QUESTION ONE

$($a$)$ Explain the role of and abjectives of financiat markets in tanzachac$,$ Dos examples to illustrate your answers.

$($b$)$ Differentiate the following terms:

$($i$)$ Direct and Indrect Finapcing

$($ii$)$ Brokers and Dealers on Fimencial Securities

$($iii$)$ Primary and Secoptlaty Markets

$($iv$)$ Money and Capital Miukets

QUESTION TWO N$.$

The Clock tower Corporation would like to issue shs$.2$ mallion in new shares of stock. The President of Clock tower believes that if the company wats two weeks, they could get a better price for their shares. The Chair of the board of directors disputes this. She shys that because markets are price efficient, there is no "timing" possible on the stock issue and Clock tower stwomle issue the shares when they need the funds, and not worry about "timing" Who is right? Explain.

QUESTION THREE

$($a$)$ What are bond markets?t

$($b$)$ Compute the value of a bond which has a coupon rate of $20\%\%,$ fice value of shs $1,000,$ and matures after $20$ years. Assume the cost debt is $15\%.$ and corporate tax is $30\%.$

Use the appropriate factors provided in the table below.

$\backslash$table$[[x$ the,$10\%,10\mathrm{.}5\%,15\%,20\%,30\%$