POST UTME NILE UNIVERSITY 2021 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A sole trader's business is considered a separate legal entity from the owner's personal assets. However, in the event of a lawsuit, the owner's personal assets may still be at risk. What is the name of this risk?
A. Unlimited liability
B. Limited liability
C. Joint and several liability
D. Solidarity liability
Question 2
A business law is designed to regulate the conduct of businesses and protect the rights of consumers. Which of the following is a correct example of a business law?
A. Uniform Commercial Code
B. Securities Exchange Act
C. Federal Trade Commission Act
D. Sherman Antitrust Act
Question 3
A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the name of the process by which a bank creates new money?
A. Fractional reserve banking
B. Monetary policy
C. Fiscal policy
D. Crowding out
Question 4
A company's risk management strategy involves diversification of its investments. What is the primary benefit of this strategy?
A. Reduced risk
B. Increased returns
C. Improved liquidity
D. Enhanced reputation
Question 5
A company has decided to go public by issuing shares to the public. What is the primary benefit of this decision?
A. Increased ownership by the public
B. Improved liquidity for shareholders
C. Reduced risk for investors
D. Increased market value
Question 6
A sole trader business is considering the use of a limited company structure. What is the primary advantage of using a limited company structure?
A. Limited liability
B. Easy to set up
C. Flexibility in decision-making
D. No tax implications
Question 7
A bank has a reserve requirement of 10% and a cash reserve of ₦1 million. What is the maximum amount of credit that the bank can extend to its customers?
A. ₦9 million
B. ₦10 million
C. ₦11 million
D. ₦12 million
Question 8
A consumer protection law is designed to protect consumers from unfair or deceptive business practices. Which of the following is a correct example of a consumer protection law?
A. Fair Packaging and Labeling Act
B. Truth in Lending Act
C. Consumer Product Safety Act
D. Fair Credit Reporting Act
Question 9
A consumer protection law requires that all businesses must provide a clear and concise warranty to their customers. What is the primary purpose of this warranty?
A. To protect the business from liability
B. To provide a clear understanding of the product's features
C. To ensure customer satisfaction
D. To promote the business's brand
Question 10
A company is considering the production of a new product. The product requires an initial investment of ₦10 million and has a projected annual profit of ₦5 million. What is the payback period of the investment?
A. 2 years
B. 3 years
C. 4 years
D. 5 years
Question 11
A company has a turnover of ₦1,500,000 and a profit of ₦200,000. What is the company's profit margin?
A. 10%
B. 20%
C. 30%
D. 40%
Question 12
A consumer purchases a product for ₦5,000 and pays an additional ₦1,000 for insurance. What is the total cost of the product?
A. ₦6,000
B. ₦6,500
C. ₦7,000
D. ₦7,500
Question 13
In a sole trader business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Easy to set up
C. Flexibility in decision-making
D. No tax implications
Question 14
A company is considering the introduction of a new product line. The product has a high demand in the market, but the production process is complex and requires significant investment. What is the primary consideration for the company in this scenario?
A. Market demand
B. Production costs
C. Investment required
D. Competitor analysis
Question 15
The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?
A. Nigeria producing cotton and importing textiles
B. Nigeria producing textiles and importing cotton
C. Nigeria producing both cotton and textiles
D. Nigeria producing neither cotton nor textiles

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