CH02+questions

CH02+questions - Chapter 2 Commercial banks 1. You are...

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Chapter 2 Commercial banks 1. You are travelling to work by train when a student seated next to you notices that you work for a bank. She asks you what a bank is, why we have banks and what they do? In your own words, respond to her questions. 2. ‘Banks have always been the dominant institutions within the financial system, but their relative importance has fluctuated due, in part, to changes in the regulatory environment in which they operate.’ Analyse and discuss this statement. 3. Within the context of a commercial bank funding its balance sheet, explain asset management and liability management. Provide an example of how a bank uses liability management when determining the structure of its balance sheet. Which form of management is predominantly used by banks today? 4. A customer has approached a commercial bank seeking to invest funds for a period of six months. The customer is considering lodging the funds in a term deposit or, alternatively, purchasing a negotiable certificate of deposit. (a) Explain each of these investment products to the customer.
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CH02+questions - Chapter 2 Commercial banks 1. You are...

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