Question

The First Chicago Bank is reviewing its service charges and
interest-paying policies on checking accounts. The daily balance of
a checking account is defined to be the balance in the checking
account at 2:00pm.

The bank has found that for all personal checking accounts the
mean of all the daily balances is $900 and the standard deviation
is $125.

In addition, the distribution of personal checking account
daily balances can be approximated very well with a normal
model.

QUESTION: What percentage of the bank's customers carry daily
balances between $700 and $1,000?(Use 2 decimal places in your
answer. Note that the answer is requested as a percent, that is, a
value between 0 and 100).

QUESTION 2: The bank is considering paying interest to
customers carrying daily checking account balances in excess of a
certain amount. If the bank does not want to pay interest to more
than 4% of its checking account customers, what is the minimum
daily balance on which it should be willing to pay interest?

Answer #1

QUESTION: What percentage of the bank's customers carry daily balances between $700 and $1,000?(Use 2 decimal places in your answer. Note that the answer is requested as a percent, that is, a value between 0 and 100).

µ | 900 |

σ | 125 |

x | 700 |

z = (x - µ)/σ | -1.6 |

p-value | 0.054799 |

x | 1000 |

z = (x - µ)/σ | 0.8 |

p-value | 0.788145 |

Required probability |
73.33% |

QUESTION 2: The bank is considering paying interest to customers carrying daily checking account balances in excess of a certain amount. If the bank does not want to pay interest to more than 4% of its checking account customers, what is the minimum daily balance on which it should be willing to pay interest?

z | -1.75069 |

x |
681.1642 |

The First Chicago Bank is reviewing its service charges and
interest-paying policies on checking accounts. The daily balance of
a checking account is defined to be the balance in the checking
account at 2:00pm.
The bank has found that for all personal checking accounts the
mean of all the daily balances is $700 and the standard deviation
is $200.
In addition, the distribution of personal checking account daily
balances can be approximated very well with a normal
model.
Question 1....

Suppose ARB Bank is reviewing its service charges and interest
payment policies on current accounts. Suppose further that ARB has
found that the average daily balance on personal current accounts
is GH¢350.00, with a standard deviation of GH¢160.00. In addition,
the average daily balances have been found to follow a normal
distribution;
What percentage of customers carries a balance of GH¢100 or
lower?
What percentage of customers carries a balance of GH¢500 or
lower?
What percentage of current account...

A local bank has determined that the daily balances of the
checking accounts of its customers are normally distributed with an
average of $280 and a standard deviation of $20. [1] What
percentage of its customers has daily balances of more than $275?
[1] What percentage of its customers has daily balances less than
$243? [2] What percentage of its customers' balances is between
$241 and $301.60?

A bank has kept records of the checking balances of its
customers and determined that the average daily balance of its
customers is $300 with a standard deviation of $48, and is a
normally distributed population. A random sample of 144 checking
accounts is selected.
a) What is the probability that the sample mean will be at least
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Cornerstone Exercise 4-16
Bank Reconciliation
Firebird Corp. prepares monthly bank reconciliations of its
checking account balance. The bank statement for February 2019
indicated the following:
Balance, February 28, 2019
$87,392
Service charge for February
100
Interest earned during
February
875
NSF check from Valerie Corp.
(deposited by Firebird)
630
Note ($12,000) and interest ($350)
collected from a customer of Firebird’s
12,350
An analysis of canceled checks and deposits and the records of
Firebird Corp. revealed the following items:
Checking account...

QUESTION 1
When a bank is expecting to be able to employ the same
managers, employees and
physical resources to offer multiple products and generate costs
savings they are expecting which of the following effects?
A) Product Line Diversification Effect
B) Economies of Scope Effect
C) Economies of Scale Effect
D) Geographic Diversification Effect
5 points
QUESTION 2
Business (commercial) transaction accounts are generally more
profitable than personal checking accounts. Which of the following
explain the reasons for this...

Charmin Paper Company sells to
the 12 accounts listed next.
Account
Receivable
Balance Outstanding
Average Age of
the Account
Over the Last Year
A
$
63,400
29
B
165,000
43
C
77,300
12
D
21,600
55
E
50,000
42
F
297,000
38
G
32,200
26
H
349,000
69
I
40,100
34
J
98,500
50
K
229,000
23
L
63,000
31
Capital Financial Corporation will lend
90 percent against account balances that have averaged 30 days or
less; 80...

Case 3: Bank of America: “Keep the Change” Service Design What
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product/service project illustrates. The goal of this service
development project was to get debit-card holders to open savings
accounts. In the spring of 2004, a team of Bank of America
researchers and consultants spent two months observing a dozen
boomer-age women and their families when they shopped, balanced
their checkbooks, and...

Charming Paper Company sells to the 12 accounts listed
here.
Account
Receivable
Balance Outstanding
Average Age of
the Account
Over the Last Year
A
$
60,800
22
B
168,000
43
C
78,300
19
D
24,300
55
E
58,900
42
F
238,000
39
G
30,400
16
H
374,000
72
I
41,400
32
J
96,500
58
K
292,000
17
L
67,700
37
Capital Financial Corporation will lend 90 percent against
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Bunsen Company’s cash collections average $10,000 per day.
Because Bunsen’s customers are scattered across the country, the
average interval between when a customer writes a check and when
the check clears and the amount is credited to Bunsen’s account is
seven days. Bunsen could reduce this to three days by implementing
a lockbox system. With a lockbox system, a company makes
arrangements with a bank to retrieve customer checks from a post
office box and deposit them directly into the...

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