The Value Chain Framework Can Be Used to View a Firm

question 46

Multiple Choice

The value chain framework can be used to view a firm as a series, a chain, or a network of basic activities that:

• A) Add value to its products and services, and thus add a margin of value to the firm.
• B) Lower costs along the product development chain.
• C) Create the perception of value and goodwill to employees.
• D) Create a smooth-flowing chain of events between the supplier and the customer.

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Definitions:

Nonlinear Factor Exposures

Nonlinear Factor Exposures refer to investment sensitivities to market factors that do not change in a straight-line (linear) relationship with the market's movements.

Down-Market Betas

Measures of how securities or portfolios perform relative to a benchmark during market downturns, reflecting their sensitivity to negative market movements.

Up-Market Betas

Measures of an asset's sensitivity to market movements, particularly during periods of rising market prices.

Geometric Average Return

The average rate of return on an investment per year, compounded annually, over a specified time period.