106 questions. Try each one, then open the answer to check yourself and read the explanation.
Which of the following is not a branch of Commerce?
Answer: E (Computerisation)
Trade and the aids to trade (insurance, warehousing, transport, banking, advertising, communication) make up commerce; computerisation is not one of them.
Which of the following is not a negotiable instrument?
Answer: A (Share certificate)
Cheques, bills of exchange, dividend warrants and bearer debentures can be transferred by delivery or endorsement; a share certificate cannot – shares are transferred by a transfer form.
Those involved in obtaining the gifts of nature from land and sea are engaged in
Answer: A (Extractive occupation)
Extractive occupations (mining, fishing, farming, lumbering) take natural resources from land and sea.
When a company sells shares to existing shareholders at preferential rate, that is called
Answer: A (Rights issue)
A rights issue offers new shares to existing shareholders, usually below market price.
Which of the following must be include in the Articles of Association?
Answer: A (Voting rights of the shareholders)
The Articles contain the internal rules, such as voting rights; the objects, registered office and limited liability are stated in the Memorandum.
Which of the following enables production to take place ahead of demand?
Answer: D (Warehousing)
Goods produced before they are demanded are stored in warehouses until needed.
Called-up capital is the amount
Answer: D (demanded on shares issued)
Called-up capital is the part of issued capital that the company has asked shareholders to pay so far.
Which of the following is true about cumulative preference shares?
Answer: A (Any unpaid dividend is carried forward)
With cumulative preference shares, dividends missed in a bad year are carried forward and paid later.
A public limited company has the rights and duties of an individual because it
Answer: C (has corporate status)
Incorporation gives the company a separate legal personality, so it can own property, sue and be sued like a person.
When firms producing similar commodities join together, this is
Answer: C (horizontal merger)
Firms at the same stage producing similar goods join in a horizontal merger.
The total indebtedness of a business is the same as its
Answer: A (liabilities)
Everything a business owes to outsiders is its liabilities.
All activities involved in the distribution and exchange of goods and services are referred to as
Answer: D (Commerce)
Commerce covers trade and all the aids to trade that distribute and exchange goods and services.
Land as a factor of production comprises
Answer: A (all resources provided by nature)
In commerce and economics, land means all natural resources: soil, minerals, water, forests and so on.
Goods are usually classified into
Answer: D (producer and consumer goods)
Goods are normally grouped as producer (capital) goods and consumer goods.
Del-credere commission is an
Answer: B (extra allowance paid for guaranteeing recovery of debts)
A del credere agent receives extra commission for guaranteeing that the buyers he finds will pay.
Which of the following is classified as invisible item in the balance of payments?
Answer: E (Salaries of expatriates)
Salaries earned by expatriates are payments for services, which are invisible items.
Which of the following is quoted when the buyer is responsible for the cost of loading the goods from the seller's warehouse up to his own warehouse?
Answer: A (LOCO)
A loco price covers the goods only at the seller's premises; the buyer pays all costs of moving them.
A trade in which many countries exchange goods and services is called
Answer: D (multilateral trade)
Multilateral trade involves many countries trading with one another.
Which of the following is used to ascertain the correct value of imports for purposes of assessing customs duty?
Answer: E (Bill of entry)
The importer fills a bill of entry describing the goods and their value, and customs uses it to work out the duty.
The best method of making payment to an overseas supplier is by
Answer: D (letter of credit)
A letter of credit gives the overseas supplier a bank's guarantee of payment.
A refund usually granted for goods imported and later re-exported is called
Answer: C (customs drawback)
A customs drawback refunds import duty on goods that are re-exported.
Which of the following is a declaration by the captain of a ship as to the cargo on board?
Answer: C (Ship's manifest)
The ship's manifest is the captain's list of all the cargo the ship carries.
When the balance of trade is unfavourable which of the following conditions prevails?
Answer: B (Imports exceed exports)
An unfavourable balance of trade means visible imports are worth more than visible exports.
When a seller decides to sell his goods at a specific price for a specific period, he is making
Answer: D (a firm offer)
A firm offer fixes the price for a stated period.
A retailer who receives a trade discount of 33⅓% and a cash discount of 10% on goods worth N360 would pay
Answer: C (N216)
Trade discount: 33⅓% of N360 = N120, leaving N240. Cash discount: 10% of N240 = N24, so he pays N216.
