In Terms of an External Search for Information in a Purchase

question 151

Multiple Choice

In terms of an external search for information in a purchase decision, the need for cognition is:

• A) the extent to which a stimulus or task is relevant to a consumer's existing needs, wants, or values.
• B) a personality characteristic in which individuals engage in and enjoy mental activities.
• C) the mental position a person takes on a topic, person, or event that influences the holder's feelings, perceptions, learning processes, and subsequent behaviors.
• D) simulations of the knowledge structure embedded in an individual's brain.

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Definitions:

Duration

A measure of the sensitivity of a bond’s price to changes in interest rates, expressed as the weighted average time to receive the bond's cash flows.

Macaulay Duration

A measure of the weighted average time until a fixed income asset's cash flows are received, used to assess interest rate risk.

Yield

The earnings generated and realized on an investment over a particular period, expressed as a percentage of the investment’s cost, its current market value, or its face value.

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, adjusting for the bond's yield to maturity.