Which of the Following Are not typically Considered a Threat

question 73

Multiple Choice

Which of the following are not typically considered a threat of new entrants to an industry?

• A) Low current prices relative to costs
• B) Large capital requirements
• C) Extensive distribution channels with exclusive distribution contracts
• D) Government policy restricting access to raw materials
• E) Large volume purchases relative to the sales of a supplier

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Definitions:

Liquidity Spreads

The difference in yield or cost between liquid (easily convertible to cash) assets and illiquid assets, often indicative of the liquidity premium required by investors.

Security A

A generic term used to represent a particular stock or financial instrument in theoretical examples.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility, and less than 1 indicates lower volatility.

Price Takers

Market participants who accept the prevailing prices in the market for their products or services because they have no power to influence those prices.