Intermediaries And Lenders

1.Discuss the evolution and functioning of the modern stock markets . Your discussion should include: The history and role of stock exchanges The nature of equities The IPO process Primary vs secondary markets The role of brokers The role of credit rating agencies Stock splits Rights issues / Scrip issues Key ratios used when judging stock value vs company performance Price weighted and value weighted stock indices Risks associated with investing in equities Valuing equities and expected return using the dividend discount model 40 Marks . Word count guide: 1500 2.Discuss the evolution and functioning of the modern bond markets. Your discussion should include: Sovereign bonds Corporate bonds Bond issuance Categories/roles of issuers, intermediaries and lenders Secondary markets Risk Maturity Yield to maturity and other relevant measures of return Interpreting term structure of forecasted future interest rates Bond markets as indicator or macro -economic expectation Coupon bonds Strips Approach to calculating present value of bonds 40 Marks . Word count guide: 1500 3. a)Discuss the key functions of a modern Central Bank. 10 Marks b)Price stability is a key objective in economic management. Discuss the dangers of excessive consumer price inflation, deflation and major asset price inflation 10 Marks Total 20 Marks. Word count guide 1000