Swot Analysis for Keystone Bank Essay Example for Free

Swot Analysis for Keystone Bank Essay Keystone has a few strengths looking at its present financial condition financial statements. However, the bank is willing and able to pay higher competitive rates compared to other banks in the area. This is likely to send a strong signal to potential customers who may wish to take advantage of the rates by increasing their core deposits at Keystone Bank. Also, increasing local economic activities can also be viewed as strength to keystone. This is because if the local people are making more money than they need, they will be willing to save some especially at high rates of return which would benefit them and Keystone at the same time. It will increase their core deposits and decrease their dependence on other sources for loanable funds. Commercial and consumer loans are also strength of keystone looking at the two year period compared to their peers. They need to capitalize on that and see if they offer some commercial loans to the new company’s coming into town at competitive rates. Weakness: Keystone Bank has a wide range of weaknesses compared to its peers. Some of their weaknesses are a result of their high exposure to credit risk, interest rate risk and liquidity risk. Credit risk can be defines as the risk of a corporation not being able to pay its debt as they become due. Keystone has a lot of CD’s on its books and need to pay the holders of the CD as they become due. This is going to put a lot of financial stress on the bank considering the fact that interest rates are low and the national economy is slowing down. Liquidity risk can be defined as a company’s ability to convert its assets into cash at fair market value. Keystone Bank’s liquidity measures are below the average of its peers. If you consider its temporary investments to assets for 1990 and 1989, they were 10. 64% and 11. 02% compared to 15. 07% and 16. 15% of its peers. This means that Keystone Bank is investing in products that cannot be quickly converted into cash at fair market price. They are also offering CD’s at a high rate compared to its peers. Other liquidity measures such as volatile liability to assets, is more than 11 % above the average of its peers. This means that Keystone has huge liabilities on its balance sheet which can easily be defaulted on. Net loans leases to core deposits also show an even high trend. There is over 25% difference between Keystone Bank and its peers. In the last two years Keystone’s funds for lending to its customers have mainly come from borrowed money instead of core deposits. This means that the bank make interest payment on the money it lends to its customers which has put it at a disadvantages in terms of offering competitive rates to its customers. It also indicates that in the case of any liquidity crises Keystone bank will not be able to convert its investments into cash at fair market value as quickly as it may want. A banks largest asset is its loans or loanable funds which is not the case for Keystone bank. Lack of clear written policies regarding liquidity and interest rate management by the bank has made it difficult for managers to make good asset and liability decisions. This could be part of the reason why instead of loaning funds to customers, the bank is selling CD’s and increasing their liabilities. Opportunities: Design of the new information system of financial reports will help management make informed decisions on how best to use the banks resources and also meet the examiners criticisms. An increase in the population in the area provides a great opportunity for the bank. The bank can capitalize on this and help it propel into the future. The establishment of new facilities by three national firms in the area – an electronics company, automotive parts and accessories manufacturer and the building materials supplier – is expected to flood the local economy with about 2700 jobs. This is great news for Keystone since it can use incentives such as free checking accounts to bring in new customers and increase its deposits. It can also find new and qualified customers who might be interested in real estate, consumer and other types of loans. The establishment of the new interest rate sensitivity and liquidity reports will help management monitor and understand changes in interest rates and liquidity and how they affect the bank. Keystone can take advantage of the current low interest rates and borrow money from the Federal Reserve Bank. With interest rates expected to rise in the near future, Keystone can increase its adjusted rate mortgages to customers instead of fixed rate mortgages in hopes to increasing their returns when interest rates rises. Threats: There are numerous threats that Keystone faces as a bank. First there is the threat of other banks and thrifts in the area who will also take advantage of the expected increase in the local economy. Most of the banks in the area may be able to offer relatively high interest rates to lure in new customers. If these banks are in a better financial position compared to Keystone that will put them at an advantage over Keystone. Also, the thrifts will also compete for the same 2700 people who will be acquiring the new jobs moving into the area. The bank need to work hard to decrease it CD’s and increase its loans if it wants to survive in the long run. Lastly, even though the local economy might be booming the thought of an economic slowdown in other parts of the country may have a negative impact on the spending practices of the locals. This may result in people saving all their monies instead of spending or avoiding loans all together.

