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

The Clearwater National Bank is planning to set up a new branch.This new branch is anticipated to generate 5 percent of the total business of the bank after it is opened.The bank also expects the return for this branch to be 15 percent with a standard deviation of 5 percent.Currently the bank has a 10 percent rate of return with a standard deviation of 5 percent.The correlation between the bank's current return and returns on the new branch is expected to be -0.3.In this problem,the proposed new branch _______ overall risk exposure due to ______ effect.

The state banking commissions (at the state level)and the Office of the Comptroller of the Currency (at the federal level)are the only ones able to issue a(n)______________________ for a new U.S.bank.

The most effective delivery channel of financial services appears to be ____________.It combines full-service branches and electronic limited service facilities within the same firm.

The FDIC requires the insured banks to maintain Tier 1 capital of at least __________ for at least the first three years of their operations.

More desirable office sites for new bank branches normally have residents who are above-average in age.

In-store services usually require:

The Jones State Bank is planning to add a branch office on the west side of Edmond,Oklahoma.The bank has done a study and found that the site where it wants to build the branch office sees 35,000 cars pass in an average day.Which factor would this address when considering whether to add a new branch?

For most of the history of financial service providers,'convenience' has meant ____________.

A personal identification number (PIN)gives a bank customer access to his or her account through a(n):

The Boyer Bank wants to add a new ATM machine in a busy mall.It knows the new machine will cost $60,000 and another $30,000 is required to install it in the mall.It expects to save $0.27 per transaction and generate 100,000 transactions per year.Also,it expects the new machine to last 8 years.If it needs to earn a 12% return,what is the NPV of this project? (Round your answer to the nearest $1,000)

The ____________________ issues charters for new state banks.

Second National Bank is considering adding 5 new ATM machines.Each machine costs $25,000 and installation costs are $15,000 per machine.Second National Bank expects the new machines to save $0.33 per transaction on 250,000 transactions per year on the new machines.It also expects the new machines to last for 15 years.If the bank needs to earn 14 percent return on this investment,what is the net present value of this investment?

A minimum of ___________ persons are required as organizers to apply for a federal bank charter.

Half of all transactions made through an ATM machine are deposits.

Recently,the issue of public need has become an increasingly important factor in the granting of bank charters.

The Office of the Comptroller of the Currency does not charter internet-only banks.

One argument frequently presented for regulation and control over bank chartering activity is that banks can create money and chartering too many might result in excessive money creation and inflation in the economy.

A group of six investors wants to open a new bank.In their application to the Comptroller of the Currency,they discuss that the population per banking office has risen to 6,000.In addition,growth in the community is to the west of town and there is only one bank serving that part of the community.Also,a new housing subdivision has just started in this part of town that should include 350 new homes.Which decision factor are the investors discussing for seeking a new charter?

Banks which offer services with in the grocery stores and other retail outlets are offering services from a(n)______________________ branch.

The Jones State Bank is planning to add a branch office on the west side of Edmond,Oklahoma.The bank has done a survey of local residents near the area where it wants to build the branch office and has discovered that most residents are in their 50's and 60's.Which factor would this address when considering whether to add a new branch?