Get premium membership and access revision papers, questions with answers as well as video lessons.

Cfm 309-F Financial Institutions And Markets Question Paper

Cfm 309-F Financial Institutions And Markets

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

1
UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR STAGE 2 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFM 309-F FINANCIAL INSTITUTIONS AND MARKETS
(SUNDAY CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer ONE and Any other TWO Questions
QUESTION ONE
a) Why are financial institutions most heavily regulated of all business firms? (6 Marks)
b) One of the management problems encountered by financial institutions is disintermediation.
Discuss disintermediation citing examples of new forms of disintermediation. (6 Marks)
c) Discuss insider trading and information asymmetry with respect to financial Markets.
(6 Marks)
d) Discuss and contrast the classical theory of interest rates with the liquidity preference theory of
interest rates. (6 Marks)
e) Discuss the three innovative financial assets that have emerged in management of corporate
risks in financial Markets. (6 Marks)
QUESTION TWO
a) What are the challenges of small scale business enterprises in obtaining debt capital to expand
production in developing economies (10 Marks)
b) Explain the extent to which specialized government finance agencies like the youth enterprise
fund can help in reducing some of the challenges in (i) above (10 Marks)
2
QUESTION THREE
a) Describe how commercial banks expedite the flow of funds from the surplus spending units to
the deficit spending units (10 Marks)
b) Explain the core functions of the financial system (10 Marks)
QUESTION FOUR
a) Define the central depository system (CDS) and discuss the advantages that accrue to the
Kenyan financial Markets after the establishment of the central depository system corporation
(CDSC) (10 Marks)
b) With reference to the equity Markets, explain the terms adverse selection and moral hazards
while outlining the mitigating mechanisms of such Market risks (10 Marks)
QUESTION FIVE
a) Distinguish between order driven and quote driven financial Markets (5 Marks)
b) State and explain any two ways in which a government may exercise credit control (5 Marks)
c) Explain a contractionary monetary policy and indicate how it affects economic activity
(5 Marks)
d) Discuss the benefits that accrue to investors in mutual funds (5 Marks)

Cfm 309-F Financial Institutions And Markets Question Paper

More Question Papers

Popular Exams

Mid Term Exams

End Term 1 Exams

End Term 3 Exams

Opener Exams

Full Set Exams