Practice Post UTME CALEB UNIVERSITY commerce 2020 Past Questions

Question 1

In the context of insurance and risk management, what is the primary function of reinsurance?

A. To reduce the risk of loss for the policyholder

B. To increase the premium paid by the policyholder

Correct C. To transfer risk from the insurer to the reinsurer

D. To provide additional coverage for the policyholder

Correct Answer: C

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Question 2

A company is considering the introduction of a new product line. What type of production specialization would be most appropriate?

A. Vertical specialization

B. Horizontal specialization

Correct C. Product specialization

D. Process specialization

Correct Answer: C

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Question 3

A consumer protection agency has received a complaint about a company's unfair business practices. What is the primary responsibility of the agency in this situation?

Correct A. To investigate the complaint and take enforcement action

B. To provide education and awareness about consumer rights

C. To mediate a settlement between the company and the consumer

D. To provide legal representation for the consumer

Correct Answer: A

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Question 4

A company is considering the use of just-in-time inventory management. What is the primary benefit of this approach?

Correct A. Reduced inventory costs

B. Improved product quality

C. Increased efficiency in production

D. Enhanced customer satisfaction

Correct Answer: A

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Question 5

A company is considering the use of a warehouse management system. What is the primary function of this system?

Correct A. To manage inventory levels and track shipments

B. To optimize warehouse layout and storage capacity

C. To automate tasks such as receiving and shipping

D. To provide real-time visibility into warehouse operations

Correct Answer: A

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Question 6

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain constant

D. shift to the left

Correct Answer: B

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Question 7

A company's marketing strategy involves creating a unique selling proposition (USP) to differentiate its product from competitors. What is the primary goal of a USP?

A. To increase market share

B. To reduce production costs

Correct C. To create a unique selling proposition

D. To improve customer satisfaction

Correct Answer: C

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Question 8

A consumer protection agency has received a complaint about a company's false advertising. The agency's primary goal is to

A. Prosecute the company

B. Compensate the affected consumers

Correct C. Investigate the complaint and take necessary action

D. Ignore the complaint

Correct Answer: C

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Question 9

A company has decided to launch a new product in a foreign market. The company's marketing strategy involves conducting market research to identify the target audience. What is the primary purpose of market research in this context?

Correct A. To identify the target audience

B. To determine the optimal pricing strategy

C. To create a unique selling proposition

D. To develop a marketing mix

Correct Answer: A

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Question 10

A company has decided to launch a new product in a foreign market. The company's marketing strategy involves conducting market research to identify the target audience. What is the primary purpose of market research in this context?

Correct A. To identify the target audience

B. To determine the optimal pricing strategy

C. To create a unique selling proposition

D. To develop a marketing mix

Correct Answer: A

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Question 11

A company specializes in producing and selling a unique brand of shoes. The production process involves a series of complex steps, including design, material selection, and manufacturing. If the company's profit margin is 25% and the selling price of each shoe is ₦12,500, what is the cost price of each shoe?

Correct A. ₦10,000

B. ₦10,500

C. ₦11,000

D. ₦11,500

Correct Answer: A

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Question 12

A firm is considering two different modes of transportation for its goods: road and rail. The cost of transporting goods by road is ₦5,000 per kilometer, while the cost of transporting goods by rail is ₦3,000 per kilometer. If the firm needs to transport goods over a distance of 200 kilometers, what is the total cost of transportation by road and rail, respectively?

Correct A. ₦1,000,000 (road), ₦600,000 (rail)

B. ₦1,000,000 (rail), ₦600,000 (road)

C. ₦1,200,000 (road), ₦800,000 (rail)

D. ₦1,200,000 (rail), ₦800,000 (road)

Correct Answer: A

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Question 13

A consumer protection agency is investigating a complaint about a company's advertising practices. The company has been accused of making false claims about the quality of its products. If the agency finds that the company has indeed made false claims, what is the likely outcome?