Which of the following documents is used when goods are sent on approval?
Answer: E (Pro forma invoice)
Goods sent on approval go with a pro forma invoice, which becomes a true invoice only if the buyer keeps them.
Terms of trade refers to
Answer: C (the relationship between export and import prices)
Terms of trade compare the prices of a country's exports with the prices of its imports.
Another name for shares, stocks and debentures traded in the stock exchange is
Answer: B (securities)
Shares, stocks and debentures are together called securities.
Which of the following belongs to the capital market?
Answer: C (Stock exchange)
The stock exchange deals in long-term funds, so it is part of the capital market.
Which of the following is not true of insurance?
Answer: B (Possibility of making a profit out of an event)
Insurance only restores the insured to his former position (indemnity); nobody may profit from a loss.
Which of the following policies qualifies the holder to income tax relief?
Answer: D (Endowment assurance)
Premiums on life and endowment assurance attract income tax relief.
Which of the following is not a feature of good banking security? The
Answer: E (value of the asset must be less than the amount loaned)
A good security must be worth more than the loan, not less, so the bank can recover its money.
Selling a bill at less than the face value for immediate cash before the due date is to
Answer: C (discount the bill)
Discounting a bill means selling it before maturity for less than its face value.
Which of the following is a non- indemnity insurance?
Answer: B (Life)
A life cannot be valued in money, so life assurance pays an agreed sum rather than indemnity.
Which of the following regulates and controls the activities of the Nigerian Stock Exchange? The
Answer: C (Securities and Exchange Commission (SEC))
The Securities and Exchange Commission regulates the capital market, including the Stock Exchange.
A cheque drawn by a bank on itself is a
Answer: D (bankdraft)
A bank draft is a cheque drawn by a bank on itself, so it is very unlikely to be dishonoured.
Which of the following is formed primarily to promote savings and loans among the members?
Answer: E (Co-operative thrift and credit society)
Thrift and credit societies collect members' savings and lend to members.
Mr. Ojo borrowed N54,000 from a Commercial Bank and deposited his life assurance certificate with the bank. The certificate deposited serves as
Answer: D (a collateral security)
A document deposited with a bank to back a loan is collateral security.
When an insurance policy is declared void because of a false declaration the principle involved is
Answer: D (utmost good faith)
Utmost good faith requires the insured to disclose all facts truthfully; a false declaration makes the policy void.
A mortgage bank is primarily concerned with financing the acquisition of
Answer: D (dwelling houses)
Mortgage banks give long-term loans for buying or building houses.
An insurance policy which gives cover against claims made by employees who suffer injury at work is
Answer: B (employers' liability insurance)
Employers' liability insurance covers claims by workers injured at work.
What is the working capital of KO Ltd which has N3,500 in fixed assets, cash balance of N4,170, trade debtors N1,150 and sundry creditors of N1,800?
Answer: E (N3,520.00)
Working capital = current assets − current liabilities = (N4,170 + N1,150) − N1,800 = N3,520. Fixed assets are left out.
The nominal value of share of a public limited company is 50k and the market value is 65k. The company's share is selling
Answer: A (above per value)
When the market price is more than the nominal (par) value, the share is selling above par (at a premium).
Turnover of a business is the same as the
Answer: E (sales of the business)
Turnover means the total sales of a business in a period.
Opening stock plus purchases less closing stock gives
Answer: B (cost of goods sold)
Opening stock + purchases − closing stock = cost of goods sold.
The part of the assets of a business that is available as cash or near cash is called
Answer: A (Liquid capital)
Liquid capital is cash and assets that can quickly be turned into cash.
Which of the following is not a source of capital to a public limited company?
Answer: E (Transporting)
Leasing, factoring, debentures and trade credit all provide funds; transporting is an aid to trade, not finance.
Which of the following enables goods to be available where they are needed?
Answer: E (Transporting)
Transport moves goods to where they are needed (place utility).
The provision and administration of air traffic controls at Benin airport is the function of
Answer: D (Nigeria Airports Authority)
The Federal Airports Authority/Nigeria Airports Authority runs Nigeria's airports and their facilities.
Which of the following ensures regular transportation of gas and liquid products in all weather?
Answer: E (Pipeline)
Pipelines carry liquids and gas continuously and are not affected by weather.
Which of the following is a feature of ocean liners?
