UNIVERSITY OF GUJRAT

Course code: FIN-439 Credit Hours: 3 hours

Semester Fall, 2013 Money an !a"#tal Mar$ets

Time allowed: 30 min

Max Marks: !

Students name: ________________________ Program: _____________________________

Roll No:_________________________ Semester:________________________

SE!TION%A &' 1' Use t(e )*))le s(eet an en+#r+le t(e +orre+t ans,er'
1. Poor people have difficulty getting loans because !. they typically have little collateral. ". they are less li#ely to benefit from access to financial mar#ets C. they are more li#ely to be dishonest. $. all of the above. %. &unicipal bond issued to finance an airport' hospital' turnpi#e' or port authority is typically a !. Revenue bond ". (eneral obligation C. )un# "ond $. none of the ans*ers are correct. +. ,hich of the follo*ing is N-. a characteristic of a conventional residential mortgage/ !. 0t is debt. ". 0t is secured by real estate. C. .he amount of the loan is e1ual to the value of the property. $. 2ach payment includes both principal and interest. 3. Savings and loans have concentrated on ________ loans *hile commercial ban#s have concentrated on ________ loans !. residential mortgage business4related ". business4related government C. government individual $. business4related personal

5. 0f the mar#ets are perfectly efficient' information available to all investors must be: !. same ". may vary C. maybe same $. depends on mar#et ris# 6. ________ mar#ets facilitate the flo* of short4term funds *hile ________ mar#ets facilitate the flo* of long4term funds. !. &oney capital ". Capital money C. Primary secondary $. "ond stoc#

7. 8inanacial institution is defined as a bridge bet*een 4444444444 unit and 44444444444unit !. "usiness:entity ". $eficit:surplus C. National:0nternational $. None of !bove

9. ,hich of the follo*ing money mar#et instruments is used to facilitate international trade/ !. ban#er:s acceptances ". negotiable certificates of deposit C. federal funds $. foreign fund certificates

;. mar#et can be physical or virtual li#e an444444444444444 based mar#et: !. -.C ". 0nternet C. .elephonic. $. !ll of the above 1<. 0f there is a conflict bet*een money manager and investor it is termed a:. !. !gency conflict ". &anagement conflict 11. 8inancial mar#et helps in cutting 444444444444444 cost. !. transaction ". bro#er C. both a and b $. none of above C. 8unds ris# $. !ll of above

1%. 0nvestors in mortgages are sub=ect to ________ ris#' *hich is generally not faced by investors in other mar#ets >li#e bonds?. !. Prepayment ". $efault C. interest rate $. li1uidity

1+. ,hich of the follo*ing mortgages *ould be most appropriate for a borro*er that anticipates rapid gro*th in income/ !. (ro*ing e1uity mortgage ". !d=ustable rate mortgage C. Conventional fi@ed rate mortgage $. "alloon payment mortgage

13. __________ is a high4ris#' high4yield bond rated belo* investment grade *hile aA>an? __________ bond has its interest payment contingent on sufficient earnings of the firm. !. ! subordinated debenture mortgage ". ! debenture subordinated debenture 15. ! pro@y is __________. !. a uni1ue voting system that allo*s minority shareholders to elect at least one director ". protective agreement that allo*s shareholder the ability to purchase ne* shares in the same percentage as their current o*nership proportion C. a legal document giving one entity or person the authority to vote for another. $. !ll of the above ans*ers are in 16. 2conomies of scale allo* financial intermediaries to overcome problems of !. adverse selection ". free4riding. C. high transaction costs. $. moral haBard. C. ! =un# bond income $. !n income bond mortgage

17. ,hat is the name of the legal document underlying a bond issue/ !. 0ndenture ". $ebenture Covenant 19. .here are 44444444444 inde@es in Pa#istan: A' 3 ". % 1;. ,hich of the follo*ing characteriBe the primary mar#et/ !. Stoc# sold at some capital gain. ". Ne, se+*r#t#es are #ss*e ' C. Stoc#s called bac# by issuing company. C. 1 $. None C. Convent $. Signatory

$. !ll of the above are characteristics of the primary mar#et. %<. .here is no e@istence in actual of any 4444444444444444 mar#et. a. -r#mary Mar$et b. 8inancial mar#et c. Secondary mar#et d. None of !bove

%1. 8inancial 0nstitution is an institution that provides 44444444444 services for its clients or members. a. F#nan+#al c. &onitory b. &oney d. None %%. T(e "r#mary s*""l#ers o. .*n s to .#nan+#al #nst#t*t#ons are %%%%%%%%%%/ t(e "r#mary eman ers o. .*n s are %%%%%%%%%%%%%%%' a. In #0# *als/ .#rms 1 2o0ernment c. investors groups b. 8irms: 0ndividuals d. groups investors %+. 444444444444444444 facilitate the flo* of money through the economy. a. F#nan+#al #nst#t*t#ons c. ban#s b. Stoc# mar#ets d. None of !bove %3. Capital mar#et is a mar#et *here buyers and sellers engage in trade of 444444444444 li#e bonds' stoc#s' etc. a. financial securities c. instruments b. 3ot( o. A)o0e d. None %5. 4444444444444 consists of primary mar#ets and secondary mar#ets. a. !a"#tal mar$et c. foreign &ar#ets b. 2@change &ar#et d. None

UNIVERSITY OF GUJRAT

Course code: FIN-439 Credit Hours: 3 hours

Semester Fall, 2013 Money an !a"#tal Mar$ets

Time allowed: "0 min

Max Marks: !

SE!TION%3

& No' 3' S(ort Essay &*est#ons a. ,hat are In#t#al -*)l#+ O..er#n2s 4I-O7, an e8"la#n ,#t( e8am"les' b. ,hat functions stoc# mar#et "er.orms, e8"la#n ,#t( real t#me e8am"les' c. 2@plain $ornbuch model *ith its approaches. d. ,hat are the different types of bonds' e@plain *ith e@amples. e. ,hat are the different types of mortgages' e@plain *ith e@amples.

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