Demand-Based Pricing Means Lower Prices During Times of Lower Demand

question 150

True/False

Demand-based pricing means lower prices during times of lower demand and higher prices during times of higher demand.

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Definitions:

Countercyclical Beta

Countercyclical beta refers to the measure of an asset’s return sensitivity in opposition to market trends, often gaining value in downturns.

Fama-French Three-factor Model

An asset pricing model that expands on the capital asset pricing model by including size risk and value risk factors in addition to market risk.

CCAPM

Consumption Capital Asset Pricing Model; it extends the Capital Asset Pricing Model by considering the consumption habits of investors to explain asset prices.

Traditional CAPM

The Capital Asset Pricing Model, a framework used to determine the expected return on an investment, factoring in risk-free rate, the asset's beta, and the market risk premium.