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

Money Banking &Amp; Finance Question Paper

Money Banking &Amp; Finance

Course:Buss 322

Institution: Kenya Methodist University question papers

Exam Year:2008

KENYA METHODIST UNIVERSITY

END OF FIRST TRIMESTER 2008 EXAMINATION

FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
COURSE CODE : BUSS 322
COURSE TITLE : MONEY BANKING & FINANCE
TIME : 3 HOURS

INSTRUCTIONS
• Answer Question ONE and any other THREE Questions

Question 1
Financial intermediaries are specialized business firms whose activities include the creation of financial assets and liabilities. With intermediation, savings are transferred to economic units that have opportunity for profitable investment. Real resources are therefore allocated more effectively and real output for the economy as a whole is increased. These intermediaries include banks, insurance companies, pension funds, savings and loans, mutual funds, investment funds, finance companies, money market funds, credit unions etc.

a) What is meant by the term financial intermediaries? (3marks)

b) To what extent are banks the principal financial intermediaries? (6marks)

c) Briefly enumerate the need for financial intermediaries, looking at each party to the intermediation process separately. (6marks)

d) Discuss three advantages of financial intermediation. (6marks)

e) Briefly explain two circumstances which motivate disintermediation activity to occur.
(4marks)

Question 2
a) Distinguish between unit banking and branch banking citing examples of each.
(10marks)

b) Highlight the disadvantages and advantages associated with each of this structure banking. (5marks)

Question 3
“The tiny streams of capitals flowing into the bank vault become rivers and these in turn fall into the ocean of national finance to drive wheels of industry and to float the vessels of commerce”.
Discuss this statement and bring out the nature and functions of commercial banks in modern society as fully as you can. (15marks)

Question 4
a) Explain the meaning of the term credit control. (5marks)

b) Briefly discuss the various methods at the disposal of central monetary authorities to control credit. (10marks)

Question 5
‘ A highly developed and efficient financial system is essential to ongoing economic growth and prosperity’. Discuss the component parts that form a financial system and the relevance of the above statement.
(15marks)

Question 6
What are the differences between primary and secondary market transactions? Why is the existence of well developed secondary markets important to the functioning of the primary markets within the financial system? (15marks)

Money Banking &Amp; Finance Question Paper

More Question Papers

Popular Exams