Financial and Capital Market (IEcoS (Economic Services) Economics Paper-2): Questions 1 - 7 of 7

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Question number: 1

» Financial and Capital Market » Financial and Capital Market » Banking and Insurance

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Appeared in Year: 2018

Essay Question▾

Describe in Detail

Describe the elements of an optimal Insurance Contract.

Explanation

  • The Insurance contracts are used to set out the rules and regulations that state certain conditions, the guidelines that must be met, and anything that is excluded from the insurance.

    • These guidelines must be met by both parties; the insurer and insured. The insurer is essentially guaranteeing that he will pay in the case of need for set am

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Question number: 2

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Briefly discuss ‘Primary and Secondary Markets’.

Explanation

  • Primary market is a market in which newly issued credit instruments are sold and purchased.

    • This market is also called the new issues market. In many cases, the new issue is done in the form of an initial public offering (IPO).

    • When investors purchase securities in the primary market, the company offering the securities hires an underwr

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Question number: 3

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

When financial market is said to be perfect?

Explanation

Perfect financial markets are characterized by certain conditions:

  • Cost of trading is less and the access to such markets is free;

  • information about opportunities of borrowing and lending is freely available; and

  • There are large number of traders because of which no single trader can impact the market prices.

Question number: 4

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Briefly discuss the merits of “Liquidity Adjustment Facility” (LAF).

Explanation

A liquidity adjustment facility (LAF) is a tool used in monetary policy that allows banks to borrow money through repurchase agreements.

  • This arrangement allows the banks to respond to liquidity pressures. It is used by governments for assuring basic stability in the financial markets.

  • It is the difference between the repo and reverse rep

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Question number: 5

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Explain Futures Contract. What are its types?

Explanation

  • A ‘Future’ is a contract for buying or selling the underlying asset for a specific price at a pre-determined time.

    • If a person buys a futures contract, he promises to pay the price of the asset at a specified time and if a person sells a future, he makes a promise to transfer the asset to the buyer of the future a specified price at a parti

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Question number: 6

» Financial and Capital Market » Financial and Capital Market » Stock Market

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Explain the concept capital market efficiency and its types?

Explanation

Efficient Market Hypothesis is based on the belief that current market price is a true reflection of the value of the securities (stocks) and it is thus useless to expect that fundamental or technical analysis will yield a superior return by identifying under-priced or over-priced stocks. Under efficient market hypothesis, investors can expect a

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Question number: 7

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

Why do financial intermediaries like banks exist in a modem money using economy?

Explanation

  • Banks play an important role in the economic development of the country apart from being the lender to people and accepting deposits.

    • They are not only dealers in money but also leaders in the development. They are not only the storehouse of the country’s wealth but also are the reservoirs of resources necessary for economic development.

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