Tuesday, October 13, 2020

MECE 004 FINANCIAL INSTITUTIONS AND MARKETS December 2019 Question Paper

 

MECE 004 FINANCIAL INSTITUTIONS AND MARKETS

December 2019 Question Paper

Time : 3 hours Maximum Marks :

Note : Attempt questions from each section as p instructions given.

SECTION A

(Long-Answer Questions) Answer any two questions from this section.

1. Analyse the Fisherian hypothesis regarding interest rates and inflation. In this regard, examine the Quantity Theory of Money.

2. Discuss the relative merits of fixed and flexible exchange rates. Explain the concept of currency convertibility.

3. What are derivatives ? Explain the concept of `Options'. What distinguishes an American option from a European option ?

4. Explain the Black-Scholes formula for pricing a financial instrument.

SECTION B

(Medium-Length Answer Questions)

Answer any five questions from this section.

5. Discuss the role of stock markets in an economy.

6. What is meant by Public Offering ? What are its costs ?

7. Explain the Linear Probability Models of estimating the risk of default.

8. Discuss the major instruments of monetary policy in India.

9. Explain the Arbitrage Pricing Theory.

10. What are the functions of a Central Bank ? Explain how it controls the creation of credit by the Commercial Banks.

11. Describe the flow-of-funds accounts of a country and discuss their significance.

12. Discuss the main achievements and failures of the Bretton Woods Institutions.

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