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  • Topic: Bond, Deposit account, Asset
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  • Published : April 16, 2013
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Point/Counter – Point
Should Banks Engage in Other Financial Services Besides Banking? Point: No, Banks should focus on what they do best.
Counter – Point: yes, Banks should increase their value by engaging in other services. They can appeal to customers who want to have all their financial services provided by one financial institution. Who is correct? Use the internet to learn more about this issue. Offer your own opinion on this issue. Answer: Many Banks have expanded their services by acquiring other types of financial institutions that can provide the services. However, they sometimes pay too much for the institutions that can offer these services. In general, offering additional services can be beneficial if the bank does not incur excessive costs from offering these services.

Questions and Answer season
1.Bank Balance Sheet. Create a balance sheet for a typical bank, showing its main liabilities (sources of funds) and assets (uses of funds).

ANSWER:
Liabilities
1.Transaction deposits
2.Savings deposits
3.Time deposits
4.Money market deposit accounts
5.Federal funds purchased
6.Repurchase agreements
7.Eurodollar borrowings

Assets
1.Cash
2.Loans
3.Investment securities
4.Federal funds sold
5.Repurchase agreements
6.Eurodollar loans
7.Fixed assets

2. Bank Sources of Funds. What are four major sources of funds for banks? What alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds?

ANSWER:

1. Transaction deposits
2. Savings deposits
3. Time deposits
4. Money market deposit accounts

Sources of temporary funds include:
1. Federal funds market
2. Discount window
3. Repos
4. Eurodollar borrowings

Banks may issue bonds to purchase fixed assets.

3. Compare and contrast the retail CD and the negotiable CD....
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