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Assignment- Financial Markets APC 313   Hong Kong MARCH 2020

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Assignment- Financial Markets APC 313

 

Hong Kong MARCH 2020.

 

 

Learning Outcomes

 

Upon successful completion of this module, students will be able to:

 

Knowledge-based outcomes

 

1. explain the operation of  financial markets and understand their importance.
2. explain key theories and models of financial markets including  the efficient market hypothesis,  and understand  key implications.
3. analyse the operations and the  efficiency of  financial markets

 

Skill-based outcomes

 

4. To identify and collect appropriate financial data and indices including share prices to carry out analysis of operations  and  efficiency of financial markets.

 

Answer all questions and parts. 

 

Q.1

 

a. Distinguish between different levels of market efficiency. Give examples to illustrate your answer.                                                                                                                                   

                                                                                             (10 marks)           

  

b. With a close reference to the efficient market hypothesis literature and by using relevant empirical evidence and financial data, critically assess the “efficiency” of a stock exchange market of your own choice.

                                                                                                             

                                                                                                (30 marks)  

 

Q.2

 

Compare and contrast key role and functions of the capital markets with those of the money markets. Critically explain how money markets’ activities might influence asset prices in the capital markets. Give examples to illustrate your answer.

                                                                                                     

                                                                                         (20 marks)

 

Q.3

 

(a) Compare and critically evaluate the two methods in managing foreign exchange rate risks: forward contracts and option contracts.

                                                                                       (10 marks)

 

(b) In addition, critically evaluate the choices of using exchange traded derivatives and over-the-counter derivatives for risk management purposes.

                                                                                                 (10 marks)

 

Q.4

 

 Explain what you understand by each one of the following terms:

 

a. Asymmetric information

b. Moral hazard

c. Adverse selection

Give examples to illustrate your answer.                                 (10 marks)

 

With a close reference to these terms, critically discuss why there is a need for regulating financial markets.                                                                                                 

                                                                                                    (10 marks)

 

                                                                                                         

                                                      

 

                                                          

 

 

 

 

 

 

 

Guidance and Preparation  Note:

 

1. Overall word limit, excluding tables, charts, and graphs, is between 3000-4000 words.

 

1. Each question should be answered with a close reference to  key  published academic literature and relevant financial data and evidence.

 

2.For Q.1(b) you need to (1)  review carefully key academic literature and relevant  published  empirical evidence on EMH  relating to  the selected stock exchange market, and  (2)  carry  out  your own  financial data analysis based on a graphical  analysis of the movements in  a relevant daily  share/stock price index ,over say a 90- days period, to arrive at a conclusion.

 

Assessment Criteria

 

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

 

2.Appropriate use of up-date Harvard referencing system

 

3. Depth of analysis based on relevant academic literature, empirical evidence, and financial data analysis.

 

4. Appropriate conclusion based on relevant analysis of data,

 academic literature and  empirical evidence.

 

• THE UNIVERSITY’S REGULATIONS CONCERNING CHEATING, COLLUSION AND PLAGIARISM APPLY TO THIS Assessment.

 

Students are required to submit their coursework through JIRA. Only assessments submitted through JIRA will be marked. Any other submission including submission to your study centre in hard copy will be treated as a non-submission.

If your centre supports Turnitin©, a copy of your Turnitin© originality report must be submitted in conjunction with your assignment