JAMB Commerce 2020 Objective — Question 9

Question 9 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2020 Objective paper, with the correct answer and a full explanation.

9. One of the following causes a share to be issued at a discount

A. A. Too much profit
B. B. Low patronage
C. C. DeflationCorrect
D. D. Too much reserve

Explanation

When the price has fallen, goods tend to be sold at a cheaper price than their face value. Thus, deflation is one of the reasons a share can be sold for less than its face value.

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