Answer: D (They belong to a particular shipping conference)
Ocean liners run on fixed routes and timetables and are members of shipping conferences that agree their freight rates.
Which of the following is a contract of carriage?
Answer: B (Charter party)
A charter party is the contract for hiring a ship to carry goods.
Telephone, telegram and telex services in Nigeria are provided by
Answer: E (NITEL)
NITEL (Nigerian Telecommunications Ltd) provided telephone, telegram and telex services.
The cost of sending a message by telephone is determined by the
Answer: D (time taken to send the message)
Telephone calls are charged by duration (and distance), not by the number of words.
A receipt for goods deposited in a public warehouse is called a
Answer: B (dock warrant)
A dock (warehouse) warrant is the receipt and document of title for goods in a public warehouse.
A firm that emphasizes the satisfaction of the consumers is applying the principle of
Answer: D (marketing concept)
The marketing concept puts satisfying the consumer at the centre of the firm's activities.
Use the diagram to answer the question.
The diagram above illustrates the marketing concept of
Answer: C (consumer sovereignty)
All four elements point at the customer in the centre, showing that the customer is king (consumer sovereignty).
Use the diagram to answer the question.
The diagram contains the four elements of
Answer: D (marketing mix)
Product, price, place and promotion are the four Ps of the marketing mix.
The use of name, symbol, letter or any combination of these by a company to distinguish its product is called
Answer: D (trade mark)
A trade mark is a name or symbol that identifies a firm's product.
The collection of information on the taste of consumers and the extent of demand for a product is called
Answer: C (market research)
Market research gathers information about consumers' tastes and demand.
Mr. Orji contracted to sell 10 colour TV sets to Mr. Ede. Unknown to both of them the TV sets were stolen in transit. The contract may be terminated on the grounds of
Answer: D (frustration)
A contract is frustrated when an event beyond both parties' control makes it impossible to perform.
In a hire purchase contract the customer becomes the legal owner of the goods by
Answer: C (paying the last instalment)
Under hire purchase, ownership passes only when the last instalment is paid.
Which of the following makes it an offence for a dealer to give misleading information about goods to consumers?
Answer: D (Trade Description Act)
The Trade Descriptions Act forbids false or misleading descriptions of goods.
Which of the following gives an exclusive right to an inventor?
Answer: C (Patent)
A patent gives an inventor the sole right to make and sell his invention for some years.
A modern trend in retailing which enables customers to purchase all the items needed in a shop is called
Answer: C (one-stop shopping)
One-stop shopping lets customers buy all they need under one roof, as in supermarkets and hypermarkets.
Who bears the greatest risks in a business? The
Answer: C (entrepreneurs)
The entrepreneur bears the risk of loss and takes whatever profit is left.
Dividend paid by public limited companies
Answer: D (depends on profit declared)
Dividends are paid out of the profit the company declares.
Commercial banks meet to exchange cheques drawn on one another and settle the differences between them at the
Answer: D (clearing house)
The clearing house is where banks exchange cheques and settle the net amounts they owe each other.
Which of the following is likely to record a high rate of turnover?
Answer: D (Newspapers)
Newspapers are cheap and bought daily, so stock is sold and replaced very quickly.
Restricting the quantity of goods which may be imported into a country is achieved through
Answer: E (quotas)
A quota fixes the maximum quantity of a good that may be imported.
A cheque is cleared
Answer: B (when the amount specified has been credited to the payee)
A cheque is cleared when the money has passed from the drawer's account to the payee's account.
A group of retailing shops with standard shop fronts and centralised buying is known as
Answer: E (multiple stores)
Multiple stores (chain stores) have identical shop fronts and buy centrally.
Master Ojo is 14 years old. He entered into contract with Ade for the supply of 20 T- shirts. Ojo received the T- shirts but has refused to pay. Ade's lawyer said that the contract is void because it lacked one of the basic elements of a valid contract which is
Answer: D (capacity)
A 14-year-old is a minor and lacks the legal capacity to make most contracts.
Goods sold under a distinctive trade mark are known as
Answer: D (branded goods)
Goods given a distinctive name or mark are branded goods.
Actions by organized body of consumers to express dissatisfaction with the quality, price and quantity of goods available to them is called
Answer: C (consumerism)
Consumerism is the organised movement of consumers protesting about poor quality, high prices or short supply.
