One of the Problems That Comes from the Intangibility of Services

question 9

Multiple Choice

One of the problems that comes from the intangibility of services is that they are perceived as higher risk purchases than goods are. Which of the following is most likely to reassure a customer who has paid in advance for a Centre Court seat at Wimbledon that they will in fact get to see the tennis?

• A) The tournament's reputation
• B) The advertising
• C) The weather forecast
• D) An expensive and official looking ticket
• E) The website

Analyze the impact of portfolio diversification on risk management.

Recognize how different types of risks affect asset prices and returns.

Understand the concept of beta and its significance in measuring systematic risk.

Grasp the principles behind the Capital Asset Pricing Model (CAPM) and its relation to risk and return.

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Definitions:

Mandatory

Required or obligatory, implying that it must be done or adhered to without choice.

Stop-payment Order

A request made to a bank by an account holder not to pay out on a check or payment that has been issued but not yet processed.

Reimburse

To pay back or compensate someone for expenses they have incurred.

Recourse

A legal means to seek enforcement of or redress for an obligation, right, or injury.