Economics Paper 2, Nov/Dec. 2012  
Questions: 1 2 3 4 5 6 7 8 9 10 11 12 Main
General Commsents
Question 12

(a)        Distinguish between a merchant bank and a commercial bank.        
            (b)        Outline any four functions of a merchant bank.                    


A good number of candidates who attempted this question performed very well in the
(b) part but could not score very high marks because they failed to properly distinguish between a merchant bank and a commercial bank as required in the (a) part of the question.

Candidates were expected to present the following as answers for the (a) part of the question:

(a)        (i)         a merchant bank is a wholesale bank while a commercial bank is a retail

(ii)        deposits of a merchant bank are fixed while those of a commercial bank
are payable on demand;

                        (iii)       a merchant bank engages in medium and long term lending while a

commercial bank engages in short term lending
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