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CFMP > Prep 2016 > Flashcards

Prep 2016 Flashcards

1
Q

What is a market?

A

All the potential customers sharing a particular need or want an able to exchange to satisfy that need or want

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2
Q

What are the five types of products strategies?

A 
Expansion 
contraction 
modification
re-positioning 
training up or down
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3
Q

What are the five adopter categories?

A 
Innovators 
early adopters 
early majority 
late majority 
laggards
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4
Q

Name the distribution channels.

A 
Branches
phone
 ATM 
online banking 
plastic cards 
mobile banking 
virtual branches/video 
intermediaries
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5
Q

Who does the Federal Reserve regulate?

A

Bank holding companies and member state banks

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6
Q

Who does the FDIC regulate?

A

State commercial banks who are not fed members and state savings associations

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7
Q

Who does the OCC regulate?

A

National banks

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8
Q

Who does the NCUA regulate?

A

Credit unions

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9
Q

Who does the OTS regulate

A

Federal charter savings and loans

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10
Q

What is the Graham Leach Bliley act?

A

Requires financial institutions to explain their information sharing practices to their customers and to safeguard sensitive data.

Applies to customer privacy protections and disclosures.

Also known as the financial services modernization act of 1999

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11
Q

What is the truth in savings act?

A

Establishes uniformity in the disclosure of terms and conditions regarding interest and fees when giving out information on or opening a new savings account

Enables consumers to make informed decisions about their accounts at depository institutions through the use of disclosures

Implemented by Reg DD

Applies to consumer, not commercial/business, deposit accounts

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12
Q

When is a consumer entitled to receive disclosures through the truth in savings or Reg DD requirements?

A

When account is opened,
Upon request,
when the terms of the accounts are changed,
when a periodic statement is sent; and
for most time accounts before the account matures

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13
Q

What are a few key triggering terms for Reg DD?

A

Profit
Free
Annual percentage yield

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14
Q

If you state annual percentage yield, Reg DD says you must then….for a fixed rate account?

A

Include the interest rate and disclose the period of time that the interest rate will be in effect

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15
Q

If you state annual percentage yield, Reg DD says you must then….for a variable rate account?

A

Include the interest rate and
the fact that the interest-rate an annual percentage yield may change,
How the interest rate is determined,
the frequency with which the interest rate may change, and
any limitation on the amount the interest rate may change.

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16
Q

What does regulation Z cover?

A

It covers advertising loan products and/ or terms but only applies to consumer loans

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17
Q

Regulation Z must provide?

A
  1. Clear, accurate, and balanced information
  2. Rate of interest must clearly be stated as an APR and include number of payments, amount of payments, amount of any finance charge, and amount/percentage of any down payment
    3 The terms of repayment including an example, the APR, and amount/percentage of any down payment must be disclosed
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18
Q

If an advertisement mentions the word dwelling or is discussing any type of dwelling you must include?

A

The equal housing lender/equal housing opportunity logo

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19
Q

Non-deposit investment products are?

A
  • Not FDIC insured
  • product is not a deposit or other obligation of or guaranteed by the bank
  • product is subject to investment risks including possible loss of principal
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20
Q

When must the FDIC logo be included?

A

All advertisements except ads for loans, nine deposit investment products, and any other non-insured product/service

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21
Q

UDAAP stands for what?

A

Unfair/Deceptive/Abusive Acts and Practices

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22
Q

Under UDAAP written disclosures in the Textor fine print of a footnote maybe ______ to correct a missing headline.

A

Insufficient

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23
Q

What is the difference between a contest and a lottery

A

Valuable consideration

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24
Q

A bank is required to retain evidence of compliance with regulations DD for how many years?

A

Two years

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25
Q

What is regulation Z?

A

The truth in lending act is implemented by regulation Z.

To promote the informed use of consumer credit by requiring disclosures about its terms and costs

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26
Q

Regulation Z prohibits…

A

Specific acts and practices in connection with an extension of credit secured by a consumers dwelling

Certain practices relating to payments made to compensate mortgage brokers and other loan originators.

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27
Q

A radio advertisement that promotes home-improvement loans requires what disclosure?

