Lecture 13- Managing & Pricing Deposits

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EXAM - calculate the cost of a deposit; calculate the cost of various features related to a deposit so that the cost of a deposit will equal some level of return; calculate the marginal cost of increasing the amounts of deposits and calculate the level of profit maximization given the deposit costs and returns in a manner similar to problems 12-4 and 12-5. Also know some basic relationships on relative costs for transactions from the assigned article.  Click on lecture notes below and print notes.

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OPTIONAL (NOT ON EXAM)

We will not discuss the pricing of early withdrawal deposits but for those who might be interested the RMA Journal article discusses the early withdrawal penalty for time deposits.

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