2007 finalexamsample2007 finalexamsample.doc

SAMPLE FINAL EXAM PAPER SUBJECT NAME : Capital Markets SUBJECT NO. : 25741 TIME ALLOWED : Three (3) hours plus ten (10) min. reading time NOTES/INSTRUCTIONS TO CANDIDATES: Part A: 10 multiple choice questions worth 1 mark each (10 marks in total). Encode your name and student number on the computer-coding sheet with a 2B grade pencil. Record one answer to each multiple-choice question with a 2B grade pencil on the computer-coding sheet. Part B: 5 calculation questions worth 4 marks each (20 marks in total). Answers to these questions must be written in the examination booklet provided. You must show your workings for the calculations. Unsubstantiated answers will be ignored. Part C: 5 short-answer questions worth 4 marks each (20 marks in total). Answers to these questions must be written in the examination booklet provided. Note: Non-programmable calculators may be used. THE QUESTIONS IN THE FINAL EXAM WILL COVER ALL THE MATERIAL STUDIED IN LECTURES 7 TO 12 IN THE SUBJECT. THE QUESTIONS COULD BE SIMILAR TO SOME OF THESE SAMPLE QUESTIONS OR TOTALLY DIFFERENT. REVISE ALL MATERIAL IN THE LECTURE NOTES, REVISION QUESTIONS AND MULTIPLE CHOICE QUESTIONS ON UTSONLINE . Formulae The following formulae were used in topics 7, 8, 9, 10, 11 and 12. You are assumed to know how to use them. Call IV = max.[S-X,0] Put IV=max.[X-S,0]  PART A Sample Multiple Choice questions. A table of answers is provided at the end of the exam paper. According to the Fisher equation: the real rate of interest responds to small changes in inflation; market yields respond to changes in inflation; yields will rise when the RBA buys securities; the exchange rate is expected to depreciate when interest rates fall; Given that 1 AUD = 0.7800 USD: the expected rate of inflation is higher in Australia than in the USA; the USD is the terms currency; Australians have a smaller purchasing power; commodity prices are