Commerce 2004 Jamb Examination
Question 21
Charges for loans paid by commercial banks to the Central Bank of Nigeria are called
Correct option: A. bank rates
Bank rates are the charges or interest rates at which the Central Bank of Nigeria lends money to commercial banks. These rates influence lending rates across the economy.
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Question 22
In the primary market, newshares are issued through
Correct option: D. a prospectus, an offer for sale and placing.
In the primary market, new shares are issued by companies to raise capital. The common methods include:
Prospectus – a public invitation to subscribe to shares.
Offer for Sale – where shares are sold to an issuing house which then offers them to the public.
Placing – where shares are offered directly to selected investors.
These are standard practices in the issuance of new shares in the primary market.
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Question 23
The instruments of credit include
Correct option: C. bills of exchange and promissory notes.
Instruments of credit are documents used to facilitate deferred payments or credit transactions.
The most common ones include:
a) Bills of exchange
b) Promissory notes
These are legally recognized instruments that represent a promise or order to pay a certain amount at a future date.
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Question 24
The shares of a company listed on the stock exchange for sale are referred to as
Correct option: D. quoted shares.
Quoted shares are the shares of a company that are listed and traded on a recognized stock exchange. They are available for public buying and selling, and their prices are publicly quoted.
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Question 25
What is the role of the capital market in the privatization exercise in Nigeria?
Correct option: A. Selling the shares and stocks of the companies to be privatized.
The capital market plays a key role in Nigeria's privatization by providing the platform for the sale of shares and stocks of public enterprises to individuals and institutions. This helps in transferring ownership from government to private investors.
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Question 26
In international trade, documentary credit is also known as
Correct option: B. letters of credit.
In international trade, documentary credit is another term for a letter of credit, which is a financial instrument issued by a bank guaranteeing that a seller will receive payment as long as the specified documents are presented.
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Question 27
A specialized institution in Nigeria that deals"in capital investments in the form of stocks, shares, bonds and debentures is the
Correct option: C. Nigerian Stock Exchange
The Nigerian Stock Exchange (NSE) is the specialized institution responsible for facilitating capital investments through the buying and selling of stocks, shares, bonds, and debentures in Nigeria.
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Question 28
A group of assets which a business acquires with the intention of reselling them are referred to as
Correct option: A. current assets
Current assets are assets a business acquires with the intention of reselling or using within a short period, typically within a year. These include inventory, trade receivables, and cash.
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Question 29
Authorized share capital is also known as
Correct option: C. registered share capital
Authorized share capital, also called registered share capital, is the maximum amount of share capital that a company is legally allowed to issue to shareholders, as stated in its memorandum of association.
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Question 30
An action taken by a company outside its object clause is regarded as
Correct option: A. ultra vires
An action taken by a company outside its object clause is called ultra vires, meaning "beyond the powers." Such acts are invalid because they fall outside the scope of activities the company is legally allowed to carry out as defined in its constitution.