Dani and Jacki Are Brainstorming Over Possible Segments They May

question 17

Multiple Choice

Dani and Jacki are brainstorming over possible segments they may want to target with their new smoothie shop in Collegetown, USA.They have a very limited marketing budget, and want to make sure that their money is well spent.One of the questions Dani and Jacki should consider in choosing segments to target is:

• A) Will the segment be profitable enough?
• B) How many other smoothie shops in Collegetown, USA are targeting this segment?
• C) How many consumers drink smoothies?
• D) What do competitors charge for their products?

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Definitions:

Modified Duration

A measure that estimates how the price of a bond will change in response to a change in interest rates, adjusting for the bond's yield to maturity.

Convexity

The curvature of the price–yield relationship of a bond.

Yield

The annual percentage yield received from an investment, including interest or dividends, relative to the cost of that investment.

Rate Anticipation Swap

A switch made between bonds of different durations in response to forecasts of interest rates.