Seeing the Financial Side of Business RA Dr. Stephen Hill, a successful optometrist in Indianapolis, Indiana, has tinkered with various inventions for years. Having finally Page 504 developed what he believes is his first saleable product (a truly scratch-resistant and lightweight lens), Hill has decided to invest his life savings and open Hill Optometrics to manufacture and market his invention. Unfortunately, despite possessing true genius in many areas, Hill is uncertain about the "finance side" of business and the various functions of different types of financial institutions in the economy. He is, however, fully aware that he will need financial services such as checking and savings accounts, various short-term investments that can easily and quickly be converted to cash as needs dictate, and sources of borrowing capacity -should the need for either short- or long-term loans arise. Despite having read mounds of brochures from various local and national financial institutions, Hill is still somewhat unclear about the merits and capabilities of each type of financial institution. He has turned to you, his 11th patient of the day, for help. Critical Thinking Questions 1. List the various types of U.S. financial institutions and the primary function of each. 2. What services of each financial institution is Hill's new company likely to need? 3. Which single financial institution is likely to be best able to meet Hill's small company's needs now? Why?
Seeing the Financial Side of Business RA Dr. Stephen Hill, a successful optometrist in Indianapolis, Indiana, has tinkered with various inventions for years. Having finally Page 504 developed what he believes is his first saleable product (a truly scratch-resistant and lightweight lens), Hill has decided to invest his life savings and open Hill Optometrics to manufacture and market his invention. Unfortunately, despite possessing true genius in many areas, Hill is uncertain about the "finance side" of business and the various functions of different types of financial institutions in the economy. He is, however, fully aware that he will need financial services such as checking and savings accounts, various short-term investments that can easily and quickly be converted to cash as needs dictate, and sources of borrowing capacity -should the need for either short- or long-term loans arise. Despite having read mounds of brochures from various local and national financial institutions, Hill is still somewhat unclear about the merits and capabilities of each type of financial institution. He has turned to you, his 11th patient of the day, for help. Critical Thinking Questions 1. List the various types of U.S. financial institutions and the primary function of each. 2. What services of each financial institution is Hill's new company likely to need? 3. Which single financial institution is likely to be best able to meet Hill's small company's needs now? Why?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Solve the Dilemma
LO 15-7 Recommend the most appropriate financial institution for a hypothetical small business.
Seeing the Financial Side of Business
Dr. Stephen Hill, a successful optometrist in Indianapolis, Indiana, has tinkered with various inventions for years. Having finally
developed what he believes is his first saleable product (a truly scratch-resistant and lightweight lens), Hill has decided to invest
his life savings and open Hill Optometrics to manufacture and market his invention.
Page 504
Unfortunately, despite possessing true genius in many areas, Hill is uncertain about the "finance side" of business and the various
functions of different types of financial institutions in the economy. He is, however, fully aware that he will need financial services such as checking and
savings accounts, various short-term investments that can easily and quickly be converted to cash as needs dictate, and sources of borrowing capacity
-should the need for either short- or long-term loans arise. Despite having read mounds of brochures from various local and national financial
institutions, Hill is still somewhat unclear about the merits and capabilities of each type of financial institution. He has turned to you, his 11th patient of
the day, for help.
Critical Thinking Questions
1. List the various types of U.S. financial institutions and the primary function of each.
2. What services of each financial institution is Hill's new company likely to need?
3. Which single financial institution is likely to be best able to meet Hill's small company's needs now? Why?
2
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