Question 3
- State four functions of money.
- Explain how the following operators function on a stock exchange:
- Bull;
- Jobber;
- Broker;
- Stag.
Observation
Comments
Most candidates who attempted this question did well in part (a). However, some candidates wrote their answers in phrases when they were expected to make a complete sentence. For (b) part of the question, many candidates explain the operators without including their functions in the stock exchange.
The expected responses are.
(a) Functions of money
- It serves as a medium of exchange
- It serves as a standard of deferred payment
- It is used as a unit of account
- It is used as a measure of value
- It serves as a store of value
(b) How the following operators function on a stock exchange
- Bull: This is a speculator who buys securities with the intention of reselling them at a higher price before the payment of the securities is due.
- Jobber: He buys and sells securities on his own for a profit called jobbers’ turn.
- Broker: This is an individual or firm who links buyers and sellers of securities with jobbers and earns a commission known as brokerage.
- Stag: This is a speculator who subscribes to new issue of shares in the hope of selling them at a profit when dealings in them begin.