Three Important Symbols in The Glass Menagerie by Tennessee Williams Es

Three Important Symbols in The Glass Menagerie by Tennessee Williams      Ã‚  Ã‚  Ã‚   In Tennessee Williams' The Glass Menagerie, the narrator is used to reveal elements of Williams' own life as a victim of the Depression in the 1930s. Williams does this through his eloquent use of symbolism. Three symbols seem to reveal Williams' intent especially accurately; the unicorn, the picture of Mr. Wingfield, and Malvolio's coffin trick.      Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The unicorn is a symbolic representation of ways that Laura is unique or unusual.   The first facet of the unicorn, its horn, refers to ways that Laura is an unusual person, such as in her may escape mechanisms.   Laura's escape devices include her glass menagerie, list... ...ness in the Plays of Tennessee Williams. Bowling Green: Bowling Green State University, 1997.    Presley, Delma. The Glass Menagerie: An American Memory. Boston: Twayne, 1990.    http://www.olemiss.edu/depts/english/ms-writers/dir/williams_tennessee    Williams, Tennessee. "The Glass Menagerie". New York: Random House, 1985.

Anchoring Effect Essay

Introduction In real life, decisions made by individual are easily deviated from the judging criteria, showing the behaviors of bounded rationality. Simon indicated that â€Å"the bounded rationality is a property of an agent or a person who makes decisions that behaves in a manner that is nearly optimal with respect to its goals and resources. (Franco 2009) This is because of, firstly human being have limited discernment and cognitive ability, also human are unable to know everything; secondly the environment is complex, when people face the complicated and uncertainty would, information is not complete due to vast uncertainty choice. Moreover, the rationality cannot play a role because of people are likely influenced by different situations. The report would analyze three concepts which are mental accounting, anchoring effect and conjunction fallacy to help to generate a better understanding of bounded rationality. Anchoring effect: Behavioral economics is on the strength of the science of judgmental heuristics that could be to depend on reflexively by people. According to Furnham that heuristics are characterized as an ‘intuitive, rapid, and automatic system’ which ‘reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations’ (Furnham 2010)The anchoring effect is one of the cognitive heuristics. Anchoring effect is a bias which people easily rely on the information of first impression as reference frame when making decisions. The first piece of information or previous information, as an anchor, could affect current performance; that information might be not highly applicable to the information judgment or even irrelevant thought. Also personal attributes and characteristic which are more deemed to an anchor are fixed and constant. The other respondent is a salesman in a Sony store. Last week I went to city Sony store, a customer who looks like a student was looking for a brand new computer. Firstly one shop assistant briefly introduces different type and function of computers, the student expresses a strong purchase intention. Then the shop manager came and provide more detailed introduction of computer’s performance. Finally this student made her choice and started  bargaining. Stalemate in their time, the shop manager said he is going to report to their boss to find out whether she can get more discount. After few minutes he walked up and said that is the lowest price, what they can do is offer her some gifts. The student was very satisfied and made payment. At this point, the computer engineer came when started to install the computer, and told her whether  she needs a protection film to protect the screen, otherwise it is easy to scratch, also keyboard cover etc. The student felt make sense. At the end, she not only purchased computer, but also some accessories. This is typically anchoring effect. Customer would feel sensitive if the shop manager promotes those accessories before they purchase computer, they might increase bargaining power and would not easily pay. However after customer paid for computers, they are willing to accept accessories because they feel accessories is relatively cheap compare to the expensive computer, moreover they do need these accessories. In general, the numbers which initially provide would affect consumers’ answer. Experienced salesman always offer a higher price before bargaining, accordingly a higher anchor exists in people’ mind. Seller fetches higher price even that consumer try to bring the price down. There is another example, which is when a business launches a new product, they will carefully discuss the positioning promotion plan, such as which good shelf the products should be placed in. If a new drink is published and placed beside Coca Cola and Pepsi, consumer would accept its high p rice and visa versa. Anchoring effect is everywhere and inevitable. So how to avoid falling into anchoring effect can help consumer become a better financial planner. Firstly, putting forward an affordable price at the start when negotiation, with the purpose of offering an anchor to the seller. Besides buyer should notice that the loss of could not sell products is much more than the loss of a low price deal for seller. However refusing negotiate is a more wise than bargaining when face an unreasonable high price, it helps consumer to build a hopeful reference standard. Mental Accounting: Mental accounting was proposed by Behavioral Science Professor Richard Thaler, he believes, â€Å"mental accounting is the set of cognitive operations used by individuals and households to organize, evaluate, and keep track of financial activities.