption but are rather brought into the country for further processing or storage before being shipped to another destination. This type of trade is often used by countries with strategic geographic locations to take advantage of their position as a transit hub for goods between different regions.

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The stock exchange belongs to the capital market. The capital market is a market for long-term investments where individuals and institutions buy and sell securities, such as stocks and bonds. The stock exchange is a platform where stocks and other securities are traded, and it provides a way for companies to raise capital by selling their shares to the public. The other options mentioned in the question - commercial bank, Ministry of Finance, Chamber of Commerce, and Discount House - are not part of the capital market.

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The process of entrusting part of the work of a superior and the corresponding authority to a subordinate in an organization is called delegation. In simpler terms, it means assigning responsibility and authority for specific tasks or decisions to someone else within the organization. Delegation helps in sharing workload and promotes teamwork within the organization. By delegating tasks, a superior can focus on more important aspects of their work, while the subordinates gain more experience and develop their skills. It also helps in improving efficiency and productivity within the organization.

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The marketing function that is not included in the list is Accounting. Accounting is a financial function that involves recording, analyzing, and reporting financial transactions. It is not directly related to the activities involved in promoting and selling products or services to customers. Packaging, branding, advertising, and pricing are all key marketing functions that are involved in creating, promoting, and delivering products or services to customers. Packaging is the process of designing and producing the physical container or wrapper for a product, with the aim of protecting the product and enhancing its appeal to customers. Branding involves creating a unique name, design, symbol, or image that identifies and distinguishes a product or service from those of competitors. Advertising involves promoting and communicating the features and benefits of a product or service to potential customers, with the aim of generating demand and increasing sales. Pricing involves setting the price for a product or service, with the aim of maximizing profits while remaining competitive in the market. Therefore, Accounting is not a marketing function, while packaging, branding, advertising, and pricing are all important marketing functions that contribute to the success of a business.

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Capital owned refers to the total amount of money invested by the owners or shareholders in a business. It is the same as the net worth of a business or the shareholders' equity. This represents the amount of money that would be left over if all the business's debts were paid off. It is not the same as authorised capital, which is the maximum amount of capital a company is allowed to issue, or issued capital, which is the amount of capital that has been issued and is currently in the hands of the shareholders. Fixed assets refer to the tangible assets that a business owns, such as land, buildings, and equipment. Finally, a public limited company is a type of business structure where the shares are publicly traded on a stock exchange, and the liability of the shareholders is limited to the amount they have invested in the company.

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Firms merge in order to create a monopoly. A monopoly is a situation where one company or group controls the market for a particular product or service. By merging with other firms, a company can eliminate its competition and become the dominant player in the market. This allows the company to set prices as it wishes, reduce costs, and maximize profits. However, it can also lead to decreased choice and higher prices for consumers.

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"Distributing" is not a function of management. The five basic functions of management are planning, organizing, staffing, directing, and controlling. Planning involves setting goals, establishing strategies to achieve the goals, and developing plans to integrate and coordinate activities. Organizing involves arranging resources and activities in a manner that maximizes efficiency and effectiveness. Staffing involves acquiring and retaining personnel, and developing and maintaining a competent workforce. Directing involves motivating and leading employees to accomplish organizational objectives. Controlling involves measuring and evaluating performance, and taking corrective action as necessary. "Distributing" is not one of the basic functions of management.

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A negotiable instrument is a written document that can be transferred to another person in exchange for a value. The recipient can then claim the value of the instrument from the original issuer or subsequent holders. Based on this definition, the answer to the question is **Debenture**. Debenture is a type of long-term debt instrument that a company issues to raise funds. Unlike negotiable instruments, debentures cannot be transferred from one person to another. They represent a company's debt obligation to the holder of the debenture and are redeemed at a specified date with interest.

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The raising of new capital by allowing existing shareholders the privilege to buy shares at a preferential rate is called a "rights issue". This means that the existing shareholders have the right to buy a specific number of new shares at a discounted price before they are offered to the general public. This helps the company to raise new capital and also provides an opportunity for the existing shareholders to increase their ownership in the company at a lower cost.

