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Oct 2008

Oct 2008

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Published by azwan ayop

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Published by: azwan ayop on May 12, 2010
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CONFIDENTIAL BM/OCT 2008/FIN536/MGT600
UNIVERSITI TEKNOLOGI MARAFINAL EXAMINATIONCOURSECOURSE CODEEXAMINATIONTIMEFINANCIAL MARKET ANDINSTITUTION/MANAGEMENT OF FINANCIALINSTITUTIONFIN536/MGT600OCTOBER 20083 HOURS
INSTRUCTIONS TO CANDIDATES
This question paper consists
of
seven
(7)
questions.Answer only five
(5)
questions
in
the Answer Booklet. Start each answer on
a
new page.Do
not
bring
any
material into
the
examination room unless permission
is
given
by the
invigilator.Please check
to
make sure that this examination pack consists
of:
i)
the
Question Paperii)
an
Answer Booklet
-
provided by the Faculty
DO NOT TURN
THIS
PAGE
UNTIL
YOU ARE TOLD TO
DO SO
This examination paper consists
of
3
printed pages
© Hak Cipta Universiti Teknologi MARA
CONFIDENTIAL
 
CONFIDENTIAL2BM/OCT 2008/FIN536/MGT600QUESTION 1
a) Commercial banks are one of the biggest financial intermediaries available ifmeasured by the size of their assets. Briefly explain three (3) sources and three (3)uses of funds of commercial banks in Malaysia.(12 marks)b) The development of financial institutions is part of our financial systems. Discuss anyfour (4) roles played by these institutions in developing the industrial sector inMalaysia.(8 marks)
QUESTION 2
a) One of the risks faced by financial institutions is the liquidity risk. Explain theimportance of tackling the issue of liquidity risk among financial institutions and givean example of how a financial institution can reduce this type of risk.(10 marks)b) According to the Banking and Financial Institution Act 1989, Bank Negara Malaysia isnot a Bank. Explain the rationale behind this statement.(10 marks)
QUESTION 3
a) Interest rate is one of the essential factors that help in determining the liquidity andprofitability position of financial institutions. Economists identify several techniques indetermining the interest rate level in a country. Two of the most common techniquesare loanable fund theory and liquidity preferences theory. Explain the theories (useillustration if necessary).(10 marks)b) Define real rate of return. The rate of return for your investment in several securitiesfor the 2007 was 17.45%. Given that the inflation rate was at 3.45%, what is yourreal rate of return?(5 marks)c) Differentiate between call option and put option.(5 marks)
© Hak Cipta Universiti Teknologi MARA
CONFIDENTIAL

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