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Scenario 6-4
The Lightning Rod is a fishing rod being introduced by Castaway Sports. At a preliminary meeting with its agency, the president of Castaway Sports mentions that the rod can improve casting distance for an average individual by more than 20 percent. The account executive asks if the president has data to support this. The president replies yes. The agency proceeds to produce a series of television spots featuring the endorsement of a well-known celebrity. The spots run on network television and trumpet the improved casting distance that the rod provides. The slogan of the spots is "Lightning Rods--the finest rod ever cast." After about a week, a competitor questions whether the rods really offer the improved performance Castaway Sports claims. The competitor files a complaint with the FTC.
-(Scenario 6-4) To meet FTC standards for the use of a celebrity endorser,
Marketable Securities Portfolio
A collection of liquid securities that a company holds, which can easily be converted into cash.
Commercial Paper
An unsecured, short-term debt instrument issued by corporations.
Treasury Bills
Short-term government securities issued at a discount from their face value, maturing in a year or less.
Low Default Risk
A classification for bonds or other forms of debt that are deemed to have a minimal chance of the issuer failing to make the required payments.
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