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Money And Banking Question Paper

Money And Banking

Course:Master In Business Administration (Business Administration)

Institution: Kabarak University question papers

Exam Year:2011

KABARAK
UNIVERSITY

UNIVERSITY EXAMINATIONS
2011/2012 ACADEMIC YEAR
FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
FNCE 626: MONEY AND BANKING
DAY: FRIDAY

DATE: 16/12/2011
TIME: 4.00 – 7.00 P.M.

STREAM: SEM 3
INSTRUCTIONS:
Answer ANY SIX questions

1. Using Kenyan examples distinguish between the following:
a) Financial market instruments from money market instruments.
(8 marks)
b) Conventional approach and the Chicago approach to the definition of money.

(7 marks)
2. Discuss:
a) The reasons why barter trade is still practiced in some markets.
(8 marks)
b) The evolution of money over the ages.

(7 marks)

3. Explain in details:
a) Assets and liabilities of commercial banks.

(7 marks)
b) Assets and liabilities of the Central Bank.

(5 marks)
c) Expected changes in the assets and liabilities of a commercial bank when a
depositor withdraws part of the checkable deposits.

(3 marks)

4. Discuss using examples in Kenya, the four principles of bank management.

5. Fully explain the role the Central Bank of Kenya in the Kenyan economy.

6. Given that monetary base is the sum of checkable deposits and reserves,
a) Derive the money multiplier?

(5 marks)
b) Compute for the money multiplier if the total: currency in circulation is KES300b;
checkable deposits are KES.500b, and; the excess reserves are KES1b and reserve
requirement is 5%?

(4 marks)
1

c) Discuss four factors that determine the money multiplier.
(6 marks)

7. Critically evaluate
a) The risks that the money market securities carry?

(6 marks)
b) Three monetary policy tools employed by the Central Bank of Kenya over the
past five years.

(9 Marks)

8. Discuss the
a) relationship between money supply, inflation and unemployment (7 marks)
b) collapse of the Bretton Woods Agreement and the current role of the IMF

(8 marks)
2

Money And Banking Question Paper

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