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Finanacial Institutions And Markets Question Paper

Finanacial Institutions And Markets

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2011

UNIVERSITY EXAMINATIONS: 2010/2011
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CFM 309 FINANACIAL INSTITUTIONS AND MARKETS (SATURDAY)
DATE: DECEMBER2011 TIME: 2 HOURS
INSTRUCTIONS: Answer Question One and Any Other Two Questions
Question One
a) Using a diagram show the general structure of the financial markets in Kenya (5 Marks)
b) Explain how secondary markets benefit investors. (2 Marks)
c) State the factors responsible for rapid development of financial institutions in Kenya
(5 Marks)
d) Explain the services offered by the money market. (5 Marks)
e) State and explain the role played by commercial banks in your country clearly
distinguishing between financial and non financial roles. (5 Marks)
f) Outline:-
i) Four merits of being listed on the stock exchange (4 Marks)
ii) Four demerits of being listed on the stock exchange (4 Marks)
2
Question Two
a) Outline any five factors to consider when buying shares of a company. (5 Marks)
b) State the challenges faced when constructing stock market indices. (5 Marks)
c) Explain the role or benefits of financial intermediaries in the economy. (10 Marks)
Question Three
a) Differentiate between monetary policy and fiscal policy. (4 Marks)
b) State the main tools of monetary policy. ( 8 Marks)
c) i) Define the term financial innovations (3 Marks)
ii) Outline the factors responsible for financial innovations. (5 Marks)
Question Four
a) State the main determinants of market interest rates? (4 Marks)
b) State the advantages of a company being cross border listed (8 Marks)
c) State the meaning of the following terms as used in the stock exchange;
i) Bull market (2 Marks)
ii) Bear market (2 Marks)
iii) Watered capital (2 Marks)
iv) Aggressive shares (2 Marks)
Question Five
a) Explain any five risks incurred by financial institutions (10 Marks)
b) Explain any five parties involved in the central depository system (10 Marks)

Finanacial Institutions And Markets Question Paper

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