Why Would a Discount Store Have Lower Gross Margins Than

question 8

Multiple Choice

Why would a discount store have lower gross margins than a jewellery store?

• A) Discounters are only beginning to explore gross margin in pricing decisions
• B) Discounters have a lower priced merchandise strategy
• C) Discounters traditionally do not profit as well as jewellery stores
• D) Jewellery stores cannot offer the variety that a discounter offers
• E) All of these are false statements

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Definitions:

Group of Banks

A group of banks refers to a consortium or a syndicate formed by several banks to provide large loans or handle major financial transactions.

IPO

An Initial Public Offering (IPO) is the process through which a private company goes public by selling its shares to the public for the first time.

Allocation of Shares

The process of distributing shares of stock among investors.

Oversubscribed

A situation in which the demand for an IPO or a new issue of securities exceeds the number of shares available.