a) A change in the supply or demand curve for loanable funds causes interest rate to move.
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Question:
a) A change in the supply or demand curve for loanable funds causes interest rate to move. Discuss THREE (3) factors that cause the demand curve of loanable funds to shift at any given interest rate. (12 marks)
b) When a corporation wants to borrow or raise funds, it may decide to issue long term debt or equity instruments. It then usually hires an investment bank to facilitate the issuance and subsequent sale of the securities. Discuss THREE (3) ways in which an investment bank may be involved in the issuance of a new security. (15 marks)
c) Describe the THREE (3) forms of stock market efficiency. (15 marks)
d)What are the major foreign exchanges activities performed by financial institutions? Explain. (13 marks)
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