You recently graduated from college with a business degree and accepted a position at a major corporation
earning more that you could have ever dreamed. You want to (1) open and checking account for transaction
purposes, (2) open a savings account for emergencies, (3) invest in an equity mutual fund for that far-off future
called retirement, (4) see if you can find more affordable auto insurance, and (5) borrow funds to buy a condo,
helped by your uncle who said he was so proud of your grades that he wanted to give you $20,000 towards a
down payment. (Is life good of what?) Make five lists of financial service firms that could provide each of these
services…………………………………..Chapter 2 Problems and Projects #1 & #2 on pg 60
For each of the actions describes , explain which government agency or agencies a financial manager must
deal with and what laws are involved:
a. Chartering a new bank
b. Establishing new bank branch offices
c. Forming a bank holding company or financial holding company
d. Completing a bank merger
e. Making holding company acquisitions of nonbank businesses
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See if you can develop a good case for and against the regulation of financial institutions in the following areas:
a. Restrictions on the number of new financial service institutions allowed to enter the industry each year
b. Restrictions on which depository institutions are eligible for government sponsored deposit insurance
c. Restrictions on the ability of financial firms to underwrite debt and equity securities issued by their business
customers
d. Restrictions on the geographic expansion of banks and other financial firms, such as limits on branching and
holding company acquisitions across state and international borders
e. Regulations on the failure process, defining when banks and other financial firms are to be allowed to fail
and how their assets are to be liquidated…………………………Chapter 4 Problems and Projects #3 on pg 125
Forever Savings Bank estimates that building a new branch office in the newly developed Washington
Township will yield an annual expected return of 12 percent with an estimated standard deviation of 10 percent.
The banks marketing department estimates that cash flows from the proposed Washington branch will be
mildly positively correlated ( with a correlation coefficient of +0.15) with the banks other sources of cash flow.
The expected annual return from the banks existing facilities and other assets is 10 percent with a standard
deviation of 5 percent. The branch will represent just 20 percent of Lifetime’s total assets. Will the proposed
branch increase Forever’s overall rate of return? Its overall risk?
When we use the term value, we are referring to the benefits buyers receive that meet or exceed their needs.
In other words, value is what the customer expects to get by purchasing and consuming a company’s offering.
So, although the company creates the offering, the value is determined by the customer. Furthermore, our goal
as marketers is to create a profitable exchange for consumers. By profitable, we mean that the consumer’s
personal value equation is positive. The personal value equation is: value = benefits received – [price + hassle]
Hassle is the time and effort the consumer puts into the shopping process. The equation is a personal one
because how each consumer judges the benefits of a product will vary, as will the time and effort he or she
puts into shopping. Value, then, varies for each consumer.
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Based on your own personal value equation, first cite some examples of the value that is created by each of
the four value-building activities for one of the products below. Then, discuss potential debits in the equation
(price and hassle) that could lower value and conclude by determining if the value is positive or negative for
you personally.