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Financial Markets And Institutions Question Paper

Financial Markets And Institutions

Course:Bachelor Of Arts Economics

Institution: University Of Nairobi question papers

Exam Year:2011

THIRD YEAR EXAMINATIONS FOR THE DEGREE OF BACHELOR OF ECONOMICS
XET 308; FINANCIAL MARKETS AND INSTITUTIONS
10TH AUGUST 2011

INSTRUCTIONS; ANSWER QUESTION ONE AND ANY OTHER TWO

1. a) Define a share, stock exchange (NSE) and briefly explain the steps of a potential investor to invest through the Nairobi Stock Exchange.
b) What is an index in the stock market? Briefly explain the meaning of the “NSE 20”
c) Define “New Issues”

2. a) Distinguish between a Developed Money Market and Developing Money Market
b) Briefly explain the meaning of a financial crisis. Mention the major types of financial crisis that have occurred in the world since 1929.

3. a) Write brief notes on the following;-
i. Stock brokers
ii. Stock jobbers
iii. Bulls, Bears and Stags

b) The Capital Market Authority was established in 1990 to stimulate the development of long term debt and Equity markets. What are its duties, powers and functions?

c) Why do we have low quotation of companies in Kenya?

4. a) Define the term structure of interest rates and briefly explain the theories of term structure.
b) State the problems arising in markets due to asymmetric information.

5. a) Define a bank and explain the major functions of Commercial Banks of Kenya.
b) For the last few years the Central Bank of Kenya has been on the spot about the way it controls credit. Briefly explain the major methods put in place to control credit.

Financial Markets And Institutions Question Paper

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