When Online Trading Emerged in the Late 1990s, A

question 41

Multiple Choice

When online trading emerged in the late 1990s, A.G.Edwards avoided online trading because personal relations with brokerage clients are central to the firm's strategy.Which of the following responses of firms to disruptive innovations does this example illustrate?

• A)Focusing on traditional mode of business
• B)Offering lower cost products or services
• C)Entering a strategic alliance with a global player
• D)Developing better product differentiation
• E)Matching the competitors' move

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Definitions:

Par Value

The face value of a bond or stock, typically the value printed on the certificate, which does not necessarily reflect its market value.

Treasury Bond

Long-term government debt securities issued by the U.S. Department of the Treasury, with maturity periods typically ranging from 20 to 30 years, considered low-risk investments.

Annual Coupon

The yearly interest payment made by a bond issuer to its bondholders, usually fixed at the time of issuance.

Yield to Maturity

The total expected return on a bond if held until its maturity date, considering all payments from interest and principal, expressed as an annual rate.