POST UTME PAN-ATLANTIC UNIVERSITY 2021 Commerce | Objective

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Question 1
What is the primary function of the International Chamber of Commerce (ICC) in facilitating international trade?
A. To provide a platform for governments to negotiate trade agreements
Correct B. To establish a set of rules and guidelines for international trade
C. To promote the use of electronic data interchange (EDI) in international trade
D. To provide training and education for international traders

Correct Answer: B

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Question 2
A company is considering investing in a foreign market. What is the primary risk associated with this investment?
A. Currency risk
Correct B. Country risk
C. Transfer risk
D. Political risk

Correct Answer: B

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Question 3
A ship is traveling from Lagos to London. What is the primary mode of transportation used for this journey?
A. Air transport
B. Road transport
C. Rail transport
Correct D. Sea transport

Correct Answer: D

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Question 4
A company is considering purchasing a new insurance policy. What is the primary benefit of this policy?
Correct A. To reduce the risk of financial loss
B. To increase the company's revenue
C. To improve the company's credit rating
D. To reduce the company's expenses

Correct Answer: A

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Question 5
A bank is considering lending money to a customer. What is the primary factor that the bank will consider when making this decision?
A. The customer's credit score
B. The customer's income
C. The customer's debt-to-equity ratio
Correct D. The customer's credit history

Correct Answer: D

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Question 6
A company's liability for a product defect is governed by the Consumer Protection Act. Which of the following is a requirement for a product to be considered defective?
A. The product must be in a defective condition unreasonably dangerous to the user.
Correct B. The product must be in a condition that poses a risk to the user's health or safety.
C. The product must be in a condition that is not in conformity with the express warranty of the manufacturer.
D. The product must be in a condition that is not in conformity with the implied warranty of merchantability.

Correct Answer: B

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Question 7
A company has a sole trader business structure. What is the primary advantage of this structure?
A. Unlimited personal liability
Correct B. Easy to set up and maintain
C. Ability to issue shares to investors
D. Ability to hire employees

Correct Answer: B

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Question 8
A bank has a customer who has a savings account with a balance of ₦100,000. The customer wants to withdraw ₦50,000. What is the new balance of the account?
Correct A. ₦50,000
B. ₦100,000
C. ₦150,000
D. ₦200,000

Correct Answer: A

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Question 9
A company has a marketing campaign that includes a promotion of 'Buy One Get One Free'. What type of pricing strategy is this?
A. Penetration pricing
B. Skim pricing
Correct C. Bundle pricing
D. Loss leader pricing

Correct Answer: C

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Question 10
A company has a risk management strategy that includes a diversification of its investments. What is the primary benefit of this strategy?
Correct A. Reduced risk
B. Increased risk
C. Improved returns
D. Decreased returns

Correct Answer: A

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Question 11
A company's marketing strategy involves a mix of advertising, sales promotion, and public relations. Which of the following is NOT a primary objective of advertising?
A. To inform customers about the company's products
B. To persuade customers to buy the company's products
C. To create a sense of urgency among customers
Correct D. To provide a detailed description of the company's products

Correct Answer: D

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Question 12
A firm's cost of capital is 10% per annum. If it invests in a project with a net present value of ₦1,500,000, what is the expected rate of return on the project?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 13
A company's inventory turnover ratio is 4 times per year. If its average inventory level is ₦500,000, what is the total cost of goods sold for the year?
A. ₦2,000,000
B. ₦2,500,000
Correct C. ₦3,000,000
D. ₦3,500,000

Correct Answer: C

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Question 14
A firm's marketing mix involves a product with a high level of quality, a price of ₦10,000, and a promotion strategy that includes advertising and sales promotion. Which of the following is NOT a characteristic of the product?
A. High quality
B. High price
C. Wide distribution
Correct D. Low price

Correct Answer: D

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Question 15
A company's financial statements show a net income of ₦1,000,000 and a total asset turnover ratio of 2 times. What is the company's return on equity (ROE)?
A. 10%
Correct B. 12%
C. 15%
D. 18%

Correct Answer: B

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Question 16
In a perfectly competitive market, the law of diminishing marginal utility implies that the demand curve for a firm's product is likely to be
A. inelastic
Correct B. elastic
C. unit elastic
D. perfectly inelastic

Correct Answer: B

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Question 17
A firm's production function is given by Q = 2L^(1/2)K^(1/2), where Q is output, L is labor and K is capital. If the firm wants to produce 16 units of output, and the wage rate is ₦100 per unit of labor, and the rental rate of capital is ₦200 per unit of capital, then the total cost of production is
A. ₦1200
Correct B. ₦1600
C. ₦2400
D. ₦3200

Correct Answer: B

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Question 18
A company is considering two marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 20% increase in sales force. If the company's current sales are ₦1,000,000, and the marginal revenue from each additional unit sold is ₦100, then the expected increase in sales revenue from Strategy A is
A. ₦10,000
B. ₦20,000
Correct C. ₦30,000
D. ₦40,000

Correct Answer: C

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Question 19
A firm's supply function is given by P = 2Q + 10, where P is price and Q is quantity. If the firm wants to produce 5 units of output, then the price it will receive is
A. ₦15
B. ₦20
Correct C. ₦25
D. ₦30

Correct Answer: C

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Question 20
A company is considering two investment projects: Project A, which has a 10% chance of success and a 90% chance of failure, and Project B, which has a 20% chance of success and an 80% chance of failure. If the expected return on investment for Project A is ₦100,000, and the expected return on investment for Project B is ₦120,000, then the expected return on investment for the portfolio of both projects is
A. ₦110,000
B. ₦120,000
Correct C. ₦130,000
D. ₦140,000

Correct Answer: C

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Question 21
A sole trader's business is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a requirement for registration?
A. Obtain a Tax Identification Number (TIN)
Correct B. Register with the Corporate Affairs Commission (CAC)
C. Obtain a Business Name Certificate
D. Obtain a Trade License

Correct Answer: B

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Question 22
A company's Memorandum and Articles of Association are filed with the Corporate Affairs Commission (CAC). What is the purpose of filing these documents?
A. To obtain a Business Name Certificate
Correct B. To register the company with the CAC
C. To file the company's annual returns
D. To obtain a Tax Identification Number (TIN)

Correct Answer: B

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Question 23
A warehouse is used to store goods for a company. What is the primary purpose of a warehouse?
A. To display goods for sale
B. To store goods for a short period
Correct C. To protect goods from damage or loss
D. To transport goods to customers

Correct Answer: C

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Question 24
A company sells goods to a consumer. What is the primary responsibility of the company towards the consumer?
A. To provide a warranty for the goods
Correct B. To ensure the goods are of good quality
C. To provide a refund for the goods
D. To protect the consumer's personal data

Correct Answer: B

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Question 25
A company exports goods to a foreign country. What is the primary responsibility of the company towards the foreign country?
Correct A. To comply with the foreign country's laws and regulations
B. To ensure the goods are of good quality
C. To provide a warranty for the goods
D. To protect the foreign country's intellectual property

Correct Answer: A

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