Swift Stocks Faced with Rapidly Growing Business, Swift Stocks, Inc., a Global

question 54

Multiple Choice

Swift Stocks
Faced with rapidly growing business, Swift Stocks, Inc., a global brokerage company with the largest market share, recently announced that it has established an online stock investment and trading subsidiary, SS.com, where investors can trade stocks at the lowest rates in the industry. The .com subsidiary has less than one percent market share, but it faces a very high business growth rate. In the brokerage industry, the competition is fierce and all players are cutting their online commission rates.
-According to the BCG matrix, the SS.com subsidiary for Swift Stocks can be classified as a:

• A) cash cow.
• B) dog.
• C) star.
• D) question mark.
• E) weakness.

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Definitions:

Beta

A gauge for assessing the volatility or inherent risk in a security or portfolio against the broader market index.

Security Market Line

A graphical representation of the expected return of investments at different levels of risk as per the Capital Asset Pricing Model (CAPM).

Required Rates of Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into it, considering the risk.

Formulation

The process of devising or planning a strategy, policy, or system often based on specified principles or procedures.