(2 marks) (b) Determine the price of a par value bond with a coupon rate of 8% and 5years to maturity. Investors require 11% returns. (6 marks) (c) With an aid of a well labeled diagram; explain TWO factors that cause an increase in interest rates in an economy. (Hint: Loanable fund theory) (4marks) (d) Securities can be classified as money market securities, capital market securities or derivatives (1) Differentiate between these three classifications (6 marks) (Total =20marks) QUESTION FOUR (a) Differentiate between Efficient Market Hypothesis and the Random walk Theory of financial markets. marks) (6) Mention three levels of the efficient market. (3 marks) (c) Discuss any Four participants within the capital market (6 marks) (d) List Four code of conduct of portfolio manager. (2 marks) (e) A taxable security offers a before-tax return of 30%. If the tax rate is 35%; find how much this security must offer to make it equally attractive as a tax-exempt security (4 marks) (f) List Four types of risk which lenders and providers of funds face and which could be reasons for bank failures (1 mark) (Total = 20 marks Page 1 of 1