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ECOWAS (Economic Community of West African States) headquarters is located in Abuja, Nigeria.

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The rate of turnover is the number of times the stock is turned over during a given period. In other words, it measures how quickly a company is selling and replacing its inventory. This is an important metric for businesses as it helps them to manage their inventory levels, track sales trends, and optimize their operations. A high rate of turnover generally indicates that a company is efficiently selling its products and replenishing its stock, while a low rate of turnover may suggest that a company is holding onto inventory for too long and may need to adjust its sales and marketing strategies.

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Advertising is any paid form of non-personal presentation of ideas, goods or services by an identified sponsor. It is a form of marketing communication that aims to inform and persuade potential customers about a product or service. Advertising can take many forms, including print ads, television commercials, online banner ads, and sponsored social media posts. Its ultimate goal is to increase sales or brand awareness by promoting the benefits and features of a product or service to a target audience.

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The given statement is referring to "communicating". Communicating refers to the process of transmitting information and ideas from one person to another, with the aim of creating a shared understanding of the message being conveyed. Effective communication is essential for an organization to function smoothly and ensure that all employees are aware of the company's decisions and policies. It involves giving clear instructions, sharing information, and ensuring that all parties understand the message being conveyed.

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A stock exchange is a market for existing shares of quoted companies. In other words, it is a platform where investors can buy and sell shares of companies that have been previously listed on the exchange. These shares are bought and sold between investors, and the stock exchange provides a mechanism for facilitating these transactions. This allows investors to invest in a company by purchasing a share of its ownership, and for companies to raise additional funds by issuing new shares of stock.

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The term you are looking for is "management." Management refers to the art of achieving the stated objectives of a business organization in the most efficient way possible through the use of human and material resources. In other words, it involves the planning, organizing, directing, and controlling of resources (such as people, finances, and technology) to achieve the goals of an organization. Managers are responsible for setting goals and objectives, developing strategies and plans to achieve them, and allocating resources in the most effective way possible. They also oversee the day-to-day operations of the organization, including the supervision of employees and the monitoring of performance. Management is a crucial aspect of any business organization as it helps to ensure that the organization is run efficiently and effectively. By setting clear objectives and goals, managers provide direction and purpose for the organization. Through effective planning, organizing, directing, and controlling, managers can optimize the use of resources and achieve the organization's goals in the most efficient way possible.

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The practice of selling goods in foreign countries at lower prices than obtainable in the exporting country is known as "dumping". This may be done by a company or a country with the aim of gaining market share or forcing competitors out of business in the importing country. Dumping can harm domestic producers and industries in the importing country and can also be seen as an unfair trade practice. It is often subject to anti-dumping laws and regulations to protect domestic industries.

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An agreement between two parties which can be enforced is called a contract. A contract is a legally binding agreement between two or more parties that creates an obligation to do or not to do a particular thing. It outlines the terms and conditions that both parties agree to abide by and the consequences of failing to do so. The contract can be enforced by a court of law if one of the parties breaches the terms of the agreement.

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The most accepted and convenient means of payment in foreign trade is the Letter of Credit (LC). An LC is a document issued by a bank that guarantees the payment to the seller, provided the seller complies with the terms and conditions of the LC. The LC is a secure method of payment for both the buyer and seller, as it ensures that the buyer's payment is held in escrow until the goods are received and found to be in good condition. The LC protects the buyer by ensuring that the payment is only made if the goods are delivered as per the agreed terms, and it protects the seller by guaranteeing that they will receive payment upon fulfilling their obligations under the contract. The LC is a widely accepted means of payment in foreign trade, as it is recognized and trusted by banks and businesses around the world. Compared to other means of payment such as bank drafts, telegraphic money orders, promissory notes, and bills of exchange, the LC is considered the most secure and convenient option. It provides a higher level of assurance for both the buyer and the seller, and it is easier to manage and verify than other payment methods.

