Intermediation - Financial Markets and Institutions - Past Exam, Exams of Finance

Download Intermediation - Financial Markets and Institutions - Past Exam and more Exams Finance in PDF only on Docsity! PRIFYSGOL ABERYSTWYTH UNIVERSITY DEGREE EXAMINATIONS – January 2009 ARHOLIADAU GRADD – Ionawr 2009 ABERYSTWYTH SEMESTER 1 AC32820 FINANCIAL MARKETS AND INSTITUTIONS Time allowed: TWO hours Answer THREE questions .Each question is worth a maximum of 100 marks This examination is worth 80% of the assessment for this module. Calculators are NOT permitted Turn Over 2 QUESTION ONE (a) Critically analyse the role and functions performed by the process of financial intermediation, with emphasis on commercial banks. (80 marks) (b) Explain the difference between a liquidity problem and a solvency problem. (20 marks) QUESTION TWO (a) Discuss the motivation for speculation, hedging and arbitrage in financial markets and provide examples. (80 marks) (b) Explain the similarities and differences between credit risk and country risk. (20 marks) QUESTION THREE Analyse three categories of market ‘anomalies’ and explain whether behavioural finance offers a credible alternative paradigm for explaining market dynamics compared to the efficient markets hypothesis. (100 marks) QUESTION FOUR (a) Analyse the main features of the Basle I and the Basle II capital adequacy records. (80 marks) (b) Explain the meaning of securitisation. (20 marks) Turn Over