A

Equal housing lender

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28
Q

What are the three types of market data?

A

Customer profile
Marketplace profile
Competitive profile

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29
Q

What is primary data?

A

Data collected for a specific need

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30
Q

What is secondary data?

A

Data collected for a general purpose

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31
Q

What is qualitative data?

A

Information about how people

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32
Q

What is quantitative data

A

Statistical information which can be applied to a larger population

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33
Q

What are the six steps for a customer experience in sales research study?

A
  1. Define the problem
  2. plan the research project
  3. Collect data
  4. Analyze data
  5. Report the research results
  6. Integrate data into planning
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34
Q

What is the internal sales process steps?

A

Recruiting
training
motivating
monitoring

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35
Q

What is market segmentation?

A

Dividing abroad target market into subsets of consumers who have common needs and applications for the relevant goods and services

Uses products or services to meet diverse customer needs

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36
Q

What is market penetration?

A

A measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service

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37
Q

What is The definition of return on investment (ROI)?

A

The measure of the economic performance calculated by comparing incremental profit driven by the investment made (lift)

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38
Q

How do you calculate return on investment? (ROI)

A

ROI=(incremental profit - marketing investment)/marketing investment

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39
Q

What is the calculation for ROE return on equity?

A

Net income / average total equity

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40
Q

How do you calculate return on assets ROA?

A

Net income/average total assets

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41
Q

How do you calculate spread?

A

Earning asset yield - cost of funds rate

42
Q

How do you calculate profit margin?

A

Net income / total income

43
Q

How do you calculate earnings per-share?

A

Net income/number of shares outstanding

44
Q

How do you calculate loan to deposit ratio?

A

Not loans / total deposits

45
Q

How do you calculate net interest income?

A

Interest income – interest expense

46
Q

How do you calculate earning assets to total assets?

A

Interest producing assets/total assets

47
Q

How do you calculate yield on earning assets?

A

Gross interest income/average earning assets (earning asset yield)

???? Ask about this

48
Q

How do you calculate the cost of interest-bearing liabilities?

A

Interest expense/interest-bearing funds (cost of funds rate)

49
Q

What is strategic planning?

A

The vision and mission of the bank or firm

50
Q

What is marketing planning?

A

The tactical methodology for reaching the strategic goals

51
Q

What is marketing?

A

Marketing is an organizational function and a set of processes for creating communicating and delivering value to customers and for managing customer relationships in ways that deliver benefit for the organization and its stakeholders

52
Q

What are the components of marketing mix?

A

Product
price
promotion
place (distribution)

53
Q

What drives the marketing concept?

A
  • declining sales or market share
  • slow growth
  • A change in buying patterns
  • increased competition
  • increased budgetary pressures
54
Q

What are a few marketing strategies?

A

Market penetration
market expansion
product expansion diversification

55
Q

What are segmentation strategies?

A

Geographic
demographic psychographic
volume
benefit

56
Q

What are budgeting methods?

A
  1. Percentage method
  2. competitive parity
  3. method incremental
  4. method objective and task method
57
Q

What is the percentage method for budgeting?

A

Allocating a fixed percentage of the anticipated revenue to the budget

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58
Q

What is the competitive parity method for budgeting?

A

A retailers budget is raised or lowered based on the actions of competitors

59
Q

What is the incremental method for budgeting?

A

A traditional budgeting that that whereby the budget is prepared by taking the current. Budget or actual performance as a base with incremental amount then been added for a new budget period

60
Q

What is the objective and task method for budgeting?

A

Built by examining each goal or objective in the tasks necessary to reach these objectives in order to build a budget

The challenge is the difficulty of accurately assessing the cost necessary to accomplish the goals

61
Q

Fed funds are best described as:

A

Overnight borrowings that banks deposit with the Federal Reserve

62
Q

What is brand?

A

Brand is the identification of the sum total of the customers experience with an organization

63
Q

What is the number one driver of intended customer loyalty?

A

A customer experience has a greater impact on customer retention when compared to location and advertising

64
Q

What is brand promise?

A

Relevant differentiating benefits the brand promises to deliver

65
Q

What is Brand experience?

