NAMIBIAN INSTITUTE OF BANKERS SECOND SEMESTER 2018 ASSIGNMENT 3 DIPLOMA IN BANKING, FINANCE AND CREDIT

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1 NAMIBIAN INSTITUTE OF BANKERS SECOND SEMESTER 2018 ASSIGNMENT 3 COURSE: MODULE: DIPLOMA IN BANKING, FINANCE AND CREDIT FINANCIAL SYSTEM MODULE CODE: FIS 2000 TOTAL MARKS: 100 EXAMINER: MR. ALBERT KAMUINJO MODERATOR: MR. NEHEMIA UZERA Instructions: 1. Answer all questions 2. Start every question on a new page 3. The IOB examination and assessment rules apply 0

2 Dear Student INTRODUCTORY NOTES I.O.B welcomes you to the new academic year 2018 wishing you a successful year and all the best in your studies. Course Name: Financial System Course Code: FIS 2000 Module Description: The detailed contents are as follows: Financial market and the system; types of financial markets; monetary system; basic monetary terms and concepts; and global financial system. Course Delivery Methods Vacation Schools During this second semester, a vacation school will be offered at I.O.B venues. The vacation school dates will be advised on time. Attending vacation schools is compulsory and students are strongly advised to make use of this support service. It is a valuable opportunity to make personal contact with tutors and fellow students, and to discuss problems. Assessment Two assignments have been set for you. These two assignments contribute equally to your course marks. Assessment of each module shall be based on Continuous Assessment (CA) and Formal Assessment (FA) methods. CA will consist of two pieces of assessment during a semester. FA will be through a three-hour examination per module at the end of each semester. Final mark is made up of CA (40%) and FA (60%). 1

3 Minimum of 40% in CA is required to qualify for examination. Submission of assignments The assignments should be submitted within the time line given by I.O.B and should not be handed in after the due dates. These assignments should be properly answered with maximum effort being put so that they may give you the best course mark. All sources should be referenced according to the in house style. It is very important to complete and submit a clean, clear and well-argued assignment for marking. Make sure that you have answered the questions. Every page of the completed assignment must be numbered in the correct order before the pages are stapled together inside the assignment cover. Once completed, each assignment must be stapled in a separate assignment cover. Plagiarism Intellectual dishonesty is theft and considered to be a criminal act. This is committed when a student copy or steal another s work without permission or acknowledgment of the source. Also, when students knowingly share work with others to be submitted as their own. Both students, sharing and submitting are guilty of plagiarism. Students sign an undertaking that they will refrain from plagiarism. Any act of plagiarism is subject to disciplinary measures as outlined in the Plagiarism policy of the IoB. Tutor s contacts: Name: Mr. A. Kamuinjo Cellphone no: address: akamuinjo@gmail.com 2

4 ASSIGNMENT 1 [100 Points] Question 1 (20 marks) Choose the correct sentence or word in each of the following instances. Merely write down the number of the question and next to it the answer that you choose to be correct. Each carries two (2) marks. e.g. 1.1 b 1.1 Complete the missing word. A is a market for securities (debt and equity), where business enterprises (companies) and governments can raise long-term funds. a. Bond markets b. Derivatives markets c. Capital markets d. Currency markets 1.2 Complete the missing word. The is a financial market in which only short-term debt instruments are traded. a. Capital market d. Stock market c. Bond market d. Money market 1.3 Depository institutions are made up of one the following intermediary. a. Finance companies b. Life insurance companies c. Commercial banks d. Mutual funds 1.4 Complete the missing word. The purpose of the is to help international trade and investment. a. Stock market b. Capital market c. Equity market d. Foreign exchange market 3

5 1.5 Complete the missing word. is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. a. Derivatives b. Insurance c. Bank d. Pension fund 1.6 Complete the missing word. A is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. a. Capital markets b. Stock market c. Derivatives markets d. Money markets 1.7 Complete the missing word. is a business, economics or investment term that refers to an asset s ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value. a. Market liquidity b. illiquid asset c. Contingent liquidity risk d. Structural liquidity risk 1.8 Complete the missing word. are markets which provide instruments for the management of financial risk. a. Insurance markets b. Money markets c. Derivatives markets d. Foreign exchange markets 1.9 Complete the missing word. A is a system (including physical or electronic infrastructure and associated procedures and protocols) used to settle financial transactions and to transfer funds between financial institutions. 4

6 a. Monetary system b. Payment system c. Banking system d. Global financial system 1.10 Complete the missing word. take deposits from those who have money to save. They can then lend money from this pool of deposited money to those who seek to borrow. a. Development bank b. Central bank c. Commercial bank d. Agricultural Bank of Namibia Question 2 (25 marks) 2.1 The basic rationale of a financial system is to bring together those who have accumulated an excess of money and who wish to save with those who have a requirement to borrow in order to finance investment. List and explain services provides by financial institutions. Question 3 (25 marks) 31. Your investment manager at NedBank Capital, Mr. Patrick Mberirua has given you a task of research on capital market. Discuss what capital market entails and provide examples. Question 4 (30 marks) 4.1 Do you agree or disagree with the statement that your country enjoys a healthy and stable banking system and therefore does not require a support from Bank for International Settlements in relation to financial regulation. Discuss and motivate your answer. 5