The Differentiation Strategy Can Be Effective in Controlling the Power

question 123

Multiple Choice

The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because:

• A) customers will seek out the lowest-cost product.
• B) customers of nondifferentiated products are sensitive to price increases.
• C) customers are loyal to brands that are differentiated in meaningful ways.
• D) the differentiation strategy benefits from rivalry because it forces the firm to innovate.

Understand and calculate covariance between two securities.

Understand and calculate the correlation coefficient between two securities.

Calculate the expected return of a portfolio based on its constituents and their weights.

Understand the concept of perfectly negatively correlated securities and their impact on portfolio risk and return.

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Definitions:

Ability

The possession of the means or skill to do something.

Satisfy Wants

The fulfillment of human desires or needs through the consumption of goods and services.

Utility

In economics, utility is the satisfaction or benefit derived by consumers from consuming goods or services.

Data

Information collected for analysis or used to reason or make decisions.