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Hbc2105:Financial Institutions And Marketing Question Paper

Hbc2105:Financial Institutions And Marketing

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2012

QUESTION ONE (30 MARKS)
a. Discuss the importance of financial market to the economy (6 Marks) b. Explain the differences between the following: i. Primary market and secondary market (3 Marks) ii. Limit order and market order (3 Marks) iii. Securities firms and investment banks (4 Marks) iv. Discuss various theories of interest rates (10 Marks) v. Describe the cheque truncation system (4 Marks)
QUESTION TWO (20 MARKS)
a. Explain the meaning of the following concepts as applied in financial markets (8 Marks) b. Write short notes on the following: i. Defined contribution pension fund (3 Marks) ii. Market making (3 Marks) iii. Net asset value (3 Marks) iv. Underwriting (3 Marks)
QUESTION THREE (20 MARKS)
a. Explain the role of money market in the financial systems (6 Marks) b. The government of Kenya recently sold to you a 812 day T-bill for sh. 8500. The T- bill has a face value of ksh.10, 000.
2
Calculate:
i. The discount yield (2 Marks) ii. The bond equivalent yield (2 Marks) c. Last year, you purchased a stock of a A company at a price of ksh.62. You sold the stock this year for ksh.75. The stock also paid ksh. 5.60 as annual dividend. What would be return on your investment (2 Marks) d. Compare loanable interest theory withy classical theory (2 Marks)
QUESTION FOUR (20 MARKS)
a. Explain the characteristics of futures that makes it different from forward (4 Marks) b. Discus various ways in which firm hedge against risk (6 Marks) c. Argue the case for and against regulation of financial system (10 Marks)

Hbc2105:Financial Institutions And Marketing Question Paper

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