POST UTME ABU 2017 Commerce | Objective

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Question 1 View Details
In the context of production and specialization, what is the primary advantage of a country specializing in the production of a particular good?
A. Increased labor productivity
Correct B. Improved resource allocation
C. Enhanced consumer welfare
D. Increased government revenue

Correct Answer: B

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Question 2 View Details
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's labor and capital inputs are increased by 20% and 15% respectively, what is the new level of output?
A. 10
B. 12
Correct C. 15
D. 18

Correct Answer: C

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Question 3 View Details
A company has a portfolio of assets with the following returns and standard deviations: Asset A: 8% and 12%, Asset B: 10% and 15%. If the company allocates 60% of its portfolio to Asset A and 40% to Asset B, what is the expected return and standard deviation of the portfolio?
Correct A. 9.2% and 13.2%
B. 10.4% and 14.6%
C. 8.4% and 12.4%
D. 9.6% and 13.6%

Correct Answer: A

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Question 4 View Details
A firm's demand function is given by Q = 100 - 2P. If the firm's marginal revenue is 50, what is the optimal price?
A. 25
Correct B. 30
C. 35
D. 40

Correct Answer: B

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Question 5 View Details
A country's production possibilities frontier is given by the equation 2L + 3K = 100. If the country's labor and capital inputs are increased by 20% and 15% respectively, what is the new level of output?
A. 120
B. 130
Correct C. 140
D. 150

Correct Answer: C

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Question 6 View Details
A company's sole trader is considering expanding its operations to a new market. The company's current market share is 30% and the new market has a potential size of ₦10 billion. If the company's current profit margin is 15% and it expects to maintain the same profit margin in the new market, what is the maximum amount of capital the company should invest in the new market?
A. ₦1.5 billion
Correct B. ₦2.5 billion
C. ₦3.5 billion
D. ₦4.5 billion

Correct Answer: B

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Question 7 View Details
A firm is considering the purchase of a new machine that will cost ₦5 million. The machine is expected to last for 5 years and will save the firm ₦1.2 million per year in labor costs. If the firm's cost of capital is 10% per annum, what is the net present value (NPV) of the investment?
Correct A. ₦2.5 million
B. ₦3.5 million
C. ₦4.5 million
D. ₦5.5 million

Correct Answer: A

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Question 8 View Details
A company's warehouse has a capacity to store 10,000 units of a product. The company currently has 8,000 units in stock and is expecting an additional 2,000 units to be delivered. If the company uses a first-in-first-out (FIFO) inventory system, what is the probability that the company will run out of stock?
A. 0.2
B. 0.3
C. 0.4
Correct D. 0.5

Correct Answer: D

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Question 9 View Details
A firm is considering the production of a new product that will require an initial investment of ₦3 million. The product is expected to generate revenue of ₦1.5 million per year for 5 years. If the firm's cost of capital is 12% per annum, what is the internal rate of return (IRR) of the investment?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 10 View Details
A bank is considering the issuance of a new bond with a face value of ₦10 million and a coupon rate of 8% per annum. If the bank's cost of capital is 10% per annum, what is the yield to maturity (YTM) of the bond?
A. 7%
Correct B. 8%
C. 9%
D. 10%

Correct Answer: B

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Question 11 View Details
In a warehouse with a capacity of 10,000 units, the inventory level is currently at 60% capacity. If 500 units are received in a shipment, what is the new inventory level as a percentage of capacity?
A. 40%
Correct B. 50%
C. 60%
D. 70%

Correct Answer: B

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Question 12 View Details
A bank offers a 5-year fixed deposit account with a 10% annual interest rate compounded annually. If ₥0,000 is deposited at the beginning of the first year, how much will be in the account at the end of the fifth year?
Correct A. ₦1,628.93
B. ₦2,628.93
C. ₦3,628.93
D. ₦4,628.93

Correct Answer: A

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Question 13 View Details
A company's profit is calculated as the difference between its revenue and cost. If the company's revenue is ₡,000,000 and its cost is ₨00,000, what is the company's profit?
A. ₡,000
Correct B. ₢00,000
C. ₡,200,000
D. ₡,800,000

Correct Answer: B

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Question 14 View Details
A container ship has a cargo capacity of 50,000 tons. If the ship is currently carrying 30,000 tons of cargo, what percentage of its capacity is the ship currently utilizing?
A. 40%
Correct B. 50%
C. 60%
D. 70%

Correct Answer: B

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Question 15 View Details
A bank's interest rate is 12% per annum compounded quarterly. If ₡,000 is deposited at the beginning of the first quarter, how much will be in the account at the end of the second year?
Correct A. ₡,628.16
B. ₡,628.32
C. ₡,628.48
D. ₡,628.64

Correct Answer: A

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Question 16 View Details
A sole trader's business is considered a separate legal entity from its owner. However, the owner is personally liable for all business debts and obligations. What is the name of this type of liability?
Correct A. Unlimited liability
B. Limited liability
C. Joint and several liability
D. Strict liability

Correct Answer: A

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Question 17 View Details
A company's production process involves the transformation of raw materials into finished goods. Which of the following is an example of a production process?
A. Sole trading
Correct B. Manufacturing
C. Wholesaling
D. Retailing

Correct Answer: B

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Question 18 View Details
A business's financial statements provide information about its financial position and performance. Which of the following financial statements provides information about a business's profitability?
A. Balance Sheet
Correct B. Income Statement
C. Cash Flow Statement
D. Statement of Changes in Equity

Correct Answer: B

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Question 19 View Details
A business's warehouse is used to store raw materials, work-in-progress, and finished goods. What is the primary purpose of a warehouse?
A. To display finished goods to customers
Correct B. To store raw materials, work-in-progress, and finished goods
C. To transport goods from one location to another
D. To sell goods to customers

Correct Answer: B

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Question 20 View Details
A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the name of this function?
Correct A. Lending function
B. Depositing function
C. Investment function
D. Risk management function

Correct Answer: A

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Question 21 View Details
The concept of 'Gross National Product' (GNP) is closely related to the concept of 'National Income'. Discuss the relationship between these two economic indicators.
Correct A. GNP is a broader measure of a nation's economic activity than National Income.
B. National Income is a more comprehensive measure of a nation's economic activity than GNP.
C. GNP and National Income are interchangeable terms.
D. GNP is a measure of a nation's economic activity, while National Income is a measure of a nation's income.

Correct Answer: A

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Question 22 View Details
A company has a total of 1000 shares outstanding, with a par value of ₦10 per share. If the company's market value is ₦15 per share, what is the total market value of the company's shares?
A. ₦15,000
Correct B. ₦15,000,000
C. ₦15,000,000,000
D. ₦15,000,000,000,000

Correct Answer: B

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Question 23 View Details
A firm's cost function is given by C(q) = 2q^2 + 5q + 10. If the firm produces 10 units of output, what is the total cost of production?
A. ₦150
B. ₦250
Correct C. ₦350
D. ₦450

Correct Answer: C

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Question 24 View Details
A company's revenue function is given by R(x) = 3x^2 - 2x + 1. If the company sells 5 units of output, what is the total revenue?
A. ₦40
B. ₦50
Correct C. ₦60
D. ₦70

Correct Answer: C

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Question 25 View Details
A firm's demand function is given by Q = 100 - 2P. If the price of the good is ₦20, how many units will be demanded?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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