Consumers Are More Likely to Be Price Sensitive When _____

question 175

Multiple Choice

Consumers are more likely to be price sensitive when _____.

• A) it is not easy to compare the prices of different goods
• B) the marginal cost of production is zero
• C) the price of the good is very low
• D) they have many substitute ways of meeting a need
• E) someone else pays the bill or shares the cost

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Definitions:

Price Sensitive

Characteristic of information or news that could influence the price of securities if it were made public.

Zero-Coupon Bond

A type of bond that does not pay interest during its life but is sold at a discount from its face value and redeemed at par at maturity.

Immunization Strategies

Financial strategies used to shield a bond portfolio from the effects of interest rate fluctuations by balancing the duration of assets and liabilities.

Interest Rate Sensitivity

The degree to which the value of an investment, particularly fixed-income securities, changes in response to variations in interest rates.