Define predatory pricing, dumping, and collusive pricing.

Q: For technical analysis, based on patterns of historical prices, to have value, ______ form of market…

A: Weak form efficiency market hypothesis is an element of efficient market hypothesis which states…

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What is the Joint Hypothesis and what are its implications for tests of asset pricing models?

A: The Capital Asset Pricing Model (CAPM) is a model that explains the relationship between expected…

Q: What are the calculation formulas for transfer pricing?

A: There are many methods for determining the transfer price. Most businesses actually set the transfer…

Q: What is a marketorder?

A: Market order It is a request made by a financial specialist generally through an intermediate person…

Q: Define semistrong form of market efficiency

A: Answer: Efficient market is one where the market price constitutes a balanced estimate of…

Q: Arbitrage pricing theory is model developed to be used by:

A: Arbitrage is the practice of taking positive expected return from overvalued or undervalued…

Q: Define pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: Define the law of one price carefully, noting its fundamentals assumptions. Why are these…

A: The question is based on the concept of One price theory used in purchase power parity.

Q: When should special pricing orders be accepted?

A: Special pricing order: A special order is a unique one time order made by a customer. In this order…

Q: Discuss the assumptions, approach, estimation, benefits, limitations, and criticisms of Arbitrage…

A: Arbitrage Pricing Theory is a multi-factor pricing model. Arbitrage Pricing Theory can be used to…

Q: Define the term make-or-buy (or outsourcing) analysis?

A: Make or buy: purchasing of goods from the outside vendors is called outsourcing.

Q: “Transfer pricing is confined to profit centers.” Do you agree? Explain.

A:

Q: Distinguish between market-skimming pricing and market-penetration pricing.

A: Product pricing strategies: There are two product pricing strategies of a company. They are,…

Q: lower-of-cost-or-market approach,

A: It is pertinent to note that inventory need to be valued at cost of net realizable value whichever…

Q: Describe three limitations of the economic, profitmaximizing model of pricing.

A: Profit maximizing price: The price for which the relative quantity is identified by the intersection…

Q: Define strong form of market efficiency

A: Strong form of market efficiency is considered to be the strongest form of efficient market…

Q: Calculate the lowest acceptable transfer price for the seller (Division A) ?

A: Calculation of contribution per unit of Division A Particulars Amount Selling price per unit 76…

Q: commercial market trade industries market segmentation inelastic demand

A: Market is a place where parties gather to exchange goods and services. Parties involved are known as…

Q: Define weak form of market efficiency

A: Efficient Market Hypothesis is a hypothesis that states that the asset prices reflect all available…

Q: which of the following could affect the price

A: Stocks are prone to systematic and unsystematic risks. Factors or risk that affect the entire…

Q: Distinguish between the downward demand spiral and the ramifications of this for price choices

A: This question tells about  the downward demand spiral and the ramifications of this for price…

Q: What is target pricing? Who uses it?

A: Target pricing: A pricing method which is used to identify the price at which the product will be…

Q: What makes the risk-adjusted discount rate approach appealing in practical application?

A: Answer: The discount rate may be changed to offset the risk involved in a project in order to…

Q: How does capacity affect transfer pricing decisions?

A:

Q: Give two reasons why the dual-pricing system of transfer pricing is not widely used.

A:

Q: Define competitive disadvantage costs.

A:

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: What is the quantity decision? The pricing decision?

A:

Q: Define Arbitrage Pricing Theory (APT)

A: Arbitrage is the method of making profit from the temporary change in the cost of shares by buying…

Q: Define the term spoilage.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Pricing Strategy

A: Answer: Pricing strategy refers to the method by which companies use to fix the prices for their…

Q: Discuss the key assumptions of Arbitrage Pricing Theory (APT) model and the implications of these…

A: Solution- APT(Arbitrage Pricing Theory) is a multi-factor technical model supported the link between…

Q: Explain the importance of the excess-capacity issue in setting a competitive bid price.

A:

Q: Explain the following assertion: “Price setting generally requires a balance between market forces…

A: Businesses have to make a lot of decisions in running a business one of which is price setting. They…

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.