01 5 marks) (e) According to the article of 27t April 2015 titled Oil price hove

Question

01 5 marks) (e) According to the article of 27t April 2015 titled Oil price hovers at four- month high", oil price has recovered from its 6-year low in January 2015, with Brent crude oil price now reaching $65.37. What factors are identified as d drivers of this recovery in the oil price? Are they demand-side or supply-side actors (5 marks Question four (25 marks) a) What are financial intermediaries? Mention four key roles of financial markets. 5 marks) b) Mention 3 main tools used by central banks for conducting monetary policy (3 marks) c) Core inflation is the same as headline inflation. Truc/False Page EXAMINERS: Dr. Edward Asiedu

Explanation / Answer

a) financial intermediary are the middle man between two parties in the financial transaction . The bodies that helps in the transaction between two or more parties are known as financial intermediary . For ex. commerical banks, investment bank , mutual funds. etc.

The four key roles of financial markets are as.

i) It helps in mobilisation of saving and converts them into more productive resources.

ii) provides price discovery.

iii) provides liquidity to financial assets.

iv) minimize the cost of transaction .

b) The three main tools conducting by central bank of monetary policy are. ----

i) Open market operations -- buying and selling of government securities in open market .

ii) Reserve requirement --- set the minimum reserve ratio to be held by the bank against their deposits.

iii) Discount rate.

C) The answer is False. because headline inflation includes all item whose price are highly volatiles such as food ,oil etc while core inflation remove those such high volatile items.

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