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The coming together of firms at different stages of the production process is known as vertical integration. In this process, a company merges with or acquires another company that is in a different stage of the supply chain. For example, a car manufacturer acquiring a tire company, or a food company acquiring a farm. This allows for better control over the supply chain, reduction in costs, and greater efficiency in production. Horizontal integration, on the other hand, refers to the coming together of firms at the same stage of the production process.

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A Factor, Dei Credere Agent, Wholesale Merchant, Jobber, and Forwarding Agent are all involved in foreign trade in one way or another. However, if we had to choose one option, we could say that a Jobber may not be directly involved in foreign trade as their role is to buy and sell goods on behalf of a trader or wholesaler, typically within the domestic market. So, the correct answer is a Jobber.

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The Jobber is not involved in foreign trade. A jobber is a type of middleman who purchases goods in bulk from manufacturers or wholesalers and then sells them in smaller quantities to retailers or other businesses. However, their role is limited to the domestic market and they are not involved in foreign trade. On the other hand, factors, dei credere agents, wholesale merchants, and forwarding agents are all involved in foreign trade in different capacities. - Factors provide financing and other services to businesses engaged in foreign trade. - Dei credere agents act as guarantors for foreign buyers and sellers. - Wholesale merchants buy and sell goods in the foreign market. - Forwarding agents arrange for the transportation of goods between countries. In summary, a jobber is not involved in foreign trade as their role is limited to the domestic market, while the other options listed are involved in various aspects of foreign trade.

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The option that is not an objective of Consumer Association is: "prevent fake goods from entering the market." Consumer Association is a non-profit organization that aims to protect and promote the interests of consumers by empowering them with information and knowledge, advocating for their rights, and providing a platform for their voices to be heard. The organization focuses on several objectives to achieve its goal, such as ensuring that fair prices are charged, educating consumers on their rights, advocating for the enactment of consumer protection laws by the government, and ensuring that goods are of the correct specifications and quality. While preventing fake goods from entering the market is an important aspect of consumer protection, it is not the sole objective of a Consumer Association. A Consumer Association focuses on a broader range of issues that affect the welfare and interests of consumers, including issues related to product safety, fair pricing, and consumer education.

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The department responsible for the welfare of staff in an organization is the Personnel Department. This department is responsible for managing the human resources of an organization, including recruitment, training, compensation, benefits, and employee relations. They are also responsible for ensuring that the organization is compliant with labor laws and regulations. The personnel department is essential for creating a positive work environment and improving the productivity and performance of staff.

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The alternative term for ordinary shares is "equities". Ordinary shares represent ownership in a company and provide the shareholder with voting rights and a share in the company's profits through dividends. The term "equities" is often used interchangeably with "stocks" or "shares" and is commonly traded on stock exchanges.

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The objectives of a company are stated in the Memorandum of Association. The Memorandum of Association is a legal document that sets out the objectives, powers, and scope of activities of a company. It is a public document that must be filed with the Registrar of Companies when the company is incorporated. The Memorandum of Association provides the legal framework within which a company operates and defines its relationship with its shareholders and other stakeholders. It is one of the founding documents of a company and cannot be altered without the approval of the shareholders. The other options listed do not contain the objectives of a company.

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The stock exchange belongs to the capital market. The capital market is a market for buying and selling long-term financial instruments such as stocks, bonds, and other securities. The stock exchange is where shares of publicly listed companies are traded between buyers and sellers, and the prices of the shares are determined by supply and demand.

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The branch of commerce that deals with the creation and manufacture of goods or services is called production. Therefore, production is not a branch of commerce. Trade, transport, warehousing, and banking are all examples of branches of commerce. Trade involves buying and selling of goods and services, while transport is the movement of goods and people from one place to another. Warehousing is the storage of goods until they are needed or sold. Banking is the financial intermediary that accepts deposits and channels the money into lending activities.

