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POST UTME BOWEN UNIVERSITY 2020 Commerce | Objective

Are you preparing for POST UTME BOWEN UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1

In a sole trade business, what is the primary source of finance?

Correct A. Owner's savings

B. Bank loans

C. Government grants

D. Investments

Correct Answer: A

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Question 2

A company's marketing strategy involves creating a new product line. Which of the following is a key benefit of this strategy?

A. Increased market share

B. Reduced competition

C. Improved customer loyalty

Correct D. Enhanced brand reputation

Correct Answer: D

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Question 3

A consumer purchases a product with a price of ₦1,500. If the consumer is entitled to a 10% discount, what is the amount the consumer pays?

Correct A. ₦1,350

B. ₦1,400

C. ₦1,450

D. ₦1,500

Correct Answer: A

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Question 4

A company's business law requires it to provide a warranty for its products. What is the primary purpose of this warranty?

Correct A. To protect the consumer

B. To increase sales

C. To reduce costs

D. To enhance reputation

Correct Answer: A

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Question 5

A company's insurance policy covers losses due to fire. What is the primary type of insurance policy this company has?

Correct A. Fire insurance

B. Liability insurance

C. Property insurance

D. Casualty insurance

Correct Answer: A

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Question 6

A sole trader's business is considered a separate legal entity from its owner. However, the owner's personal assets are still at risk in case of business debts. What is the name of this type of risk?

Correct A. Unlimited liability

B. Limited liability

C. Joint and several liability

D. Personal liability

Correct Answer: A

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Question 7

A company's production process involves the transformation of raw materials into finished goods. Which stage of production involves the creation of a new product from raw materials?

Correct A. Manufacturing

B. Assembly

C. Packaging

D. Quality control

Correct Answer: A

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Question 8

A business owner purchases an insurance policy to protect against losses due to fire. What type of risk is being managed?

Correct A. Operational risk

B. Financial risk

C. Strategic risk

D. Compliance risk

Correct Answer: A

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Question 9

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

B. Depositing

C. Investing

D. Brokerage

Correct Answer: A

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Question 10

A warehouse manager is responsible for storing and managing inventory. What is the name of the system used to track inventory levels?

A. First-In-First-Out (FIFO)

B. Last-In-First-Out (LIFO)

C. Just-In-Time (JIT)

Correct D. Inventory Management System (IMS)

Correct Answer: D

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Question 11

In a sole trade business, what is the primary advantage of using a sole trader structure?

A. Limited liability

B. Tax benefits

Correct C. Flexibility in decision-making

D. No need for formal accounting records

Correct Answer: C

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Question 12

A company has a capital structure consisting of 60% debt and 40% equity. If the cost of debt is 8% and the cost of equity is 12%, what is the weighted average cost of capital (WACC)?

Correct A. 7.68%

B. 8.32%

C. 9.12%

D. 10.24%

Correct Answer: A

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Question 13

A production process involves the following costs: fixed costs of ₦100,000, variable costs of ₦50 per unit, and a selling price of ₦75 per unit. If the company produces 10,000 units, what is the profit?

A. ₦250,000

Correct B. ₦300,000

C. ₦350,000

D. ₦400,000

Correct Answer: B

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Question 14

A company has a risk management strategy that involves diversification. If the company has a portfolio of 5 assets with a correlation coefficient of 0.2, what is the standard deviation of the portfolio?

A. 10%

Correct B. 12%

C. 15%

D. 18%

Correct Answer: B

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Question 15

A company has a business interruption insurance policy with a deductible of ₦50,000. If the company suffers a loss of ₦200,000, what is the amount payable under the policy?

A. ₦150,000

Correct B. ₦175,000

C. ₦200,000

D. ₦225,000

Correct Answer: B

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Question 16

In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of a product in this market?

A. ₦100, 100 units

Correct B. ₦80, 150 units

C. ₦120, 80 units

D. ₦90, 110 units

Correct Answer: B

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Question 17

A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 400 units of output, and the price of labor is ₦50 per unit, while the price of capital is ₦100 per unit, what is the optimal combination of labor and capital?

A. L = 100, K = 400

B. L = 400, K = 100

Correct C. L = 200, K = 200

D. L = 50, K = 800

Correct Answer: C

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Question 18

A firm's revenue function is given by R = 100x - 2x^2, where x is the number of units sold. If the firm wants to maximize its revenue, what is the optimal number of units to sell?

A. 20 units

B. 30 units

Correct C. 40 units

D. 50 units

Correct Answer: C

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Question 19

A company has a budget constraint of ₦100,000 to spend on advertising and promotion. If the cost of advertising is ₦50,000 and the cost of promotion is ₦30,000, what is the opportunity cost of advertising?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 20

A firm's production function is given by Q = 3L^0.5K^0.5. If the firm wants to produce 300 units of output, and the price of labor is ₦60 per unit, while the price of capital is ₦120 per unit, what is the optimal combination of labor and capital?

A. L = 150, K = 600

B. L = 600, K = 150

Correct C. L = 300, K = 300

D. L = 75, K = 900

Correct Answer: C

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Question 21

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 required to file annual returns.

Correct C. The business is not subject to company law.

D. The business is not entitled to issue share certificates.

Correct Answer: C

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Question 22

A consumer purchases a product from a retailer, but the product is defective. The consumer seeks redress under the Consumer Protection Act. What is the first step the consumer should take?

Correct A. File a complaint with the National Consumer Protection Agency.

B. Seek a refund from the retailer.

C. Contact the manufacturer for a replacement.

D. Take the product to a consumer ombudsman.

Correct Answer: A

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Question 23

A company is considering exporting its products to a foreign country. What is the first step the company should take?

Correct A. Conduct market research to identify potential customers.

B. Obtain a license from the relevant government agency.

C. Register with the Chamber of Commerce.

D. Establish a subsidiary in the foreign country.

Correct Answer: A

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Question 24

A producer is considering investing in a new production facility. What is the main advantage of specialization in production?

Correct A. Increased efficiency in production.

B. Reduced costs of production.

C. Improved product quality.

D. Increased market share.

Correct Answer: A

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Question 25

A consumer purchases a product from a retailer, but the product is defective. The consumer seeks redress under the Consumer Protection Act. What is the legal basis for the consumer's claim?

A. The Sale of Goods Act.

Correct B. The Consumer Protection Act.

C. The Companies Act.

D. The Trademarks Act.

Correct Answer: B

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