DU SOL B.Com (Hons) | Money and Banking, Semester 3 | Previous Year Question Paper

The DU SOL B.Com (Hons) Previous Year Question Paper for Money and Banking (Semester 3) with Unique Paper Code 12275303 is an essential resource for students in the Delhi University School of Open Learning (DU SOL) program. This paper aids students in understanding critical concepts, familiarizing themselves with exam patterns, and preparing effectively for their examinations.

Question are as follows:

Question 1. (a) What is meant by endogenous and exogenous money supply curve? Graphically represent the impact of open market purchase by central bank on the money supply when:
(i) The money supply is endogenous
(ii) The money supply is exogenous
(b) Assume that the required reserve ratio is 25 percent. The desired currency to deposit ratio and the
desired excess reserve ratio are both zero. If there is an open market purchase of Rs. 250000/-. What will happen to the following?
(i) Total deposits of the banking system
(ii) Loans
(iii) Total reserve

Question 2. (a) Explain the term adverse selection? Describe the tools that help in solving adverse selection?
(b) Explain the risk and return characteristics of options when the option price is Rs. 20 and strike
price is Rs.150 in the following cases:
(i) In the case where investor has Short put option.
(ii) In the case where investor has long call option.

Question 3. (a) Why was there a need to move from base rate lending system to MCLR system? Discuss in this context the effectiveness of MCLR system in improving the transmission effects of monetary policy.
(b) What are the factors that cause financial crises?

Question 4. (a) How is Basel – III an improvement over Basel – II? Explain.
(b) The interest rate on a one year government bond is 5 percent, the rate on a two year bond is 4 percent, and the rate on a three year government bond is 8 percent.
(i) Use the expectations hypothesis to determine the market’s forecast of the one year rate next year.
(ii) Describe the shape of the yield curve.
(iii)What is the market’s forecast of the one year rate in two years?

Question 5. (a) Explain the evolution of monetary policy framework in India since the mid 1980.
(b) What are the problems in monetary policy making faced by monetary authorities?

Question 6. Write short notes on any three of the following topics:
(a) Liquidity Adjustment Facility
(b) NPA problem in Indian banking system
(c) Definitional issues with money
(d) Interest rate swaps

You can download the PDF of this question paper from the link below.