Question 2: A central bank uses open market operations and discount rates to implement monetary policy. Explain the differences between these two tools and how a central bank uses them to implement contractionary monetary policy. (4 marks)

Question 3: Explain FOUR (4) reasons why banks need to be more heavily regulated than other financial institutions.

Question 6: Discuss TWO (2) advantages of a value-weighted stock index compared to a price-weighted stock index. (4 marks)

Question 7: You are a relationship manager with the SG Private Bank. Your client, Ms Tan is currently looking into four types of securities and has approached you for advice. As a financial adviser, analyse the interest rate risk of the following securities, and rank them from lowest risk to highest risk. Justify your ranking. No marks will be awarded if no justification provided. 270-day Treasury Bill Government treasury 30-year zero coupon bond 180-day commercial paper 10-year 5% coupon corporate bond with B credit rating (5 marks)

Question 8: Distinguish between primary and secondary markets and discuss the importance of the secondary market for an initial public offering of shares. (3 marks)