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

Which of the following is a key factor that organizers of a proposed new bank use in evaluating their investment opportunity?

In the short-term,newly-chartered banks fail at:

A group of six investors wants to open a new bank.In their application to the Comptroller of the Currency,they discuss that there are six banks already existing in the community and that the largest of these has just acquired one of the smaller banks.These six banks do a moderate amount of advertising in the community.There is also one credit union that has one office and a savings bank that has two branches on the east side of town.Growth in the community is to the west.Which decision factor are the investors discussing for seeking a new charter?

A group of six investors wants to open a new bank in the community of Edmond,Oklahoma.It has submitted the application to the Comptroller of the Currency.Which of the following would best describe the nature of the bank?

A majority of new banks do not become profitable for at least a decade.

Which of the following factor(s)does OCC assess during the application process for a national bank charter?

Most U.S.banks are chartered in urban areas.

______________________ is demonstrated by organizers of new banks by showing that local banks are not conveniently located or fail to offer some key services.

Ratio of population per branch is calculated as:

ATMs are profitable for all banks since they can eliminate tellers at branches that have ATMs.

The Fred National Bank is planning to add a branch office on the west side of town.The bank has done a survey and has discovered that the mean household income in the area is $76,000 per year.Which factor would this address when considering whether to add a new branch?

A(n)______________________ is a full service facility which offers many of the same services as the home or main office of a bank.

Under the feasibility standard adopted by the Comptroller of the Currency,applicants for a national bank charter are required to submit _____________,which contains a description of the proposed bank and its marketing,management,and financial plans.

The total number of full-service branch offices has declined in the United States in recent years.

Most new banks are situated along major routes of travel for commuters going to work,shopping areas,and schools.

"Public need" is usually established with federal or state chartering authorities by showing that existing banks in the area are adequately profitable and have satisfactory amounts of capital.

Increases in ______________ ratios tend to reduce new chartering activities in a particular region.

The existence of branch banking in a given state:

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 returns on the new branch and the bank's current returns is expected to be 0.25.What is the bank's expected standard deviation after adding this branch?

Computer facilities in retail shops and stores that permit a customer to instantly pay for goods and services electronically by deducting the cost of each purchase directly from his or her deposit account are known as: