Scenario 17

question 188

Multiple Choice

Scenario 17.1 Use the following to answer the questions.
Jafrum, Inc. is a wholesale supplier of motorcycle accessories, clothing, and tools to various motorcycle retail stores around the country. Jafrum does not manufacture these items, but sells them to other retailers and also sells its merchandise through its website. Sean Thompson is one of the salespeople for Jafrum, and is responsible for obtaining new customers, increasing sales to current customers, and visiting the retail stores throughout the country. Recently, he has been given the sales objective from Jafrum's management to increase sales dollars by 15% in the coming year by adding new customers. Sean's current compensation is based on a $1,000 per month draw, plus 5% of all sales over $100,000. His salary last year totaled $42,000. Management has given Sean the choice of going to a compensation plan where he will earn 15% of all sales, but no draw.
Refer to Scenario 17.1. Sean selects several motorcycle stores who are not currently his customers. He then obtains and analyzes information about the current brands of motorcycle accessories they stock, their sales trends, and credit history. Sean is engaged in which of the following?

• A) prospecting.
• B) the preapproach.
• C) approaching the customer.
• D) making the presentation.
• E) overcoming objections.

Recognize the investment horizon preferences of various financial institutions.

Identify the typical asset allocation of general pension funds.

Understand the financial benefits of home ownership.

Recognize the importance of establishing investment objectives for pension funds.

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Definitions:

Double-Blind Procedure

An experimental procedure in which both the research participants and the research staff are ignorant (blind) about whether the research participants have received the treatment or a placebo. Commonly used in drug-evaluation studies.

Placebo Effect

Experimental results caused by expectations alone; any effect on behavior caused by the administration of an inert substance or condition, which the recipient assumes is an active agent.

Overconfidence

The tendency to be more confident than correct—to overestimate the accuracy of our beliefs and judgments.

Illusory Correlation

The perception of a relationship where none exists.