Which of the Following Is an Example of Cognitive Residue

question 40

Multiple Choice

Which of the following is an example of cognitive residue, as advertisers would define it?

• A)Being unable to recall anything about an ad when a brand name is mentioned to you
• B)Having a certain brand name in mind, above all others, and making a point to buy only that brand
• C)Vaguely remembering a slogan and a jingle for a product
• D)Knowing that you want to buy a product but not being sure why

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Definitions:

Total Risk

The complete range of risk associated with an investment, including both systematic and unsystematic risk.

Risk Premium

The additional return an investor demands for taking on a higher risk compared to a risk-free asset, indicating the compensation for bearing extra risk.

Principle of Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize risks.

Efficient Market

A financial market theory stating prices fully reflect all available information, making it impossible to consistently achieve higher returns.