Regarding Pricing Objectives, a Good Marketing Manager Knows That

question 84

Multiple Choice

Regarding pricing objectives, a good marketing manager knows that:

• A) sales-oriented objectives usually lead to high profits.
• B) target return objectives usually lead to a large profit.
• C) status quo pricing objectives can be part of an extremely aggressive marketing strategy.
• D) profit maximization objectives always lead to high prices.
• E) None of these alternatives is correct.

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Definitions:

Fixed-Rate

Pertains to loans, mortgages, or other financial products that have an interest rate that remains constant for the entire term of the loan.

Payoff Profile

A graphical representation showing the potential profit and loss of an investment strategy at different prices of the underlying asset at expiration.

Hedge

An investment made to reduce the risk of adverse price movements in an asset, usually through derivatives such as options or futures contracts.

Financial Engineering

The application of mathematical techniques to solve financial problems, including designing new financial instruments.