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The Central Bank is responsible for carrying out the monetary policy of a country. Monetary policy refers to the actions taken by the central bank to influence the supply of money, availability of credit, and interest rates in order to achieve certain economic objectives such as price stability, full employment, and sustainable economic growth. The Ministry of Finance deals with fiscal policy, which involves government spending and taxation. The International Monetary Fund (IMF) and the World Bank are international organizations that provide financial assistance and support for economic development. The Internal Revenue Board is responsible for tax collection and administration.

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The objective of indigenisation is to help citizens participate fully in the economy. Indigenisation refers to policies that aim to transfer ownership, control, and management of businesses from foreign investors to local citizens. The idea is to encourage local entrepreneurship and to create economic opportunities for citizens who may have been excluded from participating in the economy. By giving local citizens greater control over businesses, indigenisation aims to create a more equitable distribution of wealth and income. Indigenisation can also help to promote local industries, create jobs, and stimulate economic growth. It is a way of promoting national development by encouraging citizens to take an active role in the economy. Compared to the other options listed, which include increasing foreign participation in business, attracting foreign capital, helping Nigerian entrepreneurs become monopolists, and distributing income, indigenisation has a unique focus on empowering local citizens and promoting economic inclusion.

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The term you are looking for is "rights issue". A rights issue is a way for a company to raise new capital by offering existing shareholders the opportunity to buy additional shares at a preferential rate. This is done by giving shareholders the right, but not the obligation, to purchase new shares in proportion to their existing holdings. The purpose of a rights issue is to give current shareholders a chance to maintain their ownership percentage in the company, while also raising additional capital. It is different from a bonus issue, where existing shareholders are given free additional shares based on their current holdings, without having to pay for them.

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Computerisation is not a branch of commerce. Commerce refers to the exchange of goods and services, including all activities that facilitate trade, such as transportation, warehousing, and insurance. Computerisation, on the other hand, is a tool that can be used in many industries to automate processes and improve efficiency. While it may be relevant to commerce and trade, it is not considered a branch of commerce itself. Instead, it is a technological advancement that has been applied to many fields, including commerce, manufacturing, and service industries.

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A postal order, either crossed or open, is only valid for a period of 6 months. This means that the recipient should present the postal order for payment within 6 months of the date of issue. After the expiry of the validity period, the postal order becomes stale and cannot be cashed. This is a common practice to prevent fraud and to ensure that the postal order is cashed within a reasonable time frame. It is important to note the expiry date of a postal order to avoid any inconvenience or loss of money.

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The term that describes giving clear instructions and information to all concerned in an organization to ensure proper understanding of decisions and policies is "communicating." It involves conveying information, ideas, and instructions effectively between different levels and departments within an organization. Effective communication helps to ensure that everyone understands the organization's goals, policies, and procedures, which can improve coordination, productivity, and overall performance. Examples of communication methods include emails, memos, meetings, reports, and presentations.

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The rate at which one country's products are exchanged for the products of another is called "terms of trade." This refers to the ratio of export prices to import prices. In other words, it is a measure of how much a country can import for a given amount of exports. A higher terms of trade means that a country can import more goods for the same amount of exports, while a lower terms of trade means that a country must export more to afford the same amount of imports. The terms of trade are an important factor in a country's economy because they can affect a country's ability to earn foreign exchange and maintain a balance of payments.

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A cheque is a written order to a bank to pay a specific amount of money to the person or organization named on the cheque. Typically, a cheque includes the cheque number, payee's name, drawer's name, date of issue, and the amount of money to be paid. However, a cheque does not contain the cashier's signature because it is the drawer who signs the cheque to authorize the payment. Therefore, the answer is "cashier's signature."

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An engineer is not a commercial occupation. An engineer is a professional who applies scientific and mathematical principles to design and develop products, systems, and structures. While engineers may work in industries related to commerce, their profession is primarily focused on the design and development of products, rather than on buying, selling, or trading goods or services. In contrast, the other options listed in the question (stock broker, banker, common carrier, and advertising agent) are all occupations that are directly involved in commerce, such as buying and selling securities, providing financial services, transporting goods, or promoting products or services.

