Some Consumers Make Judgments About Hidden Dimensions of Products from Observable

question 16

Multiple Choice

Some consumers make judgments about hidden dimensions of products from observable attributes, such as inferring that because a used car is clean and shiny, its mechanical condition is likewise of top quality. In this case, the clean and shiny exterior is a/an:

• A) product signal
• B) heuristic
• C) warranty
• D) guarantee
• E) intrinsic attribute

---

Definitions:

Hedging Relationship

A risk management strategy where two or more financial instruments are used together to offset potential losses in investments.

Hedged Item

A recognized asset or liability, unrecognized firm commitment, or highly probable forecast transaction in a hedging relationship.

Hedge Effectiveness

The degree to which a hedge transaction reduces the risk of fluctuations in the cash flows or value of an underlying exposure.

Hedge Effectiveness

A measure of how well a hedge transaction reduces the risk of the exposure that the hedge was intended to protect against.