REPUPLIC OF CAMEROON

Peace – Work –Fatherland

MINISTRY OF HIGHER EDUCATION
NATIONAL COMMITTEE FOR THE ORGANISATION
OF THE HIGHER NATIONAL DIPLOMA (HND)

Field: BUSINESS, FINANCE, AND MANAGEMENT

Session: JUNE/JULY 2021
Time Allowed: 3 Hours
Specialty: BANKING AND FINANCE (ACC)
Credit Value: 6
Paper: ACCOUNTING AND FINANCE
Course Code:BF16
SET 1
INSTRUCTIONS
 This paper carries FIVE sections.
 You are required to attempt ALL the questions
 Only non – programmable calculators and OHADA/COBAC Charts of Accounts are authorised.

SECTION A: FINANCE: 25 MARKS

SUBSECTIONE 1: FINANCIAL MARKETS 10MARKS

1 : In the parlance of economy/commerce, what is “gilt-edged”

market?
a) Gold and silver market
b) Industrial securities market
c) Market for safe (such as government) securities
d) Market for software technology/ service products

2 : Is there any difference between currency forwards and futures

markets?
a) No, both deal with future delivery of foreign exchange
b) No, both markets can be availed of through the internet
c) Yes, only a limited number of currencies are traded in the futures
market and that also in standardized amounts.
d) No, if one agrees on the date of delivery and brokerage, it is
immaterial which of the markets one is talking of
3 : Debenture holders of a company are its
a) Owners
b) Creditors
c) Debtors
d) Directors
4 : Consider the following points of differences between a share and
a debenture

1. While share capital is the credit into the company, debenture is

an ownership capital
2. While dividend is paid on shares, interest is paid on debentures

Which of the statements given above is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
5 : Which of the statements given below is/are correct regarding
“bear market”?
 1. It refers to fall in the value of investments
2. Investors rush to buy stocks instead of selling
3. Unemployment levels may rise

Select the correct answer using the codes given below:

a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
6 : With reference to money markets, consider the following
statements:

1. Call money refers to borrowing/lending of funds on overnight

basis.
2. Notice money refers to borrowing/lending of funds for a period
exceeding 14 days

Which of the statements given above is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
7 : Consider the following differences between private and public
limited companies:

1. In a private limited company there is restriction on the number of

members, whereas no such restriction is applicable on a public
limited company
 2. A private limited company can be listed on a stock exchange,
whereas a public limited company is always listed on a stock
exchange
3. A private limited company cannot issue debentures, whereas a
public limited company can issue debentures

Select the correct answer using the codes given below:

a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1 , 2, and 3
8 : What is the difference between primary and secondary markets?

1. Primary markets help in capital formation, while secondary

capital provides liquidity to the investor
2. Initial public offerings are undertaken in both primary and
secondary markets
3. Stock exchanges are an example of secondary markets

Select the correct answer using the codes given below:

a) 3 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
9 : Why a retail investor is recommended to invest through a
mutual fund in a stock exchange?

1. Mutual funds invest funds in a diversified portfolio of securities,

thus reducing the risk of the investor
 2. Mutual funds are managed by financial experts
3. Mutual funds promise high returns to the investors of the fund

Select the correct answer using the codes given below:

a) 3 only
b) 2 and 3 only
c) 1 and 2 only
d) 1, 2 and 3

10 : Why venture capital is considered risky in nature?

1. The business plan in which venture capitalists invest is usually

non-conventional in nature
2. Venture capitalists contribute towards a debt of the product
3. Venture capitalists contribute money for a long time period

Select the correct answer using the codes given below:

a) 3 only
b) 1 and 3 only
c) 1 and 2 only
d) 1, 2, and 3

SUBSECTION 2: DECENTRALISED FINANCIAL SYSTEM

10MARKS

1. The main COBAC control measures on micro finance institutions are:

a. prudential regulation and fiscal regulation
b. fiscal and monetary regulation
c. prudential and non prudential regulation
d. all of the above
2. Microfinance establishments are prohibited from using misleading
names in order to
a. reduce the scope of their activities
b. reduce competition
c. protect banks
d. prevent them from duping the public
3. Category three microfinance establishments are constituted under the
legal status of
a. Association
b. Public limited company
c. Micro credit
d. Private limited company
4.The minimum registered capital of microfinance establishments of
the two category is Fixed at
a. 50 million francs
b. 100 million francs
c. 25 million francs
d. 75 million francs
5. What is the legal capacity of a manager in a microfinance institution
in CEMAC ZONE?
a. Trader
b. Lawyer
c. banker
d. Director
6. The authority responsible for the approval of microfinance
establishment in the CEMAC zone is{are}
a. Monetary authority
b. COBAC
c. BEAC
d. Monetary authority and COBAC
7. When a microfinance establishment violates the regulations of the
Banking Commission the following disciplinary sanctions will be
applied on it except:
a. Warning and Blame
b. The prohibition to carry out some transactions or to exercise some
activities
c. The suspension, the automatic resignation, or the revocation of the
auditor
d. Pay a fine of 300,000 FRS
8. The key reason for the Bank to be involved in microfinance is:
a. Microfinance is a profitable investment opportunity for the Bank
b. To reduce completion among microfinance institutions
c. To reduce tax evasion
d. To promote cooperation in the financial sector

9. Commercial banks intervene in the microfinance sector by

a. Closing specialized microfinance unit
b. Closing a MFI Subsidiary
c. Creating a Microfinance Service Company
d. Eliminating Strategic Alliance
10. What is the name of the Professional Association of microfinance
establishments in the CEMAC zone?
a. ANEMCAM.
b. BEAC
c. COBAC
d. NCC

SUBSECTION 3: ISLAMIC FINANCE 5 MARKS

1. Investments given by all partners/shareholders known to as

a. partners b. ijarah
c. murabah d. takaful
2. The Islamic financial system prohibits transactions featuring
a. Trading for profit
b. Sharing of profit and risk of loss
c. Partnership agreements
d. Extreme uncertainties resulting from speculation and gambling

3. The term Aqd in Islamic commercial law refers to

a. Ownership of goods b. A contract
c. Non-permissible d. Permissible

4. Banking or banking action that is consistent with main beliefs of

Shariah and its realistic application from beginning to end improvement
of Islamic economics is

a. islamic banking

b. development Bank
c. conventional banking
d. b& c

5. A bank is considered as a custodian and trustee of money is

a. Wadiah
b. safekeeping
 c. a & b
d. Hibah

SECTION C: STRATEGIC MARKETING MANAGEMENT IN

BANKING 25 MARKS

1. State and explain the characteristics of the banking market. 5

marks

2. State and explain the bank marketing mix. 5 marks

3. Briefly explain the banking internal environment. 5 marks

4. Using the PESTEL briefly explains the factors affecting the

banking external environment. 5marks

5. Explain a banking marketing function. 5 marks

SECTION D: BANKING ENVIRONMENT 25 MARKS

1. State and explain the factors to be taken into consideration when

doing the internal analysis of the bank. 12.5 marks
2. What is the PESTEL tool in banking environment? 12.5 marks
SECTION E : LOAN PORTFOLIO MANAGEMENT 20 MARKS

1. Write short notes on

i Assessment of loan portfolio management. 2 marks
ii. Loan policy 2marks
2. Briefly explain the loan portfolio objectives 4marks

3. State and explain 2 types of risk associated with lending. 4marks

4. Explain the Loan Portfolio Management Supervision. 4 marks

5. State and explain how to get into conclusion about the quantity and
quality of risk associated with lending. 4marks