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Cfm 309: Financial Institutions And Markets Question Paper

Cfm 309: Financial Institutions And Markets

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

1
UNIVERSITY EXAMINATIONS: 2008/2009
THIRD YEAR STAGE 1 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFM 309: FINANCIAL INSTITUTIONS AND MARKETS
DATE: APRIL 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
(a) Write descriptive notes on the following:
(i) Government revenue (4 Marks)
(ii) Government expenditure (4 Marks)
(iii) Asset Securitization (4 Marks)
(b) (i) What is financial innovation? (2 Marks)
(ii) State and explain three types of financial innovation (6 Marks)
(c) State and explain two kinds of exchange rates. (4 Marks)
(d) Stock market index measures the relative changes in the general price level of security prices at
the stock market. What are its limitations? (6 Marks)
QUESTION TWO
Financial liberalization is a deliberate action by the government to significantly reduce its control over
the financial institutions and markets in the economy. Discuss the case for and against financial
liberalization (20 Marks)
2
QUESTION THREE
a) Discuss the main functions performed by the Central bank with a lot of emphasis on the
implementation of monetary policies (10 Marks)
b) Discuss the main challenges experienced by a central bank in its efficient implementation of the
monetary policies (analyze challenges using each of the instruments of monetary policies
(10 Marks)
QUESTION FOUR
(a) International Monetary Fund(IMF) is one of the most popular international financial
Institutions .State and explain any five functions of IMF (10 Marks)
(b) What is the role of Nairobi Stock exchange in the economy? (10 Marks)
QUESTION FIVE
There are certain sectors of the economy which may not attain adequate credit from the commercial
banks because of high risks involved in these sectors or because of the unattractive returns. Identify
the institutions that have been established by the government to cater for these sectors critically
examining their advantages and disadvantages. (20 Marks)

Cfm 309: Financial Institutions And Markets Question Paper

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