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The process of taking over private business by the government is known as "nationalisation." Nationalisation occurs when a government takes control of a privately owned company or industry to make it run for the benefit of the general public, rather than for the profit of private owners or shareholders. This may occur in industries that are deemed critical to the functioning of the country, such as transportation, energy, or telecommunications. The government may buy out the private owners or simply take over the assets and operations of the company. The purpose of nationalisation is usually to ensure that essential services remain accessible and affordable to the general public.

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A public corporation relies on the government for its initial capital. A public corporation is a type of organization that is owned and operated by the government, and its initial capital is usually provided by the government. This funding may come in the form of grants, loans, or other financial support. Public corporations may be created to provide essential services to the public, such as transportation, utilities, or healthcare. They may also be established to manage public assets, such as parks or museums. Unlike private companies, public corporations are accountable to the government and the public, and are subject to government regulations and oversight.

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The term you're looking for is "a cartel". A cartel is a group of companies that produce similar products or services, and they work together to control the supply of their products or services in order to keep prices high. They do this by limiting the amount of goods or services they produce, which creates an artificial scarcity that drives up prices. Essentially, it's a way for companies to collude and fix prices in their industry, which is often illegal and can harm consumers by reducing competition.

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A group of firms that produce similar goods or services is called an "industry". An industry can be defined as a collection of companies that produce similar products or services and compete with each other to gain a larger share of the market. These firms often have similar characteristics such as production processes, technologies, and target markets. Examples of industries include the automobile industry, pharmaceutical industry, and the banking industry. The grouping of firms into an industry helps analysts to better understand and compare the performance of companies within that industry.

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(a) What is production?

Production is the creation of goods and services to satisfy human wants. It covers all the activities involved in changing raw materials into finished goods and in making services available, up to the point where the goods and services reach the final consumer. Production is not complete until the goods or services get to the consumer.

(b) Activities involved in the three occupations

Industrial occupation: This is concerned with the actual production and processing of goods. It is divided into:

• Extractive: obtaining raw materials directly from nature, such as mining, farming, fishing, lumbering and quarrying.
• Manufacturing: converting raw materials into semi-finished or finished goods, for example turning cotton into cloth or crude oil into petrol.
• Constructive: assembling and building fixed structures such as roads, bridges, houses and ships.

Commercial occupation: This covers trade and the aids to trade that help to distribute the goods produced. It includes buying and selling (home and foreign trade), transportation, warehousing, banking, insurance, advertising and communication. These activities make goods available to consumers where and when they are needed.

Service occupation: This involves the provision of direct personal and professional services rather than tangible goods. It includes:

• Direct/personal services rendered to individuals, such as those of doctors, teachers, lawyers, hairdressers and musicians.
• Commercial services rendered to businesses, such as those of accountants and consultants.

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(a) Meaning of credit

Credit is an arrangement by which a buyer receives goods, services or money now and pays for them at a later agreed date, or by instalments, instead of paying immediately. It is based on trust and the confidence that the debtor will be able and willing to pay in the future.

(b) Three ways by which banks grant credit to customers

• Bank loan: The bank lends an agreed lump sum to the customer for a fixed period. The full amount is credited to the customer's account at once, and the customer repays the principal plus interest over the agreed period.
• Bank overdraft: The bank allows a current-account customer to withdraw more than the balance in the account up to an agreed limit. Interest is charged only on the amount actually overdrawn.
• Discounting of bills of exchange: The bank buys a customer's bill of exchange before its maturity date, paying the customer the face value less a discount (interest), thereby providing immediate cash.

(c) Advantages of credit sales

• They increase sales and turnover because customers who lack ready cash are still able to buy.
• They help to attract and retain customers, thereby building goodwill and a lasting business relationship.

Disadvantages of credit sales

• There is the risk of bad debts if some customers fail to pay.
• The seller's working capital is tied up in debtors, which may create cash-flow problems.
• Extra costs are incurred in keeping records of debtors and in following up and recovering debts.

