Despite the Success of Its Pentium Chips,Intel Faced a Major

question 387

Multiple Choice

Despite the success of its Pentium chips,Intel faced a major threat from competitors like AMD's K6 chips that were cheaper and better placed to serve the emerging low-cost PC market.Intel wanted to protect the brand equity and price premium of its Pentium microprocessors,but it also wanted to avoid AMD gaining a foothold into the lower end of the market.So it created Celeron as a cheaper,less powerful version of its Pentium chips to serve this market.This is a notable example of a __________.

• A)private brand
• B)brand extension
• C)subbrand
• D)co-brand
• E)fighting brand

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Definitions:

Risk Aversion

The tendency of investors to prefer lower risk or safer investments to avoid potential losses.

Portfolio Beta

A measure of a portfolio's volatility in relation to the market as a whole; it indicates the sensitivity of the portfolio's returns to market movements.

SML Shifts

Changes in the Security Market Line, a graphical representation of the Capital Asset Pricing Model (CAPM) that shows different levels of systematic, or market, risk versus return for the whole market.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically associated with government bonds.