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    ASSIGNMENT 2 Financial Market &institution - Docx To Be

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    alemayehu
    This document is an assignment for a financial markets and institutions course. It contains two parts - the first asks students to answer 5 questions in detail about classifying depository institutions, how banks create money and its implications, analyzing a bond, defining the money market and its objectives, and describing interest rate structure and instruments. The second part contains 5 multiple choice questions about securities traded in capital markets, appropriate short-term parking places for funds, economic roles of the financial system, types of financial assets, and the institution responsible for managing money supply. The assignment is worth 25% and is due on 09/06/2020.

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    ASSIGNMENT 2 Financial Market &institution - Docx To Be

    Uploaded by

    alemayehu
    203 views2 pages
    This document is an assignment for a financial markets and institutions course. It contains two parts - the first asks students to answer 5 questions in detail about classifying depository institutions, how banks create money and its implications, analyzing a bond, defining the money market and its objectives, and describing interest rate structure and instruments. The second part contains 5 multiple choice questions about securities traded in capital markets, appropriate short-term parking places for funds, economic roles of the financial system, types of financial assets, and the institution responsible for managing money supply. The assignment is worth 25% and is due on 09/06/2020.

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    This document is an assignment for a financial markets and institutions course. It contains two parts - the first asks students to answer 5 questions in detail about classifying depository institutions, how banks create money and its implications, analyzing a bond, defining the money market and its objectives, and describing interest rate structure and instruments. The second part contains 5 multiple choice questions about securities traded in capital markets, appropriate short-term parking places for funds, economic roles of the financial system, types of financial assets, and the institution responsible for managing money supply. The assignment is worth 25% and is due on 09/06/2020.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    203 views2 pages

    ASSIGNMENT 2 Financial Market &institution - Docx To Be

    Uploaded by

    alemayehu
    This document is an assignment for a financial markets and institutions course. It contains two parts - the first asks students to answer 5 questions in detail about classifying depository institutions, how banks create money and its implications, analyzing a bond, defining the money market and its objectives, and describing interest rate structure and instruments. The second part contains 5 multiple choice questions about securities traded in capital markets, appropriate short-term parking places for funds, economic roles of the financial system, types of financial assets, and the institution responsible for managing money supply. The assignment is worth 25% and is due on 09/06/2020.

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    © All Rights Reserved
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    You are on page 1of 2

    Instructor. Birhanu F.

    Allotted
    marks
    Assignment 2 on financial market and institutions
    TOTAL WEIGHT 25%........submission date………..09/06/2020 G.C
    Number Part I: Discuss the following question in detail.

    1 4
    How do we classify the depository intermediaries? What are the bases
    for distinction between the various depository intermediaries? Explain
    the features of these intermediaries in terms of the bases for distinction.
    2 3
    Why and how are banks able to create money? Does the ability of
    banks to create money have important implications for public policy?
    Please Explain.
    3 4
    Consider a bond that has a current price of 90; that is, if the par value of
    the bond is $1,000, the bond’s price is 90% of $1,000 or $900. And
    suppose that this bond has five years remaining to maturity and an 8%
    coupon rate. With five years remaining to maturity, the bond has 10
    six-month periods remaining.
    4 4
    What is money market? What are the broad objectives of the money
    market? Explain why there is a critical need for money market
    instruments.
    5 4
    Describe the structure of interest rates in the money market. What are
    the common money market instruments? Which instrument anchors the
    market and appears to be the foundation for other interest rates? Can
    you explain why this is so?

    Part II. Choose the best answer


    1. The Major securities traded in the capital markets are
    A. Stocks and bonds.
    B. Bonds and commercial paper.
    C. Commercial paper and Treasury bills.
    D. Treasury bills and certificates of deposit.
    2. One is not the right places to “park” for funds that are needed in a shorter time
    period usually one year or less.
    A. Call money market.
    B. Commercial bills market.
    C. Acceptance market.
    D. Stocks market.
    E.
    3. Which one of the following is not considered as economic role/function/ of
    financial system?
    A. Price discovery role. C. Risk transformation role.
    B. Reduction of transaction D. None
    cost role.
    4. Of the following one is not a financial asset?
    A. Insurance policy. D. Stock.
    B. Deposit in bank. E. Petroleum
    C. Bonds
    5. An institution charged with the responsibility of managing the expansion and
    contraction of the volume of money in the interest of general public welfare is?
    A. Central Bank
    B. commercial bank
    C. savings bank
    D. credit union

    2|Page

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