Principles of Finance (FINM2201)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 200
Year: 2018
24/05/2018
UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES (FEMS)
FINA 202: PRINCIPLES OF FINANCE-TEST 2017/2018 ACADEMIC YEAR
COURSE
INSTRUCTORS: CYPRIAN AMBAIN CHIA/NJIJONG MARCELUS
QUESTIONS
1. What is a Financial Market? 2mks
2. Identify and explain three functions of a Financial Market. 6mks
3. Identify and explain the short term and long term sources of finance. 6mks
4. Give three reasons why individuals and Businesses may exercise or practice the “Time
Preference of Money”. 3mks
5. Define the following: 4mks
a) Simple interest
b) Compound Interest
c) Annuity
d) Perpetuity
6. All of Finance is grounded on three principles, identify these three principles and explain
them. 6mks
7. Mr. Sama needs to pay 60,000 FRS annually to maintain a certain building indefinitely.
What is the present value of this annuity to support this perpetual maintenance if Sama can
invest at the rate 12% per annum? 2mks
8. Mr. Thomas deposits 20,000 FRS in a savings account paying 15% simple interest and
he keeps it for 9yrs. 3mks.
i. Determine the amount of accumulated interest at the end of the 9
th
year period.
ii. Calculate the future value.
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