, 2
NAME
STUDENT
#
Jack Parkinson
UTSC: MGE C71 – SAMPLE EXAM
Question 1. (15 Marks)
A) What are the impacts of rising interest rates on bonds with
different maturities when all bonds are purchased at par?
(10 marks)
B) Why are some people puzzled by these observed
phenomena? (3 marks)
C) How would you answer to part A differ if all bonds were
purchased at a discount? Explain. (2 marks)
Question 2. (15 Marks)
A) Explain what is meant by the term direct finance. Provide one
example of this in action. (4 marks)
B) Explain what is meant by the term indirect finance. Provide one
example of this in action. (5 marks)
C) List and describe at least three benefits to society
created/caused by financial intermediaries. (6 marks)
Question 3. (20 Marks)
A) Define the three functions of money. (6 marks)
B) What is commodity money? Discuss the advantages and
disadvantages of commodity money. (7 marks)
NAME
STUDENT
#
Jack Parkinson
UTSC: MGE C71 – SAMPLE EXAM
Question 1. (15 Marks)
A) What are the impacts of rising interest rates on bonds with
different maturities when all bonds are purchased at par?
(10 marks)
B) Why are some people puzzled by these observed
phenomena? (3 marks)
C) How would you answer to part A differ if all bonds were
purchased at a discount? Explain. (2 marks)
Question 2. (15 Marks)
A) Explain what is meant by the term direct finance. Provide one
example of this in action. (4 marks)
B) Explain what is meant by the term indirect finance. Provide one
example of this in action. (5 marks)
C) List and describe at least three benefits to society
created/caused by financial intermediaries. (6 marks)
Question 3. (20 Marks)
A) Define the three functions of money. (6 marks)
B) What is commodity money? Discuss the advantages and
disadvantages of commodity money. (7 marks)
