For many years you have been using your local, small-town bank. One day you hear
ID: 1163020 • Letter: F
Question
For many years you have been using your local, small-town bank. One day you hear that the bank is about to be purchased by Bank of America. From your vantage point as a retail bank customer, what are the costs and benefits of such a merger? Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. Larger network of ATMs Smaller scope of financial services Larger scope of financial services Smaller network of ATMs You will likely receive more personal service You will likely receive less personal serviceExplanation / Answer
Smaller bank is being purchased by a very large bank.
Benefit of such merger -
1. As large bank already has wide network of ATMs, acquisition of small bank by large bank will automatically extend that network to customes of small bank as well.
Thus, one benefit is larger network of ATMs.
2. Range of financial products and services as offered by large bank is vast compared to smalll banks. So, this merger will extend the range of financial services for the customer of small bank.
Thus, another benefit is larger scope of financial services.
Cost of such merger -
1. Small banks has fewer number of customers. This enable the bank to extend more personalized service relative to big banks.
Thus, one cost is that you will likely receive less personalised service.
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