A Runner-Up Firm That Wants to Hold Its Share in an Industry

question 128

Multiple Choice

A runner-up firm that wants to hold its share in an industry without rocking the boat is a ________.

• A) market follower
• B) market maven
• C) market challenger
• D) market nicher
• E) market leader

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Definitions:

Interest Rates

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Par Value

The face or nominal value of a bond, stock share, or coupon, as specified by the issuer.

Coupon Rate

Annually, the interest earned on a bond represented as a percentage of its face value.

Premium Bond

Bond prices and interest rates are inversely related; that is, they tend to move in the opposite direction from each other. A fixed-rate bond will sell at par when its coupon interest rate is equal to the going rate of interest, rd. When the going rate of interest is above the coupon rate, a fixed rate bond will sell at a “discount” below its par value. If current interest rates are below the coupon rate, a fixed rate bond will sell at a “premium” above its par value.