Capital One Interview Question: The first case was fairly str... | Glassdoor

Interview Question

Business Analyst Interview(Student Candidate) Richmond, VA

The first case was fairly straight forward: (1) Asked to

  calculate bank profitability with a given interest rates on deposits, a fixed reserve ratio, an interest rate on loans and a fixed fee value. (2) Tasked with assessing the viability of a marketing proposal where you're expected to introduce the idea of a market test. (3) Values are given for the market test and you're asked to calculate the profitability of the bank if the marketing plan was implemented. (4) Go-no/go decision at the end.
Answer

Interview Answer

2 Answers

0

Remember the nature of the cost in the marketing strategy. It's not fixed.

Interview Candidate on Apr 23, 2014
4

This is interesting. We can apply a general profitability framework where profit equals total revenue minus total cost. From there we can break down each two components into segments. Without prior knowledge of how banks calculate profitability I would ask the interviewer's help on setting up which components belong to what. However, one can be smart and and try to match which is revenue and which is cost and then ask whether the profit function for this case is valid one. Once the profit is set up we can ask some data to calculate the bank's profit. The second is regarding a business situation, launching a product I guess and depending on the analysis of this how should the product be launched. I would try to gather information regarding customers, the product itself, the bank (capabilities and so forth) and competitors. Once we identify key factors on them can propose on how to do this pilot test to gather more important information. Calculate the profitability with the new market data and see of the difference of the profit with no new product and with new product. If this is positive, it's a go decision (assuming the decision maker is a rational person).

CuriousJ on May 17, 2014

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