Explain and discuss to what extent you agree with the above description.

Question 1 (Total: 40 marks)
Promex Sdn. Bhd. is a fast growing high technology machine company in
Malaysia. Currently, the company decides to expand its business to Japan, China
and Hong Kong.
(a) In order to support the expansion, the company is considering sourcing fund
amounting to RM1,000,000 from the Malaysian financial markets. Assume that you
are the external consultant employed by this company, explain to the managers
the alternative funding sources available, and suggest a suitable solution for this
company.
(25 marks)
(b) Pertaining to international trade, the company is also concerned about the impact
of foreign currency exchange rate risk on its business. Explain what factors that
cause the exchange rate to change in the short run and how might the change of
exchange rate affect its business as an exporter.
(15 marks)
Question 2 (Total: 20 marks)
The manager at Amex Bank would like to find out the impact of interest rate
change on the bank’s income and net worth.
(a) Perform the income gap analysis and duration gap analysis based on the following
information and advise the manager accordingly.
Related information of the bank’s balance sheet:
1. Rate Sensitive Items:
– Commercial paper (RM43 million)
– Bank borrowings with a maturity less than one year (RM3.5 million)
– securities with a maturity less than one year (RM7 million)
– consumer loans with a maturity less than one year (RM56 million)
2. Total assets = RM 100 million
Total liabilities = RM 90 million
3. Average duration for assets = 2.55 years
Average duration for liabilities = 1.76 years
Assume that the interest rate increases from 10% to 11%.
(12 marks)
(b) Explain to the bank manager the limitations of these two analyses in assessing
interest-rate risk.
(8 marks)
Sunway University Business School Sample FIN2024 Final Examination
3
Section B: Answer 2 out of 3 questions.
All questions carry equal marks. This sections is worth a total of 40 marks.
Question 1 (Total: 20 marks)
“Bursa Malaysia was established with the aim of supervising the stock exchange in
Malaysia. It regulates all matters relating to securities including giving approval to
the prospectus of new share issues. The company also disseminates stock quotes
and information related to securities listed on the exchange. It reports to the
Minister of Finance and its accounts are tabled in Parliament annually.”
Explain and discuss to what extent you agree with the above description.
Question 2 (Total: 20 marks)
Explain why an effective asset management strategy is important to a bank and
how bank managers implement it.
Question 3 (Total: 20 marks)
Explain why financial intermediaries are so important in the process of channeling

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