Any act that is aimed at making manufacturers meet some required standards is to
Answer: C (protect the consumer)
Laws on standards protect consumers from poor or dangerous goods.
Which of the following makes for a valid contract?
Answer: B (Offer and acceptance)
Offer and acceptance are basic elements of a valid contract.
A voluntary association which consists of people who represent a cross section of business interests in a town is the
Answer: A (chamber of commerce)
A chamber of commerce brings together all kinds of businesses in a town or area.
Which of the following is specifically formed to finance projects that are too large for a single firm to undertake?
Answer: E (Consortium)
A consortium is a temporary grouping of firms to undertake a project too big for one of them.
A voluntary body formed by people in the same line of business for the purpose of protecting their interest is
Answer: B (trade association)
A trade association is made up of firms in the same trade.
A holding company exercises control over its subsidiaries by
Answer: D (owning majority of the shares)
A holding company controls subsidiaries by owning more than half of their voting shares.
An organisation that aims at restricting supply in order to keep up price is known as
Answer: A (cartel)
A cartel restricts output to keep prices high.
A document of title to goods which also serves as a contract between the seller and the shipping company is known as
Answer: A (bill of lading)
A bill of lading is a receipt, a contract of carriage and a document of title.
A diagram showing the formal lines of authority in any establishment is known as
Answer: C (an organisation chart)
An organisation chart shows positions and the lines of authority between them.
Which of the following is responsible for preparing the balance sheet of a public limited company?
Answer: E (Finance Department)
The finance (accounts) department prepares the final accounts and balance sheet.
A structure of direct vertical relationship connecting the positions at each level in an organization is called
Answer: C (line organisation)
In line organisation, authority flows straight down from top to bottom.
The process of transferring decision making to low levels of the organisation hierarchy is called
Answer: B (delegation of authority)
Delegation passes authority to make decisions down to subordinates.
The process by which the structure and allocation of jobs are determined is a management function of
Answer: D (organising)
Organising sets up the structure and assigns jobs and authority.
The process of establishing objectives for the organisation and determining the best ways to achieve them is a management function of
Answer: C (Planning)
Planning sets objectives and decides how to reach them.
The number of subordinates that one person can supervise effectively in an organisation is referred to as
Answer: E (Span of control)
Span of control is the number of subordinates one manager can supervise well.
Measuring performance against the set objectives in an organisation is a management function that relates to
Answer: E (controlling)
Controlling compares actual performance with the plan and corrects differences.
When a company contributes to the welfare of the immediate community, it is performing a
Answer: C (social responsibility)
Helping the community it operates in is a firm's social responsibility.
Which of the following is not related to imports?
Answer: B (Excise duties)
Excise duties are taxes on goods made at home, not on imports.
Which of the following is not true of the stock exchange?
Answer: A (It is a commodity market)
The stock exchange deals in securities, not in commodities such as cocoa or metals.
Life assurance premium is determined by the
Answer: D (age of the assured)
The older the person, the greater the risk of death, so age largely decides the premium.
Which of the following accurately describes the basis for international trade?
Answer: C (Comparative cost advantage)
Countries trade because each specialises in what it produces at a comparatively lower cost.
Commerce 2 (answer five questions)
(a) What is a Public Limited Company?
(b) State and explain any five features distinguishing a Public Limited Company from a Partnership.
(a) A public limited company is a business owned by shareholders (minimum of seven, now two, with no upper limit), registered under the Companies Act, with limited liability, whose shares are offered to the public and freely transferable on the stock exchange; it is a legal person separate from its owners.
(b) Any five, explained by contrast: legal personality – PLC is separate from its members and can sue and be sued, a partnership is not; liability – shareholders' liability is limited to their shares, partners (except limited partners) have unlimited liability; capital – PLC raises large capital from the public through shares and debentures, partners contribute their own capital; membership – no maximum for a PLC, a partnership has 2 to 20 members; transfer of ownership – shares freely transferable, a partner cannot transfer his share without others' consent; continuity – PLC has perpetual succession, a partnership may end on death, bankruptcy or withdrawal of a partner; management – PLC run by a board of directors elected by shareholders, partners manage the firm themselves; formation – PLC registers Memorandum and Articles and gets a certificate of incorporation and trading certificate, a partnership needs only a deed or agreement; publicity – PLC must publish audited accounts, a partnership's accounts are private.
In (b) every point should say what the PLC does and what the partnership does.
