POST UTME RHEMA UNIVERSITY 2023 Commerce | Objective

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Question 1
A company has a portfolio of 10 stocks with an average return of 8% and a standard deviation of 12%. If the company wants to diversify its portfolio by adding a new stock, which of the following stocks would be the best choice?
A. Stock A with a return of 10% and a standard deviation of 15%
Correct B. Stock B with a return of 12% and a standard deviation of 18%
C. Stock C with a return of 9% and a standard deviation of 13%
D. Stock D with a return of 11% and a standard deviation of 16%

Correct Answer: B

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Question 2
A firm is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which of the following is a potential advantage of Strategy A?
Correct A. Increased brand awareness
B. Reduced production costs
C. Improved customer satisfaction
D. Enhanced product quality

Correct Answer: A

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Question 3
A company is considering outsourcing its production to a foreign country. Which of the following is a potential benefit of outsourcing?
Correct A. Reduced labor costs
B. Improved product quality
C. Increased market share
D. Enhanced brand reputation

Correct Answer: A

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Question 4
A firm is considering two different pricing strategies for its new product. Strategy A involves a high price, while Strategy B involves a low price. Which of the following is a potential advantage of Strategy B?
A. Increased revenue
B. Reduced market share
Correct C. Improved customer satisfaction
D. Enhanced brand reputation

Correct Answer: C

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Question 5
A company is considering two different distribution channels for its new product. Channel A involves a direct sales force, while Channel B involves a retail network. Which of the following is a potential advantage of Channel A?
Correct A. Increased control over the sales process
B. Reduced distribution costs
C. Improved product quality
D. Enhanced brand reputation

Correct Answer: A

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Question 6
An exporter in Nigeria is considering exporting a product to the European Union (EU). The exporter is aware that the EU has implemented a tariff of 15% on imports from Nigeria. However, the exporter is also aware that the EU has a Generalised System of Preferences (GSP) that allows for duty-free imports of certain products from certain countries, including Nigeria. If the exporter's product qualifies for the GSP, what is the effective tariff rate that the exporter will pay?
A. 10%
B. 5%
Correct C. 0%
D. 15%

Correct Answer: C

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Question 7
A company in Nigeria is planning to launch a new product in the domestic market. The company has conducted market research and has identified a target audience of young adults aged 18-35. The company wants to create an advertising campaign that will appeal to this target audience. Which of the following advertising strategies is most likely to be effective?
Correct A. Social media advertising
B. Television advertising
C. Print advertising
D. Radio advertising

Correct Answer: A

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Question 8
A consumer in Nigeria has purchased a product from a retailer and has discovered that the product is defective. The consumer wants to return the product and obtain a refund. However, the retailer is refusing to accept the return. What is the consumer's best course of action?
Correct A. File a complaint with the Nigerian Consumer Protection Council
B. Take the retailer to court
C. Negotiate with the retailer to accept the return
D. Contact the manufacturer to complain

Correct Answer: A

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Question 9
A company in Nigeria is planning to transport goods from Lagos to Abuja. The company has two options: to use a road transport company or to use a rail transport company. Which of the following is a benefit of using a rail transport company?
A. Faster delivery time
B. Lower cost
Correct C. Reduced risk of damage to goods
D. Increased flexibility

Correct Answer: C

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Question 10
A bank in Nigeria is offering a loan to a customer. The loan has an interest rate of 12% per annum and a repayment period of 5 years. What is the total interest paid by the customer over the repayment period?
A. ₦12,000
Correct B. ₦15,000
C. ₦18,000
D. ₦20,000

Correct Answer: B

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Question 11
A company's marketing strategy involves creating a brand identity that appeals to a specific demographic. Which of the following is a characteristic of this approach?
A. Mass marketing
B. Segmented marketing
C. Target marketing
Correct D. Differentiated marketing

Correct Answer: D

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Question 12
A sole trader's business is affected by the following factors: market demand, competition, and government regulations. Which of the following is a characteristic of this business?
A. Limited liability
Correct B. Unlimited liability
C. Partnership
D. Company

Correct Answer: B

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Question 13
A company's insurance policy covers the following risks: fire, theft, and liability. Which of the following is a type of insurance policy?
A. Fire insurance
B. Theft insurance
C. Liability insurance
Correct D. All-risk insurance

Correct Answer: D

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Question 14
A warehouse's inventory management system involves the following steps: receiving, storing, and shipping. Which of the following is a characteristic of this system?
A. Just-in-time inventory
B. Economic order quantity
C. Inventory turnover
Correct D. All of the above

Correct Answer: D

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Question 15
A company's marketing strategy involves creating a brand identity that appeals to a specific demographic. Which of the following is a characteristic of this approach?
A. Mass marketing
B. Segmented marketing
C. Target marketing
Correct D. Differentiated marketing

Correct Answer: D

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Question 16
A commercial bank's primary function is to act as a financial intermediary between savers and borrowers. Which of the following is a correct example of a financial intermediary?
Correct A. A commercial bank accepting deposits from customers and lending to other customers
B. A stockbroker buying and selling shares on behalf of clients
C. A merchant bank providing financial advice to companies
D. A central bank regulating the money supply in an economy

Correct Answer: A

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Question 17
In the context of consumer protection, which of the following is an example of a consumer right?
Correct A. The right to return goods that are defective or not as described
B. The right to cancel a contract within a specified period
C. The right to claim compensation for damages caused by a product
D. The right to access a product's ingredients and nutritional information

Correct Answer: A

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Question 18
A sole trader is a type of business ownership where one person owns and operates the business. Which of the following is a characteristic of a sole trader?
Correct A. The business is owned and operated by one person
B. The business is owned and operated by multiple people
C. The business is owned by one person, but operated by multiple people
D. The business is owned and operated by a partnership of two or more people

Correct Answer: A

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Question 19
In the context of production and specialization, which of the following is an example of a comparative advantage?
Correct A. A country producing a good at a lower opportunity cost than another country
B. A country producing a good at a higher opportunity cost than another country
C. A country producing a good at the same opportunity cost as another country
D. A country producing a good at a higher quantity than another country

Correct Answer: A

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Question 20
A company is a type of business ownership where multiple people own and operate the business. Which of the following is a characteristic of a company?
A. The business is owned and operated by one person
Correct B. The business is owned and operated by multiple people
C. The business is owned by one person, but operated by multiple people
D. The business is owned and operated by a partnership of two or more people

Correct Answer: B

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Question 21
A sole trader's business is considered a separate legal entity from its owner. Discuss.
A. True
Correct B. False
C. Depends on the type of business
D. Not applicable

Correct Answer: B

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Question 22
A company's Memorandum of Association is a document that outlines the company's
A. Objectives
B. Structure
C. Ownership
Correct D. All of the above

Correct Answer: D

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Question 23
A country's balance of payments account records its
A. Imports and exports
B. Foreign exchange transactions
C. Government revenue and expenditure
Correct D. All of the above

Correct Answer: D

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Question 24
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the number of workers (L) is 25, find the number of machines (K) required.
A. 10
Correct B. 20
C. 30
D. 40

Correct Answer: B

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Question 25
A risk management strategy involves identifying, assessing, and mitigating potential risks. Discuss the importance of risk assessment in this process.
A. Risk assessment is not important
Correct B. Risk assessment is crucial
C. Risk assessment is only important if the risk is high
D. Risk assessment is only important if the risk is low

Correct Answer: B

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