Finance Seminar Question Paper

Finance Seminar

Course:Master Of Science In Finance

Institution: Kenyatta University question papers

Exam Year:2009

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
FIRST SEMESTER EXAMINATION FOR THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION /MASTER OF SCIENCE
(FINANCE)

BAC 602: FINANCE SEMINAR

DATE: Thursday
26th November 2009

TIME: 2.00 pm - 5.00 pm

INSTRUCTIONS:
Answer all questions
Q1.
The new Chief Executive Officer (CEO) of an established company is facing a

problem. The company is currently unprofitable and is, in the CEO’s opinion

operating inefficiently considering the area of finance.

a)
Develop a conceptual framework for the research problem. [5marks]
b)
Develop
a
research
questionnaire.
[5marks]

Q2.
Thesis or project writing utilizes 8 writing principles completeness, conciseness,

consideration, concreteness, clarity, courtesy, correctness, coherence.

Required:

Provide vivid financial illustrations (examples) of usage of each principle.

[15marks]

Page 1 of 3
Q3.
Hypothesis: Male employees predominate female employees in higher salary

bands. Data to test the assertion:

Frequency

Salary bond
Male
Female

= sh 28,000
1
0

26,000 - 27,999
10
3

24,000 - 25,999
5
2

22,000 - 23,999
5
4

20,000 - 21,999
1
1

18,000 - 19,999
8
9

16,000 - 17,999
7
9

14,000 - 15,999
8
9

12,000 - 13,999
9
16

10,000 - 11,999
12
32

8,000 - 9,999
4
12

6,000 - 6,999
0
6

Required:

a)
Calculate percentages across to find total of responses in each salary band

b)
State your conclusion bases on (a) above.

c)
Is there a significant difference in salaries between males and females at
5%
level?

(a = .05 , df = 11 , chi - square = 19.68)

[10marks]

Q4.
a)
Analyze critically the theories of Investment and State which theory(s) is

most applicable to the investment by private sector in Kenya.

[10marks]

Page 2 of 3

b)
Behavioral Finance has emerged as a major branch of finance. Explain
the
following
terms
i)
Financial
Cognitive
Dissonance
[3marks]

ii)
Prospect theory

[3marks]
iii)
Iterd
behaviour [2marks]
iv)
Fractional
exuberance
[2marks]

[Total 20marks]

Q5.
a)
Critically analyze Factors/Variable that affect the Optional Financing

Policy with regard to Capital Structure.

[9marks]

b)
A Regression analysis of Referencinants of capital Structure produced the
following
results.

Models Variables
R2

1. Constant 0.600

2. Banking
System
0.79
0.68

3. Constant 0.45

Banking
System
0.68

Earnings
0.79
0.72

Constant
0.99

Banking
System
0.689

Earnings
0.43
0.77

Economic
Growth
0.254

Required:
i)
Prepare
the
Regression
Models.
[4marks]
ii)
Interpret
the
R2 [2marks]
Page 3 of 3

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