CONFIDENTIAL BA/FEB 2023/FIN250

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE FUNDAMENTALS OF FINANCIAL MARKETS AND

INSTITUTIONS
COURSE CODE FIN250
EXAMINATION FEBRUARY 2023
TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of five (5) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 3 printed pages

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 CONFIDENTIAL 2 BA/FEB 2023/FIN250

QUESTION 1

a) Bank Negara Malaysia (BNM) is a statutory body that started operations on January 26,
1959. Discuss the four (4) principal objectives of BNM.
(10 marks)

b) There are three (3) responsibilities of BNM as a financial advisor, banker, and financial
agent of the government. Describe the responsibilities.
(6 marks)

c) List any four (4) legislative powers used by BNM to regulate and supervise financial
institutions.
(4 marks)

QUESTION 2

a) One of the main functions of a commercial bank is to provide funds to the government.
Describe the other four (4) functions of the bank.
(10 marks)

b) Discuss any two (2) differences between conventional and Islamic banks.
(6 marks)

c) State any four (4) commercial banks in Malaysia.

(4 marks)

QUESTION 3

a) Briefly describe the following capital market regulatory bodies:

i) Securities Commissions

ii) Bursa Malaysia Securities Berhad

(10 marks)

b) Discuss any two (2) differences between primary and secondary markets.
(6 marks)

c) Give any four (4) advantages of investing in common stock.

(4 marks)

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 CONFIDENTIAL 3 BA/FEB 2023/FIN250

QUESTION 4

a) Derivatives are financial instruments used to manage one's exposure to today's volatile
markets. Describe four (4) participants in the Malaysian Derivative Market.
(10 marks)

b) Describe any two (2) differences between futures and options.

(6 marks)

c) List any four (4) derivative products.

(4 marks)

QUESTION 5

a) Labuan is an active offshore financial center in Malaysia that helps support the increasing
demands of the domestic economy. Describe four (4) characteristics of the offshore
financial center.
(10 marks)

b) Labuan Financial Services Authority (Labuan FSA) was established on February 15,
1996, under the Labuan Financial Services Authority Act 1996. Labuan FSA is the
statutory body responsible for the development and administration of the Labuan
International Business and Financial Centre (Labuan IBFC). Provide any three (3)
functions of the Labuan FSA.
(6 marks)

c) List any two (2) key areas in which the Labuan International Business and Financial
Centre (Labuan IBFC) has focused its effort to develop Labuan as a reputable offshore
financial center.

(4 marks)

END OF QUESTION PAPER

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