Exam 4: Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

Which of the following is one of the common services provided by banks on the internet today?

Which of the following is not an advantage of ATMs?

Third State Bank wants to add a new branch office.It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs.The bank has estimated that it will generate $319,522 per year in net revenues.If the new branch is expected to last 20 years,what is the expected rate or return on this investment? (Round to the nearest whole percent)

A bank is planning to set up a new branch.It expects the new branch to generate 20 percent of the total business of the bank after it is opened.The bank expects the returns on this branch to be 15 percent with a standard deviation of 5 percent.Currently the bank has a 12 percent rate of return with a standard deviation of 4 percent.The correlation between the bank's current returns and the returns on the new branch is expected to be 0.25.What is the bank's total expected return after adding this branch?

A charter of incorporation to start a new U.S.bank can be issued by:

____________ are much less costly to build and maintain,typically costing as little as one-fourth the expense incurred in constructing and operating a stand-alone bank branch,and experiencing more traffic flow than conventional branches.

According to the textbook,the disadvantages of a federal charter include:

When considering possible location for new branches,expected rate of return is the only criteria that a management should consider.

The Jones State Bank is planning to add a branch office on the west side of Edmond,Oklahoma.Growth of new homes in the area has averaged 15% per year over the last five years and is expected to continue at that rate in the future.Which factor would this address when considering whether to add a new branch?

Society pays a price if it restricts the number of bank charters below the number that the private sector normally would generate due to lessened competition.

Which of the following is a challenge faced by a virtual bank?

____________________________________________ allows customers to carry pocket-sized terminals with them and pay for goods and services and transfer funds as needed.These are already popular in Europe.

A customer can use a POS terminal at a store to pay for his purchases through a debit or a credit card.

The ______________________ issues charters for new national banks.

"Virtual" banks are found on the ____________________,and more and more banks are using this medium to deliver selected services.

A(n)______________________ bank is one that offers its services only through the Internet.It does not have any brick-and-mortar offices.

A group of six investors wants to open a new bank.In their application to the Comptroller of the Currency,they discuss that the community they want to do business in has a median income of $55,000,that there are approximately 75,000 homes in the community,and that there is approximately $5.6 million in sales generated in the community on any given day.Which decision factor are the investors discussing for seeking a new charter?

Fees for ATMs are larger and more common if a customer uses another financial institution's ATM because most institutions charge each other _____________ fees.

Research suggests that in the short-term,newly chartered banks fail at a higher rate than established banks.

One of the keys to branch office profitability is to apply the latest information technology and thereby lower personnel costs.