Katherine Was Shopping for a New Pair of Sunglasses

question 174

Multiple Choice

Katherine was shopping for a new pair of sunglasses. While in The Bay department store in the shopping center, Katherine visited the optical department. Here she found a pair of Oakley brand sunglasses that she considered very attractive. However, the price of $225 was more than she expected to pay for sunglasses and asked the salesperson why the glasses carried such a high price tag. The salesperson informed Katherine that the $225 ensured her of the finest quality glasses featuring ultra-strong titanium frames and specially formulated lenses, which would protect Katherine from all harmful UV and blue light. Finally, the lenses would offer optimum optical clarity, and the glasses would "look great" on Katherine. The salesperson was attempting to help Katherine realize the value offered by the Oakley glasses by:

• A)creating a price/cost/benefit equation.
• B)comparing the features of the glasses to those of other glasses.
• C)creating a value analysis for Katherine.
• D)comparing the ratio of perceived benefits to the price of the glasses.

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Definitions:

Commodities

Raw materials or primary agricultural products that can be bought and sold.

Futures Exchange

A Futures Exchange is a central marketplace where people can trade standardized futures contracts; that is, contracts to buy or sell assets at a future date at an agreed-upon price.

Interest Rate Swap

A financial derivative contract where two parties exchange interest rate payments, typically one with a fixed rate and the other with a floating rate.

Futures Put Option

A financial contract giving the buyer the right, but not the obligation, to sell a futures contract at a specified price within a specified time.