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(a) Distinction between commercial banks and merchant banks

(b) Explanation of the types of cheque

• (i) Order cheque: A cheque made payable to a named person 'or order'. It can only be cashed by the named payee, or transferred to another person by endorsement (signing on the back).
• (ii) Bearer cheque: A cheque payable to 'bearer', that is, to whoever presents it at the bank. It passes from one person to another by mere delivery, without endorsement, and is therefore risky if lost.
• (iii) Certified cheque: A cheque that the drawer's bank has confirmed and marked as good, guaranteeing that funds are available to meet it. It assures the payee that the cheque will not be dishonoured.
• (iv) Non-negotiable cheque: A crossed cheque marked 'not negotiable'. It can still be transferred, but the transferee gets no better title than the person who gave it; if the cheque was stolen, the holder cannot claim ownership. It reduces the risk of loss through theft.

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NITEL (the Nigerian Telecommunications Limited) provided telecommunication services that supported business activities in Nigeria in the following ways:

1. Provision of telephone services: NITEL provided telephone lines that enabled businessmen to communicate quickly with customers, suppliers and branches within and outside the country, saving time and travelling costs.
2. Facilitation of speedy transmission of information: Through services such as telex, telegram and fax, NITEL allowed firms to send and receive orders, quotations and business messages rapidly, so that decisions could be made without delay.
3. Promotion of international trade: By linking Nigerian businesses with the outside world through international call and communication facilities, NITEL made it easier for exporters and importers to negotiate and conclude foreign transactions.
4. Employment and reduction of travelling: NITEL created jobs for many Nigerians and, by making distant communication possible, reduced the need for businessmen to travel physically for every transaction, thereby cutting costs.
5. Support for banking and other services: NITEL's lines carried the data and messages needed by banks, insurance firms and other institutions to transfer funds and confirm transactions, thereby speeding up commercial and financial activities.

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Nationalised industries (public corporations owned by the State) differ from public limited companies (privately owned joint-stock companies) in the following ways:

1. Ownership: A nationalised industry is owned by the government on behalf of the whole nation, while a public limited company is owned by private individual shareholders who have bought its shares.
2. Source of capital: A nationalised industry obtains its capital mainly from government funds, grants and loans, whereas a public limited company raises its capital by selling shares and debentures to the public.
3. Aim or motive: A nationalised industry is set up primarily to provide essential services to the public, not mainly to make profit, while a public limited company is established mainly to maximise profit for its shareholders.
4. Formation: A nationalised industry is created by a special Act of Parliament (a statute), while a public limited company is formed by registration under the Companies Act.
5. Control and management: A nationalised industry is controlled by a board appointed by the government and is answerable to a minister and to Parliament, whereas a public limited company is managed by a board of directors elected by the shareholders at the annual general meeting.
6. Distribution of profit: Any surplus made by a nationalised industry belongs to the government and may be used for public purposes, while the profit of a public limited company is shared among shareholders as dividends.

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(a) What is personal selling?

Personal selling is a method of promotion in which a salesperson meets and talks directly with a prospective buyer, face to face, in order to persuade the buyer to purchase a product. It involves a personal, two-way communication between the seller and the customer, during which the salesperson explains the product, answers questions and tries to close the sale.

(b) Four reasons why firms engage in personal selling

• To persuade customers to buy: The salesperson can explain the benefits of the product convincingly and directly influence the customer's decision, thereby increasing sales.
• To give detailed explanation and demonstration: Personal selling allows the salesperson to describe and demonstrate how technical or complex products work, which advertising alone cannot do adequately.
• To provide feedback and answer questions on the spot: The salesperson can immediately answer the customer's questions, remove doubts and gather information about customers' needs and reactions for the firm.
• To build good customer relationships: Face-to-face contact helps to win the confidence and loyalty of customers, provides after-sales advice and encourages repeat purchases.

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(a) What is planning?

