Financial Markets & Institutions Feb.23

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MMS-SemesterlIIEndTermExamination,February2023

Subject: Financial Markets and Institutions Max. Marks: 60

Duration: 3 Hours Date: 11-Feb-2023

Ql would be compulsory and would carry 20 Marks.

ln addition to Q1, there would be six questions. Each question would carry l0 Marks.
Students have to attempt any four out of the remaining six Questions and within each
question;
students have to attempt any one out of two sub - questions'

In all, students have to attempt five questions i.e. (Q1 + Any Four of the remaining)

(20 Marks)
Q.l
A) How much would an investor pay to purchase a bond today, which is redeemable in four
years for its nominal value or face value of Rs1000 and pays an annual coupon of Soh on the
nominal value? The required rate of return (or YTM) for a bond in this risk class is 4o/o.

B) What would be the price if the required rate of return (or YTM) was 6oh in the above
situation?
oh anrutal coupon, 4.5 % current market interest rate.
C) 5 years Bond, 1000 Face value, 6
to the
Calculate Modified duration. What if there is a 1 7o increase in the yield? What happens
bond's price?
years to
D) Mr. X is looking to purchase a zero-coupon bond with a face value of Rs 1 ,000 and 5
maturity. The interest rate on the bond rs 5o/o compounded annually. What price will Mr.
X pay
for the bond today? And what will be the Yield to Maturity on it?

Attempt Any Four out of the Remaining Six Qut:stions

Q.2 Attempt any one from below (10 Marks)

A) Explain the role of regulator of Stock market in India'

OR

B) Existence of capital market is essential for an economy to function, why?


Q.3) Attempt any one from below
(10 Marks)
A) what are Financiar Intermediaries
and exprain any four
of them in detair
OR

B) Explain the concept


of Crowdfunding with example.

Q.4) Attempt any one from below


(10 Marks)
A) Explain Money market
and its instruments
OR

B) Explain types of Derivative


instruments

Q.5) Attempt any one from below


(10 Marks)
A) Define the role of Central
Bank _ RBI in India
OR

B) Exprain the structure


of Foreign Exchange
Markets in India

Q.6) Attempt any one from below


(10 Marks)
A) Mention the factors /characteristics
that pray avitar rore in determining
the varue of a bond.
OR

B) What is the Term Structure


of Interest Rates

Q.7) Attempt any TWO


(10
Marks)
A) Explain the differences
between Zero-coupon
Bond and Regurar coupon
Bearing Bond.
B) Bond prices are inversery
rerated with Bond yierd.
Exprain.
C) Explain Duration
and Convexity in Bond
Market.
D) Distinguish between
Money Market and Capital
market.
***'f*

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