Commerce 2 (answer five questions)
(a) State any five channels of distribution for consumer goods.
(b) Explain five factors to be considered before choosing a particular channel.
(a) Any five: producer → wholesaler → retailer → consumer; producer → retailer → consumer; producer → consumer (direct, e.g. own shops, mail order, door-to-door); producer → agent → wholesaler → retailer → consumer; producer → agent → retailer → consumer; producer → wholesaler → consumer; producer → agent → consumer.
(b) Any five, explained: nature of the product – perishable, bulky, technical or expensive goods use short channels; number and location of customers – many scattered buyers need wholesalers and retailers, few concentrated buyers can be served directly; size of orders – large orders favour direct sales; financial strength of the producer – a rich producer can run his own outlets and salesmen; cost of each channel and the margins of middlemen; producer's wish to control price, quality and after-sales service; availability and efficiency of middlemen; competitors' channels and government regulations.
List channels as chains of arrows; in (b) say how each factor makes the channel longer or shorter.
Commerce 2 (answer five questions)
(a) What is Capital?
(b) Explain five types of Capital.
(a) Capital is the money and other assets (wealth) that the owner(s) put into a business to start and run it; in accounts, capital = assets − liabilities.
(b) Any five, explained: authorised (nominal/registered) capital – the maximum share capital a company may issue, stated in its Memorandum; issued capital – the part of authorised capital actually offered to and taken up by shareholders; called-up capital – the part of issued capital the company has asked shareholders to pay; paid-up capital – the part of called-up capital actually paid; capital owned – assets less liabilities, the owner's net worth; capital employed – capital owned plus long-term liabilities, or fixed assets plus working capital; working capital – current assets less current liabilities, used for day-to-day running; liquid capital – cash and assets quickly turned into cash; fixed capital – money tied up in fixed assets such as buildings and machinery; borrowed capital – loans, debentures and overdrafts.
Define each type briefly; formulas earn credit for capital employed and working capital.
Commerce 2 (answer five questions)
(a) Mention and explain the four business resources.
(b) Explain four ways by which government regulates business.
(a) Four resources (factors of production): land/natural resources – sites, raw materials, minerals, water; labour – human effort, physical and mental, used in production; capital – money and man-made aids such as machines, buildings, vehicles; entrepreneur/management – the person who organises the other resources, takes decisions and bears the risk. (Accept also money, materials, machines and men/manpower as the four Ms.)
(b) Any four, explained: legislation – laws on registration of businesses, companies (CAMA), contracts, sale of goods, hire purchase; consumer protection laws and agencies – standards (SON), food and drugs (NAFDAC), price control, weights and measures; licensing and registration – permits and licences before trading; taxation and tariffs – company tax, excise and customs duties, import bans and quotas; monetary policy through the Central Bank – interest rates, credit control; indigenisation, nationalisation and privatisation policies; labour laws – minimum wage, safety at work, trade union rules; environmental and zoning laws on where firms may locate.
Name each resource and say what it contributes; in (b) give the means and its effect on business.
Commerce 2 (answer five questions)
(a) Describe five factors that determine the choice of means of transportation for goods.
(b) Explain five factors that have contributed to the growth of commerce.
(a) Any five, described: cost/freight charges compared with the value of the goods; nature of the goods – perishable goods need speed, fragile goods safety, bulky goods water/rail, liquids pipeline; speed/urgency of delivery; distance and destination – air or sea for long distances, road for short; safety and security of the goods; availability and regularity of the means; flexibility – road can give door-to-door service; terrain and the facilities available (roads, rail lines, ports).
(b) Any five, explained: specialisation and division of labour, creating surpluses for exchange; development of money as a medium of exchange; improved transport; improved communication (post, telephone, internet); growth of banking and credit facilities; development of insurance, which reduces risks; warehousing; advertising and mass media; large-scale production (industrial revolution); government policies, peace and stability, and growth of international trade and economic groupings; growth of population and income.
In (a) relate each factor to the kind of goods; in (b) show how each factor increased trade.
Commerce 2 (answer five questions)
(a) List five documents used in foreign trade.
(b) Explain five conditions under which an agency may be terminated.
(a) Any five: indent (order); letter of credit; bill of lading; consular invoice; certificate of origin; bill of entry; shipping note; export licence/import licence; mate's receipt; ship's manifest; marine insurance policy/certificate; bill of exchange; dock warrant; pro forma invoice; Form M.
