When Starbucks Introduced Their New Instant Coffee Brand,Via,the Company Only

question 181

Multiple Choice

When Starbucks introduced their new instant coffee brand,Via,the company only sold it in packages of three single-cup units.Starbucks' primary objective for selling Via in three-unit packages rather than single-unit packages was most likely

• A)to encourage the consumer to try the product several times.
• B)to encourage a higher consumption of all Starbucks products.
• C)to sell more because of infrequent coffee purchases.
• D)to reduce costs in the distribution and handling of the Via products.
• E)to engage in environmentally responsible behavior.

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Definitions:

Risk-Adjusted Performance

A measure of how much risk is taken to achieve a certain level of return, comparing the performance of investments across different risk levels.

Mutual Funds

Investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Treynor Measure

A performance metric for determining how much excess return was generated for each unit of risk taken by a portfolio.

Beta

A measure of a stock's volatility in relation to the overall market; indicates the stock's risk compared to that of the average market portfolio.