JAMB Commerce 2013 Objective — Question 15

Question 15 of 50 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2013 Objective paper, with the correct answer and a full explanation.

Use the table below to answer questions 15 and 16. Name | Insured Amount (₦) | Actual Value (₦) | Actual Loss (₦) Mr. N | 25,000 | 100,000 | 30,000 Mr. R | 30,000 | 120,000 | 40,000 Mr. P | 40,000 | 150,000 | 50,000 If Mr. N takes a fire insurance policy with average clause, his compensation will be

A. ₦7,500Correct
B. ₦70,000
C. ₦75,000
D. ₦5,000

Explanation

Since only 25% of the actual value is insured (₦25,000 ÷ ₦100,000), only 25% of the loss suffered will be paid: 25% × ₦30,000 = ₦7,500.

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