† (Thaler 1999)In other words, except financial accounting, there is another managerial accounting exist in people’s mind, which called mental accounting, to influence people to make decision in real life. Consumers usually divide any expenditure and income of equal value into different accounts. For example, we usually put salaries into ‘hard to get rich’ account, regard annual bonus as an added gift, and put a winning lottery into ‘pie-in-the-sky’ account. The money in the ‘hard to get rich’ account is expensed precisely and carefully; for annual bonus, we often have relaxed attitude to treat it, for example, we might go to shopping center to purchase an expensive dress as a gift which are reluctant to spend money to buy at ordinary times. The money in the ‘pie-in-the-sky’ account is the most valueless, imagine that people who win five million dollars would become openhanded and extravagant. This is how  mental accounting works. My friend went to a fashion store and took a fancy to a very beautiful dress, but it costs about $320. She thought it is too expensive and gave up finally. But in her birthday party, her husband bought that dress for the birthday gift. It makes her very happy. In fact, her money and her husband money are the family’s capital, but why she feels different with the same money spending according to different reasons. This study finds that the expenditure of mental accounting can be divided to four parts, which are daily necessities expenditures, home contribution expenditures and personal development expenditures, expenditures of emotional connection and recreational expenditures. According to irreplaceable of mental accounting, $320, as daily necessities expenditures, is too expensive to purchase a dress, however, the husband purchase it as a birthday gift which can be treated as expenditures of emotional connection. This amount of money can improve their relationship, so rewards are priceless. Consequently, people are willing to accept gifts  from their family or friends, but they will not purchase for themselves. According to above example, emotional connection and interpersonal relationship is significantly important for human beings, the investment of emotional for people is much more than other expenditures in everyday life. As a consequence, merchants could use these different festivals such as mother’s day, Christmas etc. to gain bigger sales. For example, a beautiful wrapped chocolate in Saint Valentine’s Day, coupons in Christmas, these special offers is negligible for merchants, but it can attract more consumers’ attention. In usual, most of us could be influenced by mental accounting; we have different attitudes to handle the equivalent value of money, hence different decision comes out. From the point of view of economics, there is no any difference among salary, bonus and lottery, but people make three different decisions when spending them. Conjunction fallacy: Tversky and Kahneman believe that the representativeness heuristic is a means of assessing the probability of an uncertain event or the value of a quantity by comparing it to a mental model (Berendsen 2012) Conjunction fallacy is one of the result that causes by representativeness heuristic, which states the declare that there are two independent events, the probability of both events will happen cannot be higher than the probability than one of the events alone will happen. I made 20 questionnaire surveys and handed into Finc6013 lecture. The question is that ‘the probability of healthy man who have heart disease is higher’ or ‘the probability of healthy men who are over 55 years old and have heart disease is higher’. There are 6 students chosen B and only 14 students chosen A. I was surprised that the result of this question is against the results of Linda problem. People think an event with more materials and details is more likely to happen. In fact it was not the case; every added detail makes things uncertainty. Two events can be happened  independent or conjunction, the probability of conjunction events happened cannot higher than the probability of any independent event occurs. However in reality, people sometimes linked probability and quantity together by mistake when making decision, they consider that there is a higher probability of conjunction events. According to the investigation result above, there are three reasonable defenses for conjunction fallacy. Firstly the representativeness heuristic is identified as the cognitive tools valid for evaluating subjective probabilities. The conjunction fallacy is attributed to the representativeness heuristic. It states that if the probability that the event is included in a classification is decided by how representative the event is of include in this classification. Consequently the conjunction fallacy proceed when the combination events is rated as more representative of the aimed classification than either the event alone. Conjunction fallacy can be occurred both in situation whether heuristic is applicable. Hence conjunction fallacy might have no any relationship with the heuristic. Secondly, there is an argument that informant misconception the investigative mission representatively used to study the phenomenon when investigator is doing survey. However it is undeniable that there is value for the investigation, for example some high quality levels of conjunction fallacies are surveyed, and misinterpretations are appropriately controlled in the survey. Thirdly informants are likely to use an incorrect rule to gibe rise to conjunction fallacy happen when associating the probability of single events. There are some experimental results shows those informants assume the probability of conjunctive events is equal to the weighted average of the probability of event alone. Therefore if the probability of even A is rated to be greater than the probability of event B, but lower than the probability of event C, informants might debate that the probability of conjunction event A and B is lower than the probability of event A, however meanwhile they consider the probability of conjunction event A and C is greater than the probability of A. This is regard as conjunction fallacy effect. The reason is informants use an incorrect rule for combining probability. Conjunction fallacy is increasingly questionable, it is common phenomenon though when people making decision in reality. On the basis of the  characteristics of perceptual selectivity, the characteristics of information are more distinct and stimulation is stronger, people are more sensitive to their perception. Moreover, situational circumstances can influence human’s perception. Because decision making is conducted on the basis of human’s perception, the general and specific information and situational circumstances play a significant role on people’s decision making behaviors. (Nilsson 2010) Conclusion: Although science and technology are advancing, and research measures of human being is always improving, to some extent, mental process stays at hypothetical stage up to now. This report discussed three decision making trap which are mental accounting, anchoring effect and conjunction fallacy. No matter which decision people try to make, it is important that they are supposed to search more information to choose the best alternatives, then they are able to gain experience through every decisions. Reference: Berendsen, A., Hadilich, S. and Amersfoort, J. 2012, Looking at â€Å"Linda†: Is the Conjunction Fallacy Really a Fallacy?, viewed 27 March 2014, Franco, R. 2009, ‘The conjunction fallacy and interference effects’, Journal of Mathematical Psychology, vol. 53, no. 5, pp. 415-422, viewed 30 March 2014,ScienceDirect, Furnham, A. 2010, ‘A literature review of the anchoring effect’, The Journal of Socio-Economics, vol.

