Theory of financial markets and institutions UE Past Papers Questions.

1. What is bank solvency
2. There is a tendency of using bank solvency and liquidity synonymously. How are the two related?. Is a solvent bank always liquid? Discuss.

Answer / Solution

UNSOLVED

1. How can the purchasing power of money be measured?
2. Consider a market basket in year 1 costing Tshs 20,000/= and in year two costing Tshs 40,000/=. How much is TZS 1 worth in year 2?. What is your interpretation of the obtained answer?

Answer / Solution

UNSOLVED

1. What are the three ways in which strong financial institutions can be built in developing countries? Describe.
2. i) Differentiate between consumer price index (CPI) and producer price index (PPI)

          ii)Consider the information provided in the table below and answer the question that follow.

1. Taking year 1 as base year , calculate the CPI for year 2.
2. Comment on your answer with reference to CPI in year 1.
3. What do you notice when you compare CPI for years 4 and 5?.

Answer / Solution

UNSOLVED

1. What are the three ways in which strong financial institutions can be built in developing countries? Describe.
2. i) Differentiate between consumer price index (CPI) and producer price index (PPI)

          ii)Consider the information provided in the table below and answer the question that follow.

1. Taking year 1 as base year , calculate the CPI for year 2.
2. Comment on your answer with reference to CPI in year 1.
3. What do you notice when you compare CPI for years 4 and 5?.

Answer / Solution

UNSOLVED