Commerce Questions and Answers

The Securities and Exchange Commission (SEC), is the apex regulatory institution of the Nigerian capital market. We all know the capital market is where long-term securities are sold, and shares fall under long-term securities.

Credit instruments are items that are used in the place of currency. This means that they are legal and can be tendered in business transactions as a means of payment. From the options above, the cheque falls into this category.

A business transaction can be paid for in cash or a cheque.

Commercial banks lend large amounts of funds to businesses or corporate entities at a predetermined interest rate. They only lend to companies requiring medium to long-term finances, which is usually large scale.

No explanation has been provided for this answer.

Open-market operations refer to the purchase and sale of securities in the open market by a central bank. It is done to control the flow of money in the economy. When there is excess money in circulation, the central bank buys securities in the open market by raising interest rates so that people will be willing to exchange their monies (for high interest in return) for a particular period of time.

In the same way, if it wants to increase the flow of money in the economy, the central bank sells securities to the market by lowering the interest that will be paid on the instruments (debt instruments). With this, people will be willing to buy (borrow money) from the central and pay back with low interest.