CIFA REVISION QUESTIONS

Certified securities and investment analysts(CSIA) NOW CIFA

QUESTION ONE

(a) Define the term ―Financial asset (2 marks)
(b) (i) Explain three economic functions of financial assets. (6 marks)
(ii) State six properties of financial assets. (6 marks)

QUESTION TWO
(a) (i) Define the term ―Bank run (2 marks) 
(ii) summarise four measures that might be used to stop bank runs in financial institutions. (8 marks)

QUESTION THREE
a) Describe two types of municipal bonds. (4 marks)

b) Explain three factors that have contributed to the growth of informal financial institutions. (6 marks)

c) A trader buys a stock on a margin and holds the position for exactly one year, during which time the stock pays a dividend.
The following information relates to the stock:

*Purchase price sh.20 per share.
*Selling price sh.15 per share.
*Number of shares purchased 1,000.
*Leverage ratio 2.5.
*Market interest rate 5%.
*Dividend paid sh.0.10 per share.
*Commission charged sh.0.01 per share.

Required:
The return on the initial investment

(Total: 20 marks)

‪#‎QUIZ‬ 1
A medium sized company borrowed sh.775, 000 from three sources A, B and C to expand its production line. The annual interest rates for the borrowed funds were 8%, 9% and 10% for A, B and C respectively. The amount borrowed at 8% was four times the amount borrowed at 10%. The total interest charged on the total amount borrowed was sh.67, 500.

Required:
The amount borrowed from each source; A, B and C.

#QUIZ 2

In relation to micro finance, briefly explain the following terms: 
i) Commercialisation. 
ii) Transformation.