1. If my local retail bank was about to be bought by Bank of America, I would feel that I would probably be able to get more services and options with my money. However, on the cost side, Bank of America would not know my local perspective and needs as well as they local retail bank.

4. A single financial holding company needs only one CEO, one board of directors, one accounting system, etc. Therefore, the larger the company becomes the more efficient it can run. I believe they will be successful in accomplishing this since they will offer everything under one roof, more efficiently and at a cheaper price.

6. The rationale behind the Glass-Steagall Act of 1933’s banning the separation of commercial and investment banking was to eliminate potential conflicts of interest that arise when an institution issues securities for one set of customers and manages assets for another. This law was reversed in 1999 by the Gramm-Leach-Bliley Financial Services Modernization Act so that financial institutions could take advantage of economies of scale and scope.

8. Stock and bond fluctuations are more a problem for life insurance companies than for property and casualty companies since property and casualty companies have a preponderance of very short term money market instruments, while life insurance companies hold mostly bonds.

13. I do not think that this insurance company will be profitable. Combining the two groups together would raise the premiums for adults and lower them for teenagers. First off, adults would switch from this firm to another firm that did not charge them the higher premiums. Furthermore, if they did not distinguish between the two then teenagers would take advantage and all switch to this firm. This firm’s customers would eventually have much more teenagers than adults and would not be successful since teenagers get in much more accidents.