FINANCIAL INSTITUTIONS AND MARKETS HOME WORK

QUESTION 1:

a) Who are the major participants in the money markets? What is their contribution of the money market to the development of Uganda's economy?

b) Briefly describe the types of the structure of the pension fund system in Uganda.

c) Supposing you are an investment adviser of a venture Capital investment firm. Describe the main features of a venture fund and show how venture capital can be an alternative investment vehicle?

QUESTION 2

a) With examples explain the fundamental listing requirements of Security Exchanges in developed markets.

b) Does market liquidity or otherwise determine the performance and development of capital markets in developing countries such as East Africa?

c) With examples, explain how the recent and current trends in financial markets have influenced the development of the stock markets in the world.

QUESTION 3

a) Analyse the potential risk factors associated with the issue of corporate bonds. What would be the likely mitigating factors to those potential risks?

b) An investor with sizable portfolio of investments in real estate has approached you as a student of financial markets. He would like to diversify. A brief report should be written suggesting possible areas of investments showing clearly the process, the risk factors in each market and potential benefits and challenges.

QUESTION:4

a) With examples as applicable, explain the role of financial institutions as an intermediary in the capital accumulation and mobilization process for deficit and surplus units in financial markets system.

b) An investor with a portfolio of investments in equity and real estate in East Africa has approached you for advise. He would like you to provide arguments for and critic insurance as a vehicle for mitigating risk of his investment portfolio

QUESTION 5

a) Examine how the securities central depository system works in United States.

b) Explain how the central banks use monetary policy, bank regulation and supervision to determine the stability of the financial markets in US.

c) Examine how volatility in interest rates affects the performance of the money market and the stock exchange in developed countries.

d) Why is this behavior not replicated in developing markets?

Question 6

a) Explain the meaning of the term market efficiency.

b) Examine under what circumstances are equity markets described as efficient or otherwise?

c) With examples as applicable, explain the role of investment and brokerage firms in market efficiency and price stability of equity, drawing your experience from both developed markets and developing markets.