Referral Programs, Which Offer Rewards to Current Members Who Convince

question 7

Multiple Choice

Referral programs, which offer rewards to current members who convince others to join, are an important element of ________.

• A) friendship groups
• B) shopping groups
• C) virtual communities
• D) advocacy groups
• E) aspirational groups

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Definitions:

Multifactor Model

Model of security returns positing that returns respond to several systematic risk factors as well as firm-specific influences.

Explanatory Power

The ability of a statistical model to account for the variance in a given data set, explaining how well the model fits or predicts the outcomes.

Security Returns

The gains or losses from investing in a financial security, calculated based on the change in investment value and any income from the investment, like dividends.

Systematic Factors

Factors that affect the entire market or a large segment of the market, such as economic, political, or social changes.