NABTEB Commerce Past Questions And Answers (Objective and Theory)
Section A: Commerce Questions (Continued)
What is the purpose of a SWOT analysis in strategic management?
a) Assessing financial performance
b) Evaluating internal strengths and weaknesses
c) Setting product prices
d) Analyzing market trends
Answer: b) Evaluating internal strengths and weaknesses
In finance, what does the term “Diversification” refer to?
a) Concentrating investments in a single asset
b) Spreading investments across different assets
c) Maximizing return on investment
d) Minimizing risk entirely
Answer: b) Spreading investments across different assets
Which type of business structure offers limited liability to its owners?
a) Sole proprietorship
b) Partnership
c) Corporation
d) Limited Liability Company (LLC)
Answer: c) Corporation
What is the purpose of a marketing plan in business?
a) Managing human resources
b) Setting production schedules
c) Developing sales forecasts
d) Outlining marketing objectives and strategies
Answer: d) Outlining marketing objectives and strategies
Which financial ratio measures the efficiency of a company’s inventory management?
a) Current Ratio
b) Inventory Turnover Ratio
c) Debt-to-Equity Ratio
d) Return on Investment (ROI)
Answer: b) Inventory Turnover Ratio
Define the term “Stakeholder” in the context of business management.
a) Any individual who holds shares in a company
b) A person with a direct interest or concern in the success of a business
c) The CEO of a company
d) An external auditor hired by the government
Answer: b) A person with a direct interest or concern in the success of a business
What is the role of a credit rating agency in the financial markets?
a) Regulating interest rates
b) Evaluating and assigning creditworthiness to borrowers
c) Controlling inflation
d) Issuing government bonds
Answer: b) Evaluating and assigning creditworthiness to borrowers
In accounting, what does the term “Depreciation” refer to?
a) Increase in the value of an asset
b) A sudden decrease in market demand
c) The allocation of the cost of an asset over its useful life
d) Loss of value due to inflation
Answer: c) The allocation of the cost of an asset over its useful life
What is the purpose of a feasibility study in the business planning process?
a) Analyzing market trends
b) Evaluating the practicality and viability of a proposed project
c) Setting advertising budgets
d) Developing sales forecasts
Answer: b) Evaluating the practicality and viability of a proposed project
Which financial statement provides an overview of a company’s cash inflows and outflows?
a) Income statement
b) Balance sheet
c) Cash flow statement
d) Statement of retained earnings
Answer: c) Cash flow statement
Section B: Theory Questions
Discuss the concept of supply and demand in the context of market equilibrium.
Answer: Supply and demand represent the forces that determine the prices and quantities of goods and services in a market. Market equilibrium occurs when the quantity supplied equals the quantity demanded, resulting in a stable price.
Explain the concept of a “Value Chain” and how it contributes to a company’s competitive advantage.
Answer: A value chain is the series of activities that businesses go through to create and deliver a product or service. It contributes to competitive advantage by identifying opportunities to optimize processes, reduce costs, and enhance overall value for customers.
Define the term “Monetary Policy” and discuss its role in influencing economic conditions.
Answer: Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates. It influences economic conditions by impacting borrowing costs, inflation rates, and overall economic activity.
Discuss the importance of ethics in business decision-making and its impact on long-term success.
Answer: Ethics in business decision-making is crucial for maintaining trust, reputation, and long-term success. Ethical behavior contributes to positive relationships with stakeholders and fosters a culture of integrity.
Explain the concept of “Time Value of Money” and its significance in financial decision-making.
Answer: The time value of money recognizes that a sum of money has different values at different points in time. It is significant in financial decision-making as it helps assess the present and future value of cash flows, aiding in investment and financial planning.
