Scribd
Upload
18 views2 pages

FIM Questions

This document outlines an exam for an MBA financial institutions and markets course. It provides instructions for the exam and lists three groups of questions covering various topics: Group A asks students to define terms like depository institutions and nominal interest rate. It also asks students to explain concepts like primary markets and efficient stock markets. Group B asks students to explain monetary policy tools and solve problems related to mutual funds, Treasury bills, and interest rates. Group C asks students to explain financial markets and calculate bond durations and dividend discount models. Group D provides a case study about money markets and asks students to describe money market participants and instruments, differentiate money market yield measures, and calculate yields on Treasury bills.

Uploaded by

Kripaya Shakya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
18 views2 pages

FIM Questions

This document outlines an exam for an MBA financial institutions and markets course. It provides instructions for the exam and lists three groups of questions covering various topics: Group A asks students to define terms like depository institutions and nominal interest rate. It also asks students to explain concepts like primary markets and efficient stock markets. Group B asks students to explain monetary policy tools and solve problems related to mutual funds, Treasury bills, and interest rates. Group C asks students to explain financial markets and calculate bond durations and dividend discount models. Group D provides a case study about money markets and asks students to describe money market participants and instruments, differentiate money market yield measures, and calculate yields on Treasury bills.

Uploaded by

Kripaya Shakya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

NOS initiative

Pre-Board Examination - Spring 2023


Program: MBA; Semester III; Morning
Subject Code: MBA2213
Subject Name: Financial Institutions and Markets
Full Marks: 100 Pass Marks: 40
Time: 3 Hours
Candidates are required to give their answer in their own words as far as practicable.
Answer ALL questions briefly
Group A
1. Define depository institutions with examples.
2. What is the nominal interest rate? Illustrate with example. 3. What are the regulators of Nepali
financial system?
4. What is primary market? Illustrate with example.
5. What are the features of closed end fund?
6. Define bond duration. Why is it calculated?
7. What are the regulators of Nepali financial system? S. What is primary market? Illustrate with
example. 9. What are the features of efficient stock market? 10. Define bond duration. Why is it
calculated?
Answer any FOUR questions
Group B
11. Explain the monetary policy tools used by central bank.
12. City Street Fund has a portfolio of $ 450 million and liabilities of $ 10 million.
a. If there are 44 million shares outstanding, what is net asset value?
b. If a large investor redeems 1 million shares, what happens to the portfolio value, to shares
outstanding, and to NAV?
13. Suppose you purchase a T-bill that is 91 days from maturity for $97. The T-bill has a face value of $
1,00.
a. Calculate the T-bill's quoted discount yield.
b. Calculate the T-bill's bond equivalent yield.
14. The current one-year Treasury bill rate is 5.0 percent, and the expected one-year rate 12 months
from now is 5.4 percent. According to the unbiased expectations theory, what should be the current
rate for a two-year Treasury security?
15. Calculate the value of bond with 8 years to maturity and coupon rate of 8% with face value of
$1,000. The required return is 10 percent. Would you buy this bond if market price is $ 1,100?
Group C
Cold,st her
Answer any THREE questions Shone market, bond marker 3×10=30 16. Explain the various
classification of the financial markets.ncy marker, derivatius market, forex mark 17. Consider a bond
selling at its par value of $ 1,000, with three years to maturity and a 10%
coupon rate (with annual interest payments).
a. Calculate the bond's duration. Interpret the result.
b. Calculate the bond's modified duration. Interpret the result.
18. 18. The FI Corporation's dividends per share are expected to grow indefinitely by 5% per year. a. If
this year's year-end dividend is $8 and the market capitalization rate is 10% per year. what must the
current stock price be according to the DDM?
Page 1 of 2
b. If the expected earnings per share are $12, what is the implied value of the ROE on future
investment opportunities?
How much is the market paying per share for growth opportunities (i.e.. for an ROE on future
investments that exceeds the market capitalization rate)?
Answer ALL questions briefly
Group D
20. Read the given case and answer the questions given below.
1×30-30
Money markets provide means for lenders and borrowers to satisfy their short-term financial needs.
For the most part, money markets provide lenders a means for safe. liquid and short-term
investments. They offer borrowers access to low-cost funds. The term money market is an umbrella
that covers several market types, which vary according to the needs of the lenders and borrowers.
Money markets include markets for such instruments as bank accounts, including term certificates of
deposit. interbank loans, money market mutual funds, commercial papers, treasury bills, securities
lending and repurchase agreements. Yields on money market securities vary from one to other
depending on the level of risk. The yields on money market instruments can be measured using four
key conventions, namely, annualized discount rate, annualized investment rate, single payment yield
and effective annual yield.
Questions:
a. Describe the conditions at which money market is needed with their participants. What are the
major instruments traded at this market? Who are the major participants? (10 Marks)
b. Given the several measures of money market yields, how do you differentiate annualized discount
rate from the annualized investment rate on money market instruments? For an investor, which of
these two rates represents the rate of return on investment? (10 Marks)
sou
c. Suppose the Public Debt Department of Nepal Rastra Bank, on behalf of Government of Nepal,
recently issued 91-day treasury bills of $ 10,000 face value. The Treasury bills were sold at $ 9,900.
What is the annualized discount rate, annualized investment rate and effective annual yield on this
Treasury bill issue? Among these rates, which is the quoted rate of Treasury bill? (10 Marks)
DISCOUN
All the Best 6
Page 2 of 2
E(EXP(t))
εν

You might also like