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Cfm 309:Financial Institutions And Markets (Evening Class) Question Paper

Cfm 309:Financial Institutions And Markets (Evening Class)

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

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UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR STAGE 2 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFM 309:FINANCIAL INSTITUTIONS AND MARKETS
(EVENING CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer ONE and Any other TWO Questions
QUESTION ONE
a) (i) State the features of securities bought and sold in the money Market (4 Marks)
(ii) Discuss the reasons why money Markets are not fully developed in Kenya (6 Marks)
b) Differentiate between the Market value of shares and the par value of shares and state the value
that is used to compute Market capitalization (4 Marks)
c) Write short notes on the following international financial institutions:
(i) International Bank for Reconstruction and Development(IBRD) (4 Marks)
(ii) International monetary fund(IMF) (4 Marks)
d) Compare and contrast forward and futures contract (4 Marks)
e) What are the ways through which financial sector will be said to develop (4 Marks)
QUESTION TWO
a) Financial liberalization should be exercised with care since it may result to negative
consequences such as the collapse of crucial but weak financial systems and the loss of
control of the financial systems to the foreigners. How does the government intervene to
reduce the negative consequences of financial liberalization? (10 Marks)
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b) (i) What is meant by fixed exchange rate system? (2 Marks)
(ii) State and explain the advantages of fixed exchange rate system (8 Marks)
QUESTION THREE
a) What are fiscal policies? Identify three instruments of fiscal policies (5 Marks)
b) Discuss the objectives of adopting fiscal policies in a developing country (10 Marks)
c) What is the role of financial intermediaries in an economy? (5 Marks )
QUESTION FOUR
a) Write short notes ion the following
i) Financial Disintermediation (3 Marks)
ii) Depository institutions (3 Marks)
iii) Random walk (3 Marks)
iv) Contango operations (3 Marks)
b) What is financial innovation? Describe three types of financial innovation
(8 Marks)
QUESTION FIVE
Critically examine the roles played by commercial banks in the development of Kenya
(20 Marks)

Cfm 309:Financial Institutions And Markets (Evening Class) Question Paper

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