Commerce 2025 Jamb Examination

Called-up capital represents the portion of the issued share capital that a company has formally requested its shareholders to pay. A company may not require the full value of the shares at the time of issue; instead, it can 'call' for portions of the money in stages. Once the company makes a formal demand for payment, that amount becomes called-up capital. This is different from 'paid-up capital', which is the actual amount of money the shareholders have already handed over, and 'authorized capital', which is the maximum amount the company is allowed to issue according to its legal documents.

In the stock market, a 'put option' is a financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying security at a pre-determined price (the strike price) within a specific time frame. Investors typically buy put options if they expect the price of a stock to fall, as it allows them to sell the stock at a higher price than the current market rate. Conversely, a 'call option' gives the holder the right to buy a security. Therefore, the 'put' refers specifically to the right to sell (or 'put' the stock to someone else).

Product differentiation is a marketing strategy used by businesses to distinguish a product from similar items in the market or within their own range. By grading products based on quality, size, features, or performance, a manufacturer can cater to different segments of the market (e.g., 'Economy', 'Premium', and 'Luxury' grades). This allows the firm to satisfy various buyer preferences and price sensitivities. While a 'product line' is a group of related products and a 'product mix' is the total set of all products a company offers, the specific act of creating variations to appeal to different buyers is known as differentiation.

The Central Bank uses 'Open Market Operations' (OMO) to control the money supply in the economy. When the Central Bank sells government securities (like treasury bills) to the public and commercial banks, the buyers pay for these securities with cash. This process effectively mops up excess liquidity from the banking system, thereby reducing the amount of cash available for lending and spending in the economy. This is a contractionary monetary policy often used to combat inflation. Conversely, if the bank wanted to increase cash in the economy, it would buy back securities, injecting money into the system.

While a Certificate of Incorporation gives a company its legal existence, a Public Limited Company (PLC) cannot actually begin its operations or exercise borrowing powers until it receives a 'Trading Certificate' (also known as a Certificate of Commencement of Business). To obtain this, the registrar must be satisfied that the company has raised the minimum required share capital from the public. Private limited companies, on the other hand, can usually start business as soon as they receive their Certificate of Incorporation. The Memorandum and Articles of Association are internal constitutional documents rather than permits from the registrar.