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Buss 322: Money Banking And Finance Question Paper

Buss 322: Money Banking And Finance

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2011

SCHOOL : SCHOOL OF BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions

Question 1
a) The evolution of money helped define what paper money is today. Discuss. (10marks)
b) Family bank is considering raising money using a corporate bond as opposed to an IPO. Discuss the 3 benefits of such a move. (6marks)
c) What are financial intermediaries? (2marks)
d) Highlight 3 broad differences and similarities between a commercial bank such as KCB and an institution such as Faulu Kenya. (12marks)

Question 2
a) The central Bank of Kenya targets inflation through monetary policy instruments. Discuss. (10marks)
b) Highlight 5 determinants of a floating exchange rate system. (10marks)

Question 3
a) Give 3 distinguishing traits between money markets and capital markets. (6marks)
b) If CFC Stanbic wants to issue a Corporate bond. Highlight 3 different kinds of corporate bonds it would issue. (9marks)
c) Highlight 5 characteristics of money. (5marks)

Question 4
a) Discuss 3 roles that are co-ordinated by the two Brenton woods institutions. (6marks)
b) The NSE has created enormous opportunities in economic liberalization and financing for various companies that have gone public and are now listed on the stock exchange. Companies continue to raise capital through the secondary markets for financing of various projects and expansion activities. Discuss 7 roles that the NSE has and continues to play in the economy. (14marks)

Question 5
a) If Kamau made an initial deposit in his equity bank a/c of Ksh 400,000, (thro deposit expansion) of KCB, Barclays, Stan chart and Diamond trust if a cash ration of 10% is maintained. (8marks)
b) What 3 limitations do banks face in this process? (6marks)
c) Martin is deciding whether to buy Safaricom shares as opposed to TPS Serena shares. What investment rations would he consider to make an informed decision? (6marks)

Buss 322: Money Banking And Finance Question Paper

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