No.

of Printed Pages : 4

MECE-004

MASTER OF ARTS (Economics)

Term-End Examination
December, 2014
MECE-004 : FINANCIAL INSTITUTIONS
AND MARKETS
Time : 3 hours

Maximum Marks : 100

Note : Answer questions from both parts as per instructions.

PART- A

1.

Attempt any two questions from this part. 2x20=40

What are derivatives ? Explain the concept of
options. What distinguishes an American Option
from an European Option ?

2.

What is the need for a capital regulator in India ?

Give reasons. Explain the objectives and
functions of SEBI. How far has SEBI been
successful in protecting the interest of investors ?

3.

Discuss the relationship among money supply,

inflation and interest rates using Fisher's
hypothesis.

4.

Discuss the relative merits of fixed and flexible

exchange rates. Explain the concept of currency
convertibility.

MECE-004

P.T.O.

PART - B

5.

Answer any five questions from this part. 5x12=60

Explain the nature and significance of money
supply using the money multiplier process.

6.

What are the main functions of a Merchant Bank ?

7.

Write short notes on :

(a) Credit risk
(b) Demat of securities

8. What are the important links between options and

loans ?
9.

Explain the concept of interest rate risk. How is

risk measured in practice ?

10.

Explain the loanable fund theory of interest rates.

11.

Explain the Modigliani-Miller hypothesis.

12. What is a Customs Union ? How does it work ?

In what way is it different from an optimum
currency area ?

MECE-004

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MECE-004

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MECE-004

14