(b) Any five, explained: by agreement of principal and agent; completion of the task (performance) for which the agent was appointed; expiry of the agreed period; revocation by the principal or renunciation by the agent (with notice); death of either party; insanity of either party; bankruptcy of the principal (or of the agent); destruction of the subject matter; the business becoming illegal (frustration); breach of duty by the agent.
(a) only needs names; (b) needs a sentence on each condition.
Commerce 2 (answer five questions)
(a) Explain five roles of advertising.
(b) Give three advantages and two disadvantages of using television as a medium of advertising.
(a) Any five, explained: informs consumers about new products, prices, uses and where to buy them; persuades people to buy and increases sales; creates and maintains demand, which allows mass production and lower unit cost; helps a firm meet competition and keep customers loyal (brand loyalty); educates consumers on how to use products; builds the image/goodwill of the firm; reminds customers of existing products; creates employment in the media and advertising agencies; provides revenue for the mass media.
(b) Advantages (any three): combines sight, sound, colour and movement, so it is very attractive; reaches a large audience at once, including illiterates; products can be demonstrated; high impact and easily remembered; can target audiences by programme and time.
Disadvantages (any two): very expensive to produce and air; message is short and quickly forgotten; reaches only people with sets and electricity; viewers may switch channels during adverts; cannot be kept for later reference.
Explain each role; keep advantages and disadvantages of television separate.
Commerce 2 (answer five questions)
(a) Explain five services which NIPOST renders to the public.
(b) Give five advantages of using courier service.
(a) Any five, explained: collection and delivery of letters (ordinary, registered, express/EMS); parcel post; postal orders and money orders for sending money; private mail bags and post office boxes; poste restante – keeping mail for travellers to collect; sale of stamps and stationery, philatelic services; savings services (post office savings); speed post/express mail service; business reply and franking services; payment of pensions and collection of some bills and fees; agency services such as sale of licences.
(b) Any five: speed – fast delivery, often next day; door-to-door delivery and pick-up; safety and security of items, with tracking; proof of delivery (signature); delivery both within the country and abroad; handles documents and parcels of various sizes; reliability; some offer insurance cover for items.
Name each NIPOST service and say what it does for the public.
Commerce 2 (answer five questions)
(a) Describe five reasons why a manufacturer may brand his products.
(b) Outline five services rendered by the wholesaler to the manufacturer.
(a) Any five, described: to distinguish his product from competitors'; to make advertising easier and more effective; to build brand loyalty and repeat buying; to make it possible to charge a higher or stable price; to give assurance of quality and standard; to protect the product from imitation (with a registered trade mark); to make the product easy to identify and order; to introduce new products under a known name.
(b) Any five: buys in bulk, saving the manufacturer the cost of many small orders; gives market information about consumers' tastes and complaints; stores (warehouses) goods, relieving the manufacturer of storage costs; bears risks of price change, damage and theft; may finance the manufacturer by paying promptly or in advance; distributes goods to retailers over a wide area; helps advertise and promote the products; may pack, grade and label goods; enables continuous production by placing regular orders.
Five points in each part, with a short explanation for (a).
Commerce 2 (answer five questions)
(a) Differentiate between Indigenisation and Nationalisation.
(b) Give five advantages and three disadvantages of Indigenisation.
(a) Indigenisation is a policy that transfers ownership and control of businesses from foreigners to citizens (individual Nigerians and government), e.g. the Nigerian Enterprises Promotion Decrees of 1972 and 1977. Nationalisation is the government taking over ownership and control of privately owned businesses (local or foreign), making them public enterprises. Differences: who acquires ownership (citizens/private persons vs the State); aim (economic independence and local participation vs public control of strategic industries); compensation and scope.
(b) Advantages (any five): increases Nigerians' participation and control of the economy; reduces foreign domination and repatriation of profits; develops local entrepreneurs and managerial skills; creates employment and promotion for citizens; keeps profits in the country; encourages use of local raw materials and technology; promotes economic independence and national pride.
Disadvantages (any three): discourages foreign investment and capital inflow; shortage of local capital, skills and technology; fronting – Nigerians used as fronts for foreigners; shares concentrated in the hands of a few rich people; possible fall in efficiency and quality; may lead to loss of foreign expertise and technology.
In (a) show who takes over in each case.