FINS1612 Lecture Notes - Children'S Book Council Of Australia, Capital Market, Modern Portfolio Theory
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Family Name:
First Name
Student ID
Signature
University of New South Wales
School of Banking and Finance
FINS 1612 Capital Markets and Institutions
Final Examination
Session 2 2006
Instructions:
Time allowed: 2 hours + 10 minutes reading time
During reading time the candidate is not to make any notes.
Total number of questions: 90 (1 mark each)
All questions are to be answered.
This exam constitutes 50% of your grade.
Write and sign your name and student number on the examination question paper.
Also enter your name and registration number in the spaces provided on the multiple
choice answer sheet.
All answers must be recorded in pencil on the multiple choice answer sheet provided
The examinations office will provide calculators for the exam.
The candidate is not allowed to use any other examination aid.
This paper may NOT be taken out of the examination room.
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Please identify the letter of the choice that best completes the statement or answers the
question and record your selection on the answer sheet provided. There are 90
Questions.
1. The level of banks’ share of assets of all Australian financial institutions from the 1950s on-
wards first _______, then in the 1980s _______, and recently has _______due to securitisation
of banks’ assets.
A: increased; decreased; increased
B: increased; decreased; remained stable
C: decreased; increased; decreased
D: decreased; increased; remained stable
2. Banks have gradually moved to liability management in the management of their balance
sheets. Which statement best describes liability management?
A: The loan portfolio is tailored to match the available deposit base.
B: The deposit base is managed in order to fund loan and other commitments.
C: The ratio of debt to equity is managed to meet capital adequacy requirements.
D: The liability to assets ratio is maintained within Reserve Bank standards.
3. All of the following financial securities are ‘uses of funds’ by the banks EXCEPT:
A: commercial bills
B: credit cards
C: certificates of deposit
D: overdrafts.
4. The financial institution that is called a money market corporation and classified under the Fi-
nancial Corporations Act 1974 but not able to use the word ‘bank’ in its business name is:
A: a credit union
B: a finance company
C: a building society
D: an investment bank.
5. The main difference between project finance and other forms of lending is:
A: lenders base their participation on expected future cash flows and assets of the project
B: lenders take a major equity stake in the project
C: the project company that is set up as a separate legal entity relies heavily on venture capi-
talists for equity funding as those participating expect
D: the lenders have a claim on the assets of the project as well as the sponsors.
