DBAF 4111: FINANCIAL MARKETS AND INTERMEDIARIES Past Paper

W1-2-60-1-6
JOMO KENYATTA UNIVERSITY
OF
AGRICULTURE AND TECHNOLOGY
University Examinations 2014/2015
EXAMINATION FOR THE DEGREE OF DOCTOR OF
PHILOSOPHY IN BUSINESS ADMINISTRATION
DBAF 4111: FINANCIAL MARKETS AND INTERMEDIARIES
DATE: AUGUST 2014 TIME: 3 HOURS
INSTRUCTIONS: ANSWER QUESTION ONE (COMPULSORY) AND ANY OTHER THREE QUESTIONS

Question One (40 Marks)

For the last one decade Kenya has experience a phenomena increase in financial institutions both in the money markets and capital markets. This coupled with increase in microfinance institutions and other non – bank financial institutions have facilitated financial sector deepening and inclusiveness.

a) Fully discuss the pros and cons of this increase in financial institutions in Kenya. (14 Marks)

b) Highlight five factors that have led to this phenomena increase in financial institutions in Kenya. (10 Marks)

c) Fully discuss any one modern theory of financial intermediation. (10 Marks)

d) Money can be defined as “ money is what money does”. Explain five factors to support this definition. (6 Marks)

Question Two (20 Marks)

a) Money markets are not fully developed in Kenya. Explain five causes of this state of affairs, while advising policy makers on four ways to achieve full development of this market. (12 Marks)

b) Discuss the differences between the money markets and capital markets in Kenya. (8 Marks)

Question Three (20 Marks)

a) To control money supply the Government through the Central Bank must control the activities of commercial banks. This control is done using monetary policy instruments. Explain five such instruments used by Central Bank of Kenya. (10 Marks)

b) Discuss five circumstances under which the monetary policy instruments may not be effective in controlling money supply. (10 Marks)

Question Four (20 Marks)

a) Highlight five key differences between the Commercial Banks and non – bank financial institutions in Kenya. (10 Marks)

b) Critically examine the importance of stock exchange market in any country’s economy. (10 Marks)

Question Five (20 Marks)

The different non – bank financial institutions in Kenya perform different specific roles. Discuss. (20 Marks)

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