Lecture_5_Questions

Lecture_5_Questions - Lecture 5 Questions 1. Please give 5...

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Lecture 5 Questions 1. Please give 5 examples of the most significant trends in the CB (Commercial Bank) industry. Answer: Some of the trends we mentioned in class include: 1) Number of products sold by depository institutions has increased with time (see pg. 321 in Saunders and Cornett, 3 rd edition), 2) Business loans have decreased, mortgages have increased since 1950s rd edition), 3) There’s been a decrease in time deposits due to competition from money market mutual funds, 4) Off-Balance-Sheet activities that CBs rd edition), 5) The number of commercial banks has decreased. (There can be other trends mentioned.) 2. What are the advantages and disadvantages of international expansion of CBs? Answer: Advantages: 1) Risk Diversification, 2) Economies of Scale, 3) Increase in innovations due to exposure, 4) Easy and cheap access to funds, 5) Improved customer relationships due to exposure, 6) Regulatory Benefits. Disadvantages: 1) Information/Monitoring Costs (due to different accounting standards,
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This note was uploaded on 10/16/2011 for the course FIN 353 taught by Professor Cobus during the Spring '08 term at S.F. State.

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Lecture_5_Questions - Lecture 5 Questions 1. Please give 5...

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