ECS3701
ASS 02
SEMESTER 1
YEAR 2022
, ECS3701 1st semester
Unique number 174996
Due date 20 April 2022
Material All learning Units
Assignment 02
is optional, but contributes 60% towards your semester mark and therefore
contributes towards your final mark.
is a written assignment.
consists of THREE questions worth 30 marks (maximum of four pages for all
questions, written or typed. Extra pages beyond 4 will be ignored, that is, not
marked).
Note: You will be severely penalised if you plagiarise. Use your own words as much as
possible.
2.01 Explain how adverse selection influences the financial structure. [10]
2.02 Explain the role of financial intermediaries by making reference to high
transaction costs in financial transactions and the role of financial expertise.
2.03 The Theory of portfolio choice indicates that other factors besides income and
nominal interest rate can determine the demand for money. List the other three
factors and explain how their changes can affect the demand for money. [10]
ASS 02
SEMESTER 1
YEAR 2022
, ECS3701 1st semester
Unique number 174996
Due date 20 April 2022
Material All learning Units
Assignment 02
is optional, but contributes 60% towards your semester mark and therefore
contributes towards your final mark.
is a written assignment.
consists of THREE questions worth 30 marks (maximum of four pages for all
questions, written or typed. Extra pages beyond 4 will be ignored, that is, not
marked).
Note: You will be severely penalised if you plagiarise. Use your own words as much as
possible.
2.01 Explain how adverse selection influences the financial structure. [10]
2.02 Explain the role of financial intermediaries by making reference to high
transaction costs in financial transactions and the role of financial expertise.
2.03 The Theory of portfolio choice indicates that other factors besides income and
nominal interest rate can determine the demand for money. List the other three
factors and explain how their changes can affect the demand for money. [10]
