Assignment- Financial Markets (APC 313)

Hand-In Date: Monday 1st October 2012

Answer all questions.

1. Explain what you understand by each of the following two terms:

1. Moral Hazard, 2. Asymmetric information.

For each term give examples from the financial markets to illustrate your answer.

(20 marks)

2. Distinguish between different forms of market efficiency, give examples to

Illustrate your answer. (20 marks)

3. Explain the operation and activities of the London Stock Exchange (LSE) market

and with reference to the relevant theoretical and empirical literature critically

evaluate the efficiency of this stock exchange market.

(40 marks)

4. Explain the implications of the recent global financial crisis for the regulation of

the financial markets. (20 marks)

Guidance and Preparation Note:

Each question should be answered with reference to the key published academic

literature and relevant research in the field.

1. Q.1 and Q.2 each requires a focused answer within approx.500 words.

2. For Q.3 you need to review carefully key academic literature, combine theory with

evidence /data within the framework of the (LSE) market to arrive at a conclusion.

Normally this process can be done within a 2000 word limit plus an appropriate

appendix to include more details of the (LSE) activities and relevant data.

3. Q.4 does require a focused answer within 500 words limit using relevant

references.

Assessment Criteria

1. Evidence of background reading and relevance of the material to the question

posed.

2. Appropriate use of Harvard referencing system.

3. Depth of analysis based on relevant literature and evidence.

4. Appropriate conclusion based on relevant evidence provided.