Which of the Following Is TRUE

question 11

Multiple Choice

Which of the following is TRUE?

• A) As customer loyalty increases, customers are more sensitive to price increases.
• B) Customer loyalty has a positive relationship with firm profitability.
• C) Customer loyalty is fragile and cannot reliably be considered a factor in firm success.
• D) Customer loyalty is of importance only to firms using a differentiation strategy.

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Definitions:

Coupon Bond

A bond that offers interest payments to its holder at regular intervals until the bond's maturity, whereupon the face value is repaid.

Ask Price

The lowest price a seller is willing to accept for an asset on the market.

Accrued Interest

The interest that has accumulated on a bond or loan since the last interest payment was made.

Conversion Premium

The additional amount that an investor pays over the current market price to convert a convertible security into a predetermined number of common shares.