Which of the Following Statements Accurately Reflects a Factor Encouraging

question 109

Multiple Choice

Which of the following statements accurately reflects a factor encouraging WOM?

• A) Positive word of mouth is weighted more heavily by consumers than negative comments.
• B) Negative word of mouth can reduce the credibility of a firm's advertising.
• C) WOM is especially powerful for those consumers who are well informed about the product category.
• D) Positive word of mouth is almost as powerful as advertising.

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Definitions:

Imputed Interest

The assumed interest rate used by the IRS for tax purposes on loans with little or no interest, to ensure that tax is collected on essentially interest-free loans.

Call Provision

A clause in a bond's contract that allows the issuer to redeem the bond before its maturity date under specific conditions.

Retire Bonds

The process of paying off or redeeming bonds before or at maturity to eliminate debt obligations.

Investing

The act of allocating resources, often money, in the hope of generating an income or profit in the future.