Online Marketers Run the Risk of Cannibalization When They

question 185

Multiple Choice

Online marketers run the risk of cannibalization when they:

• A)compete with off-price houses on the Internet.
• B)differently price the same products sold in their retail outlets to be sold online.
• C)construct new stores alongside their websites.
• D)hold on to tradition in the face of new technology.

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Definitions:

Capital Allocation Line

A line in investment graph that shows the risk-reward profiles of various portfolios, combining a risk-free asset with a risky portfolio to maximize returns.

Risk-free Asset

An investment with a guaranteed return and no chance of default, such as government bonds.

Risk Aversion

The preference to avoid risk, where investors require higher returns to compensate for higher risk.

Expected Returns

The average of all possible returns for an investment, weighted by the likelihood of each outcome.