NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2021 EXAMINATION

Course Code: BFN 304

Credit Unit: 3.

Course Title: FINANCIAL SYSTEMS

Time Allowed: TWO AND HALF HOURS

Instructions: 1. Attempt Question 1 and any other two (2) Questions.

2. Question 1 is compulsory and carries 30 marks while the other 2 Questions carry 20 marks each.

3. Present all your points in a coherent and orderly manner.

Question ONE

a. Corporate entities and institutions constitute the surplus-deficit units within the economy which require a strong financial system. In line with this, what do you understand by a financial system? (10marks)

b. Financial system performs some dynamic functions to the economy, which are geared towards enhancing the performance of the economy to achieve growth and development. Discuss five (5) functions of a financial system. (20marks)

Question TWO

a. What do you understand by capital market and its instruments? (10marks)

b. Describe an international financial system and its players. (10 marks)

Question THREE

a. Identify two regulatory authorities of the financial institutions in Nigeria and describe the roles of the Central Bank of Nigeria (CBN). (10marks)

b. Describe five functions of the Nigeria Deposit Insurance Corporation. (10 marks)

Question FOUR

a. The Federal Mortgage Bank of Nigeria (FMBN) was established to substitute the defunct Nigerian Building Society, describe the role it played in the financial system.(10marks)

b. List 3 each of the bank and non-banking institutions in the structure of the Nigerian financial system. (10 marks)

Question FIVE

a. There are some acceptable functions by majority of economists that the Central bank performs based on the views of De Kock. Enumerate any five of these functions. (10marks)

b. Discuss five basic differences between the central bank and a commercial bank regarding their structure and operations. (10 marks)