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Financial Institutions And Markets Question Paper

Financial Institutions And Markets

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CFM 309-F: FINANCIAL INSTITUTIONS AND MARKETS (day +evening)
DATE: AUGUST 2010 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) Distinguish between a capital and money Markets. (2 Marks)
c) Explain how secondary Markets benefit investors. (3 Marks)
d) State the factors responsible for rapid development of financial institutions in Kenya
(5 Marks)
e) Explain why “over the counter Market” is not fully developed in Kenya. ( 5 Marks)
f) State and explain the role played by commercial banks in your country clearly distinguishing
between financial and non financial roles. (5 Marks)
g) State and explain the main risks faced by financial institutions in the course of conduct of their
business. (5 Marks)
QUESTION TWO
a) Differentiate between monetary policy and fiscal policy? [ 5 Marks]
b) State the main tools of monetary policy. [10 Marks]
c) What are financial innovations? State and explain the factors responsible for financial
innovations. [5 Marks]
2
QUESTION THREE
a) What is the relationship between interest and the price of bonds? [5 Marks]
b) Discuss the theories of the term structure of interest rates. [10 Marks]
c) Differentiate between financial intermediation and financial mobilization. [5 Marks]
QUESTION FOUR
a) What is a stock Market index? [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 FIVE
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; bull Market, bear
Market, watered capital, aggressive shares [8 Marks]

Financial Institutions And Markets Question Paper

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