Explore These Free Online Macroeconomics Textbook Resources

Today, there are more resources available for economics students than ever before. This new knowledge-rich environment has opened the possibility for enriched learning and has made research more easily and readily accessible to the average economics student. Whether you are seeking to supplement your university studies, dig deeper into your economic research for a project, or drive your self-study of economics, we at About.com have compiled a series of excellent economics resources and assembled them into a comprehensive online macroeconomics textbook. Introduction to About.coms Online Macroeconomics Textbook About.coms online macroeconomics textbook is presented as a set of links to various resources and articles on key macroeconomics topics that are perfect for the economics beginner, undergraduate student, or someone just trying to brush up on the basic macroeconomics concepts. These resources present much of the same information as the classic hardcover textbooks listed on university course syllabi, but  in an easily accessible format that encourages fluid navigation. Also like those expensive economics textbooks that undergo revisions and updates as they are published in subsequent editions, our online macroeconomics textbook resources are always being updated with the latest and most useful information -- some of which is driven by readers like you!   While every undergraduate-level macroeconomics textbook covers the same core material within its many pages, each does so in a different order depending on the publisher and how the authors choose to present the information. The order we have chosen to present our macroeconomics resources is adapted from Parkin and Bades quintessential text,  Economics. Complete Online Macroeconomics Textbook CHAPTER 1: What is Macroeconomics? Compilation of articles that strive to answer this seemingly simple question, what is economics? CHAPTER 2: Unemployment An examination of the macroeconomics issues surrounding unemployment including, but not limited to, productivity and income growth, supply and demand of labor, and wages. CHAPTER 3: Inflation and Deflation A look at the basic macroeconomics concepts of inflation and deflation, including examinations of price levels, demand-pull inflation, stagflation, and the Phillips curve. CHAPTER 4: Gross Domestic Product Learn about the concept of gross domestic product or GDP, what it measures, and how it is calculated. CHAPTER 5: The Business Cycle Discover one of the keys to understanding how periodic but irregular fluctuations in the economy, what they are, what they mean, and what economic indicators are involved. CHAPTER 6: Aggregate Demand Supply Supply and demand at the macroeconomic level. Learn about aggregate supply and demand and how it influence economic relationships. CHAPTER 7: Consumption Saving Learn to analyze the economic behaviors of consumption versus saving. CHAPTER 8: Fiscal Policy Discover the policies and actions of the United States government that influence the American economy. CHAPTER 9: Money Interest Rates Money makes the world, or rather, the economic go round. Explore the various money-related economic factors that drive the economy. Be sure to check out this chapters subsections for a deeper exploration:- Money- Banks- Demand For Money- Interest Rates CHAPTER 10: Monetary Policy Like federal fiscal policy, the United Statess government also directs monetary policy that impacts the economy.   CHAPTER 11: Wages Unemployment Looking deeper into the drivers of wages and unemployment, be sure to check out the subsections of this chapter for further discussion:- Productivity Income Growth- Demand Supply of Labor- Wages Employment- Unemployment CHAPTER 12: Inflation Looking deeper into the drivers of inflation, be sure to check out the subsections of this chapter for further discussion:- Inflation Price Level- Demand-Pull Inflation- Stagflation- Phillips Curve CHAPTER 13: Recessions Depressions The phases of the business cycle are exaggerated with the occurrence of recessions and depressions. Learn about these deep falls in the economy. CHAPTER 14: Government Deficit Debt Discover the impact government debt and deficit spending has on the economy. CHAPTER 15: International Trade In todays global economy, globalization and international trade along with its concerns regarding tariffs, sanctions, and exchanges rates are consistently among the most debated issues. CHAPTER 16: Balance of Payments Explore the balance of payments and the role it plays in the international economy. CHAPTER 17: Exchange Rates Exchange rates are ever more important to an economys health as international trade continues to be a great influence on domestic economies. CHAPTER 18: Economic Development Beyond the borders of the United States, explore the economic issues faced by developing countries and the third world.