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Fnce 324 2008/2009 Academic Year Question Paper

Fnce 324 2008/2009 Academic Year

Course:Bachelor Of Commerce

Institution: Kabarak University question papers

Exam Year:2009

INSTRUCTIONS:
1. Answer question 1 and any 2 questions.
2. Write your registration number clearly, be neat, precise and to the point, show
your workings where needed.

QUESTION ONE
i) A modern financial market is crucial for the efficacy of financial institutions and
the economy as a whole. To make it more effective and economical most if not
all the financial markets are categorized into various types. Discuss any 4 types
of these markets and give the importance of each market to an economy.
(12mks)
ii) Discuss any 5 basic roles of financial institutions. (10mks)
iii) Describe any 4 instruments of money market found in Kenya Financial Market.
(8mks)
QUESTION TWO
i) Discuss any 4 existing fundamental types of Financial Market Structures.
(10mks)
ii) According to the Kenyan Economic Survey 2008, inflation was still in a two
digits level and in a way it could temper with the achievement of the 2030
economic goals. Discuss any 4 tools of monetary policy that the Central Bank of
Kenya can use in dealing with this “social evil”. (10mks)
QUESTION THREE
i) Describe the phrase cyber trading world. (4mks)
ii) Discuss the mode of trading referred to in question 3 (i) (10mks)
iii) The globalised mode of trading of financial assets has created some very serious
issues to the policy makers. Discuss any 3 of these issues. (6mks)
QUESTION FOUR
i) Analyze the term structure of interest rates and describe any 2 particular theories
related to it. (10mks)
ii) Describe any 5 instruments of capital market that are found in the Kenyan
financial market. (10mks)
QUESTION FIVE
i) Describe the basis of Time Value concepts. (4mks)
ii) Assume that you are 20 years old and have accumulated Ksh. 50,000 in your
savings account. You can add Ksh. 1000 at the end of each month to your
account which pays an annual interest rate of 6% compounded monthly.
Calculate the amount you will receive after 30 years. (6mks)
iii) Describe a derivative market and give the part it plays in a contemporary financial
market. (10mks)

Fnce 324 2008/2009 Academic Year Question Paper

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