Vertigo Is an Electronics Company

question 7

Multiple Choice

Vertigo is an electronics company. According to the BCG matrix, which of the following products of Vertigo would most likely classify as a question mark?

• A) Electra-a home entertainment system that has a strong market share in a market that is likely to expand in the future
• B) SoLo-a CD player that has a very low market share in a market that is shrinking rapidly
• C) Blue-a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily
• D) Kindle Fire-a children's iPad that has a high market share in a market that is not expected to grow significantly
• E) SpinDrive-a car audio system that has a high market share in a market that has been growing constantly

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Definitions:

Put Option

A financial contract giving the buyer the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Striking Price

The predetermined price at which the holder of an option can buy or sell the underlying security.

Cumulative Feature

A characteristic of certain preferred stocks or securities where unpaid dividends accumulate and must be paid before dividends to common stockholders.

Common Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders known as common shareholders.