According to the Search Model, a Computerized Used Car Search

question 70

Multiple Choice

According to the search model, a computerized used car search service should

• A)reduce the amount of search
• B)not affect the amount of search
• C)increase price dispersion
• D)reduce price dispersion
• E)lower the marginal benefit of search

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Definitions:

Warrants

Options issued by a company that give the holder the right to purchase the company's stock at a specified price before a certain date.

Diluted Earnings

Earnings per share calculated by including the effects of all potential dilutive securities, which could decrease earnings per share by increasing the number of shares outstanding.

Potential Dilutive Effect

The possible impact on a company’s earnings per share if convertible securities were converted into common stock, often considered in financial analysis.

If-Converted Method

A calculation technique used to assess the impact on diluted earnings per share if all convertible securities were converted into common stock.