Fredox Inc

question 40

Multiple Choice

Fredox Inc. manufactures confectionaries, cakes, and other packaged foods. The firm tries to reach both consumers and business customers by using a combination of both direct and indirect distribution channels. The company uses these channels to maximize its sales.
-Which of the following, if true, will strengthen the chances that Fredox will sell more through direct distribution?

• A)Most of Fredox's target consumers make small-scale purchases.
• B)Most retailers in Canada have increased listing fees recently.
• C)The products that Fredox sells have relatively low value.
• D)Most of the firm's business comes from retail selling.
• E)Retail outlets in Canada have little shelf space for storing confectionaries.

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Definitions:

Treasury Bond

A long-term, government-issued security with a fixed interest rate and maturity of more than 10 years, considered to be one of the safest investments.

STRIPS

Separate Trading of Registered Interest and Principal of Securities; a form of a bond that separates its interest payments from its principal repayment obligation, enabling investors to hold and trade them separately.

Expectations Theory

A theory related to the term structure of interest rates, suggesting that the long-term interest rates reflect expected future short-term interest rates.

Forward Rate

The agreed-upon exchange rate for a currency, security, or commodity to be delivered and paid for at a future date, used in forward contracts.