A Firm Would Prefer an Administered Channel System to a Corporate

question 187

Multiple Choice

A firm would prefer an administered channel system to a corporate channel system for all the following reasons except:

• A) managing all manufacturing, wholesaling, and retailing functions in a channel is too challenging.
• B) administered channel systems are more costly to operate than corporate systems.
• C) corporate channel systems offer more control over marketing activities than administered systems.
• D) administered channel systems offer good enough channel cooperation for the firms' distribution needs.
• E) administered channel systems have some of the same benefits of corporate channel systems but without the expense.

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Definitions:

Risk-Free Return

The theoretical return on an investment with zero risk of financial loss, often represented by the return on government securities.

Treynor's Measure

A performance metric for determining how well an investment portfolio has compensated the investor for the risk taken, using beta as the risk measure.

Risk-Free Return

The theoretical return on an investment with zero risk, typically represented by government bonds or bills, serving as a benchmark for assessing investment performance.

Information Ratio

This ratio measures the excess return of a portfolio over the benchmark's return, relative to the volatility of those excess returns, indicating the portfolio manager's ability to generate consistent excess returns.