a)Explain the difference between interest rate risk and interest rate risk management. (6marks)
b)Why have financial institutions decided to focus on other incomes other than interest based incomes. Explain using relevant examples (8marks)
c)Distinguish direct fro indirect investments (5marks)
d)What is the market segmentation theory? Use graphs and other illustrations to clarify your explanations (6marks)
Question 2
a)State and explain the main factors that influence the demand and supply of loanable funds in Kenya financial market. (8marks)
b)Explain the effects of interest rates on bond valuation (6marks)