A partnership sourcing for funds to expand its business would approach _______

Step 1: Analyze the question A partnership wants funds to expand its business. We need to identify the right source of funds for it.

Step 2: Explain the concept

• Central bank: The government's bank (e.g., CBN). It regulates money supply and acts as banker to commercial banks and government. It does not lend to businesses directly.
• Money market: The market for short-term funds (up to about one year), such as treasury bills, commercial papers, and bank loans or overdrafts. Businesses of any type, including partnerships, can borrow here.
• Insurance: Provides protection against risk. It is not a source of expansion funds.
• Stock exchange: The capital market where shares and bonds of public limited companies are traded. Partnerships cannot issue shares to the public. Only public limited companies can do so.

Step 3: Solution

• A is wrong because the central bank does not finance private businesses.
• C is wrong because insurance covers risk and does not raise capital.
• D is wrong because a partnership is not a public company and cannot sell shares on the stock exchange.
• B is the best fit. A partnership can raise funds through the money market, for example through bank loans, overdrafts, and commercial paper.

Step 4: Answer The correct option is B. a money market.

Tip: Remember who can use the stock exchange. Only public limited companies can sell shares to the public. Sole proprietors and partnerships rely on personal savings, loans, and the money market. If "stock exchange" appears in an option about a partnership, it is usually a trap.