A

Consumer perceptions of what the brand delivers

66
Q

What is brand value?

A

Monetary premium that results from consumer commitment to a brand

67
Q

What is strategic branding?

A

Converts your desired image and reputation into memorable experiences that impact perceptions of your institution

68
Q

What is public relations?

A

A way for companies organizations or people to enhance their reputations

Working with the media and other organizations to create goodwill

69
Q

What are examples of public relations goals?

A 
Raise awareness in the community
Enhance credibility
Motivate your staff
Build customer loyalty
Improve your image/boost your reputation
70
Q

What are the components of public relations?

A 
Research 
Media relations 
publicity 
employee relations 
community relations 
special events marketing communications
71
Q

What is social media?

A

Websites and applications that enable users to create and share content or participate in social networking

72
Q

What is search marketing?

A

The process of gaining traffic in visibility from search engines through both paid and unpaid efforts.

Encompasses both search engine optimization and search engine marketing.

73
Q

Lifestyle segment factors

A

Age
Income
Marital status
Children living at home / no children at home

74
Q

What is marketing planning?

A

The marketing plan is a way to focus your resources on the greatest opportunities in the marketplace in order to meet or exceed your goals.

75
Q

What are the 5 steps of the marketing planning process?

A
  1. Identify key areas of focus
  2. Understand your market
  3. Build your marketing plan
  4. Implement marketing plans
  5. Evaluate and report
76
Q

What is the calculation for ROI?

A

ROI = r-c / c

Revenue - cost / cost

77
Q

Equation for loan spread:

A

Spread = Weighted average rate of each loan type - cost of funds

78
Q

Equation for first year revenue on a loan of a campaign:

A

First year revenue = Spread x balance of loans

79
Q

Calculation for net 1st year revenue.

A

Spread x balance

Spread = loan yield - interest paid

80
Q

Spread on deposit acct

A

Loan yield - interest paid

81
Q

Spread on loan =

A

WAR - COF = spread.

Spread x balance of loans = first year loan revenue

82
Q

ROAA

A

Return on average assets

= net income / average total assets

83
Q

ROAE

A

Return on average equity

= net income / average total equity

84
Q

Net interest margin

A

Net interest income / average earning assets

85
Q

Yield on earning assets

A

Interest and dividend income / average earning assets

86
Q

What is cost of funds?

A

How much it cost to find your bank

87
Q

What is the equation for cost of funds?

A

Interest expense / average interest bearing liabilities and non-interest-bearing deposits

88
Q

What is the definition of efficiency ratio?

A

How much it cost to create one dollar revenue

89
Q

What is the equation for an efficiency ratio?

A

Operating expense / net interest income + non interest income

90
Q

Calculation for expense ratio

A

Operating expenses / average assets

91
Q

Assets =

A

Liabilities + equity

92
Q

What potential issues to look for in a balance sheet?

A
  1. Periodic large changes in balances
  2. Concentration risk
  3. Asset quality / past due loans
  4. Equity / capital adequacy.
93
Q

Net income =

A

Net income = revenue - expense.

94
Q

Revenue is

A

The income generated by the bank

Interest income and non-interest income

95
Q

Expenses represent…

A

Cost of the bank operations

Interest expense and non-interest expense

96
Q

Income statement - most important is….

A

Net income. Are we making money?

97
Q

What to look for in the income statement.

A 
Large. Over. Changes and balances
Extraordinary or one time benefits or expenses
Charge-offs or provisioning
Tax efficiency
Net income
98
Q

Balance sheet risk types

A

Liquidity risk
capital risk
credit risk and
interest rate risk

99
Q

What does EVE stand for and what does it mean?

A

Economic value of equity represents the value of assets on the balance sheet

100
Q

Product profitability

A

A marketing tool to determine organizational resources required to deliver products to customers versus the revenue per the product

101
Q

Organizational profitability

A

Management tool to assist in improving organization performance by measuring the results of organizational units the reflect how the institution is managed

102
Q

What is funds transfer pricing?

A

Determining the spread of an account by matching the interest income or interest expense to a market instrument such as an FHLB borrowing of the same duration

CFMP (1 decks)

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