Planning is the management function of deciding in advance what is to be done, how it is to be done, when it is to be done and who is to do it, in order to achieve the goals of an organisation. It involves setting objectives and working out the best course of action to attain them. Planning is the first and most basic function of management on which the other functions depend.

(b) Five advantages of delegation of authority

Delegation of authority is the process by which a superior gives part of his authority and responsibility to a subordinate to carry out certain tasks. Its advantages include:

1. It reduces the workload of the superior manager: By passing routine tasks to subordinates, the manager is free to concentrate on more important and policy matters.
2. It ensures quick decisions and faster work: Since subordinates can act on the spot without always waiting for the superior, decisions are taken and work is done more quickly.
3. It trains and develops subordinates: Delegation gives subordinates the opportunity to gain experience and develop managerial skills, preparing them for higher positions.
4. It motivates subordinates: Being trusted with authority raises the morale, confidence and job satisfaction of subordinates, encouraging them to work harder.
5. It ensures continuity: Because subordinates are trained through delegation, the work of the organisation can continue smoothly even when the superior is absent, ill or has left.

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(a) Who is an agent?

An agent is a person who is employed and authorised by another person, called the principal, to act on his behalf, especially to bring the principal into a contractual or business relationship with a third party. The agent represents the principal and acts in the principal's name.

(b) Six duties of an agent

• To obey the lawful instructions of the principal and act strictly within the authority given to him.
• To exercise reasonable care, skill and diligence in carrying out the work assigned by the principal.
• To act in good faith and in the best interest of the principal, avoiding any conflict of interest.
• To render a true and proper account of all transactions and monies handled on behalf of the principal.
• To keep the principal's affairs and business secrets confidential.
• Not to make any secret profit or accept bribes from a third party; any commission or profit made must be disclosed and handed over to the principal.

(c) Three rights of an agent

• The right to be paid the agreed commission or remuneration for services rendered.
• The right to be reimbursed for all lawful expenses incurred in the course of the agency.
• The right of lien, that is, to retain the principal's goods in his possession until he is paid what is due to him.

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(a) Four obligations of the employer to the employee

• To pay agreed wages or salary: The employer must pay the employee the agreed remuneration promptly and in full for the work done.
• To provide a safe working environment: The employer must provide safe and healthy working conditions and the necessary tools and protective equipment for the job.
• To provide work and reasonable conditions: The employer should provide the employee with the work agreed upon and grant entitlements such as leave, rest periods and other agreed benefits.
• To indemnify or compensate the employee: The employer should reimburse expenses lawfully incurred by the employee in the course of duty and compensate the employee for injuries suffered at work in line with the law.

(b) Four duties of the employee to the employer

• To obey lawful and reasonable instructions given by the employer in the course of the work.
• To be honest and faithful: to serve the employer with loyalty, avoid making secret profit and not disclose the employer's business secrets.
• To exercise care and skill: to perform the work carefully, diligently and competently, taking proper care of the employer's property and equipment.
• To be punctual and regular: to attend work regularly, keep to the agreed hours and give the employer his full and dedicated service.

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(a) What is transportation by pipeline?

Transportation by pipeline is the movement of liquids and gases, such as crude oil, refined petroleum products, natural gas and water, through a network of connected pipes from one place (for example an oil field or refinery) to another (for example a depot, port or consumer). The materials flow through the pipes under pressure with the aid of pumping stations.

(b) Advantages of transportation by pipeline

• It is cheap to operate once the pipeline has been laid, because it needs little labour and energy to move large volumes.
• It allows the continuous, uninterrupted flow of large quantities of liquids and gases over long distances.
• It is not affected by road traffic congestion or bad weather, so delivery is fast and reliable.
• It is safe from theft and damage since the goods travel underground and out of reach.

Disadvantages of transportation by pipeline

• The initial cost of laying the pipeline and building pumping stations is very high.
• It is limited to only liquids and gases and cannot carry solid goods or passengers.
• It is fixed in route and inflexible; it cannot be diverted easily to serve new locations.
• Leakages, bursts or sabotage (vandalism) can cause serious pollution, fire and huge losses.