A. The company will be fined ₦500,000

B. The company will be ordered to stop advertising

Correct C. The company will be sued for damages

D. The company will be allowed to continue advertising

Correct Answer: C

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Question 14

A sole trader is considering expanding its business by opening a new branch. If the initial investment required to open the new branch is ₦500,000, and the expected annual profit is ₦200,000, what is the payback period?

Correct A. 2.5 years

B. 3 years

C. 3.5 years

D. 4 years

Correct Answer: A

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Question 15

A company is considering importing goods from a foreign country. If the cost of importing the goods is ₦1,000,000, and the expected selling price is ₦1,500,000, what is the profit margin?

Correct A. 25%

B. 30%

C. 35%

D. 40%

Correct Answer: A

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Question 16

A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the legal implication of this?

A. The business is not entitled to limited liability.

B. The business is not entitled to issue shares.

Correct C. The business is not entitled to sue or be sued in its own name.

D. The business is not entitled to pay taxes.

Correct Answer: C

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Question 17

A company has a capital of ₦10,000,000 divided into 10,000 shares of ₦1,000 each. If the company issues 5,000 shares at a premium of ₦200 per share, what is the total amount received from the issue of shares?

A. ₦10,000,000

Correct B. ₦12,000,000

C. ₦15,000,000

D. ₦18,000,000

Correct Answer: B

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Question 18

A foreign trade agreement between Nigeria and a foreign country involves the export of 10,000 metric tons of cocoa beans. If the export price is 1,500 per metric ton, what is the total value of the export in US dollars?

A. ₦15,000,000

Correct B. ₦18,000,000

C. ₦20,000,000

D. ₦22,000,000

Correct Answer: B

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Question 19

A bank has a reserve requirement of 10% on deposits. If a customer deposits ₦10,000,000, what is the amount of cash that the bank must hold in reserve?

Correct A. ₦1,000,000

B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: A

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Question 20

A company has a policy of paying a 10% dividend on its shares. If the company has 10,000 shares outstanding and the dividend per share is ₦5, what is the total amount paid out in dividends?

A. ₦50,000

B. ₦60,000

Correct C. ₦70,000

D. ₦80,000

Correct Answer: C

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Question 21

The Central Bank of Nigeria (CBN) uses the monetary policy instrument of Open Market Operations (OMO) to manage the money supply in the economy. What is the primary objective of OMO in the context of monetary policy?

A. To reduce the money supply in the economy

Correct B. To increase the money supply in the economy

C. To control inflation

D. To stabilize the exchange rate

Correct Answer: B

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Question 22

A firm is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦1.5 million and has a variable cost of ₦200 per unit. Process B requires an initial investment of ₦2 million and has a variable cost of ₦150 per unit. If the firm produces 10,000 units, what is the total cost of production for each process?

Correct A. Process A: ₦2.5 million, Process B: ₦2.8 million

B. Process A: ₦2.8 million, Process B: ₦2.5 million

C. Process A: ₦3.2 million, Process B: ₦2.2 million

D. Process A: ₦2.2 million, Process B: ₦3.2 million

Correct Answer: A

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Question 23

A company is considering launching a new product in the Nigerian market. The company has conducted market research and has determined that the demand for the product is elastic. What is the implication of this finding for the company's pricing strategy?

A. The company should set a high price for the product

Correct B. The company should set a low price for the product

C. The company should use a penetration pricing strategy

D. The company should use a skimming pricing strategy

Correct Answer: B

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Question 24

A firm is considering exporting its product to the European market. The firm has determined that the exchange rate between the Nigerian naira and the Euro is 1:1.5. If the firm sells its product for ₦1,000 in Nigeria, what is the equivalent price in Euros?

Correct A. €666.67

B. €500

C. €750

D. €1,000

Correct Answer: A

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Question 25

A firm is considering importing a raw material from the Asian market. The firm has determined that the cost of transportation from Asia to Nigeria is ₦500 per unit. If the firm imports 10,000 units, what is the total transportation cost?

Correct A. ₦5 million

B. ₦5.5 million

C. ₦6 million

D. ₦6.5 million

Correct Answer: A

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