Which of the Following Is Not an Example of a Way

question 31

Multiple Choice

Which of the following is not an example of a way a seller can increase switching costs?

• A)Creating a product line compatible with parts that are made by other manufacturers
• B)Offering coupons that tie discounts to the completion of a series of transactions
• C)Offering warranties if product is not serviced at authorized dealer
• D)Bundling complementary products that fit together in a product line
• E)Offering "frequent customer" points that tie promotions to the completion of a series of transactions

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Definitions:

Business Cycle Risk

The exposure to fluctuations in the economic cycle, which can impact the performance and profitability of businesses in different sectors.

Momentum

An investment strategy that aims to capitalize on the continuance of existing trends in the market.

Fama-French Three-factor Model

A model designed to describe stock returns through three factors: market risk, value vs. growth, and company size.

Default Spread

The additional yield that investors demand for holding a corporation's debt over a risk-free security, compensating for the risk of default.