UNIVERSITY OF GUJRAT

SPRING 2020 SEMESTER FINAL TERM EXAMINATION

Course Code: FIN 439 Course Title: Financial Markets

Time Allowed: 180 Minutes Marks: 50
Name: Roll No:
Attempt All Questions. (2.5*20=50)

Q1. Why are financial intermediaries important to financial system?

Q2. How do you think the credit crisis happened?

Q3. What do you think are some good investments in an economic downturn?

Q4. When should a company issue stock rather than debt to fund its operations?

Q5. Why would an investor buy preferred stock?

Q6. Why would a company distribute its earnings through dividends to common stockholders?

Q7. How do you value a company?

Q8. What is typically higher – the cost of debt or the cost of equity?
Q9. How do you calculate the cost of equity?
Q10. What’s an Index? 

Q11. What is the difference between a 'growth' investment and a 'value' investment?

Q12. Why invest in mutual funds?

Q13. In case you have the chance to evaluate the financial viability of the company which
statement would you choose and why?

Q14. What is the difference between Commercial and Investment Banking?

Q15.What is lien and what is it used in mortgage lending?

Q16. Distinguish between conventional mortgage loans and insured mortgage loans.
Q17. Why do people choose to buy insurance even if their expected loss is less than the
payments they will make to the insurance companies?

Q18. Are most insurance companies organized as mutual or stock companies?

Q19. Distinguish between an open and lose end mutual fund.

Q20. Is it better for a security issue to be fully subscribed or oversubscribed?