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Theory of financial markets and institutions questions.

Theory of financial markets and institutions questions.

Find Theory of financial markets and institutions university examination questions in acaproso.com

# Question
1

The purchasing power of money varies inversely with the price levels in such a way that , the lower the price the greater would be the purchasing power of money and vise versa.


True OR False
2

Producer price index measures price changes in all sectors of the economy in terms of the aveerage changes in price received by domestic producers of commodities in all stages of processing.


True OR False
3

Two major instances of fiduciary money are bank notes and current account deposits.


True OR False
4

Both Fiat Money and Fiduciary money are tokens money.


True OR False
5

Headline inflation is calculated by including food prices in the consumer price index.


True OR False
6

List down five major characteristics of money.


Short answers
7

Match the statements given in section A with the correct alphabet of terminology in section B.

Section A Section B

 

  1. Has discretionary control over the monetary system of the country
  2. Are the parts of the financial institutions which accept demand deposit
  3. Reducing risks on portifolio of assets
  4. Occurs only if the costs of obtaining information, assessing risk and undertake transaction is low.
  5. Forward transaction in foreign exchange market-trade today at an agreed rate for settlement in future date.
  6. When prices range over 10% p.a
  7. Is the price a borrower pays for the use of money they do not own
  8. Is the published or quoted rate on deposit, loan or bond
  9. Refers to the price of foreign exchange in terms of domestic money payable for immediate delivery of a particular foreign currency
  10. A deficit BOP – of a country implies that demand for foreign exchange exceeds it supply.
  11. Changes in consumers` taste real income levels and productive capacities.
  12. Deals with government expenditure and revenue collection.
  13. Tax rate is declining and increased public income
  14. Burden of the privates sector through crowding out effect.
  15. Is a summary of national`s total economic transactions undertaken on international trade account.
  16. Official reserve for financing deficit balance of payment .
  17. Risks associated with investment .
  18. Last for more than twelve months.
  19. Comprises of services and transfers
  20. It exposes the relationship between export price and import price.

 

  1. Determinant of exchange rate
  2. The nominal rate
  3. Treasury bonds
  4. An interest rate
  5. Expansionary  fiscal policy
  6. Fiscal policy weaknes
  7. Running inflation
  8. Commercial Banks
  9. Spot exchange rate
  10. Balance of payment
  11. Repurchase agreement
  12. FInancial intermediary
  13. Interest rate movement
  14. Fiscal policy
  15. Invisible account
  16. Terms of trade
  17. Bank of Tanzania
  18. Special drawing rights
  19. Disintermediation
  20. Monetary policy
  21. Forward exchange rate

 


Matching items
8
  1. Define the following terms;deflation and disintermediation
  2. What are the effects of inflation on the functions of money as unit of account and store of value?

Short answers
9

Outline briefly the measure of money stock used in Tanzania.


Short answers
10
  1. Define the following terms as used in finance
  1. Financial bailout
  2. Financial contagion
  3. Repurchase agreement
  4. Financial instrument
  5. Vault cash
  1. Discuss the relationship between profitability and liquidity of commercial banks

Long answers