Commerce 2025 Jamb Examination

Warehousing is a critical function of the wholesaler that plays a direct role in price stabilisation. By storing large quantities of goods when production is high and releasing them gradually into the market when supply is low, the wholesaler prevents extreme price fluctuations caused by seasonal changes or irregular production cycles. This constant flow of goods ensures that the market is neither flooded nor starved, maintaining a relatively steady price level for both retailers and consumers. Without this storage capability, prices would drop significantly during harvests or peak production and skyrocket during periods of scarcity.

Posters, free samples, and window displays are all legitimate methods of sales promotion and advertising used to attract customers and increase sales volume. They are constructive marketing tools intended to communicate value to the consumer. In contrast, the hoarding of goods is an unethical and often illegal business practice where a trader intentionally withdraws goods from the market to create artificial scarcity, thereby forcing prices to rise. While the other three options are forms of marketing communication, hoarding is a restrictive trade practice that harms the consumer and the economy.

An actuary is a highly trained professional who uses complex mathematical, statistical, and financial theories to assess risk and uncertainty. In the insurance industry, actuaries evaluate the probability of future events—such as accidents, illnesses, or deaths—and determine the appropriate premium rates that should be charged to ensure the company remains solvent while covering potential claims. While an underwriter decides whether to accept a specific risk and an assessor evaluates the extent of a loss after it has occurred, the actuary is responsible for the foundational mathematical modeling and pricing of the insurance products.

Excise duties are taxes levied by the government on specific goods produced and sold within the borders of a country. These are internal taxes designed to generate revenue for the government or to discourage the consumption of certain products like tobacco or alcohol. They differ from import duties, which are taxes on goods brought in from abroad, and export duties, which are taxes on goods sent out of the country. Ad valorem duties refers to a method of calculating tax based on the value of the item, which can apply to both local and foreign trade, but the specific term for tax on local production is excise duty.

A co-operative society is founded on the principle of democratic control, which is often summarised by the rule: 'one member, one vote.' Unlike a limited liability company, where voting power is determined by the number of shares an individual owns (proportional to capital investment), a co-operative treats all members equally regardless of their financial contribution. This ensures that the organization is managed for the benefit of all its members rather than being dominated by a few wealthy shareholders. This democratic approach is a core characteristic of co-operative movements worldwide, emphasizing people over capital.

Manufacturing is the process of converting raw materials into finished or semi-finished goods through the application of labour, tools, and chemical or mechanical processing. Processing garri involves taking raw cassava tubers (primary products) and transforming them through peeling, grating, fermenting, pressing, and frying into a completely different form suitable for consumption. While 'extracting' refers to the primary industry of removing resources from nature, 'manufacturing' represents the secondary industry where those resources are physically changed to add value and utility.

Dead freight is a maritime term referring to the amount paid by a charterer to a ship owner when the charterer fails to provide a full cargo as agreed in the charter party. Essentially, the charterer pays for the empty space in the ship because the owner has lost the opportunity to carry other goods. This differs from demurrage, which is a penalty for delaying the ship beyond the agreed time for loading or unloading, and dock dues, which are fees paid for using a port's facilities.

Average stock is a financial metric used to represent the value of inventory a business holds over a specific period. It is calculated by taking the sum of the opening stock and the closing stock and dividing it by two. In this specific problem: \[ \text{Average Stock} = \frac{\text{Opening Stock} + \text{Closing Stock}}{2} \] \[ \text{Average Stock} = \frac{2,000 + 3,000}{2} \] \[ \text{Average Stock} = \frac{5,000}{2} = 2,500 \] Note that turnover and purchases are not required for this specific calculation, as average stock only concerns the inventory levels at the start and end of the period.

The Central Bank of Nigeria (CBN) acts as the 'bankers' bank' and manages the clearing house system for the entire country. A clearing house is a central agency where commercial banks meet to exchange cheques and other financial instruments drawn on each other and to settle the net balances resulting from these exchanges. By providing this facility, the Central Bank ensures the smooth and efficient functioning of the payment system, reducing the need for physical cash transfers between individual banks to settle customer transactions.

In marine insurance, 'Hull insurance' specifically covers the physical structure of the vessel itself, including the machinery and equipment attached to it. This protects the ship owner against financial loss resulting from damage to the body of the ship caused by perils of the sea. It is distinct from 'Cargo insurance', which covers the goods being transported, and 'Freight insurance', which covers the loss of earnings if the ship is unable to deliver the cargo. 'Voyage insurance' refers to the duration of the policy rather than the subject matter being insured.